<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K (A)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: October 23, 1997
JACOR COMMUNICATIONS, INC.
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-12404 31-0978313
(Commission File No.) (IRS Employer Identification No.)
50 East RiverCenter Boulevard
12th Floor
Covington, KY 41011
(606) 655-2267
<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
As previously reported, in October, 1997, Citicasters Co., an indirect
wholly-owned subsidiary of Jacor Communications, Inc. (the "Company"), signed a
letter of intent to acquire the assets of 17 radio stations (the "Stations")
from Nationwide Communications Inc. ("NCI") and its affiliated entities. These
stations are: KDMX-FM in Dallas, Texas; KEGL-FM in Ft. Worth, Texas; KHMX-FM in
Houston, Texas; KTBZ-FM in Lake Jackson, Texas; KMJZ-FM and KSGS-AM in St. Louis
Park, Minnesota; KMCG-FM in Carlsbad, California; KGLQ-FM in Phoenix, Arizona;
KZZP-FM in Mesa, Arizona; WPOC-FM in Baltimore, Maryland; WGAR-FM, WMJI-FM and
WMMS-FM in Cleveland, Ohio; WCOL-FM, WFII-AM and WNCI-FM in Columbus, Ohio; and
KXGL-FM in San Diego, California.
On December 19, 1997, Citicasters Co. and Jacor Communications Company,
a wholly-owned subsidiary of the Company ("JCC"), entered into an Agreement
of Sale ("Sale Agreement") with NCI, Nationwide Mutual Insurance Company
("Nationwide"), Employers Insurance of Wausau, a mutual company ("Wausau"),
San Diego Lotus Corp. ("SDLC"), and The Beak and Wire Corporation ("TBWC")
(NCI, Nationwide, Wausau, SDLC and TBWC are collectively referred to herein
as "Sellers.") Pursuant to the Sale Agreement, Citicasters Co. will purchase
(the "Purchase") from the Sellers: (i) all of the assets and properties used
or useable in connection with the business and operation of the Stations, as
well as (ii) partnership interests in the Shoreview FM Group (which is
engaged in the business of providing tower and antenna facilities for
television and radio broadcast stations) and Senior Road Tower Group (which
is engaged in the business of providing tower and antenna facilities for
television and radio broadcast stations and oil drilling), held by NCI and
TBWC, respectively, (collectively, the "Assets"). JCC has unconditionally
guaranteed the performance of Citicasters Co. under the Sale Agreement.
Pursuant to that certain Assets Exchange Agreement dated December 19, 1996
by and between NCI and Eagle Radio, Inc., NCI will receive KEGL-FM in
exchange for KSLX-FM and KSLX-AM (which NCI acquired from the Company in
April 1997). Although it is currently expected that this exchange will be
consummated prior to the closing of the Purchase, Citicasters Co. may succeed
to NCI's ownership of KSLX-FM and KSLX-AM as well as NCI's right to close on
the exchange of KEGL-FM for KSLX-FM and KSLX-AM.
2
<PAGE>
The purchase price for the Assets to be paid by Citicasters Co. will be
approximately $620 million in cash, of which $30 million has been placed in
escrow pending the closing of the Purchase. The Company anticipates that the
sources of the cash to be used to satisfy the purchase price will be obtained
from a combination of one or more of the following sources: credit facilities
established with banks or other financial institutions; Citicasters Co.'s and/or
JCC's working capital; and/or monies that may be raised through public and/or
private offerings of the Company's equity and/or debt securities. As of the
date hereof, the Company has made no definitive decisions as to which of these
potential funding sources will be utilized.
The closing of the Purchase is subject to certain conditions, including
expiration of the applicable Hart-Scott-Rodino waiting period and the consent
of the FCC to the assignment of the FCC Licenses of the Stations to
Citicasters Co. The Sale Agreement provides that, after April 1, 1998, at the
option of Citicasters Co., the closing of the Purchase may occur before the
FCC consent has become a Final Order. In addition to options to terminate for
various matters including a breach of the Sale Agreement, if the parties to
the Sale Agreement shall have materially satisfied all of their respective
obligations under the Sale Agreement and, nevertheless, the closing of the
purchase has not taken place prior to December 31, 1998, either party may
terminate the Sale Agreement. The Company anticipates that the closing will
occur during the second quarter of 1998.
A copy of the above mentioned Sale Agreement is attached as an exhibit
hereto. The summary of the Sale Agreement set forth above is qualified in its
entirety by reference to the Sale Agreements, which is incorporated herein by
reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
The financial statements of the business acquired required to be filed
by the Company as part of this Form 8-K require substantial effort on
behalf of NCI and have not yet been finalized on the date of this report.
The Company will file such financial statements by amendment to this Form
8-K no later than 60 days hereafter.
(b) Pro Forma Financial Information
The pro forma financial statements required to be filed by the Company
as part of this Form 8-K require substantial effort on behalf of the
Company and NCI and have not yet been finalized on the date of this report.
The Company will file such pro forma financial statements by amendment to
this Form 8-K no later than 60 days hereafter.
(c) Exhibits
2.1 Agreement of Sale dated December 19, 1997 by and between
Nationwide Mutual Insurance Company, Employers Insurance of
Wausau, Nationwide
3
<PAGE>
Communications Inc., San Diego Lotus Corp., The Beak and Wire
Corporation, Citicasters Co. and Jacor Communications Company
(omitting schedules and exhibits not deemed material).
99.1 Press Release dated October 13, 1997*
99.2 Press Release dated October 23, 1997*
99.3 Press Release dated October 27, 1997*
* Previously filed.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JACOR COMMUNICATIONS, INC.
January 5, 1998 By: /s/ R. Christopher Weber
--------------------------------------------
R. Christopher Weber, Senior Vice President
and Chief Financial Officer
4
<PAGE>
AGREEMENT OF SALE
THIS AGREEMENT, made this 19th day of December, 1997, by and between
NATIONWIDE MUTUAL INSURANCE COMPANY ("Nationwide"), a mutual insurance
company organized under the laws of the State of Ohio, with offices at One
Nationwide Plaza, Columbus, Ohio 43215, EMPLOYERS INSURANCE OF WAUSAU A
Mutual Company ("Wausau"), a mutual insurance company organized under the
laws of the State of Wisconsin, with offices at 2000 Westwood Drive, Wausau,
Wisconsin 54401, NATIONWIDE COMMUNICATIONS INC. ("NCI"), an Ohio corporation,
SAN DIEGO LOTUS CORP. ("SDLC"), a California corporation, and THE BEAK AND
WIRE CORPORATION ("TBWC"), an Ohio corporation, NCI, SDLC and TBWC each with
offices at One Nationwide Plaza, Columbus, Ohio 43215, and CITICASTERS CO.,
an Ohio corporation, with offices at 50 East RiverCenter Boulevard,
Covington, Kentucky 41011 ("Purchaser"), and, solely for purposes of Section
35 hereof, JACOR COMMUNICATIONS COMPANY, a Florida corporation ("Jacor").
WITNESSETH:
WHEREAS, on the Closing Date Nationwide will be the owner, licensee and
operator of radio broadcast stations KDMX-FM, licensed to Dallas, Texas,
KHMX-FM, licensed to Houston, Texas, KTBZ-FM, licensed to Lake Jackson,
Texas, KMJZ-FM and KSGS-AM, licensed to St. Louis Park, Minnesota, KMCG-FM,
licensed to Carlsbad, California, KGLQ-FM, licensed to Phoenix, Arizona,
KZZP-FM, licensed to Mesa, Arizona, WPOC-FM, licensed to Baltimore, Maryland,
WGAR-FM, WMJI-FM and WMMS-FM, licensed to Cleveland, Ohio, WCOL-FM, WFII-AM
and WNCI-FM, licensed to Columbus, Ohio; each holding valid licenses and
authorizations for the operation thereof from the FCC; and
WHEREAS, on the Closing Date Nationwide expects to be the owner and
licensee of radio broadcast station KEGL-FM, licensed to Fort Worth, Texas,
pursuant to its pending application with the FCC to exchange radio broadcast
stations KSLX-FM and KSLX-AM, licensed to Scottsdale, Arizona, for KEGL-FM;
and
WHEREAS, on the Closing Date Wausau will be the owner and licensee of
radio broadcast station KXGL-FM, licensed to San Diego, California; holding a
valid license and authorizations for the operation thereof from the FCC; and
WHEREAS, TBWC owns a partnership interest in Senior Road Tower Group, a
general partnership formed under the laws of the State of Texas, and, on the
Closing Date, will own a partnership interest in Shoreview FM Group, a
general partnership formed under the laws of the State of Minnesota, and TBWC
desires to transfer such partnership interests to Purchaser, and
1
<PAGE>
Purchaser desires to be bound by the terms of the partnership agreements
governing the terms and conditions of the Senior Road Tower Group and the
Shoreview FM Group; and
WHEREAS, Seller desires to sell, and Purchaser desires to acquire, the
aforesaid authorizations and license rights, together with the assets used
and usable in conjunction therewith, subject to the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, Seller and Purchaser hereby agree
as follows:
1. DEFINITIONS.
"AAA" means the American Arbitration Association.
"ACCOUNTS RECEIVABLE(S)" means all accounts receivable and any notes or
written obligations reflecting accounts receivable, relating to the Stations
as of the Closing Date, including all billed or unbilled obligations of
Seller with respect to advertising carried on the Stations prior to the
Closing Date.
"ACCRUED 1998 VACATION" means the liability with respect to vacation
days accrued in calendar year 1998 only for those employees at the Stations
hired by Purchaser as of the Closing Date and which remain unused as of the
last day of employment with the Seller, exclusive of carryover vacation days
for calendar year 1997.
"ACQUIRED ASSETS" has the meaning set forth in Section 2 below.
"ACQUISITION" has the meaning set forth in Section 7(g) below.
"ACQUISITION PROPOSAL" has the meaning set forth in Section 7(g) below.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"ASSESSMENT" has the meaning set forth in Section 7(m) hereof.
"ASSUMED LIABILITIES" means (i) all debts, obligations and other
Liabilities of Seller arising or to be performed on and after the Closing
under Contracts, FCC Licenses, Trade Deals and promotional sponsorships set
forth in the Disclosure Schedule assigned to Purchaser pursuant to this
Agreement and referred to in the definition of Acquired Assets for periods
from and after the time of Closing, (ii) the Permitted Title Exceptions; and
(iii) Permitted Encumbrances, all of subsections (i) - (iii) are subject to
appropriate prorations; provided, however that the Assumed Liabilities shall
not include (a) any liability of Seller for costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby;
2
<PAGE>
(b) any liability or obligation of Seller under this Agreement (or under any
collateral agreement between Seller or any of its Affiliates on the one hand
and Purchaser on the other hand entered into on or after the date of this
Agreement); (c) any liabilities arising from or associated with the Excluded
Assets; or (d) any other liabilities, obligations or commitments of Seller of
any nature whatsoever whether accrued, absolute, contingent or otherwise
except as otherwise provided in this Agreement.
"BASIS" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms the basis for any specified
consequence.
"CLOSING" has the meaning set forth in Section 11 below.
"CLOSING DATE" has the meaning set forth in Section 11 below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" has the meaning set forth in Section 32 below.
"CONTRACTS" has the meaning set forth in Section 2(d) below.
"COUNTER-NOTICE" has the meaning set forth in Section 15(d) below.
"CREDIT AGREEMENT" means that certain Credit Agreement dated as of April
3, 1997, by and among NCI, the Lenders Party Thereto, The First National Bank
of Boston, as co-agent, and The Bank of New York, as agent.
"DISAPPROVED MATTERS" has the meaning set forth in Section 7(l) below.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 5 below.
"DISPUTE" has the meaning set forth in Section 15(a) hereof.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan,
(b) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan
or arrangement which is an Employee Pension Benefit Plan, or (d) Employee
Welfare Benefit Plan or material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(1).
"ENVIRONMENTAL REQUIREMENT" means any law, ordinance, rule, regulation,
order or directive in effect as of the date of this Agreement addressing
environmental, health or safety
3
<PAGE>
issues of or by any Governmental Authority, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
as amended (42 U.S.C. Sec. 9601 et seq.), the Hazardous Materials
Transportation Act as amended (49 U.S.C. Sec. 1801 et seq.), the Resource
Conservation and Recovery Act as amended (42 U.S.C. Sec. 6901 et seq.), the
Toxic Substance Control Act (15 U.S.C. Sec. 2601 et seq.), the Clean Air Act
as amended (42 U.S.C. Sec. 7401 et seq.) and the Federal Water Pollution
Control Act as amended (33 U.S.C. Sec. 1251 et seq.), all as presently in
effect, and any regulation pursuant thereto presently in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED ASSETS" means (i) any of the rights of Seller or any of its
Affiliates under this Agreement (or under any collateral agreement between
Seller or any of its Affiliates on the one hand and Purchaser on the other
hand entered into on or after the date of this Agreement), (ii) Accounts
Receivable, (iii) notes receivable, (iv) insurance policies, (v) any right to
the use of the name ANationwide", and the "N and the Eagle" service mark of
Nationwide Mutual Insurance Company, (vi) cash or cash equivalents, (vii) all
corporate or other assets of NCI listed on EXHIBIT "K" hereto, or (viii) any
rights in and with respect to the assets associated with Seller's Employee
Benefit Plans, all of which shall be and remain the exclusive property of
Seller free and clear of any claim from Purchaser whatsoever.
"FCC" means the Federal Communications Commission.
"FCC LICENSES" has the meaning set forth in Section 2(a) below.
"GAAP" means U.S. generally accepted accounting principles, consistently
applied throughout the specified period and the immediately prior comparable
period.
"GOVERNMENTAL AUTHORITIES" means any of the federal government, any
state or local or other political subdivision thereof, exercising executive,
legislative, judicial, regulatory or administrative functions.
"H-S-R ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"HAZARDOUS MATERIALS" means any material, substance or item that,
whether by its nature or use, is defined as a toxic or hazardous substance,
hazardous waste, solid waste, hazardous material, pollutant or contaminant or
otherwise subject to regulation as of the date of this Agreement under any
Environmental Requirement.
"INITIATING PARTY" has the meaning set forth in Section 15(d) below.
"INTERIM STATEMENTS" has the meaning set forth in Section 7(o) below.
4
<PAGE>
"KNOWLEDGE OF SELLER" or words of similar import, means to the best of
Seller's actual knowledge after having made due inquiry of the directors and
officers of Seller and the general managers of the Stations, and with respect
to the condition of any Acquired Assets, records or other object, if such
person inspected it.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due).
"MEDIATION NOTICE" has the meaning set forth in Section 15(d) below.
"NEUTRAL AUDITORS" has the meaning set forth in Section 4(b)(iii) below.
"NOVEMBER 13 APPLICATION" has the meaning set forth in Section 10(b)
below.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past practice.
"PARTIES" means Nationwide, Wausau, NCI, SDLC, TBWC and Purchaser.
"PARTNERSHIP INTERESTS" has the meaning set forth in Section 2(i) below.
"PARTY" means any of Nationwide, Wausau, NCI, SDLC, TBWC or Purchaser.
"PERMITTED ENCUMBRANCES" means (i) liens for real estate and personal
property taxes not yet due and payable, (ii) statutory liens of landlords,
warehousemen, mechanics and materialmen incurred in the Ordinary Course of
Business for sums not yet due and payable, and (iii) those liens set forth on
EXHIBIT "M".
"PERMITTED TITLE EXCEPTIONS" has the meaning set forth in Section 7(l)
below.
"PERSON" means an individual, a partnership, limited liability
partnership, a corporation, a limited liability corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or
political subdivision thereof).
"PRIMARY TOWER SITES" means all radio broadcast tower sites used by a
Station on which is located a radio broadcast antenna; provided, however, if
such tower site contains only an auxiliary radio broadcast antenna, such site
shall not be deemed a Primary Tower Site.
"PURCHASE PRICE" has the meaning set forth in Section 3(a) below.
"PURCHASER" has the meaning set forth in the recitals of this Agreement.
"PURCHASER'S DISCLOSURE SCHEDULE" has the meaning set forth in Section 6
below.
5
<PAGE>
"PURCHASER'S REPRESENTATIVES" has the meaning set forth in
Section4(b)(ii) below.
"PURCHASER'S REQUIRED CONSENTS" has the meaning set forth in Section
7(k) below.
"REAL PROPERTY" has the meaning set forth in Section 2(b) below.
"RECIPIENT PARTY" has the meaning set forth in Section 15(d) below.
"RELEASES" has the meaning set forth in Section 33 below.
"REPRESENTATIVES" has the meaning set forth in Section 32(a) below.
"RESOLUTION PERIOD" has the meaning set forth in Section 4(b)(ii) below.
"RETAINED LIABILITIES" has the meaning set forth in Section 3(c) below.
"SENIOR ROAD TOWER GROUP PARTNERSHIP AGREEMENT" means that Senior Road
Tower Partnership Agreement dated April 24, 1981, as amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, condition, community property interest, option, hypothecation,
attachment, conditional sale, title retention, right of first refusal, debt,
security interest, trust, claim or other lien, liability, encumbrance or
right of a third party whatsoever, other than Permitted Encumbrances.
"SELLER" means Nationwide, Wausau, TBWC, NCI and SDLC.
"SELLER'S REQUIRED CONSENTS" has the meaning set forth in Section 7(k)
below.
"SHOREVIEW FM GROUP PARTNERSHIP AGREEMENT" means that Partnership
Agreement of Shoreview FM Group dated November 23, 1988, as amended June 24,
1996, under which NCI is a partner by virtue of that certain Assignment and
Assumption of Agreement to Admit Partner dated June 21, 1996 by and between
NCI and Roy H. Park Broadcasting of Minnesota, Inc.
"STATIONS" means all of the radio broadcast stations set forth in the
first and third recitals above, as well as either (a) KSLX-AM and KSLX-FM, or
(b) KEGL-FM, following the closing of the exchange of KSLX-AM and KSLX-FM for
KEGL-FM, (provided that until such time as the exchange is completed,
references to "Stations" in Sections 5, 6, 10, 12 and 16 shall be applicable
to all of KSLX-AM, KSLX-FM and KEGL-FM).
"SURVEY" has the meaning set forth in Section 7(l) below.
"TAX" means any federal, state, foreign or local income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the
Code , customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property,
6
<PAGE>
personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto.
"TERMINATION DATE" has the meaning set forth in Section 19(a) below.
"TITLE COMMITMENT" has the meaning set forth in Section 7(l) below.
"TRADE DEALS" has the meaning set forth in Section 2(e) below.
"UNRESOLVED CHANGES" has the meaning set forth in Section 4(b)(iii) below.
"WARN ACT" means the Worker Adjustment and Retraining Notification Act,
29 U.S.C. Section 2101 et seq., or any state statute requiring notice to
terminated or laid off employees.
2. ASSETS SOLD AND PURCHASED.
On the Closing Date, Seller will sell, transfer, assign and convey to
Purchaser, by appropriate instruments, and Purchaser will purchase and
assume, subject to the terms and conditions hereinafter set forth, all of the
assets and properties used or usable in connection with the business and
operation of the Stations (but excluding the Excluded Assets), including but
not limited to, the following assets and properties (the "Acquired Assets"),
free and clear of all Security Interests except as otherwise set forth herein:
(a) The FCC licenses, permits and authorizations (the "FCC Licenses") and
all other licenses, permits and authorizations issued by any
Governmental Authorities for the operation of the Stations including,
but not limited to, those listed on EXHIBIT "A" hereto, and all other
licenses, permits and authorizations now or hereafter obtained in
connection with the operation of the Stations.
(b) All real property used in connection with the operation of the
Stations (other than any real property that is the subject of any
lease set forth on EXHIBIT "D" hereof), together with all appurtenant
easements thereunto and all structures, fixtures and improvements
thereof, including without limitation the real property more fully
described on EXHIBIT "B" hereto (the "Real Property").
(c) All other fixed, tangible and intangible assets used and usable in the
operation of the Stations including, but not limited to, those assets
identified on EXHIBIT "C" hereto, subject to any changes thereto made
in the Ordinary Course of Business between the date hereof and the
Closing Date which are permitted pursuant to Section 5(d) of this
Agreement.
7
<PAGE>
(d) All contracts, real property and other leases and agreements listed
and described on EXHIBIT "D" attached hereto, together with all
contracts for sale of time on the Stations for cash entered into in
the Ordinary Course of Business and which do not have more than twelve
(12) months remaining in their term (whether or not listed on EXHIBIT
"D") (except for such contracts for sale of time that have been
fulfilled prior to the Closing or contracts, leases or agreements that
expire in accordance with their terms prior to Closing) and such other
contracts (other than for the sale of time on the Stations), leases
and agreements entered into between December 1, 1997 and the Closing
Date (i) with the written consent of Purchaser, or (ii) in accordance
with the provisions of Section 7(n) hereof; which are to be in effect
on the Closing Date, except those which may have been unilaterally
canceled by a party other than Seller, provided that, legal rights, if
any, accruing to Seller by virtue of any such unilateral cancellation
by a party other than Seller shall be assigned by Seller to Purchaser
(collectively, "the Contracts").
(e) The rights and obligations under the agreements, pursuant to which
reimbursement is or was to be made in whole or in part in services,
merchandise or other non-cash consideration ("Trade Deals"), listed
and described on EXHIBIT "E" attached hereto, subject to any changes
thereto made in the Ordinary Course of Business between the date
hereof and the Closing Date. Seller shall not enter into any Trade
Deal outside of the Ordinary Course of Business after execution of
this Agreement which shall obligate Purchaser without first obtaining
Purchaser's written consent, which shall not be unreasonably
withheld. Seller agrees that, as of the Closing Date, the amount due
to clients under the Trade Deals shall not exceed the amount due to
the Stations under the Trade Deals by more than Five Hundred Thousand
Dollars ($500,000) in the aggregate. To the extent that the aggregate
value of the amount due to clients under the Trade Deals is greater
than Five Hundred Thousand Dollars ($500,000), Buyer shall be entitled
to receive the difference as part of the post-closing adjustment
pursuant to Section 4 below.
(f) The call letters for each of the Stations and, except for the "N and
Eagle" service mark of, and other service marks owned by Nationwide,
all copyrights, trademarks, trade names, logos, jingles, service
marks, slogans and promotional materials used in connection with the
Stations, and any registrations or applications for registration of
any of the same including, but not limited to, those copyrights,
trademarks, trade names and service marks listed and described on
EXHIBIT "F" attached hereto.
(g) Such files, records and logs pertaining to the operation of the
Stations as are required to be maintained by federal, state or local
law or regulation and as Purchaser may reasonably require; provided,
however, that Purchaser is not purchasing and will not be entitled to
receive Seller's corporate books, files, personnel records of Seller's
employees not hired by Purchaser as of the Closing
8
<PAGE>
Date, records and logs, or journals, books of accounts or other
confidential books and records not directly relating to the operation
of the Stations; and provided further that Seller shall be provided
access to the originals of all such documents, and shall be furnished
promptly with copies thereof, upon reasonable request therefor.
(h) The goodwill used in the operation of the Stations.
(i) TBWC's partnership interests in the Shoreview FM Group general
partnership and in the Senior Road Tower Group general partnership
(the "Partnership Interests").
This Agreement is limited to the assets herein described, and Purchaser is
not purchasing the Excluded Assets.
3. PURCHASE PRICE; DEPOSIT; PERMITTED ENCUMBRANCES, ASSUMED LIABILITIES AND
RETAINED LIABILITIES.
(a) PURCHASE PRICE.
The purchase price for the Acquired Assets shall be Six Hundred Twenty
Million Dollars ($620,000,000) (the "Purchase Price") payable in full
to Seller by wire transfer of immediately available funds on the
Closing Date. The Purchase Price shall be allocated among the Acquired
Assets in a manner determined by Purchaser based upon an appraisal
prepared by Bond & Pecaro, which shall establish reasonable values for
such assets; provided, notwithstanding the foregoing, Seller and
Purchaser agree that the allocation of the Purchase Price with respect
to the assets of KXGL-FM shall in no event be less than Twenty Nine
Million Dollars ($29,000,000), and such appraisal and allocation shall
be completed prior to Closing unless otherwise agreed to by the
Parties. Seller and Purchaser agree to use the allocations determined
by Purchaser for all Tax purposes, including without limitation, those
matters subject to Section 1060 of the Code.
(b) DEPOSIT.
(i) Upon execution of this Agreement, Purchaser shall deposit in
escrow with Bank One Trust Company, NA, acting as escrow agent on
the Parties' behalf ("Escrow Agent"), a deposit (the "Deposit")
in the amount of Thirty Million Dollars ($30,000,000). The
Deposit shall be held in escrow pursuant to a separate escrow
agreement ("Escrow Agreement") entered into between Nationwide,
Purchaser and the Escrow Agent and attached hereto as EXHIBIT
"G." The Deposit shall be invested and disbursed in accordance
with the terms of the Escrow Agreement.
9
<PAGE>
(ii) Subject to Section 19 of this Agreement and the Escrow Agreement,
the Deposit, together with any interest earned thereon, shall
either be credited toward partial payment of the Purchase Price
on the Closing Date, or shall be disbursed to Seller or returned
to Purchaser upon termination of this Agreement.
(c) PERMITTED ENCUMBRANCES, ASSUMED LIABILITIES AND RETAINED LIABILITIES.
The Acquired Assets shall be sold and conveyed to Purchaser free
and clear of all Security Interests except Permitted Encumbrances
and the Assumed Liabilities. Except as expressly and specifically
provided in this Agreement with regard to Assumed Liabilities,
Purchaser will not assume or otherwise be responsible for any
Liabilities or obligations of Seller, regardless of nature and
all of such liabilities, obligations and commitments of Seller
described in this sentence shall be referred to herein
collectively as the "Retained Liabilities."
4. PAYMENT OF CERTAIN ITEMS; POST-CLOSING ADJUSTMENTS; COLLECTION OF ACCOUNTS
RECEIVABLE.
(a) All FCC filing and grant fees, if any, shall be paid by Seller and
Purchaser equally.
(b) Within ninety (90) days after Closing, an accounting shall be made as
follows:
(i) All prepaid income, prepaid expenses (including, but not
limited to, FCC regulatory fees), prepayments on any Contracts
assumed by Purchaser hereunder, accrued income and accrued
expenses of the Stations as of the end of the day prior to the
Closing Date shall, except as otherwise expressly provided
herein, be adjusted and allocated between Seller and Purchaser
to reflect the principle that all expenses and income arising
from the operation of the Stations before 12:01 a.m. on the
Closing Date shall be for the account of Seller, and all
expenses and income arising from the operation of the Stations
from and after 12:01 a.m. on the Closing Date shall be for the
account of Purchaser.
(ii) As soon as practicable following the Closing Date, and in any
event within ninety (90) days thereafter, or at such other time
as the Parties mutually agree, Seller shall deliver to
Purchaser Seller's certificate setting forth as of the Closing
Date all adjustments to be made as provided in Section 4(b)(i)
above. Seller shall provide Purchaser or Purchaser's
accountants, counsel or other representatives (the "Purchaser's
Representatives") access to copies of all books and records as
Purchaser may reasonably request for
10
<PAGE>
purposes of verifying such adjustments. Seller's certificate
shall be final and conclusive unless objected to by Purchaser
in writing within thirty (30) days after delivery. Seller and
Purchaser shall attempt jointly to reach agreement as to the
amount of the adjustments to be made hereunder within sixty (60)
days after receipt by Seller of such written objection by
Purchaser, which agreement, if achieved, shall be binding upon
all Parties to this Agreement and not subject to dispute or
review (the "Resolution Period").
(iii) Any amounts or methods, principles, practices or policies
employed in the preparation thereof, remaining in dispute at
the conclusion of the Resolution Period ("Unresolved Changes"),
shall be submitted to such firm of United States independent
certified public accountants as Seller and Purchaser may agree.
If they cannot so agree within five (5) days after the end of
the Resolution Period, they shall each select one (1) such firm
within ten (10) days after the end of the Resolution Period and
the two (2) firms so chosen shall select a third firm of United
States independent certified public accountants, to which such
dispute shall be submitted (the firm ultimately selected
pursuant to this Section 4 being the "Neutral Auditors"). All
Unresolved Changes shall be submitted to the Neutral Auditors
no later than ten (10) days after the same is designated. Each
Party agrees to execute, if requested by the Neutral Auditors,
a reasonable engagement letter. All fees and expenses relating
to the work, if any, to be performed by the Neutral Auditors
shall be borne pro rata by Seller and Purchaser in proportion
to the allocation of the dollar amount of the Unresolved
Changes between Seller and Purchaser made by the Neutral
Auditors such that the prevailing Party pays a lesser
proportion of the fees and expenses. The Neutral Auditors
shall act as an arbitrator to determine, based on the
provisions of this Section 4, only the Unresolved Changes. The
Neutral Auditors' determination of the Unresolved Changes shall
be made within forty-five (45) days of the submission of the
Unresolved Changes thereto, shall be set forth in a written
statement delivered to Purchaser and Seller and shall be final,
binding and conclusive.
(iv) Any amounts due Purchaser or Seller for the adjustments
provided for herein shall be paid within ten (10) calendar days
after final determination by the Neutral Auditors. If such
amount is not paid within such ten (10) day period, interest on
such amount shall accrue until paid at the prime rate as
published from time to time in the WALL STREET JOURNAL plus
five percent (5%).
(c) Filing and recordation fees and any other fees incurred in connection
with the transfer of title to the Real Property being conveyed
hereunder, and any applicable
11
<PAGE>
transfer taxes, and all expenses incurred in connection with such
filing or recordation, and any sales or use tax arising from the
consummation of the transactions contemplated by this Agreement,
shall be borne by Purchaser or Seller in accordance with local custom.
(d) At Closing, Seller shall assign to Purchaser the Accounts Receivable,
for the purposes of collection only for a period of ninety (90) days,
and deliver to Purchaser a list of Seller's Accounts Receivable, for
the Stations. If, after the Closing Date, Purchaser shall sell time
to any customer of the Stations whose account is included in the
Accounts Receivable being assigned, it is agreed that any payments
subsequently made by such customer within such ninety (90) day period
shall first be applied in reduction of the indebtedness covered by the
Accounts Receivable being assigned herein; provided, however, that if
during the collection period any account debtor contests the validity
of its obligation with respect to any Account Receivable, then
Purchaser shall return that Account Receivable to Seller after which
Seller will be solely responsible for the collection thereof. Within
twenty (20) days after the end of each month end during such ninety
(90) day period, Purchaser shall pay over to Seller all amounts
collected by Purchaser during the preceding month with respect to
Accounts Receivable assigned pursuant to this Section 4(d). Purchaser
agrees to utilize reasonable efforts to collect all Accounts
Receivable assigned to it by Seller. Purchaser=s obligation and
authority shall not extend to the institution of litigation,
employment of counsel or a collection agency or any other
extraordinary means of collection. During the 90-day collection
period Seller shall not make any direct solicitation of any account
debtor for collection purposes or institute litigation for the
collection of amounts due unless the account debtor contests the
validity of its obligations and the Account Receivable for such
account debtor is returned by Purchaser to Seller. Purchaser shall
not, without the prior written consent of Seller, compromise any
Accounts Receivable assigned to it by Seller. Any Accounts Receivable
remaining uncollected at the termination of said ninety (90) day
period after the Closing Date shall be reassigned by Purchaser to
Seller. Any amounts thereafter collected by Purchaser with respect to
such reassigned Accounts Receivable shall promptly be paid over to
Seller. If there is any difference between the amount of the Accounts
Receivable according to the records furnished to Purchaser by Seller
and the amount claimed by a customer, Purchaser shall not have the
right to resolve such dispute. Seller shall be solely responsible for
the payment of all salesperson, agency and sales representative
commissions due with respect to the Accounts Receivable.
5. SELLER'S REPRESENTATIONS AND WARRANTIES.
Except as set forth in the disclosure schedule accompanying this Agreement (the
"Disclosure Schedule"), Seller hereby jointly and severally represents and
warrants to Purchaser the following, which representations and warranties,
together with all other representations and
12
<PAGE>
warranties of Seller in this Agreement and the Exhibits and Schedules
hereto, shall be true and correct as of the Closing Date as if expressly
restated on said date.
(a) ORGANIZATION OF SELLER.
(i) Nationwide is a mutual insurance company duly organized,
validly existing and in good standing and authorized to do
business under the laws of the State of Ohio, is duly
authorized under applicable law to carry on its business as
presently conducted, and has all requisite corporate power and
authority to own, lease and operate its assets, properties and
business and to carry on its business as now being and
heretofore conducted.
(ii) Wausau is a mutual insurance company duly organized, validly
existing and in good standing and authorized to do business
under the laws of the State of Wisconsin, is duly authorized
under applicable law to carry on its business as presently
conducted, and has all requisite corporate power and authority
to own, lease and operate its assets, properties and business
and to carry on its business as now being and heretofore
conducted.
(iii) Subject to its pending winding up of affairs and dissolution
which Seller expects to have been effective on or about
December 11, 1997, NCI is a corporation duly organized, validly
existing and in good standing and authorized to do business
under the laws of the State of Ohio, is duly authorized under
applicable law to carry on its business as presently conducted,
and has all requisite corporate power and authority to own,
lease, and operate its assets, properties and business and to
carry on its business as now being and heretofore conducted. As
of the Closing Date, and as a result of said dissolution, NCI
shall not be a legal entity existing under Ohio law but shall
nonetheless be authorized under Ohio law to carry out its
obligations hereunder.
(iv) Subject to its pending winding up of affairs and dissolution
which Seller expects to be effective on or about December 31,
1997, SDLC is a corporation duly organized, validly existing
and in good standing and authorized to do business under the
laws of the State of California, is duly authorized under
applicable law to carry on its business as presently conducted,
and has all requisite corporate power and authority to own,
lease, and operate its assets, properties and business and to
carry on its business as now being and heretofore conducted. As
of the Closing Date, and as a result of said dissolution, SDLC
shall not be a legal entity existing under California law but
shall nonetheless be authorized under California law to carry
out its obligations hereunder.
13
<PAGE>
(v) TBWC is a corporation duly organized, validly existing and in
good standing and authorized to do business under the laws of
the State of Ohio, is duly authorized under applicable law to
carry on its business as presently conducted, and has all
requisite corporate power and authority to own, lease and
operate its assets, properties and business and to carry on its
business as now being and heretofore conducted. As part of the
dissolution of NCI, the capital stock of TBWC will be
distributed to Nationwide.
(b) AUTHORITY.
Seller has all requisite corporate power and authority to execute and
deliver this Agreement and has all requisite power and authority to
carry out its obligations hereunder. The making and performance of
this Agreement by Seller does not and will not violate any provisions
of the Articles of Incorporation, Code of Regulations, Bylaws or other
charter document of Seller or, subject to Seller obtaining those
consents set forth on EXHIBIT "H" hereto, breach or constitute a
default under any material agreement, instrument, order, judgment or
decree to which Seller is a party or by which it is bound or violate
any law or regulation applicable to Seller or the Stations. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Seller and this Agreement
has been duly executed and delivered by Seller and, except for the
consent of The Bank of New York, as agent, pursuant to the Credit
Agreement for the consummation of the transactions contemplated
hereby, which Seller expects to be eliminated in December, 1997 by
virtue of the payoff of all indebtedness under the Credit Agreement
prior to the effective dissolution of NCI and which consent, in any
event, shall not constitute a condition to Seller's closing under this
Agreement, constitutes the valid and legally binding obligation of
Seller, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, rehabilitation, or similar laws affecting
the enforcement of creditors' rights generally. Seller is qualified to
do business as a foreign entity in all of the states in which it
currently is doing business.
(c) COMPLIANCE WITH LAWS.
Except as set forth in the Disclosure Schedule, the operation of the
Stations is not in violation of any applicable laws, rules and
regulations of all Governmental Authorities and Seller has no
Knowledge that any such violation is being or may be alleged. Other
than the pending application for FCC consent to the exchange of
KSLX-FM and KSLX-AM for KEGL-FM, and pending renewal applications set
forth on EXHIBIT "A," there is not now, nor on the Closing Date will
there be any judgment outstanding or litigation or proceeding pending
or, to the Knowledge of Seller, threatened which affects the title or
interest of Seller in or to any of the
14
<PAGE>
Acquired Assets, or its power or right to sell, convey, transfer or
assign the same to Purchaser as hereinafter provided, or which would
prevent or affect the operation and use of the same by Purchaser, as
presently operated and used by Seller, and as contemplated by the
terms of any applicable Government Authorization.
(d) TANGIBLE ASSETS.
As of the date hereof, EXHIBIT "C" attached hereto represents a true
and complete list of all tangible assets, except for those assets
listed on EXHIBIT "K," used or usable in the business and operation of
the Stations to be transferred to Purchaser hereunder. Subject to
(i) Seller's right to dispose of any properties, equipment and assets
in the Ordinary Course of Business (provided, however, that Seller
agrees that the value of all such tangible assets disposed of and not
replaced with an asset of like kind and quality shall not exceed Three
Hundred Thousand Dollars ($300,000) in the aggregate) and (ii)
ordinary wear and tear, on the Closing Date Seller will convey to
Purchaser good and valid title to such tangible assets and any other
properties, equipment and assets acquired by it subsequent to the date
hereof and used in the business or operation of the Stations, free of
any and all Security Interests, except for any Permitted Encumbrances.
(e) CONDITION OF EQUIPMENT.
Except as set forth on the Disclosure Schedule, Acquired Assets
comprised of transmission and studio equipment and other equipment
(mechanical and electrical) are in good and technically sound repair
and working condition with no material defects therein, fit for the
purposes for which they are being utilized and in material compliance
with all current FCC requirements and all other applicable laws and
regulations.
(f) FCC LICENSES.
Except as set forth on the Disclosure Schedule or EXHIBIT "A," the FCC
Licenses are valid and existing authorizations for the purpose of
operating the Stations, issued by the FCC under the Communications Act
of 1934, as amended, and in accordance with the Rules and Regulations
of the FCC, and applications, reports and other disclosures required
by the FCC with respect to the Stations have been duly filed and are
in full force and effect. Seller is an FCC licensee in good standing
and as of the date hereof, except as set forth on the Disclosure
Schedule, there are no proceedings or complaints pending or, to the
Knowledge of Seller, threatened at the FCC in respect to any such FCC
License and Seller is unaware of any facts or circumstances that could
reasonably provide a Basis for any such proceeding or complaint.
Except for Seller's pending application with the FCC to acquire the
FCC License pertaining to KEGL-FM and as set forth on the
15
<PAGE>
Disclosure Schedule or EXHIBIT "A," Seller holds all FCC Licenses
necessary to operate the Stations as presently conducted, and all such
FCC Licenses are in full force and effect. Seller anticipates final
FCC approval of its application to acquire the FCC License pertaining
to KEGL-FM prior to Closing and, except as set forth in the Disclosure
Schedule, Seller knows of no facts which may delay or prevent Seller's
closing on such FCC License prior to the Closing Date. Seller holds
the FCC Licenses necessary to enable Seller to conduct its business of
operating the Stations as presently and at the Closing Date conducted
(except as set forth on the Disclosure Schedule and as limited by the
need to complete the exchange of KSLX-AM and KSLX-FM for KEGL-FM).
Seller has no reason to believe that any FCC License of any of the
Stations will not be renewed in its ordinary course.
(g) PUBLIC INSPECTION FILES.
The public inspection files for the Stations are in material
compliance with the regulations of the FCC relating thereto.
(h) CONTRACTS AND TRADE DEALS.
True and complete copies of all Contracts and all modifications,
amendments and renewals thereof listed on EXHIBIT "D" have been
furnished to Purchaser and, to the Knowledge of Seller, represent all
Contracts of Seller in conjunction with the operation of the Stations
through November 30, 1997, except contracts for the sale of air time
and Trade Deals. All material provisions of the Contracts listed on
EXHIBIT "D" and Trade Deals listed on EXHIBIT "E," and all other
contracts, leases, understandings and agreements which may be
effectuated between December 1, 1997, and the Closing Date relating to
the operations of the Stations have been complied with, and will have
been complied with, in all material respects, as of the Closing Date,
and no default in respect to any duties or obligations required
according to the terms of the Contracts are or will have occurred. If
any Contracts are unilaterally canceled by a party other than Seller,
legal rights, if any, accruing to Seller by virtue of such unilateral
cancellation shall, upon mutual agreement of Seller and Purchaser, be
assigned by Seller to Purchaser in whole or pro rata. To the extent
that the assignment of any Contract may require the consent of a third
party, Seller shall exercise reasonable, good faith efforts to secure
such consent. Subject to Section 7(k) regarding Purchaser's Required
Consents, in the event that Seller is unable to secure such consent,
Purchaser shall not be required to assume performance of said
Contract. EXHIBIT "E" specifies the trade balance of all contracts
listed thereon as of October 31, 1997. All Contracts listed on
EXHIBIT "D" and all Trade Deals listed on EXHIBIT "E" are in full
force and effect and are valid and enforceable against Seller in
accordance with their respective terms and, to the Knowledge of
Seller, no other party thereto is in breach or default, and no event
has occurred which with
16
<PAGE>
notice or lapse of time would constitute a breach or default, or
permit termination, modification, or acceleration, under the
Contracts. EXHIBIT "H" lists all consents required in connection
with the assignment of the Contracts from Seller to Purchaser.
(i) NO INSOLVENCY.
No insolvency proceedings of any character, including, without
limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting Seller
or any of the Acquired Assets are pending or, to the Knowledge of
Seller, threatened, and Seller has made no assignment for the benefit
of creditors, nor taken any action with a view to, or which would
constitute the Basis for, the institution of any such insolvency
proceedings.
(j) EMPLOYEES.
The Disclosure Schedule sets forth a list of the employees of the
Stations as of October 31, 1997, together with the job titles and
annual salaries or estimated annual compensation of such employees as
of such date, which list will be updated through the Closing Date.
From October 9, 1997, through the date hereof, Seller has not
increased the salary of any employee at the Stations other than in the
Ordinary Course of Business. Seller has performed all obligations
required to be performed by it under its agreements and Employee
Benefit Plans with or for the benefit of its employees at the
Stations, and is not in breach or in default of any of the material
terms thereof. The vacation policy of the Seller with respect to the
Stations' employees is set forth in the employee handbook previously
provided to Purchaser. Except as set forth on the Disclosure Schedule,
there is no dispute between Seller and any of its former or current
employees at the Stations related to compensation, severance pay,
vacation or pension benefits, or discrimination.
(k) EMPLOYEE COMPLAINTS.
Except as set forth on the Disclosure Schedule, Seller knows of no
outstanding complaint or charge filed or made to any government civil
rights agency or commission by or on behalf of any employee, former
employee or applicant for employment at the Stations concerning any
alleged illegal employment practice or alleged discrimination in
violation of law with respect to the Stations and Seller is not aware
of any fact or circumstance that could reasonably provide a Basis for
any such charge or complaint.
17
<PAGE>
(l) UNION ACTIVITY.
Except as set forth on the Disclosure Schedule, the employees at the
Stations are not presently represented by and are not seeking
representation through any union or other collective bargaining agent.
(m) EMPLOYEE BENEFITS AND EMPLOYMENT RIGHTS.
Seller shall retain, and Purchaser will not assume, any obligation or
Liability due to or because of any past service Liability of any of
Seller's employees, vested benefits, retirement plan insolvencies or
other obligation under local, state or federal law (including ERISA)
resulting from the acquisition of the Stations or from the employment
of such individuals by Seller. Except for those certain performer
agreements listed on EXHIBIT "D" or such other performer or employment
agreements (or renewals or amendments thereto) permitted under this
Agreement pursuant to Section 7(n), nothing contained in this
Agreement shall confer upon any employee of Seller any right with
respect to employment by Purchaser, nor shall anything herein
interfere with any right Purchaser may have after the Closing Date to
(i) terminate the employment of any of the employees at any time, with
or without cause, or (ii) establish or modify any of the terms or
conditions of employment of the employees in the exercise of
Purchaser's independent business judgment.
(n) TRANSMITTER AND STUDIO SITES.
Except as set forth in the Disclosure Schedule, the Stations'
transmitter and studio sites are not the subject of any complaint,
notice of noncompliance or notice of violation of any applicable
zoning ordinance or building code or regulation of the Federal
Aviation Administration, Federal Occupational Safety and Health
Administration or Federal Environmental Protection Agency, or
regulations of Governmental Authorities and no such violation is known
to exist, and there is no zoning ordinance or building code or use or
occupancy restriction or condemnation proceeding pending or, to the
Knowledge of Seller, threatened which would preclude or impair the use
of any such real property or the improvements thereon by Purchaser, in
the manner and for the purposes for which they are presently used.
(o) ENVIRONMENTAL MATTERS.
Seller hereby represents and warrants to Purchaser that except as
specified in the Disclosure Schedule: (i) no Hazardous Material is or
has been located at, on, in or under or has been released or
transported from the Stations or the Acquired Assets in such a manner
so as to require remediation, removal or cleanup or create other
18
<PAGE>
Liability under, or otherwise in violation of, any Environmental
Requirement or otherwise; (ii) there are no and have been no
underground storage tanks at the Stations or included in the Acquired
Assets; and (iii) Seller has received no notice of violation, lien,
complaint, suit, order or other notice pursuant to any Environmental
Requirement or with respect to any environmental condition of the
Stations or the Acquired Assets. Notwithstanding anything to the
contrary contained in this Agreement, Seller makes no representations
or warranties with respect to Environmental Requirements or
environmental matters generally except as set forth in this Section
5(o).
(p) TAXES.
Seller has paid and discharged all Taxes which are due, including any
such Taxes which, if due and not paid, would interfere with
Purchaser's enjoyment or use of the Acquired Assets, excepting such
Taxes which will not be due until or after the Closing Date and which
are to be prorated between Seller and Purchaser pursuant to the
provisions of Section 4(c) hereof. There are no present disputes as to
Taxes of any nature payable by Seller which in any event could
interfere with Purchaser's enjoyment or use of the Acquired Assets.
Seller does not and will not in the future have any Liability, fixed
or contingent, for any unpaid Taxes whatsoever which could result in
any Security Interests on the Acquired Assets after conveyance thereof
to Purchaser or in any other form of transferee Liability to
Purchaser.
(q) INSURANCE.
Seller has in force adequate fire and other risk insurance covering
the full replacement value of the Real Property and tangible personal
property to be transferred herein and shall maintain such insurance in
full force until the Closing Date. Seller also has in force, and will
maintain until the Closing Date, adequate general public liability
insurance in amounts consistent with broadcasting industry standards
for similar radio broadcast stations. None of the Acquired Assets has
been damaged as a result of fire, explosion, earthquake, accident,
fraud, rain, storm, drought, riot, Act of God or public enemy or any
other casualty, whether or not covered by insurance, which damage has
not been fully repaired or replaced.
(r) REAL PROPERTY.
The Real Property set forth on EXHIBIT "B" hereto constitutes all of
the real property that is used in connection with the Stations (other
than any real property that is the subject of any lease set forth on
EXHIBIT "D" hereof). Except as set forth in the Disclosure Schedule,
and to the Knowledge of Seller, all buildings, structures, towers,
antennae, improvements and fixtures comprising part of the
19
<PAGE>
Real Property or real property leased by Seller are in good and
technically sound operating condition, have no structural, mechanical
or other defects of material significance, and are reasonably suitable
for the purposes for which they are being used. With respect to the
Real Property or real property leased by Seller, Seller has full legal
and practical access thereto and adequate utility service for water
and sewer, telephone, electric and/or gas, and sanitary services for
the conduct of the business and operations of the Stations as
presently conducted. Except as set forth on the Disclosure Schedule,
there is no pending or, to the Knowledge of Seller, threatened
condemnation or other legal proceeding or action of any kind relating
to the Real Property and/or title thereto. Seller will convey to
Purchaser at Closing good, marketable, indefeasible and insurable fee
simple title to the Real Property free and clear of all Security
Interests, other than Permitted Title Exceptions and Permitted
Encumbrances. Seller has good and marketable fee simple title to
the Real Property, free and clear of any Security Interests other than
(i) Permitted Encumbrances, (ii) Title Exceptions and (iii) those
matters set forth in the Disclosure Schedule.
(s) INTANGIBLES.
Except as set forth in the Disclosure Schedule and for any intangible
assets that are leased pursuant to any Contracts set forth on EXHIBIT
"D" hereto, all of the intangible assets used in the operation of the
Stations are owned by Seller free and clear of adverse claims and none
of such intangible assets infringes on the rights of others. No
proceedings are pending against Seller or, to the Knowledge of Seller,
are threatened which challenge the validity of the ownership of the
intangible assets owned by Seller.
(t) COPYRIGHTS AND SERVICE MARKS.
EXHIBIT "F" lists all material, and to Seller's Knowledge, all other
copyrights, patents, patent applications, service marks, trademarks,
trade names, logos, emblems or slogans owned by or in the possession
of Seller or licensed to Seller and used in the conduct of the
business of the Stations as now operated, except for Nationwide's "N
and Eagle" service mark. Seller's right, title and interest in and to
the items listed on EXHIBIT "F" is free and clear of all Security
Interests. Except as set forth on the Disclosure Schedule, there is no
claim pending or, to the Knowledge of Seller, threatened with respect
to the alleged infringement of any such copyright, patent, patent
application, service mark, trademark, trade name, logo, emblem or
slogan owned by another Person, and to the Knowledge of Seller, there
is not any Basis for any such claim.
20
<PAGE>
(u) FINANCIAL STATEMENTS.
The 1996 and 1997 operating and financial statements of the Stations
attached to the Disclosure Schedule reflect fairly the financial
condition and results of operations of the Stations for the periods
during which Seller owned or operated such Stations and said financial
statements are stated in accordance with GAAP, except for Trade Deals;
provided, that the 1997 operating and financial statements are subject
to normal, recurring year-end adjustment. There are no material
liabilities associated with the Stations that are not accurately
reflected in such operating and financial statements or that have not
been otherwise disclosed to Purchaser to the extent this Agreement
requires the disclosure thereof.
(v) ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as set forth in the Disclosure Schedule or as otherwise
contemplated by this Agreement, since December 31, 1996, Seller has
operated the Stations in the Ordinary Course of Business and there has
not been since December 31, 1996 (i) any material adverse change in
the business or financial condition of the Stations; (ii) any damage,
destruction or loss to the Acquired Assets (other than normal wear and
tear) which has not been repaired or replaced; (iii) except in the
Ordinary Course of Business, any sale, lease, mortgage, pledge or
encumbrance of any of the Acquired Assets subject to the limitations
set forth in Section 5(d) above; or (iv) any change in the accounting
methods or in the maintenance or method of preparation of books and
records relating to the Stations.
(w) NO BREACH.
Assuming compliance with the requirements referred to in Section 5(y)
below, and the consent of The Bank of New York, as agent, pursuant to
the Credit Agreement for the consummation of the transactions
contemplated hereby, which Seller expects to be eliminated in
December, 1997 by virtue of the payoff of all indebtedness under the
Credit Agreement prior to the effective dissolution of NCI and which
consent, in any event, shall not constitute a condition to Seller's
closing under this Agreement, neither the execution and the delivery
of this Agreement by Seller, nor the consummation of the transactions
contemplated hereby, will (i) violate any statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authorities or court to which Seller
is subject or any provision of the charter or code of regulations or
by laws, as applicable, of Seller or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any Contract or FCC License to
which Seller is a party or by which it is
21
<PAGE>
bound or to which any of the Acquired Assets is subject (or result in
the imposition of any Security Interest upon any of the Acquired
Assets).
(x) BROKERS FEES.
Seller has retained Gary Stevens & Co. as its broker in connection
with this Agreement. Seller is solely liable for the payment of any
and all fees or commission in connection therewith and Seller hereby
covenants to pay such fees and will indemnify Purchaser for any
misrepresentation contained in this Section 5(x).
(y) GOVERNMENTAL AUTHORITIES' APPROVALS.
The execution and delivery by the Seller of this Agreement, the
performance by the Seller of its obligations hereunder, and the
consummation by the Seller of the transactions contemplated hereby do
not require the Seller to obtain any consent, approval or action of,
or make any filing with or give any notice to, any Governmental
Authority, except for (i) the consent of the FCC and any such consent
set forth on EXHIBIT "H" hereto, and (ii) the expiration or early
termination of the applicable waiting period under the H-S-R Act.
(z) PARTNERSHIP INTERESTS.
True and complete copies of the Partnership Agreement of Shoreview FM
Group and the Senior Road Tower Partnership Agreement have been
furnished to Purchaser. NCI is currently a partner in, and as of the
Closing Date, TBWC will be a partner in, the Shoreview FM Group
partnership and TBWC is a participating partner in the Senior Road
Tower Group (the "Partnership Interests"). The only business in which
the Shoreview FM Group is engaged in is providing tower and antenna
facilities for television and radio broadcast stations and the only
businesses in which the Senior Road Tower Partnership is engaged in
are providing tower and antenna facilities for television and radio
broadcast stations and oil drilling. Each partnership agreement is in
full force and effect and enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and general
principles of equity (regardless of whether considered in a proceeding
at law or in equity); Seller has not received any notice (written or
oral) of cancellation, termination or dissolution of either
partnership agreement and there exists no event of default or
occurrence, condition or act on the part of Seller which constitutes
or would constitute (with notice or lapse of time or both) a breach of
or default under either partnership agreement and to the Knowledge of
Seller there exists no event of default or occurrence, condition or
act on the part of any other party to either partnership agreement
which constitutes or would constitute (with
22
<PAGE>
notice or lapse of time or both) a breach of or default under either
partnership agreement.
(aa) ALL NECESSARY ASSETS.
Except as set forth on the Disclosure Schedule, the Acquired Assets
constitute all of the assets, property and business used or needed
(other than the Excluded Assets) in carrying on the business and
operation of the Stations as presently conducted. Other than the
Excluded Assets, there are no other rights, assets or property owned,
used or needed in the operation of the Stations as presently
conducted.
(bb) LITIGATION.
Except as set forth on the Disclosure Schedule, there is no judgment,
award, order, writ, injunction, arbitration decision or decree
relating to the conduct of the business or the operation of the
Stations or any of the Acquired Assets, and there is no litigation,
administrative action, arbitration, proceeding or investigation
pending or, to the Knowledge of Seller, threatened against Seller or
the Stations in any federal, state or local court, or before any
administrative agency or arbitrator (including, without limitation,
any proceeding which seeks the forfeiture of, or opposes the renewal
of, any of the FCC Licenses), or before any other tribunal duly
authorized to resolve disputes. In particular, but without limiting
the generality of the foregoing, except as set forth in the Disclosure
Schedule, there are no applications, complaints or proceedings pending
or, to the Knowledge of Seller, threatened before the FCC or any other
governmental organization with respect to the FCC Licenses or the
business or operations of the Stations.
(cc) UNDISCLOSED LIABILITIES.
No Liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, relating to the Stations or the Acquired
Assets exists which could, after the Closing, result in any form of
transferee liability against Purchaser or subject the Acquired Assets
to any Security Interests (other than Permitted Encumbrances or
Permitted Title Exceptions) or otherwise affect the full, free and
unencumbered use of the Acquired Assets by Purchaser.
(dd) RECENT DEVELOPMENTS.
(i) On November 4, 1997, the board of directors and shareholder
of NCI approved the winding up and voluntary dissolution of
NCI, to have been effective on or about December 11, 1997. As
part of the dissolution, NCI has assigned, conveyed or
otherwise transferred, or is in the process of assigning,
23
<PAGE>
conveying or otherwise transferring, to Nationwide all of the
assets and properties relating to the Stations owned or
operated by it, including NCI's right to close on the
exchange of KEGL-FM for KSLX-FM and AM, except for its
partnership interest in the Shoreview FM Group general
partnership, which NCI has assigned, or prior to the Closing
Date will assign, to TBWC. As a result, it is expected that
NCI will not be selling, transferring, assigning or conveying
Acquired Assets at the Closing. In addition, on November 5,
1997, NCI and Nationwide filed an application with the FCC to
approve the transfer of such NCI Stations to Nationwide.
(ii) On November 4, 1997, the board of directors, and on November 5,
1997, the shareholder of SDLC, approved the winding up and
voluntary dissolution of SDLC, to be effective on or about
December 31, 1997. As part of the dissolution, SDLC has
assigned, conveyed or otherwise transferred, or is in the
process of assigning, conveying or otherwise transferring, to
Wausau all of the assets and properties relating to KXGL-FM. As
a result, it is expected that SDLC will not be selling,
transferring, assigning or conveying Acquired Assets at the
Closing. In addition, on November 5, 1997, SDLC and Wausau
filed an application with the FCC to approve the transfer of
KXGL-FM to Wausau.
(ee) REPRESENTATIONS AND WARRANTIES.
The representations and warranties made by Seller in this Agreement
are not, and will not be on the Closing Date, false or misleading
individually or in the aggregate with respect to any material fact and
will not omit to state a material fact required to be stated therein
when necessary in order to make the statements contained therein not
materially false or misleading.
6. PURCHASER'S REPRESENTATIONS AND WARRANTIES.
Except as set forth in the disclosure schedule accompanying this Agreement (the
"Purchaser's Disclosure Schedule"), Purchaser hereby represents and warrants to
the Seller the following, which representations and warranties, together with
all other representations and warranties of Purchaser in this Agreement and the
Exhibits and Schedules hereto, shall be true and correct as of the Closing Date
as if expressly restated on said date.
(a) ORGANIZATION.
Purchaser is a corporation duly organized, validly existing and in
good standing and authorized to do business under the laws of the
State of Ohio, is duly authorized under applicable law to carry on its
business as presently conducted, and has all requisite corporate power
24
<PAGE>
and authority to own, lease and operate its assets, properties and
business and to carry on its business as now being and heretofore
conducted.
(b) AUTHORITY.
Purchaser has all requisite corporate power and authority to execute
and deliver this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Purchaser and this Agreement
has been duly executed and delivered by Purchaser and constitutes the
valid and legally binding obligation of Purchaser, enforceable against
it in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, rehabilitation, or similar laws affecting the enforcement
of creditors' rights generally.
(c) NO BREACH.
Assuming compliance with the requirements referred to in Section 6(h)
below, neither the execution and the delivery of this Agreement by
Purchaser, nor the consummation of the transactions contemplated
hereby, will (i) violate any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
Governmental Authorities or court to which Purchaser is subject or any
provision of the charter or by laws of Purchaser or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement or license to which Purchaser is a party or by which it is
bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets.
(d) FCC APPROVAL.
Except as set forth on the Purchaser's Disclosure Schedule, there are
no proceedings, complaints, notices of forfeiture, claims, or
investigations pending or, to Purchaser's knowledge, threatened,
against any, or in respect of any, of the radio broadcast stations
licensed to Purchaser, or any of its Affiliates, or any of its or
their officers, directors or stockholders, that could materially
impair the qualifications of Purchaser to become the licensee of the
Stations or delay the FCC's processing of the assignment application
as referenced in Section 10 hereof, and Purchaser knows of no reason
why the FCC (i) would not approve an application for the assignment of
25
<PAGE>
the FCC Licenses to it without material delay or (ii) would require
any type of waiver before approving an application for the assignment
of the FCC Licenses to it.
(e) NO CONFLICTING AGREEMENTS.
There are not any agreements, contracts, understandings or commitments
which will restrain or inhibit the right of Purchaser to enter into
this Agreement, make any representations or warranties herein and/or
consummate any of the transactions contemplated herein.
(f) NO LITIGATION.
There are no suits, legal proceedings or investigations of any nature
pending or, to Purchaser's knowledge, threatened against or affecting
it that would affect Purchaser's ability to carry out the transactions
contemplated by this Agreement, and Purchaser is unaware of any facts
which could reasonably result in any such proceeding.
(g) FINANCIAL APPROVALS.
Purchaser, as of the Closing Date, shall have obtained all financial
approvals necessary to consummate the transactions contemplated
herein, if any, and shall be financially able to consummate the
transactions contemplated herein.
(h) GOVERNMENTAL AUTHORITIES' APPROVALS.
The execution and delivery by the Purchaser of this Agreement, the
performance by the Purchaser of its obligations hereunder, and the
consummation by the Purchaser of the transactions contemplated hereby
do not require the Purchaser to obtain any consent, approval or action
of, or make any filing with or give any notice to, any Governmental
Authority, except for (i) the consent of the FCC and any such consent
set forth on EXHIBIT "H" hereto, and (ii) the expiration or early
termination of the applicable waiting period under H-S-R Act.
(i) BROKERS FEES.
Purchaser has not retained a broker or other adviser in connection
with this Agreement. Purchaser will indemnify Seller for any
misrepresentation contained in this Section 6(i).
26
<PAGE>
7. COVENANTS PENDING CLOSING.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
(a) GENERAL.
Each of the Parties shall cooperate fully with one another in taking
any reasonable actions (including, without limitation, reasonable
actions to obtain the required consent of any Governmental Authority
or any third party) necessary or helpful to accomplish the
transactions contemplated by this Agreement, including but not limited
to the satisfaction of any condition to closing set forth herein.
(b) GOVERNMENTAL AUTHORITIES' APPROVALS.
Each of the Parties shall use all reasonable efforts, and shall
cooperate with each other in such efforts, to obtain the approvals of
all Governmental Authorities required to be obtained by Seller or
Purchaser in order to consummate the transactions contemplated by this
Agreement. Except with respect to such related transactions as may be
necessary under the FCC's ownership rules, Seller and Purchaser shall
make all necessary filings as soon as practicable, but in no event
later than ten (10) business days from the date of this Agreement,
including, without limitation, those required by the H-S-R Act and the
FCC in order to facilitate prompt consummation of the transactions
contemplated by the Agreement. In addition, subject to Section 10
hereof, Seller and Purchaser shall each use all reasonable efforts,
and shall cooperate fully with each other, to comply as soon as
practicable with all governmental requirements applicable to, or
necessary for the consummation of, the transactions contemplated
hereby. Seller and Purchaser shall provide such information and
communications to Governmental Authorities as such Governmental
Authorities may request. Each of the Parties shall provide to the
other Party copies of all applications filed or submitted with
Governmental Authorities in connection with this Agreement and shall
keep the other Party apprised of the status of matters relating to
completion of the transactions contemplated hereby.
(c) ACCESS TO INFORMATION.
Seller shall give to Purchaser and to Purchaser's Representatives
during normal business hours in a manner so as not to interfere with
the normal business operations of Seller or the Stations, throughout
the period prior to the Closing, access to all of Seller's properties,
books, contracts, commitments and records with respect to the
Stations; provided, however, that Purchaser may not visit the Stations
without the express written consent of Seller, nor may Purchaser
27
<PAGE>
contact any current employee of Seller without the express written
consent of NCI. All contacts with Seller must be made through
Steven P. Berger, President, Willard W. Hoyt, Senior Vice
President-Treasurer-Administration, Daniel S. Morris, Vice
President-Radio, Ronald (Clancy) P. Woods, Vice President-Radio,
Bertram S. Goldman, Vice President-Engineering, Sandra L. Rich,
Director-Administration and Assistant Secretary, and Lori Kaiser,
Corporate Controller of NCI and all contacts with Seller with
respect to legal matters must be made through Mark B. Koogler, Vice
President-Associate General Counsel of Nationwide. During such
period, Seller shall furnish to Purchaser all such information
concerning the affairs of the Stations as Purchaser may reasonably
request. Pending the Closing hereunder, Purchaser and Purchaser's
Representatives will comply with the provisions of the
Confidentiality Agreement between NCI and Purchaser, dated
October 9, 1997.
(d) CONDUCT OF BUSINESS.
Seller shall take all reasonable efforts to maintain the business
reputation and financial condition of the Stations, and to preserve
their customers and suppliers. During the period from the date of
this Agreement to the Closing Date, the Stations, including without
limitation, the amount of on-air promotion, contests or the dollar
value of prizes at the Stations, shall be operated in the Ordinary
Course of Business and in the same manner as operated prior to the
execution hereof. On the Closing Date, there shall be outstanding no
Liability, judgment or litigation that could result in any Security
Interest upon, or otherwise substantially adversely affect, the
Acquired Assets. Seller shall not change the call letters of the
Stations.
(e) INSURANCE.
Seller will use its reasonable efforts to maintain in effect insurance
coverage against loss of or damage to the Acquired Assets in amounts
and kinds not less favorable in any material respect than those
currently in effect and use its reasonable efforts to maintain the
same through the Closing Date.
(f) BOOKS OF ACCOUNT.
Seller will maintain and continue to keep its books, accounts and
records with respect to the Stations and the Acquired Assets in the
Ordinary Course of Business.
(g) EXCLUSIVITY.
Seller agrees that, commencing on the date hereof through the Closing
or earlier termination of this Agreement, Purchaser shall have the
exclusive right to consummate the transactions contemplated herein,
28
<PAGE>
and during such exclusive period, Seller agrees that, except as set
forth in Sections 5(a) and (dd) above or at the request of Purchaser,
neither Seller, nor any officer, executive employee or other
representative or agent of Seller: (a) will initiate, solicit or
encourage, directly or indirectly, any inquiries, or the making or
implementation of any proposal or offer with respect to a merger,
acquisition, consolidation or similar transaction involving, or any
purchase of, all or any portion of the Acquired Assets or any
securities of NCI, SDLC or TBWC (any such inquiry, proposal or offer
being hereinafter referred to as an "Acquisition Proposal" and any
such transaction being hereinafter referred to as an "Acquisition");
(b) will engage in any negotiations concerning, or provide any
Confidential Information or data to, or have any discussions with, any
person relating to an Acquisition Proposal, or otherwise facilitate
any effort or attempt to make or implement an Acquisition Proposal; or
(c) will continue any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition
Proposal or Acquisition and will take the necessary steps to inform
the individuals or entities referred to above of the obligations
undertaken by them in this Section 7(g). Seller shall promptly notify
Purchaser in the event an Acquisition Proposal is received by Seller.
(h) NOTICE OF DEVELOPMENTS.
Each Party will give prompt written notice to the other of any
material matter causing a breach of any of its own representations and
warranties in Sections 5 or 6 above, as applicable.
(i) COMPLIANCE WITH LAWS.
Seller will comply with all material and applicable federal, state and
local laws, ordinances and regulations, including, but not limited to,
the Communications Act of 1934, as amended, and the Rules and
Regulations of the FCC.
(j) MAINTENANCE OF ACQUIRED ASSETS.
Seller will keep at its own expense in a normal historical state of
repair and operating efficiency the Acquired Assets. On the Closing
Date, the operation of the Stations and the technical equipment shall
be in material compliance with the FCC Licenses and the FCC's Rules
and Regulations and all other applicable laws and regulations. Except
as set forth on the Disclosure Schedule, no citations, complaints or
petitions shall be pending or, to Seller's Knowledge, threatened
against Seller.
29
<PAGE>
(k) REQUIRED CONSENTS.
Seller will use its reasonable good faith efforts to obtain all of the
consents noted on EXHIBIT "H" hereto, and in connection therewith
promptly to commence and thereafter diligently prosecute application
for all such consents, waivers and approvals required herein, and to
keep Purchaser currently informed of the status thereof and of any
difficulties encountered in obtaining same and to advise Purchaser of
all communications relevant to the transactions provided for in this
Agreement received by Seller from the FCC subsequent to the date
hereof, and to furnish the Purchaser copies of all written
communications and documents filed with the FCC by Seller and received
by Seller from the FCC subsequent to the date hereof. Marked with an
asterisk on EXHIBIT "H" are those consents the receipt of which is a
condition precedent to Purchaser's obligation to close under this
Agreement (the "Purchaser's Required Consents"). Marked with two
asterisks on EXHIBIT "H" are those consents the receipt of which is a
condition precedent to Seller's obligation to close under this
Agreement (the "Seller's Required Consents").
(l) TITLE INSURANCE.
Seller shall, within sixty (60) days after the execution of this
Agreement, at its expense, (i) commission a qualified title company
to prepare and provide to Purchaser commitments for ALTA title
insurance policies ("Title Commitments") with respect to the Real
Property and leased Primary Tower Sites, and Seller shall provide a
copy of each Title Commitment to Purchaser, together with complete
copies of all documents relating to the title exceptions referred to
in each Title Commitment, and (ii) commission a qualified surveyor
(licensed in the states where the Real Property or each leased Primary
Tower Site is located) to prepare and provide to Purchaser surveys
("Surveys") of the Real Property and the leased Primary Tower Sites
depicting the location of all title exceptions. Purchaser shall have
the right to disapprove of any title exceptions (whether or not
disclosed on any Title Commitment) which in Purchaser's reasonable
discretion have an adverse impact on the Real Property or any leased
Primary Tower Site or the Purchaser's intended use thereof and
Purchaser shall notify Seller of any such disapproval within fifteen
(15) days after receipt of both the Title Commitments and Surveys by
Purchaser. All title exceptions set forth in the Title Commitments
and any supplemental reports or updates to the Title Commitments and
not disapproved by Purchaser within the time period provided herein
shall constitute "Permitted Title Exceptions." Prior to the Closing,
Seller may , at its expense, remove or cause to be removed all
disapproved exceptions relating to the Real Property or any leased
Primary Tower Site (the "Disapproved Matters") or, in the alternative,
obtain title insurance in a form satisfactory to Purchaser insuring
against the effect of such Disapproved Matters; provided that Seller
30
<PAGE>
shall not be obligated to spend more than Five Million Dollars
($5,000,000) at any one (1) site in its attempt to remove or insure
over any such Disapproved Matters (other than monetary liens and
encumbrances which Seller shall be required to remove regardless of
amount thereof). Seller shall notify Purchaser within ten (10) days
after receipt of the notice of Disapproved Matters whether it intends
to remove the same. If Seller is unable to remove or endorse over any
such Disapproved Matters, or if Seller exercises its right not to
remove one or more Disapproved Matters (because Seller would be
required to spend more than Five Million Dollars ($5,000,000) at such
site) or if Seller does not provide an alternative tower site with
comparable signal coverage and without a gap in signal coverage,
Purchaser may elect (i) to terminate this Agreement or (ii) to waive
such Disapproved Matters (such Disapproved Matters shall then be
deemed to be Permitted Title Exceptions), in which event Purchaser
shall receive a credit at the Closing in the amount, if any, by which
Five Million Dollars ($5,000,000) at any one (1) site exceeds the
amount paid by Seller (with the approval of Purchaser, which approval
shall not be unreasonably withheld) with respect to such site to third
parties in connection with removing or endorsing over the Disapproved
Matters at such site, to compensate Purchaser for the reduction in
value of such Real Property or leased Primary Tower Site resulting
from such Disapproved Matters.
(m) ENVIRONMENTAL STUDY.
Within sixty (60) days after the execution of this Agreement,
Purchaser shall have the right, at its expense, to commission a
qualified engineering firm to conduct Phase I environmental
assessments of the Real Property and tower sites leased by Seller
(the "Assessments"). If Purchaser notifies Seller in writing within
fifteen (15) days after its receipt of the Assessments and the
Surveys, that the Assessments disclose any conditions contrary to the
representations of Seller contained in Section 5 (and with respect to
Seller's representation contained in Section 5(o)(i) only, without
regard to any disclosures contained in Seller's Disclosure Schedule),
or any potential that such conditions may exist, then Purchaser may
conduct or have conducted, at its expense, additional testing to
confirm or negate the existence of any such conditions. If such
additional testing confirms the existence of any such conditions, then
(i) Seller shall reimburse Purchaser for the cost of the applicable
Assessment and additional testing and (ii) Seller will undertake
appropriate remedial action such that its representations and
warranties are true and correct as of the Closing Date; provided that
Seller shall not be obligated to spend more than Five Million Dollars
($5,000,000) at any one (1) site in its attempt to cure all of such
conditions. If Seller exercises the right not to cure such conditions
because the cost would exceed Five Million Dollars ($5,000,000) at any
one (1) site, Purchaser may elect (i) to terminate this Agreement or
(ii) waive such environmental conditions, in which event Purchaser
31
<PAGE>
shall receive a credit at the Closing in the amount, if any, by which
Five Million Dollars ($5,000,000) at any one (1) site exceeds the
amount paid by Seller (with the approval of Purchaser which approval
shall not be unreasonably withheld) with respect to such site to third
parties in connection with the remedial action at such site.
(n) CONTRACTS.
Seller shall only be permitted to enter into or terminate, and
Purchaser shall only be required to assume pursuant to Section 2(d) of
this Agreement, (a) contracts entered into in the Ordinary Course of
Business (other than employment agreements) (i) which do not
individually exceed Twenty Five Thousand Dollars ($25,000), and (ii)
which can be terminated by notice of twelve (12) months or less
without consideration, penalty or obligation; and (b) contracts
(including employment agreements) which Purchaser has agreed in
writing to assume. If Seller intends to enter into a contract which
exceeds the parameters set forth in (a) above, Seller shall
immediately notify either Jerome L. Kersting or David H. Crowl of
Purchaser to obtain Purchaser's written consent, which may be withheld
in Purchaser's judgment reasonably exercised; provided, if either of
such individuals does not grant or deny Purchaser's written consent
within three (3) business days after receipt of Seller's written
notice, Purchaser shall be deemed to have given its consent to Seller
entering into such contract.
(o) INTERIM STATEMENTS.
Until the Closing Date, within thirty (30) days of the end of each
calendar month, Seller shall deliver to Purchaser an unaudited
statement of revenue and expenses of the Stations and a balance sheet
for the month then ended (collectively, the "Interim Statements").
Seller shall also furnish to Purchaser any and all information
customarily prepared by Seller concerning the financial condition and
results of operations of the Stations, including periodic NCI local
and national billing reports prepared in accordance with past
practices.
(p) WAIVER OF OPTION.
Nationwide shall cause NCI to provide written notice to Wausau, with a
copy to Purchaser, of NCI's waiver of its right to exercise either
its Asset Option or Stock Option with respect to SDLC as provided for
in that certain Option Agreement dated September 30, 1996, by and
between NCI and Wausau.
32
<PAGE>
(q) TRANSFER OF PARTNERSHIP INTERESTS.
Seller will use all reasonable efforts to obtain all necessary
consents to transfer its Partnership Interests to Purchaser as of the
Closing Date.
(r) CLOSING OF KEGL-FM.
Seller will use all reasonable efforts to close the exchange of
KSLX-AM and FM, licensed to Scottsdale, Arizona, for KEGL-FM,
licensed to Fort Worth, Texas or, in the event such closing does
not take place prior to the Closing Date, Seller shall assign its
rights in connection therewith to Purchaser.
(s) CONSULTING AGREEMENTS.
As of the Closing Date, Purchaser shall enter into three (3) separate
three (3) year consulting agreements with Willard W. Hoyt, Daniel S.
Morris and Ronald P. Woods, respectively, each such agreement
substantially in the form of EXHIBIT "I" hereto.
(t) SALARY INCREASES.
Seller shall grant no salary increase to any employee of the Stations,
except normal merit, promotional and similar increases granted in the
Ordinary Course of Business and consistent with prior practice.
(u) BOOKS AND RECORDS.
Purchaser shall maintain the books of accounts and records of the
Stations in the usual, regular and ordinary manner, in accordance with
Seller's standard accounting practices.
(v) REPRESENTATIONS AND WARRANTIES.
Each Party shall promptly notify the other Parties of any change in
any of the information contained in their respective representations
and warranties contained herein.
(w) CONSENTS TO ASSIGNMENT.
To the extent that any contract being assumed by Purchaser hereunder
is not capable of being sold, assigned, transferred, delivered or
subleased without the waiver or consent of any third person (including
a Governmental Authority), or if such sale, assignment, transfer,
delivery or sublease or attempted sale, assignment, transfer, delivery
33
<PAGE>
or sublease would constitute a breach thereof or a violation of any
law or regulation, this Agreement and any assignment executed pursuant
hereto shall not constitute a sale, assignment, transfer, delivery or
sublease or an attempted sale, assignment, transfer, delivery or
sublease thereof. Subject to the provisions of Section 7(k) hereof,
in those cases where consents, assignments, releases and/or waivers
have not been obtained at or prior to the Closing to the transfer and
assignment of such contracts, this Agreement and any assignment
executed pursuant hereto, to the extent permitted by law, shall
constitute an equitable assignment of all of Seller's rights,
benefits, title and interest in and to the contracts, and where
necessary or appropriate, Purchaser shall be deemed to be the Seller's
agent for the purpose of completing, fulfilling and discharging all of
the Seller's rights and liabilities arising after the Closing Date
under such contracts. Seller shall use its best efforts to provide
Purchaser with the financial and business benefits of such contracts
(including, without limitation, permitting assignee to enforce any
rights of Seller arising under such contracts), and Purchaser shall,
to the extent Purchaser is provided with the benefits of such
contracts, assume, perform, and in due course pay and discharge all
debts, obligations and liabilities of Seller under such contracts to
the extent that Purchaser was to assume those obligations pursuant to
the terms hereof.
(x) BUILDING AND MECHANICAL INSPECTION.
Within thirty (30) days after the execution of this Agreement,
Purchaser may, at its sole expense, commission a reputable engineer to
conduct an inspection of the Real Property and any real property
subject to assumed leases. If Purchaser notifies Seller in writing
within such 30-day period that the inspection discloses a condition
that constitutes a material breach of the representations and
warranties of Seller contained in Section 5, Seller shall promptly
commence remedial action at its expense to reasonably cure the
condition and reasonably cure such condition prior to the Closing.
(y) AUDITED FINANCIAL STATEMENTS.
Seller shall cooperate, and use its reasonable best efforts to cause
its independent accountants to reasonably cooperate, with Purchaser in
order to enable Purchaser to have Seller's or Purchaser's independent
accountants prepare audited financial statements for the Stations for
the most recently completed fiscal year-end or such other period
deemed appropriate by Purchaser. Without limiting the generality of
the foregoing, Seller agrees that it will: (i) consent to the use of
such audited financial statements in any registration statement or
other document filed by Purchaser or any of its affiliates under the
Securities Act or the Exchange Act, and (ii) execute and deliver, and
cause its officers to execute and deliver, such "representation"
letters as are customarily delivered in connection with audits,
34
<PAGE>
substantially in the form of EXHIBIT "N" and as Seller's or
Purchaser's independent accountants may reasonably request under the
circumstances.
(z) ESTOPPEL CERTIFICATES.
Seller shall use its best efforts to obtain estoppel certificates, in
a form reasonably acceptable to Purchaser, from each of the lessors
under the real estate leases being assumed by Purchaser.
8. PURCHASER'S PERFORMANCE.
The obligations of Purchaser hereunder are subject at its election to
fulfillment of the following conditions as of the Closing Date:
(a) The representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects at and as
of the Closing Date, except for representations and warranties made as
of a specified date, which shall be true and correct in all material
respects as of such date, and the covenants and agreements of Seller
to be performed on or prior to the Closing Date pursuant to the terms
of this Agreement shall have been duly performed, and Seller shall
have delivered to Purchaser a certificate, dated as of the Closing
Date, signed by a duly authorized officer of Seller (without personal
Liability to such officer) to that effect.
(b) The FCC Licenses shall be assigned and transferred to Purchaser and
shall contain no adverse modifications of the terms of such
authorizations as they presently exist.
(c) No suit, action or other proceeding against Seller shall be pending
before any court or governmental agency of competent jurisdiction in
which it is sought to restrain or prohibit any of the transactions
contemplated by this Agreement or to obtain damages or other relief in
connection with this Agreement or the transactions contemplated
hereby.
(d) Seller shall have obtained all of the Purchaser's Required Consents.
Any and all Governmental Authorities' approvals necessary to
consummate the transactions contemplated by this Agreement shall have
been received without the imposition of any conditions adverse to
Purchaser or any of its Affiliates (other than conditions related to
Purchaser's ownership of other radio broadcast stations) and the
waiting period under the H-S-R Act shall have been terminated early or
expired.
(e) One or more Title Commitments covering title to the Real Property and
leasehold interests of Seller in the Primary Tower Sites and being
assumed by Purchaser
35
<PAGE>
shall have been issued to Purchaser as of the Closing at normal
premiums (such premiums to be paid by Purchaser), showing title
vested in Purchaser free of all Security Interests except Permitted
Title Exceptions.
(f) All Security Interests (except for Permitted Encumbrances) on the
Acquired Assets shall have been released.
(g) Seller shall have obtained and delivered to Purchaser the Surveys as
provided in Section 7(o).
(h) Purchaser shall have received an unqualified auditor's report from
either Purchaser's or Seller's independent accountants, as well as the
necessary consents, as provided in Section 7(y).
(i) Seller must deliver to Purchaser the Purchaser Required Consents,
including recordable, insurable assignments of, and consents to the
assignment of, the real estate leases relating to all transmitter and
tower sites assumed by Purchaser hereunder.
(j) No application shall be pending for renewal of any of the FCC
Licenses, the FCC shall have granted renewals of the FCC Licenses for
the full terms authorized by law without conditions materially adverse
to Purchaser, and such grants (except with respect to KEGL-FM) shall
have become Final Orders as defined in Section 10(a); provided that,
such requirements of renewal grants, or of such grants becoming Final
Orders, may be waived by Purchaser in its sole discretion.
(k) Seller shall have executed and delivered to Purchaser the documents
required herein to be executed and delivered by it.
(l) Any divestiture by Purchaser or any of its Affiliates of one (1) or
more of the Stations or one (1) or more radio broadcast stations other
than the Stations required by the FCC, Antitrust Division of the
United States Department of Justice or the Federal Trade Commission in
order to permit, approve or otherwise allow the consummation of the
transactions contemplated by this Agreement shall have been completed
or shall be completed simultaneously with the Closing, including, but
not limited to, any such divestiture to one (1) or more divestiture
trusts.
(m) Seller shall have executed a lease amendment of the existing lease
with respect to the primary tower site for WNCI-FM so that the lease
will be extended on the same terms and conditions for ten (10) years,
followed by an additional ten (10) year term on commercially
reasonable terms, so that the lease will not expire prior to
36
<PAGE>
December 31, 2017, and the rights under such lease shall be fully
assignable to Purchaser so that on the Closing Date, Purchaser
shall be entitled to reasonable access and exclusive control of
such primary tower site.
(n) Seller shall have executed a new lease with respect to the primary
tower site for KDMX-FM, and (i) such lease will be on commercially
reasonable terms; (ii) the term of such lease shall be acceptable to
Purchaser (which acceptance may be withheld in the event the term of
such lease expires less than five (5) years after the Closing Date,
but shall be given if the term of such lease expires five (5) years or
more after the Closing Date); provided, however, Seller shall use
reasonable best efforts to obtain an initial term of such lease that
expires not less than ten (10) years after the Closing Date and a
commercially reasonable renewal term, and (iii) the rights under such
lease shall be fully assignable to Purchaser such that on the Closing
Date, Purchaser shall be entitled to fully enjoy all such lease
rights.
(o) Seller shall have executed a new lease with respect to the primary
tower site for KEGL-FM, and (i) such lease will be on commercially
reasonable terms; (ii) the term of such lease shall be acceptable to
Purchaser (which acceptance may be withheld in the event the term of
such lease expires less than five (5) years after the Closing Date,
but shall be given if the term of such lease expires five (5) years or
more after the Closing Date); provided, however, Seller shall use
reasonable best efforts to obtain an initial term of such lease that
expires not less than ten (10) years after the Closing Date and a
commercially reasonable renewal term, and (iii) the rights under such
lease shall be fully assignable to Purchaser such that on the Closing
Date, Purchaser shall be entitled to fully enjoy all such lease
rights.
(p) Seller shall have provided Purchaser with written confirmation from
Seller's landlord that the existing lease with respect to the primary
tower site for KXGL-FM will not expire prior to June 30, 2004, and the
rights under such lease shall be fully assignable to Purchaser such
that on the Closing Date, Purchaser shall be entitled to fully enjoy
all such lease rights.
9. SELLER'S PERFORMANCE.
Seller's performance is subject at its election to fulfillment of the
following conditions as of the Closing Date:
(a) The Purchase Price shall have been paid in accordance with the terms
of this Agreement, and Purchaser shall have executed all of the
documents required of it herein.
(b) The representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects at and as
of the Closing Date, except for representations and warranties made as
of a specified date, which shall be true and correct in all material
37
<PAGE>
respects as of such date, and the covenants and agreements of
Purchaser to be performed on or prior to the Closing Date pursuant to
the terms of this Agreement shall have been duly performed, and
Purchaser shall have delivered to Seller a certificate, dated as of
the Closing Date, signed by a duly authorized officer of Purchaser
(without personal Liability to such officer) to that effect.
(c) No litigation, investigation or proceeding of any kind shall have been
instituted which would adversely affect the ability of Purchaser to
comply with the provisions of this Agreement.
(d) Seller shall have received all of the Seller's Required Consents. Any
and all Governmental Authorities' approvals necessary to consummate
the transactions contemplated by this Agreement shall have been
received without the imposition of any conditions adverse to Seller or
any of its Affiliates and the waiting period under the H-S-R Act shall
have terminated early or expired.
10. FCC AND H-S-R APPROVAL AND APPLICATION.
(a) Consummation of the transactions contemplated hereunder is conditioned
upon the FCC having given its prior consent in writing to the
assignment to Purchaser of the FCC Licenses without the imposition of
adverse conditions to Purchaser or any of its Affiliates, except as
set forth below in Sections 10(c), (d) and (e), and such consent
having become a Final Order(s). For purposes of this Agreement, a
consent shall be deemed a Final Order(s) when it is no longer subject
to timely review by the FCC or by any court or, in the event of
reconsideration upon its own motion or otherwise by the FCC or an
appeal by any person to any court, upon the decision of such body
becoming no longer subject to review. The condition of finality may
be waived jointly by Seller and Purchaser.
(b) On November 13, 1997, the Parties filed an application requesting FCC
consent to the transactions herein involved (the "November 13
Application"). The November 13 Application contemplated that a further
application or applications would be made with the FCC such that
Purchaser will comply with the FCC's rules regarding multiple
ownership of radio stations. The Parties agree to prosecute the
November 13 Application and all subsequent applications diligently and
in good faith.
(c) Notwithstanding anything in this Agreement to the contrary, in the
event the FCC, as part of its review of the transactions contemplated
hereby, notifies Purchaser that the FCC has formally determined
(orally or in writing) that Purchaser's ownership of the Stations and
the radio broadcast stations currently owned or operated by Purchaser
38
<PAGE>
may or would violate applicable laws and regulations and require a
disapproval, in whole or in part, of the transactions contemplated
hereby, Purchaser agrees that it shall take all steps necessary to
comply with such requirements as the FCC may require in order to
approve the consummations of the transactions contemplated by this
Agreement, including but not limited to Purchaser's divestiture of the
Stations or radio broadcast stations other than the Stations.
(d) Consummation of the transactions contemplated hereunder is conditioned
upon early expiration or termination of the waiting period under the
H-S-R Act. Notwithstanding anything in this Agreement to the contrary,
in the event the Antitrust Division of the United States Department of
Justice or the Federal Trade Commission, as part of their review of
the transactions contemplated hereby pursuant to the H-S-R Act,
challenges Purchaser's acquisition of the Stations, Purchaser agrees
that it shall take all steps necessary to resolve such challenge to
the transactions contemplated by this Agreement, including but not
limited to Purchaser's divestiture of the Stations or radio broadcast
stations other than the Stations.
(e) If the FCC has given its consent(s) in writing to the assignment of
the FCC Licenses as set forth in subsection (a) above, but such
consent(s) has not become a Final Order(s), then the Parties hereby
agree that, at Purchaser's option, the condition that the consent(s)
be a Final Order(s) as set forth in subsection (a) above shall be
waived by the Parties and, for purposes of Section 11, the condition
to closing set forth in Section 10 shall be satisfied and the Closing
may take place in accordance with Section 11 hereof; provided,
however, that (i) in no event shall the Closing take place prior to
April 1, 1998 unless such consents have become Final Orders; and (ii)
from and after April 1, 1998, Seller may, if there shall be a
challenge made to the FCC consent(s) to the assignment of the FCC
Licenses prior to such consent(s) becoming a Final Order(s), delay the
Closing of the transactions contemplated by this Agreement if and for
so long as its outside FCC counsel shall provide Seller and Purchaser
with a written opinion to the effect that the challenge has raised
material non-frivolous issues which could require substantive review
of the merits of the challenge by the FCC and/or any reviewing court
and which reasonably could be expected to result in reversal or
rescission of the FCC consent(s) to the assignment of the FCC
Licenses.
11. DATE, NOTICE AND PLACE OF CLOSING.
The closing of the sale and purchase of the Acquired Assets (the "Closing")
shall be mutually agreed upon by Seller and Purchaser, but, in the absence
of such agreement, shall not be more than ten (10) business days after all
of the conditions to closing set forth in Sections 8, 9 and 10 hereof are
satisfied or waived (the "Closing Date"). In the event of the inability of
the Parties to agree on the Closing Date, Seller or Purchaser shall have
39
<PAGE>
the right to fix the same on ten (10) days' prior written notice to the
other, the first such notice given being binding. The closing shall be held
at the offices of Seller at One Nationwide Plaza, Columbus, Ohio.
12. CONTROL OF STATIONS.
Until the Closing Date, Seller shall have ultimate control of the Stations,
their respective equipment and operation. Purchaser shall be entitled,
however, to notice of any significant problems or developments with the
purpose that an uninterrupted and efficient transfer to Purchaser of the
Stations and the Acquired Assets may be accomplished.
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations, warranties, covenants and agreements contained in this
Agreement shall be true and correct on and as of the Closing Date as though
such representations, warranties, covenants and agreements were made on and
as of such time (except those given as of a specified date), and all such
representations, warranties, covenants and agreements shall survive the
Closing hereunder; provided, however, that neither Party shall have any
Liability for a misrepresentation or breach of warranty unless written
notice of claim therefor specifying with particularity the facts upon which
such claim is based has been given to such Party by the other Party hereto
within eighteen (18) months from the Closing Date.
14. RIGHTS OF INDEMNIFICATION.
a. It is understood and agreed that Purchaser does not assume, and shall
not be obligated to pay, any Liabilities of Seller under the terms of
this Agreement or otherwise and shall not be obligated to perform any
obligations of Seller of any kind or manner except by reason of
Contracts expressly assigned and assumed by Purchaser hereunder, and,
with respect to Contracts, only such obligations which arise
subsequent to the Closing Date or as is herein provided. Seller hereby
agrees to jointly and severally indemnify and hold Purchaser, its
successors and assigns, harmless from and against:
i. Liabilities arising from the operation of the Stations prior to
the Closing Date, including, but not limited to, any Tax
Liability from such operation and claims arising or required to
be performed prior to the Closing Date under any Contract
assumed by Purchaser hereunder; and
ii. Any and all damage or deficiency resulting from a
misrepresentation, breach of warranty or nonfulfillment of a
covenant or an agreement on the part of Seller under this
Agreement, or from a misrepresentation in or omission from any
certificate or other instrument furnished to Purchaser pursuant
40
<PAGE>
to this Agreement, or in connection with any of the
transactions contemplated hereby; and
iii. the Retained Liabilities; and
iv. Any and all actions, suits, proceeding, damages, assessments,
judgments, costs and expenses, including reasonable attorneys'
fees, incurred by Purchaser as a result of Seller's failure or
refusal to settle, compromise or defend any claim incident to
the foregoing provisions.
b. If any claim for which Purchaser is entitled to indemnity is asserted
against Purchaser by a third party, Purchaser shall promptly give
Seller notice thereof and give Seller an opportunity to defend the
same with counsel of Seller's choice (subject to the approval of
Purchaser, not to be unreasonably withheld or delayed) at Seller's
expense. Purchaser, at Seller's expense, shall provide reasonable
cooperation in connection with such defense. In the event that Seller
desires to compromise or settle any such claim and such compromise
will adversely affect Purchaser, Purchaser shall have the right to
consent to such settlement or compromise; provided, however, that if
such compromise or settlement is for money damages only and will
include a full release and discharge of Purchaser, and Purchaser
withholds its consent to such compromise or settlement, Purchaser and
Seller agree that (i) Seller's Liability shall be limited to the
amount of the proposed settlement and upon payment of such sum to
Purchaser Seller shall thereupon be relieved of any further Liability
with respect to such claim, and (ii) from and after such date,
Purchaser will undertake all legal costs and expenses in connection
with any such claim. If Seller fails to defend any claim within a
reasonable time, Purchaser shall be entitled to assume the defense
thereof, and Seller shall be liable to Purchaser for its expenses
reasonably incurred, including attorneys' fees and payment of any
settlement amount or judgment.
c. It is understood and agreed that Seller does not assume, and shall not
be obligated to pay, any Liabilities of Purchaser under the terms of
this Agreement or otherwise. Purchaser hereby agrees to indemnify and
hold Seller, its successors and assigns, harmless from and against:
i. Liabilities arising from the operation of the Stations on or
after the Closing Date, including, but not limited to, any Tax
Liability resulting from such operation and claims arising or
required to be performed on or after the Closing Date under any
Contract assumed by Purchaser hereunder; and
ii. Any and all damage or deficiency resulting from a
misrepresentation, breach of warranty or nonfulfillment of a
covenant or an agreement on the part of Purchaser under this
41
<PAGE>
Agreement, or from a misrepresentation in or omission from any
certificate or other instrument furnished to Seller pursuant to
this Agreement, or in connection with any of the transactions
contemplated hereby; and
iii. the Assumed Liabilities; and
iv. Any and all actions, suits, proceedings, damages, assessments,
judgments, costs and expenses, including reasonable attorneys'
fees, incurred by Seller as the result of Purchaser's failure
or refusal to settle, defend or compromise any claim incident
to any of the foregoing provisions.
d. If any claim for which Seller is entitled to indemnity is asserted
against Seller by a third party, Seller shall notify Purchaser
promptly and give Purchaser an opportunity to defend the same with
counsel of Purchaser's choice (subject to the approval of Seller, not
to be unreasonably withheld or delayed) at Purchaser's expense.
Seller, at Purchaser's expense, shall provide reasonable cooperation
in connection with such defense. In the event that Purchaser desires
to compromise or settle any such claim and such compromise will
adversely affect Seller, Seller shall have the right to consent to
such settlement or compromise; provided, however, that if such
compromise or settlement is for money damages only and will include a
full release and discharge of Seller, and Seller withholds its consent
to such compromise or settlement, Purchaser and Seller agree that
(i)Purchaser's Liability shall be limited to the amount of the
proposed settlement and upon payment of such sum to Seller Purchaser
shall thereupon be relieved of any further Liability with respect to
such claim, and (ii) from and after such date, Seller will undertake
all legal costs and expenses in connection with any such claims. If
Purchaser fails to defend any claim within a reasonable time, Seller
shall be entitled to assume the defense thereof, and Purchaser shall
be liable to Seller for its expenses reasonably incurred, including
attorneys' fees and payment of any settlement amount or judgment.
e. Notwithstanding any other provision hereof, in the event either Party
shall default in its obligations hereunder, such Party shall have a
period not to exceed fifteen (15) business days after notice thereof
by the other Party in which to cure said default.
f. Notwithstanding the foregoing, the right of Purchaser and Seller to
obtain indemnification from the other shall be subject to the
following provisions:
i. Seller shall not be obligated to indemnify Purchaser pursuant
to Section 14(a) unless the aggregate amount owed by Seller to
Purchaser pursuant to Section 14(a) exceeds Two Million Dollars
($2,000,000), in which event Seller shall be required to
42
<PAGE>
indemnify Purchaser for the entire amount owed which exceeds
One Million Dollars ($1,000,000), but which is less than the
Purchase Price.
ii. Purchaser shall not be obligated to indemnify Seller pursuant
to Section 14(c) unless the aggregate amount owed by Purchaser
to Seller pursuant to Section 14(c) exceeds Two Million Dollars
($2,000,000), in which event Purchaser shall be required to
indemnify Seller for the entire amount owed which exceeds One
Million Dollars ($1,000,000), but which is less than the
Purchase Price.
15. ALTERNATIVE DISPUTE RESOLUTION.
(a) Except as otherwise provided herein, in case any disagreement of
whatever nature arising out of or relating to this Agreement or the
breach, termination, enforceability or validity thereof ("Dispute")
shall arise between the Parties hereto, the Parties shall first
attempt in good faith to resolve the Dispute promptly by negotiation
between executives who have authority to settle the Dispute. If the
Dispute cannot be resolved through negotiation, either party may
initiate mediation of the Dispute as hereinafter provided.
(b) If the Dispute has not been resolved by negotiation as hereinabove
provided, the Parties shall make a good faith attempt to settle the
Dispute by mediation pursuant to the provisions of this Section 15
before resorting to arbitration. Unless the Parties agree otherwise,
the mediation shall be conducted in accordance with the Commercial
Mediation Rules of the AAA then in effect by a mediator who (i) has
the qualifications and experience set forth in paragraph (c) of this
Section 15 and (ii) is selected as provided in paragraph (d) of this
Section 15.
(c) Unless the Parties agree otherwise, the mediator shall be a lawyer (i)
who is or has been a partner in (or counsel to) a highly respected law
firm for at least fifteen (15) years as a practicing attorney
specializing in either general commercial litigation or general
corporate and commercial matters and (ii) who has had both training
and experience as a mediator.
(d) Either party (the "Initiating Party") may initiate mediation of the
Dispute by giving the other party (the "Recipient Party") written
notice (a "Mediation Notice") setting forth a list of the names and
resumes of qualifications and experience of three impartial persons
who the Initiating Party believes would be qualified as a mediator
pursuant to the provisions of paragraph (c) hereof. Within fifteen
(15) days after the delivery of the Mediation Notice, the Recipient
Party shall give a counter-notice (the "Counter-Notice") to the
Initiating Party in which the Recipient Party may designate a person
43
<PAGE>
to serve as the mediator from among the three (3) persons listed by
the Initiating Party in the Mediation Notice (in which event such
designated person shall be the mediator). If none of the persons
listed in the Mediation Notice is designated by the Recipient Party to
serve as the mediator, the Counter-Notice should set forth a list of
the names and resumes of three (3) impartial persons who the Recipient
Party believes would be qualified as a mediator pursuant to the
provisions of paragraph (c) hereof. Within ten (10) days after the
delivery of the Counter-Notice, the Initiating Party may designate a
person to serve as the mediator from among the three (3) persons
listed by the Recipient Party in the Counter-Notice (in which event
such designated person shall be the mediator). If the Parties cannot
agree on a mediator from the three (3) impartial nominees submitted by
each party, each party shall strike two (2) names from the other
Party's list, and the two (2) remaining persons on both lists will
jointly select as the mediator any person who has the qualifications
and experience set forth in paragraph (c) hereof. If they are unable
to agree, then the mediator will be selected by the President of the
AAA.
(e) Within thirty (30) days after the mediator has been selected as
provided above, both Parties and their respective attorneys shall meet
with the mediator for one (1) mediation session of at least six (6)
hours, it being agreed that each Party representative attending such
mediation session shall be an executive with authority to settle the
Dispute. If the Dispute cannot be settled at such mediation session
or at any mutually agreed continuation thereof, either Party may give
the other and the mediator a written notice declaring the mediation
process at an end, in which event the Dispute shall be resolved by
arbitration as hereinafter provided.
(f) The costs of the mediation shall be shared equally between the
Parties.
(g) If the Dispute is not settled by negotiation or mediation, then the
Dispute shall be decided by binding and final arbitration.
Arbitration shall be initiated by either Party giving written notice
to arbitrate to the other Party, stating the question to be arbitrated
and the name of the arbitrator selected by that Party. Within ten
(10) days of the date of said notice to arbitrate, the other Party
shall select and give written notice of its arbitrator to the
initiating Party. The two arbitrators so selected shall select a
third arbitrator and give written notice within five (5) days after
the second arbitrator is chosen. The arbitration shall be conducted
solely by the third arbitrator, who shall hear evidence and make an
award within twenty (20) days after the notice of selection of the
third arbitrator is given to the Parties, which award, when signed by
the third arbitrator, shall be final. If either Party shall refuse or
neglect to appoint an arbitrator within ten (10) days after the other
Party shall have appointed an arbitrator and given written notice to
arbitrate to the other Party, requiring such Party to appoint an
arbitrator, then the arbitrator so appointed by the first Party shall
have power to proceed to arbitrate and determine the matters of
disagreement as if he were an arbitrator appointed by both the Parties
hereto for that purpose, and his award in writing signed by him shall
be final; provided that such award shall be made within fifteen (15)
days after such refusal or neglect of the other Party to appoint an
arbitrator. The Party against which such award is made shall pay all
costs and expenses of the arbitration.
44
<PAGE>
(h) Any arbitration pursuant to this Section 15 shall be conducted in
Columbus, Ohio, and governed by the Federal Arbitration Act and
administered by the American Arbitration Association under its
Commercial Arbitration Rules and its Supplementary Procedures for
Large, Complex Disputes, provided that persons eligible to be selected
as arbitrators shall be limited to attorneys-at-law who (i) are on the
AAA's Large, Complex Case Panel or a CPR Panel of Distinguished
Neutrals, or who have professional credentials similar to the
attorneys listed on such AAA and CPR panels, and (ii) have practiced
law for at least fifteen (15) years as an attorney specializing in
either general commercial litigation or general corporate and
commercial matters. The arbitrator shall base its award on applicable
law and judicial precedent and include in such award a statement of
the reasons upon which the award is based. Judgment on the award
rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
16. RISK OF LOSS.
The risk of any loss, damage or destruction to any of the Acquired Assets
from fire or other casualty or cause shall be borne by Seller at all times
prior to the Closing hereunder. Upon the occurrence of any loss or damage
to any of the Acquired Assets as a result of fire, casualty or other causes
prior to the Closing Date, Seller shall immediately notify Purchaser of
same in writing stating with particularity the extent of loss or damage
incurred, the cause thereof, if known, and the extent to which restoration,
replacement and repair of the property or assets lost or destroyed will be
reimbursed under any insurance policy with respect thereto. Prior to the
Closing, Seller shall, at its expense, restore, replace and/or repair the
Acquired Assets which have been damaged or suffered loss; provided that
Seller shall not be obligated to spend more than Five Million Dollars
($5,000,000) in the aggregate in its attempt to restore, replace and/or
repair such damage or loss. If Seller exercises the right not to restore,
replace and/or repair such damage or loss because the aggregate cost would
exceed Five Million Dollars ($5,000,000), Purchaser may elect (i) to
terminate this Agreement or (ii) to waive such conditions, in which event
Purchaser shall receive a credit of Five Million Dollars ($5,000,000)
toward the Purchase Price (less the amount of any proceeds received by
Seller under any insurance policy and paid to Purchaser by Seller), and
Seller shall assign to Purchaser all rights under any insurance claim(s)
covering the loss(es).
17. SELLER'S PERFORMANCE AT CLOSING.
At the Closing hereunder, Seller shall:
(a) Deliver to Purchaser an executed General Conveyance, Bill of Sale,
Assignment and Assumption, substantially in the form of EXHIBIT "J"
hereto, which General Conveyance, Bill of Sale, Assignment and
Assumption shall include, but not be limited to, an assignment to
Purchaser of (i) the FCC Licenses, (ii) good and marketable title to
all tangible personal property described on EXHIBIT "C" hereof
(subject to changes permitted herein), (iii) the Contracts and Trade
Deals described on EXHIBIT "D" and EXHIBIT "E" hereof, subject to
45
<PAGE>
changes permitted herein, (iv) the copyrights and service marks listed
on EXHIBIT "F" hereof, and (v) all right, title and interest of Seller
in and to the intangible assets; all of which shall be conveyed free
and clear of all Security Interests except the Permitted Encumbrances.
(b) Deliver to Purchaser one or more executed general warranty deeds,
conveying to Purchaser good and marketable title, in fee simple, to
the Real Property, free and clear of all Security Interests except the
Permitted Encumbrances and the Permitted Title Exceptions.
(c) Deliver to Purchaser at the Stations the files, records and logs
referred to in Section 2(g) hereof.
(d) Deliver to Purchaser a certified copy of the resolutions of the Board
of Directors of Seller authorizing the execution of this Agreement and
the consummation of the transactions described herein.
(e) Deliver to Purchaser a certificate signed by a duly authorized officer
of Seller and dated as of the Closing Date to the effect that all of
Seller's representations and warranties set forth in this Agreement
are true and correct in all material respects as of and as if made on
the Closing Date, and that all covenants, terms and conditions to be
complied with and performed by Seller have been complied with or
performed in all material respects.
(f) Deliver to Purchaser such instruments and documents required pursuant
to Section 8, and such other instruments and documents as may be
reasonably requested by Purchaser to effectuate the transactions
contemplated hereby.
(g) Pay to Purchaser an amount equal to the Accrued 1998 Vacation of all
Seller's employees hired by Purchaser pursuant to Section 20 hereof.
(h) A written opinion of Seller's FCC counsel in the form of EXHIBIT "L"
dated as of the Closing Date.
18. PURCHASER'S PERFORMANCE AT CLOSING.
At the Closing hereunder, Purchaser shall:
(a) Pay, by wiring immediately available funds, the Purchase Price.
(b) Deliver to Seller an executed counterpart of the General Conveyance,
Bill of Sale, Assignment and Assumption substantially in the form of
EXHIBIT "J" hereto, and such other instruments as Seller may
reasonably require evidencing Purchaser's
46
<PAGE>
assumption and agreement to perform all of the Contracts assigned
to it hereunder and evidencing Purchaser's acceptance and conveyance
of title to the personal property and other assets assigned and
conveyed to it hereunder.
(c) Deliver to Seller a certified copy of the resolutions of Purchaser's
Board of Directors duly authorizing the execution and delivery of this
Agreement and the consummation of the transactions described herein.
(d) Deliver to Seller a certificate signed by a duly authorized officer of
Purchaser and dated as of the Closing Date to the effect that all of
Purchaser's representations and warranties set forth in this Agreement
are true and correct in all material respects as of and as if made on
the Closing Date, and that all covenants, terms and conditions to be
complied with and performed by Purchaser have been complied with or
performed in all material respects.
(e) Deliver to Seller such instruments and documents required pursuant to
Section 9 and such other documents and instruments as may be
reasonably requested by Seller to effectuate the transactions
contemplated hereby.
(f) Deliver to the individuals identified in Section 7(s) those consulting
agreements described in Section 7(s) substantially in the form of
EXHIBIT "I."
19. EVENTS OF TERMINATION; REMEDIES
(a) FAILURE TO CLOSE WITHOUT FAULT.
In the event that (i) each of the Parties hereto shall have materially
satisfied all of the obligations of such Party under this Agreement
which were to have been satisfied by such Party prior to the Closing
Date and shall not have materially breached any representation,
warranty, covenant or agreement of such Party contained in this
Agreement, but (ii) the Closing shall nevertheless fail to take place
(without any fault on the part of any Party) prior to December 31,
1998 (the "Termination Date") because one or more conditions to the
Closing in Sections 8, 9 or 10 hereof shall not have been satisfied or
waived, this Agreement shall terminate at the option of either Party,
and the Deposit, together with any interest earned thereon, shall be
returned to Purchaser; provided, however, if the failure to close
results from the failure of the FCC to grant its written consent(s) to
the assignment of the FCC Licenses as contemplated by Section 10(a)
and Section 10(e), a Party may not terminate this Agreement pursuant
to Section 19(a), if such Party would not be allowed to terminate this
Agreement pursuant to Section 19(b).
47
<PAGE>
(b) FCC APPROVAL.
If the FCC has failed or refused to grant its written consent(s) to
the assignment of the FCC Licenses as contemplated by Section 10(a)
and Section 10(e) and/or to any other transactions contemplated to be
consummated hereunder by the Termination Date, the Party not at fault
or whose qualifications are not in issue shall have the option of
terminating this Agreement.
(c) MUTUAL CONSENT.
This Agreement may be terminated at any time by mutual written
agreement of Purchaser and Seller.
(d) PARTY NOT AT FAULT.
(i) Seller may terminate this Agreement if (a) any of the
conditions set forth in Section 9 or 10 of this Agreement have
become incapable of fulfillment (or are otherwise not
fulfilled) on or before the Termination Date, or if Purchaser
has breached in any material respect any of its representations
and warranties contained herein or defaults in any material
respect in the observance or in the due and timely performance
of any of its covenants or agreements contained herein, (b)
Seller has given Purchaser thirty (30) days notice of such
matter, (c) Purchaser has failed to cure such matter within
that period, and (d) Seller's representations and warranties
are not materially incorrect and Seller is not in material
breach of its agreements and covenants under this Agreement.
(ii) Purchaser may terminate this Agreement if (a) any of the
conditions set forth in Section 8 or 10 of this Agreement have
become incapable of fulfillment (or are otherwise not
fulfilled) on or before the Termination Date, or if Seller has
breached in any material respect any of its representations and
warranties contained herein or defaults in any material respect
in the observance or in the due and timely performance of any
of its covenants or agreements contained herein, (b) Purchaser
has given Seller thirty (30) days notice of such matter, (c)
Seller has failed to cure such matter within that period, and
(d) Purchaser's representations and warranties are not
materially incorrect and Purchaser is not in material breach of
its agreements and covenants under this Agreement.
(iii) Purchaser may terminate this Agreement under the conditions set
forth in Sections 7(l), 7(m) and 16.
Except as set forth in Section 19(e) below, the termination of this
Agreement as
48
<PAGE>
set forth in this Section 19 shall not relieve any Party from any
Liability it may have hereunder for a breach of this Agreement prior
to termination.
(e) LIQUIDATED DAMAGES.
If this Agreement is terminated by Seller due to a material breach by
Purchaser of its representations, agreements or covenants under this
Agreement (and if the Seller is not then in breach or default under
this Agreement), then Seller shall be entitled to the Deposit amount
of Thirty Million Dollars ($30,000,000) as liquidated damages, it
being agreed that the liquidated damages shall constitute full payment
for any and all damages suffered by Seller by reason of Purchaser's
failure to close this Agreement. Seller and Purchaser agree in
advance that Seller's actual damages if Purchaser materially breaches
its obligations hereunder would be difficult to ascertain and that the
amount of the liquidated damages paid to Seller is a fair and
equitable amount to reimburse Seller for damages sustained from the
termination of this Agreement for the reason stated in the first
sentence of this Section 19(e).
(f) SPECIFIC PERFORMANCE.
Seller agrees that the Acquired Assets include unique property that
cannot be readily obtained on the open market and that monetary
damages may not be adequate to compensate Purchaser for its injury if
this Agreement is not specifically enforced in the event of a material
default by Seller. Purchaser shall therefore be entitled, in lieu of
the right to collect money damages as provided in Section 14, to
obtain specific performance of the terms of this Agreement. If any
action is brought by Purchaser to enforce this Agreement, Seller shall
waive the defense that there is an adequate remedy at law.
20. SELLER'S EMPLOYEES.
Seller shall be responsible for providing any notice required by the WARN
Act and shall do so prior to the Closing Date, but in no event prior to
February 1, 1998, after consultation with the Purchaser to allow a
reasonable period of time for Purchaser to interview Seller's employees at
the Stations for possible employment. Purchaser may also interview
employees with employment contracts to be assumed by Purchaser hereunder.
Seller shall provide notice to Purchaser of its notice under the WARN Act,
and Purchaser shall have ten (10) business days from the date of Seller's
notice to interview such employees and make offers of employment. Prior to
the date Purchaser intends to make offers of employment to Seller's
employees, Purchaser shall notify Seller of the names of those employees to
whom Purchaser makes such offers, including the salary and other
compensation offered to each such employee, and Purchaser shall use its
reasonable best efforts to promptly notify Seller of the names of those
employees of Seller who accept
49
<PAGE>
such offers of employment with Purchaser after acceptance of such offers,
but in all events prior to the Closing Date. Purchaser shall have the
sole and exclusive right to establish the wage, any other compensation
and all other terms and conditions of employment and accrued employee
benefits and vacation payable to all such employees hired by Purchaser as
of the Closing Date. As of the Closing Date, Seller covenants and agrees
to pay to Purchaser an amount equal to all of the Accrued 1998 Vacation
of Seller's employees hired by Purchaser as of the Closing Date and
Purchaser covenants and agrees to allow all such employees to take the
vacation days represented by the Accrued 1998 Vacation with respect to
each such employee after the Closing Date. All employees of Seller who
are offered and accept employment with Purchaser shall be considered
terminated employees of Seller and shall not be entitled to receive from
Purchaser credit for any accrued vacation days, sick days, personal days,
paid time off or other such days, other than Accrued 1998 Vacation;
provided, however, that any such hired employees shall be entitled to
receive credit under Purchaser's employee benefit plans for time served
with Seller. Seller acknowledges and agrees that it, and not Purchaser, is
and shall after Closing remain solely responsible for any and all wages,
compensation, commissions, bonuses, severance pay, insurance, supplemental
pension, deferred compensation, retirement and any other benefits,
premiums and claims, due, to become due, committed, accrued or otherwise
promised to any person who, as of the Closing Date, is a retiree, former
employee, or current employee of Seller, relating to the period up to the
Closing Date. Purchaser, as purchaser of the Acquired Assets, shall assume
no employee benefit plans, programs, policies, or practices, whether or
not set forth in writing, maintained by Seller at any time.
21. ASSET ACQUISITION STATEMENT.
The Parties shall each file Internal Revenue Service Form 8594 in a timely
manner after the Closing Date and in accordance with the purchase price
allocation determined in accordance with Section 3(a) hereof.
22. EXHIBITS AND SCHEDULES.
All Exhibits and Schedules attached to this Agreement shall be deemed part
of this Agreement and incorporated herein as if fully set forth herein.
23. BENEFIT AND ASSIGNMENT.
(a) This Agreement shall be binding upon and shall inure to the benefit of
the Parties hereto and their respective successors and permitted
assigns. All covenants, agreements, statements, representations,
warranties and indemnities in this Agreement by and on behalf of any
of the Parties hereto shall bind and inure to the benefit of their
respective successors and permitted assigns.
50
<PAGE>
(b) Purchaser shall have the right to assign and/or delegate all or any
portion of its rights and obligations under this Agreement, including
without limitation assignments as collateral, provided that no such
assignment and/or delegation shall relieve Purchaser of its
obligations hereunder in the event that its assignee fails to perform
the obligations delegated. Specifically, but not in limitation of the
immediately preceding sentence, in the event that Purchaser determines
that in order to make certain the consummation of the transactions
contemplated hereby on or before the Termination Date, it would be
advisable for its designee/assignee to purchase directly from Seller
all or some portion of the Acquired Assets, Seller shall take such
actions as are reasonably requested by Purchaser to effectuate the
same, including but not limited to cooperating in any appropriate
filings with the FCC or other Governmental Authorities. Provided,
further, that in the event Purchaser finds it necessary or is required
to provide to a third party a collateral assignment of Purchaser's
interest in this Agreement and/or any related documents, Seller will
cooperate with Purchaser and any third party requesting such
assignment, including but not limited to signing a consent and
acknowledgment of such assignment.
(c) Seller shall not have the right to assign and/or delegate all or any
portion of its rights and obligations under this Agreement.
24. CONSTRUCTION.
This Agreement shall be construed and enforced in accordance with the laws
of the State of Ohio, excluding the choice of law rules thereof.
25. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
26. NOTICES.
All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing (which shall include
notice by telex or facsimile transmission) and shall be deemed to have been
duly made and received when personally served, or when delivered by Federal
Express or a similar overnight courier service, expenses prepaid, or, if
sent by telex, graphic scanning or other facsimile communications
equipment, delivered by such equipment, addressed as set forth below:
51
<PAGE>
(a) If to Seller, then to:
Nationwide Mutual Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Attention: Executive Vice President-Chief Investment Officer
Telecopier No.: (614) 249-2223
With a copy (which shall not constitute notice) to:
Office of General Counsel
One Nationwide Plaza
Columbus, Ohio 43216
Attention: Mark B. Koogler, Vice President-Associate General Counsel
Telecopier No.: (614) 677-0330
(b) If to Purchaser, then to:
Jacor Communications, Inc.
50 East RiverCenter Blvd.
12th Floor
Covington, Kentucky 41011
Attn: Chief Executive Officer
Telecopier No.: (606 ) 655-9345
With a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Telecopier No.: (513) 651-3836
Any Party may alter the address to which communications are to be sent by
giving notice of such change of address in conformity with the provisions
of this Section providing for the giving of notice.
27. ADDITIONAL DOCUMENTS.
Prior to, on or subsequent to the Closing Date, each Party to this
Agreement shall, at the request of the other, furnish, execute and deliver
such documents and instruments as the requesting Party shall reasonably
require as necessary or desirable to implement and consummate the
transactions contemplated hereunder.
52
<PAGE>
28. PARAGRAPH HEADINGS.
Paragraph headings herein have been inserted for reference only and shall
not be deemed to limit or otherwise affect, in any manner, or be deemed to
interpret, in whole or part, any of the terms or provisions of this
Agreement.
29. ENTIRE AGREEMENT.
This Agreement, together with the Exhibits and Schedules attached hereto,
and that certain Confidentiality Agreement dated October 9, 1997, contains
all of the terms agreed upon by the Parties with respect to the sale of the
Stations and supersedes all prior agreements and understandings between the
Parties and may not be changed or terminated orally. No attempted change,
termination or waiver of any of the provisions hereof shall be binding
unless in writing and signed by the party against whom the same is sought
to be enforced.
30. EXPENSES.
Except as otherwise expressly provided in this Agreement, each party shall
bear its own legal, accounting and other expenses in connection with the
negotiation, preparation and consummation of this Agreement and the
transactions contemplated hereby, except that, if a party's qualifications
are challenged before or by the FCC, that party shall be responsible for
reimbursing any expenses reasonably incurred by the other party in
cooperating with the first party's responses to such challenge.
31. ATTORNEYS' FEES.
Except as otherwise provided herein, in the event of a dispute between or
among any of the Parties hereto arising out of or related to this Agreement
or the interpretation or enforcement of this Agreement, the prevailing
party or Parties shall be entitled to recover reasonable attorneys' fees,
costs and expenses from the other Party or Parties.
32. CONFIDENTIALITY.
(a) Subject to the requirements of applicable law, Purchaser and Seller
shall each keep confidential all information obtained by it with
respect to the other Parties hereto in connection with this Agreement
and the negotiations preceding this Agreement ("Confidential
Information"); provided that, the Parties hereto may furnish such
Confidential Information to its employees, agents and representatives
who need to know such Confidential Information (including its
financial and legal advisers, its banks and other lenders)
(collectively, "Representatives"). Each Party hereto shall, and shall
cause each of such Party's Representatives to, use the Confidential
Information solely in connection with the transactions contemplated by
this Agreement. If the transactions contemplated hereby are not
consummated for any reason, each Party shall return to such other
Party hereto, without retaining a copy thereof, any schedules,
documents or other written information
53
<PAGE>
obtained from such other Party in connection with this Agreement and
the transactions contemplated hereby.
(b) Notwithstanding anything contained in Section 32(a), no Party shall be
required to keep confidential or return any Confidential Information
which: (a) is known or available through other lawful sources, not
bound by a confidentiality agreement with the disclosing Party; (b) is
or becomes publicly known through no fault of the receiving Party or
its agents; (c) is required to be disclosed pursuant to an order or
request of a judicial or governmental authority (provided the
disclosing Party is given reasonable prior notice of the order or
request and the purpose of the disclosure); or (d) is developed by the
receiving Party independently of the disclosure by the disclosing
Party.
(c) Notwithstanding anything contained in this Agreement to the contrary,
any and all Confidential Information may be disclosed by Purchaser to
any prospective assignee of Purchaser, provided that, such prospective
assignee agrees to abide by the terms of this Section 32 with regard
to such Confidential Information disclosed to it.
33. PUBLIC ANNOUNCEMENTS.
Notwithstanding anything to the contrary in this Agreement, Purchaser and
its Affiliates, and Seller and its Affiliates shall, in accordance with
their respective legal obligations, including but not limited to filings
permitted or required by the Securities Act of 1933 and the Securities and
Exchange Act of 1934, the NASDAQ National Market, the New York Stock
Exchange and other similar regulatory bodies, make (i) such press releases
and other public statements and announcements ("Releases") as each Party
deems to be necessary and appropriate in connection with this Agreement
and the transactions contemplated hereby, and (ii) any and all statements
each Party deems in its sole judgment to be appropriate in any and all
filings, prospectuses and other similar documents. Each Party shall use
reasonable efforts to provide the other with a copy of any Releases before
any publication of same; provided that, if the content of the Release is,
in the sole judgment of the disclosing Party reasonably exercised,
substantially similar to the content of a Release previously provided to
the other Party, the disclosing Party shall have no obligation to provide
the other Party with a copy of such Release. Each Party may make comments
to the other with respect to any such Releases, provided however, the
disclosing Party is not required to incorporate any such comments into the
Releases.
34. FORCE MAJEURE.
Notwithstanding anything to the contrary herein, if the performance of any
obligation under this Agreement on the part of any Party is prevented or
delayed by an event of force majeure, such as wars (whether declared or
not), insurrections, earthquakes, fires, floods or other natural
catastrophes, acts of a government in its sovereign capacity, blockades or
embargoes, provided such event is without the fault of or beyond the
54
<PAGE>
reasonable control of the Party invoking force majeure, the Party's duty to
perform those obligations affected by the event of force majeure shall be
suspended for a period equal to the delay directly resulting from the
occurrence of such event. In the event of force majeure, no Party shall be
responsible for any damage, increased costs or loss which the other Party
may sustain by reason of such a failure or delay of performance. In the
event that any Party wishes to invoke this force majeure provision, that
Party shall, within seven (7) days after the occurrence of the event of
force majeure has become known to that Party, send written notice of such
event to the other parties. The Party affected shall take appropriate
measures to minimize or remove the effects of force majeure and, within the
shortest possible time, attempt to resume performance of the obligations
affected by the event of force majeure.
35. GUARANTY OF PERFORMANCE.
(a) GUARANTY OF PERFORMANCE.
To induce Seller to enter into this Agreement and to consummate the
transactions, and in consideration of the benefits which will inure to
Jacor from the consummation of such transactions, Jacor hereby
unconditionally represents, warrants and covenants that it is the
surety for and guarantees the performance of all obligations of
Citicasters hereunder for the benefit of Seller.
(b) ORGANIZATION.
Jacor is a corporation duly organized, validly existing and in good
standing and authorized to do business under the laws of the State of
Florida, is duly authorized under applicable law to carry on its
business as presently conducted, and has all requisite corporate power
and authority to own, lease and operate its assets, properties and
business and to carry on its business as now being and heretofore
conducted.
(c) AUTHORITY.
Jacor has all requisite corporate power and authority to execute and
deliver this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Jacor and this Agreement has
been duly executed and delivered by Jacor and constitutes the valid
and legally binding obligation of Jacor, enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
rehabilitation, or similar laws affecting the enforcement of
creditors' rights generally.
55
<PAGE>
(d) NO BREACH.
Neither the execution and the delivery of this Agreement by Jacor, nor
the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
Governmental Authorities or court to which Jacor is subject or any
provision of the charter or by laws of Jacor or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement or license to which Jacor is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition
of any Security Interest upon any of its assets).
(e) NO CONFLICTING AGREEMENTS.
There are not any agreements, contracts, understandings or commitments
which will restrain or inhibit the right of Jacor to enter into this
Agreement, make any representations or warranties herein and/or
consummate any of the transactions contemplated herein.
(f) NO LITIGATION.
There are no suits, legal proceedings or investigations of any nature
pending or, to Jacor's knowledge, threatened against or affecting it
that would affect Jacor's ability to carry out the transactions
contemplated by this Agreement, and Jacor is unaware of any facts
which could reasonably result in any such proceeding.
56
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have hereunto set their respective
hands and seals as of the day and year first above written.
SELLER:
NATIONWIDE MUTUAL INSURANCE COMPANY
By: /s/ Robert J. Woodward, Jr.
-------------------------------------------------
Its: Executive Vice President-Chief Investment Officer
-------------------------------------------------
EMPLOYERS INSURANCE OF WAUSAU A MUTUAL COMPANY
By: /s/ Robert J. Woodward, Jr.
-------------------------------------------------
Its: Executive Vice President-Chief Investment Officer
-------------------------------------------------
NATIONWIDE COMMUNICATIONS INC.
By: /s/ Steve Berger
-------------------------------------------------
Its: President
-------------------------------------------------
SAN DIEGO LOTUS CORP.
By: /s/ Steve Berger
-------------------------------------------------
Its: President
-------------------------------------------------
THE BEAK AND WIRE CORPORATION
By: /s/ Steve Berger
-------------------------------------------------
Its: President
-------------------------------------------------
PURCHASER:
CITICASTERS CO.
By: /s/ R. Christopher Weber
-------------------------------------------------
Its: Senior Vice President
-------------------------------------------------
For purposes of Section 35 only:
JACOR COMMUNICATIONS COMPANY
By: /s/ R. Christopher Weber
-------------------------------------------------
Its: Senior Vice President
-------------------------------------------------
57
