Exhibit 2.32
ASSET EXCHANGE AGREEMENT
By and Among
EZ COMMUNICATIONS, INC.
PROFESSIONAL BROADCASTING INCORPORATED
EZ PHILADELPHIA, INC.
EVERGREEN MEDIA CORPORATION OF LOS ANGELES
EVERGREEN MEDIA CORPORATION OF CHARLOTTE
EVERGREEN MEDIA CORPORATION OF THE EAST
EVERGREEN MEDIA CORPORATION OF CAROLINALAND
WBAV/WBAV-FM/WPEG LICENSE CORP.
and
WRFX LICENSE CORP.
Dated as of
December 5, 1996
TABLE OF CONTENTS
ARTICLE 1 DEFINED TERMS................................................ 2
ARTICLE 2 EXCHANGE OF LICENSES AND STATIONS............................ 2
2.1 Agreement to Exchange Licenses and Stations.................. 2
2.2 Appraisals; Tax Reporting.................................... 2
2.3 Assumption of Liabilities and Obligations.................... 3
2.4 Closing Date................................................. 6
2.5 Accounts Receivable.......................................... 7
2.6 Like-Kind Exchange........................................... 8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE EVERGREEN PARTIES........ 8
3.1 Organization and Business; Power and Authority; Effect of
Transaction................................................. 8
3.2 Financial and Other Information.............................. 9
3.3 Changes in Condition......................................... 9
3.4 Materiality.................................................. 9
3.5 Title to Properties; Leases.................................. 10
3.6 Compliance with Private Authorizations....................... 11
3.7 Compliance with Governmental Authorizations and Applicable
Law......................................................... 11
3.8 Intangible Assets............................................ 13
3.9 Related Transactions......................................... 13
3.10 Insurance.................................................... 13
3.11 Tax Matters.................................................. 14
3.12 Employee Retirement Income Security Act of 1974.............. 14
3.13 Absence of Sensitive Payments................................ 15
3.14 Inapplicability of Specified Statutes........................ 15
3.15 Employment Arrangements...................................... 16
3.16 Material Agreements.......................................... 16
3.17 Ordinary Course of Business.................................. 17
3.18 Broker or Finder............................................. 18
3.19 Solvency..................................................... 18
3.20 Environmental Matters........................................ 18
3.21 Trade or Barter.............................................. 18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE EZ PARTIES............. 19
4.1 Organization and Business; Power and Authority; Effect of
Transaction................................................. 19
4.2 Financial and Other Information.............................. 20
4.3 Changes in Condition......................................... 20
4.4 Materiality.................................................. 20
4.5 Title to Properties; Leases.................................. 20
4.6 Compliance with Private Authorizations....................... 21
4.7 Compliance with Governmental Authorizations and Applicable
Law......................................................... 21
4.8 Intangible Assets............................................ 23
4.9 Related Transactions......................................... 23
4.10 Insurance.................................................... 24
4.11 Tax Matters.................................................. 24
4.12 Employee Retirement Income Security Act of 1974.............. 24
4.13 Absence of Sensitive Payments................................ 25
4.14 Inapplicability of Specified Statutes........................ 25
4.15 Employment Arrangements...................................... 26
4.16 Material Agreements.......................................... 26
4.17 Ordinary Course of Business.................................. 27
4.18 Broker or Finder............................................. 28
4.19 Solvency..................................................... 28
4.20 Environmental Matters........................................ 28
4.21 Trade or Barter.............................................. 28
ARTICLE 5 COVENANTS.................................................... 29
5.1 Access to Information; Confidentiality....................... 29
5.2 Agreement to Cooperate....................................... 30
5.3 Public Announcements......................................... 32
5.4 Notification of Certain Matters.............................. 33
5.5 No Solicitation.............................................. 33
5.6 Conduct of Business by Evergreen Pending the Closing......... 33
5.7 Conduct of Business by EZ Pending the Closing................ 35
5.8 Building of EZ Stations...................................... 36
5.9 FCC Application; Divesture Commitment........................ 36
ARTICLE 6 CLOSING CONDITIONS........................................... 38
6.1 Conditions to Obligations of Each Party to Effect the
Exchange..................................................... 38
6.2 Conditions to Obligations of EZ.............................. 38
6.3 Conditions to Obligations of Evergreen....................... 40
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER............................ 41
7.1 Termination.................................................. 41
7.2 Effect of Termination........................................ 42
ARTICLE 8 INDEMNIFICATION.............................................. 42
8.1 Survival..................................................... 43
8.2 Indemnification.............................................. 43
8.3 Limitation of Liability...................................... 43
8.4 Notice of Claims............................................. 44
8.5 Defense of Third Party Claims................................ 44
8.6 Exclusive Remedy............................................. 44
ARTICLE 9 GENERAL PROVISIONS........................................... 45
9.1 Amendment.................................................... 45
9.2 Waiver....................................................... 45
9.3 Fees, Expenses and Other Payments............................ 45
9.4 Notices...................................................... 45
9.5 Specific Performance; Other Rights and Remedies.............. 46
ii
9.6 Severability................................................. 47
9.7 Counterparts................................................. 47
9.8 Section Headings............................................. 47
9.9 Governing Law................................................ 47
9.10 Further Acts................................................. 47
9.11 Entire Agreement............................................. 48
9.12 Assignment................................................... 48
9.13 Parties in Interest.......................................... 48
9.14 Mutual Drafting.............................................. 48
9.15 EZ Agent for Other EZ Parties................................ 48
9.16 Evergreen Parent Agent for Other Evergreen Parties........... 48
APPENDIX A: Definitions
iii
ASSET EXCHANGE 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
Philadelphia, 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 Charlotte ("EMC Charlotte"), Evergreen
Media Corporation of the East ("EMC East"), Evergreen Media Corporation of
Carolinaland ("EMC Carolinaland), WBAV/WBAV-FM/WPEG License Corp. ("EMC-BAV")
and WRFX(FM) License Corp. ("EMC-RFX"), 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, an Evergreen Party is the owner, operator and licensee of radio
stations WRFX(FM), Kannapolis, North Carolina, WPEG(FM), Concord, North
Carolina, WBAV(AM) and WFNZ(AM), Charlotte, North Carolina and WBAV-FM,
Gastonia, North Carolina (individually, an "Evergreen Station" and collectively,
the "Evergreen Stations") pursuant to licenses issued by the FCC (the "Evergreen
FCC Licenses");
WHEREAS, PBI, a wholly-owned subsidiary of EZ, operates, and EZP, a wholly-
owned subsidiary of PBI, is the licensee of, radio stations WIOQ(FM) and
WUSL(FM) (individually, an "EZ Station" and collectively, the "EZ Stations")
pursuant to licenses issued to EZP by the FCC (the "EZ FCC Licenses");
WHEREAS, the EZ Parties and the Evergreen Parties desire to exchange
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
Stations and the EZ Stations on the terms and conditions hereinafter set forth
(the "Exchange");
WHEREAS, the parties hereto intend the Exchange to qualify as a Like-Kind
Exchange; 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
-------------
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 either 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
EXCHANGE OF LICENSES AND STATIONS
---------------------------------
2.1 Agreement to Exchange Licenses and Stations. Subject to the terms and
-------------------------------------------
conditions set forth in this Agreement, the Evergreen Parties and the EZ Parties
hereby agree to exchange, transfer and deliver at the Closing, the Evergreen
Assets and the EZ Assets, not previously transferred by the parties pursuant to
the applicable TBA, free and clear of any Liens of any nature whatsoever except
Permitted Liens, on the terms and conditions of this Agreement.
2.2 Appraisals; Tax Reporting.
-------------------------
(a) The Evergreen Parties and the EZ Parties agree that the fair market
value of each asset included in the Evergreen Assets and the EZ Assets will be
determined on the basis of the appraisals (the "Appraisals"), prepared by the
firm of Bond & ▇▇▇▇▇▇, whose fee and expenses shall be equally borne by
Evergreen and EZ. The parties shall direct Bond & ▇▇▇▇▇▇ to deliver Appraisals
within thirty (30) days from the Closing and to set forth in the Appraisals the
fair market value of each asset included in the Evergreen Assets and the EZ
Assets.
(b) Within thirty (30) days of the receipt of the Appraisals, each party
shall prepare a draft schedule that sets forth the "exchange groups" and
"residual group" (each within the meaning of Treas. Reg. section 1.1031(j)-1)
together with each asset included in the Evergreen Assets and the EZ Assets that
belongs to the relevant exchange group or residual group, and send the schedule
to the other for approval, which approval shall not be unreasonably conditioned,
withheld or delayed. If the draft schedules do not contain any differences,
they shall form the basis for the final schedule (the "Section 1031 Schedule").
If the draft schedules contain any differences, the parties shall negotiate in
good faith to reconcile the draft and produce a uniform schedule which shall
constitute the Section 1031 Schedule.
-2-
(c) Each of Evergreen and EZ shall cause to be prepared in a timely
fashion a draft of IRS Forms 8824 for itself on the basis of the Appraisals and
the Section 1031 Schedule. Each of Evergreen and EZ shall deliver drafts of
their respective IRS Forms 8824 to the other for approval, which approval shall
not be unreasonably conditioned, withheld or delayed.
(d) Each of Evergreen and EZ shall cause to be prepared in a timely
fashion a draft of IRS Form 8594 for itself in a manner consistent with the
Section 1031 Schedule and IRS Forms 8824 prepared in accordance with paragraphs
(b) and (c) above, reflecting (i) the allocation of consideration exchanged by
it among the assets acquired based on the respective fair market values of the
relevant assets as set forth in the Appraisals and in accordance with section
1060 of the Code and (ii) such other information as required by Section 1060 of
the Code and IRS Form 8594. Each of Evergreen and EZ shall deliver drafts of
their respective IRS Forms 8594 to the other for approval, which approval shall
not be unreasonably conditioned, withheld or delayed.
(e) Each of Evergreen and EZ shall report the transactions contemplated
hereby as a "like-kind exchange" to the maximum extent permissible under Section
1031 of the Code, consistent with the Appraisals, the Section 1031 Schedule, and
IRS Forms 8594 and 8824 prepared in accordance with paragraphs (c) and (d)
above, and shall not take, and shall cause their respective Affiliates,
representatives, successors and assigns not to take, any position on any
federal, state or local Tax Return or report, inconsistent with such reporting
position, the Appraisals, the Section 1031 Schedule or such IRS Form 8594 or
8824. Each of Evergreen and EZ shall promptly give the other notice of any
disallowance of or challenge to such reporting by any Taxing Authority.
(f) Each of Evergreen and EZ shall cooperate with the other, including
without limitation in preparing the Section 1031 Schedule, the IRS Forms 8594
and 8824 and executing all necessary agreements and documents, to the extent
necessary for each of Evergreen and EZ to treat the exchange of the Evergreen
Assets for the EZ Assets as a Like-Kind Exchange pursuant to Section 1031 of the
Code.
(g) Notwithstanding the provisions of this Section 2.2, the parties to
this Agreement will rely solely on their own advisors in determining the tax
consequences of the transactions contemplated by this Agreement and each party
is not relying, and will not rely, on any representations or assurances of any
other party regarding such consequences other than the representations,
warranties, covenants and agreements set forth in writing in this Agreement or
furnished pursuant to the provisions hereof. Notwithstanding anything in this
Agreement to the contrary, the obligations of the parties set forth in this
Section 2.2 shall survive the Closing.
2.3 Assumption of Liabilities and Obligations.
-----------------------------------------
(a) Except as expressly provided in this Agreement, the Evergreen Parties
shall not assume or become obligated to perform any debt, liability or
obligation of any EZ Party or relating to any EZ Station whatsoever, including
without limitation (i) any obligations or liabilities arising under any
contract, lease or agreement, other than those arising under the EZ Assumable
Agreements; (ii) any obligations or liabilities under the EZ Assumable
Agreements relating to the period prior to the Cut-off Date; (iii) any Claims or
pending or threatened Legal Actions to which
-3-
any EZ Party is a party or to which any of the EZ Assets or either of the EZ
Stations is subject relating to the ownership or operation of the EZ Assets or
the conduct of the business of the EZ Stations prior to the Closing (other than
as provided in the EZ Stations TBA); (iv) any insurance policies of the EZ
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 EZ Party under any EZ
Employment Arrangement (including under any EZ Employee Plan), including any
obligation to any EZ Station Employee for severance benefits, vacation time or
sick leave; (vii) any liability for any Taxes attributable to the ownership or
operation of the EZ Assets or the EZ Stations 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 EZ Party prior to the Closing. All such
obligations and liabilities (the "EZ Nonassumed Liabilities") shall remain and
be the obligations and liabilities solely of the EZ Parties.
(b) 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 any of the Evergreen Stations is subject relating to the ownership or
operation of the Evergreen Assets or the conduct of the business of the
Evergreen Stations 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 Stations 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 Stations 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.
(c) Notwithstanding anything contained in this Agreement to the contrary
and except as otherwise provided in the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ or the EZ
Stations TBA, as the case may be, (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 Stations and EZ Stations (the conduct of such
business, in each case, 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 transferring party responsible for
any such items prior to the Cut-off Date and the transferee party 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(g). 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
-4-
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.
(d) 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(g), 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 2.3(d) 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 the Evergreen Proration Schedule 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).
(e) Within sixty (60) days of the Closing Date, Evergreen Parent shall
deliver to EZ a schedule of its proposed prorations, including without
limitation any with respect to the EZ Trade Agreements pursuant to the
provisions of Section 2.3(g), which shall set forth in reasonable detail the
basis for those determinations (the "Philadelphia Proration Schedule"). The
Philadelphia Proration Schedule shall be conclusive and binding upon the EZ
Parties unless EZ provides Evergreen Parent with a Notice of Disagreement within
thirty (30) days after EZ's receipt of the Philadelphia Proration Schedule,
which notice shall state the prorations proposed by EZ (the "EZ Proration
Schedule"). Evergreen Parent shall have fifteen (15) days from receipt of a
Notice of Disagreement to accept or reject the EZ Proration Schedule. If
Evergreen Parent rejects the EZ Proration Schedule and the amount in dispute
exceed Five Thousand Dollars ($5,000), the dispute shall be submitted within ten
(10) days of such rejection to 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 Evergreen Parties and the EZ Parties. EZ and
Evergreen Parent 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-
($5,000), such amount shall be divided equally between EZ and Evergreen Parent.
Payment by EZ or Evergreen Parent, as the case may be, of the proration amounts
determined pursuant to this Section 2.3(e) shall be due fifteen (15) days after
the last to occur of (i) EZ's acceptance of the Philadelphia Proration Schedule
or failure to give Evergreen Parent a timely Notice of Disagreement; (ii)
Evergreen Parent's acceptance of the EZ Proration Schedule or failure to reject
the EZ Proration Schedule within fifteen (15) days of receipt of a timely Notice
of Disagreement; (iii) Evergreen Parent's rejection of the EZ Proration Schedule
in the event the amount in dispute equal or is less than Five Thousand Dollars
($5,000); and (iv) notice to Evergreen Parent and EZ of the resolution of the
disputed amount by the Referee in the event that the amount in dispute exceeds
Five Thousand Dollars ($5,000).
(f) Any payment required by EZ to Evergreen Parent or by Evergreen Parent
to EZ, as the case may be, under Section 2.3(d), 2.3(e) or 2.3(g) 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
Philadelphia Proration Schedule or the Charlotte Proration Schedule, as the case
may be, 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 2.3(d), 2.3(e) or 2.3(g), 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 average of such rates if
-------------------
more than one rate indicated) plus two percent (2%), and such interest shall be
----
payable upon demand.
(g) Obligations and liabilities under Trade Agreements shall be prorated
in favor of the party assuming the same only to the extent that the aggregate
obligations and liabilities (determined in accordance with GAAP) for unperformed
air time under all such agreement as of 12:01 a.m. on the applicable Cut-off
Date exceed by One Hundred Twenty-Five Thousand Dollars ($125,000) in the case
of the EZ Stations, and by One Hundred Fifteen Thousand ($115,000) in the case
of the Evergreen Stations, the fair market value of the property (determined in
accordance with GAAP) to be received by the Assuming Party under such Trade
Agreements after 12:01 a.m. on the applicable Cut-off Date under all such Trade
Agreements. Additionally, the aggregate obligations and liabilities for
unperformed air time under all Evergreen Trade Agreements and under all EZ Trade
Agreements on the applicable Cut-off Date which are required to be prorated (any
excess being part of the applicable Nonassumed Liabilities) shall not exceed
Five Hundred Thousand Dollars ($500,000) and Six Hundred Thousand Dollars
($600,000), respectively. There shall be no proration in favor of the assigning
party with respect to the Trade Agreements, notwithstanding the fact that the
excess, if any, of the obligations and liabilities under the Trade Agreements
over the fair market value of the property to be received under such Trade
Agreements after 12:01 a.m. on the applicable Cut-off Date is less than the
amounts specified in the first sentence of this paragraph.
(h) 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.
2.4 Closing Date. The closing of the Exchange (the "Closing") shall 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
-6-
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. Prior to Closing, Evergreen Parent shall
identify for EZ the appropriate Evergreen Party to which the EZ Assets (or any
portion of them) shall be assigned.
2.5 Accounts Receivable. Upon the earlier to occur of Closing or the
-------------------
commencement of the effectiveness of the applicable TBA, the Evergreen Parties
shall appoint PBI their agent and the EZ Parties shall appoint Evergreen Parent
their agent for the purpose of collecting all Accounts Receivable relating to
the Evergreen Stations and the EZ Stations, respectively. Each party shall
deliver to the other on or as soon as practicable after the applicable TBA Date
(but, in any event, within ten (10) days after such TBA Date) a complete and
detailed statement showing the name, amount and age of each Account Receivable
of its Stations. Subject to and limited by the following, revenues relating to
the Evergreen Accounts Receivable and the EZ Accounts Receivable will be for the
account of Evergreen and the EZ Parties, respectively. Each agent shall use its
best efforts to collect the Accounts Receivable with respect to which it is
acting as agent for a period of ninety (90) days after the applicable Cut-off
Date (the "Collection Period"). Any payment received by either party during the
Collection Period from any customer with an account which is an Account
Receivable with respect to which it is acting as agent shall first be applied in
reduction of such Account Receivable, unless the customer indicates otherwise in
writing. During the Collection Period, each agent shall furnish the other with
a list of, and pay over to the other, the amounts collected with respect to the
Accounts Receivable with respect to which it is acting as agent on a bi-weekly
basis. Each agent shall provide the other with a final accounting on or before
the fifteenth (15th) day following the end of the Collection Period. Upon the
request of either agent at and after such time, the parties shall meet to
mutually and in good faith analyze any uncollected Accounts Receivable to
determine if the same, in their reasonable business judgment, are deemed to be
collectable and if the party which acted as agent with respect thereto desires
to retain such Accounts Receivable in the interest of maintaining an advertising
relationship. As to each such Accounts Receivable, the parties shall negotiate
a good faith value of such Accounts Receivable, which the purchasing party shall
pay to the other if the purchasing party, in its sole discretion, chooses to
retain such Accounts Receivable. Each party shall retain the right to collect
any of its Accounts Receivable as to which the parties are unable to reach
agreement as to a good faith value, and each party agrees to turn over to the
other any payments received against any such Accounts Receivable. Neither agent
shall be obligated to use any extraordinary efforts to collect any of the
Accounts Receivable assigned to it for collection hereunder or to refer any of
such Accounts Receivable to a collection agency or to any attorney for
collection, and neither party shall make any such referral or compromise, nor
settle or adjust the amount of any such Accounts Receivable, except with the
approval of the other agent. Neither agent shall incur any liability to any
other party for any uncollected account unless such agent 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 the agent with respect thereto to the contrary, none of the
assigning parties nor its agents shall make any direct solicitation of the
Accounts Receivable for collection purposes, except for Accounts Receivable
retained by the assigning party after the Collection Period.
-7-
2.6 Like-Kind Exchange. The EZ Parties may elect to effect the transfer
------------------
and conveyance of the Evergreen Assets relating to WRFX(FM) as part of an
exchange under Section 1031 of the Code, in lieu of selling such assets
hereafter. If the EZ Parties so elect, they shall provide notice to Evergreen
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 with respect to such Evergreen Assets 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 Evergreen Parties and (ii) shall
promptly provide written notice of such assignment to all Evergreen Parties.
The Evergreen Parties shall cooperate with all reasonable requests of the EZ
Parties and the "qualified intermediary" in arranging and effecting the transfer
of such Evergreen Assets to the "qualified intermediary". Without limiting the
generality of the foregoing, if the EZ Parties have given notice of their
intention to effect the acquisition of such Evergreen Assets as part of a tax-
deferred exchange, the Evergreen Parties shall (i) promptly provide the EZ
Parties with written acknowledgment of such notice and (ii) at Closing, deliver
such Evergreen Assets to the "qualified intermediary" rather than to the EZ
Parties (which deliver shall discharge the obligation of the Evergreen Parties
to make delivery of such Evergreen Assets hereunder).
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.
---------------------------------------------------------------------
(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 Exchange and the
other 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.
-8-
(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
Exchange and the other 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.
(d) Evergreen Parent does not have any direct or indirect Subsidiaries or
other Affiliates which own or have any interest in any of the Evergreen Stations
or any of the Evergreen Assets other than the other Evergreen Parties.
3.2 Financial and Other Information. Evergreen has heretofore furnished
-------------------------------
to EZ copies of the unaudited financial data of the Evergreen Stations 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
Stations for the periods indicated.
3.3 Changes in Condition. Since June 30, 1996, except to the extent
--------------------
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 Evergreen which Materially Adversely Affects, or (so far as any Evergreen
Party 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
-----------
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
-9-
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.
---------------------------
(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 Stations (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 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 Stations 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, and except
for the Evergreen AM Stations (as to which no representation or warranty is made
hereby), 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, and except for the
Evergreen AM Stations (as to which no representation or warranty is made
hereby), 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 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 Stations (the "Evergreen Studio Facilities") require significant
improvement (including without limitation the
-10-
necessity of repair, renovation or relocation), all Material items of Evergreen
Personal Property (other than the Evergreen Studio Facilities and the Evergreen
Personal Property used solely in connection with the Evergreen AM Stations, as
to which no representation or warranty is made hereby) 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
Stations 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 Evergreen Private Authorization which individually or when
taken together with other substantially similar Evergreen Private Authorizations
is Material to the Evergreen Assets or any of the Evergreen Stations, 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 Stations 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 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 any of the Evergreen Stations;
(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 any of the Evergreen Stations 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 any of the Evergreen Stations; 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 any of the
-▇▇-
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 any of the
Evergreen Stations 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
each of the Evergreen Stations, 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 any of the Evergreen Stations 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 each of the Evergreen Stations is in accordance in all Material
respects with the Evergreen FCC Licenses. The Evergreen Stations 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, 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 each of the Evergreen
Stations have been filed and are true, complete and accurate in all Material
respects. To the knowledge, information and belief of Evergreen, under the FCA,
there are no facts that would disqualify it as the transferee of the control of
the EZ Stations. 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 each of the Evergreen
Stations 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
-12-
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 any of the
Evergreen Stations (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 any of the Evergreen Stations as currently owned, operated and
conducted or proposed to be owned, operated and conducted on or prior to the
Closing Date.
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 any of the Evergreen Stations 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 Stations, 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 Stations TBA.
-13-
3.11 Tax Matters. Each Evergreen Party has in respect of the Evergreen
-----------
Assets and the Evergreen Stations 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 any of the Evergreen Stations. All Taxes in respect of the
Evergreen Assets and the Evergreen Stations 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 Stations 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
any of the Evergreen Stations (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 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 any of the Evergreen Station Employees and
neither any Evergreen Party nor
-14-
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 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,
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 Stations (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.
-15-
3.15 Employment Arrangements. Except as described in Section 3.15 of the
-----------------------
Evergreen Disclosure Schedule, with respect to any 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 such 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 such
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 any of the
Evergreen Stations 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 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.
-16-
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 each of the Evergreen Stations:
(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;
(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.
-17-
3.18 Broker or Finder. No Person assisted in or brought about the
----------------
negotiation of this Agreement or the Exchange 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 Exchange and the other 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
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 any of
the Evergreen Stations 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.
-18-
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 Exchange and the
other 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 the Exchange and the other
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 EZ Material Agreement; 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.
-19-
(d) EZ Parent does not have any direct or indirect Subsidiaries or other
Affiliates which own or have any interest in any of the EZ Stations or any of
the EZ Assets other than the other EZ Parties.
4.2 Financial and Other Information. EZ has heretofore furnished to
-------------------------------
Evergreen copies of the unaudited financial data of the EZ Stations listed in
Section 4.2 of the EZ Disclosure Schedule (the "EZ Financial Data"). Except as
set forth in Section 4.2 of the EZ 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 EZ 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 EZ Stations for the periods indicated.
4.3 Changes in Condition. Since June 30, 1996, except to the extent
--------------------
specifically described in Section 4.3 of the EZ Disclosure Schedule, there has
been no Material Adverse Change in EZ. There is no Event known to EZ which
Materially Adversely Affects, or (so far as any EZ Party can now reasonably
foresee) is likely to Materially Adversely Affect, EZ, except to the extent
specifically described in Section 4.3 of the EZ Disclosure Schedule.
4.4 Materiality. The representations and warranties set forth in this
-----------
Article would in the aggregate be true and correct even without the materiality
exceptions or qualifications contained therein or set forth in the EZ Disclosure
Schedule, except for such exceptions and qualifications including without
limitation those set forth in the EZ 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 EZ.
4.5 Title to Properties; Leases.
---------------------------
(a) Section 4.5(a) of the EZ Disclosure Schedule lists all Real Property
and describes all Leases of Real Property (the "EZ Leases") used or held for use
in the operation of the EZ Stations (the "EZ Real Property"). One of the EZ
Parties has good and marketable title, or valid and subsisting leasehold
interests (as shown on Section 4.5(a) of the EZ Disclosure Schedule), to all EZ
Real Property, in each case free and clear of all Liens, except (i) Permitted
Liens and (ii) Liens set forth on Section 4.5(a) of the EZ Disclosure Schedule
(which Liens shall be released prior to Closing). Except as otherwise set forth
in Schedule 3.5(a) of the EZ Disclosure Schedule, each EZ Lease included in the
EZ Real Property has been duly authorized, executed and delivered by the
appropriate EZ Party and, to EZ's knowledge, information and belief, each of the
other parties thereto, and is a legally valid and binding obligation of the
appropriate EZ Party, and, to EZ's knowledge, information and belief, each of
the other parties thereto, enforceable in accordance with its terms. The
appropriate EZ Party has a valid leasehold interest in and enjoys peaceful and
undisturbed possession under all EZ Leases pursuant to which it holds any EZ
Real Property. All EZ Leases are valid and subsisting and in full force and
effect; neither any EZ Party nor, to EZ's knowledge, information and belief, any
other party thereto, is in default in the performance, observance or fulfillment
of any obligation, covenant or condition contained in any EZ Lease. Except as
disclosed in Section 4.5(a) of the EZ Disclosure Schedule, all improvements on
the EZ Real Property are in compliance with applicable zoning and land use laws,
ordinances and
-20-
regulations in all respects necessary to conduct the operation of the EZ
Stations 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 EZ
Real Property. Except as disclosed in Section 4.5(a) of the EZ 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 4.5(a) of the EZ Disclosure Statement, all of the transmitting towers,
ground radials, guy anchors, transmitting buildings and related improvements
located on the EZ Real Property are located entirely on the EZ Real Property. EZ
has no knowledge of any pending, threatened or contemplated action to take by
eminent domain or otherwise to condemn any part of the EZ Real Property.
(b) Section 4.5(b) of the EZ Disclosure Schedule contains a true, accurate
and complete description of all Material items of EZ Personal Property. None of
the EZ Personal Property is subject to any Lien, except (i) Permitted Liens and
(ii) Liens set forth on Section 4.5(b) of the EZ Disclosure Schedule (which
Liens shall be released prior to Closing). Except as set forth in Section
4.5(b) of the EZ Disclosure Schedule, all Material items of EZ Personal Property
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 EZ Stations to be operated in accordance with the terms and
conditions of their respective EZ FCC Licenses and all Applicable Laws. Without
limiting the generality of the foregoing, EZ acknowledges and agrees that it
shall be responsible for the substantial completion of construction of the
tenant improvements currently underway at the studio building for the EZ
Stations as more fully described in Section 4.5(b) of the EZ Disclosure Schedule
and Section 5.8 of this Agreement.
4.6 Compliance with Private Authorizations. Section 4.6 of the EZ
--------------------------------------
Disclosure Schedule sets forth a true, accurate and complete list and
description of each EZ Private Authorization which individually or when taken
together with other substantially similar EZ Private Authorizations is Material
to the EZ Assets or either of the EZ Stations, all of which are in full force
and effect. The EZ Private Authorizations are all Private Authorizations that
are necessary for the ownership and operation by EZ of the EZ Assets and the EZ
Stations 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 EZ. No EZ Party
is in breach or violation of, or in default in the performance, observance or
fulfillment of, any EZ 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 EZ Private Authorization, except for such defaults, breaches or
violations as do not and will not have in the aggregate any Material Adverse
Effect on EZ. No EZ Private Authorization is the subject of any pending or, to
EZ's knowledge, information or belief, threatened attack, revocation or
termination.
4.7 Compliance with Governmental Authorizations and Applicable Law.
--------------------------------------------------------------
(a) Section 4.7(a) of the EZ Disclosure Schedule contains a description
of:
-21-
(i) all Legal Actions pending or, to EZ's knowledge, information
and belief, is threatened against any EZ Party with respect to the
operation or ownership of any of the EZ Assets or the conduct of the
business of either of the EZ Stations;
(ii) all Claims and Legal Actions pending or, to EZ's knowledge,
information and belief, threatened against any EZ Party with respect to the
operation or ownership of any of the EZ Assets or the conduct of the
business of either of the EZ Stations which, individually or in the
aggregate, are reasonably likely to result in the revocation or termination
of any of the EZ FCC Licenses or the imposition of any restriction of such
a nature as would Adversely affect the ownership or operations of either of
the EZ Stations; in particular, but without limiting the generality of the
foregoing, there are no applications, complaints or Legal Actions pending
or, to EZ's knowledge, information and belief, threatened (x) before the
FCC relating to the ownership or operations of any of the EZ Assets or the
conduct of business of either of the EZ Stations 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 any of the EZ Stations under any federal or state
employment Laws; and
(ii) each Governmental Authorization (including without limitation
all FCC Licenses) required under Applicable Laws (x) to own and operate
each of the EZ Stations, 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 EZ Party to execute and deliver
this Agreement and to perform its obligations hereunder (the "EZ
Governmental Authorizations").
The EZ Parties have delivered to the EZ Parties true and complete copies of the
EZ Governmental Authorizations (including any and all amendments and other
modifications thereto.)
(b) The appropriate EZ Party is the authorized legal holder of the EZ FCC
Licenses listed in Section 4.7(a) of the EZ Disclosure Schedule, none of which
is subject to any restriction or condition which would limit in any respect the
operations of any of the EZ Stations as currently conducted or proposed to be
conducted on or prior to the Closing Date. The EZ 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 EZ Party or its officers, directors,
employees or agents, and the operation of each of the EZ Stations is in
accordance in all Material respects with the EZ FCC Licenses. The EZ Stations
are operating in accordance with the EZ FCC Licenses, all underlying
construction permits and the FCA. Except as disclosed in Section 4.7 of the EZ
Disclosure Schedule, no application, action or proceeding is pending for the
renewal or modification of any EZ FCC Licenses and, to EZ's knowledge,
information and belief, there is not as of the date of this Agreement issued or
outstanding any investigation or material complaint against any EZ Party at the
FCC relating to either EZ Station. Except as disclosed in Section 4.7 of the EZ
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 either EZ
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 EZ.
-22-
All Material reports, forms and statements required to be filed by any EZ Party
with the FCC with respect to each of the EZ Stations have been filed and are
true, complete and accurate in all Material respects. To the knowledge,
information and belief of EZ, under the FCA, there are no facts that would
disqualify it as the transferee of the control of the Evergreen Stations. No
renewal of any EZ FCC License would constitute a major environmental action (as
defined in the FCC rules and regulations).
The EZ Governmental Authorizations comprise all Governmental Authorizations
which are necessary for the lawful ownership or operations of the EZ Assets or
the lawful conduct of the business of each of the EZ Stations 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 EZ. No EZ
Governmental Authorization is the subject of any pending or, to EZ's knowledge,
information and belief, threatened challenge or proceeding to revoke or
terminate any EZ Governmental Authorization. EZ has no reason to believe that
any EZ Governmental Authorization would not be renewed in the name of EZ by the
granting Authority in the ordinary course.
(c) With respect to matters, if any, of a nature referred to in Section
4.7(a) or 4.7(b) of the EZ Disclosure Schedule, except as otherwise specifically
described in Section 4.7(c) of the EZ Disclosure Schedule, all such information
and matters set forth in the EZ Disclosure Schedule, if adversely determined
against EZ, will not, in the aggregate, Materially Adversely Affect EZ.
4.8 Intangible Assets. Section 4.8 of the EZ Disclosure Schedule sets
-----------------
forth a true, accurate and complete description of all Intangible Assets held or
used by EZ (other than the EZ Governmental Authorizations and the EZ Private
Authorizations) relating to the ownership and operation of the EZ Assets or the
conduct of the business of any of the EZ Stations (the "EZ Intangible Assets"),
including without limitation the nature of EZ's interest in each and the extent
to which the same have been duly registered in the offices as indicated therein.
One of the EZ Parties owns or possesses or otherwise has the right to use all EZ
Intangible Assets necessary in order to operate the EZ Assets in the manner
currently being operated by the EZ Parties. Except as set forth in Section 4.8
of the EZ Disclosure Schedule, no Intangible Assets (except for the EZ
Governmental Authorizations and the EZ Private Authorizations and the EZ
Intangible Assets so set forth) are required for the ownership or operation of
the EZ Assets or the conduct of the business of any of the EZ Stations as
currently owned, operated and conducted or proposed to be owned, operated and
conducted on or prior to the Closing Date.
4.9 Related Transactions. No EZ Party is a party or subject to any
--------------------
Contract relating to the ownership and operation of the EZ Assets or the conduct
of the business of any of the EZ Stations between any EZ Party and any of its
officers, directors, stockholders, employees or, to the knowledge, information
and belief of EZ, any Affiliate of any thereof (other than another EZ 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) EZ
Employment Arrangements listed or described in Section 4.12 of the EZ Disclosure
Schedule and (ii) Contracts between EZ and officers which constitute EZ Excluded
Assets and obligations of EZ not being assumed by Evergreen.
-23-
4.10 Insurance. One of the EZ Parties maintains, with respect to the EZ
---------
Assets and the EZ Stations, 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 EZ's reasonable business judgment prudent (a true, complete
and accurate description of which is set forth in Section 4.10 of the EZ
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 EZ Stations TBA.
4.11 Tax Matters. Each EZ Party has in respect of the EZ Assets and the EZ
-----------
Stations 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 EZ Assets or any of the EZ Stations. All
Taxes in respect of the EZ Assets and the EZ Stations which EZ 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 4.11 of the EZ Disclosure Schedule, no
EZ 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 EZ Assets or the EZ
Stations for the fiscal years prior to and including the most recent fiscal
year.
4.12 Employee Retirement Income Security Act of 1974.
-----------------------------------------------
(a) Section 4.12(a) of the EZ Disclosure Schedule contains a true,
accurate and complete list of all EZ employees employed in the ownership or
operation of any of the EZ Assets or the conduct of the business of either of
the EZ Stations (the "EZ 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 "EZ Employment
Arrangement"). All of the EZ Employee Plans and all other EZ Employment
Arrangements are listed in Section 4.12(a) of the Evergreen Disclosure Schedule
and true, complete and accurate copies of all such written EZ Employee Plans and
EZ Employment Arrangements (or related insurance policies) have been furnished
to EZ, along with copies of any employee handbooks or similar documents
describing such EZ Employee Plans or any other EZ Employment Arrangements.
Section 4.12(a) of the Evergreen Disclosure Schedule also contains a true,
complete and accurate description of any unwritten EZ Employee Plan or other
unwritten EZ Employment Arrangement.
(b) Each EZ 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. EZ is not aware of any pending audit or examination of any EZ
Employee Plan or any other EZ 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 EZ Employee Plan or any other EZ Employment
Arrangement pending or, to EZ's knowledge, information and belief, threatened
against any EZ Employee Plan or any
-24-
other EZ Employment Arrangement, and no EZ Party possesses any knowledge of any
facts which could give rise to any such Legal Action or Claim.
(c) No EZ Party contributes to or is required to contribute to any
Multiemployer Plan with respect to any of the EZ Station Employees and neither
any EZ Party nor any other trade or business under common control with any EZ
Party (within the meaning of Sections 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 4.12(d) of the EZ Disclosure Statement,
neither any EZ Party nor any other trade or business under common control with
any EZ Party (within the meaning of Sections 414(b), (c), (m) or (o) of the
Code) sponsors, maintains or contributes to any EZ Employee Plan or any other EZ
Employment Arrangement that provides retiree medical or retiree life insurance
coverage to any EZ Station Employee upon his/her retirement.
(e) Except as described in Section 4.12(e) of the EZ Disclosure Statement
with respect to each Employee Plan and, to the extent applicable, any other
compensation arrangement comprising an EZ Employment Arrangement: (i) each such
EZ 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 EZ 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 EZ Party to any liability that
could become a liability of Evergreen; and (iii) all contributions premiums or
payments accrued, in whole or in part, under each such EZ Employee Plan or other
EZ Employment Arrangement or with respect thereto as of the Closing will be paid
by the appropriate EZ Party prior to the Closing.
(f) For purposes of this Section, the term "EZ 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,
maintains or otherwise is bound which provides benefits to any person employed
or previously employed at either of the EZ Stations.
4.13 Absence of Sensitive Payments. Neither any EZ Party nor, to EZ's
-----------------------------
knowledge, information and belief, any of its officers, directors, employees,
agents or other representatives, has with respect to the EZ Assets or the EZ
Stations (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.
4.14 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
-25-
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.
4.15 Employment Arrangements. Except as described in Section 4.15 of the
-----------------------
EZ Disclosure Schedule, with respect to either EZ Station, (i) none of the EZ
Station Employees is now, or, to EZ's knowledge, information and belief, since
the later of the date on which an EZ Party acquired such EZ Station or January
1, 1993, has been, represented by any labor union or other employee collective
bargaining organization, and no EZ Party is, or has ever been, a party to any
labor or other collective bargaining agreement with respect to the EZ 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 EZ Party nor any of such employees is now, or, to EZ's
knowledge, information and belief, since the later of the date on which an EZ
Party acquired such EZ Station or January 1, 1993 has been, subject to or
involved in or, to EZ'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 EZ Station Employees. Each EZ
Party has performed in all Material respects all obligations required to be
performed under each EZ Employment Plan and each other EZ Employment
Arrangements and is not in Material breach or violation of or in Material
default or arrears under any of the terms, provisions or conditions thereof.
4.16 Material Agreements. Listed on Section 4.16 of the EZ Disclosure
-------------------
Schedule are all Material Agreements relating to the ownership or operation of
the EZ Assets or the conduct of the business of any of the EZ Stations or to
which any of the EZ Assets is subject (the "EZ Material Agreements"). True,
accurate and complete copies of each EZ Material Agreement have been made
available by EZ to Evergreen and EZ has provided Evergreen with photocopies of
all EZ Material Agreements requested by Evergreen (or true, accurate and
complete descriptions thereof have been set forth in Section 4.16 of the EZ
Disclosure Schedule, if any such Material Agreements are oral). All of the EZ
Material Agreements are valid, binding and legally enforceable obligations of an
EZ Party and, to EZ's knowledge, information and belief, all other parties
thereto (except to the extent that the invalidity or non-binding nature of any
EZ Material Contract would not have a Material Adverse Effect on EZ). Each EZ
Party has duly complied with all of the Material terms and conditions of each EZ
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 EZ, threatened Claim that any EZ 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 EZ Material Agreement or impair the
rights or benefits, or increase the costs, of any EZ Party under any EZ Material
Agreement. No EZ Party has granted any Material waivers or forbearance under
any EZ Material Agreement and, to EZ's knowledge, information and belief, no
third party is in material default in the performance of any of its obligations
under any EZ Material Agreement. Except for those consents or approvals listed
in Section 4.16 of the EZ Disclosure Schedule, no consents or approvals of any
third party are necessary to permit the assignment by the EZ Parties of the EZ
Material Agreements to the Evergreen Parties and such assignment will not affect
the validity or enforceability of any EZ Material Agreement or cause any
Material change in the substantive terms of any of them.
-26-
4.17 Ordinary Course of Business. Each EZ Party, from the end of its most
---------------------------
recent fiscal quarter to the date hereof, except (i) as may be described on
Section 4.17 of the EZ Disclosure Schedule, or (ii) as may be required or
expressly contemplated by the terms of this Agreement, with respect to the EZ
Assets and each of the EZ Stations:
(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 EZ 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;
(e) except as described in Section 4.17(e) of the EZ Disclosure
Schedule, has not increased the compensation payable or to become payable
to any of the EZ 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 EZ Lease, EZ Governmental Authorization, EZ
Private Authorization, EZ Material Agreement, EZ Employment Arrangement or
Contract, or any transaction, agreement or arrangement with any Affiliate
of EZ.
-27-
4.18 Broker or Finder. No Person assisted in or brought about the
----------------
negotiation of this Agreement or the Exchange 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.
4.19 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
Exchange and the other Transactions will be, solvent.
4.20 Environmental Matters. Except as set forth in Section 4.20 of the EZ
---------------------
Disclosure Schedule, with respect to the EZ Assets, each EZ Party:
(a) to the knowledge, information and belief of EZ, 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 EZ, in substantial
compliance in all Material respects with all Environmental Laws, has, to
EZ's knowledge, information and belief, obtained all Environmental Permits
required under Environmental Laws, and is not the subject of or, to EZ's
knowledge, information and belief, threatened with any Legal Action
involving a demand for damages or other potential 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 either of
the EZ Stations or any of the EZ 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.
4.21 Trade or Barter. Section 4.21 of the EZ Disclosure Schedule sets
---------------
forth a true, complete and accurate description (including obligations and
liabilities remaining thereunder) of all of the Trade Agreements currently in
effect that relate to the business or operation of the EZ Stations 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.
-28-
ARTICLE 5
COVENANTS
5.1 Access to Information; Confidentiality.
--------------------------------------
(a) Each party shall afford to the other party (including, in the case of
EZ, to 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 its (and its
Subsidiaries') properties, books, contracts, commitments and records (including
without limitation Tax Returns) relating to the Assets and the Stations 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 limitation the FCA) or
filed by it or any of its Subsidiaries with any Authority in connection with the
Exchange and other Transactions or any other report, schedule or document which
may have a Material Effect on their respective Assets or Stations or their
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 (x)
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
Stations and certifying financial statements and financial information, and (y)
EZ or its accountants deemed by Evergreen or its Representatives necessary or
useful for the purpose of performing an audit of the business of the EZ Stations
and certifying financial statements and financial information, and (iii) such
other information concerning any of the foregoing as EZ or Evergreen 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 the party disclosing such information, 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 Exchange and the other
Transactions. In no event shall either party (or, in the case of EZ, American)
or any of its Representatives use such information to the detriment of the other
party. Except as otherwise herein provided, each party (and, in the case of EZ,
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 Exchange and the other 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, each of the parties shall not, without the prior written consent of
the other party, disclose any information remaining in its possession with
respect to the Assets or the Stations conveyed by it pursuant to the Exchange,
and no such information shall be used for any purposes, other than in connection
with the Exchange and the other Transactions or to the extent required by
Applicable Law.
(b) Subject to the terms and conditions of Section 5.1(a), each 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,
-29-
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 party (and,
in the case of EZ, 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 Exchange and the other
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
Exchange and make effective the other Transactions, and (y) to refrain from
taking, or cause to be 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 Exchange and the other 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(b), (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 and
Evergreen to own and operate the Evergreen Stations and the EZ Stations,
respectively), (iv) to lift any injunction or other legal bar to the Exchange or
any of the other Transactions (and, in such case, to proceed with the Exchange
and the other Transactions 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 (i) 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 and (ii) Evergreen may file a separate
application with the FCC seeking reassignment of the Extra Philadelphia Station
from the Philadelphia Trustee to any Evergreen Party or Affiliate of an
Evergreen 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 further, however, that
-30-
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
Exchange is expressly conditioned upon the grant of the Final Order as to the
FCC Consents for the transfer of the FCC Licenses for the Stations without any
condition which would have a Materially Adverse Effect upon the party acquiring
such Stations, it being understood that the imposition of any condition
requiring (a) any Evergreen Party (or any Affiliate thereof) to divest its
interest in any radio station in the Philadelphia, Pennsylvania market or to
otherwise take any action to comply with Section 73.3555(a) of the FCC rules
shall not be deemed to have a Materially Adverse Effect upon the Evergreen
Parties, or (b) 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 have a Materially Adverse Effect upon the EZ Parties.
Notwithstanding the foregoing, nothing in this Agreement shall be construed to
require any EZ Party or any Evergreen Party to divest any asset to obtain
termination of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act 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 divesture is necessary
to comply with the multiple ownership rules or policies of the FCC).
(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,
registration and other fees, and any similar Taxes which become payable in
connection with the Exchange and the other 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
Stations 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. EZ shall cooperate and use its reasonable business
-31-
efforts to cause its independent accountants to reasonably cooperate with
Evergreen, and at Evergreen's expense, in order to enable Evergreen to have EZ
and Evergreen's or EZ's independent accountants prepare audited and unaudited
financial statements for the EZ Stations described in Section 6.3(f). EZ
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 EZ Stations described in Section 6.3(f),
subject, in the case of the unaudited financial statements, to normal year-end
adjustments and accruals. Without limiting the generality of the foregoing, EZ
agrees that it will (i) consent to the use of such financial statements in any
registration statement or other document filed by Evergreen (or any of its
Affiliates) under the Securities Act or the Exchange Act and (ii) execute and
deliver, and cause its officers to execute and deliver, such "representation"
letters as are customarily delivered in connection with audits and as
Evergreen's or EZ's independent accountants may reasonably request under the
circumstances.
(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 (i) each of the EZ Stations substantially on the terms contemplated by that
certain letter of intent, dated August 27, 1996 between EZ and Evergreen Parent
(the "Letter of Intent") (the "EZ Stations TBA"), and (ii) each of the Evergreen
Stations substantially on the terms contemplated by the Letter of Intent (the
"Evergreen Stations 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, and
none of the EZ Parties shall be liable in any respect to the extent any of the
representations and warranties contained in Article 4, 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 Stations TBA (in the case of the
Evergreen Parties) and the EZ Stations TBA (in the case of the EZ Parties),
respectively, (ii) the conditions set forth in Sections 6.2(c), 6.2(e), 6.3(c)
and 6.3(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 of any Evergreen Party pursuant to the provisions of the EZ
Stations TBA, respectively, and (iii) the certificates to be delivered to EZ and
Evergreen pursuant to the provisions of Section 6.2(c) and 6.3(c), respectively,
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 Exchange or any other Transaction 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.
-32-
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 nor EZ 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 or, in the case of EZ, American) 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 Exchange and the
other 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 Assets owned by
it or any of the Stations owned by it. The provisions of this Section shall
apply to each of Evergreen's Subsidiaries and EZ'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
EZ Stations TBA 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 any of the Evergreen Stations 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;
-33-
(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 each of the Evergreen Stations 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 any 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 any Evergreen Station or making
any material changes in any 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 Stations, or make any other
Material changes in any 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 any 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
any Evergreen Station;
(i) notify EZ promptly if any 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 any of the Evergreen Stations, 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 Stations.
-34-
5.7 Conduct of Business by EZ 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 Evergreen
shall otherwise agree in writing, EZ shall, and shall cause its Subsidiaries, to
the extent relating to either of the EZ Stations or the EZ 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;
(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 5.7(d) of the EZ Disclosure
Schedule;
(e) (i) to operate each of the EZ Stations in conformity with the EZ
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
either EZ Station and (ii) take all actions necessary to maintain the EZ
FCC Licenses;
(f) prior to the effectiveness of the EZ Stations TBA, refrain from
changing the frequency or format of any EZ Station or making any material
changes in any EZ 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 EZ Stations TBA, not make any
material changes in the broadcast hours or in the percentage or types of
programming broadcast by the EZ Stations, or make any other Material
changes in either EZ Station's programming policies, except such changes as
in the good faith judgment of EZ are required by the public interest;
(h) not (i) dispose of any of the EZ Assets owned by EZ or used in the
operation of either EZ 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 EZ Assets to another EZ Party or any
Affiliate of an EZ Party who is or becomes a party to this
-35-
Agreement) or (ii) modify, change in any Material respect or enter into any
Material Agreement relating to the business of either EZ Station;
(i) notify Evergreen promptly if either EZ 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 EZ
Assets or either of the Evergreen Stations, except for (i) Permitted Liens
and (ii) other Liens, if any, set forth on Section 4.5(a) or 4.5(b) of the
EZ Disclosure Schedule (which Liens shall be released prior to Closing);
and
(k) not waive any material rights relating to the EZ Stations.
5.8 Building of EZ Stations. EZ shall, prior to the Closing, complete (or
-----------------------
place in escrow funds necessary to complete) all tenant improvements at the
studio building for the EZ Stations (including all costs for construction,
equipment and furniture) substantially in accordance with the plans,
specifications, standards and budget for such improvements described in Section
4.5(b) of the EZ Disclosure Schedule. On the Closing Date, Evergreen shall
reimburse EZ in an amount equal to the lesser of (a) any such costs in excess of
$1,200,000 incurred by EZ or which it is obligated to pay with respect to such
construction, equipment and furniture and (b) $400,000. EZ shall be responsible
for and have the right to direct the completion of such improvements,
notwithstanding the effectiveness of the EZ Stations TBA. In the event that on
the Closing Date, such improvements are not completed, EZ shall have the right,
in its sole discretion, but not the obligation, to continue to be responsible
for and to direct the completion of such improvements, unless Evergreen shall
agree to bear all of such costs (and not only up to $400,000 thereof) in excess
of $1,200,000, in which event Evergreen shall have the right to assume
responsibility for and to direct the completion of such improvements. Anything
in this Agreement to the contrary notwithstanding, in the event the costs of
such construction, equipment and furniture exceed $1,600,000, the parties shall
negotiate in good faith in an attempt to agree as to how such excess costs
shall be borne as between the parties.
5.9 FCC Application; Divesture Commitment.
-------------------------------------
(a) The parties acknowledge that (i) Affiliates of Evergreen have entered
into agreements to acquire a number of radio stations serving the Philadelphia,
Pennsylvania area, that, when combined with the radio stations now licensed to
Affiliates of Evergreen and the EZ Stations, would cause the Evergreen Parties
to be in violation of Section 73.3555 of the FCC's rules (absent a waiver of
those rules) and (ii) the EZ Parties own a number of radio stations in the
Charlotte, North Carolina area that, when combined with the Evergreen Stations
(and the Evergreen Station (as defined in the Asset Purchase Agreement)), would
cause the EZ Parties or their Affiliates 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 with respect to the transfer of the EZ
Stations to the Evergreen Parties may contain a condition requiring the
Evergreen Parties to divest their interest in one or more FM radio stations in
the Philadelphia market (the "Extra Philadelphia FM") prior to the Closing and
-36-
the FCC Consents to transfer of the Evergreen Stations to the EZ Parties may
contain a condition requiring the EZ Parties to divest their 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 Evergreen Parties and the EZ Parties
can each meet such a condition, prior to the filing of the applications for FCC
Consent, the Evergreen Parties shall agree to assign the Extra Philadelphia FM
to a trustee (the "Philadelphia Trustee") and the EZ Parties shall agree to
assign the Extra Charlotte FM to a trustee (the "Charlotte Trustee") pursuant to
a trust agreement in each case that satisfies the FCC's multiple ownership rules
and policies, including the cross-interest policy, then in effect. In the event
that the acquisition of the EZ Stations 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
Philadelphia FM, the Evergreen Parties shall assign, subject to receipt of the
FCC's grant of the Philadelphia Trustee Application, the Extra Philadelphia FM
to the Philadelphia Trustee on the Closing Date in order to effectuate the
Closing under this Agreement. In the event that the acquisition of the
Evergreen Stations 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, the
Evergreen Parties shall file an application with the FCC requesting the consent
to the assignment of the FCC authorizations for the Extra Philadelphia FM to the
Philadelphia Trustee (the "Philadelphia Trustee Application") and the EZ Parties
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 applications, and the
parties shall prosecute such applications in good faith and with due diligence.
(c) Anything in this Section to the contrary notwithstanding, the Evergreen
Parties and 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 Philadelphia FM or the Extra Charlotte FM, as the case
may be, 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 Philadelphia Trustee or the Charlotte Trustee, as the case may
be, and, in such event, the Evergreen Parties and/or the EZ Parties, as the case
may be, need not transfer the Extra Philadelphia FM or the Extra Charlotte FM,
as the case may be, to the Philadelphia Trustee or the Charlotte Trustee, as the
case may be, 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 Philadelphia Trustee or the Charlotte Trustee, as the case
may be. Notwithstanding the foregoing, the parties agree to leave the applicable
trusts and trust applications in effect until such time as any such third party
sale has been consummated.
ARTICLE 6
-37-
CLOSING CONDITIONS
6.1 Conditions to Obligations of Each Party to Effect the Exchange. The
--------------------------------------------------------------
respective obligations of each party to effect the Exchange shall, except as
hereinafter provided in this 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) 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 conditions in
connection with, the consummation of the Exchange, or which might, in the
reasonable business judgment of EZ or Evergreen, based upon the advice of
counsel, have a Material Adverse Effect on the Assets and Stations to be
acquired by it, 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 Exchange or any other Transaction, 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
(b) 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 Exchange, 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 each of the parties,
have a Material Adverse Effect on the Assets and Stations being acquired by
such party. 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 any party hereto (or, in the case of
EZ, American or any of its Subsidiaries) to divest its interest in any
radio station in the Charlotte, North Carolina market (in the case of EZ)
or in the Philadelphia, Pennsylvania market (in the case of Evergreen) 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 Exchange, the
party on whom such condition is imposed 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 Exchange, the party on whom such condition is
imposed shall be obligated to proceed with the consummation of the
Exchange.
-38-
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 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 Exchange and the other 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;
-39-
(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; and
(f) EZ shall have received from its 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 Stations and the Evergreen Station (as defined
in the Asset Purchase 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.
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), 4.7(a) (limited to its knowledge and to Legal Actions),
and 4.14, 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 of ▇▇▇▇▇▇ &
Naftalin, LPP, FCC counsel for the EZ Parties, 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, in each case, with respect to such other matters arising
after the date of this Agreement incident to the Exchange and the other
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;
-40-
(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
covenants, agreements and conditions as Evergreen or its counsel shall have
reasonably requested;
(d) All authorizations, consents, waivers, orders or approvals marked
with an asterisk as "material" on Section 4.6 or 4.16 of the EZ Disclosure
Statement shall have been obtained, without the imposition, individually or
in the aggregate, of any condition or requirement which could Materially
Adversely Affect Evergreen;
(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 EZ Parties from that reflected in the most recent EZ Financial
Statements; as of the Closing Date, the EZ FCC Licenses shall not have been
Materially and Adversely Affected by any act, or failure to act, of the EZ
Party; and
(f) Evergreen Parent shall have received from its or EZ'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 EZ Stations presented on a combined basis (consisting of
a balance sheet at December 31, 1995 and statements of operations and cash
flow for the year ended December 31, 1995) and unaudited financial
statements as of and for any subsequent period (ending not less than forty-
five (45) days prior to the Closing Date) reasonably requested by Evergreen
Parent which financial statements shall have been prepared in conformity
with GAAP and Regulation S-X under the Securities Act.
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
Exchange shall have become final and nonappealable; or
-41-
(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 Exchange has 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
Exchange has 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 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 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 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
-42-
8.1 Survival. Except as otherwise provided in Section 2.2(g) to the effect
--------
that the provisions of Section 2.2 shall survive the Closing without limitation,
and except with respect to obligations and liabilities assumed pursuant to the
Evergreen Assumable Agreements and the EZ 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, 4.1(b), 4.11 and 4.12 (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 Affiliates, 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:
(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) the Evergreen Nonassumed Liabilities (in the case of Evergreen)
and the EZ Nonassumed Liabilities (in the case of EZ), including without
limitation any Legal Action or other Claim brought or asserted by any third
party; or
(d) the failure to comply with the Bulk Sales law of the State of
North Carolina (in the case of Evergreen) or the Commonwealth of
Pennsylvania (in the case of EZ).
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
Purchase Agreement exceeds, in the aggregate, $50,000, in which event the
indemnified
-43-
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 Purchase 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) and 4.7(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 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.
-44-
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 Exchange
and the other 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 Stations 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 Exchange and the other
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 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:
-▇▇-
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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.: (▇▇▇) ▇▇▇-▇▇▇▇
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
-46-
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 Exchange and the other 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.
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
-47-
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 that 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.
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,
-48-
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.
-49-
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 PHILADELPHIA, INC.
By: /s/ ▇▇▇▇ Box
---------------------------------
Name: ▇▇▇▇ Box
Title: President
EVERGREEN MEDIA CORPORATION OF LOS ANGELES
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
EVERGREEN MEDIA CORPORATION OF CHARLOTTE
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
-50-
EVERGREEN MEDIA CORPORATION OF THE EAST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
EVERGREEN MEDIA CORPORATION
OF CAROLINALAND
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
WBAV/WBAV-FM/WPEG LICENSE CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
WRFX LICENSE CORP.
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
-51-
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 EZ Party or any Evergreen Party, as the case may be,
attributable to the sale of time or talent on one of its Stations.
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 Exchange, or (b) adversely affect or affected the ownership
or operation of the Evergreen Assets or the EZ Assets or the conduct of the
business of the Evergreen Stations or the EZ Stations, as the case may be, or
(c) impair the Evergreen Parties' or the EZ Parties', as the case may be,
ability to fulfill their obligations under the terms of this Agreement, or (d)
adversely affect the aggregate rights and remedies of the EZ Parties or the
Evergreen Parties, as the case may be, 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 EZ
Disclosure Schedule, 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 fifth Whereas paragraph.
AMERICAN-EZ MERGER shall have the meaning given to it in the fifth 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.
APPRAISALS shall have the meaning given to it in Section 2.2(a).
ASSET PURCHASE AGREEMENT shall mean the asset purchase agreement, dated as
of the date of this Agreement, among certain of the Evergreen Parties and, among
others, certain of the EZ Parties relating to the purchase of WNKS(FM),
Charlotte, North Carolina.
ASSETS shall mean the EZ Assets in the case of the EZ Parties and the
Evergreen Assets in the case of the Evergreen Parties.
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
2.3(d).
CHARLOTTE TRUSTEE shall have the meaning given to it in Section 5.9(a).
CHARLOTTE TRUSTEE APPLICATION shall have the meaning given to it in Section
5.9(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 2.4.
CLOSING DATE shall have the meaning given to it in Section 2.4.
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 EZ Stations TBA, the Evergreen Stations
TBA 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 EZ Assets or the
conduct of the business of any of the Evergreen Stations or either of the EZ
Stations.
-2-
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.
CUT-OFF DATE shall mean (i) with respect to any Contract to be assigned and
the rights and obligations to be assumed pursuant to any TBA (including all
items of revenue and expense relating to such Contract), the applicable TBA Date
for such TBA and (ii) in all other cases, the Closing Date.
DISCLOSURE SCHEDULE shall mean the EZ Disclosure Schedule or the Evergreen
Disclosure Schedule, as the case may be.
EMC-BAV shall have the meaning given to it in the Preamble.
EMC CAROLINALAND shall have the meaning given to it in the Preamble.
EMC CHARLOTTE shall have the meaning given to it in the Preamble.
EMC EAST shall have the meaning given to it in the Preamble.
EMC-RFX 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.
-3-
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 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 or EZ, as the case may be, 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 any of the Evergreen
Stations prior to the Cut-off Date.
EVERGREEN AM STATIONS shall mean WBAV(AM) and WFNZ(AM).
-4-
EVERGREEN ASSETS shall mean all assets used or held for use in the
ownership or operation of or the conduct of the business of any of the Evergreen
Stations 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 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 any of the Evergreen Stations 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 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 any of the Evergreen Stations 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
-5-
as a "retained agreement", (b) all Contracts for the sale of time on any
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 $300,000 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 any of the Evergreen Stations.
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 any of the Evergreen
Stations.
EVERGREEN PRORATION SCHEDULE shall have the meaning given to it in Section
2.3(d).
EVERGREEN REAL PROPERTY shall have the meaning given to it in Section
3.5(a).
EVERGREEN STATION and EVERGREEN STATIONS shall have the meaning given them
in the first Whereas paragraph.
EVERGREEN STATION 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 any of the Evergreen
Stations.
EVERGREEN'S KNOWLEDGE (including the term "to the knowledge, information
and belief of Evergreen") shall mean the actual knowledge of any Evergreen Party
executive officer or any General Manager of any Evergreen Station.
EXCHANGE shall have the meaning given to it in the third Whereas paragraph.
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 FM shall have the meaning given to it in Section 5.9(a).
-6-
EXTRA PHILADELPHIA FM shall have the meaning given to it in Section 5.9(a).
EZ shall have the meaning given to it in the Preamble.
EZ ACCOUNTS RECEIVABLE shall mean the Accounts Receivables of any EZ Party
arising in connection with the ownership or operation of any of the EZ Assets or
the conduct of the business of either of the Evergreen Stations prior to the
applicable Cut-off Date.
EZ ASSETS shall mean all assets used or held for use in the ownership or
operation of or the conduct of the business of either of the EZ Stations by an
EZ Party or an Entity Affiliated with any EZ Party, including without limitation
the EZ Real Property, the EZ Personal Property, the EZ Private Authorizations,
the EZ Governmental Authorizations, including the EZ FCC Licenses, the EZ
Intangible Assets and the EZ Assumable Agreements, but excluding the EZ Excluded
Assets.
EZ ASSUMABLE AGREEMENTS shall mean the EZ Private Authorizations, the EZ
Trade Agreements, the EZ Leases and the EZ Other Contracts.
EZ DISCLOSURE SCHEDULE shall mean the EZ Disclosure Schedule dated as of
the date of this Agreement delivered by EZ to Evergreen.
EZ EMPLOYEE PLAN shall have the meaning given to it in Section 4.12(f).
EZ EMPLOYMENT ARRANGEMENTS shall have the meaning given to it in Section
4.12(a).
EZ EXCLUDED ASSETS shall mean (i) all cash and cash equivalents of any EZ
Party, (ii) all EZ Accounts Receivable, (ii) the corporate names of each EZ
Party, (iv) all books and records or EZ relating to either of the EZ Stations
and which any EZ 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 EZ Employee Plans and other EZ Employee
Arrangements, (vi) all insurance policies relating to the EZ Assets, (vii)
software programs and other assets at the principal executive offices of any EZ
Party used to provide certain financial and accounting services for either of
the EZ Stations and (viii) any and all products, profits and proceeds of, and
including without limitation any Claims with respect to, any of the foregoing.
EZ FCC LICENSES shall have the meaning given to it in the second Whereas
paragraph.
EZ FINANCIAL DATA shall have the meaning given to it in Section 4.2(a).
EZ GOVERNMENTAL AUTHORIZATIONS shall have the meaning given to it in
Section 4.7(a).
EZ INTANGIBLE ASSETS shall have the meaning given to it in Section 4.8.
EZ LEASES shall have the meaning given to it in Section 4.5(a).
EZ MATERIAL AGREEMENT shall have the meaning given to it in Section 4.16.
-7-
EZ MERGER AGREEMENT shall have the meaning given to it in the fifth Whereas
paragraph.
EZ NONASSUMED LIABILITIES shall have the meaning given to it in Section
2.3(a).
EZ OTHER CONTRACTS shall mean (a) all EZ Material Agreements set forth on
Section 4.15 of the EZ Disclosure Schedule excluding those agreements identified
thereon as a "retained agreement", (b) all Contracts for the sale of time on
either EZ 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 4.15 of the EZ Disclosure Schedule that have been entered into in the
ordinary course of business and involve less than $300,000 per year in the
aggregate.
EZP shall have the meaning given to it in the Preamble.
EZ PARTIES shall have the meaning given to it in the Preamble.
EZ 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
either of the EZ Stations.
EZ PRIVATE AUTHORIZATIONS shall mean all Private Authorizations obtained or
held in connection with the ownership or operation of any of the EZ Assets or
the conduct of the business of either of the EZ Stations.
EZ PRORATION SCHEDULE shall have the meaning given to it in Section 2.3(e).
EZ REAL PROPERTY shall have the meaning given to it in Section 4.5(a).
EZ STATION and EZ STATIONS shall have the meaning given to them in the
second Whereas paragraph.
EZ STATION EMPLOYEES shall have the meaning given to it in Section 4.12(a).
EZ STATIONS TBA shall have the meaning given to it in Section 5.2(d).
EZ 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 either of the EZ
Stations.
EZ'S KNOWLEDGE (including the term "to the knowledge, information and
belief of EZ") shall mean the actual knowledge of any EZ Party executive officer
or any General Manager of either EZ Station.
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.
-8-
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 Stations to the
appropriate EZ Parties and the EZ Stations to the appropriate Evergreen Parties.
FCC LICENSES shall mean all Governmental Authorizations issued by the FCC
to Evergreen or EZ or its Subsidiaries in connection with the ownership,
operation and conduct of the business of the Evergreen Stations and the EZ
Stations, as the case may be.
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 Assets or the conduct of the
business of any of the Stations.
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
-9-
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 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.
-10-
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.
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.
LETTER OF INTENT shall have the meaning given to it in Section 5.2(d).
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.
LIKE-KIND EXCHANGE shall mean an exchange of assets of the nature
contemplated by the provisions of Section 1031 of the Code.
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 EZ Stations or the Evergreen Stations in any of the last
three fiscal years or is likely to account
-11-
for more than three percent (3%) of revenues of the EZ Stations or the Evergreen
Stations 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
2.3(d).
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
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 Stations.
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.
PHILADELPHIA PRORATION SCHEDULE shall have the meaning given to it in
Section 2.3(e).
PHILADELPHIA TRUSTEE APPLICATION shall have the meaning given to it in
Section 5.9(a).
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
Assets or the conduct of the business of any of the Stations.
-12-
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.
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 2.3(d).
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 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.
SECTION 1031 SCHEDULE shall have the meaning given to it in Section 2.2(b).
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.
STATIONS shall mean, collectively, the Evergreen Stations and the EZ
Stations.
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,
-13-
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 or 4.11.
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 TBAs shall become
effective (or in the event such date is not the same for all of the TBAs, the
applicable date of such effectiveness).
TBAS shall mean the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ and the EZ Stations TBA, or the
applicable one of such agreements.
TERMINATION DATE shall have the meaning given to it in Section 7.1.
TRADE AGREEMENTS shall mean any Contract relating to any of the Stations
pursuant to which any EZ Party or any Evergreen Party is required to provide air
time in exchange for property or services other than cash.
TRANSACTIONS shall mean the Exchange and all of the other transactions
hereunder or under any of the Collateral Documents.
-14-