EXHIBIT 2.33
ASSET PURCHASE AGREEMENT
By and Among
EZ COMMUNICATIONS, INC.
PROFESSIONAL BROADCASTING INCORPORATED
EZ CHARLOTTE, INC.
EVERGREEN MEDIA CORPORATION OF LOS ANGELES
EVERGREEN MEDIA CORPORATION OF THE EAST
and
EVERGREEN MEDIA CORPORATION OF CAROLINALAND
Dated as of
December 5, 1996
TABLE OF CONTENTS
ARTICLE 1 DEFINED TERMS.................................................................... 1
ARTICLE 2 SALE AND PURCHASE OF ASSETS...................................................... 2
2.1 Agreement to Sell and Buy........................................................ 2
2.2 Assumption of Liabilities and Obligations........................................ 2
2.3 Closing Date..................................................................... 4
2.4 Purchase Price................................................................... 4
2.5 Accounts Receivable.............................................................. 4
2.6 Like-Kind Exchange............................................................... 5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE EVERGREEN PARTIES............................ 6
3.1 Organization and Business; Power and Authority; Effect of Transaction............ 6
3.2 Financial and Other Information.................................................. 7
3.3 Changes in Condition............................................................. 7
3.4 Materiality...................................................................... 7
3.5 Title to Properties; Leases...................................................... 7
3.6 Compliance with Private Authorizations........................................... 8
3.7 Compliance with Governmental Authorizations and Applicable Law................... 9
3.8 Intangible Assets................................................................ 10
3.9 Related Transactions............................................................. 11
3.10 Insurance........................................................................ 11
3.11 Tax Matters...................................................................... 11
3.12 Employee Retirement Income Security Act of 1974.................................. 11
3.13 Absence of Sensitive Payments.................................................... 13
3.14 Inapplicability of Specified Statutes............................................ 13
3.15 Employment Arrangements.......................................................... 13
3.16 Material Agreements.............................................................. 13
3.17 Ordinary Course of Business...................................................... 14
3.18 Broker or Finder................................................................. 15
3.19 Solvency......................................................................... 15
3.20 Environmental Matters............................................................ 15
3.21 Trade or Barter.................................................................. 16
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE EZ PARTIES................................. 16
4.1 Organization and Business; Power and Authority; Effect of Transaction............ 16
4.2 Inapplicability of Specified Statutes............................................ 17
4.3 Broker or Finder................................................................. 17
4.4 Solvency......................................................................... 17
ARTICLE 5 COVENANTS........................................................................ 17
5.1 Access to Information; Confidentiality........................................... 17
5.2 Agreement to Cooperate........................................................... 18
5.3 Public Announcements............................................................. 20
5.4 Notification of Certain Matters.................................................. 21
5.5 No Solicitation.................................................................. 21
5.6 Conduct of Business by Evergreen Pending the Closing............................. 21
5.7 FCC Application; Divesture Commitment............................................ 23
ARTICLE 6 CLOSING CONDITIONS............................................................... 23
6.1 Conditions to Obligations of Each Party to Effect the Transactions............... 23
6.2 Conditions to Obligations of EZ.................................................. 24
6.3 Conditions to Obligations of Evergreen........................................... 26
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER................................................ 27
7.1 Termination...................................................................... 27
7.2 Effect of Termination............................................................ 28
ARTICLE 8 INDEMNIFICATION.................................................................. 28
8.1 Survival......................................................................... 28
8.2 Indemnification.................................................................. 28
8.3 Limitation of Liability.......................................................... 29
8.4 Notice of Claims................................................................. 29
8.5 Defense of Third Party Claims.................................................... 29
8.6 Exclusive Remedy................................................................. 30
ARTICLE 9 GENERAL PROVISIONS............................................................... 30
9.1 Amendment........................................................................ 30
9.2 Waiver........................................................................... 30
9.3 Fees, Expenses and Other Payments................................................ 30
9.4 Notices.......................................................................... 30
9.5 Specific Performance; Other Rights and Remedies.................................. 32
9.6 Severability..................................................................... 32
9.7 Counterparts..................................................................... 32
9.8 Section Headings................................................................. 33
9.9 Governing Law.................................................................... 33
9.10 Further Acts..................................................................... 33
9.11 Entire Agreement................................................................. 33
9.12 Assignment....................................................................... 33
9.13 Parties in Interest.............................................................. 33
9.14 Mutual Drafting.................................................................. 33
9.15 EZ Agent for Other EZ Parties.................................................... 34
9.16 Evergreen Parent Agent for Other Evergreen Parties............................... 34
APPENDIX A: Definitions
ii
ASSET PURCHASE AGREEMENT
This Asset Exchange Agreement (this "Agreement") is dated as of December 5,
1996, by and among EZ Communications, Inc., a Virginia corporation ("EZ"),
Professional Broadcasting Incorporated, a Virginia corporation ("PBI") and EZ
Charlotte, Inc., a Virginia corporation ("EZP" and, collectively with EZ and
PBI, sometimes collectively referred to individually as an "EZ Party" and
collectively as the "EZ Parties"), on the one hand, and Evergreen Media
Corporation of Los Angeles, a Delaware corporation ("Evergreen" or "Evergreen
Parent"), Evergreen Media Corporation of the East ("EMC East"), and Evergreen
Media Corporation of Carolinaland ("EMC Carolinaland"), each a Delaware
corporation and an indirect wholly owned subsidiary of Evergreen Parent
(including Evergreen Parent, individually an "Evergreen Party" and collectively
the "Evergreen Parties"), on the other hand.
WHEREAS, EMC East is the owner and operator and EMC Carolinaland is the
licensee of radio station WNKS(FM), Charlotte, North Carolina (the "Evergreen
Station") pursuant to licenses issued by the FCC (the "Evergreen FCC Licenses");
WHEREAS, the EZ Parties desire to purchase and the Evergreen Parties desire
to sell certain property and assets used in, held for use in connection with or
necessary for the conduct of the business or operations of the Evergreen Station
on the terms and conditions hereinafter set forth;
WHEREAS, the EZ Parties, the Evergreen Parties and certain other
Subsidiaries of Evergreen Parent are parties to an Asset Exchange Agreement,
dated as of the date of this Agreement (the "Asset Exchange Agreement"),
relating to the exchange of radio stations in Philadelphia and Charlotte; and
WHEREAS, EZ is party to an agreement and plan of merger (the "EZ Merger
Agreement"), dated as of August 5, 1996, as amended and restated as of September
27, 1996, with American Radio Systems Corporation, a Delaware corporation
("American"), pursuant to which EZ will be merged into American or a wholly-
owned subsidiary of American (the "American-EZ Merger"), and American desires to
consent to the Exchange and the other transactions contemplated by this
Agreement;
NOW, THEREFORE, in consideration of the above premises and the covenants
and agreements contained herein, the EZ Parties and the Evergreen Parties,
intending to be legally bound, do hereby covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
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As used herein, unless the context otherwise requires, the terms defined in
Appendix A shall have the respective meanings set forth therein. Terms defined
in the singular shall have a comparable meaning when used in the plural, and
vice versa, and the reference to any gender shall be deemed to include all
genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in the Evergreen Disclosure Schedule and each Collateral
Document executed or required to be executed pursuant hereto or thereto or
otherwise delivered, from time to time, pursuant hereto or thereto. References
to "hereof", "herein" or similar terms are intended to refer to this Agreement
as a whole and not a particular section, and references to "this Section" are
intended to refer to the entire section and not a particular subsection thereof.
The term "either party" shall, unless the context otherwise requires, refer to
Evergreen Parent and EZ, and shall include, any Subsidiary of either thereof
which is a party to this Agreement.
ARTICLE 2
SALE AND PURCHASE OF ASSETS
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2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
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forth in this Agreement, the Evergreen Parties hereby agree to sell, assign,
transfer and deliver to the EZ Parties at the Closing, and the EZ Parties agree
to purchase at the Closing, the Evergreen Assets, not previously transferred
pursuant to the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, free and clear of any Liens of any nature
whatsoever except for Permitted Liens, on the terms and conditions of this
Agreement.
2.2 Assumption of Liabilities and Obligations.
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(a) Except as expressly provided in this Agreement, the EZ Parties shall
not assume or become obligated to perform any debt, liability or obligation of
any Evergreen Party whatsoever, including without limitation (i) any obligations
or liabilities arising under any contract, lease or agreement, other than those
arising under the Evergreen Assumable Agreements; (ii) any obligations or
liabilities under the Evergreen Assumable Agreements relating to the period
prior to the Cut-off Date; (iii) any Claims or pending or threatened Legal
Action to which any Evergreen Party is a party or to which any of the Evergreen
Assets or the Evergreen Station is subject relating to the ownership or
operation of the Evergreen Assets or the conduct of the business of the
Evergreen Station prior to the Closing (other than as provided in the ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇); (iv) any insurance policies of the Evergreen Parties; (v) any
obligations or liabilities arising under any financing arrangement, capitalized
lease or other agreement relating to Indebtedness for Borrowed Money; (vi) any
obligations or liabilities of any Evergreen Party under any Evergreen Employment
Arrangement (including under any Evergreen Employee Plan), including any
obligation to any Evergreen Station Employee for severance benefits, vacation
time, or sick leave; (vii) any liability for any Taxes attributable to the
ownership or operation of the Evergreen Assets or the Evergreen Station on or
prior to the Cut-off Date; or (viii) any obligations or liabilities caused by,
arising out of, or resulting from any action or omission of any Evergreen Party
prior to the Closing. All such obligations and liabilities (the "Evergreen
Nonassumed Liabilities") shall remain and be the obligations and liabilities
solely of the Evergreen Parties.
(b) Notwithstanding anything contained in this Agreement to the contrary
and except as otherwise provided in the Evergreen Station TBA, (i) all items of
income and expense (including without limitation with respect to rent,
utilities, Pro Ratable Taxes and wages, salaries and accrued but unused vacation
for employees) arising from the conduct of the business of the Evergreen
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Station (the conduct of such business to be in the ordinary course consistent
with past practice) shall be prorated between the Evergreen Parties and EZ
Parties in accordance with GAAP applied consistently with past practice as of
12:01 a.m., Eastern time, on the Cut-off Date, with the Evergreen Parties
responsible for any such items prior to the Cut-off Date and the EZ Parties
responsible for any such items relating to any subsequent period, and (ii)
obligations and liabilities under the Evergreen Trade Agreements shall be
prorated to the extent and in the manner set forth in Section 2.3(e). For these
purposes, Pro Ratable Taxes attributable to a period that begins before and ends
after the Cut-off Date shall be treated on a "closing of the books" basis as two
partial periods, one ending at the close of the day immediately preceding the
Cut-off Date and the other beginning on the Cut-off Date, except that Pro
Ratable Taxes (such as property Taxes) imposed on a periodic basis shall be
allocated on a daily basis.
(c) Within sixty (60) days of the Closing Date, EZ shall deliver to
Evergreen Parent a schedule of its proposed prorations, including without
limitation any with respect to the Evergreen Trade Agreements pursuant to the
provisions of Section 2.3(e), which shall set forth in reasonable detail the
basis for those determinations (the "Charlotte Proration Schedule"). The
Charlotte Proration Schedule shall be conclusive and binding upon the Evergreen
Parties unless Evergreen Parent provides EZ with written notice of objection
(the "Notice of Disagreement") within thirty (30) days after Evergreen's receipt
of the Charlotte Proration Schedule, which notice shall state the prorations
proposed by Evergreen Parent (the "Evergreen Proration Schedule"). EZ shall
have fifteen (15) days from receipt of a Notice of Disagreement to accept or
reject the Evergreen Proration Schedule. If EZ rejects the Evergreen Proration
Schedule, and the amount in dispute exceeds Five Thousand Dollars ($5,000), the
dispute shall be submitted within ten (10) days of such rejection to the
Chicago, Illinois office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., LLP (the "Referee") for
resolution, such resolution to be made within thirty (30) days after submission
to the Referee and to be final, conclusive and binding on the EZ Parties and the
Evergreen Parties. Evergreen Parent and EZ agree to share equally the cost and
expenses of the Referee, but each party shall bear its own legal and other
expenses, if any. If the amount in dispute is equal to or less than Five
Thousand Dollars ($5,000), such amount shall be divided equally between
Evergreen Parent and EZ. Payment by Evergreen Parent or EZ, as the case may be,
of the proration amounts determined pursuant to this Section 2.2(c) shall be due
fifteen (15) days after the last to occur of (i) Evergreen Parent's acceptance
of the Charlotte Proration Schedule or failure to give EZ a timely Notice of
Disagreement; (ii) EZ's acceptance of the Evergreen Proration Schedule or
failure to reject within fifteen (15) days of receipt of a timely Notice of
Disagreement; (iii) EZ's rejection of the Evergreen Proration Schedule in the
event the amount in dispute equals or is less than Five Thousand Dollars
($5,000); and (iv) notice to EZ and Evergreen Parent of the resolution of the
disputed amount by the Referee in the event that the amount in dispute exceeds
Five Thousand Dollars ($5,000).
(d) Any payment required by EZ to Evergreen Parent or by Evergreen Parent
to EZ, as the case may be, under Section 2.2(c) or 2.2(e) shall be paid by wire
transfer of immediately available funds to the account of the payee with a
financial institution in the United States as designated by such party in the
Charlotte Proration Schedule or the Notice of Disagreement (or by separate
notice in the event a Notice of Disagreement is not sent). If either EZ or
Evergreen Parent fails to pay when due any amount under Section 2.2(c) or
2.2(e), interest on such amount will accrue from the date payment was due to the
date such payment is made at a per annum rate equal to the "prime rate" as
published daily in the Money Rates column of the Wall Street Journal (or the
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average of such rates if more than one rate indicated) plus two percent (2%),
----
and such interest shall be payable upon demand.
(e) Obligations and liabilities under the Evergreen Trade Agreements shall
be prorated in favor of the EZ Parties only to the extent that the aggregate
obligations and liabilities (determined in accordance with GAAP) for unperformed
air time under all Evergreen Trade Agreements as of 12:01 a.m. on the Cut-off
Date exceed by Ten Thousand Dollars ($10,000) the fair market value of the
property (determined in accordance with GAAP) to be received by the EZ Parties
under the Evergreen Trade Agreements after 12:01 a.m. on the Cut-off Date under
the Evergreen Trade Agreements. Additionally, the aggregate obligations and
liabilities for unperformed air time under the Evergreen Trade Agreements on the
Cut-off Date which are required to be prorated (any excess being part of the
Evergreen Nonassumed Liabilities) shall not exceed One Hundred Thousand Dollars
($100,000). There shall be no proration in favor of the Evergreen Parties with
respect to the Evergreen Trade Agreements, notwithstanding the fact that the
excess, if any, of the obligations and liabilities under the Evergreen Trade
Agreements over the fair market value of the property to be received under all
Evergreen Trade Agreements after 12:01 a.m. on the Cut-off Date is less than the
amount specified in the first sentence of this paragraph.
(f) Nothing contained in this Section 2.3 is intended or shall be deemed
to amend or modify the indemnification provisions of Article 8 nor to reallocate
responsibility for the matters set forth therein.
2.3 Closing Date. The closing of the Transactions (the "Closing") shall
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take place at Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., local time, on the later of (a) the earlier of
(i) the second (2nd) business day following the effectiveness of the American-EZ
Merger, and (ii) June 30, 1997, and (b) the tenth (10th) business day after the
satisfaction or waiver by Evergreen Parent and EZ of the conditions set forth in
Section 6.1, or such other place or on such other date, prior to the Termination
Date, as the parties may agree (the "Closing Date"). At the Closing, each of
the parties shall deliver such bills of sale, assignments, assumptions of
liabilities, opinions and other instruments and documents as are described in
this Agreement or as may be otherwise reasonably requested by the parties and
their respective counsel.
2.4 Purchase Price. The purchase price for the Evergreen Assets and the
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Evergreen Station (the "Purchase Price") shall be an amount equal to Ten Million
Dollars ($10,000,000), subject to adjustment pursuant to the provisions of
Section 2.2. On the Closing Date, the EZ Parties shall pay to the Evergreen
Parties Ten Million Dollars ($10,000,000) by wire transfer of immediately
available funds to such account as is designated by the Evergreen Parent in
written instructions to EZ delivered not later than two (2) business days prior
to the Closing.
2.5 Accounts Receivable. Upon the earlier to occur of Closing or the
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commencement of the effectiveness of the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, the Evergreen
Parties shall appoint PBI their agent for the purpose of collecting all
Evergreen Accounts Receivable. Evergreen shall deliver to EZ on or as soon as
practicable after the Cut-off Date (but, in any event, within ten (10) days
following the Cut-off Date) a complete and detailed statement showing the name,
amount and age of each Evergreen Account Receivable. Subject to and limited by
the following, revenues relating to the Evergreen Accounts Receivable will be
for the account of Evergreen. EZ shall use its best
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efforts to collect the Evergreen Accounts Receivable for a period of ninety (90)
days after the Cut-off Date (the "Collection Period"). Any payment received by
EZ during the Collection Period from any customer with an account which is an
Evergreen Account Receivable shall first be applied in reduction of such
Evergreen Account Receivable, unless the customer indicates otherwise in
writing. During the Collection Period, EZ shall furnish Evergreen with a list
of, and pay over to the other, the amounts collected with respect to the
Evergreen Accounts Receivable on a bi-weekly basis. EZ shall provide Evergreen
with a final accounting on or before the fifteenth (15th) day following the end
of the Collection Period. Upon the request of either party at and after such
time, the parties shall meet to mutually and in good faith analyze any
uncollected Evergreen Accounts Receivable to determine if the same, in their
reasonable business judgment, are deemed to be collectable and if EZ desires to
retain such Evergreen Accounts Receivable in the interest of maintaining an
advertising relationship. As to each such Evergreen Accounts Receivable, the
parties shall negotiate a good faith value of such Evergreen Accounts
Receivable, which EZ shall pay to Evergreen if EZ, in its sole discretion,
chooses to retain such Evergreen Accounts Receivable. Evergreen shall retain the
right to collect any of the Evergreen Accounts Receivable as to which the
parties are unable to reach agreement as to a good faith value, and EZ agrees to
turn over to Evergreen any payments received against any such Evergreen Accounts
Receivable. EZ shall not be obligated to use any extraordinary efforts to
collect any of the Evergreen Accounts Receivable or to refer any of such
Evergreen Accounts Receivable to a collection agency or to any attorney for
collection, and EZ shall not make any such referral or compromise, nor settle or
adjust the amount of any such Evergreen Accounts Receivable, except with the
approval of Evergreen. EZ shall not incur any liability to Evergreen for any
uncollected account unless EZ shall have engaged in willful misconduct or gross
negligence in the performance of its obligations set forth in this Section.
During and after the Collection Period, without specific agreement with EZ to
the contrary, neither Evergreen nor its agents shall make any direct
solicitation of the Evergreen Accounts Receivable for collection purposes,
except for Evergreen Accounts Receivable retained by Evergreen after the
Collection Period.
2.6 Like-Kind Exchange. The Evergreen Parties may elect to effect the
------------------
transfer and conveyance of the Evergreen Assets as part of an exchange under
Section 1031 of the Code, in lieu of selling such assets hereunder. If the
Evergreen Parties so elect, they shall provide notice to EZ of their election,
and thereafter (i) may at any time at or prior to Closing assign their rights
(but such assignment shall not relieve them of their obligations) under this
Agreement to a "qualified intermediary" as defined in Treas. Reg. (S)1.1031(k)-
1(g)(4), subject to all rights and obligations hereunder of the EZ Parties and
(ii) shall promptly provide written notice of such assignment to all EZ Parties.
The EZ Parties shall cooperate with all reasonable requests of the Evergreen
Parties and the "qualified intermediary" in arranging and effecting the exchange
as one which qualifies under Section 1031 of the Code. Without limiting the
generality of the foregoing, if the Evergreen Parties have given notice of their
intention to effect the acquisition of the Evergreen Assets as part of a tax-
deferred exchange, the EZ Parties shall (i) promptly provide the Evergreen
Parties with written acknowledgment of such notice and (ii) at Closing, pay the
Purchase Price for the Evergreen Assets to the "qualified intermediary" rather
than to the Evergreen Parties (which payment shall discharge the obligation of
the EZ Parties to make payment for the Evergreen Assets hereunder).
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE EVERGREEN PARTIES
Each Evergreen Party hereby, jointly and severally, represents, warrants
and covenants to, and agrees with, the EZ Parties as follows:
3.1 Organization and Business; Power and Authority; Effect of Transaction.
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(a) Each Evergreen Party is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, has all
requisite corporate power and authority to own or hold under lease its
properties and to conduct its business as now conducted.
(b) Each Evergreen Party has all requisite corporate power and authority
necessary to enable it to execute and deliver, and to perform its obligations
under, this Agreement and each Collateral Document executed or required to be
executed by it pursuant hereto or thereto or to consummate the Transactions; and
the execution, delivery and performance of this Agreement and each Collateral
Document executed or required to be executed by it pursuant hereto or thereto
have been duly authorized by all requisite corporate action on the part of each
Evergreen Party. This Agreement has been duly executed and delivered by each
Evergreen Party and constitutes, and each Collateral Document to which any
Evergreen Party becomes a party will, when executed and delivered by such
Evergreen Party, constitute, the legally valid and binding obligation of such
Evergreen Party, enforceable against such Evergreen Party in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, moratorium, insolvency and similar laws affecting the rights and
remedies of creditors and obligations of debtors generally and by general
principles of equity.
(c) Except as set forth in Section 3.1(c) of the Evergreen Disclosure
Schedule, neither the execution and delivery by each Evergreen Party of this
Agreement or any Collateral Document executed or required to be executed by it
pursuant hereto or thereto, nor the consummation by each Evergreen Party of the
Transactions, nor compliance with the terms, conditions and provisions hereof or
thereof by each Evergreen Party:
(i) will conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of any Evergreen Party or
any Applicable Law on the part of any Evergreen Party, or will conflict
with, or result in a breach or violation of, or constitute a default under,
or permit the acceleration of any obligation or liability in, or but for
any requirement of giving of notice or passage of time or both would
constitute such a conflict with, breach or violation of, or default under,
or permit any such acceleration in, any Evergreen Material Agreement; or
(ii) will require any Evergreen Party to make or obtain any
Governmental Authorization, Governmental Filing or Private Authorization,
except for the FCC Consents, filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and
Private Authorizations the failure of which to be obtained or maintained
would not, individually or in the aggregate, have a Material Adverse Effect
on Evergreen.
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(d) Evergreen Parent does not have any direct or indirect Subsidiaries or
other Affiliates which own or have any interest in the Evergreen Station or any
of the Evergreen Assets other than the other Evergreen Parties.
3.2 Financial and Other Information. Evergreen has heretofore furnished
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to EZ copies of the unaudited financial data of the Evergreen Station listed in
Section 3.2 of the Evergreen Disclosure Schedule (the "Evergreen Financial
Data"). Except as set forth in Section 3.2 of the Evergreen Disclosure Schedule
(which schedule reflects the inclusion of "barter" transactions and the effects
thereof), and except for normal year-end audit adjustments and accruals, if any,
the Evergreen Financial Data have been prepared in accordance with GAAP applied
on a basis consistent with past practices and are a true, accurate and fair
presentation of the operating revenues and operating expenses of the Evergreen
Station for the periods indicated.
3.3 Changes in Condition. Since June 30, 1996, except to the extent
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specifically described in Section 3.3 of the Evergreen Disclosure Schedule,
there has been no Material Adverse Change in Evergreen. There is no Event known
to any Evergreen Party which Materially Adversely Affects, or (so far as
Evergreen can now reasonably foresee) is likely to Materially Adversely Affect,
Evergreen, except to the extent specifically described in Section 3.3 of the
Evergreen Disclosure Schedule.
3.4 Materiality. The representations and warranties set forth in this
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Article would in the aggregate be true and correct even without the materiality
exceptions or qualifications contained therein or set forth in the Evergreen
Disclosure Schedule, except for such exceptions and qualifications including
without limitation those set forth in the Evergreen Disclosure Schedule which,
in the aggregate for all such representations and warranties, are not and could
not reasonably be expected to be Materially Adverse to Evergreen.
3.5 Title to Properties; Leases.
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(a) Section 3.5(a) of the Evergreen Disclosure Schedule lists all Real
Property and describes all Leases of Real Property (the "Evergreen Leases") used
or held for use in the operation of the Evergreen Station (the "Evergreen Real
Property"). One of the Evergreen Parties has good and marketable title, or
valid and subsisting leasehold interests (as shown on Section 3.5(a) of the
Evergreen Disclosure Schedule), to all Evergreen Real Property, in each case
free and clear of all Liens, except (i) Permitted Liens and (ii) Liens set forth
on Section 3.5(a) of the Evergreen Disclosure Schedule (which Liens shall be
released prior to Closing). Except as otherwise set forth in Schedule 3.5(a) of
the Evergreen Disclosure Schedule, each Evergreen Lease included in the
Evergreen Real Property has been duly authorized, executed and delivered by the
appropriate Evergreen Party and, to Evergreen's knowledge, information and
belief, each of the other parties thereto, and is a legally valid and binding
obligation of the appropriate Evergreen Party, and, to Evergreen's knowledge,
information and belief, each of the other parties thereto, enforceable in
accordance with its terms. The appropriate Evergreen Party has a valid
leasehold interest in and enjoys peaceful and undisturbed possession under all
Evergreen Leases pursuant to which it holds any Evergreen Real Property. All
Evergreen Leases are valid and subsisting and in full force and effect; neither
any Evergreen Party nor, to Evergreen's knowledge, information and belief, any
other
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party thereto, is in default in the performance, observance or fulfillment of
any obligation, covenant or condition contained in any Evergreen Lease. Except
as disclosed in Section 3.5(a) of the Evergreen Disclosure Schedule, all
improvements on the Evergreen Real Property are in compliance with applicable
zoning and land use laws, ordinances and regulations in all respects necessary
to conduct the operation of the Evergreen Station operating thereon as presently
conducted, except for any instances of non-compliance which do not and will not
individually or in the aggregate have a Material Adverse Effect on the owner or
lessee, as the case may be, of such Evergreen Real Property. Except as disclosed
in Section 3.5(a) of the Evergreen Disclosure Statement, all such improvements
are in good working condition and repair (ordinary wear and tear excepted), are
insurable at standard rates, and comply in all Material aspects with FCC rules
and regulations. Except as disclosed in Section 3.5(a) of the Evergreen
Disclosure Statement, all of the transmitting towers, ground radials, guy
anchors, transmitting buildings and related improvements located on the
Evergreen Real Property are located entirely on the Evergreen Real Property.
Evergreen has no knowledge of any pending, threatened or contemplated action to
take by eminent domain or otherwise to condemn any part of the Evergreen Real
Property.
(b) Section 3.5(b) of the Evergreen Disclosure Schedule contains a true,
accurate and complete description of all Material items of Evergreen Personal
Property. None of the Evergreen Personal Property is subject to any Lien,
except (i) Permitted Liens and (ii) Liens set forth on Section 3.5(b) of the
Evergreen Disclosure Schedule (which Liens shall be released prior to the
Closing). Except as set forth in Section 3.5(b) of the Evergreen Disclosure
Schedule, including without limitation the fact that the office and studio
facilities of the Evergreen Station (the "Evergreen Studio Facilities") require
significant improvement (including without limitation the necessity of repair,
renovation or relocation), all Material items of Evergreen Personal Property
(other than the Evergreen Studio Facilities) are in a state of good repair and
maintenance and are in good operating condition, normal wear and tear excepted,
have been maintained in a manner consistent with generally accepted standards of
good engineering practice and currently permit the Evergreen Station to be
operated in accordance with the terms and conditions of the Evergreen FCC
Licenses and all Applicable Laws. EZ acknowledges and agrees that Evergreen
shall not be required to perform any facility improvements to the Evergreen
Studio Facilities.
3.6 Compliance with Private Authorizations. Section 3.6 of the Evergreen
--------------------------------------
Disclosure Schedule sets forth a true, accurate and complete list and
description of each Private Authorization which individually or when taken
together with other substantially similar Evergreen Private Authorizations is
Material to the Evergreen Assets or the Evergreen Station, all of which are in
full force and effect. The Evergreen Private Authorizations are all Private
Authorizations that are necessary for the ownership and operation by Evergreen
of the Evergreen Assets and the Evergreen Station and the conduct of business
thereof as now conducted or as presently proposed to be conducted or which, if
not obtained and maintained, could, individually or in the aggregate, Materially
Adversely Affect Evergreen. No Evergreen Party is in breach or violation of, or
in default in the performance, observance or fulfillment of, any Evergreen
Private Authorization, and no Event exists or has occurred, which constitutes,
or but for any requirement of giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any Evergreen Private
Authorization, except for such defaults, breaches or violations as do not and
will not have in the aggregate any Material Adverse Effect on Evergreen. No
Evergreen Private Authorization
-8-
is the subject of any pending or, to Evergreen's knowledge, information or
belief, threatened attack, revocation or termination.
3.7 Compliance with Governmental Authorizations and Applicable Law.
--------------------------------------------------------------
(a) Section 3.7(a) of the Evergreen Disclosure Schedule contains a
description of:
(i) all Legal Actions pending or, to Evergreen's knowledge,
information and belief, is threatened against any Evergreen Party with
respect to the operation or ownership of any of the Evergreen Assets or the
conduct of the business of the Evergreen Station;
(ii) all Claims and Legal Actions pending or, to Evergreen's
knowledge, information and belief, threatened against any Evergreen Party
with respect to the operation or ownership of any of the Evergreen Assets
or the conduct of the business of the Evergreen Station which, individually
or in the aggregate, are reasonably likely to result in the revocation or
termination of any of the Evergreen FCC Licenses or the imposition of any
restriction of such a nature as would Adversely affect the ownership or
operations of the Evergreen Station; in particular, but without limiting
the generality of the foregoing, there are no applications, complaints or
Legal Actions pending or, to Evergreen's knowledge, information and belief,
threatened (x) before the FCC relating to the ownership or operations of
any of the Evergreen Assets or the conduct of the business of the Evergreen
Station other than applications, complaints or Legal Actions which affect
the radio broadcasting industry generally, or (y) before any Authority
involving charges of illegal discrimination by the Evergreen Station under
any federal or state employment Laws; and
(iii) each Governmental Authorization (including without limitation
all FCC Licenses) required under Applicable Laws (x) to own and operate the
Evergreen Station, as currently conducted or proposed to be conducted on or
prior to the Closing Date, all of which are in full force and effect or (y)
that are necessary to permit each Evergreen Party to execute and deliver
this Agreement and to perform its obligations hereunder (the "Evergreen
Governmental Authorizations").
The Evergreen Parties have delivered to the EZ Parties true and complete copies
of the Evergreen Governmental Authorizations (including any and all amendments
and other modifications thereto.)
(b) The appropriate Evergreen Party is the authorized legal holder of the
Evergreen FCC Licenses listed in Section 3.7(a) of the Evergreen Disclosure
Schedule, none of which is subject to any restriction or condition which would
limit in any respect the operations of the Evergreen Station as currently
conducted or proposed to be conducted on or prior to the Closing Date. The
Evergreen FCC Licenses are valid and in good standing, are in full force and
effect and are not impaired in any Material respect by any act or omission of
any Evergreen Party or its officers, directors, employees or agents, and the
operation of the Evergreen Station is in accordance in all Material respects
with the Evergreen FCC Licenses. The Evergreen Station are operating in
accordance with the Evergreen FCC Licenses, all underlying construction permits
and the FCA. Except as disclosed in Section 3.7 of the Evergreen Disclosure
Schedule, no application, action or proceeding is pending for the renewal or
modification of any Evergreen FCC Licenses and, to Evergreen's knowledge,
-9-
information and belief, there is not as of the date of this Agreement issued or
outstanding any investigation or material complaint against any Evergreen Party
at the FCC relating to any Evergreen Station. Except as disclosed in Section
3.7 of the Evergreen Disclosure Schedule, as of the date of this Agreement,
there is no proceeding pending at or outstanding notice of violation from the
FCC relating to any Evergreen Station. All fees payable to Authorities pursuant
to the FCC Licenses, including FCC annual regulatory fees have been paid and no
event has occurred which, individually or in the aggregate, and without the
giving of notice or the lapse of time or both, would constitute grounds for
revocation thereof or would have a Material Adverse Effect on Evergreen. All
Material reports, forms and statements required to be filed by each Evergreen
Party with the FCC with respect to the Evergreen Station have been filed and are
true, complete and accurate in all Material respects. No renewal of any
Evergreen FCC License would constitute a major environmental action (as defined
in the FCC rules and regulations).
The Evergreen Governmental Authorizations comprise all Governmental
Authorizations which are necessary for the lawful ownership or operation of the
Evergreen Assets or the lawful conduct of the business of the Evergreen Station
as now conducted or as presently proposed to be conducted, except for
Governmental Authorizations, the failure of which to obtain and maintain, would
not individually or in the aggregate, have any Material Adverse Effect on
Evergreen. No Evergreen Governmental Authorization is the subject of any
pending or, to Evergreen's knowledge, information and belief, threatened
challenge or proceeding to revoke or terminate any Evergreen Governmental
Authorization. Evergreen has no reason to believe that any Evergreen
Governmental Authorization would not be renewed in the name of Evergreen by the
granting Authority in the ordinary course.
(c) With respect to matters, if any, of a nature referred to in Section
3.7(a) or 3.7(b) of the Evergreen Disclosure Schedule, except as otherwise
specifically described in Section 3.7(c) of the Evergreen Disclosure Schedule,
all such information and matters set forth in the Evergreen Disclosure Schedule,
if adversely determined against Evergreen, will not, in the aggregate,
Materially Adversely Affect Evergreen.
3.8 Intangible Assets. Section 3.8 of the Evergreen Disclosure Schedule
-----------------
sets forth a true, accurate and complete description of all Intangible Assets
held or used by Evergreen (other than the Evergreen Governmental Authorizations
and the Evergreen Private Authorizations) relating to the ownership and
operation of the Evergreen Assets or the conduct of the business of the
Evergreen Station (the "Evergreen Intangible Assets"), including without
limitation the nature of Evergreen's interest in each and the extent to which
the same have been duly registered in the offices as indicated therein. One of
the Evergreen Parties owns or possesses or otherwise has the right to use all
Evergreen Intangible Assets necessary in order to operate the Evergreen Assets
in the manner currently being operated by the Evergreen Parties. Except as set
forth in Section 3.8 of the Evergreen Disclosure Schedule, no Intangible Assets
(except for the Evergreen Governmental Authorizations and the Evergreen Private
Authorizations and the Evergreen Intangible Assets so set forth) are required
for the ownership or operation of the Evergreen Assets or the conduct of the
business of the Evergreen Station as currently owned, operated and conducted or
proposed to be owned, operated and conducted on or prior to the Closing Date.
-10-
3.9 Related Transactions. No Evergreen Party is a party or subject to any
--------------------
Contract relating to the ownership and operation of the Evergreen Assets or the
conduct of the business of the Evergreen Station between any Evergreen Party and
any of its officers, directors, stockholders, employees or, to the knowledge,
information and belief of Evergreen, any Affiliate of any thereof (other than
another Evergreen Party), including without limitation any Contract providing
for the furnishing of services to or by, providing for rental of property, real,
personal or mixed, to or from, or providing for the lending or borrowing of
money to or from or otherwise requiring payments to or from, any such Person,
other than (i) Evergreen Employment Arrangements listed or described in Section
3.12 of the Evergreen Disclosure Schedule and (ii) Contracts between Evergreen
and officers which constitute Evergreen Excluded Assets and obligations of
Evergreen not being assumed by EZ.
3.10 Insurance. One of the Evergreen Parties maintains, with respect to
---------
the Evergreen Assets and the Evergreen Station, policies of fire and extended
coverage and casualty, liability and other forms of insurance in such amounts
and against such risks and losses as are in Evergreen Parent's reasonable
business judgment prudent (a true, complete and accurate description of which is
set forth in Section 3.10 of the Evergreen Disclosure Schedule) and shall use
reasonable business efforts to keep such insurance or comparable insurance in
full force and effect through the Closing Date, except to the extent otherwise
provided in the Evergreen Station TBA.
3.11 Tax Matters. Each Evergreen Party has in respect of the Evergreen
-----------
Assets and the Evergreen Station filed all Material Tax Returns which are
required to be filed, and has paid, or made adequate provision for the payment
of, all Taxes which have or may become due and payable pursuant to said Tax
Returns and all other governmental charges and assessments received to date
other than those Taxes being contested in good faith. There are no unpaid Taxes
which are due and payable, or alleged to be due and payable by any Taxing
Authority, the non-payment of which is or could become a Lien on any of the
Evergreen Assets or the Evergreen Station. All Taxes in respect of the
Evergreen Assets and the Evergreen Station which Evergreen is required by law to
withhold and collect have been duly withheld and collected, and have been paid
over, in a timely manner, to the proper Authorities to the extent due and
payable. Except as set forth in Section 3.11 of the Evergreen Disclosure
Schedule, no Evergreen Party has executed any waiver to extend, or otherwise
taken or failed to take any action that would have the effect of extending, the
applicable statute of limitations in respect of any Tax associated with the
Evergreen Assets or the Evergreen Station for the fiscal years prior to and
including the most recent fiscal year.
3.12 Employee Retirement Income Security Act of 1974.
-----------------------------------------------
(a) Section 3.12(a) of the Evergreen Disclosure Schedule contains a true,
accurate and complete list of all Evergreen employees employed in the ownership
or operation of any of the Evergreen Assets or the conduct of the business of
the Evergreen Station (the "Evergreen Station Employees"), together with each
such employee's title or the capacity in which he or she is employed and all
Employment Arrangements with respect to such employee (each, an "Evergreen
Employment Arrangement"). All of the Evergreen Employee Plans and all other
Evergreen Employment Arrangements are listed in Section 3.12(a) of the
Evergreen Disclosure Schedule and true, complete and accurate copies of all such
written Evergreen Employee Plans and Evergreen Employment Arrangements (or
related insurance policies) have been furnished to EZ, along with
-11-
copies of any employee handbooks or similar documents describing such Evergreen
Employee Plans or any other Evergreen Employment Arrangements. Section 3.12(a)
of the Evergreen Disclosure Schedule also contains a true, complete and accurate
description of any unwritten Evergreen Employee Plan or other unwritten
Evergreen Employment Arrangement.
(b) Each Evergreen Employment Arrangement has been administered in
compliance with its own terms and in Material compliance with the provisions of
ERISA, the Code, the Age Discrimination in Employment Act and any other
applicable federal or state Laws. Evergreen is not aware of any pending audit
or examination of any Evergreen Employee Plan or any other Evergreen Employment
Arrangement by any Authority or of any facts which would lead it to believe that
any such audit or examination is threatened. There exists no Claim or Legal
Action (other than routine claims for benefits) with respect to any Evergreen
Employee Plan or any other Evergreen Employment Arrangement pending or, to
Evergreen's knowledge, information and belief, threatened against any Evergreen
Employee Plan or any other Evergreen Employment Arrangement, and no Evergreen
Party possesses any knowledge of any facts which could give rise to any such
Legal Action or Claim.
(c) No Evergreen Party contributes to or is required to contribute to any
Multiemployer Plan with respect to the Evergreen Station Employees and neither
any Evergreen Party nor any other trade or business under common control with
any Evergreen Party (within the meaning of Section 414(b), (c), (m) or (o) of
the Code) has incurred or reasonably expects to incur any "withdrawal
liability," as defined under Section 4201 et seq. of ERISA.
-- ---
(d) Except as described in Section 3.12(d) of the Evergreen Disclosure
Statement, neither any Evergreen Party nor any other trade or business under
common control with any Evergreen Party (within the meaning of Sections 414(b),
(c), (m) or (o) of the Code) sponsors, maintains or contributes to any Evergreen
Employee Plan or any other Evergreen Employment Arrangement that provides
retiree medical or retiree life insurance coverage to any Evergreen Station
Employee upon his/her retirement.
(e) Except as described in Section 3.12(e) of the Evergreen Disclosure
Statement with respect to each Evergreen Employee Plan and, to the extent
applicable, any other compensation arrangement comprising an Evergreen
Employment Arrangement: (i) each such Evergreen Employee Plan that is intended
to be tax-qualified, and each amendment thereto, is the subject of a favorable
determination letter, and no plan amendment that is not the subject of a
favorable determination letter would affect the validity of an Evergreen
Employee Plan's letter; (ii) no prohibited transaction, within the definition of
Section 4975 of the Code or Title 1, Part 4 of ERISA, has occurred which would
subject any Evergreen Party to any liability that could become a liability of
EZ; and (iii) all contributions premiums or payments accrued, in whole or in
part, under each such Evergreen Employee Plan or other Evergreen Employment
Arrangement or with respect thereto as of the Closing will be paid by the
appropriate Evergreen Party prior to the Closing.
(f) For purposes of this Section, the term "Evergreen Employee Plan"
shall mean any pension, profit-sharing, deferred compensation, vacation, bonus,
incentive, medical, vision, dental, disability, life insurance or any other
employee benefit plan as defined in Section 3(3) of ERISA to which any Evergreen
Party (under the terms of Section 414(b), (c), (m) or (o) of the Code) sponsors,
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maintains or otherwise is bound which provides benefits to any person employed
or previously employed at any of the Evergreen Stations.
3.13 Absence of Sensitive Payments. Neither any Evergreen Party nor, to
-----------------------------
Evergreen's knowledge, information and belief, any of its officers, directors,
employees, agents or other representatives, has with respect to the Evergreen
Assets or the Evergreen Station (a) made any contributions, payments or gifts to
or for the private use of any governmental official, employee or agent where
either the payment or the purpose of such contribution, payment or gift is
illegal under the laws of the United States or the jurisdiction in which made or
(b) established or maintained any unrecorded fund or asset for any purpose or
made any false or artificial entries on its books.
3.14 Inapplicability of Specified Statutes. Evergreen Parent is not a
-------------------------------------
"holding company", or a "subsidiary company" or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, or an "investment company" or a company "controlled" by or
acting on behalf of an "investment company", as defined in the Investment
Company Act of 1940, as amended, or a "carrier" or a person which is in control
of a "carrier", as defined in section 11301 of Title 49, U.S.C.
3.15 Employment Arrangements. Except as described in Section 3.15 of the
-----------------------
Evergreen Disclosure Schedule, with respect to the Evergreen Station (i) none of
the Evergreen Station Employees is now, or, to Evergreen's knowledge,
information and belief, since the date on which the appropriate Evergreen Party
acquired the Evergreen Station, has been, represented by any labor union or
other employee collective bargaining organization, and no Evergreen Party is, or
has ever been, a party to any labor or other collective bargaining agreement
with respect to the Evergreen Station Employees, (ii) there are no pending
grievances, disputes or controversies with any union or any other employee or
collective bargaining organization of such employees, or threats of strikes,
work stoppages or slowdowns or any pending demands for collective bargaining by
any such union or other organization, and (iii) neither any Evergreen Party nor
any of such employees is now, or, to Evergreen's knowledge, information and
belief, since the date on which the appropriate Evergreen Party acquired the
Evergreen Station, has been, subject to or involved in or, to Evergreen's
knowledge, information and belief, threatened with, any union elections,
petitions therefore or other organizational or recruiting activities, in each
case with respect to any Evergreen Station Employees. Each Evergreen Party has
performed in all Material respects all obligations required to be performed
under each Evergreen Employee Plan and each other Evergreen Employment
Arrangement and is not in Material breach or violation of or in Material default
or arrears under any of the terms, provisions or conditions thereof.
3.16 Material Agreements. Listed on Section 3.16 of the Evergreen
-------------------
Disclosure Schedule are all Material Agreements relating to the ownership or
operation of the Evergreen Assets or the conduct of the business of the
Evergreen Station or to which any of the Evergreen Assets is subject (the
"Evergreen Material Agreements"). True, accurate and complete copies of each
Evergreen Material Agreement have been made available by Evergreen to EZ and
Evergreen has provided EZ with photocopies of all Evergreen Material Agreements
requested by EZ (or true, accurate and complete descriptions thereof have been
set forth in Section 3.16 of the Evergreen Disclosure Schedule, if any such
Material Agreements are oral). All of the Evergreen Material Agreements are
valid, binding and legally enforceable obligations of an Evergreen Party and, to
Evergreen's
-13-
knowledge, information and belief, all other parties thereto (except to the
extent that the invalidity or non-binding nature of any Evergreen Material
Agreements, individually or in the aggregate would not have a Material Adverse
Effect on Evergreen). Each Evergreen Party has duly complied with all of the
Material terms and conditions of each Evergreen Material Agreement to which it
is a party and has not done or performed, or failed to do or perform (and there
is no pending or, to the knowledge, information and belief of Evergreen,
threatened Claim that any Evergreen Party has not so complied, done and
performed or failed to do and perform) any act which would invalidate or provide
grounds for the other party thereto to terminate (with or without notice,
passage of time or both) any Evergreen Material Agreement or impair the rights
or benefits, or increase the costs, of any Evergreen Party under any Evergreen
Material Agreement. No Evergreen Party has granted any Material waivers or
forbearance under any Evergreen Material Agreement and, to Evergreen's
knowledge, information and belief, no third party is in material default in the
performance of any of its obligations under any Evergreen Material Agreement.
Except for those consents or approvals listed in Section 3.16 of the Evergreen
Disclosure Schedule, no consents or approvals of any third party are necessary
to permit the assignment by the Evergreen Parties of the Evergreen Material
Agreements to the EZ Parties and such assignment will not affect the validity or
enforceability of any Evergreen Material Agreement or cause any Material change
in the substantive terms of any of them.
3.17 Ordinary Course of Business. Each Evergreen Party, from the end of
---------------------------
its most recent fiscal quarter to the date hereof, except (i) as may be
described on Section 3.17 of the Evergreen Disclosure Schedule, or (ii) as may
be required or expressly contemplated by the terms of this Agreement, with
respect to the Evergreen Assets and the Evergreen Station:
(a) has operated its business in the normal, usual and customary
manner in the ordinary and regular course of business, consistent with
prior practice;
(b) has not sold or otherwise disposed of or contracted to sell or
otherwise dispose of any Evergreen Asset having a value in excess of
$50,000, other than in the ordinary course of business;
(c) except in each case in the ordinary course of business,
consistent with prior practice:
(i) has not incurred any obligations or liabilities (fixed,
contingent or other) having a value in excess of $50,000;
(ii) has not entered into any commitments having a value in
excess of $50,000; and
(iii) has not canceled any debts or claims;
(d) has not made or committed to make any additions to its property
or any purchases of equipment, except for normal maintenance and
replacements;
-14-
(e) except as described in Section 3.17(e) of the Evergreen
Disclosure Schedule, has not increased the compensation payable or to
become payable to any of the Evergreen Station Employees other than in the
ordinary course of business or otherwise altered, modified or changed the
terms of their employment;
(f) has not suffered any Material damage, destruction or loss
(whether or not covered by insurance) or any acquisition or taking of
property by any Authority;
(g) has not waived any rights of Material value without fair and
adequate consideration;
(h) has not experienced any work stoppage; and
(i) except in the ordinary course of business, has not entered into,
amended or terminated any Evergreen Lease, Evergreen Governmental
Authorization, Evergreen Private Authorization, Evergreen Material
Agreement, Evergreen Employment Arrangement or Contract, or any
transaction, agreement or arrangement with any Affiliate of Evergreen.
3.18 Broker or Finder. No Person assisted in or brought about the
----------------
negotiation of this Agreement or the Transactions in the capacity of broker,
agent or finder or in any similar capacity on behalf of any Evergreen Party
other than Star Media Group whose fee will be paid by Evergreen.
3.19 Solvency. As of the execution and delivery of this Agreement, each
--------
Evergreen Party is, and immediately prior to giving effect to the consummation
of the Transactions will be, solvent.
3.20 Environmental Matters. Except as set forth in Section 3.20 of the
---------------------
Evergreen Disclosure Schedule, with respect to the Evergreen Assets, each
Evergreen Party:
(a) to the knowledge, information and belief of Evergreen, has not
been notified that it is potentially liable under, has not received any
request for information or other correspondence concerning its potential
liability with respect to any site or facility under, and is not a
"potentially responsible party" under, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Conservation Recovery Act, as amended, or any similar state law;
(b) has not entered into or received any consent decree, compliance
order or administrative order issued pursuant to any Environmental Law;
(c) is not a party in interest or in default under any judgment,
order, writ, injunction or decree of any final order issued pursuant to any
Environmental Law;
(d) is, to the knowledge, information and belief of Evergreen, in
substantial compliance in all Material respects with all Environmental
Laws, has, to Evergreen's knowledge, information and belief, obtained all
Environmental Permits required under Environmental Laws, and is not the
subject of or, to Evergreen's knowledge, information and belief, threatened
with any Legal Action involving a demand for damages or other potential
-15-
liability including any Lien with respect to Material violations or
Material breaches of any Environmental Law; and
(e) has no knowledge of any past or present Event related to the
Evergreen Station or any of the Evergreen Assets which Event, individually
or in the aggregate, will interfere with or prevent continued Material
compliance with all Environmental Laws, or which, individually or in the
aggregate, will form the basis of any Material Claim for the release or
threatened release into the environment, of any Hazardous Material.
3.21 Trade or Barter. Section 3.21 of the Evergreen Disclosure Schedule
---------------
sets forth a true, complete and accurate description (including obligations and
liabilities remaining thereunder) of all Evergreen Trade Agreements that
individually involve or may involve, valued in accordance with GAAP, more than
$500 in obligations remaining thereunder as of the date of this Agreement in
money, property or services or a remaining term in excess of two months.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE EZ PARTIES
Each EZ Party hereby, jointly and severally, represents, warrants and
covenants to, and agrees with, the Evergreen Parties as follows:
4.1 Organization and Business; Power and Authority; Effect of
---------------------------------------------------------
Transaction.
-----------
(a) Each EZ Party is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, has all
requisite corporate power and authority to own or hold under lease its
properties and to conduct its business as now conducted.
(b) Each EZ Party has all requisite corporate power and authority
necessary to enable it to execute and deliver, and to perform its obligations
under, this Agreement and each Collateral Document executed or required to be
executed by it pursuant hereto or thereto or to consummate the Transactions; and
the execution, delivery and performance of this Agreement and each Collateral
Document executed or required to be executed by it pursuant hereto or thereto
have been duly authorized by all requisite corporate action on the part of each
EZ Party. This Agreement has been duly executed and delivered by each EZ Party
and constitutes, and each Collateral Document to which any EZ Party becomes a
party will, when executed and delivered by such EZ Party, constitute, the
legally valid and binding obligation of such EZ Party, enforceable against such
EZ Party in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, moratorium, insolvency and similar
laws affecting the rights and remedies of creditors and obligations of debtors
generally and by general principles of equity.
(c) Except as set forth in Section 4.1(c) of the EZ Disclosure Schedule,
neither the execution and delivery by any EZ Party of this Agreement or any
Collateral Document executed or required to be executed by it pursuant hereto or
thereto, nor the consummation by each EZ Party of
-16-
the Transactions, nor compliance with the terms, conditions and provisions
hereof or thereof by each EZ Party:
(i) will conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of any EZ Party or any
Applicable Law on the part of any EZ Party, or will conflict with, or
result in a breach or violation of, or constitute a default under, or
permit the acceleration of any obligation or liability in, or but for any
requirement of giving of notice or passage of time or both would constitute
such a conflict with, breach or violation of, or default under, or permit
any such acceleration in, any Material Contract of any EZ Party; or
(ii) will require any EZ Party to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization, except for the
FCC Consents, filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and Private
Authorizations the failure of which to be obtained or maintained would not,
individually or in the aggregate, have a Material Adverse Effect on EZ.
4.2 Inapplicability of Specified Statutes. EZ is not a "holding
-------------------------------------
company", or a "subsidiary company" or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended, or an "investment company" or a company "controlled" by or acting on
behalf of an "investment company", as defined in the Investment Company Act of
1940, as amended, or a "carrier" or a person which is in control of a "carrier",
as defined in section 11301 of Title 49, U.S.C.
4.3 Broker or Finder. No Person assisted in or brought about the
----------------
negotiation of this Agreement, the Exchange or the subject matter of any other
Transactions in the capacity of broker, agent or finder or in any similar
capacity on behalf of any EZ Party other than Star Media Group which EZ
understands was retained by, and whose fee will be paid by, Evergreen.
4.4 Solvency. As of the execution and delivery of this Agreement, each
--------
EZ Party is, and immediately prior to giving effect to the consummation of the
Transactions will be, solvent.
ARTICLE 5
COVENANTS
5.1 Access to Information; Confidentiality.
--------------------------------------
(a) Evergreen shall afford to the EZ Parties (and American) and its
accountants, counsel, financial advisors and other representatives (the
"Representatives") full access during normal business hours throughout the
period prior to the Closing Date to all of Evergreen's (and its Subsidiaries')
properties, books, contracts, commitments and records (including without
limitation Tax Returns) relating to the Evergreen Assets and the Evergreen
Station and, during such period, shall furnish promptly upon request (i) a copy
of each report, schedule and other document filed or received by any of them
pursuant to the requirements of any Applicable Law (including without
-17-
limitation the FCA) or filed by it or any of its Subsidiaries with any Authority
in connection with the Transactions or any other report, schedule or document
which may have a Material Effect on the Evergreen Assets or the Evergreen
Station or the businesses, operations, properties, prospects, personnel,
condition, (financial or other), or results of operations thereof, (ii) to the
extent not provided for pursuant to the preceding clause, all financial records,
ledgers, work papers and other sources of financial information possessed or
controlled by Evergreen or its accountants deemed by EZ or its Representatives
necessary or useful for the purpose of performing an audit of the business of
the Evergreen Station and certifying financial statements and financial
information, and (iii) such other information concerning any of the foregoing as
EZ shall reasonably request. All non-public information furnished pursuant to
the provisions of this Agreement, including without limitation this Section,
will be kept confidential and, except as required by Applicable Law (including
without limitation in connection with any registration statement or similar
document filed pursuant to any federal or state securities Law), shall not,
without the prior written consent of Evergreen, be disclosed by the other party
in any manner whatsoever, in whole or in part, and shall not be used for any
purposes, other than in connection with the Transactions. In no event shall any
EZ Party (or American) or any of its Representatives use such information to the
detriment of the other party. Except as otherwise herein provided, each EZ Party
(and American) agrees to reveal such information only to those of its
Representatives or other Persons who need to know such the information for the
purpose of evaluating the Transactions, who are informed of the confidential
nature of such information and who shall undertake in writing (a copy of which,
if requested, will be furnished to the disclosing party) to act in accordance
with the terms and conditions of this Agreement. From and after the Closing, No
Evergreen Party shall, without the prior written consent of EZ, disclose any
information remaining in its possession with respect to the Evergreen Assets or
the Evergreen Station, and no such information shall be used by it for any
purposes, other than in connection with the Transactions or to the extent
required by Applicable Law.
(b) Subject to the terms and conditions of Section 5.1(a), each EZ Party
(and American) may disclose such information as may be necessary in connection
with seeking all Governmental Authorizations and Private Authorizations or that
is required by Applicable Law to be disclosed, including without limitation in
any registration statement or other document required to be filed under any
federal or state securities Law. In the event that this Agreement is terminated
in accordance with its terms, each EZ Party (and American) shall promptly
redeliver all non-public written material provided pursuant to this Section or
any other provision of this Agreement or otherwise in connection with the
Transactions and shall not retain any copies, extracts or other reproductions in
whole or in part of such written material other than one copy thereof which
shall be delivered to independent counsel for such party.
(c) No investigation pursuant to this Section or otherwise shall affect
any representation or warranty in this Agreement of either party or any
condition to the obligations of the parties hereto.
5.2 Agreement to Cooperate.
----------------------
(a) Each of the parties hereto shall use reasonable business efforts (x)
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under Applicable Law to consummate the
Transactions, and (y) to refrain from taking, or cause to be
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taken, any action and to refrain from doing or causing to be done, any thing
which could impede or impair the consummation of the Exchange or the making
effective of the other Transactions, including, in all cases, without limitation
using its reasonable business efforts (i) to prepare and file with the
applicable Authorities as promptly as practicable after the execution of this
Agreement all requisite applications and amendments thereto, together with
related information, data and exhibits, necessary to request issuance of orders
approving the Transactions by all such applicable Authorities, each of which
must be obtained or become final in order to satisfy the condition applicable to
it set forth in Section 6.1(a), (ii) to obtain all necessary or appropriate
waivers, consents and approvals, (iii) to effect all necessary registrations,
filings and submissions (including without limitation filings under the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Act and all filings necessary for EZ to own and operate the
Evergreen Station), (iv) to lift any injunction or other legal bar to the
purchase and sale of the Evergreen Assets and the Evergreen Station (and, in
such case, to proceed with such purchase and sale as expeditiously as possible),
and (v) to obtain the satisfaction of the conditions specified in Article 6,
including without limitation the truth and correctness as of the Closing Date as
if made on and as of the Closing Date of the representations and warranties of
such party and the performance and satisfaction as of the Closing Date of all
agreements and conditions to be performed or satisfied by such party. Without
limiting the generality of the foregoing, the parties acknowledge and agree that
the assignment of the FCC Licenses as contemplated by this Agreement is subject
to the prior consent and approval of the FCC. Within twenty (20) days following
the execution and delivery of this Agreement, Evergreen and EZ shall file with
the FCC appropriate applications for FCC Consents, which applications shall not
contain any request for waiver of the FCC's multiple ownership rules; provided,
however, that EZ may file a separate application with the FCC seeking
reassignment of the Extra Charlotte Station from the Charlotte Trustee to any EZ
Party or Affiliate of an EZ Party (or, if not theretofore assigned, seeking
retention of such Station) which application may request a waiver of the
Commission's multiple ownership rules; provided, however, that no such
application shall be filed or prosecuted in a manner that materially delays the
grant of the applications seeking the FCC Consents. The parties shall prosecute
said applications with all reasonable diligence and otherwise use reasonable
business efforts to obtain the grant of FCC Consents to such applications as
expeditiously as practicable. If the FCC Consents, or any of them, imposes any
condition on either party hereto (or, in the case of EZ, American or any of its
Subsidiaries), such party shall use reasonable business efforts to comply with
such condition unless compliance would have a Material Adverse Effect upon it.
If reconsideration or judicial review is sought with respect to any FCC Consent,
Evergreen and EZ shall oppose such efforts to obtain reconsideration or judicial
review (but nothing herein shall be construed to limit any party's right to
terminate this Agreement pursuant to the provisions of Section 7.1).
Notwithstanding anything in this Agreement to the contrary, the Transactions are
expressly conditioned upon the grant of the Final Order as to the FCC Consents
for the transfer of the FCC Licenses for the Evergreen Station without any
condition which would have a Materially Adverse Effect upon the EZ Parties, it
being understood that the imposition of any condition requiring any EZ Party
(including American and its Subsidiaries) to divest their interest in any radio
station in the Charlotte, North Carolina market or to otherwise take any action
to comply with Section 73.3555(a) of the FCC rules shall not be deemed to be
have a Materially Adverse Effect upon EZ.
(b) The parties shall cooperate with one another in the preparation,
execution and filing of all Returns, questionnaires, applications, or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp Taxes, any transfer, recording,
-19-
registration and other fees, and any similar Taxes which become payable in
connection with the Transactions that are required or permitted to be filed on
or before the Closing Date.
(c) Evergreen shall cooperate and use its reasonable business efforts to
cause its independent accountants to reasonably cooperate with EZ, and at EZ's
expense, in order to enable EZ to have Evergreen and EZ's or Evergreen's
independent accountants prepare audited financial statements for the Evergreen
Station described in Section 6.2(f). Evergreen represents and warrants that
such financial statements will have been prepared in accordance with GAAP
applied on a basis consistent with past practices, will be true, correct and
complete, and will present fairly the financial condition and results of
operation of the Evergreen Stations described in Section 6.2(f). Without
limiting the generality of the foregoing, Evergreen agrees that it will (i)
consent to the use of such audited financial statements in any registration
statement or other document filed by EZ (or American or any of either of their
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 and as EZ's or
Evergreen's independent accountants may reasonably request under the
circumstances. Notwithstanding the foregoing, nothing in this Agreement shall
be construed to require any EZ Party to divest any asset to obtain termination
of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period or to avoid or settle litigation
initiated by any antitrust enforcement Authority seeking to block the
transactions contemplated by this Agreement (unless such divestiture is
necessary to comply with the multiple ownership rules or policies of the FCC).
(d) The parties acknowledge and agree that the parties intend, if
appropriate at the time the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act waiting period has expired or
been terminated, to execute and deliver a time brokerage agreement with respect
to the Evergreen Station substantially on the terms contemplated by the letter
of intent, dated August 27, 1996, between EZ and Evergreen Parent (the "Letter
of Intent") (the "the Evergreen Station TBA"). Anything in this Agreement to the
contrary notwithstanding, including without limitation any provision of Articles
3 and 4 and Sections 6.2 and 6.3, (i) Evergreen shall not be liable in any
respect to the extent any of the representations and warranties contained in
Article 3 are not true and correct in any Material respect on and as of the
Closing Date due solely to the existence and operation of the Evergreen Station
TBA, (ii) the conditions set forth in Sections 6.2(c) and 6.2(e) shall not be
deemed to be not satisfied as a result of any action or failure to act of any EZ
Party pursuant to the provisions of the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, and (iii) the
certificates to be delivered to EZ pursuant to the provisions of Section 6.2(c)
shall not be required to address any of such representations and warranties that
are not true and correct in any material respect on and as of the Closing Date
due to the existence and operation of such agreements.
5.3 Public Announcements. Until the Closing, or in the event of
--------------------
termination of this Agreement, Evergreen and EZ shall consult with the other
before issuing any press release or otherwise making any public statements with
respect to this Agreement, the Transactions and shall not issue any such press
release or make any such public statement without the prior consent of the
other. Notwithstanding the foregoing, each party acknowledges and agrees that
Evergreen and EZ may, without its prior consent, issue such press releases or
make such public statements as may be required by Applicable Law, in which case,
to the extent practicable, the party proposing to make such press release or
public statement will consult with the other regarding the nature, extent and
form of such press release or public statement.
-20-
5.4 Notification of Certain Matters. Evergreen Parent and EZ shall give
-------------------------------
prompt notice to the other, of the occurrence or non-occurrence of any Event
the occurrence or non-occurrence of which would be likely to cause (i) any
representation or warranty made by it or any of its Subsidiaries contained in
this Agreement to be untrue or inaccurate in any respect such that one or more
of the conditions of Closing might not be satisfied, or (ii) any covenant,
condition or agreement made by it or any of its Subsidiaries contained in this
Agreement not to be complied with or satisfied, or (iii) any change to be made
in the Evergreen Disclosure Schedule or the EZ Disclosure Schedule, as the case
may be, in any respect such that one or more of the conditions of Closing might
not be satisfied, and any failure made by it to comply with or satisfy, or be
able to comply with or satisfy, any covenant, condition or agreement to be
complied with or satisfied by it hereunder in any respect such that one or more
of the conditions of Closing might not be satisfied; provided, however, that the
delivery of any notice pursuant to this Section shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
5.5 No Solicitation. Neither Evergreen Parent shall, nor shall it permit
---------------
any Subsidiary, or any of its Representatives (including, without limitation,
any investment banker, broker, finder, attorney or accountant retained by it)
to, initiate, solicit or facilitate, directly or indirectly, any inquiries or
the making of any proposal with respect to any Alternative Transaction, engage
in any discussions or negotiations concerning, or provide to any other Person
any information or data relating to, it or any Subsidiary for the purposes of,
or otherwise cooperate in any way with or assist or participate in, or
facilitate any inquiries or the making of any proposal which constitutes, or may
reasonably be expected to lead to, a proposal to seek or effect any Alternative
Transaction, or agree to or endorse any Alternative Transaction. "Alternative
Transaction" means a transaction or series of related transactions (other than
the Transactions) resulting in (i) any merger or consolidation of either,
regardless of whether it is the surviving Entity unless the surviving Entity
remains obligated under this Agreement to the same extent as it was, or (ii) any
sale or other disposition of all or any substantial part of the Evergreen Assets
or the Evergreen Station. The provisions of this Section shall apply to each of
Evergreen's Subsidiaries.
5.6 Conduct of Business by Evergreen Pending the Closing. Except as
----------------------------------------------------
otherwise contemplated by this Agreement, and subject to the commencement of the
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ as set forth in Section 5.2(d), after the date hereof and
prior to the Closing Date or earlier termination of this Agreement, unless EZ
shall otherwise agree in writing, Evergreen Parent shall, and shall cause its
Subsidiaries, to the extent relating to the Evergreen Station or the Evergreen
Assets, to:
(a) conduct their respective businesses in the ordinary and usual
course of business and consistent with past practice;
(b) use all reasonable business efforts to preserve intact their
respective business organizations and goodwill, keep available the services
of their respective present general managers, on-air personalities and
other key employees, and preserve the goodwill and business relationships
with customers and others having business relationships with them and not
engage in any action, directly or indirectly, with the intent to Adversely
Affect the transactions contemplated by this Agreement;
-21-
(c) maintain with financially responsible insurance companies
insurance on their respective tangible assets and their respective
businesses in such amounts and against such risks and losses as are
consistent with past practice;
(d) maintain levels of advertising, marketing and promotion efforts
and expenditures at levels no less than those currently budgeted in the
1996 business plan, a true, correct and complete in all material respects
description of which is set forth in Section 5.6(d) of the Evergreen
Disclosure Schedule;
(e) (i) to operate the Evergreen Station in conformity with the
Evergreen FCC Licenses on a basis consistent with past practice and any
special temporary authority or program test authority issued thereunder,
the FCA and the rules and regulations of any other Authority with
jurisdiction over the Evergreen Station, and (ii) take all actions
necessary to maintain the Evergreen FCC Licenses;
(f) prior to the effectiveness of the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, refrain
from changing the frequency or format of the Evergreen Station or making
any material changes in the Evergreen Station's studio or other structures,
except to the extent required by the FCA or the rules and regulation of the
FCC;
(g) prior to the effectiveness of the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, not make
any material changes in the broadcast hours or in the percentage or types
of programming broadcast by the Evergreen Station, or make any other
Material changes in the Evergreen Station's programming policies, except
such changes as in the good faith judgment of Evergreen are required by the
public interest;
(h) not (i) dispose of any of the Evergreen Assets owned by Evergreen
or used in the operation of the Evergreen Station (other than for the
disposition in the ordinary course of business of immaterial assets that
are of no further use to such Station or disposition of Evergreen Assets to
another Evergreen Party or any Affiliate of an Evergreen Party who is or
becomes a party to this Agreement) or (ii) modify, change in any Material
respect or enter into any Material Agreement relating to the business of
the Evergreen Station;
(i) notify EZ promptly if the Evergreen Station's normal broadcast
transmissions are interrupted or impaired for (i) thirty (30) minutes or
more for a period of five (5) consecutive days or for seven (7) days within
any thirty (30) day period (except for normal maintenance) or (ii) a period
of six (6) continuous hours or more;
(j) not create, assume or permit to exist any Lien upon any of the
Evergreen Assets or the Evergreen Station, except for (i) Permitted Liens
and (ii) other Liens, if any, set forth on Section 3.5(a) of the Evergreen
Disclosure Schedule (which Liens shall be released prior to Closing); and
(k) not waive any Material right relating to the Evergreen Station.
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5.7 FCC Application; Divesture Commitment.
-------------------------------------
(a) The parties acknowledge that the EZ Parties and/or their Affiliates
own a number of radio stations in the Charlotte, North Carolina area that, when
combined with the Evergreen Station (and the Evergreen Stations (as defined in
the Asset Exchange Agreement)), would cause the EZ Parties to be in violation of
Section 73.3555 of the FCC's rules (absent a waiver of those rules). The parties
further acknowledge that the FCC Consents to transfer of the Evergreen Station
to EZ may contain a condition requiring EZ to divest its interest in one or more
FM radio stations in the Charlotte market (the "Extra Charlotte FM") prior to
Closing. In order to ensure that the EZ Parties can meet such a condition, prior
to the filing of the applications for FCC Consent, EZ shall agree to assign the
Extra Charlotte FM to a trustee (the "Charlotte Trustee") pursuant to a trust
agreement that satisfies the FCC's multiple ownership rules and policies,
including the cross-interest policy, then in effect. In the event that the EZ
Parties' acquisition of the Evergreen Station would not comply with the FCC's
multiple ownership rules and policies, including the cross-interest policy, on
or prior to the Closing Date, unless the FCC Consents permit retention of the
Extra Charlotte FM, the EZ Parties shall assign, subject to receipt of the FCC's
grant of the Charlotte Trustee Application, the Extra Charlotte FM to the
Trustee on the Closing Date in order to effectuate the Closing under this
Agreement.
(b) Within twenty (20) business days after the date of this Agreement EZ
shall file an application with the FCC requesting the consent to the assignment
of the FCC licenses for the Extra Charlotte FM to the Charlotte Trustee (the
"Charlotte Trustee Application"). The parties shall cooperate with each other
in the preparation and filing of the aforementioned FCC application, and the
parties shall prosecute such application in good faith and with due diligence.
(c) Anything in this Section to the contrary notwithstanding, the EZ
Parties may, in the event such parties (or their Affiliates) enter into a
binding agreement with respect to the sale, exchange or other disposition of the
Extra Charlotte FM with a third party, file an application with the FCC
requesting the consent to the assignments of the FCC authorizations for such
station to such third party, either directly to such third party or indirectly
to such third party through the Charlotte Trustee and, in such event, the EZ
Parties need not transfer the Extra Charlotte FM to the Charlotte Trustee
pursuant to the provisions of paragraph (a) of this Section 5.9 so long as the
application with respect to such binding agreement is pending or has been
granted, except in the event such application relates solely to an indirect
transfer through the Charlotte Trustee. Notwithstanding the foregoing, the EZ
Parties agree to leave the trust and Charlotte Trustee Application in effect
until any such third party sale has been consummated.
ARTICLE 6
CLOSING CONDITIONS
6.1 Conditions to Obligations of Each Party to Effect the Transactions.
------------------------------------------------------------------
The respective obligations of each party to effect the Transactions shall,
except as hereinafter provided in this
-23-
Section, be subject to the satisfaction at or prior to the Closing Date of the
following conditions, any or all of which may be waived, in whole or in part, to
the extent permitted by Applicable Law:
(a) All authorizations, consents, waivers, orders or approvals
required to be obtained from all Authorities, and all Governmental Filings
required to be made by any EZ Party or any Evergreen Party with any
Authority, prior to the consummation of the purchase and sale of the
Evergreen Assets and the Evergreen Station, shall have been obtained from,
and made with, the FCC and all other required Authorities, except for such
authorizations, consents, waivers, orders, approvals, filings,
registrations, notices or declarations the failure to obtain or make would
not, in the reasonable business judgment of EZ have a Material Adverse
Effect on the Evergreen Assets or the Evergreen Station. Without limiting
the generality of the foregoing, the FCC shall have issued the FCC
Consents, the same shall have become Final Orders, and any conditions
precedent to the effectiveness of such Final Orders which are specified
therein shall have been satisfied; provided, however, that any condition
requiring EZ (or American or any of its Subsidiaries) to divest its
interest in any radio station in the Charlotte, North Carolina market or to
otherwise take any action to comply with Section 73.3555 of the FCC's rules
in such markets shall not be a condition of such party's obligation to
effect the Exchange; provided further, however, that notwithstanding
anything in this Section or elsewhere in this Agreement, including without
limitation Section 5.2(a) or 5.9, to the contrary, if such Final Orders
impose such a condition (i) as a condition precedent to the effectiveness
of the FCC Consents, or as a condition which must be complied with within
less than six (6) months subsequent to consummation of the Transactions, EZ
shall have the right, prior to the Termination Date, to attempt to comply
with such condition, or (ii) as a condition which can be complied with
within six (6) months or more following consummation of the Transactions,
EZ shall be obligated to proceed with the consummation of the Transactions;
(b) As of the Closing Date, no Legal Action shall be pending before
or threatened in writing by any Authority seeking to enjoin, restrain,
prohibit or make illegal, or to impose any Materially Adverse Condition in
connection with, the consummation of the purchase and sale of the Evergreen
Assets and the Evergreen Station, it being understood and agreed that a
written request by any Authority for information with respect to any
Evergreen Party, any EZ Party or American or the purchase and sale of the
Evergreen Assets and the Evergreen Station, which information could be used
in connection with such Legal Action, shall not be deemed to be a threat of
any such Legal Action; and
(c) The transactions contemplated by the Asset Exchange Agreement
shall have been consummated prior to or simultaneously with the
consummation of the Transactions.
6.2 Conditions to Obligations of EZ. The obligation of the EZ Parties to
-------------------------------
effect the Exchange shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) Evergreen shall have delivered or cause to be delivered to EZ all
of the Collateral Documents required to be delivered by the Evergreen
Parties to the EZ Parties at or prior to the Closing pursuant to the terms
of this Agreement; such Collateral Documents
-24-
shall be reasonably satisfactory in form, scope and substance to EZ and its
counsel and American and its counsel; and EZ and its counsel and American
and its counsel shall have received all information and copies of all
documents, including records of corporate proceedings, which they may
reasonably request in connection therewith, such documents where
appropriate to be certified by proper corporate officers;
(b) Evergreen shall have furnished EZ and, at EZ's request, any bank
or other financial institution providing credit to EZ or American or any
Subsidiary of EZ or American, with a favorable opinion, dated the Closing
Date of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel and FCC counsel for the Evergreen
Parties, with respect to the matters set forth in Sections 3.1(a), (b) and
(c) (other than as to Private Authorizations), 3.7(a) (limited to its
knowledge and to Legal Actions), and 3.14 and with respect to FCC related
matters of a nature and scope customary in comparable transactions
(including without limitation with respect to the grant of all necessary
FCC Consents and their being Final Orders, that all FCC Licenses are valid,
binding and in good standing and in full force and effect, the absence of
Legal Actions which could Materially Adversely Affect the FCC Licenses and
the FCC Consents, and the filing of all Material reports and the payment of
all fees) and with respect to such other matters arising after the date of
this Agreement incident to the Transactions, as EZ or its counsel or
American or its counsel may reasonably request or which may be reasonably
requested by any such bank or financial institution or their respective
counsel;
(c) The representations and warranties of each Evergreen Party
contained in this Agreement shall be true and correct in all Material
respects at and as of the Closing Date with the same force and effect as
though made on and as of such date except those which speak as of a certain
date which shall continue to be true and correct in all Material respects
as of such date on the Closing Date; each and all of the covenants,
agreements and conditions to be performed or satisfied by each Evergreen
Party hereunder at or prior to the Closing Date shall have been duly
performed or satisfied in all Material respects; and each Evergreen Party
shall have furnished EZ with such certificates and other documents
evidencing the truth of such representations and warranties and the
performance or satisfaction of the covenants, agreements and conditions as
EZ or its counsel shall have reasonably requested;
(d) All authorizations, consents, waivers, orders or approvals marked
with an asterisk as "material" on Section 3.6 or 3.16 of the Evergreen
Disclosure Statement shall have been obtained, without the imposition,
individually or in the aggregate, of any condition or requirement which
could Materially Adversely Affect EZ;
(e) Between the date of this Agreement and the Closing Date, there
shall not have occurred and be continuing any Material Adverse Change in
the Evergreen Parties; as of the Closing Date, the Evergreen FCC Licenses
shall not have been Materially and Adversely Affected by any act, or
failure to act, of any Evergreen Party;
(f) EZ shall have received from its or American's or Evergreen's
independent accountants an unqualified report (as to the scope of the
audit, access to the books and records and the cooperation of management)
on the financial statements of the Evergreen
-25-
Stations and the Evergreen Stations (as defined in the Asset Exchange
Agreement) presented on a combined basis (consisting of balance sheets at
December 31, 1995 and September 30, 1996 and statements of operations and
cash flow for the year ended December 31, 1995 and the nine month period
ended September 30, 1996), which financial statements shall have been
prepared in conformity with GAAP and Regulation S-X under the Securities
Act; and
(g) As of the Closing Date, no Legal Action shall be pending before
or threatened in writing by any Authority which might, in the reasonable
business judgment of EZ, based upon the advice of counsel, have a Material
Adverse Effect, it being understood and agreed that a written request by
any Authority for information with respect to the Transactions, which
information could be used in connection with such Legal Action, shall not
be deemed to be a threat of any such Legal Action.
6.3 Conditions to Obligations of Evergreen. The obligation of the
--------------------------------------
Evergreen Parties to effect the Exchange shall be subject to the satisfaction of
the following conditions, any or all of which may be waived, in whole or in
part, to the extent permitted by Applicable Law:
(a) EZ shall have delivered or cause to be delivered to Evergreen
Parent all of the Collateral Documents required to be delivered by the EZ
Parties to the Evergreen Parties at or prior to the Closing pursuant to the
terms of this Agreement; such Collateral Documents shall be reasonably
satisfactory in form, scope and substance to Evergreen and its counsel; and
Evergreen and its counsel shall have received all information and copies of
all documents, including records of corporate proceedings, which they may
reasonably request in connection therewith, such documents where
appropriate to be certified by proper corporate officers;
(b) EZ shall have furnished Evergreen and, at Evergreen's request,
any bank or other financial institution providing credit to Evergreen or
any Subsidiary, with favorable opinions, dated the Closing Date of Hunton &
▇▇▇▇▇▇▇▇, special counsel for the EZ Parties, with respect to the matters
set forth in Sections 4.1(a), (b) and (c) (other than as to Private
Authorizations) and 4.2, of ▇▇▇▇▇▇▇▇ & Worcester LLP, counsel for American,
with respect to the effectiveness of the Merger and that this Agreement is
enforceable against American (subject to customary qualifications), and
with respect to such other matters arising after the date of this Agreement
incident to the Transactions, as Evergreen or its counsel may reasonably
request or which may be reasonably requested by any such bank or financial
institution or their respective counsel;
(c) The representations and warranties of each EZ Party contained in
this Agreement shall be true and correct in all Material respects at and as
of the Closing Date with the same force and effect as though made on and as
of such date except those which speak as of a certain date which shall
continue to be true and correct in all Material respects as of such date on
the Closing Date; each and all of the covenants, agreements and conditions
to be performed or satisfied by each EZ Party hereunder at or prior to the
Closing Date shall have been duly performed or satisfied in all Material
respects; and each EZ Party shall have furnished Evergreen Parent with such
certificates and other documents evidencing the truth of such
representations and warranties and the performance or satisfaction of the
-26-
covenants, agreements and conditions as Evergreen or its counsel shall have
reasonably requested; and
(d) As of the Closing Date, no Legal Action shall be pending before
or threatened in writing by any Authority which might, in the reasonable
business judgment of Evergreen, based upon the advice of counsel, have a
Material Adverse Effect of a nature specified in clauses (a) or (c) of the
definition of Adverse Change, Effect or Affect, it being understood and
agreed that a written request by any Authority for information with respect
to the Transactions, which information could be used in connection with
such Legal Action, shall not be deemed to be a threat of any such Legal
Action.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing Date:
(a) by mutual consent of Evergreen Parent and EZ;
(b) by either EZ or Evergreen Parent if any permanent injunction,
decree or judgment by any Authority preventing the consummation of the
Transactions shall have become final and nonappealable; or
(c) by Evergreen Parent in the event no Evergreen Party is in
Material breach of this Agreement and none of its representations or
warranties shall have become and continue to be untrue in any Material
respect, and either (i) the purchase and sale of the Evergreen Assets and
the Evergreen Station have not been consummated prior to the Termination
Date or (ii) one or more EZ Parties is in Material breach of this Agreement
or any of its representations or warranties shall have become and continue
to be untrue in any Material respect and such breach or untruth exists and
is not cured within the cure period specified in this Section; or
(d) by EZ in the event no EZ Party is in Material breach of this
Agreement and none of its representations or warranties shall have become
and continue to be untrue in any Material respect, and either (i) the
purchase and sale of the Evergreen Assets and the Evergreen Station have
not been consummated prior to the Termination Date or (ii) one or more
Evergreen Parties is in Material breach of this Agreement or any of its
representations or warranties shall have become and continue to be untrue
in any Material respect, and such a breach or untruth exists and is not
cured within the cure period specified in this Section.
Neither party shall have the right to terminate this Agreement as a result of
the other party's breach or default unless the terminating party shall have
given the defaulting party thirty (30) business days to cure the default (or
such longer period not in excess of an additional thirty (30) business days as
is, in the reasonable business judgment of the parties, reasonably necessary to
effect such cure so
-27-
long as the defaulting party is proceeding with due diligence and best efforts
to effect such cure); provided, however, that such cure period shall not extend
the Termination Date.
The term "Termination Date" shall mean December 31, 1997 or such other date
as the parties may, from time to time, mutually agree.
The right of EZ or Evergreen Parent to terminate this Agreement pursuant to
this Section shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of either party, any Person controlling
any such party or any of their respective Representatives whether prior to or
after the execution of this Agreement.
7.2 Effect of Termination. Except as provided in Sections 5.1 (with
---------------------
respect to confidentiality), 5.3 and 9.3 and this Section, in the event of the
termination of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void, there shall be no liability on the part of either party,
or any of their respective Affiliates (including without limitations
stockholders, officers or directors), to the other and all rights and
obligations of either party shall cease; provided, however, that such
termination shall not relieve either party from liability for any
misrepresentation or breach of any of its warranties, covenants or agreements
set forth in this Agreement.
ARTICLE 8
INDEMNIFICATION
8.1 Survival. Except with respect to obligations and liabilities assumed
--------
pursuant to the Evergreen Assumable Agreements, the representations, warranties,
covenants and agreements of the parties contained in or made pursuant to this
Agreement or any Collateral Document shall survive the Closing and shall remain
operative and in full force and effect for a period of (a) one (1) year after
the Closing Date or (b) the applicable statute of limitations in the case of
matters of a nature referred to in Sections 3.1(b), 3.11, 3.12, and 4.1(b) (the
"Indemnity Period"), regardless of any investigation or statement as to the
results thereof made by or on behalf of any party hereto. No claim for
indemnification, other than with respect to fraud, may be asserted after the
expiration of the Indemnity Period. Notwithstanding anything herein to the
contrary, any representation, warranty, covenant and agreement which is the
subject of a Claim which is asserted in writing prior to the expiration of the
Indemnity Period shall survive with respect to such Claim or any dispute with
respect thereto until the final resolution thereof.
8.2 Indemnification. Each of Evergreen Parent and EZ (the "indemnifying
---------------
party") agrees that on and after the Closing it shall indemnify and hold
harmless the other (which shall include its Subsidiaries, officers, directors,
employees, agents and other representatives) (the "indemnified party") from and
against any and all damages, claims, losses, expenses, costs, obligations and
liabilities, including without limitation liabilities for all reasonable
attorneys', accountants' and experts' fees and expenses including those incurred
to enforce the terms of this Agreement or any Collateral Document (collectively,
"Loss and Expense"), suffered, directly or indirectly, by the indemnified party
by reason of, or arising out of:
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(a) any breach of representation or warranty made by the indemnifying
party pursuant to this Agreement or any Collateral Document or any failure
by the indemnifying party to perform or fulfill any of its respective
covenants or agreements set forth in this Agreement or any Collateral
Document; or
(b) any Legal Action or other Claim by any third party relating to
the indemnifying party or the ownership or operations of any of its Assets
or the conduct of the business of its Stations to the extent such Legal
Action or other Claim has also resulted in a breach of representation or
warranty by the indemnifying party pursuant to this Agreement or any
Collateral Document; or
(c) in the case of Evergreen Parent as the indemnifying party, (i)
the Evergreen Nonassumed Liabilities, including without limitation any
Legal Action or other Claim brought or asserted by any third party, and
(ii) the failure of the Evergreen Parties to comply with the Bulk Sales law
of the State of North Carolina.
8.3 Limitation of Liability. Notwithstanding the provisions of Section
-----------------------
8.2, after the Closing, (i) each indemnified party shall be entitled to recover
its Loss and Expense in respect of any Claim only in the event that the
aggregate Loss and Expense for all Claims and all Claims under the Asset
Exchange Agreement exceed, in the aggregate, $50,000 in which event the
indemnified party shall be entitled to recover all such Loss and Expense
(including such $50,000), and (ii) in no event shall the aggregate amount
required to be paid by each indemnifying party pursuant to the provisions of
this Section or pursuant to the comparable section of the Asset Exchange
Agreement exceed $5,000,000, except for any Loss or Expense arising out of
matters of a nature referred to in Sections 3.1 and 4.1 and the first paragraph
of Section 3.7(b) as to which the limitations set forth in this clause (ii)
shall not apply. The provisions of the immediately preceding sentence of this
Section with respect to the limitation on each indemnifying party's obligation
to indemnify the indemnified party in respect of Loss and Expense shall not be
applicable to any claims which are based on fraud or willful or intentional
breach of representation or warranty.
8.4 Notice of Claims. If an indemnified party believes that it has
----------------
suffered or incurred any Loss and Expense, it shall notify the indemnifying
party promptly in writing, and in any event within the applicable time period
specified in Section 8.4, describing such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred. If any Legal Action
is instituted by a third party with respect to which an indemnified party
intends to claim any liability or expense as Loss and Expense under this
Article, such indemnified party shall promptly notify the indemnifying party of
such Legal Action, but the failure to so notify the indemnifying party shall not
relieve such indemnifying party of its obligations under this Article, except to
the extent such failure to notify prejudices such indemnifying party's ability
to defend against such Claim.
8.5 Defense of Third Party Claims. The indemnifying party shall have the
-----------------------------
right to conduct and control, through counsel of their own choosing, reasonably
acceptable to the indemnified party, any third party Legal Action or other
Claim, but the indemnified party may, at its election, participate in the
defense thereof at its sole cost and expense; provided, however, that
-29-
if (a) the indemnifying party shall fail to defend any such Legal Action or
other Claim or (b) the indemnified party shall have been advised by counsel that
there may be one or more legal defenses available to it which are different from
or in addition to those available to the indemnifying party, then the
indemnified party may defend, through counsel of its own choosing, such Legal
Action or other Claim, and (so long as it gives the indemnifying party at least
fifteen (15) days' notice of the terms of the proposed settlement thereof and
permits the indemnifying party to then undertake the defense thereof) settle
such Legal Action or other Claim and to recover the amount of such settlement or
of any judgment and the reasonable costs and expenses of such defense. The
indemnifying party shall not compromise or settle any such Legal Action or other
Claim without the prior written consent of the indemnified party.
8.6 Exclusive Remedy. Except for fraud or as otherwise provided in
----------------
Section 9.5, the indemnification provided in this Article shall be the sole and
exclusive post-Closing remedy available to either party against the other party
for any Claim under this Agreement.
ARTICLE 9
GENERAL PROVISIONS
9.1 Amendment. This Agreement may be amended from time to time by the
---------
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto.
9.2 Waiver. At any time prior to the Closing Date, except to the extent
------
not permitted by Applicable Law, EZ or Evergreen may extend the time for the
performance of any of the obligations or other acts of the other, waive any
inaccuracies in the representations and warranties of the other contained herein
or in any document delivered pursuant hereto, and waive compliance by the other
with any of the agreements, covenants or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
9.3 Fees, Expenses and Other Payments. All costs and expenses, incurred
---------------------------------
in connection with any transfer taxes, sales taxes, document stamps or other
charges levied by any Authority in connection with this Agreement, the
Transactions, shall be borne by EZ insofar as they related to the EZ Stations
and the EZ Assets and by Evergreen insofar as they relate to the Evergreen
Station and the Evergreen Assets. All filing and similar fees (including
without limitation ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ filings and FCC filing fees) shall be borne
equally by EZ and Evergreen. All other costs and expenses incurred in
connection with this Agreement, the Transactions, and in compliance with
Applicable Law and Contracts as a consequence hereof and thereof, including
without limitation fees and disbursements of counsel, financial advisors and
accountants incurred by the parties hereto shall be borne solely and entirely by
the party which has incurred such costs and expenses (with respect to such
party, its "Expenses").
9.4 Notices. All notices and other communications which by any provision
-------
of this Agreement are required or permitted to be given shall be given in
writing and shall be (a) mailed by
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first-class or express mail, or by recognized courier service, postage prepaid,
(b) sent by telex, telegram, telecopy or other form of rapid transmission,
confirmed by mailing (by first class or express mail, or by recognized courier
service, postage prepaid) written confirmation at substantially the same time as
such rapid transmission, or (c) personally delivered to the receiving party
(which if other than an individual shall be an officer or other responsible
party of the receiving party). All such notices and communications shall be
mailed, sent or delivered as follows:
(a) If to any EZ Party:
EZ Communications, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Box, President and Chief Executive Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
American Radio Systems Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief Executive Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to any Evergreen Party:
Evergreen Media Corporation
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman and Chief Executive Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
9.5 Specific Performance; Other Rights and Remedies. Each party
-----------------------------------------------
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Article 7, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by Applicable Law. Each party hereby waives any requirement
for security or the posting of any bond or other surety in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief.
Nothing herein contained shall be construed as prohibiting each party from
pursuing any other remedies available to it pursuant to the provisions of, and
subject to the limitations contained in, this Agreement for such breach or
threatened breach.
9.6 Severability. If any term or provision of this Agreement shall be
------------
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination the effect of which is to Affect Materially and
Adversely either party, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Transactions are fulfilled and consummated to the
maximum extent possible.
9.7 Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, binding upon all of the parties. In
pleading or proving any provision of this Agreement, it shall not be necessary
to produce more than one of such counterparts.
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9.8 Section Headings. The headings contained in this Agreement are for
----------------
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.9 Governing Law. The validity, interpretation, construction and
-------------
performance of this Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts made and
performed in such State and, in any event, without giving effect to any choice
or conflict of laws provision or rule that would cause the application of
domestic substantive laws of any other jurisdiction. Anything in this Agreement
to the contrary notwithstanding, including without limitation the provisions of
Article 8, in the event of any dispute between the parties which results in a
Legal Action, the prevailing party shall be entitled to receive from the non-
prevailing party reimbursement for reasonable legal fees and expenses incurred
by such prevailing party in such Legal Action.
9.10 Further Acts. Each party agrees that at any time, and from time to
------------
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as any other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
9.11 Entire Agreement. This Agreement (together with the Disclosure
----------------
Schedules and the other Collateral Documents delivered in connection herewith),
constitutes the entire agreement of the parties and supersedes all prior
agreements and undertakings, both written and oral, between the parties, with
respect to the subject matter hereof, including without limitation the Letter of
Intent.
9.12 Assignment. This Agreement shall not be assignable by any party and
----------
any such assignment shall be null and void, except that it shall inure to the
benefit of and by binding upon any successor to any party (including without
limitation, in the case of EZ, American) by operation of law, including by way
of merger, consolidation or sale of all or substantially all of its assets, and
each party may assign its rights and remedies hereunder to (a) any Affiliate of
any party who is a transferee of any Assets or any FCC Licenses on or prior to
the Closing Date and (b) any bank or other financial institution which has
loaned funds or otherwise extended credit to it.
9.13 Parties in Interest. This Agreement shall be binding upon and inure
-------------------
solely to the benefit of each party and, so long as the EZ Merger Agreement has
not been terminated and, in any event, after the consummation of the American-EZ
Merger, American, and nothing in this Agreement, express or implied, is intended
to or shall confer upon any Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except as otherwise provided in
Section 9.12.
9.14 Mutual Drafting. This Agreement is the result of the joint efforts of
---------------
EZ and Evergreen, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties and there shall be no
construction against either party based on any presumption of that party's
involvement in the drafting thereof.
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9.15 EZ Agent for Other EZ Parties. Anything in this Agreement to the
-----------------------------
contrary notwithstanding, each of the EZ Parties (other than EZ) hereby grants
EZ an irrevocable power of attorney and hereby irrevocably appoints EZ its agent
for all purposes of this Agreement, including without limitation for the purpose
of executing and delivering extensions of the time for the performance of any of
the obligations or other acts of EZ, waivers, terminations or amendments, and
any action taken by EZ pursuant to such power of attorney and agency, and any
such extension, waiver, termination or amendment executed and delivered by EZ,
shall be binding upon each other EZ Party whether or not it has specifically
approved such action or executed such extension, waiver, termination or
amendment.
9.16 Evergreen Parent Agent for Other Evergreen Parties. Anything in this
--------------------------------------------------
Agreement to the contrary notwithstanding, each of the Evergreen Parties (other
than Evergreen Parent) hereby grants Evergreen Parent an irrevocable power of
attorney and hereby irrevocably appoints Evergreen Parent its agent for all
purposes of this Agreement, including without limitation for the purpose of
executing and delivering extensions of the time for the performance of any of
the obligations or other acts of Evergreen Parent, waivers, terminations or
amendments, and any action taken by Evergreen Parent pursuant to such power of
attorney and agency, and any such extension, waiver, termination or amendment
executed and delivered by Evergreen Parent, shall be binding upon each other
Evergreen Party whether or not it has specifically approved such action or
executed such extension, waiver, termination or amendment.
-34-
IN WITNESS WHEREOF, the EZ Parties and the Evergreen Parties have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
EZ COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ Box
--------------------------------------
Name: ▇▇▇▇ Box
Title: President
PROFESSIONAL BROADCASTING INCORPORATED
By: /s/ ▇▇▇▇ Box
--------------------------------------
Name: ▇▇▇▇ Box
Title: President
EZ CHARLOTTE, INC.
By: /s/ ▇▇▇▇ Box
--------------------------------------
Name: ▇▇▇▇ Box
Title: President
EVERGREEN MEDIA CORPORATION OF THE EAST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
EVERGREEN MEDIA CORPORATION
OF LOS ANGELES
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
-35-
EVERGREEN MEDIA CORPORATION
OF CAROLINALAND
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
American represents and warrants that it has heretofore entered into the EZ
Merger Agreement with EZ and hereby acknowledges and agrees (a) to be bound by
the provisions of Sections 5.1, (b) that the terms and conditions of the above
Agreement are satisfactory to it, and (c) that it consents to such terms and
conditions.
AMERICAN RADIO SYSTEMS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer
-36-
APPENDIX A
DEFINITIONS
ACCOUNTS RECEIVABLE shall mean any and all rights to the payment of money
or other forms of consideration of any kind at any time now or hereafter owing
or to be owing to any Evergreen Party attributable to the sale of time or talent
on the Evergreen Station.
ADVERSE CHANGE, EFFECT OR AFFECT (or comparable terms) shall mean any Event
which has, or is reasonably likely to, (a) adversely affect or affected the
validity or enforceability of this Agreement or the likelihood of consummation
of the Transactions, or (b) adversely affect or affected the ownership or
operation of the Evergreen Assets or the conduct of the business of the
Evergreen Station, or (c) impair the Evergreen Parties' ability to fulfill their
obligations under the terms of this Agreement, or (d) adversely affect the
aggregate rights and remedies of the EZ Parties under this Agreement.
Notwithstanding the foregoing, and anything in this Agreement to the contrary
notwithstanding, any Event affecting the radio broadcasting industry generally
shall not be deemed to constitute an Adverse Change, have an Adverse Effect or
to Adversely Affect or Effect.
AFFILIATE, AFFILIATED shall mean, with respect to any Person, any other
Person at the time directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person.
AGREEMENT shall mean this Agreement as originally in effect, including,
unless the context otherwise specifically requires, this Appendix A, the
Evergreen Disclosure Schedule and all exhibits hereto, and as any of the same
may from time to time be supplemented, amended, modified or restated in the
manner herein or therein provided.
AMERICAN shall have the meaning given to it in the fourth Whereas
paragraph.
AMERICAN-EZ MERGER shall have the meaning given to it in the fourth Whereas
paragraph.
APPLICABLE LAW shall mean any Law of any Authority, whether domestic or
foreign, including without limitation all federal and state securities and
Environmental Laws, to which a Person is subject or by which it or any of its
business or operations is subject or any of its property or assets is bound.
ASSET EXCHANGE AGREEMENT shall have the meaning given to it in the third
Whereas paragraph.
ASSUMED LIABILITIES shall have the meaning given to it in Section 2.2(c).
AUTHORITY shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or
governmental or quasi-governmental agency, arbitrator, authority, board, body,
branch, bureau, central bank or comparable agency or Entity, commission,
corporation, court, department, instrumentality, master, mediator, panel,
referee, system or other political unit or subdivision or other Entity of any of
the foregoing, whether domestic or foreign.
CHARLOTTE PRORATION SCHEDULE shall have the meaning given to it in Section
2.2(c).
CHARLOTTE TRUSTEE shall have the meaning given to it in Section 5.7(a).
CHARLOTTE TRUSTEE APPLICATION shall have the meaning given to it in Section
5.7(b).
CLAIMS shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind and nature
relating thereto, and all fees, costs, expenses and disbursements (including
without limitation reasonable attorneys' and other legal fees, costs and
expenses) relating to any of the foregoing.
CLOSING shall have the meaning given to it in Section 2.3.
CLOSING DATE shall have the meaning given to it in Section 2.3.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
CODE shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
COLLATERAL DOCUMENT shall mean the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ and any other
agreement, certificate, contract, instrument, notice, opinion or other document
delivered or required to be delivered pursuant to the provisions of this
Agreement or of any of the foregoing.
COLLECTION PERIOD shall have the meaning given to it in Section 2.5.
CONTRACT shall mean any agreement, arrangement, commitment, contract,
covenant, indemnity, undertaking or other obligation or liability which involves
the ownership or operation of the Evergreen Assets or the conduct of the
business of the Evergreen Station.
CONTROL (including the terms "controlled," "controlled by" and "under
common control with") shall mean the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person, or the disposition of such Person's assets
or properties, whether through the ownership of stock, equity or other
ownership, by contract, arrangement or understanding, or as trustee or executor,
by contract or credit arrangement or otherwise.
-2-
CUT-OFF DATE shall mean (i) with respect to any Contract to be assigned and
the rights and obligations to be assumed pursuant to the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
(including all items of revenue and expense relating to such Contract) the TBA
Date and (ii) in all other cases, the Closing Date.
EMC CAROLINALAND shall have the meaning given to it in the Preamble.
EMC EAST shall have the meaning given to it in the Preamble.
EMPLOYMENT ARRANGEMENT shall mean any employment, consulting, retainer,
severance or similar contract, agreement, plan, arrangement or policy (exclusive
of any which is terminable within thirty (30) days without liability, penalty or
payment of any kind by such Person or any Affiliate), or providing for
severance, termination payments, insurance coverage (including any self-insured
arrangements), workers compensation, disability benefits, life, health, medical,
dental or hospitalization benefits, supplemental unemployment benefits, vacation
or sick leave benefits, pension or retirement benefits or for deferred
compensation, profit-sharing, bonuses, stock options, stock purchase or
appreciation rights or other forms of incentive compensation or post-retirement
insurance, compensation or post-retirement insurance, compensation or benefits,
or any collective bargaining or other labor agreement, whether or not any of the
foregoing is subject to the provisions of ERISA.
ENCUMBER shall mean to suffer, accept, agree to or permit the imposition of
a Lien.
ENTITY shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
ENVIRONMENTAL LAW shall mean any Law relating to or otherwise imposing
liability or standards of conduct concerning pollution or protection of the
environment, including without limitation Laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials or other
chemicals or industrial pollutants, substances, materials or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, mining or reclamation or mined land, land surface or subsurface strata)
or otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances, materials
or wastes. Environmental Laws shall include without limitation the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 6901 et seq.), the Hazardous Material Transportation Act (49 U.S.C.
-- ---
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
-- ---
Section 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
-- ---
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
-- --- -- ---
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Occupational
-- ---
Safety and Health Act (29 U.S.C. Section 651 et seq.), the Federal Insecticide
-- ---
Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), and the Surface
-- ---
Mining Control and Reclamation Act of 1977 (30 U.S.C. Section 1201 et seq.), and
-- ---
any analogous federal, state, local or foreign, Laws, and the rules and
regulations promulgated thereunder all as from time to time in effect, and any
reference to any
-3-
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
ENVIRONMENTAL PERMIT shall mean any Governmental Authorization required by
or pursuant to any Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
ERISA AFFILIATE shall mean any Person that is treated as a single employer
with Evergreen under Sections 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA.
EVENT shall mean the existence or occurrence of any act, action, activity,
circumstance, condition, event, fact, failure to act, omission, incident or
practice, or any set or combination of any of the foregoing.
EVERGREEN shall have the meaning given to it in the Preamble.
EVERGREEN ACCOUNTS RECEIVABLE shall mean the Accounts Receivables of any
Evergreen Party arising in connection with the ownership or operation of any of
the Evergreen Assets or the conduct of the business of the Evergreen Station
prior to the Cut-off Date.
EVERGREEN ASSETS shall mean all assets used or held for use in the
ownership or operation of or the conduct of the business of the Evergreen
Station by any Evergreen Party or any Entity Affiliated with any Evergreen
Party, including without limitation the Evergreen Real Property, the Evergreen
Personal Property, the Evergreen Private Authorizations, the Evergreen
Governmental Authorizations, including the Evergreen FCC Licenses, the Evergreen
Intangible Assets and the Evergreen Assumable Agreements, but excluding the
Evergreen Excluded Assets.
EVERGREEN ASSUMABLE AGREEMENTS shall mean the Evergreen Private
Authorizations, the Evergreen Trade Agreements, the Evergreen Leases and the
Evergreen Other Contracts.
EVERGREEN DISCLOSURE SCHEDULE shall mean the Evergreen Disclosure Schedule
dated as of the date of this Agreement delivered by Evergreen to EZ.
EVERGREEN EMPLOYEE PLAN shall have the meaning given to it in Section
3.12(f).
EVERGREEN EMPLOYMENT ARRANGEMENTS shall have the meaning given to it in
Section 3.12(a).
EVERGREEN EXCLUDED ASSETS shall mean (i) all cash and cash equivalents of
any Evergreen Party, (ii) all Evergreen Accounts Receivable, (iii) the corporate
names of each Evergreen Party, (iv) all books and records of each Evergreen
Party relating to the Evergreen Station and which any Evergreen Party is
required by Applicable Law, to retain, subject to the right of the other party
to have access and to copy for a period of three (3) years from the Closing
Date, (v) the Evergreen
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Employee Plans and other Evergreen Employment Arrangements, (vi) all insurance
policies relating to the Evergreen Assets, (vii) software programs and other
assets at the principal executive offices of any Evergreen Party used to provide
certain financial and accounting services for the Evergreen Station and (viii)
any and all products, profits and proceeds of, and including without limitation
any Claims with respect to, any of the foregoing.
EVERGREEN FCC LICENSES shall have the meaning given to it in the first
Whereas paragraph.
EVERGREEN FINANCIAL DATA shall have the meaning given to it in Section
3.2(a).
EVERGREEN GOVERNMENTAL AUTHORIZATIONS shall have the meaning given to it in
Section 3.7(a).
EVERGREEN INTANGIBLE ASSETS shall have the meaning given to it in Section
3.8.
EVERGREEN LEASES shall have the meaning given to it in Section 3.5(a).
EVERGREEN MATERIAL AGREEMENTS shall have the meaning given to it in Section
3.16.
EVERGREEN NONASSUMED LIABILITIES shall have the meaning given to it in
Section 2.3(b).
EVERGREEN OTHER CONTRACTS shall mean (a) all Evergreen Material Agreements
set forth on Section 3.15 of the Evergreen Disclosure Schedule excluding those
agreements identified thereon as a "retained agreement", (b) all Contracts for
the sale of time on the Evergreen Station for cash entered into in the ordinary
course of business consistent with prior practice, and (c) Contracts not
required to be listed on Section 3.15 of the Evergreen Disclosure Schedule that
have been entered into in the ordinary course of business and involve less than
$50,000 per year in the aggregate.
EVERGREEN PARENT shall have the meaning given to it in the Preamble.
EVERGREEN PARTIES shall have the meaning given to it in the Preamble.
EVERGREEN PERSONAL PROPERTY shall mean all items of Personal Property, used
or held for use in the ownership or operation of or the conduct of the business
of the Evergreen Station.
EVERGREEN PRIVATE AUTHORIZATIONS shall mean all Private Authorizations
obtained or held in connection with the ownership or operation of any of the
Evergreen Assets or the conduct of the business of the Evergreen Station.
EVERGREEN PRORATION SCHEDULE shall have the meaning given to it in Section
2.2(c).
EVERGREEN REAL PROPERTY shall have the meaning given to it in Section
3.5(a).
EVERGREEN STATION shall have the meaning given to it in the first Whereas
paragraph.
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ EMPLOYEES shall have the meaning given it in the Section
3.12(a).
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ shall have the meaning given it in the Section
5.2(d).
EVERGREEN STUDIO FACILITIES shall have the meaning given to it in Section
3.5(b).
EVERGREEN TRADE AGREEMENTS shall mean all Trade Agreements in effect on the
date hereof or entered into on or prior to the Cut-off Date that relate to the
ownership or operation of or the conduct of the business of the Evergreen
Station.
EVERGREEN'S KNOWLEDGE (including the term "to the knowledge, information
and belief of Evergreen") shall mean the knowledge of any Evergreen Party
executive officer or any General Manager of the Evergreen Station.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, and the rules
and regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
EXTRA CHARLOTTE STATION shall have the meaning given to it in Section
5.7(a).
EZ shall have the meaning given to it in the Preamble.
EZ MERGER AGREEMENT shall have the meaning given to it in the fourth
Whereas paragraph.
EZP shall have the meaning given to it in the Preamble.
EZ PARTIES shall have the meaning given to it in the Preamble.
FCA shall mean the Communication Act of 1934, and the rules and regulations
thereunder, all as from time to time in effect, or any successor law, rules or
regulations, and any reference to any statutory or regulatory provision shall be
deemed to be a reference to any successor statutory or regulatory provision.
FCC shall mean the Federal Communications Commission and shall include any
successor Authority.
FCC CONSENTS shall mean the actions of the FCC granting its consents to the
transfer of the FCC Licenses relating to the Evergreen Station to the
appropriate EZ Parties.
FCC LICENSES shall mean all Governmental Authorizations issued by the FCC
to Evergreen or its Subsidiaries in connection with the ownership, operation and
conduct of the business of the Evergreen Station.
-6-
FINAL ORDER shall mean, with respect to any Authority, including without
limitation the FCC, one with respect to which no appeal, no stay, no petition or
application for rehearing, reconsideration, review or stay, whether on motion of
the applicable Authority or other Person or otherwise, is in effect or pending
and as to which the time or deadline for filing any such appeal, petition or
application has expired or, if filed, has been denied, dismissed or withdrawn,
and the time or deadline for instituting any further Legal Action has expired.
GAAP shall mean generally accepted accounting principles as in effect from
time to time in the United States of America.
GOVERNMENTAL AUTHORIZATIONS shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the FCC Licenses, issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the ownership or operation of any of the Evergreen Assets or the conduct of
business of the Evergreen Station.
GOVERNMENTAL FILINGS shall mean all filings, including franchise and
similar Tax filings, submissions, registrations, notices or declarations and the
payment of all fees, assessments, interest and penalties associated with such
filings, with all Authorities.
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
HAZARDOUS MATERIALS shall mean and include any substance, material, waste,
constituent, compound, chemical, natural or man-made element or force (in
whatever state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law, or (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law; or (c) that is
toxic, explosive, corrosive, etiologic, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any
applicable Authority or subject to any Environmental Law; or (d) the presence of
which on the real property owned or leased by such Person causes or threatens to
cause a nuisance upon any such real property or to adjacent properties or poses
or threatens to pose a hazard to the health or safety of persons on or about any
such real property; or (e) the presence of which on adjacent properties could
constitute a trespass by such Person; or (f) that contains gasoline, diesel fuel
or other petroleum hydrocarbons, or any by-products or fractions thereof,
natural gas, polychlorinated biphenyls ("PCBs") and PCB-containing equipment,
radon or other radioactive elements, ionizing radiation, electromagnetic field
radiation and other non-ionizing radiation, sonic forces and other natural
forces, lead, asbestos or asbestos-containing materials ("ACM"), or urea
formaldehyde foam insulation.
INDEBTEDNESS shall mean, with respect to any Person, (a) all items, except
items of capital stock or of surplus or of general contingency or deferred tax
reserves or any minority interest in any Subsidiary of such Person to the extent
such interest is treated as a liability with indeterminate term on the
consolidated balance sheet of such Person, which in accordance with GAAP would
be included in determining total liabilities as shown on the liability side of a
balance sheet of such
-7-
Person, (b) all obligations secured by any Lien to which any property or asset
owned or held by such Person is subject, whether or not the obligation secured
thereby shall have been assumed, and (c) to the extent not otherwise included,
all Contracts of such Person constituting capitalized leases and all obligations
of such Person with respect to Leases constituting part of a sale and leaseback
arrangement.
INDEBTEDNESS FOR MONEY BORROWED shall mean, with respect to EZ and
Evergreen, money borrowed and Indebtedness represented by notes payable and
drafts accepted representing extensions of credit, all obligations evidenced by
bonds, debentures, notes or other similar instruments, the maximum amount
currently or at any time thereafter available to be drawn under all outstanding
letters of credit issued for the account of such Person, all Indebtedness upon
which interest charges are customarily paid by such Person, and all Indebtedness
(including capitalized lease obligations) issued or assumed as full or partial
payment for property or services, whether or not any such notes, drafts,
obligations or Indebtedness represent Indebtedness for money borrowed, but shall
not include (a) trade payables, (b) expenses accrued in the ordinary course of
business, or (c) customer advance payments and customer deposits received in the
ordinary course of business.
INTANGIBLE ASSETS shall mean all assets and property lacking physical
properties the evidence of ownership of which must customarily be maintained by
independent registration, documentation, certification, recordation or other
means, and shall include, without limitation, concessions, franchises, licenses,
permits and all Intellectual Property.
INTELLECTUAL PROPERTY shall mean any and all research, information,
inventions, designs, procedures, developments, discoveries, improvements,
patents and applications therefor, trademarks and applications therefor, service
marks, trade names, copyrights and applications therefor, logos, trade secrets,
drawing, plans, systems, methods, specifications, computer software programs,
tapes, discs and related data processing software (including without limitation
object and source codes) owned by such Person or in which it has an ownership
interest and all other manufacturing, engineering, technical, research and
development data and know-how made, conceived, developed and/or acquired by such
Person, which relate to the manufacture, production or processing of any
products developed or sold by such Person or which are within the scope of or
usable in connection with such Person's business as it may, from time to time,
hereafter be conducted or proposed to be conducted.
LAW shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
policy statement, proclamation, promulgation, regulation, requirement, rule,
rule of law, rule of public policy, settlement agreement, statute, or writ or
any Authority, domestic or foreign; (b) the common law, or other legal or quasi-
legal precedent; or (c) arbitrator's, mediator's or referee's award, decision,
finding or recommendation; including, in each such case or instance, any
interpretation, directive, guideline or request, whether or not having the force
of law including, in all cases, without limitation any particular section, part
or provision thereof.
LEASE shall mean any lease of property, whether real, personal or mixed,
and all amendments thereto.
-8-
LEGAL ACTION shall mean, with respect to any Person, any and all litigation
or legal or other actions, arbitrations, counterclaims, investigations,
proceedings, requests for material information by or pursuant to the order of
any Authority or suits, at law, in equity or in arbitration.
LIEN shall mean any mortgage; lien (statutory or other); or other security
agreement, arrangement or interest; hypothecation, pledge or other deposit
arrangement; assignment; charge; levy; executory seizure; attachment;
garnishment; encumbrance (including any easement, exception, reservation or
limitation, right of way, and the like); conditional sale, title retention or
other similar agreement, arrangement, device or restriction; preemptive or
similar right; any financing or capital lease involving substantially the same
economic effect as any of the foregoing; restriction on sale, transfer,
assignment, disposition or other alienation; or any option, equity, claim or
right of or obligation to, any other Person, of whatever kind and character.
LETTER OF INTENT shall have the meaning given to it in Section 5.2(d).
LOSS AND EXPENSE shall have the meaning given to it in Section 8.2.
MATERIAL, MATERIALLY OR MATERIALITY for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
MATERIAL AGREEMENT shall mean, with respect to any Person, any Contract
which (a) was entered into not in the ordinary course of business, (b) was
entered into in the ordinary course of business which (i) involved the purchase,
sale or lease of goods or materials, or purchase of services, aggregating more
than Fifty Thousand Dollars ($50,000) during any of the last three fiscal years,
(ii) extends for more than three (3) months, or (iii) is not terminable on
thirty (30) days or less notice without penalty or other payment, (c) involves
Indebtedness for Money Borrowed, (d) is or otherwise constitutes a written
agency, broker, dealer, license, distributorship, sales representative or
similar written agreement, or (e) accounted for more than three percent (3%) of
the revenues of the Evergreen Station in any of the last three fiscal years or
is likely to account for more than three percent (3%) of revenues of the
Evergreen Station during the current fiscal year.
MULTIEMPLOYER PLAN shall mean a Plan which is a "multiemployer plan" within
the meaning of Section 4001(a)3 of ERISA.
NOTICE OF DISAGREEMENT shall have the meaning given to it in Section
2.2(c).
ORGANIC DOCUMENT shall mean, with respect to a Person which is a
corporation, its certificate or articles of incorporation or organization, its
by-laws and all stockholder agreements, voting trusts and similar arrangements
applicable to any of its capital stock.
PBGC shall mean the Pension Benefit Guaranty Corporation and any Entity
succeeding to any or all of its functions under ERISA.
PBI shall have the meaning given to it in the Preamble
-9-
PERMITTED LIENS shall mean (a) any mechanic's or materialmen's Lien or
similar Lien with respect to amounts not yet due and payable or which are being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, (b) Liens for taxes not yet due and payable or
which are being contested in good faith by appropriate proceeding, for which
appropriate reserves have been established, and (c) easements, licenses,
covenants, rights of way and similar Liens which, individually or in the
aggregate, would not materially and adversely affect the marketability or value
of the property encumbered thereby or materially interfere with the operations
of the Evergreen Station.
PERSON shall mean any natural individual or any Entity.
PERSONAL PROPERTY shall mean all of the machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts and other tangible personal property, plus such additions thereto
and deletions therefrom arising in the ordinary course of business between the
date hereof and the Closing Date.
PLAN shall mean, with respect to any Person and at a particular time, any
employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, but only to the extent that it covers or relates to any
officer, employee or other Person involved in the ownership and operation of the
Evergreen Assets or the conduct of the business of the Evergreen Station.
PRIVATE AUTHORIZATIONS shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
PRO RATABLE TAXES shall mean real estate and other property Taxes, ad
valorem Taxes, gross receipts Taxes and similar Taxes, but shall not include
federal, state or local income Taxes, franchise Taxes or other Taxes measured by
or based upon income or gain on sale or other disposition of property or assets.
PURCHASE PRICE shall have the meaning given to it in Section 2.4.
REAL PROPERTY shall mean all of the fee estates and buildings and other
improvements thereon, leasehold interest, easements, licenses, rights to access,
right-of- way, and other real property interest.
REFEREE shall have the meaning given to it in Section 2.2(c).
REGULATIONS shall mean the federal income tax regulations promulgated under
the Code, as such Regulations may be amended from time to time. All references
herein to specific sections of the Regulations shall be deemed also to refer to
any corresponding provisions of succeeding
-10-
Regulations, and all references to temporary Regulations shall be deemed also to
refer to any corresponding provisions of final Regulations.
REPRESENTATIVES shall have the meaning given to it in Section 5.1(a).
SEC shall mean the United States Securities and Exchange Commission, or any
successor Authority.
SECURITIES ACT shall mean the Securities Act of 1933, and the rules and
regulations of the SEC thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
SUBSIDIARY shall mean, with respect to a Person, any Entity a majority of
the capital stock ordinarily entitled to vote for the election of directors of
which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
TAX (and "Taxable", which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, addition to tax or
additional amount imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a) and (c) any liability of such Person for the payment
of any amounts of the type described in (a) as a result of any express or
implied obligation to indemnify any other Person.
TAX CLAIM shall mean any Claim which relates to Taxes, including without
limitation the representations and warranties set forth in Section 3.11.
TAX RETURN OR RETURNS shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
TAXING AUTHORITY shall mean any Authority responsible for the imposition of
any Tax.
TBA DATE shall mean the date when operations under the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ shall become effective.
TERMINATION DATE shall have the meaning given to it in Section 7.1.
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TRADE AGREEMENTS shall mean any Contract relating to the Evergreen Station
pursuant to which any Evergreen Party is required to provide air time in
exchange for property or services other than cash.
TRANSACTIONS shall mean the purchase and sale of the Evergreen Assets and
the Evergreen Station and all of the other transactions hereunder or under any
of the Collateral Documents.
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