-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CckZLTawVaNpuQSfW3s+Mfhkn6rtLRsn74ou53F1LtAMNBOXVXw7hkfge5MqmfV5 ArcJySgPoRKLtE1hATaddg== 0000950109-97-002046.txt : 19970310 0000950109-97-002046.hdr.sgml : 19970310 ACCESSION NUMBER: 0000950109-97-002046 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970216 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970307 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN MEDIA CORP CENTRAL INDEX KEY: 0000894972 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 752247099 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21570 FILM NUMBER: 97552371 BUSINESS ADDRESS: STREET 1: 433 EAST LAS COLINAS BLVD STREET 2: STE 2230 CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 2148699020 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): February 16, 1997 ----------------- Evergreen Media Corporation ----------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 75-2247099 - --------------- ------------------- (State or Other (IRS Employer Jurisdiction of Identification No.) Incorporation) 433 East Las Colinas Boulevard Suite 1130 Irving, Texas 75039 ---------------------------- (Address of Principal Executive Offices) (972) 869-9020 ----------------------- (Registrant's telephone number, including area code) ITEM 5. Other Events. ------------ On February 16, 1997, Evergreen Media Corporation of Los Angeles, a Delaware corporation ("EMCLA"), a direct wholly-owned subsidiary of Evergreen Media Corporation, a Delaware corporation (the "Company"), entered into a Stock Purchase Agreement (the "Viacom Stock Purchase Agreement") with Viacom International, Inc. ("Viacom"). Under the Viacom Stock Purchase Agreement, EMCLA agreed to acquire from Viacom all of the issued and outstanding capital stock of WAXQ Inc., Riverside Broadcasting Co., Inc., KYSR Inc., KIBB Inc., WMZQ Inc., Viacom Broadcasting East Inc., WLIT Inc., and WDRQ Inc. (each, a subsidiary of Viacom, and referred to collectively as the "Viacom Subsidiaries") for an aggregate purchase price of $1.075 billion, subject to certain adjustments as set forth in the Viacom Stock Purchase Agreement. The Viacom Subsidiaries own and operate (or will own and operate at the consummation of the Viacom Stock Purchase Agreement) the assets used in the operation of the following radio broadcast stations: (i) WAXQ(FM), New York, New York; (ii) WLTW(FM), New York, New York; (iii) KYSR(FM), Los Angeles, California; (iv) KIBB(FM), Los Angeles, California; (v) WMZQ-FM, Washington, D.C.; (vi) WZHF(AM), Arlington, Virginia; (vii) WJZW(FM), Woodbridge, Virginia; (viii) WBZS(AM), Alexandria, Virginia; (ix) WLIT(FM), Chicago, Illinois; and (x) WDRQ(FM), Detroit, Michigan. Consummation of the Viacom Stock Purchase Agreement is subject to (i) consent of the Federal Communications Commission ("FCC"), (ii) expiration or early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and (iii) satisfaction of certain other closing conditions, each as more fully described in the Viacom Stock Purchase Agreement. No assurance can be given that the Viacom Stock Purchase Agreement will be consummated. Subject to the satisfaction of such conditions, the Company anticipates that the Viacom Stock Purchase Agreement will be consummated in the second quarter of 1997. On February 18, 1997, the Company announced that it had reached an agreement in principle to merge with Chancellor Broadcasing Company, a Delaware corporation ("Chancellor"), and Chancellor Radio Broadcasing Company, a Delaware corporation and a subsidiary of Chancellor("CRBC"). If the transactions contemplated by the Viacom Stock Purchase Agreement are consummated prior to the consummation of the transactions contemplated by the Agreement and Plan of Merger (the "Merger Agreement"), dated February 19, 1997, among the Company, Chancellor and CRBC, as described below, certain aspects of the consummation of the acquisition of the Viacom Subsidiaries will be governed by the Joint Purchase Agreement (the "Joint Purchase Agreement"), dated February 19, 1997, among the Company, EMCLA, Chancellor and CRBC, as described below. On February 19, 1997, the Company entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") with Chancellor and CRBC. Pursuant to the terms of the Merger Agreement, Chancellor and CRBC will be merged with and into the Company, with the Company remaining as the surviving corporation. Upon the consummation of the Merger Agreement (the "Effective Time"), the surviving corporation will be renamed Chancellor Media Corporation (as such, the "Surviving Corporation"). At the Effective Time, (i) each share of Chancellor's Class A Common Stock, par value $.01 per share, and Class B Common Stock, par value $.01 per share, will be converted into 0.9091 shares of Common Stock of the Surviving Corporation, (ii) each share of the Company's Class A Common Stock, par value $.01 per share, and Class B Common Stock, par value $.01 per share, will be converted into one share of Common Stock of the Surviving Corporation, (iii) each share of Chancellor's 7% Convertible Preferred Stock, par value $.01 per share, will be converted into one share of Preferred Stock of the Surviving Corporation with substantially identical powers, preferences and relative rights, (iv) each share of CRBC's 12.25% Series A Senior Cumulative Exchangeable Preferred Stock, par value $.01 per share, will be converted into one share of preferred stock of the Surviving Corporation with substantially identical powers, preferences and relative rights, and (v) each share of CRBC's 12% Exchangeable Preferred Stock, par value $.01 per share, will be converted into one share of Preferred Stock of the Surviving Corporation with substantially identical powers, preferences and relative rights. All shares of Common Stock of the Surviving Corporation will be entitled to one vote per share on all matters that holders of such stock are entitled to vote. Additionally, at the Effective Time, all indebtedness of Chancellor and CRBC will either be assumed or refinanced by the Surviving Corporation. 2 The Merger Agreement provides that, at the Effective Time, the board of directors of the Surviving Corporation will consist of three classes of directors. Class I directors will hold their respective office from the Effective Time until the 1998 annual meeting of the Surviving Corporation. Class II directors will hold their respective office from the Effective Time until the 1999 annual meeting of the Surviving Corporation. Class III directors will hold their respective office from the Effective Time until the 2000 annual meeting of the Surviving Corporation. At the Effective Time, the board of directors of the Surviving Corporation will consist of the following individuals: (a) Class I -- Eric C. Neuman, Perry J. Lewis and Matrice Ellis-Kirk; (b) Class II -- Lawrence D. Stuart, Jr., Steven Dinetz, Jeffrey A. Marcus and James E. de Castro; and (c) Class III -- Thomas O. Hicks, Scott K. Ginsburg, John H. Massey and Thomas J. Hodson. The Company has been informed by Chancellor that Ms. Ellis-Kirk recently resigned from the board of directors of Chancellor, and it is expected that another nominee will be identified to fill the seat that Ms. Ellis-Kirk would have held on the board of directors of the Surviving Corporation. The Merger Agreement provides that, at the Effective Time, the following individuals will become officers of the Surviving Corporation: (a) Chairman of the Board -- Thomas O. Hicks; (b) President and Chief Executive Officer -- Scott K. Ginsburg; (c) Co-Chief Operating Officers -- Steven Dinetz and James E. de Castro; and (d) Chief Financial Officer -- Matthew E. Devine. Other officers of the Surviving Corporation will be determined by the Company and Chancellor prior to the Effective Time. Consummation of the Merger Agreement is subject to (i) consent of the FCC, (ii) expiration or early termination of the waiting period required under the HSR Act, (iii) approval of the shareholders of the Company, (iv) approval of the common shareholders of Chancellor, and (v) satisfaction of certain other closing conditions, each as more fully described in the Merger Agreement. In order to obtain the consent of the FCC, it will be necessary for the Surviving Corporation to divest or commit to divest certain stations in the Chicago, Detroit, Washington D.C. and San Francisco markets in order to comply with limits set by the FCC's multiple ownership rules. No assurance can be given that the Merger Agreement will be consummated. Subject to such conditions, the Company anticipates that the Merger Agreement will be consummated in the third quarter of 1997. On February 19, 1997, Thomas O. Hicks and certain individuals and entities affiliated with Thomas O. Hicks (the "Hicks Stockholders") and Scott K. Ginsburg entered into a Stockholders Agreement (the "Stockholders Agreement") with Chancellor and the Company. Pursuant to the Stockholders Agreement, the Hicks Stockholders and Mr. Ginsburg agreed, among other things, to vote all shares of capital stock of Chancellor and the Company held by such parties at any meeting of the stockholders of the respective companies in favor of the transactions contemplated by the Merger Agreement. The Hicks Stockholders control approximately 90% of the voting power of the outstanding common stock of Chancellor. Mr. Ginsburg controls approximately 44% of the voting power of the outstanding common stock of the Company. On February 19, 1997, CRBC, Chancellor, EMCLA and the Company entered into a Joint Purchase Agreement (the "Joint Purchase Agreement"). The Joint Purchase Agreement governs certain aspects of the acquisition of the Viacom Subsidiaries as between CRBC, Chancellor, EMCLA and the Company. Pursuant to the Joint Purchase Agreement, each of the Company and Chancellor will pay one-half of certain costs due under the Viacom Stock Purchase Agreement, including those amounts owed as deposits. On February 19, 1997, each of the Company and Chancellor paid $53.75 million to Viacom to satisfy the obligation of the Company under the Viacom Stock Purchase Agreement to pay a non-refundable (except under limited circumstances) deposit of 10% of the purchase price under the Viacom Stock Purchase Agreement. If the consummation of the Viacom Stock Purchase Agreement occurs prior to the consummation of the Merger Agreement, (i) EMCLA will be required to purchase the Viacom Subsidiaries that own and operate radio stations WAXQ(FM), New York, New York, WLTW(FM), New York, New York, WMZQ- FM, Washington, D.C., WZHF(AM), Arlington, Virginia, WJZW(FM), Woodbridge, Virginia and WBZS(AM) Alexandria, Virginia, for an aggregate purchase price of approximately $595 million and (ii) CRBC will be required to purchase the Viacom Subsidiaries that own and operate radio stations KYSR(FM), Los Angeles, California, KIBB (FM), Los Angeles, California, WLIT(FM), Chicago, Illinois and WDRQ(FM), Detroit, Michigan, for an aggregate purchase price of approximately $480 million. If the Viacom Stock Purchase Agreement is consummated after the consummation of the Merger Agreement, the Surviving Corporation will be required to purchase all of the Viacom Subsidiaries, subject to the FCC's multiple ownership limitations as described above. 3 The Company anticipates that the Viacom Stock Purchase Agreement and the refinancing of the indebtedness of the Company and Chancellor required in connection with the transactions contemplated by the Merger Agreement will be financed through additional bank borrowings or additional public or private debt or equity financing. In connection with these transactions, the Company is actively engaged in discussions with the lenders that are parties to the Company's Amended and Restated Credit Agreement, dated January 17, 1996 (the "Senior Credit Facility"), concerning possible amendments to the Senior Credit Facility. Toronto Dominion (Texas), Inc. acts as administrative agent for the lenders that are parties to the Senior Credit Facility. 4 ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------------------------------- 7(c) Exhibits -------- * 2.28 Stock Purchase Agreement by and between Viacom International Inc. and Evergreen Media Corporation of Los Angeles, dated as of February 16, 1997 (see table of contents for list of omitted schedules and exhibits). * 2.29 Agreement and Plan of Merger, by and among Evergreen Media Corporation, Chancellor Broadcasting Company and Chancellor Radio Broadcasting Company, dated as of February 19, 1997. * 2.30 Stockholders Agreement, by and among Chancellor Broadcasting Company, Evergreen Media Corporation, Scott K. Ginsburg (individually and as custodian for certain shares held by his children), HM2/Chancellor, L.P., Hicks, Muse, Tate & Furst Equity Fund II, L.P., HM2/HMW, L.P., The Chancellor Business Trust, HM2/HMD Sacramento GP, L.P., Thomas O. Hicks, as Trustee of the William Cree Hicks 1992 Irrevocable Trust, Thomas O. Hicks, as Trustee of the Catherine Forgrave Hicks 1993 Irrevocable Trust, Thomas O. Hicks, as Trustee of the John Alexander Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Mack Hardin Hicks 1984 Trust, Thomas O. Hicks, as Trustee of Robert Bradley Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Thomas O. Hicks, Jr. 1984 Trust, Thomas O. Hicks and H. Rand Reynolds, as Trustees for the Muse Children's GS Trust, and Thomas O. Hicks, dated as of February 19, 1997. * 2.31 Joint Purchase Agreement, by and among Chancellor Radio Broadcasting Company, Chancellor Broadcasting Company, Evergreen Media Corporation of Los Angeles, and Evergreen Media Corporation, dated as of February 19, 1997. - --------------------------- * Filed herewith. 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Evergreen Media Corporation By: /s/ Matthew E. Devine ---------------------- Matthew E. Devine Chief Financial Officer Date: March 7, 1997 6 EX-2.28 2 VIACOM STOCK PURCHASE AGREEMENT EXHIBIT 2.28 =============================================================================== ------------------------------- STOCK PURCHASE AGREEMENT ------------------------------- dated as of February 16, 1997 between VIACOM INTERNATIONAL INC. and EVERGREEN MEDIA CORPORATION OF LOS ANGELES =============================================================================== TABLE OF CONTENTS
Section Page - ------- ---- ARTICLE I.............................................. 2 DEFINITIONS............................................ 2 1.01 Certain Defined Terms............................ 2 1.02 Other Defined Terms.............................. 7 1.03 Terms Generally.................................. 9 ARTICLE II............................................. 9 PURCHASE AND SALE...................................... 9 2.01 Purchase and Sale of the Shares.................. 9 2.02 Purchase Price................................... 9 2.03 Closing.......................................... 9 2.04 Closing Deliveries by Seller..................... 9 2.05 Closing Deliveries by Purchaser.................. 10 2.06 Purchase Price Adjustment........................ 10 2.07 Interest Amount ................................. 12 2.08 Payments and Computations ....................... 12 ARTICLE III............................................ 12 REPRESENTATIONS AND WARRANTIES OF SELLER............... 12 3.01 Incorporation and Authority of Seller............ 13 3.02 Incorporation and Qualification of Each Company.. 13 3.03 Capital Stock of the Companies................... 13 3.04 No Conflict...................................... 13 3.05 Consents and Approvals........................... 14 3.06 Financial Information............................ 14 3.07 Absence of Undisclosed Liabilities............... 15 3.08 Absence of Certain Changes or Events............. 15 3.09 Absence of Litigation............................ 16 3.10 Compliance with Laws............................. 16 3.11 Licenses and Permits............................. 16 3 12 The Assets....................................... 17 3.13 Real Property.................................... 17 3.14 Employee Benefit Matters......................... 17 3.15 Taxes............................................ 18 3.16 Brokers.......................................... 19 3.17 Environmental Compliance......................... 19 3.18 EXCLUSIVITY OF REPRESENTATIONS................... 19
ARTICLE IV............................................ 19 REPRESENTATIONS AND WARRANTIES OF PURCHASER........... 19 4.01 Incorporation and Authority of Purchaser........ 20 4.02 No Conflict..................................... 20 4.03 Consents and Approvals.......................... 20 4.04 Absence of Litigation........................... 20 4.05 Securities Matters.............................. 21 4.06 FCC Qualification............................... 21 4.07 Brokers......................................... 22 4.08 EXCLUSIVITY OF REPRESENTATIONS.................. 22 ARTICLE V............................................. 22 ADDITIONAL AGREEMENTS................................. 22 5.01 Conduct of Business Prior to the Closing........ 22 5.02 Access to Information........................... 24 5.03 Confidentiality................................. 25 5.04 Regulatory and Other Authorizations; Consents... 25 5.05 Intercompany Accounts........................... 26 5.06 Insurance....................................... 26 5.07 Financial Statements............................ 27 5.08 Notification.................................... 27 5.09 No Other Bids................................... 27 5.10 Environmental Audit............................. 28 5.11 Further Action.................................. 28 ARTICLE VI............................................ 28 EMPLOYEE MATTERS...................................... 28 6.01 Employees....................................... 28 6.02 INTENTIONALLY OMITTED........................... 30 6.03 Retirement Plan................................. 30 6.04 Indemnity....................................... 30 6.05 No Third Party Beneficiaries.................... 31 ARTICLE VII........................................... 31 TAX MATTERS........................................... 31 7.01 Tax Indemnities................................. 31 7.02 Refunds and Tax Benefits........................ 32 7.03 Contests........................................ 33 7.04 Preparation of Tax Returns...................... 34 7.05 Section 338(h)(10) Election..................... 34 7.06 Cooperation and Exchange of Information......... 35 7.07 Conveyance Taxes................................ 35 7.08 Miscellaneous................................... 35
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ARTICLE VIII................................... 36 CONDITIONS TO CLOSING.......................... 36 8.01 Conditions to Obligations of Seller...... 36 8.02 Conditions to Obligations of Purchaser... 37 ARTICLE IX..................................... 38 TERMINATION, AMENDMENT AND WAIVER.............. 38 9.01 Termination.............................. 38 9.02 Termination is Nonexclusive Remedy....... 39 9.03 Waiver................................... 40 ARTICLE X...................................... 40 INDEMNIFICATION................................ 40 10.01 Indemnification by Purchaser............ 40 10.02 Indemnification by Seller............... 41 10.03 Notification of Claims.................. 42 10.04 Exclusive Remedies...................... 43 ARTICLE XI..................................... 43 GENERAL PROVISIONS............................. 43 11.01 Survival................................ 43 11.02 Expenses................................ 43 11.03 Notices................................. 43 11.04 Public Announcements.................... 44 11.05 Non-Solicitation........................ 44 11.06 Headings................................ 44 11.07 Severability............................ 44 11.08 Entire Agreement........................ 45 11.09 Successors and Assigns.................. 45 11.10 No Recourse............................. 45 11.11 No Third-Party Beneficiaries............ 45 11.12 Amendment............................... 46 11.13 Sections and Schedules.................. 46 11.14 Governing Law........................... 46 11.15 Counterparts............................ 46 11.16 No Presumption.......................... 46 11.17 Specific Performance.................... 46
-iii- STOCK PURCHASE AGREEMENT, dated as of February 16, 1997, between VIACOM INTERNATIONAL INC., a Delaware corporation ("Seller"), and EVERGREEN ------ MEDIA CORPORATION OF LOS ANGELES, a Delaware corporation ("Purchaser"). --------- W I T N E S S E T H : ------------------- WHEREAS, Seller owns all of the issued and outstanding shares of capital stock of each of the companies listed in Schedule 1 and each company listed in such Schedule owns and operates the radio broadcast station or stations set forth opposite its name in such Schedule; WHEREAS, the Shares (as hereinafter defined) constitute all of the issued and outstanding shares of capital stock of each of the Companies (as hereinafter defined); WHEREAS, the Companies operate all of the radio broadcast stations owned directly or indirectly by Seller (the "Stations") and serving the radio -------- broadcast markets in New York, NY (the "NY Market"), Los Angeles, CA (the "LA --------- -- Market"), Washington, D.C. (the "D.C. Market"), Chicago, IL (the "Chicago - ------ ----------- ------- Market") and Detroit, MI (the Detroit Market") (individually a "Market" and -------------- ------ collectively, the "Markets"), in each case as reflected in Schedule 1; ------- WHEREAS, simultaneously with the execution and delivery of this Agreement, Purchaser has delivered to Seller a deposit (the "Deposit") in an ------- amount equal to 10% of the Base Price (as hereinafter defined); WHEREAS, Purchaser has informed Seller that Purchaser and certain of its Affiliates (as hereinafter defined) intend to consummate a business combination (the "Purchaser Merger") with Chancellor Broadcasting Company, a ---------------- Delaware company, and certain of its Affiliates; and WHEREAS, Seller now wishes to sell to Purchaser, and Purchaser now wishes to purchase from Seller, the Shares upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, Purchaser and Seller hereby agree as follows: 2 ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the --------------------- following terms shall have the following meanings: "Accounting Firm" means (a) an independent certified public accounting --------------- firm in the United States of national recognition (other than a firm which then serves as the independent auditor for Seller, or Purchaser or any of their respective Affiliates) mutually acceptable to Seller and Purchaser or (b) if Seller and Purchaser are unable to agree upon such a firm, then the regular independent auditors for Seller and Purchaser shall mutually agree upon a third independent certified public accounting firm, in which event, "Accounting Firm" shall mean such third firm. "Action" means any claim, action, suit, arbitration, inquiry, ------ proceeding or investigation by or before any Governmental Authority. "Affiliate" means, with respect to any specified Person, any other --------- Person who or which, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with such specified Person; provided, however, that for purposes of this definition and except as -------- ------- used in Section 5.02(b), Affiliates of Seller shall be limited to Viacom and its direct and indirect Subsidiaries. "Agreement" means this Agreement, including the Disclosure Schedule, --------- all exhibits and schedules hereto, all documents, certificates and instruments delivered pursuant hereto and all amendments hereto made in accordance with Section 11.12. "Assets" means all of the assets, properties and rights of every type ------ and description, real, personal and mixed, tangible and intangible, that are owned, leased or licensed by each of the Companies and are used exclusively or held for use exclusively in the conduct of the Business on the date hereof, including the following: (i) the goodwill relating exclusively to the Business; (ii) all the Owned Real Property and all rights in respect of the Leased Real Property; (iii) all furniture, fixtures, equipment, machinery and other tangible personal property; (iv) all vehicles; 3 (v) all receivables; (vi) all books of account, general, financial, tax and personnel records, invoices, supplier lists, correspondence and other documents, records and files and all computer software and programs and any rights thereto; (vii) all intellectual property; (viii) all claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind (including rights to insurance proceeds and rights under and pursuant to all warranties, representations and guarantees made by suppliers of products, materials or equipment, or components thereof); (ix) all sales and promotional literature, customer lists and other sales-related materials; (x) all rights under all contracts, licenses, sublicenses, agreements, leases, commitments, and sales and purchase orders, and under all commitments, bids and offers (to the extent such offers are transferable); (xi) all of the FCC Licenses; (xii) all municipal, state and federal franchises, permits, licenses, agreements, waivers and authorizations, to the extent transferable; and (xiii) all of each Company's right, title and interest in and to all other assets, rights and claims of every kind and nature used exclusively or held for use exclusively in the operation of the Business. "Base Price" means One Billion Seventy-Five Million Dollars ---------- ($1,075,000,000), which is the aggregate purchase price for all of the Companies being acquired by Purchaser hereunder. "Business" means the business of operating the Stations, considered as -------- a single enterprise, as conducted on the date hereof. "Business Day" means any day that is not a Saturday, a Sunday or other ------------ day on which banks are required or authorized by Law to be closed in the City of New York. "Cash" means the aggregate of all cash, cash equivalents and bank ---- accounts owned by each of the Companies from time to time from the date hereof to the Closing Date. 4 "Closing Working Capital" means Working Capital as of the close of ----------------------- business on the day immediately preceding the Closing Date, as reflected on the Final WC Statement. "Code" means the Internal Revenue Code of 1986, as amended. ---- "Communications Act" means the Communications Act of 1934, as amended. ------------------ "Companies" means WAXQ Inc. and Riverside Broadcasting Co., Inc. in --------- the NY Market, KYSR Inc. and KIBB Inc. in the LA Market, Viacom Broadcasting East Inc. and WMZQ Inc. in the D.C. Market, WLIT Inc. in the Chicago Market and WDRQ Inc. in the Detroit Market, each of which is a Delaware corporation. "Control" means, as to any Person, the power to direct or cause the ------- direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The term "Controlled" shall have a correlative meaning. "Disclosure Schedule" means the Disclosure Schedule attached as ------------------- Schedule 1.01 hereto. "Environmental Laws" means any applicable federal, state or local law, ------------------ rule or regulation relating to the environment, natural resources, or public health and safety. "ERISA" means the Employee Retirement Income Security Act of 1974, as ----- amended. "FCC" means the Federal Communications Commission and any successor --- thereto. "FCC Consent" means the FCC's initial grant of its consent to the ----------- transfer of the FCC Licenses to Purchaser pursuant to this Agreement. "FCC Licenses" means all of the licenses, permits and authorizations ------------ granted and issued from time to time by the FCC to each of the Companies to operate their respective Station or Stations as currently operated. "Final Order" means the FCC Consent to the extent not reversed, ----------- stayed, enjoined, set aside, annulled or suspended, and with respect to which no timely request for stay, petition for rehearing, or appeal is pending, and as to which the time for filing any such request, petition or appeal or reconsideration by the FCC on its own motion has expired. 5 "Governmental Authority" means any United States federal, state or ---------------------- local or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. "Governmental Order" means any order, writ, judgment, injunction, ------------------ decree, stipulation, determination or award entered by or with any Governmental Authority. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of ------- 1976, as amended, and the rules and regulations thereunder. "Interest Amount" means, as of any date of determination, the --------------- aggregate amount of interest accrued on the Base Price (less the amount of the ---- Deposit) pursuant to Section 2.07 as of such date of determination. "Interest Payment Date" means the earlier of the (i) Closing Date and --------------------- (ii) the fifth Business Day following the date of the termination, if any, of this Agreement pursuant to Section 9.01 (other than clause (a) thereof). "Interest Rate" means 8% per annum. ------------- "IRS" means the Internal Revenue Service. --- "knowledge of Seller " or "Seller's knowledge" means the actual -------------------- ------------------ knowledge of Mr. William Figenshu, President, Viacom Radio, and Mr. Kevin Reymond, Senior Vice President and Chief Financial Officer, Viacom Radio, in each case without specific investigation. "Law" means any federal, state, local or foreign statute, law, --- ordinance, regulation, rule, code, order, other requirement or rule of law. "liabilities" means all liabilities or obligations, with respect to ----------- the Business, Assets or Stations, whether direct or indirect, matured or unmatured or absolute, contingent or otherwise. "Lien" means any mortgage, deed or trust, pledge, hypothecation, ---- security interest, encumbrance, claim, lien, lease (including any capitalized lease) or charge of any kind, whether voluntarily incurred or arising by operation of Law or otherwise, affecting any assets or property, including any agreement to give or grant any of the foregoing, any conditional sale or other title retention agreement and the filing of or agreement to give any financing statement with respect to any assets or property under the Uniform Commercial Code of any state or comparable Law of any U.S. jurisdiction. 6 "Material Adverse Effect" means a material adverse effect on the ----------------------- Assets, taken as a whole, or on the results of operations or the condition (financial or otherwise) of the Stations, considered as a single enterprise; provided, however, that any material adverse effect arising out of or resulting - -------- ------- from an event or series of events or circumstances affecting (i) the radio broadcast industry generally or (ii) the Market or Markets in which any of the Stations operate, shall not constitute a Material Adverse Effect. "Permitted Liens" means the following Liens: (a) Liens for Taxes, --------------- assessments or other governmental charges or levies not yet due; (b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanic, material and other Liens imposed by Law and on a basis consistent with past practice for amounts not yet due; (c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of the Business and on a basis consistent with past practice in connection with worker's compensation, unemployment insurance or other types of social security; (d) minor defects of title, easements, rights-of-way, restrictions and other similar charges or encumbrances with respect to any parcel of Owned Real Property not materially detracting from the value of such Owned Real Property or interfering with the current use of such Owned Real Property or interfering with the ordinary conduct of the Business; (e) Liens not created by Seller or any of the Companies which affect the underlying fee interest of any Leased Real Property; (f) Liens incurred in the ordinary course of the Business and on a basis consistent with past practice securing liabilities which are not individually or in the aggregate material; (g) any state of facts an accurate survey would show, provided such facts do not render title unmarketable or materially interfere with the present use of the Owned Real Property; and (h) other Liens that, individually or in the aggregate, would not have a Material Adverse Effect. "Person" means any natural person, general or limited partnership, ------ corporation, limited liability company, firm, association or other legal entity. "Purchase Price" means the sum of (i) the Base Price, plus (ii) the -------------- ---- Interest Amount, if any, and (iii) either (a) if Estimated Closing Working Capital is positive, plus the amount of Estimated Closing Working Capital, or ---- (b) if Estimated Closing Working Capital is negative, less the amount of ---- Estimated Closing Working Capital. "Securities Act" means the Securities Act of 1933, as amended. -------------- "Seller's Account" means the account of Seller maintained by Seller ---------------- with Chase Manhattan Bank, N.A. at its office at One Chase Manhattan Plaza, New York, NY, Account No. 910-2-712511, ABA No. 021000021. "Shares" means all of the issued and outstanding shares of capital ------ stock of each of the Companies. 7 "Subsidiary" of any Person means any corporation, partnership, joint ---------- venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or Controlled by such Person. "Tax" or "Taxes" means all income, excise, gross receipts, ad valorem, --- ----- sales, use, employment, franchise, profits, gains, property, transfer, use, payroll, intangibles or other taxes, fees, stamp taxes, duties, charges, levies or assessments of any kind whatsoever (whether payable directly or by withholding), together with any interest and any penalties, additions to tax or additional amounts imposed by any Tax authority with respect thereto. "Tax Returns" means all returns and reports (including elections, ----------- declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes. "Viacom" means Viacom Inc., a Delaware corporation, the parent of ------ Seller. "Working Capital" means, for all Markets, on a combined basis, as of --------------- any date of determination, (a) the sum of (i) Cash, (ii) receivables and (iii) prepaid expenses minus (b) the sum of (i) accounts payable and (ii) accrued ----- expenses, in each case as of such date, calculated in the same manner and using the same methods, as the line items on the Reference Balance Sheet(s). SECTION 1.02. Other Defined Terms. The following terms have the ------------------- meanings defined for such terms in the Sections set forth below: Term Section ----- -------------- Acquisition Proposal 5.09 Allocations 7.05(b) Chicago Market Recitals Closing 2.03 Closing Date 2.03 COBRA 6.03(c) Confidentiality Agreement 5.03 Contest 7.03(b) 8 Continuation Period 6.01(d) D.C. Market Recitals Deposit Recitals Deposit Delivery Time 2.02 Detroit Market Recitals Election 7.05(a) Environmental Assessments 5.10 Estimated Closing Working Capital 2.06(a) Filing 5.02(b) Final WC Statement 2.06(a) Financial Statements 3.06 Forms 7.05(a) Indemnified Party 10.03(a) Indemnifying Party 10.03(a) Initial WC Statement 2.06(a) KIBB Assets Article III LA Market Recitals Leased Real Propert 3.13 Losses 10.01(a) MADSP 7.05(b) Market Recitals Markets Recitals Multiemployer Plan 3.14(b) Multiple Employer Plan 3.14(b) Notice of Disagreement 2.06(a) NY Market Recitals Outside Date 9.01(b) Owned Real Property 3.13 Post-Closing Date Tax Benefit 7.02(b) Purchaser Preamble Purchaser Assignee 11.09 Purchaser Indemnified Parties 10.02(a) Purchaser's DC Plan 6.03(b) Purchaser Merger Recitals Reference Balance Sheet(s) 3.06 Securities Acts 5.02(b) Seller Preamble Seller Indemnified Parties 10.01(a) Stations Recitals Station Employees 6.01(a) Sublease 2.04(d) Submitted Notice of Disagreement 2.06(a) Submitted WC Statement 2.06(a) Surviving Entity 11.09 9 Supplemental Financial Statement 5.07 Transferred Employees 6.01(b) Viacom ERISA Plan 3.14(a) Viacom Plans 3.14(a) VIP 3.14(d) VPP 3.14(d) SECTION 1.03. Terms Generally. (a) Words in the singular shall be --------------- held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires, (b) the term "hereof," "herein," and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to any particular provision of this Agreement, and Article, Section, paragraph, Exhibit and Schedule references are to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise specified, (c) the word "including" and words of similar import when used in this Agreement means "including, without limitation," unless otherwise specified, and (d) the word "or" shall not be exclusive. ARTICLE II PURCHASE AND SALE SECTION 2.01. Purchase and Sale of the Shares. On the terms and ------------------------------- subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from Seller, the Shares. SECTION 2.02. Purchase Price. Subject to the adjustments set forth -------------- in Section 2.06, Purchaser shall pay the Purchase Price in cash to Seller as follows: (i) the Deposit, which will be delivered to Seller's Account by wire transfer in immediately available funds no later than 3:00 P.M. (New York City time) on the second Business Day immediately succeeding the date hereof (the "Deposit Delivery Time") and (ii) the balance of the Purchase Price at the - ---------------------- Closing as provided in Section 2.05(a). SECTION 2.03. Closing. Subject to the terms and conditions of this ------- Agreement, the sale and purchase of the Shares contemplated hereby shall take place at a closing (the "Closing") to be held at 10:00 A.M. (New York City time) ------- on the fifth Business Day following the later to occur of (i) the expiration or termination of the applicable waiting periods under the HSR Act and (ii) the satisfaction or waiver of the other conditions to the obligations of the parties set forth in Article VIII, at the offices of Seller, 1515 Broadway, New York, New York, or at such other time or on such other date or at such other place as Seller and Purchaser may mutually agree upon in writing (the day on which the Closing takes place being the "Closing Date"). ------------ 10 SECTION 2.04. Closing Deliveries by Seller . At the Closing, Seller ----------------------------- shall deliver or cause to be delivered to Purchaser: (a) stock certificates evidencing the Shares, duly endorsed in blank or accompanied by stock powers duly executed in blank, with all required stock transfer tax stamps affixed; (b) a receipt for the Purchase Price; (c) the certificates and other documents required to be delivered pursuant to Section 8.02; and (d) the sublease described on Schedule 3.13(b) (the "Sublease") duly -------- executed by Seller. SECTION 2.05. Closing Deliveries by Purchaser. At the Closing, ------------------------------- Purchaser shall deliver to Seller : (a) the balance of the Purchase Price after the application of the Deposit thereto, by wire transfer in immediately available funds to Seller's Account; (b) the certificates and other documents required to be delivered pursuant to Section 8.01; and (c) the Sublease duly executed by Purchaser. All deliveries under Sections 2.04 and 2.05 shall occur simultaneously. SECTION 2.06. Purchase Price Adjustment. (a) No less than two ------------------------- Business Days prior to the Closing Date, Seller shall deliver a notice to Purchaser which sets forth Seller's good faith estimate of Working Capital as of the close of business on the day immediately preceding the Closing Date (the "Estimated Closing Working Capital"). Within 30 days after the Closing Date, --------------------------------- Purchaser shall prepare and deliver to Seller a statement setting forth Working Capital as of the close of business on the day immediately preceding the Closing Date (the "Initial WC Statement"). During the 30 days immediately following --------------------- Seller's receipt of the Initial WC Statement, Seller will be permitted to review Purchaser's working papers relating to the Initial WC Statement, all of Purchaser's and each Company's books and records with respect thereto and such other books and records of Purchaser and each Company as Seller may reasonably request in connection with such review. The Initial WC Statement shall become final and binding upon the parties (and shall thereupon become the Final WC Statement) on the 31st day following receipt thereof by Seller, unless Seller shall 11 provide a written notice (the "Notice of Disagreement") of its disagreement ---------------------- with the Initial WC Statement to Purchaser prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted. If a timely Notice of Disagreement is received by Purchaser, then the Initial WC Statement (as revised in accordance with clause (x) or (y) below) shall become final and binding upon the parties, and shall thereupon become the "Final WC Statement", on the earlier of (x) the date on ------------------ which the parties hereto resolve in writing any differences they have with respect to any matter specified in the Notice of Disagreement, and agree upon a Final WC Statement, or (y) the date on which the Accounting Firm finally resolves in writing any matters with respect to the Initial WC Statement that are properly in dispute by providing each of the parties hereto with a Final WC Statement. During the 30 days immediately following the delivery of a Notice of Disagreement, Seller and Purchaser shall seek in good faith to resolve in writing (and thereby agree on a Final WC Statement) any differences which they may have with respect to any matter specified in the Notice of Disagreement. During such period, Purchaser shall have access to the working papers of Seller prepared in connection with Seller 's preparation of the Notice of Disagreement. At the end of such 30-day period, Seller and Purchaser shall submit to the Accounting Firm for review and resolution any and all matters which remain in dispute and which were properly included in the Notice of Disagreement (the Initial WC Statement, as it may be modified by Purchaser prior to submission to the Accounting Firm, being the "Submitted WC Statement", and the Notice of ---------------------- Disagreement, as it may be modified by Seller prior to submission to the Accounting Firm, being the "Submitted Notice of Disagreement"), and, within 30 -------------------------------- days of its receipt of the Submitted Notice of Disagreement, the Accounting Firm shall make a final determination, binding on the parties hereto, of Working Capital as of the close of business on the day immediately preceding the Closing Date. Purchaser and Seller shall share equally the cost of the Accounting Firm's review and determination. (b) (i) If Closing Working Capital exceeds Estimated Closing Working Capital, then Purchaser shall pay to Seller an amount equal to such excess or (ii) if Estimated Closing Working Capital exceeds Closing Working Capital, then Seller shall pay to Purchaser an amount equal to such excess, in either case within 10 Business Days after the Final WC Statement becomes final and binding on the parties hereto, together with interest thereon from the Closing Date to the date of payment at the rate of interest publicly announced by Citibank, N.A. in New York, New York from time to time as its base rate. If Closing Working Capital is equal to Estimated Closing Working Capital, then neither Purchaser nor Seller shall owe any amount to the other party pursuant to this Section 2.06. (c) Purchaser agrees that following the Closing through the date that payment, if any, is made pursuant to Section 2.06(b), it will not, and will cause the Companies not to, take any actions with respect to any accounting books, records, policy or procedure on which the Initial WC Statement is to be based that are inconsistent with past practices of Seller or that would make it impossible or 12 impracticable to calculate Working Capital in the manner utilizing the methods required hereby. Without limiting the generality of the foregoing, no changes shall be made in any reserve or other account existing as of the date of the Reference Balance Sheet(s) except as a result of events occurring after the date of the Reference Balance Sheet(s) and, in such event, only in a manner consistent with the past practices of Seller. SECTION 2.07. Interest Amount. If the Closing shall not have --------------- occurred on or prior to the 120th day following the date hereof for any reason other than as a result of Seller 's failure to comply in all material respects with its covenants and agreements hereunder or the material inaccuracy of the representations and warranties made by Seller herein, then interest shall commence to accrue on the Base Price (less the amount of the Deposit) at the ---- Interest Rate from such date through the Interest Payment Date. Purchaser shall pay the Interest Amount to Seller on the Interest Payment Date. SECTION 2.08. Payments and Computations. Each party shall make each ------------------------- payment due to the other party hereunder as soon as practicable on the day when due in U.S. dollars, in the case of payments to Seller at Seller 's Account or as otherwise directed by Seller, and in the case of payments to Purchaser as directed by Purchaser in writing, by wire transfer in immediately available funds. All computations of interest shall be made by the party entitled to receive payment on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the party to which interest is to be paid pursuant to the terms of this Agreement of an interest rate or any amount of interest due hereunder shall be conclusive and binding for all purposes, absent manifest error. Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest. ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER Purchaser understands and acknowledges that as of the date of this Agreement such of the Assets as are used or held for use exclusively in the operation of the radio broadcast station identified by the call letters KIBB-FM (the "KIBB Assets") and serving the Los Angeles Market, are held directly by ----------- Viacom. Seller hereby represents and warrants to Purchaser that KIBB Inc. is a recently-formed Delaware corporation that, other than for its organization, has undertaken no operations and conducted no business as of the date hereof. Purchaser further understands and Seller hereby covenants and agrees that prior to the Closing, Viacom shall contribute the KIBB Assets to Seller which will then contribute such assets to KIBB Inc. Accordingly, 13 the references to "each Company", "any of the Companies", the "Companies", any "Company" or any comparable phrase or reference contained in Sections 3.11, 3.12 or 3.13, to the extent the representations and warranties set forth in such Sections are made as of the date hereof and solely to the extent referring to or including KIBB Inc., shall be deemed to include Viacom. The immediately preceding sentence shall not apply to the representations and warranties set forth in Sections 3.11, 3.12 or 3.13 when made as of the Closing Date. Seller represents and warrants to Purchaser as follows: SECTION 3.01. Incorporation and Authority of Seller . Seller is a -------------------------------------- corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Seller, the performance by Seller of its obligations hereunder and the consummation by Seller of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller and (assuming due authorization, execution and delivery by Purchaser) this Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject, as to enforceability, to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or similar Laws affecting creditors' rights generally and to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law). SECTION 3.02. Incorporation and Qualification of Each Company. Each ----------------------------------------------- Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to own or lease and operate its respective Assets. Each Company is duly qualified as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of its properties owned or leased and operated or the nature of its activities makes such qualification necessary, except for where the failure to be so qualified would not have a Material Adverse Effect. SECTION 3.03. Capital Stock of the Companies. The Shares constitute ------------------------------ all the authorized, issued and outstanding shares of capital stock of the Companies. The Shares have been duly authorized and validly issued and are fully paid and nonassessable and were not issued in violation of any pre-emptive rights. There are no options, warrants or rights of conversion or other rights, agreements, arrangements or commitments relating to the capital stock of any Company obligating such Company to issue or sell any of its shares of capital stock. Seller owns the Shares, free and clear of all Liens except for Permitted Liens specified in clause (a) of the definition of Permitted Liens and any Liens arising out of, under or in connection with this Agreement or through Purchaser. There are no voting trusts, stockholder agreements, proxies or 14 other agreements in effect with respect to the voting or transfer of the Shares. None of the Companies owns, directly or indirectly, any shares of any corporation or any ownership or other investment interest, either of record, beneficially or equitably, in any association, partnership, joint venture or other legal entity. SECTION 3.04. No Conflict. Assuming all consents, approvals, ----------- authorizations and other actions described in Section 3.05 have been obtained and all filings and notifications listed in Section 3.05 of the Disclosure Schedule have been made, and except as may result from any facts or circumstances relating solely to Purchaser or as described in Section 3.04 of the Disclosure Schedule, the execution, delivery and performance of this Agreement by Seller do not and will not (a) violate or conflict with the Certificate of Incorporation or By-laws of Seller or any Company, (b) conflict with or violate any Law or Governmental Order applicable to Seller or any Company, except as would not, individually or in the aggregate, have a Material Adverse Effect or prohibit Seller from consummating the purchase and sale of the Shares as contemplated hereby or (c) result in any breach of, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, or give to any Person any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any Lien on any Shares or on any of the Assets pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument to which Seller or any Company is a party or by which any of the Shares or, to the knowledge of Seller, the Assets are bound or affected, except as would not, individually or in the aggregate, have a Material Adverse Effect or prohibit Seller from consummating the purchase and sale of the Shares as contemplated hereby. SECTION 3.05. Consents and Approvals. The execution and delivery of ---------------------- this Agreement by Seller does not, and the performance of this Agreement by Seller will not, require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority or other Person except (a) as described in Section 3.05 of the Disclosure Schedule, (b) the notification requirements of the HSR Act, (c) for consents required from the FCC prior to the Closing and those notices to be filed with the FCC after the Closing, (d) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prohibit Seller from consummating the purchase and sale of the Shares as contemplated hereby, (e) as would not have a Material Adverse Effect and (f) as may be necessary as a result of any facts or circumstances relating solely to Purchaser or its Affiliates. SECTION 3.06. Financial Information. The unaudited balance sheet --------------------- relating to all of the Stations, on a combined basis, in each Market as at December 31, 1996 (collectively for all of the Markets, the "Reference Balance ----------------- Sheet(s)") and the related unaudited statement of income of all such Stations, - -------- on a combined basis, in each such Market for the fiscal year then ended (collectively, the "Financial Statements"), all of which are included in Exhibit -------------------- 3.06 hereto, fairly present, in all 15 material respects, the financial condition and results of operations of all such Stations, on a combined basis, in each such Market at such date, or for the period covered thereby, and were prepared on a basis consistent with the past practices of Seller for purposes of inclusion in the consolidated financial statements of Viacom and, except as disclosed in Section 3.06(a) of the Disclosure Schedule, were prepared in accordance with generally accepted accounting principles. SECTION 3.07. Absence of Undisclosed Liabilities. As of the Closing ---------------------------------- Date, there shall be no liability of any Company except liabilities (i) disclosed in Section 3.07(a) of the Disclosure Schedule or otherwise included in the Disclosure Schedule or addressed by or referred to in any of the representations, warranties, covenants or agreements made by Seller in this Agreement, (ii) as, and to the extent, reflected or reserved against in the Reference Balance Sheet(s), (iii) covered by insurance, indemnification, contribution or comparable arrangements, the benefits of which will be available to Purchaser or the Companies after the Closing, (iv) with respect to the matters addressed in Sections 3.14 and 3.15 and Articles VI and VII (which shall be governed solely by the terms of such Sections and Articles), (v) incurred in the ordinary course of the Business after the date hereof and prior to the Closing and (vi) liabilities which would not individually or in the aggregate have a Material Adverse Effect. SECTION 3.08. Absence of Certain Changes or Events. (a) Since the ------------------------------------ date of the Reference Balance Sheet(s) or such other date as specified below, except as disclosed in Section 3.08 of the Disclosure Schedule, the Business has been conducted in the ordinary course and consistent with past practice. (b) Since the date of the Reference Balance Sheet(s) and, except as set forth in Section 3.08 of the Disclosure Schedule or as contemplated by this Agreement or in the ordinary course of the Business, there has not been: (i) a Material Adverse Effect; (ii) the creation of any Lien on the Assets or the Shares, other than, in the case of the Shares, Permitted Liens specified in clause (a) of the definition of Permitted Liens; (iii) any establishment or material increase in any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including any grant of any stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plans, or other material increase in the compensation payable or to become payable to any officer or key employee of any of the Stations by Seller or by any Company, except, in any case described above, as may be required by Law, existing contracts or applicable collective bargaining agreements; 16 (iv) any employment or severance agreement providing for annual compensation or severance payments in excess of $100,000 entered into by Seller or by any Company with any of the Station Employees; (v) any sale, assignment, transfer, lease or other disposition or agreement to sell, assign, transfer, lease or otherwise dispose of any of the Assets having an aggregate replacement value exceeding $100,000; (vi) by any Company, (A) any acquisition (by merger, consolidation, acquisition of stock or assets or otherwise) of any corporation, partnership or other business organization or division thereof or interest therein or (B) any incurrence of any indebtedness for borrowed money (other than to Seller on arm's-length terms) or issuance of any debt securities or assumption, grant, guarantee or endorsement, or other accommodation or arrangement making any Company responsible for, the obligations of any Person or any distributions of cash (other than by one or more of the Companies to Seller) or any loans or advances other than to Seller on arm's-length terms; (vii) any material change in any method of accounting or accounting practice used by any Company. SECTION 3.09. Absence of Litigation. Except as set forth in Section --------------------- 3.09 of the Disclosure Schedule, there are no Actions pending, or to Seller's knowledge threatened in writing, against Seller or any Company, or to which any of the Shares or Assets are subject, before any Governmental Authority that, individually or in the aggregate, would have a Material Adverse Effect or would prohibit Seller from consummating the purchase and sale of the Shares as contemplated hereby. SECTION 3.10. Compliance with Laws. Except as set forth in Section -------------------- 3.10 of the Disclosure Schedule, to the knowledge of Seller, neither Seller nor any Company is in material violation of any Law or Governmental Order applicable to the Business, Shares or any material Asset, or by which any of them is bound. SECTION 3.11. Licenses and Permits. Each Company holds and is in -------------------- material compliance with all FCC Licenses necessary to operate as currently operated each of the Stations set forth opposite such Company's name on Schedule 1 as a radio broadcast station with the power disclosed in Section 3.11 of the Disclosure Schedule. Except as set forth in Section 3.11 of the Disclosure Schedule, no governmental qualifications, registrations, filings, privileges, franchises, licenses, permits, approvals or authorizations other than the FCC Licenses are required to operate each of the Stations as a radio broadcast station in substantially the same manner as each such Station is being operated as of the date hereof, other than those that the failure to hold or obtain would not, individually or in the aggregate, have a material adverse effect on the results 17 of operations or financial condition of any Station. Except as set forth in Section 3.11 of the Disclosure Schedule, no application, action or proceeding is pending for the renewal or modification of any of the FCC Licenses, and, except for actions or proceedings affecting radio broadcast stations generally, no application, complaint, action or proceeding is pending, or to Seller's knowledge threatened in writing, that would reasonably be expected to result in (i) the denial of an application for renewal of any of the FCC Licenses, (ii) the revocation, modification, nonrenewal or suspension of any of the FCC Licenses, (iii) the issuance of a cease-and-desist order with respect to any of the FCC Licenses or (iv) the imposition of any material administrative or judicial sanction with respect to Seller, any Company or any Station. To Seller's knowledge, there is no fact or circumstance relating to Seller, the Companies or any of Seller's Affiliates that would cause the FCC to deny the FCC application for assignment of the FCC Licenses as provided in this Agreement. No waiver of any FCC rule or policy is necessary to be obtained by Seller, any Company or any of Seller's Affiliates for the grant of the FCC application for assignment of the FCC Licenses as provided in this Agreement, nor will processing pursuant to any exception to a rule of general applicability be requested or required in connection with the consummation by Seller of the transactions contemplated hereby except in each case for facts or circumstances not related to Seller, the Companies or any of Seller's Affiliates. SECTION 3.12. The Assets. (a) Except as set forth in Section 3.12(a) ---------- of the Disclosure Schedule, the Assets include all of the assets, properties and rights of every type and description, real, personal and mixed, tangible and intangible, that are owned, leased or licensed by any of the Companies and are used exclusively or held for use exclusively in the operation of the Business as of the date hereof. All of the tangible Assets material to the operation of any Station are in good operating condition and repair, subject to normal wear and maintenance, except to the extent the failure to be in such condition or repair would not result in a Material Adverse Effect. The Assets constitute all of the assets necessary for the continued operation of the Business in substantially the same manner as conducted on the date of this Agreement. (b) The Companies hold, and at the Closing will hold, good title to or have valid leasehold interests in all of their respective Assets (other than the Owned Real Property and Leased Real Property as to which the provisions of Section 3.13 apply), free and clear of any and all Liens, except (i) as disclosed in Section 3.12(b) of the Disclosure Schedule, (ii) for Permitted Liens and (iii) for Liens created by or through Purchaser or any of its Affiliates. SECTION 3.13. Real Property. Each parcel of real property, including ------------- those properties set forth in Sections 3.13(a) (which lists material real property owned by each Company, the "Owned Real Property") and 3.13(b) (which ------------------- lists material real property leased by each Company, the "Leased Real Property") -------------------- of the Disclosure Schedule, owned or leased by any Company is, and at the Closing will be, owned in fee simple or held pursuant to a valid leasehold estate, free and clear of all Liens, except (i) 18 as disclosed in Section 3.13(a) or in Section 3.13(b), as the case may be, of the Disclosure Schedule, (ii) for Permitted Liens and (iii) for Liens created by or through Purchaser or any of its Affiliates. SECTION 3.14. Employee Benefit Matters. (a) Section 3.14 of the ------------------------ Disclosure Schedule contains a true and complete list of all employee benefit plans (within the meaning of Section 3(3) of ERISA, hereafter "Viacom ERISA ------------ Plan") and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, supplemental retirement, severance or other benefit plans, programs or arrangements (collectively, the "Viacom Plans") with respect ------------ to which Seller or any Company has any obligation or which are maintained, contributed to or sponsored by Viacom, Seller or any Company for the benefit of any current employee, officer or director of Seller or any Company or any former employee of Seller or any Company who was previously employed in the Business, other than plans, programs, arrangements, contracts or agreements for which no benefits are payable after the Closing. Except as disclosed in Section 3.14 of the Disclosure Schedule, each Viacom ERISA Plan is in writing and Seller has previously made available to Purchaser a true and complete copy of each Viacom ERISA Plan and a true and complete copy of each of the following documents, to the extent applicable, prepared in connection with each such Viacom Plan: (i) a copy of each trust or other funding arrangement, (ii) the most recently filed IRS Form 5500 and (iii) the most recently received IRS determination letter. (b) Except as otherwise disclosed in Section 3.14 of the Disclosure Schedule, none of the Viacom ERISA Plans (i) is a multiemployer plan, within the meaning of Section 3(37) or 4001(a)(3) of ERISA (a "Multiemployer Plan"), or a ------------------ single employer pension plan, within the meaning of Section 4001(a)(15) of ERISA, for which Seller could incur liability under Section 4063 or 4064 of ERISA (a "Multiple Employer Plan"), or (ii) provides or promises to provide ---------------------- retiree medical or life insurance benefits. (c) With respect to each Viacom ERISA Plan, neither Seller nor any Company is currently liable for any material tax arising under Section 4971, 4972, 4975, 4979, 4980 or 4980B of the Code. Seller has not incurred any material liability under, arising out of or by operation of Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation arising in the ordinary course), including any liability in connection with (i) the termination or reorganization of any employee pension benefit plan subject to Title IV of ERISA or (ii) the withdrawal from any Multiemployer Plan or Multiple Employer Plan. (d) The Viacom Pension Plan (the "VPP") and the Viacom Investment Plan --- (the "VIP") which are intended to be qualified under Section 401(a) of the Code --- have received favorable determination letters from the IRS that such plans are so qualified, and the related trusts which are intended to be exempt from federal income tax pursuant to Section 501(a) of the Code have received determination letters from the IRS that such trusts are so exempt. 19 (e) Seller and the Companies have complied with their obligations under the collective bargaining agreements disclosed in Section 3.14 of the Disclosure Schedule, except for any failure to comply that would not result in a Material Adverse Effect. SECTION 3.15. Taxes. Except as set forth in Section 3.15 of the ----- Disclosure Schedule, (a) each Company has timely filed or been included in, or will timely file or be included in, all material Tax Returns required to be filed by it or in which it is to be included with respect to Taxes for any period ending on or before the Closing Date, (b) all material Taxes which are due with respect to each Company have been paid except to the extent such Taxes are being contested in good faith, (c) no deficiency for any material amount of Tax has been asserted or assessed by a Tax authority against any Company or for which any Company may be liable, (d) there are no judicial proceedings with respect to material Taxes due from any Company; and (e) there is no contract, agreement, plan or arrangement covering any Person that, individually or collectively, could give rise to the payment of any amount that would not be deductible by any Company by reason of Section 280G of the Internal Revenue Code of 1986, as amended. SECTION 3.16. Brokers. Except for Credit Suisse First Boston ------- Corporation, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller or any Company. Seller is solely responsible for the fees and expenses of Credit Suisse First Boston Corporation. SECTION 3.17. Environmental Compliance. Except as set forth in ------------------------ Section 3.17 of the Disclosure Schedule or as would not result in a Material Adverse Effect, (i) Seller and each Company is in compliance with all Environmental Laws and (ii) there are no judicial or administrative actions, proceedings or investigations pending or, to the knowledge of Seller, threatened in writing against Seller or any Company or any real property owned, operated or leased by any Company alleging the violation of or seeking to impose liability pursuant to any Environmental Law. SECTION 3.18. EXCLUSIVITY OF REPRESENTATIONS. THE REPRESENTATIONS ------------------------------ AND WARRANTIES MADE BY SELLER IN THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES. SELLER HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO PURCHASER OR ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION 20 (INCLUDING, WITHOUT LIMITATION, ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA). ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser represents and warrants to Seller as follows: SECTION 4.01. Incorporation and Authority of Purchaser. Purchaser is ---------------------------------------- a corporation duly incorporated, validly existing and in good standing under the Laws of its jurisdiction of incorporation or organization and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Purchaser, the performance by Purchaser of its obligations hereunder and the consummation by Purchaser of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and (assuming due authorization, execution and delivery by Seller) constitutes the legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, subject, as to enforceability, to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or similar Laws affecting creditors' rights generally and to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law). SECTION 4.02. No Conflict. Except as may result from any facts or ----------- circumstances relating solely to Seller, the execution, delivery and performance of this Agreement by Purchaser do not and will not (a) violate or conflict with the Certificate of Incorporation or By-laws (or other similar applicable documents) of Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to Purchaser or (c) result in any breach of, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, or give to any Person any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any Lien on any of the assets or properties of Purchaser pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument relating to such assets or properties to which Purchaser is a party or by which any of such assets or properties is bound or affected, except as would not, individually or in the aggregate, prohibit Purchaser from consummating the purchase and sale of the Shares as contemplated hereby. SECTION 4.03. Consents and Approvals. The execution and delivery of ---------------------- this Agreement by Purchaser do not, and the performance of this Agreement by Purchaser will not, require any consent, approval, authorization or other action by, or 21 filing with or notification to, any Governmental Authority or other Person, except (a) as described in a writing delivered to Seller by Purchaser on the date hereof, (b) the notification requirements of the HSR Act, (c) for consents required from the FCC prior to the Closing and those notices to be filed with the FCC after the Closing, (d) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prohibit Purchaser from consummating the purchase and sale of the Shares as contemplated hereby and (e) as may be necessary as a result of any facts or circumstances relating solely to Seller or its Affiliates. SECTION 4.04. Absence of Litigation. There are no Actions pending --------------------- against Purchaser before any Governmental Authority that, individually or in the aggregate, would prohibit Purchaser from consummating the purchase and sale of the Shares as contemplated hereby. SECTION 4.05. Securities Matters. (a) Purchaser understands that (i) ------------------ the offering and sale of the Shares hereunder is intended to be exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof and (ii) there is no existing public or other market for the Shares and there can be no assurance that such a market will exist or that Purchaser will be able to sell or dispose of the Shares. (b) The Shares are being acquired by Purchaser for its own account and without a view to the public distribution of the Shares or any interest therein. (c) Purchaser is an "accredited investor" as such term is defined in Regulation D promulgated under the Securities Act. (d) Purchaser is not a broker-dealer subject to Regulation T promulgated by the Board of Governors of the Federal Reserve System. (e) Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Shares, and Purchaser is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Shares. (f) In evaluating the suitability of an investment in the Shares, Purchaser has relied solely upon the representations, warranties, covenants and agreements made by Seller herein and Purchaser has not relied upon any other representations or other information (whether oral or written and including any estimates, projections or supplemental data) made or supplied by or on behalf of Seller or any Affiliate, employee, agent or other representative of Seller other than as contemplated by this Section 4.05. 22 (g) Purchaser understands and agrees that it may not sell or dispose of any of the Shares other than pursuant to a registered offering or in a transaction exempt from the registration requirements of the Securities Act. SECTION 4.06. FCC Qualification. Except as set forth on Schedule ----------------- 4.06, Purchaser is legally, technically, financially and otherwise qualified under the Communications Act and all rules, regulations and policies of the FCC to acquire the FCC Licenses and own and operate each of the Stations. Except as set forth on Schedule 4.06, and except for proceedings of general applicability to the radio industry, there are no proceedings pending or, to the knowledge of Purchaser, threatened in writing, or facts, which could reasonably be expected to disqualify Purchaser under the Communications Act or otherwise from acquiring the FCC Licenses or owning and operating each of the Stations or would cause the FCC not to approve the assignment of the FCC Licenses to Purchaser. Except as set forth on Schedule 4.06, there is no fact or circumstance relating to Purchaser or any of its Affiliates that could (i) cause the FCC to deny the FCC application for assignment of the FCC Licenses as provided for in this Agreement or (ii) delay processing of the FCC application for the assignment of the FCC Licenses as provided for in this Agreement because the FCC is considering whether acts or omissions of Purchaser or any of its Affiliates warrant admonishing Purchaser or any of its Affiliates, or imposing a fine, forfeiture, or other penalty against Purchaser or any of its Affiliates. Except as set forth on Schedule 4.06, no waiver of any FCC rule or policy is necessary to be obtained by Purchaser and/or its Affiliates for the grant of the FCC application for assignment of the FCC Licenses as provided for in this Agreement, nor will processing pursuant to any exception to a rule of general applicability be requested or required in connection with the consummation by Purchaser of the transactions contemplated hereby. SECTION 4.07. Brokers. No broker, finder or investment banker is ------- entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser. SECTION 4.08. EXCLUSIVITY OF REPRESENTATIONS. THE REPRESENTATIONS ------------------------------ AND WARRANTIES MADE BY PURCHASER IN THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES. PURCHASER HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO SELLER OR ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION. 23 ARTICLE V ADDITIONAL AGREEMENTS SECTION 5.01. Conduct of Business Prior to the Closing. (a) Between ---------------------------------------- the date hereof and the Closing Date, Purchaser shall not directly or indirectly control, supervise or direct, or attempt to control, supervise or direct, the operation of the Business or any Station. Such operation, including complete control and supervision of all programs, employees and policies of the Business and each Station shall be the sole responsibility of Seller and the Companies. Neither title nor right to possession of the Shares, the Business or any Station shall pass to Purchaser until the Closing, but Purchaser shall, however, be entitled to reasonable inspection of each Station and the Assets (upon reasonable prior notice and approval of Seller, which shall not be unreasonably withheld) during normal business hours with the purpose that an uninterrupted and efficient transfer thereof may be accomplished. (b) Unless Purchaser otherwise agrees in writing and except as otherwise set forth herein or in the Disclosure Schedule, between the date of this Agreement and the Closing Date, Seller shall, and shall cause each Company to, (i) conduct the Business only in the ordinary course consistent with past practice, (ii) use commercially reasonable efforts to preserve substantially intact the organization of the Business, (iii) use commercially reasonable efforts to keep available to Purchaser the services of the key employees and on- air talent of each Station, (iv) use commercially reasonable efforts to preserve the current relationships of each Station with its customers, suppliers, distributors and other Persons with which such Station has significant business relationships and (v) pay and discharge all material liabilities of the Companies and the Stations substantially in accordance with their terms (other than liabilities being contested in good faith and for which appropriate reserves are established in the books and records of the appropriate Company). (c) Except as expressly provided in this Agreement, including, without limitation, the contribution by Viacom of the KIBB Assets to Seller and the subsequent contribution of such assets by Seller to KIBB Inc., between the date of this Agreement and the Closing Date, Seller shall not, and shall not permit any Company to, do any of the following without the prior written consent of Purchaser (which consent shall not be unreasonably withheld): (i) grant any Lien on any material Asset, other than Permitted Liens or incur any liabilities other than, in either such case, in the ordinary course of the Business consistent with past practice; (ii) establish or materially increase any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit 24 plan, or otherwise materially increase the compensation payable to or to become payable to any officers or key employees and on-air talent of any Station by Seller or any Company, except in any case described above, in the ordinary course of the Business consistent with past practice or as may be required by Law, existing contracts or applicable collective bargaining agreements; (iii) enter into any material employment or severance agreement providing for annual compensation or severance payments in excess of $100,000 with any of the Station Employees; (iv) except (A) in the ordinary course of the Business and (B) cash dividends by any Company to Seller, sell, assign, transfer, lease or otherwise dispose of any of the Assets having an aggregate replacement value exceeding $100,000; (v) solely in the case of each of the Companies, (A) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or interest therein or (B) incur any indebtedness for borrowed money (other than to Seller on terms no more advantageous to Seller than could be procured by the Companies at arm's length) or issue any debt securities or assume, grant, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans, advances or distributions of cash (other than by one or more of the Companies to Seller); (vi) except in accordance with Law or changes required by U.S. generally accepted accounting principles, materially change any method of accounting or accounting practice used by any Company; (vii) issue or sell any additional shares of the capital stock of, or other equity interests in, any Company or securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of such capital stock, such other equity interests, or such securities; (viii) amend the Certificate of Incorporation or By-laws of any Company; or (ix) agree to do any of the foregoing. SECTION 5.02. Access to Information. (a) From the date hereof until --------------------- the Closing, upon reasonable notice, Seller shall, and shall cause the officers, directors, employees, auditors and agents of each Company to (i) afford the officers, employees and agents and representatives of Purchaser reasonable access, during normal 25 business hours, to the offices, properties, books and records of each Station and (ii) furnish to the officers, employees and authorized agents and representatives of Purchaser such additional financial and operating data and other information regarding the Business and the Assets as Purchaser may from time to time reasonably request; provided, however, that such investigation -------- ------- shall not unreasonably interfere with the Business or any of the businesses or operations of Seller or any Affiliate of Seller, any Company or any Station. (b) Seller shall, and shall cause its officers, employees and representatives to, cooperate in all reasonable respects with the efforts of Purchaser and Purchaser's independent auditors to prepare such audited and interim unaudited financial statements of the Stations and/or the Companies as Purchaser may reasonably determine are necessary to satisfy the requirements of the Securities Act of 1933 or the Securities Exchange Act of 1934 (the "Securities Acts") applicable to Purchaser and its Affiliates. Without limiting - ---------------- the foregoing, Seller shall execute and deliver to Purchaser's independent auditors such customary management representation letters as the auditors may reasonably require as a condition to such auditors' ability to deliver a report upon the audited financial statements of the Stations and/or the Companies for the periods for which such financial statements are required under the Securities Acts; provided, however, under no circumstance shall Seller or any such officer, employee or representative have any liability whatsoever (other than as expressly provided in this Agreement) to Purchaser, Purchaser's independent auditors or otherwise to any Person or Governmental Authority, including, without limitation, under the Securities Acts as a result of providing such management representation letters and Purchaser shall indemnify and hold Seller and each such Person harmless against any and all such liability. Seller hereby consents to the inclusion of the audited and interim financial statements referred to in this Section 5.02(b) in any registration statement or report (each a "Filing") filed by Seller under the Securities Acts ------ as registrant under such Filing and hereby waives such provisions of the Confidentiality Agreement as are necessary solely to permit such public disclosure. SECTION 5.03. Confidentiality. (a) Except as provided in Section --------------- 5.02(b), the terms of the letter agreement dated as of November 22, 1996 (the "Confidentiality Agreement") between Seller and Purchaser are hereby - -------------------------- incorporated herein by reference and shall continue in full force and effect until the Closing, at which time the Confidentiality Agreement and the obligations of Purchaser under this Section 5.03 shall terminate; provided, -------- however, that the Confidentiality Agreement shall terminate only in respect of - ------- that portion of the Evaluation Material (as defined in the Confidentiality Agreement) exclusively relating to the transactions contemplated by this Agreement. If this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement shall nonetheless continue in full force and effect. (b) Except as Seller in its sole discretion may determine to be required by applicable law, rule or regulation or by any stock exchange rule, after the Closing, Seller 26 agrees to keep confidential all material non-public information with respect to the Stations and all material non-public information obtained by it with respect to Purchaser in connection with this Agreement and the negotiations preceding this Agreement. Notwithstanding the foregoing, Seller shall not be required to keep confidential or return any information which (a) is known by it through other lawful sources not, to the knowledge of Seller, subject to a confidentiality agreement with the disclosing party, (b) is or becomes publicly known through no breach of a confidentiality obligation owed by Seller or its agents or (c) is developed by Seller independently of any disclosure by Purchaser. SECTION 5.04. Regulatory and Other Authorizations; Consents. (a) --------------------------------------------- Each party hereto shall use its reasonable best efforts to obtain all authorizations, consents, orders and approvals of all Governmental Authorities that may be or become necessary for its execution and delivery of, and the performance of its obligations pursuant to, this Agreement and will cooperate fully with the other party in promptly seeking to obtain all such authorizations, consents, orders and approvals. With respect to Purchaser, the foregoing obligation to use reasonable best efforts shall be deemed to include, without limitation, the obligation to divest such radio station or stations in such radio broadcast market or markets as may be required by the FCC or any other Governmental Authority or as may be necessary in order to secure all required approvals of the FCC or any other Governmental Authority. Except for the Purchaser Merger, the parties hereto will not take any action that would have the effect of delaying, impairing or impeding the receipt of any required approval. (b) Seller and Purchaser shall prepare and file with the FCC as soon as practicable, but in no event later than five Business Days after the execution of this Agreement, the requisite applications and other necessary instruments or documents requesting the FCC Consent. After the aforesaid applications and documents have been filed with the FCC, Seller and Purchaser shall prosecute such applications with all reasonable diligence to obtain the requisite FCC Consent; provided, however, except as provided in the following -------- ------- sentence, that neither Seller nor Purchaser shall be required to pay consideration to any third party to obtain the FCC Consent. Purchaser shall pay all FCC filing fees relating to the Transaction. (c) Each party hereto agrees to make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby within 10 Business Days after the date hereof and to supply promptly any additional information and documentary material that may be requested pursuant to the HSR Act. Purchaser shall bear all filing fees associated with both its and Seller 's HSR filings. (d) Each party hereto agrees to cooperate in obtaining any other consents and approvals which may be required in connection with the transactions contemplated by this Agreement; provided, however, that Seller in cooperation ----------------- with 27 Purchaser shall use its commercially reasonable efforts to obtain each consent identified in Section 3.05 of the Disclosure Schedule prior to the Closing Date. Notwithstanding the foregoing, neither Seller nor Purchaser shall be required to pay consideration to any third party to obtain any such consent or approval. SECTION 5.05. Intercompany Accounts. Immediately prior to the --------------------- Closing, Seller will contribute to the capital of each Company all amounts then owing from such Company to Seller and Seller's Affiliates, and each Company will forgive all amounts then owing from Seller and its Affiliates to such Company, and all of such debts shall be cancelled. Any tax sharing or tax allocation or other similar contract shall be cancelled with respect to each Company as of the Closing Date, and no Company shall have any further obligations or liability under any such tax sharing or tax allocation agreement or other similar contract. SECTION 5.06. Insurance. (a) Effective 12:01 A.M. on the Closing --------- Date, each Company and the Assets shall cease to be insured by Seller 's or its Affiliates' insurance policies. With respect to insurance coverage written on an "occurrence basis," Seller and its Affiliates will have no liability for occurrences which take place on and after 12:01 A.M. on the Closing Date. With respect to insurance coverage written on a "claims made basis," Seller and its Affiliates will have no liability for claims made after 12:01 A.M. on the Closing Date. Purchaser agrees to indemnify and hold harmless Seller and its Affiliates in respect to any liability, claim, damage or expense of any kind whatsoever, which Seller and its Affiliates might incur arising out of or relating to any occurrences, losses or claims arising after 12:01 A.M. on the Closing Date. (b) From and after the Closing Date, neither Seller nor any of its Affiliates shall have any liability for self-insured workers' compensation claims with respect to the Transferred Employees in existence on the Closing Date or arising from any event or circumstance taking place or existing prior to, on or subsequent to the Closing Date. Purchaser shall take all steps necessary under any applicable Law to assume the liability for self-insured workers' compensation pursuant to this Section 5.06 and shall fully indemnify Seller and its Affiliates with respect to any liability, claim, damage or expense of any kind whatsoever arising out of or relating to any workers' compensation claim assumed by Purchaser hereunder. Purchaser shall cooperate with Seller and its Affiliates in order to obtain the return or release of bonds or securities or indemnifications given by Seller or any of its Affiliates to any state in connection with workers' compensation self-insurance with respect to the Station Employees; and, in order to effectuate such return or release, Purchaser shall, to the extent required by any state, post its own bonds, letters of credit, indemnifications or other securities in substitution therefor. SECTION 5.07. Financial Statements. Within 30 days of the end of -------------------- each month, Seller shall use commercially reasonable efforts to deliver to Purchaser an unaudited income statement and a balance sheet of all the Stations, on a combined 28 basis in each Market for the month then ended (collectively, the "Supplemental Financial Statements"). The Supplemental Financial Statements - ---------------------------------- shall be prepared on a basis consistent with past practices regarding the preparation of internal monthly financial statements. SECTION 5.08. Notification. Seller shall notify Purchaser, and ------------ Purchaser shall notify Seller, of any litigation, arbitration or administrative proceeding pending or, to Seller's knowledge, threatened in writing against Seller or any Company, on one hand, or Purchaser, on the other hand, which challenges the transactions contemplated hereby or the Purchaser Merger. Purchaser shall keep Seller informed and shall consult with Seller concerning the status, scope and nature of Purchaser's efforts to comply with its covenant in Section 5.04, and regarding the status of the Purchaser Merger. SECTION 5.09. No Other Bids. From and after the date hereof, neither ------------- Seller nor any of Seller's Affiliates shall, nor shall it permit any of the Companies to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative of Seller, any of the Companies or any of Seller's Affiliates to, directly or indirectly, (a) solicit, initiate or encourage the submission of any Acquisition Proposal (as hereinafter defined) or (b) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes an Acquisition Proposal. For purposes of this Agreement, "Acquisition Proposal" means any proposal with respect to a merger, consolidation, share exchange or similar transaction or business combination involving any Company, or any proposal or offer to acquire in any manner a substantial equity interest in any Company or any proposal or offer to purchase of all or any significant portion of the Assets, other than the transactions contemplated hereby. SECTION 5.10. Environmental Audit. Within 60 days of the date of ------------------- this Agreement, Purchaser may, at its sole cost and expense, perform Phase I environmental assessments (the "Environmental Assessments") of the parcels of ------------------------- the Owned Real Property and/or Leased Real Property designated by Purchaser and the improvements thereon and shall deliver to Seller a report prepared by an environmental consulting firm designated by Purchaser and reasonably acceptable to Seller summarizing the results of the Environmental Assessments. In the event that such report indicates that any material remediation is necessary in order to cause the Companies and the Assets to comply with any Environmental Law, Seller shall, at Seller's cost and expense, cause such remediation to be completed in all material respects. SECTION 5.11. Further Action. Each of the parties hereto shall -------------- execute and deliver such documents and other papers and take such further actions as may be 29 reasonably required to carry out the provisions of this Agreement and give effect to the transactions contemplated hereby. ARTICLE VI EMPLOYEE MATTERS SECTION 6.01. Employees. (a) Set forth in Section 6.01(a) of the --------- Disclosure Schedule is a true and complete list showing the names and current annual salary rates of all of the employees and on-air talent of each Station as of the date hereof (all such employees and on-air talent together being the "Station Employees"), which includes for such employees the amounts paid or - ------------------ payable as a base salary and lists any other compensation arrangements for such employees for 1996, including bonuses or other compensation arrangements. The Station Employees constitute all of the on-air talent and personnel working at the Stations (whether full-time or part-time) or otherwise involved in the operations of the Stations. (b) Purchaser shall furnish to Seller at the earliest practicable date but no later than 10 days prior to Closing a list of the Station Employees which Purchaser desires Seller to terminate prior to Closing. Seller shall indemnify and hold harmless Purchaser from and against all costs and liabilities resulting from the termination of such Station Employees, except that Seller shall have no obligation with respect to, and Purchaser shall indemnify and hold harmless Seller and Seller's Affiliates from and against, all costs and liabilities resulting from any termination requested by Purchaser pursuant to this Section 6.01(b) which violates of any federal, state or local law, rule or regulation or any collective bargaining agreement. For the purposes hereof, those Station Employees who remain as employees of the Companies following the Closing Date are hereinafter referred to collectively as the "Transferred Employees". --------------------- (c) Purchaser agrees (i) subject to the rights of the affected Transferred Employees regarding representation, to recognize the unions listed in Section 3.14 of the Disclosure Schedule as the sole and exclusive collective bargaining agents for the affected Transferred Employees and (ii) to be bound by, and to comply in all respects with, the terms and conditions of the collective bargaining agreements listed in Section 3.14 of the Disclosure Schedule applicable to Transferred Employees. (d) For the one-year period commencing on the Closing Date (the "Continuation Period"), Purchaser agrees to provide (i) those Transferred - -------------------- Employees whose employment is governed by the terms of a collective bargaining agreement with such employee benefits as are required by the terms of such collective bargaining agreement and (ii) all other Transferred Employees with employee benefits that in the aggregate are substantially equivalent in value as, and no less favorable in value than, those provided to such Transferred Employees immediately prior to the Closing. Notwithstanding anything to the contrary herein, Purchaser shall not have any 30 obligation to provide any equity, equity-based or similar compensation or benefit to any Transferred Employee with respect to the equity of Purchaser or any Company, and no equity or equity-based compensation or benefits provided to Transferred Employees immediately prior to the Closing shall be taken into account for purposes of this Section 6.01(d) in determining substantial equivalence. (e) To the extent that service is relevant for eligibility, vesting, benefit accrual, benefit contributions, benefit calculations or allowances (including entitlements to vacation and sick days) under any employee benefit plan, program or arrangement established or maintained by Purchaser or any Company for the benefit of Transferred Employees, such plan, program or arrangement shall credit such Transferred Employees for service on or prior to the Closing with Seller or any Affiliate thereof; provided, however, that -------- ------- Purchaser shall not be obligated to give credit for such service to the extent it (i) would result in duplication of any benefits to which a Transferred Employee is entitled to under any comparable plans, programs or arrangements maintained by Seller or any of its Affiliates on or prior to the Closing Date or by Purchaser after the Closing Date or (ii) was not a service which was recognized for purposes of such comparable plans, programs or arrangements. In addition, Purchaser shall waive any pre-existing conditions and recognize for purposes of annual deductible and out-of-pocket limits under its medical and dental plans, claims of Transferred Employees incurred during the year in which the Closing Date occurs and prior to the Closing Date. SECTION 6.02. INTENTIONALLY OMITTED. SECTION 6.03. Retirement Plan. (a) As soon as practicable after the --------------- Closing, Seller shall prepare and deliver to Purchaser a schedule listing the Transferred Employees who were participants in the VPP and the VIP as of the Closing. Seller shall cause all Transferred Employees to be paid such benefits under the terms of the VPP and VIP, and Purchaser shall not have any responsibility with respect thereto. Purchaser shall cooperate with Seller to provide such current information regarding Transferred Employees on an ongoing basis as may be necessary to facilitate payment of benefits to such Transferred Employees from the VPP and VIP. (b) Purchaser agrees that it shall designate a defined contribution plan ("Purchaser's DC Plan") that will accept a direct rollover, within the ------------------- meaning of Section 401(a)(31) of the Code, of the account balances of Transferred Employees in the VIP, including any loan obligation that a Transferred Employee may have in his or her account in the VIP. To the extent that a Transferred Employee transfers a loan obligation to Purchaser's DC Plan, Purchaser's DC Plan shall continue to accept repayments of such loan amounts and shall otherwise administer such loans in accordance with their terms and the terms of ERISA until such loan amounts are repaid or are foreclosed upon. 31 (c) Purchaser shall provide continuation health care coverage to all Transferred Employees and their qualified beneficiaries who incur a qualifying event on and after the Closing in accordance with the continuation health care coverage requirements of Section 4980D of the Code and Sections 601 through 608 of ERISA ("COBRA"). Seller shall be responsible for providing continuation ----- coverage to the extent required by law (i) to any Transferred Employee who incurs a "qualifying event" under COBRA on or before the Closing Date and (ii) to any employee who is not a Transferred Employee who incurs a "qualifying event" under COBRA on or before the Closing Date. SECTION 6.04. Indemnity. Anything in this Agreement to the contrary --------- notwithstanding (including Section 10.01), Purchaser hereby agrees to indemnify Seller and its Affiliates against and hold Seller and its Affiliates harmless from any and all claims, losses, damages, expenses, obligations and liabilities (including costs of collection, reasonable attorneys' fees and other costs of defense) arising out of or otherwise in respect of (i) any failure of Purchaser or any Company to comply with their obligations under any collective bargaining agreement applicable to Transferred Employees, (ii) any withdrawal liability attributable to a withdrawal as a result of or after the Closing assessed against Seller or any of its Affiliates in respect of any Multiemployer Plan listed in Section 3.14 of the Disclosure Schedule, (iii) any claim made by any Transferred Employee against Seller or any of its Affiliates for any severance or termination benefits pursuant to the provisions of any Viacom Plan which was disclosed in Section 3.14 of the Disclosure Schedule, (iv) any suit or claim of violation brought against Seller or any of its Affiliates under WARN for any actions taken by Purchaser or any Company on or after the Closing Date with respect to any facility, site of employment, operating unit or Transferred Employee, and (v) any claim for payments of benefits by Transferred Employees or their beneficiaries with respect to their employment after the Closing. SECTION 6.05. No Third Party Beneficiaries. Nothing in this Article ---------------------------- VI or elsewhere in this Agreement shall be deemed to make any of the Station Employees third party beneficiaries of this Agreement. ARTICLE VII TAX MATTERS SECTION 7.01. Tax Indemnities. (a) From and after the Closing --------------- Date, Seller shall indemnify Purchaser and each Company against all Taxes (i) imposed on Seller or any member of an affiliated group with which Seller files a consolidated or combined income Tax Return (other than the Companies) with respect to any taxable period that ends on or before the Closing Date or includes the Closing Date; (ii) imposed on any Company with respect to any taxable period or portion thereof that ends on or before the Closing Date, in excess of any amount reserved for Taxes on 32 such Company's Financial Statements or (iii) arising as a result of the Election; provided, however, that no indemnity shall be provided under this -------- ------- Agreement for any Tax resulting from any transaction of any Company occurring on the Closing Date but after the Closing that is not in the ordinary course of the Business other than the Election. (b) From and after the Closing Date, Purchaser and each Company shall, jointly and severally, indemnify Seller and its Affiliates against all Taxes imposed on or with respect to such Company that are not subject to indemnification pursuant to paragraph (a) of this Section 7.01, including Taxes resulting from any transaction of the Company occurring on the Closing Date but after the Closing that is not in the ordinary course of the Business. (c) Payment by the indemnitor of any amount due under this Section 7.01 shall be made within 10 days following written notice by the indemnitee that payment of such amounts to the appropriate Tax authority is due, provided that the indemnitor shall not be required to make any payment earlier than two days before it is due to the appropriate Tax authority. In the case of a Tax that is contested in accordance with the provisions of Section 7.03, payment of the Tax to the appropriate Tax authority will not be considered to be due earlier than the date a final determination to such effect is made by such Tax authority or a court. (d) For purposes of this Agreement, in the case of any Tax that is imposed on a periodic basis and is payable for a period that begins before the Closing Date and ends after the Closing Date, the portion of such Taxes payable for the period ending on the Closing Date shall be (i) in the case of any Tax other than a Tax based upon or measured by income, the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period and (ii) in the case of any Tax based upon or measured by income, the amount which would be payable if the taxable year ended on the Closing Date. Any credit shall be prorated based upon the fraction employed in clause (i) of the preceding sentence. In the case of any Tax based upon or measured by capital (including net worth or long-term debt) or intangibles, any amount thereof required to be allocated under this Section 7.01(d) shall be computed by reference to the level of such items on the Closing Date. SECTION 7.02. Refunds and Tax Benefits. (a) Purchaser shall ------------------------ promptly pay to Seller any refund or credit (including any interest paid or credited with respect thereto) received by Purchaser or any Company of Taxes of any Company (i) relating to taxable periods or portions thereof ending on or before the Closing Date or (ii) attributable to an amount paid by Seller or any of its Affiliates under Section 7.01 hereof. Purchaser shall, if Seller so requests and at Seller 's expense, cause the relevant entity to file for and obtain any refund to which Seller is entitled under this 33 Section 7.02. Purchaser shall permit Seller to control (at Seller 's expense) the prosecution of any such refund claimed, and shall cause the relevant entity to authorize by appropriate power of attorney such Persons as Seller shall designate to represent such entity with respect to such refund claimed. In the event that any refund or credit of Taxes for which a payment has been made pursuant to this Section 7.02(a) is subsequently reduced or disallowed, Seller shall indemnify and hold harmless the payor for any Tax liability, including interest and penalties, assessed against such payor by reason of the reduction or disallowance. (b) Any amount otherwise payable by Seller under Section 7.01 shall be reduced by any Tax benefit to Purchaser or any Company for a period or portion thereof beginning after the Closing Date (a "Post-Closing Date Tax Benefit") ----------------------------- that arose as a result of any underlying adjustment resulting in the obligation of Purchaser or such Company to pay Taxes for which Seller is responsible under Section 7.01 or the payment of such Taxes. If a payment is made by Seller in accordance with Section 7.01, and if in a subsequent taxable year a Post-Closing Date Tax Benefit is realized by Purchaser or any Company (that was not previously taken into account pursuant to the preceding sentence to reduce an amount otherwise payable by Seller under Section 7.01), Purchaser or such Company shall pay to Seller at the time of such realization the amount of such Post-Closing Date Tax Benefit to the extent that the Post-Closing Date Tax Benefit would have resulted in a reduction in the amount paid by Seller under Section 7.01 if the Post-Closing Date Tax Benefit had been obtained in the year of such payment. A Post-Closing Date Tax Benefit will be considered to be realized for purposes of this Section 7.02 at the time that it is actually utilized on a Tax Return which includes Purchaser or any Company. (c) Neither Purchaser nor any Company shall carryback to any taxable period ending on or before the Closing Date any net operating loss, capital loss or tax credit incurred by any Company in any taxable period beginning after the Closing Date. SECTION 7.03. Contests. (a) After the Closing, Purchaser shall -------- promptly notify Seller in writing of the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim on Purchaser or any Company which, if determined adversely to the taxpayer or after the lapse of time, would be grounds for indemnification under Section 7.01. Such notice shall contain factual information (to the extent known) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any Tax authority in respect of any such asserted Tax liability. If Purchaser fails to give Seller prompt notice of an asserted Tax liability as required by this Section 7.03, then (a) if Seller is precluded by the failure to give prompt notice from contesting the asserted Tax liability in both the administrative and judicial forums, then Seller shall not have any obligation to indemnify for any loss arising out of such asserted Tax liability, and (b) if Seller is not so precluded from contesting but such failure to give prompt notice results in a detriment to Seller, then any amount which Seller is otherwise required to pay Purchaser pursuant to 34 Section 7.01 with respect to such liability shall be reduced by the amount of such detriment. (b) Seller may elect to direct, through counsel of its own choosing and at its own expense, any audit, claim for refund and administrative or judicial proceeding involving any asserted liability with respect to which indemnity may be sought under Section 7.01 (any such audit, claim for refund or proceeding relating to an asserted Tax liability is referred to herein as a "Contest"). If Seller elects to direct a Contest, it shall within 30 days of - -------- receipt of the notice of asserted Tax liability notify Purchaser of its intent to do so, and Purchaser shall cooperate and shall cause each Company to cooperate, at the expense of Seller, in each phase of such Contest. Seller shall keep Purchaser informed regarding the progress but not any substantive aspect of any Contest which Seller has elected to direct. If Seller elects not to direct the Contest, fails to notify Purchaser of its election as herein provided or contests its obligation to indemnify under Section 7.01, Purchaser or the relevant Company may pay, compromise or contest, at its own expense, such asserted liability. However, in such case, neither Purchaser nor such Company may settle or compromise any asserted liability over the objection of Seller; provided, however, that consent to settlement or compromise shall not be - -------- ------- unreasonably withheld. In any event, Seller may participate, at its own expense, in the Contest. If Seller chooses to direct the Contest, Purchaser shall promptly empower and shall cause the relevant Company promptly to empower (by power of attorney and such other documentation as may be appropriate) such representatives of Seller as it may designate to represent Purchaser and such Company in the Contest insofar as the Contest involves an asserted Tax liability for which Seller would be liable under Section 7.01. SECTION 7.04. Preparation of Tax Returns. Seller shall prepare and -------------------------- file U.S. federal, state and local income and franchise Tax Returns relating to each Company for any Tax period ending on or prior to the Closing Date and which are required to be filed after the Closing Date. The parties agree that if any Company is permitted, but not required, under applicable state or local income or franchise Tax Laws to treat the Closing Date as the last day of a Tax period, it will treat the Tax period as ending on the Closing Date. Seller shall prepare and file all other Tax Returns for any period ending on or prior to the Closing Date to the extent Seller or an Affiliate of Seller previously was responsible for the preparation and filing of such Tax Returns for the immediately preceding Tax period. All Tax Returns relating to any Company and prepared by Seller shall be prepared in a manner consistent with past practices, except as otherwise required by applicable law. Purchaser shall prepare and timely file, and shall cause each Company to prepare and timely file, all Tax Returns for which Seller is not responsible pursuant to this Section 7.04. Purchaser will deliver to Seller a complete and accurate copy of each Tax Return required to be filed by Purchaser or any Company under this Section 7.04 for Tax periods that include the Closing Date, and any amendment to such return, within 10 days of the date such Tax Return is filed with the appropriate Tax authority. 35 SECTION 7.05. Section 338(h)(10) Election. (a) At the option of --------------------------- Purchaser given in writing to Seller on or before the Closing Date, Seller and Purchaser shall jointly make the election provided for by Section 338(h)(10) of the Code and any corresponding elections under state, local or foreign Tax Law (the "Election") with respect to the Shares. Seller and Purchaser shall provide -------- to the other all necessary information to permit the Election to be made. Seller and Purchaser shall, as promptly as practicable following the Closing Date, take all actions necessary and appropriate (including filing IRS Form 8023-A and other such forms, returns, elections, schedules, attachments, and other documents as may be required (the "Forms")) to effect and preserve a ----- timely Election. (b) In connection with the Election, Seller and Purchaser shall mutually (i) determine the amount of the modified aggregate deemed sales price ("MADSP") of the Shares (within the meaning of Treas. Reg. (S)1.338(h)(10)-1(f)) ----- and (ii) the proper allocations of the MADSP among the Assets in accordance with Treas. Reg. (S)1.338(h)(10)-1. The allocations referred to in the preceding sentence are referred to herein as the "Allocations". Seller will calculate the ----------- gain or loss, if any, in a manner consistent with the Allocations and will not take any position inconsistent with the Allocations in any Tax Return or otherwise (subject to appropriate adjustments pursuant to Treas. Reg. (S)1.338(h)(10)-1(f)(4)). Purchaser will allocate the Purchase Price consistently with the Allocations and will not take any position inconsistent with the Allocations in any Tax Return or otherwise (subject to appropriate adjustments pursuant to Treas. Reg. (S)1.338(h)(10)-1(f)(4)). (c) At least 120 days prior to the latest date for the filing of each Form, Seller, after consultation with Purchaser, shall prepare and submit to Purchaser a draft of each Form. No party hereto shall file any Form unless it shall have obtained the consent of the other party hereto, which consent shall not be unreasonably withheld. On or prior to the 30th day after Purchaser's receipt of a draft Form, Purchaser shall deliver to Seller either (i) its consent to such filing or (ii) a written notice specifying in reasonable detail all disputed items and the basis therefor. If Purchaser and Seller have been unable to resolve their differences within 30 days after Seller 's receipt of Purchaser's written notice of disputed items, any remaining disputed issues shall be submitted to the Accounting Firm to resolve in a final binding manner after hearing the views of both parties. The fees and expenses of the Accounting Firm pursuant to this Section 7.05 shall be shared equally between Seller and Purchaser. SECTION 7.06. Cooperation and Exchange of Information. Seller and --------------------------------------- Purchaser shall, and they shall cause each Company to, provide each other with such cooperation and information as any of them reasonably may request of another in filing any Tax Return, amended return or claim for refund, determining a liability for Taxes or a right to a refund of Taxes or participating in or conducting any audit or other proceeding in respect of Taxes. Such cooperation and information shall include 36 providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules and related work papers and documents relating to rulings or other determinations by Tax authorities. Each such party shall make its employees available on a mutually convenient basis to provide explanations of any documents or information provided hereunder. Each such party will retain all Tax Returns, schedules and work papers and all material records or other documents relating to Tax matters of any Company for its taxable period first ending after the Closing Date and for all prior taxable periods until the later of (i) the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate, without regard to extensions except to the extent notified by another party in writing of such extensions for the respective Tax periods, or (ii) eight years following the due date (without extension) for such Tax Returns. Any information obtained under this Section 7.06 shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding. SECTION 7.07. Conveyance Taxes. Purchaser agrees to assume liability ---------------- for and to pay all sales, transfer, stamp, real property transfer or gains and similar Taxes incurred as a result of the sale of the Shares contemplated hereby. In addition, Purchaser agrees to indemnify Seller and its Affiliates for any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties (including attorneys' and consultants' fees and expenses) incurred by Seller and its Affiliates arising out of Purchaser's failure to make timely or full payments of such Taxes. Purchaser and Seller shall jointly prepare all Tax Returns relating to such Taxes. SECTION 7.08. Miscellaneous. (a) The parties agree to treat all ------------- payments made under Article X or this Article VII (except payments made pursuant to Section 7.07) as adjustments to the Purchase Price for Tax purposes. (b) Except as expressly provided otherwise and except for the representations contained in Section 3.15 of this Agreement, this Article VII shall be the sole provision governing Tax matters and indemnities therefor under this Agreement. (c) For purposes of this Article VII, all references to Seller, Purchaser or a Company includes successors thereto. ARTICLE VIII CONDITIONS TO CLOSING SECTION 8.01. Conditions to Obligations of Seller . The obligations ------------------------------------ of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: 37 (a) Representations and Warranties; Covenants. (i) The ----------------------------------------- representations and warranties of Purchaser contained in Article IV (A) that are qualified as to materiality, shall be true and correct and (B) that are not qualified as to materiality, shall be true and correct in all material respects, in each case as of the Closing, other than representations and warranties made as of another date, which representations and warranties shall have been true and correct, or true and correct in all material respects, as the case may be, as of such date; (ii) the obligations, covenants and agreements of Purchaser contained in this Agreement to be performed or complied with on or prior to the Closing Date (A) that are qualified as to materiality shall have been performed or complied with and (B) that are not qualified as to materiality shall have been performed or complied with in all material respects, in each case on or prior to the Closing Date, except that Purchaser shall have complied in all respects with its obligations under Article II hereof; and (iii) Seller shall have received a certificate to such effect signed by a duly authorized senior officer of Purchaser; (b) Communications Act. The FCC Consent shall have been issued and ------------------ shall contain no provision materially adverse to Seller; (c) HSR Act. Any waiting period (and any extension thereof) under the ------- HSR Act applicable to the purchase and sale of the Shares contemplated hereby shall have expired or shall have been terminated; (d) No Governmental Order. There shall be no Governmental Order in --------------------- existence which restrains or which materially and adversely affects the transactions contemplated by this Agreement or is likely to render it impossible or unlawful to consummate such transactions; and (e) Resolutions. Seller shall have received a true and complete copy, ----------- certified by the Secretary or an Assistant Secretary of Purchaser, of the resolutions duly and validly adopted by the Board of Directors of Purchaser evidencing its authorization of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. SECTION 8.02. Conditions to Obligations of Purchaser. The -------------------------------------- obligations of Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or waiver, at or prior to the Closing, of each of the following conditions: (a) Representations and Warranties; Covenants. (i) The ----------------------------------------- representations and warranties of Seller contained in this Agreement (A) that are qualified as to materiality, shall be true and correct and (B) that are not qualified as to materiality, shall be true and correct in 38 all material respects, in each case as of the Closing, other than representations and warranties made as of another date, which representations and warranties shall have been true and correct, or true and correct in all material respects, as the case may be, as of such date; (ii) the obligations, covenants and agreements of Seller contained in this Agreement to be performed or complied with on or prior to the Closing Date (A) that are qualified as to materiality, shall have been performed or complied with and (B) that are not qualified as to materiality, shall have been performed or complied with in all material respects, in each case on or prior to the Closing Date; and (iii) Purchaser shall have received a certificate to such effect signed by a duly authorized senior officer of Seller; (b) Communications Act. The FCC Consent shall have been issued and ------------------ shall contain no provision materially adverse to Purchaser; provided, however, -------- ------- that Purchaser shall not be required to close before the FCC Consent has become a Final Order if a financing source from whom Purchaser is obtaining financing for the purpose of consummating the purchase and sale of the Shares as contemplated by this Agreement refuses, after Purchaser has used its good faith reasonable best efforts to persuade such financing source to close upon receipt of the FCC Consent, to consummate such financing arrangements until the FCC Consent has become a Final Order. (c) HSR Act. Any waiting period (and any extension thereof) under the ------- HSR Act applicable to the purchase and sale of the Shares contemplated hereby shall have expired or shall have been terminated; (d) No Governmental Order. There shall be no Governmental Order in --------------------- existence which restrains or which materially and adversely affects the transactions contemplated by this Agreement or is likely to render it impossible or unlawful to consummate such transactions; (e) Resolutions. Purchaser shall have received a true and complete ----------- copy, certified by the Secretary or an Assistant Secretary of Seller, of the resolutions duly and validly adopted by the Board of Directors of Seller evidencing its authorization of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby; (f) Leased Transmission Properties. Seller shall have obtained and ------------------------------ delivered to Purchaser all material consents (in writing and signed by the applicable lessor) required in connection with the consummation of the transactions contemplated hereby with respect to any lease pursuant to which any Company leases a main transmission facility; and (g) Indebtedness. Seller shall have satisfied in full all ------------ indebtedness for borrowed money of the Companies other than the current portion of such indebtedness that would reduce the Working Capital of the Companies as to the Closing Date. 39 ARTICLE IX TERMINATION, AMENDMENT AND WAIVER SECTION 9.01. Termination. This Agreement may be terminated at any ----------- time prior to the Closing as follows: (a) by the mutual written consent of Seller and Purchaser; (b) by either Seller or Purchaser, if the Closing shall not have occurred prior to the nine-month anniversary of the date hereof (the "Outside ------- Date"); provided, however, that the right to terminate this Agreement under this - ---- -------- ------- Section 9.01(b) shall be suspended as to any party whose failure to fulfill any material obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur prior to such date, until the 10th day after such failure has been cured; provided further, that subject -------- ------- to Purchaser's good faith obligation in Section 8.02(b) to seek to consummate the Closing following receipt of the FCC Consent but prior receipt of Final Order, the Outside Date shall be automatically extended by 60 days if the FCC shall have issued the FCC Consent on or before the Outside Date, but such FCC Consent shall not have become a Final Order. (c) by Seller in the event that any representation or warranty of Purchaser made hereunder shall be materially inaccurate or breached or Purchaser shall have failed to comply with or satisfy, in all material respects, its covenants and agreements made hereunder; provided that written notice of such material inaccuracy, breach or failure shall have been given to Purchaser and Purchaser shall not have cured the same within 10 Business Days of receipt of such notice, except that Seller shall be entitled to terminate this Agreement and there shall be no cure period for any breach, whether or not material, for a failure by Purchaser to deliver the Purchase Price pursuant to Section 2.05; (d) by Purchaser in the event that any representation or warranty of Seller made hereunder shall be materially inaccurate or breached or Seller shall fail to comply with or satisfy, in all material respects, its covenants and agreements made hereunder provided that written notice of such material inaccuracy, breach or failure shall have been given to Seller and Seller shall not have cured the same within 10 Business Days of receipt of such notice, except that Purchaser shall be entitled to terminate this Agreement, and there shall be no cure period for any breach, whether or not material, for a failure by Seller to deliver the Shares pursuant to Section 2.04; (e) by either Seller or Purchaser in the event of the issuance of a final, nonappealable Governmental Order restraining or prohibiting the transactions contemplated herein; or 40 (f) by Seller if the Deposit has not been delivered by Purchaser to Seller on or prior to the Deposit Delivery Time. Notwithstanding the foregoing, neither party may terminate this Agreement pursuant to clauses (c) or (d) of this Section 9.01 if any representation or warranty of the party seeking to terminate is materially inaccurate or breached or such party has failed to comply with or satisfy, in all material respects, its covenants and agreements made hereunder. SECTION 9.02. Termination is Non-exclusive Remedy. (a) If this ----------------------------------- Agreement is terminated pursuant to Section 9.01(b) (provided that Seller is not then in material breach of this Agreement), Section 9.01(c) or 9.01(e) (unless, in the case of Section 9.01(e), such Governmental Order is attributable to facts or circumstances relating exclusively to Seller, any of Seller's Affiliates, any of the Companies or any of the Stations), then (i) Seller shall retain the Deposit and (ii) Purchaser shall pay the Interest Amount to Seller on the Interest Payment Date. The termination rights of Seller under Section 9.01 and the rights of Seller under this Section 9.02(a) are in addition to, and not exclusive of, any other rights or remedies Seller may have hereunder, at Law or otherwise. (b) If this Agreement is terminated by Purchaser pursuant to Section 9.01(d) or 9.01(e) (if such Governmental Order is attributable to facts or circumstances relating exclusively to Seller, any of Seller's Affiliates, any of the Companies or any of the Stations) or is terminated by Seller other than in compliance with the terms of this Agreement, then the Deposit (together with interest thereon at the Interest Rate through the date of repayment) shall be refunded by Seller promptly to Purchaser and the Interest Amount shall not be payable to Seller. (c) In the event of the termination of this Agreement as provided in Section 9.01, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto, except as set forth in Sections 5.03, 9.02(a) and 11.02 and nothing herein shall relieve either party from liability for any breach hereof or failure to perform hereunder. SECTION 9.03. Waiver. At any time prior to the Closing, any party ------ may (a) extend the time for the performance of any of the obligations or other acts of any other party hereto, (b) waive any inaccuracies in the representations and warranties of the other party hereto contained herein or in any document delivered pursuant hereto or (c) waive compliance by the other party hereto with any of the agreements 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 to be bound thereby. 41 ARTICLE X INDEMNIFICATION SECTION 10.01. Indemnification by Purchaser. (a) Subject to Section ---------------------------- 11.01, Purchaser shall indemnify and hold Seller, its Affiliates and their respective employees, officers and directors (collectively, the "Seller ------ Indemnified Parties") harmless from and against, and agrees to promptly defend - ------------------- any Seller Indemnified Party from and reimburse any Seller Indemnified Party for, any and all losses, damages, costs, expenses, liabilities, obligations and claims of any kind (including any Action brought by any Governmental Authority or Person and including reasonable attorneys' fees and expenses reasonably incurred) (collectively, "Losses"), which such Seller Indemnified Party may at ------ any time suffer or incur, or become subject to, as a result or in connection with: (i) the inaccuracy as of the date of this Agreement or the Closing Date of any representations and warranties made by Purchaser in or pursuant to this Agreement or in any instrument or certificate delivered by Purchaser at the Closing in accordance herewith; or (ii) any failure by Purchaser to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under this Agreement or under any of the documents and/or other instruments delivered by Purchaser pursuant to this Agreement. (b) The amounts for which Purchaser shall be liable under Section 10.01(a) shall be net of (i) any insurance payable to Seller Indemnified Parties from their own insurance policies in connection with the facts giving rise to the right of indemnification and (ii) any Tax benefits received by or accruing to Seller Indemnified Parties. (c) Notwithstanding any other provision to the contrary, Purchaser shall not be required to indemnify and hold harmless any Seller Indemnified Party pursuant to Section 10.01(a) unless Seller has asserted a claim with respect to such matters within the applicable survival period set forth in Section 11.01, and the cumulative indemnification obligation of Purchaser under Section 10.01(a)(i) of this Article X shall in no event exceed the Purchase Price. SECTION 10.02. Indemnification by Seller . (a) Subject to Section -------------------------- 11.01 hereof, Seller shall indemnify and hold Purchaser, its Affiliates and their respective employees, officers and directors (collectively, the "Purchaser --------- Indemnified Parties") harmless from and against, and agrees to promptly defend - ------------------- any Purchaser Indemnified Party from and reimburse any Purchaser Indemnified Party for, any and all Losses 42 which such Purchaser Indemnified Party may at any time suffer or incur, or become subject to, as a result or in connection with: (i) the inaccuracy as of the date of this Agreement or the Closing Date of any representations and warranties made by Seller in or pursuant to this Agreement or in any instrument or certificate delivered by Seller at the Closing in accordance herewith; or (ii) any failure by Seller to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under this Agreement or under any of the documents and/or other instruments delivered by Seller pursuant to this Agreement. (b) The amounts for which Seller shall be liable under Section 10.02(a) shall be net of (i) any insurance payable to Purchaser Indemnified Parties from their own insurance policies in connection with the facts giving rise to the right of indemnification and (ii) any Tax benefits received by or accruing to Purchaser Indemnified Parties. (c) Notwithstanding any other provision to the contrary, Seller shall not be required to indemnify and hold harmless any Purchaser Indemnified Party pursuant to Section 10.02(a), (i) unless Purchaser has asserted a claim with respect to such matters within the applicable survival period set forth in Section 11.01, and (ii) until the aggregate amount of Purchaser Indemnified Parties' Losses exceeds an amount equal to 1% of the Purchase Price, after which Seller shall be obligated for all Losses of Purchaser Indemnified Parties in excess of such amount; provided, however, that the cumulative indemnification -------- ------- obligation of Seller under this Article X shall in no event exceed the Purchase Price. (d) For purposes of calculating the amount of Losses subject to indemnification pursuant to Sections 10.01 and 10.02, it is understood and agreed between the parties hereto that to determine if there has been an inaccuracy or breach of a representation or warranty which is qualified as to materiality by the party making such representation or warranty or contains an exception for matters that would not have a Material Adverse Effect, then such representation or warranty shall be read as if it were not so qualified or contained no such exception. SECTION 10.03. Notification of Claims. (a) A party entitled to be ---------------------- indemnified pursuant to Section 10.01 or 10.02 (the "Indemnified Party") shall ----------------- promptly notify the party liable for such indemnification (the "Indemnifying ------------ Party") in writing of any claim or demand which the Indemnified Party has - ----- determined has given or could give rise to a right of indemnification under this Agreement; provided, however, that a failure to give prompt notice or to include ----------------- any specified information in any notice will not affect the rights or obligations of any party hereunder except and only to the extent that, as a 43 result of such failure, any party which was entitled to receive such notice was damaged as a result of such failure. Subject to the Indemnifying Party's right to defend in good faith third party claims as hereinafter provided, the Indemnifying Party shall satisfy its obligations under this Article X within 30 days after the receipt of written notice thereof from the Indemnified Party. (b) If the Indemnified Party shall notify the Indemnifying Party of any claim or demand pursuant to Section 10.03(a), and if such claim or demand relates to a claim or demand asserted by a third party against the Indemnified Party which the Indemnifying Party acknowledges is a claim or demand for which it must indemnify or hold harmless the Indemnified Party under Section 10.01 or 10.02, the Indemnifying Party shall have the right to employ counsel reasonably acceptable to the Indemnified Party to defend any such claim or demand asserted against the Indemnified Party for so long as the Indemnifying Party shall continue in good faith to diligently defend against such action or claim. The Indemnified Party shall have the right to participate in the defense of any such claim or demand at its own expense. The Indemnifying Party shall notify the Indemnified Party in writing, as promptly as possible (but in any case five Business Days before the due date for the answer or response to a claim) after the date of the notice of claim given by the Indemnified Party to the Indemnifying Party under Section 10.03(a) of its election to defend in good faith any such third party claim or demand. So long as the Indemnifying Party is defending in good faith any such claim or demand asserted by a third party against the Indemnified Party, the Indemnified Party shall not settle or compromise such claim or demand without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld, and the Indemnified Party shall make available to the Indemnifying Party or its agents all records and other material in the Indemnified Party's possession reasonable required by it for its use in contesting any third party claim or demand. Whether or not the Indemnifying Party elects to defend any such claim or demand, the Indemnified Party shall have no obligations to do so. In the event the Indemnifying Party elects not to defend such claim or action or if the Indemnifying Party elects to defend such claim or action but fails to diligently defend such claim or action in good faith, the Indemnified Party shall have the right to settle or compromise such claim or action without the consent of the Indemnifying Party, except that the Indemnified Party shall not settle or compromise any such claim or demand, unless the Indemnifying Party is given a full and completed release of any and all liability by all relevant parties relating thereto. SECTION 10.04. Certain Exclusive Remedies. Except (i) as provided in -------------------------- Section 9.02(a) and (ii) for the indemnification obligations specified in Sections 5.02(b) and 5.06, Article VI and Article VII, Seller and Purchaser acknowledge and agree that the indemnification provisions of Sections 10.01 and 10.02 shall be the sole and exclusive remedies of Seller and Purchaser, respectively, for any breach of the representations or warranties herein or nonperformance of any covenants and agreements herein of the other party. 44 ARTICLE XI GENERAL PROVISIONS SECTION 11.01. Survival. The representations, warranties, covenants -------- and agreements of Seller and Purchaser contained in or made pursuant to this Agreement or in any certificate furnished pursuant hereto shall terminate at the Closing, except that the representations and warranties made in Article III and Article IV and the convenants and agreements made herein shall survive in full force and effect until the later of (x) the six-month anniversary of the Closing Date or (y) March 31, 1998. In addition, Section 10.04, including the indemnification obligations contained in Sections 5.02(b), 5.06, 6.04 and 7.01, shall survive in perpetuity and Section 2.06 shall survive until the working capital adjustment contemplated therein has been completed. SECTION 11.02. Expenses. Except as may be otherwise specified -------- herein, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred. SECTION 11.03. Notices. All notices, requests, claims, demands and ------- other communications hereunder shall be in writing and shall be deemed to have been duly given or made when delivered in person one Business Day after having been dispatched via a nationally recognized overnight courier service, when dispatched by facsimile, or three Business Days after being sent by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.03): (a) if to Seller : Viacom International Inc. 1515 Broadway New York, New York 10036 Attention: General Counsel and Deputy General Counsel Telecopier: (212) 258-6099 (b) if to Purchaser: Evergreen Media Corporation of Los Angeles 433 East Las Colinas Boulevard, Suite 1130 Irving, Texas 75039 45 Attention: Scott K. Ginsburg Telecopier: (977) 432-0754 With a copy to: Latham & Watkins 1001 Pennsylvania Ave., N.W., Suite 1300 Washington, D.C. 20004 Attention: Eric L. Bernthal Telecopier: (202) 637-2201 SECTION 11.04. Public Announcements. Except as may be required by -------------------- Law or stock exchange rules, no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without prior notification to the other party, and the parties shall cooperate as to the timing and contents of any such announcement. SECTION 11.05. Non-Solicitation. Until the six-month anniversary of ---------------- the Closing Date, Seller (excluding any of Seller's Affiliates) will not solicit or offer employment to any general manager or on-air talent who is then a Transferred Employee except that a general solicitation through advertisement or a professional broker will not constitute a violation of this Section. SECTION 11.06. Headings. The headings contained in this Agreement -------- are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 11.07. Severability. If any term or other provision of this ------------ Agreement is invalid, illegal or incapable of being enforced because of any Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. SECTION 11.08. Entire Agreement. This Agreement constitutes the ---------------- entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersedes all prior agreements and undertakings, both written and oral, between Seller and Purchaser with respect to the subject matter hereof and thereof, except as otherwise expressly provided herein. 46 SECTION 11.09. Successors and Assigns. This Agreement will be ---------------------- binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns but will not be assignable or delegable by any party without the prior written consent of the other party which shall not be unreasonably withheld; provided, however, that in the event the Purchaser Merger -------- ------- is completed either prior to or after the Closing, then this Agreement and all of the rights and obligations of Purchaser hereunder, hereto and herein shall become binding upon and inure to the benefit of the corporation or other Person (the "Surviving Entity") surviving the Purchaser Merger; provided, further, that ---------------- -------- ------- (a) except as otherwise permitted in this Section 11.09, prior to Closing, Purchaser or the Surviving Entity, as the case may be, may assign this Agreement to another party (the "Purchaser Assignee") without the consent of Seller if, ------------------ but only if, (A) such Purchaser Assignee is legally, financially and in all other respects qualified under the laws, rules, and regulations of the FCC and each other applicable Governmental Authority to own the FCC Licenses and to operate the Stations as currently operated and (B) Purchaser or the Surviving Entity, as the case may be, agrees in a writing, in form and substance satisfactory to Seller, to remain primarily liable and responsible for the timely performance by Purchaser Assignee of this Agreement, and (b) Purchaser or the Surviving Entity, as the case may be, may without the consent of Seller make a collateral assignment of its rights under this Agreement to any financing source who provides funds to Purchaser or the Surviving Entity, as the case may be. Seller agrees to execute acknowledgments of such assignment(s) and collateral assignments in such forms as Purchaser or the Surviving Entity, as the case may be, or institutional lender(s) may from time to time reasonably request. In the event that the Purchaser Merger is consummated, all references herein to Purchaser shall be deemed to be references to the Surviving Entity. SECTION 11.10. No Recourse. Notwithstanding any of the terms or ----------- provisions of this Agreement, each of Seller on the one hand, and Purchaser, on the other hand, agree that neither it nor any Person acting on its behalf may assert any claims or cause of action against any employee, officer or director of the other party or stockholder of such other party in connection with or arising out of this Agreement or the transactions contemplated hereby. SECTION 11.11. No Third-Party Beneficiaries. Except as expressly ---------------------------- provided in Articles VII and X, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. SECTION 11.12. Amendment. This Agreement may not be amended or --------- modified except by an instrument in writing signed by Seller and Purchaser. 47 SECTION 11.13. Sections and Schedules. Any disclosure with respect ---------------------- to a Section or Schedule of this Agreement shall be deemed to be disclosure for all other Sections and Schedules of this Agreement. SECTION 11.14. Governing Law. This Agreement shall be governed by, ------------- and construed in accordance with, the Laws of the State of New York. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in a New York state or federal court sitting in the City of New York, and the parties hereto hereby irrevocable submit to the nonexclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. SECTION 11.15. Counterparts. This Agreement may be executed in one ------------ or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement. SECTION 11.16. No Presumption. This Agreement shall be construed -------------- without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. SECTION 11.17. Specific Performance. Seller agrees that the Shares -------------------- represent unique property that cannot be readily obtained on the open market and that Purchaser would be irreparably injured if this Agreement is not specifically enforced after default. Therefore, in addition to any other remedy Purchaser may have under this Agreement or at law or in equity, Seller agrees to waive the defense to the remedy of specific performance that Purchaser has an adequate remedy at law and to interpose no opposition, legal or otherwise, as to the propriety of specific performance as a remedy. 48 IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. VIACOM INTERNATIONAL INC. By ------------------------------- Name: Title: EVERGREEN MEDIA CORPORATION OF LOS ANGELES By -------------------------------- Name: Title: SCHEDULES Schedule 1 Markets, Companies and Radio Station Call Letters Schedule 1.01 Disclosure Schedule EXHIBITS Exhibit 3.06 Financial Statements SCHEDULE 1 MARKETS, COMPANIES AND RADIO STATION CALL LETTERS -------------------------------------------------
Radio Station Markets Companies Call Letters - -------- --------- -------------- New York WAXQ Inc. WAXQ -FM Riverside Broadcasting Co., Inc. WLTW-FM Los Angeles KYSR Inc. KYSR-FM KIBB Inc. KIBB-FM Washington, DC WMZQ Inc. WMZQ -FM WZHF-AM Viacom Broadcasting East Inc. WJZW-FM WBZS-AM Chicago, IL WLIT Inc. WLIT-FM Detroit, MI WDRQ Inc. WDRQ-FM
EX-2.29 3 MERGER AGREEMENT EXHIBIT 2.29 EXECUTION COPY AGREEMENT AND PLAN OF MERGER AMONG CHANCELLOR BROADCASTING COMPANY, CHANCELLOR RADIO BROADCASTING COMPANY AND EVERGREEN MEDIA CORPORATION Dated as of February 19, 1997 TABLE OF CONTENTS ----------------- ARTICLE I THE MERGER.................................. 2 1.1 THE MERGER............................................................ 2 ---------- 1.2 CLOSING............................................................... 2 ------- 1.3 EFFECTIVE TIME........................................................ 2 -------------- 1.4 CERTIFICATE OF INCORPORATION.......................................... 2 ---------------------------- 1.5 CERTIFICATE OF DESIGNATION............................................ 3 -------------------------- 1.6 BYLAWS................................................................ 3 ------ 1.7 DIRECTORS............................................................. 3 --------- 1.8 OFFICERS.............................................................. 4 -------- 1.9 EFFECT ON EVERGREEN CAPITAL STOCK..................................... 4 --------------------------------- (a) Outstanding Evergreen Common Stock................................ 4 ---------------------------------- (b) Exchange of Certificates.......................................... 5 ------------------------ 1.10 EFFECT ON COMPANY CAPITAL STOCK....................................... 5 ------------------------------- (a) Outstanding Shares................................................ 5 ------------------ (b) Treasury Shares................................................... 5 --------------- (c) Outstanding Company Convertible Preferred Stock................... 5 ----------------------------------------------- (d) Impact of Stock Splits, etc....................................... 5 --------------------------- 1.11 EFFECT ON RADIO BROADCASTING CAPITAL STOCK............................ 6 ------------------------------------------ (a) Outstanding Common Stock of Radio Broadcasting.................... 6 ---------------------------------------------- (b) Outstanding 12 1/4% Series A Senior ----------------------------------- Cumulative Exchangeable Preferred Stock........................... 6 --------------------------------------- (c) Outstanding 12% Exchangeable Preferred Stock...................... 6 -------------------------------------------- 1.12 EXCHANGE OF CERTIFICATES.............................................. 6 ------------------------ (a) Paying Agent...................................................... 6 ------------ (b) Exchange Procedures............................................... 6 ------------------- (c) Letter of Transmittal............................................. 8 --------------------- (d) Distributions with Respect to Unexchanged Shares.................. 8 ------------------------------------------------ (e) No Further Ownership Rights in Shares Company --------------------------------------------- Convertible Preferred Stock and Radio Broadcasting -------------------------------------------------- Preferred Stock................................................... 8 --------------- (f) No Fractional Shares.............................................. 9 -------------------- (g) Termination of Payment Fund....................................... 9 --------------------------- (h) No Liability......................................................10 ------------ 1.13 DISSENTING SHARES.....................................................10 ----------------- ARTICLE II REPRESENTATIONS AND WARRANTIES OF EVERGREEN..........................11 2.1 ORGANIZATION, STANDING AND CORPORATE POWER............................11 ------------------------------------------ i 2.2 CAPITAL STRUCTURE...................................................... 12 ----------------- 2.3 AUTHORITY; NONCONTRAVENTION............................................ 13 --------------------------- 2.4 SEC DOCUMENTS.......................................................... 15 ------------- 2.5 ABSENCE OR CERTAIN CHANGES OR EVENTS................................... 16 ------------------------------------ 2.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS........................ 17 ----------------------------------------------- 2.7 VOTING REQUIREMENTS.................................................... 17 ------------------- 2.8 STATE TAKEOVER STATUTES................................................ 17 ----------------------- 2.9 EVERGREEN FCC LICENSES; OPERATIONS OF EVERGREEN ----------------------------------------------- LICENSED FACILITIES.................................................... 18 ------------------- 2.10 BROKERS................................................................ 19 ------- 2.11 OPINION OF FINANCIAL ADVISOR........................................... 19 ---------------------------- 2.12 FCC QUALIFICATION ..................................................... 19 ----------------- 2.13 COMPLIANCE WITH APPLICABLE LAWS........................................ 19 ------------------------------- 2.14 ABSENCE OF UNDISCLOSED LIABILITIES..................................... 20 ---------------------------------- 2.15 LITIGATION............................................................. 20 ---------- 2.16 TRANSACTIONS WITH AFFILIATES........................................... 20 ---------------------------- ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND RADIO BROADCASTING.......................... 21 3.1 ORGANIZATION, STANDING AND CORPORATE POWER............................. 21 ----------------------------------------- 3.2 COMPANY AND RADIO BROADCASTING CAPITAL STRUCTURE....................... 21 ------------------------------------------------ 3.3 AUTHORITY; NONCONTRAVENTION............................................ 23 --------------------------- 3.4 SEC DOCUMENTS.......................................................... 25 ------------- 3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS................................... 26 ------------------------------------ 3.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS........................ 27 ----------------------------------------------- 3.7 VOTING REQUIREMENTS.................................................... 27 ------------------- 3.8 STATE TAKEOVER STATUTES................................................ 27 ----------------------- 3.9 COMPANY FCC LICENSES; OPERATIONS OF COMPANY ------------------------------------------- LICENSED FACILITIES.................................................... 27 ------------------- 3.10 BROKERS................................................................ 28 ------- 3.11 OPINION OF FINANCIAL ADVISOR........................................... 29 ---------------------------- 3.12 FCC QUALIFICATION...................................................... 29 ----------------- 3.13 COMPLIANCE WITH APPLICABLE LAWS........................................ 29 ------------------------------- 3.14 ABSENCE OF UNDISCLOSED LIABILITIES..................................... 30 ---------------------------------- 3.15 LITIGATION............................................................. 30 ---------- 3.16 TRANSACTIONS WITH AFFILIATES........................................... 30 ---------------------------- ARTICLE IV ADDITIONAL AGREEMENTS.......................... 31 4.1 PREPARATION OF FORM S-4 AND THE JOINT PROXY ------------------------------------------- STATEMENT; INFORMATION SUPPLIED........................................ 31 ------------------------------- 4.2 MEETINGS OF COMPANY STOCKHOLDERS AND EVERGREEN ---------------------------------------------- STOCKHOLDERS........................................................... 32 ------------ 4.3 ACCESS TO INFORMATION; CONFIDENTIALITY................................. 33 -------------------------------------- 4.4 PUBLIC ANNOUNCEMENTS................................................... 34 -------------------- ii 4.5 ACQUISITION PROPOSALS.......................................... 34 --------------------- 4.6 CONSENTS, APPROVALS AND FILINGS................................ 35 ------------------------------- 4.7 AFFILIATES LETTERS............................................. 36 ------------------ 4.8 NASDAQ LISTING................................................. 36 -------------- 4.9 STOCKHOLDER LITIGATION......................................... 36 ---------------------- 4 10 INDEMNIFICATION................................................ 36 --------------- 4.11 LETTER OF THE COMPANY'S ACCOUNTANTS............................ 37 ----------------------------------- 4.12 LETTER OF EVERGREEN'S ACCOUNTANTS.............................. 37 --------------------------------- ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER................ 38 5.1 CONDUCT OF BUSINESS............................................ 38 ------------------- 5.2 COMPANY STOCK OPTIONS.......................................... 41 --------------------- 5.3 OTHER ACTIONS.................................................. 42 ------------- ARTICLE VI CONDITIONS PRECEDENT........................ 42 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT ----------------------------------------------- THE MERGER..................................................... 42 ---------- (a) Stockholder Approval...................................... 42 -------------------- (b) FCC Order................................................. 42 --------- (c) Governmental and Regulatory Consents...................... 43 ------------------------------------ (d) HSR Act................................................... 43 ------- (e) No Injunctions or Restraints.............................. 43 ---------------------------- (f) Nasdaq Listing............................................ 43 -------------- (g) Form S-4.................................................. 43 -------- 6.2 CONDITIONS TO OBLIGATIONS OF EVERGREEN......................... 43 -------------------------------------- (a) Representations and Warranties............................ 43 ------------------------------ (b) Performance of Obligations of the Company and --------------------------------------------- Radio Broadcasting........................................ 44 ------------------ (c) Tax Opinion............................................... 44 ----------- 6.3 CONDITIONS TO OBLIGATION OF THE COMPANY AND RADIO ------------------------------------------------ BROADCASTING................................................... 44 ------------ (a) Representations and Warranties............................ 44 ------------------------------ (b) Performance of Obligations of Evergreen................... 45 --------------------------------------- (c) Tax Opinion............................................... 45 ----------- ARTICLE VII TERMINATION, AMENDMENT AND WAIVER................. 45 7.1 TERMINATION.................................................... 45 ----------- 7.2 EFFECT OF TERMINATION.......................................... 46 --------------------- 7.3 AMENDMENT...................................................... 46 --------- 7.4 EXTENSION; WAIVER.............................................. 47 ----------------- 7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR -------------------------------------------------- WAIVER......................................................... 47 ------ iii ARTICLE VIII SURVIVAL OF PROVISIONS................. 47 8.1 SURVIVAL.......................................... 47 -------- ARTICLE IX NOTICES........................ 47 9.1 NOTICES........................................... 47 ------- ARTICLE X MISCELLANEOUS ................. 49 10.1 ENTIRE AGREEMENT................................. 49 ---------------- 10.2 EXPENSES......................................... 49 -------- 10.3 COUNTERPARTS..................................... 49 ------------ 10.4 NO THIRD PARTY BENEFICIARY....................... 50 -------------------------- 10.5 GOVERNING LAW.................................... 50 ------------- 10.6 ASSIGNMENT; BINDING EFFECT....................... 50 -------------------------- 10.7 HEADINGS, GENDER, ETC. .......................... 50 ---------------------- 10.8 INVALID PROVISIONS .............................. 50 ------------------ 10.9 VIACOM TRANSACTION............................... 51 ------------------ Annex I Form of Amended and Restated Certificate of Incorporation Annex II Form of Bylaws Exhibit A Form of Affiliate Letter Exhibit B Form of Certificate of Chancellor Broadcasting Company Exhibit C Form of Certificate Chancellor Radio Broadcasting Company Exhibit D Form of Certificate of 5% Stockholder of Chancellor Broadcasting Company Exhibit E Form of Certificate of 5% Stockholder of Chancellor Radio Broadcasting Company Exhibit F Form of Certificate of Evergreen Media Corporation Exhibit G Form of Tax Opinion of Latham & Watkins Exhibit H Form of Tax Opinion of Weil, Gotshal, & Manges LLP iv AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered into as of February 19, 1997, by and among CHANCELLOR BROADCASTING COMPANY, a Delaware corporation (the "Company"), CHANCELLOR RADIO BROADCASTING COMPANY, a Delaware corporation and a subsidiary of the Company ("Radio Broadcasting"), and EVERGREEN MEDIA CORPORATION, a Delaware corporation ("Evergreen"). RECITALS WHEREAS, the respective Boards of Directors of Evergreen, the Company and Radio Broadcasting have each approved the merger of the Company and Radio Broadcasting with and into Evergreen, upon the terms and subject to the conditions set forth herein; WHEREAS, as a condition of the willingness of each of Evergreen, Radio Broadcasting and the Company to enter into this Agreement and effect the transactions contemplated hereby, contemporaneously with the execution and delivery of this Agreement (i) certain beneficial and record holders (the "Principal Company Stockholders") of the Class A Common Stock, $0.01 par value ("Company Class A Common Stock") and Class B Common Stock, $0.01 par value ("Company Class B Common Stock" and collectively with the Company Class A Common Stock, the "Shares"), of the Company, and (ii) Scott K. Ginsburg, the beneficial and record holder (the "Principal Evergreen Stockholder") of substantially all the outstanding Class B Common Stock, $0.01 par value ("Evergreen Class B Common Stock"), of Evergreen shall enter into an agreement (the "Stockholders Agreement") providing for certain matters with respect to their respective Shares and Evergreen Class B Common Stock, including among other things, voting such Shares and Evergreen Class B Common Stock in favor of the adoption of this Agreement; and WHEREAS, Evergreen, Radio Broadcasting and the Company desire to make certain representations, warranties, covenants and agreements in connection with such merger and also to prescribe various conditions to such merger; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I THE MERGER 1.1 THE MERGER. Subject to the terms and conditions of this ---------- Agreement, at the Effective Time (as defined in Section 1.3), the Company and Radio Broadcasting shall be merged with and into Evergreen (the "Merger"), in a transaction intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), in accordance with the Delaware General Corporation Law (the "Delaware Code"), and the separate corporate existences of the Company and Radio Broadcasting shall cease and Evergreen shall continue as the surviving corporation under the laws of the State of Delaware (the "Surviving Corporation") with all the rights, privileges, immunities and powers, and subject to all the duties and liabilities, of a corporation organized under the Delaware Code. The Merger shall have the effects set forth in the Delaware Code. 1.2 CLOSING. Unless this Agreement shall have been terminated and ------- the transactions herein contemplated shall have been abandoned pursuant to Section 7.1, and subject to the satisfaction or waiver of the conditions set forth in Article VI, the closing of the Merger (the "Closing") will take place at 10:00 a.m., Dallas, Texas time, on the second business day following the date on which the last to be fulfilled or waived of the conditions set forth in Article VI shall be fulfilled or waived in accordance with this Agreement (the "Closing Date"), at the offices of Weil, Gotshal & Manges LLP, 100 Crescent Court, Suite 1300, Dallas, Texas 75201, unless another date, time or place is agreed to in writing by the parties hereto. 1.3 EFFECTIVE TIME. The parties hereto will file with the Secretary -------------- of State of the State of Delaware (the "Delaware Secretary of State") on the date of the Closing (or on such other date as Evergreen, the Company and Radio Broadcasting may agree) a certificate of merger or other appropriate documents, executed in accordance with the relevant provisions of the Delaware Code, and make all other filings or recordings required under the Delaware Code in connection with the Merger. The Merger shall become effective upon the filing of the certificate of merger with the Delaware Secretary of State, or at such later time specified in the certificate of merger (the "Effective Time"). 1.4 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation ---------------------------- of Evergreen shall be amended and restated in its entirety as set forth in Annex ----- I hereto, and as so amended and - - 2 restated shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended in accordance with its terms and as provided by applicable law. From and after the Effective Time, the name of the Surviving Corporation shall be Chancellor Media Corporation. 1.5 CERTIFICATES OF DESIGNATION. At the Effective Time, the Board of --------------------------- Directors of the Surviving Corporation shall authorize the designation of three series of preferred stock, $0.01 par value (collectively, the "Merger Preferred Stock"), of the Surviving Corporation so as to permit the Surviving Corporation to issue the shares of Merger Preferred Stock pursuant to Sections 1.10 and 1.11 hereof, and the Surviving Corporation shall file with the Delaware Secretary of State immediately following the Effective Time a certificate of designations (the "Certificates of Designation") with respect to each series of Merger Preferred Stock pursuant to the Delaware Code. 1.6 BYLAWS. The Bylaws of the Surviving Corporation shall be in the ------ form of Annex II hereto until thereafter amended in accordance with their terms and as provided by applicable law. 1.7 DIRECTORS. The directors of the Surviving Corporation at the --------- Effective Time shall be as set forth below: Class I Directors ----------------- Eric C. Neuman Perry J. Lewis Matrice Ellis-Kirk Class II Directors ------------------ Lawrence D. Stuart, Jr. Steven Dinetz Jeffrey A. Marcus James E. de Castro Class III Directors ------------------- Thomas O. Hicks Scott K. Ginsburg John H. Massey Thomas J. Hodson Each Class I director, Class II director and Class III director identified as such above will hold office from the 3 Effective Time until the 1998, 1999 and 2000 annual meetings of the Surviving Corporation, respectively, and in all cases, until his or her respective successor is duly elected or appointed and qualified in the manner provided in the Certificate of Incorporation or Bylaws of the Surviving Corporation, or as otherwise provided by applicable law. 1.8 OFFICERS. The initial senior executive officers of the Surviving -------- Corporation at the Effective Time shall be as set forth below: Thomas O. Hicks Chairman of the Board Scott K. Ginsburg President and Chief Executive Officer Steven Dinetz Co-Chief Operating Officer James E. de Castro Co-Chief Operating Officer Matthew W. Devine Chief Financial Officer Each such officer will hold office from the Effective Time until his respective successor is duly elected or appointed and qualified in the manner provided in the Certificate of Incorporation or Bylaws of the Surviving Corporation, or as otherwise provided by applicable law. The names, titles and responsibilities of the other individuals who initially will hold officerships with the Surviving Corporation shall be determined by Evergreen and the Company prior to the Effective Time, and the election of these persons shall be considered by the Board of Directors of the Surviving Corporation immediately following the Effective Time. 1.9 EFFECT ON EVERGREEN CAPITAL STOCK. (a) Outstanding Evergreen --------------------------------- --------------------- Common Stock. Each of the shares of Evergreen Class B Common Stock and Class A - ------------ Common Stock, $0.01 par value, of Evergreen ("Evergreen Class A Common Stock" and collectively with the Evergreen Class B Common Stock, the "Evergreen Common Stock") issued and outstanding immediately prior to the Effective Time (other than shares of Evergreen Common Stock held as treasury shares by Evergreen) shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into a right to receive one validly issued, fully paid and nonassessable share of the common stock, $0.01 par value ("Surviving Corporation Common Stock"), of the Surviving Corporation. 4 (b) Exchange of Certificates. Evergreen shall instruct its transfer ------------------------ agent that from and after the Effective Time, upon the presentation for transfer of any shares of Evergreen Common Stock or at the request of any holder thereof, the transfer agent shall issue to the transferee or holder thereof certificates representing that number of shares of Surviving Corporation Common Stock into which such shares of Evergreen Common Stock were converted pursuant to this Agreement. 1.10 EFFECT ON COMPANY CAPITAL STOCK. (a) Outstanding Shares. Each of ------------------------------- ------------------ the Shares of the Company issued and outstanding immediately prior to the Effective Time (other than Shares held as treasury shares by the Company) shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into a right to receive 0.9091 validly issued, fully paid and nonassessable shares of Surviving Corporation Common Stock (the "Exchange Ratio"). The shares of Surviving Corporation Common Stock to be issued to holders of Shares in accordance with this Section 1.10(a), any cash to be paid in accordance with Section 1.12(f) in lieu of fractional shares of Surviving Corporation Common Stock, and the shares of Merger Preferred Stock to be issued to holders of Company Convertible Preferred Stock (as hereinafter defined) and Radio Broadcasting Preferred Stock (as hereinafter defined) are referred to collectively as the "Merger Consideration." (b) Treasury Shares. Each Share issued and outstanding immediately --------------- prior to the Effective Time which is then held as a treasury share by the Company shall, by virtue of the Merger and without any action on the part of the Company, be cancelled and retired and cease to exist, without any conversion thereof. (c) Outstanding Company Convertible Preferred Stock. Each share ----------------------------------------------- (other than a Dissenting Share, as defined in Section 1.14 below) of 7% Convertible Preferred Stock, par value $0.01 per share ("Company Convertible Preferred Stock"), of the Company outstanding immediately prior to the Effective Time shall be converted into one share of preferred stock of the Surviving Corporation having substantially identical powers, preferences and relative rights as the Company Convertible Preferred Stock. (d) Impact of Stock Splits, etc. In the event of any change in ---------------------------- Evergreen Common Stock and/or Shares between the date of this Agreement and the Effective Time of the Merger by reason of any stock split, stock dividend, subdivision, reclassification, recapitalization, combination, exchange of shares or the like, the number and class of shares of Surviving 5 Corporation Common Stock to be issued and delivered in the Merger in exchange for each outstanding Share as provided in this Agreement shall be proportionately adjusted. 1.11 EFFECT ON RADIO BROADCASTING CAPITAL STOCK. (a) Outstanding Common ------------------------------------------ ------------------ Stock of Radio Broadcasting. Each of the shares of common stock, $0.01 par - --------------------------- value, of Radio Broadcasting issued and outstanding immediately prior to the Merger shall, by virtue of the Merger, be cancelled, and no consideration shall be delivered in exchange therefor. (b) Outstanding 12 1/4% Series A Senior Cumulative Exchangeable ----------------------------------------------------------- Preferred Stock. Each share (other than a Dissenting Share) of 12 1/4% Series A - --------------- Senior Cumulative Exchangeable Preferred Stock, par value $0.01 per share ("Radio Broadcasting 12 1/4% Preferred Stock"), of Radio Broadcasting outstanding immediately prior to the Effective Time shall be converted into one share of preferred stock of the Surviving Corporation having substantially identical powers, preferences and relative rights as the Radio Broadcasting 12 1/4% Preferred Stock. (c) Outstanding 12% Exchangeable Preferred Stock. Each share (other -------------------------------------------- than a Dissenting Share) of 12% Exchangeable Preferred Stock, par value $0.01 per share ("Radio Broadcasting 12% Preferred Stock" and collectively with Radio Broadcasting 12 1/4% Preferred Stock, the "Radio Broadcasting Preferred Stock"), of Radio Broadcasting outstanding immediately prior to the Effective Time shall be converted into one share of preferred stock of the Surviving Corporation having substantially identical powers, preferences and relative rights as the Radio Broadcasting 12% Preferred Stock. 1.12 EXCHANGE OF CERTIFICATES. (a) Paying Agent. As of the Effective Time, ------------------------ ------------ the Surviving Corporation shall deposit with its transfer agent and registrar (the "Paying Agent"), for the benefit of the holders of Shares, Company Convertible Preferred Stock and Radio Broadcasting Preferred Stock, other than holders of Dissenting Shares, certificates representing the shares of Surviving Corporation Common Stock and Merger Preferred Stock to be issued to such holders pursuant to Sections 1.10 and 1.11 (such certificates, together with any dividends or distributions with respect to such certificates and any cash paid in lieu of fractional shares pursuant to Section 1.12(f), being hereinafter referred to as the "Payment Fund"). (b) Exchange Procedures. As soon as practicable after the Effective ------------------- Time, each holder of an outstanding 6 certificate or certificates which prior thereto represented Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock shall, upon surrender to the Paying Agent of such certificate or certificates and acceptance thereof by the Paying Agent, be entitled to a certificate representing that number of whole shares of Surviving Corporation Common Stock or Merger Preferred Stock which the aggregate number of Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock previously represented by such certificate or certificates surrendered shall have been converted into the right to receive pursuant to Sections 1.10 and 1.11 of this Agreement (with respect to the Surviving Corporation Common Stock, including any cash to be received in lieu of fractional shares, as provided in Section 1.12(f) below). The Paying Agent shall accept such certificates upon compliance with such reasonable terms and conditions as the Paying Agent may impose to effect an orderly exchange thereof in accordance with its normal exchange practices. If the Merger Consideration (or any portion thereof) is to be delivered to any person other than the person in whose name the certificate or certificates representing Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock surrendered in exchange therefor is registered, it shall be a condition to such exchange that the certificate or certificates so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the person requesting such exchange shall pay to the Paying Agent any transfer or other taxes required by reason of the payment of such consideration to a person other than the registered holder of the certificate(s) surrendered, or shall establish to the satisfaction of the Paying Agent that such tax has been paid or is not applicable. After the Effective Time, there shall be no further transfer on the records of the Company, Radio Broadcasting or their respective transfer agents of certificates representing Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock and if such certificates are presented to the Company or Radio Broadcasting for transfer, they shall be cancelled against delivery of the Merger Consideration as hereinabove provided. Until surrendered as contemplated by this Section 1.12(b), each certificate representing Shares, shares of Company Convertible Preferred Stock and shares of Radio Broadcasting Preferred Stock (other than certificates representing treasury Shares to be cancelled in accordance with Section 1.10(b)), shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration, without any interest thereon, as contemplated by Sections 1.10 and 1.11. 7 (c) Letter of Transmittal. Promptly after the Effective Time (but in --------------------- no event more than five business days thereafter), the Surviving Corporation shall require the Paying Agent to mail to each record holder of certificates that immediately prior to the Effective Time represented Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock which have been converted pursuant to Sections 1.10 and 1.11, a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of certificates representing Shares, shares of Company Convertible Preferred Stock or Shares of Radio Broadcasting Preferred Stock to the Paying Agent, and which shall be in such form and have such provisions as the Surviving Corporation reasonably may specify) and instructions for use in surrendering such certificates and receiving the consideration to which such holder shall be entitled therefor pursuant to Sections 1.10 and 1.11. (d) Distributions with Respect to Unexchanged Shares. No dividends or ------------------------------------------------ other distributions with respect to Surviving Corporation Common Stock or Merger Preferred Stock with a record date after the Effective Time shall be paid to the holder of any certificate that immediately prior to the Effective Time represented Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock which have been converted pursuant to Sections 1.10 or 1.11, until the surrender for exchange of such certificate in accordance with this Article I. Following surrender for exchange of any such certificate, there shall be paid to the holder of such certificate, without interest, (i) at the time of such surrender, the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to the number of whole shares of Surviving Corporation Common Stock or Merger Preferred Stock into which the Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock represented by such certificate immediately prior to the Effective Time were converted pursuant to Sections 1.10 or 1.11, and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time, but prior to such surrender, and with a payment date subsequent to such surrender, payable with respect to such whole shares of Surviving Corporation Common Stock or Merger Preferred Stock. (e) No Further Ownership Rights in Shares, Company Convertible ---------------------------------------------------------- Preferred Stock and Radio Broadcasting Preferred Stock. The Merger Consideration - ------------------------------------------------------ (or, in respect of Dissenting Shares, the cash payment therefor) paid upon the surrender for 8 exchange of certificates representing Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock in accordance with the terms of this Article I shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to the Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock theretofore represented by such certificates, subject, however, to the Surviving Corporation's obligation (if any) to pay any dividends or make any other distributions with a record date prior to the Effective Time which may have been declared by the Company or Radio Broadcasting, as appropriate, on the Shares, shares of Company Convertible Preferred Stock, or shares of Radio Broadcasting Preferred Stock in accordance with the terms of this Agreement (or, with respect to the Company Convertible Preferred Stock and Radio Broadcasting Preferred Stock, in accordance with their respective terms) or prior to the date of this Agreement and which remain unpaid at the Effective Time. (f) No Fractional Shares. No certificates or scrip representing -------------------- fractional shares of Surviving Corporation Common Stock shall be issued upon the surrender for exchange of certificates that immediately prior to the Effective Time represented Shares which have been converted pursuant to Section 1.10, and each holder of Shares who would otherwise have been entitled to receive a fraction of a share of Surviving Corporation Common Stock (after taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of Surviving Corporation Common Stock multiplied by the closing price per share of Evergreen Class A Common Stock on the Nasdaq National Market on the trading day immediately prior to the Effective Time. (g) Termination of Payment Fund. Any portion of the Payment Fund --------------------------- which remains undistributed to the holders of the certificates representing Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock for 120 days after the Effective Time shall be delivered to the Surviving Corporation, upon demand, and any holders of Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock who have not theretofore complied with this Article I shall thereafter look only to the Surviving Corporation and only as general creditors thereof for payment of their claims for any Merger Consideration and any dividends or distributions with respect to Surviving Corporation Common Stock or Merger Preferred Stock. 9 (h) No Liability. None of Evergreen, the Company, Radio Broadcasting, ------------ the Surviving Corporation or the Paying Agent shall be liable to any person in respect of any cash, shares, dividends or distributions payable from the Payment Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. If any certificates representing Shares, shares of Company Convertible Preferred Stock or shares of Radio Broadcasting Preferred Stock shall not have been surrendered prior to five years after the Effective Time (or immediately prior to such earlier date on which any Merger Consideration in respect of such certificate would otherwise escheat to or become the property of any Governmental Entity (as defined in Section 2.3)), any such cash, shares, dividends or distributions payable in respect of such certificate shall, to the extent permitted by applicable law, become the property of the Surviving Corporation, free and clear of all claims or interest of any person previously entitled thereto. 1.13 DISSENTING SHARES. Notwithstanding anything herein to the contrary in ----------------- this Agreement, shares of Company Convertible Preferred Stock or Radio Broadcasting Preferred Stock, as applicable, outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto and who properly demands in writing appraisal of such shares of Company Convertible Preferred Stock or Radio Broadcasting Preferred Stock in accordance with Section 262 of the Delaware Code and who shall not have withdrawn such demand or otherwise have forfeited appraisal rights, shall not be converted into or represent the right to receive the Merger Consideration therefor ("Dissenting Shares"). Such stockholders shall be entitled to receive payment of the appraised value of such shares of Company Convertible Preferred Stock or Radio Broadcasting Preferred Stock, as the case may be, held by them in accordance with the provisions of Section 262 of the Delaware Code, except that all Dissenting Shares held by stockholders who shall have failed to perfect or who effectively shall have withdrawn or lost their rights to appraisal of such securities under Section 262 shall thereupon be deemed to have been converted into, as of the Effective Time, the right to receive, without any interest thereon, the applicable Merger Consideration, upon surrender, in the manner provided in this Article I, of the certificate or certificates that formerly represented such securities. The Company shall take all actions required to be taken by it in accordance with Section 262 (d) (1) of the Delaware Code with respect to the holders of Company Convertible Preferred Stock as of the record date for the Stockholders Meeting (as defined in Section 4.2 (a)) and shall otherwise comply with the provisions of Section 262 of the Delaware Code. The Surviving Corporation 10 shall, within ten days after the Effective Time, take all actions required to be taken by it pursuant to Section 262(d) (2) of the Delaware Code with respect to all holders of record, as of the Effective Time, of the Radio Broadcasting Preferred Stock. The Company shall give Evergreen prompt written notice of any demands for appraisal received by the Company with respect to the Company Convertible Preferred Stock, withdrawals of such demands, and any other instruments served pursuant to Delaware law and received by the Company, and Evergreen shall have the right to participate in all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, except with the prior written consent of Evergreen, make any payments with respect to any demands for appraisal, or settle or offer to settle, any such demands. ARTICLE II REPRESENTATIONS AND WARRANTIES OF EVERGREEN Evergreen hereby represents and warrants to the Company and Radio Broadcasting as follows: 2.1 ORGANIZATION, STANDING AND CORPORATE POWER. Evergreen and each of its ------------------------------------------ Significant Subsidiaries (as defined below) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and has the requisite corporate power and authority to carry on its business as now being conducted. Evergreen and each of its Significant Subsidiaries is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, except where the failure to be so qualified could not reasonably be expected to have a material adverse effect on the business, properties, results of operations, or condition (financial or otherwise) of Evergreen and its subsidiaries, considered as a whole (an "Evergreen Material Adverse Effect"); provided, however, that for purposes of Sections 2.13, 2.14, 2.15 and 2.16, no - -------- ------- fact, event or circumstance shall be deemed to constitute an Evergreen Material Adverse Effect unless, in addition to otherwise satisfying the elements of the definition given above, the relevant fact, event or circumstance not disclosed pursuant to such representations would be material facts or circumstances, the omission of which in a document filed with the SEC (as hereinafter defined) pursuant to the Exchange Act would be such as to cause the statements contained in such filings to be misleading within the meaning of Rule 10b-5 under the Exchange Act. Evergreen has delivered to the Company and Radio Broadcasting complete and 11 correct copies of its Certificate of Incorporation and Bylaws, as amended to the date of this Agreement. For purposes of this Agreement, a "Significant Subsidiary" of any person means any subsidiary of such person that would constitute a "significant subsidiary" within the meaning of Rule 1-02 of Regulation S-X of the Securities and Exchange Commission (the "SEC"). 2.2 CAPITAL STRUCTURE. The authorized capital stock of Evergreen consists ----------------- of (i) 75,000,000 shares of Evergreen Class A Common Stock, (ii) 4,500,000 shares of Evergreen Class B Common Stock and (iii) 6,000,000 shares of preferred stock, $0.01 par value (the "Preferred Stock"). At the close of business on February 18, 1997: (i) 39,100,750 shares of Evergreen Class A Common Stock were issued and outstanding, 1,720,091 shares of Evergreen Class A Common Stock were reserved for issuance pursuant to outstanding options or warrants to purchase Evergreen Class A Common Stock which have been granted to directors, officers or employees of Evergreen or others ("Evergreen Stock Options"); (ii) 3,114,066 shares of Evergreen Class B Common Stock were issued and outstanding and no shares of Evergreen Class B Common Stock were reserved for issuance for any purpose; and (iii) no shares of Preferred Stock were issued and outstanding. Except as set forth above, at the close of business on February 18, 1997, no shares of capital stock or other equity securities of Evergreen were authorized, issued, reserved for issuance or outstanding. All outstanding shares of capital stock of Evergreen are, and all shares which may be issued pursuant to Evergreen's stock option plans, as amended to the date hereof (the "Evergreen Stock Option Plans"), or any outstanding Evergreen Stock Options will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. No bonds, debentures, notes or other indebtedness of Evergreen or any subsidiary of Evergreen having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which the stockholders of Evergreen or any subsidiary of Evergreen may vote are issued or outstanding. All the outstanding shares of capital stock of each subsidiary of Evergreen have been validly issued and are fully paid and nonassessable and are owned by Evergreen, by one or more wholly- owned subsidiaries of Evergreen or by Evergreen and one or more such wholly- owned subsidiaries, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever (collectively, "Liens"), except for Liens arising out of Evergreen Media Corporation of Los Angeles' ("EMCLA") senior credit facility and senior notes and those that, individually or in the aggregate, could not reasonably be expected to have an Evergreen Material Adverse Effect. Except as set forth above and 12 except for certain provisions of the Certificate of Incorporation of Evergreen relating to transfers of Evergreen Class B Common Stock and to "alien ownership", neither Evergreen nor any subsidiary of Evergreen has any outstanding option, warrant, subscription or other right, agreement or commitment that either (i) obligates Evergreen or any subsidiary of Evergreen to issue, sell or transfer, repurchase, redeem or otherwise acquire or vote any shares of the capital stock of Evergreen or any Significant Subsidiary of Evergreen or (ii) restricts the transfer of Evergreen Common Stock. No shares of capital stock of Evergreen are owned of record or beneficially by any subsidiary of Evergreen. Since the close of business on February 18, 1997 to the date hereof, neither Evergreen nor any subsidiary of Evergreen has issued any capital stock or securities or other rights convertible into or exercisable or exchangeable for shares of such capital stock other than securities issued upon the exercise of Evergreen Stock Options outstanding on February 18, 1997 or other convertible securities outstanding on February 18, 1997. 2.3 AUTHORITY; NONCONTRAVENTION. Evergreen has the requisite corporate --------------------------- power and authority to enter into this Agreement and, subject to the approval of its stockholders as set forth in Section 6.1(a) with respect to the consummation of the Merger (the "Evergreen Stockholder Approval"), to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Evergreen and the consummation by Evergreen of the transactions contemplated hereby have been duly authorized by the necessary corporate action on the part of Evergreen, subject, in the case of the Merger and issuance of Evergreen Common Stock in the Merger, to the Evergreen Stockholder Approval. This Agreement has been duly executed and delivered by Evergreen and, assuming this Agreement constitutes the valid and binding agreement of the Company and Radio Broadcasting, constitutes a valid and binding obligation of Evergreen, enforceable against Evergreen in accordance with its terms except that the enforcement thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditor's rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, (i) conflict with any of the provisions of the Certificate of Incorporation or Bylaws of Evergreen or the comparable documents of any subsidiary of Evergreen, (ii) subject to the governmental filings and other matters referred to in the following sentence, 13 conflict with, result in a breach of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a material benefit under, or require the consent of any person under, any indenture or other agreement, permit, concession, franchise, license or similar instrument or undertaking to which Evergreen or any of its subsidiaries is a party or by which Evergreen or any of its subsidiaries or any of their assets is bound or affected, (iii) result in an obligation by Evergreen, the Surviving Corporation or any of their respective subsidiaries to redeem, repurchase or retire (or offer to redeem, repurchase or retire) any outstanding debt (other than EMCLA's senior credit facility and senior notes) or equity security of Evergreen, the Surviving Corporation or any of their respective subsidiaries, or (iv) subject to the governmental filings and other matters referred to in the following sentence, contravene any law, rule or regulation of any state or of the United States or any political subdivision thereof or therein, or any order, writ, judgment, injunction, decree, determination or award currently in effect, except for (x) conflicts, breaches, defaults or other consequences (collectively, "breaches") referred to above with respect to EMCLA's senior credit facility and senior notes, (y) breaches resulting from the Surviving Corporation's ownership of radio stations in certain markets where such ownership may be in excess of the numerical limits imposed on local multiple radio station ownership under the Telecommunications Act of 1996, together with the rules and regulations thereunder (collectively, the "1996 Telecom Act") or where such ownership otherwise may be subject to challenge by any Governmental Entity under any antitrust or similar law, rule or regulation, or (z) breaches that, individually or in the aggregate, could not reasonably be expected to have an Evergreen Material Adverse Effect or to materially hinder Evergreen's ability to consummate the transactions contemplated by this Agreement. No consent, approval or authorization of, or declaration or filing with, or notice to, any governmental agency or regulatory authority (a "Governmental Entity") which has not been received or made, is required by or with respect to Evergreen or any of its subsidiaries in connection with the execution and delivery of this Agreement by Evergreen or the consummation by Evergreen of the transactions contemplated hereby, except for (i) the filing of premerger notification and report forms under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), with respect to the Merger and the termination or earlier expiration of the applicable waiting periods thereunder, (ii) such filings with and approvals required by the Federal Communications Commission or any successor entity (the "FCC") under the Communications Act of 14 1934, as amended, and the rules, regulations and policies of the FCC promulgated thereunder (collectively, the "Communications Act") including those required in connection with the transfer of control of FCC Licenses (as defined in Section 3.9) for the operation of the Company Licensed Facilities (as defined in Section 3.9) and the transfer of control of the Evergreen FCC Licenses (as defined in Section 2.9), (iii) the filing of (x) the registration statement on Form S-4 to be filed with the SEC by Evergreen in connection with the issuance of Surviving Corporation Common Stock and, if required to be registered under the Securities Act, the Merger Preferred Stock in the Merger (the "Form S-4") and the declaration of effectiveness of the Form S-4 by the SEC, (y) a proxy statement to be filed with the SEC by Evergreen relating to the Evergreen Stockholder Approval (such proxy statement, together with the proxy statement relating to the approval of this Agreement and the Merger by the holders of Shares (the "Company Stockholder Approval"), in each case as amended or supplemented from time to time, (the "Joint Proxy Statement"), and (z) such reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be required in connection with this Agreement and the transactions contemplated by this Agreement, and (iv) the filing of the certificate of merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company and Radio Broadcasting is qualified to do business. 2.4 SEC DOCUMENTS. (i) Evergreen has filed all required reports, ------------- schedules, forms, statements and other documents with the SEC since January 1, 1995 (such reports, schedules, forms, statements and other documents are hereinafter referred to as the "SEC Documents"); (ii) as of their respective dates, the SEC Documents complied with the requirements of the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Documents, and none of the SEC Documents as of such dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and (iii) the consolidated financial statements of Evergreen included in the SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited 15 statements, as permitted by Rule 10-01 of Regulation S-X) and fairly present, in all material respects, the consolidated financial position of Evergreen and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (on the basis stated therein and subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments). 2.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the ------------------------------------ SEC Documents filed and publicly available prior to the date of this Agreement (the "Filed SEC Documents") and except as disclosed in writing by Evergreen to the Company prior to the execution and delivery of the Agreement, or as it relates to the Viacom Transaction (as defined in Section 10.9) or as otherwise agreed to in writing after the date hereof by the Company and Evergreen, since the date of the most recent audited financial statements included in the Filed SEC Documents, Evergreen and its subsidiaries have conducted their business only in the ordinary course, and there has not been (i) any change which could reasonably be expected to have an Evergreen Material Adverse Effect (including as a result of the consummation of the transactions contemplated by this Agreement), (ii) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any Of Evergreen's currently outstanding capital stock, (iii) any split, combination or reclassification of any of its outstanding capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock, (iv) (x) any granting by Evergreen or any of its subsidiaries to any director, officer or other employee or independent contractor of Evergreen or any of its subsidiaries of any increase in compensation or acceleration of benefits, except in the ordinary course of business consistent with prior practice or as was required under employment agreements in effect as of the date of the most recent audited financial statements included in the Filed SEC Documents, (y) any granting by Evergreen or any of its subsidiaries to any director, officer or other employee or independent contractor of any increase in, or acceleration of benefits in respect of, severance or termination pay, or pay in connection with any change of control of Evergreen, except in the ordinary course of business consistent with prior practice or as was required under any employment, severance or termination agreements in effect as of the date of the most recent audited financial statements included in the Filed SEC Documents or (z) any entry by Evergreen or any of its subsidiaries into any employment, severance, change of control, or termination or similar agreement with any director, executive officer or other 16 employee or independent contractor, or (v) any change in accounting methods, principles or practices by Evergreen or any of its subsidiaries materially affecting its assets, liability or business, except insofar as may have been required by a change in generally accepted accounting principles. 2.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS. Except as disclosed ----------------------------------------------- in writing by Evergreen to the Company prior to the execution and delivery of the Agreement, no current or former director, officer, employee or independent contractor of Evergreen or any of its subsidiaries is entitled to receive any payment under any agreement, arrangement or policy (written or oral) relating to employment, severance, change of control, termination, stock options, stock purchases, compensation, deferred compensation, fringe benefits or other employee benefits currently in effect (collectively, the "Evergreen Benefit Plans"), nor will any benefit received or to be received by any current or former director, officer, employee or independent contractor of Evergreen or any of its subsidiaries under any Evergreen Benefit Plan be accelerated or modified, as a result of or in connection with the execution and delivery of, or the consummation of the transactions contemplated by, this Agreement. 2.7 VOTING REQUIREMENTS. The affirmative vote of the holders of at least a ------------------- majority of the votes entitled to be cast by the holders of the outstanding Evergreen Common Stock, voting as a single class, entitled to vote thereon at the Evergreen Stockholders Meeting (as hereinafter defined) with respect to the approval of this Agreement, the Merger and the issuance of shares of Evergreen Common Stock in the Merger is the only vote of the holders of any class or series of Evergreen's capital stock necessary to approve this Agreement and the transactions contemplated by this Agreement. 2.8 STAKE TAKEOVER STATUTES. The Board of Directors of Evergreen has ----------------------- approved the terms of this Agreement and the Stockholders Agreement and the consummation of the transactions contemplated by this Agreement and by the Stockholders Agreement, and such approval is sufficient to render inapplicable to the Merger and the other transactions contemplated by this Agreement and by the Stockholders Agreement the provisions of Section 203 of the Delaware Code. To Evergreen's knowledge, no other state takeover statute or similar statute or regulation applies or purports to apply to the Merger, this Agreement, the Stockholders Agreement or any of the transactions contemplated by this Agreement or the Stockholders Agreement and no provision of the Certificate of Incorporation, Bylaws or other governing instrument of Evergreen or any of its subsidiaries would, 17 directly or indirectly, restrict or impair the ability of Evergreen or Evergreen to consummate the transactions contemplated by this Agreement or the Stockholders Agreement. 2.9 EVERGREEN FCC LICENSES; OPERATIONS OR EVERGREEN LICENSED FACILITIES. ------------------------------------------------------------------- Evergreen and its subsidiaries have operated the radio stations for which Evergreen and any of its subsidiaries holds licenses from the FCC, in each case which are owned or operated by Evergreen and its subsidiaries (the "Evergreen Licensed Facilities",) in material compliance with the terms of the licenses issued by the FCC to Evergreen and its subsidiaries (the "Evergreen FCC Licenses") (complete and correct copies of each of which have been made available to the Company and Radio Broadcasting), and in material compliance with the Communications Act, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have an Evergreen Material Adverse Effect. Evergreen and its subsidiaries have, since acquired by Evergreen, timely filed or made all applications, reports and other disclosures required by the FCC to be made with respect to the Evergreen Licensed Facilities and have timely paid all FCC regulatory fees with respect thereto, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have an Evergreen Material Adverse Effect. Evergreen and each of its subsidiaries have, and are the authorized legal holders of, all the Evergreen FCC Licenses necessary or used in the operation of the businesses of the Evergreen Licensed Facilities as presently operated. All such Evergreen FCC Licenses are validly held and are in full force and effect, unimpaired by any act or omission of Evergreen, each of its subsidiaries (or, to Evergreen's knowledge, their respective predecessors) or their respective officers, employees or agents, except where such impairments could not, individually or in the aggregate, reasonably be expected to have an Evergreen Material Adverse Effect. As of the date hereof, except as disclosed in writing by Evergreen to the Company prior to the execution and delivery of this Agreement, no application, action or proceeding is pending for the renewal or material modification of any of the Evergreen FCC Licenses and, to Evergreen's knowledge, there is not now before the FCC any material investigation, proceeding, notice of violation, order of forfeiture or complaint relating to any Evergreen Licensed Facility that, if adversely determined, could reasonably be expected to have an Evergreen Material Adverse Effect, and Evergreen is not aware of any basis that would cause the FCC not to renew any of the Evergreen FCC Licenses. There is not now pending and, to Evergreen's knowledge, there is not threatened, any action by or before the FCC to revoke, suspend, cancel, rescind or modify in any material respect any of the Evergreen 18 FCC Licenses that, if adversely determined, could reasonably be expected to have an Evergreen Material Adverse Effect (other than proceedings to amend FCC rules or the Communications Act of general applicability to the radio industry). 2.10 BROKERS. Except with respect to Wasserstein, Perella & Co. ------- ("Wasserstein"), all negotiations relating to this Agreement and the transactions contemplated hereby have been carried out by Evergreen directly with the Company and Radio Broadcasting, without the intervention of any person on behalf of Evergreen in such a manner as to give rise to any valid claim by any person against Evergreen, the Company, the Surviving Corporation or any subsidiary of any of them for a finder's fee, brokerage commission, or similar payment. Evergreen has provided the Company with a written summary of the terms of its agreement with Wasserstein, and Evergreen has no other agreements or understandings (written or oral) with respect to such services. 2.11 OPINION OF FINANCIAL ADVISOR. Evergreen has received the opinion of ---------------------------- Wasserstein, dated the date hereof, to the effect that, as of such date, the Exchange Ratio is fair, from a financial point of view, to Evergreen. 2.12 FCC QUALIFICATION. Evergreen and its subsidiaries are fully qualified ----------------- under the Communication Act to be the transferees of control of the Company FCC Licenses (as hereinafter defined); provided, however, that the parties -------- ------- recognize that the consummation of the Merger could cause the Surviving Corporation to exceed in certain cases the numerical limits on local multiple radio station ownership imposed by Section 202(b) of the 1996 Telecom Act and that a waiver of these limits may be required prior to the grant of such transfer of control of the Evergreen FCC Licenses and Company FCC Licenses. Each individual or entity that is an officer, director or attributable stockholder of Evergreen that is proposed to be an officer, director or attributable stockholder of the Surviving Corporation is fully qualified under the Communications Act to be an officer, director or attributable stockholder of the Surviving Corporation. 2.13 COMPLIANCE WITH APPLICABLE LAWS. Each of Evergreen and its ------------------------------- subsidiaries has in effect all Federal, state, local and foreign governmental approvals, authorizations, certificates, filings, franchises, licenses, notices, permits and rights ("Permits") necessary for it to own, lease or operate its properties and assets and to carry on its business as now conducted other than such Permits the absence of which would not, individually or in the aggregate, have an Evergreen Material 19 Adverse Effect, and there has occurred no default under any such Permit other than such defaults which, individually or in the aggregate, would not have an Evergreen Material Adverse Effect. Except as disclosed in the Filed Evergreen SEC Documents, Evergreen and its subsidiaries are in compliance with all applicable statutes, laws, ordinances, rules orders and regulations of any Governmental Entity, except for such noncompliance which individually or in the aggregate would not have a Evergreen Material Adverse Effect. 2.14 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the Filed ---------------------------------- Evergreen SEC Documents, and except for (A) liabilities contemplated by this Agreement or disclosed in writing by Evergreen to the Company prior to the execution and delivery of this Agreement, and (B) EMCLA's obligations with respect to the Viacom Transaction, Evergreen and its subsidiaries do not have any material indebtedness, obligations or liabilities of any kind (whether accrued, absolute, contingent or otherwise) (i) required by GAAP to be reflected on a consolidated balance sheet of Evergreen and its consolidated subsidiaries or in the notes, exhibits or schedules thereto or (ii) which reasonably could be expected to have an Evergreen Material Adverse Effect. 2.15 LITIGATION. Expect as disclosed in the Filed Evergreen SEC ---------- Documents, there is no litigation, administrative action, arbitration or other proceeding pending against Evergreen or any of its subsidiaries or, to the knowledge of Evergreen, threatened that, individually or in the aggregate, could reasonably be expected to (i) have an Evergreen Material Adverse Effect or (ii) prevent, or significantly delay the consummation of the transactions contemplated by this Agreement. Except as set forth in the Filed Evergreen SEC Documents, there is no judgment, order, injunction or decree of any Governmental Entity outstanding against Evergreen or any of its subsidiaries that, individually or in the aggregate, could reasonably be expected to have any effect referred to in the foregoing clauses (i) and (ii) of this Section 2.14. 2.16 TRANSACTIONS WITH AFFILIATES. Other than the transactions ---------------------------- contemplated by this Agreement, the Viacom Transaction and except to the extent disclosed in the Field Evergreen SEC Documents or disclosed in writing to the Company by Evergreen prior to the execution and delivery of this Agreement, there have been no transactions, agreements, arrangements or understandings between Evergreen or its subsidiaries, on the one hand, and Evergreen's affiliates (other than subsidiaries of Evergreen) or any other person, on the other hand, that would be 20 required to be disclosed under Item 404 of Regulation S-K under the Securities Act. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND RADIO BROADCASTING The Company and Radio Broadcasting hereby, jointly and severally, represent and warrant to Evergreen as follows: 3.1 ORGANIZATION, STANDING AND CORPORATE POWER. The Company and each of ------------------------------------------ its Significant Subsidiaries (including Radio Broadcasting) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and has the requisite corporate power and authority to carry on its business as now being conducted. The Company and each of its Significant Subsidiaries is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, except where the failure to be so qualified could not reasonably be expected to have a material adverse effect on the business, properties, results of operations or condition (financial or otherwise) of the Company and its subsidiaries, considered as a whole (a "Company Material Adverse Effect"); provided, however, that for purposes of Sections 3.13, 3.14, 3.15, and 3.16, no - -------- ------- fact, event or circumstances shall be deemed to constitute a Company Material Adverse Effect unless in addition to otherwise specifying the elements of the definition given above, the relevant event, fact or circumstance not disclosed pursuant to such representations would be a material fact, event or circumstance, the omission of which in a document filed with the SEC pursuant to the Exchange Act would be such as to cause the statements contained in such filing to be misleading within the meaning of Rule 10b-5 under the Exchange Act. Each of the Company and Radio Broadcasting have delivered to Evergreen complete and correct copies of its Certificate of Incorporation and Bylaws, as amended to the date of this Agreement. 3.2 COMPANY AND RADIO BROADCASTING CAPITAL STRUCTURE. The authorized ------------------------------------------------ capital stock of the Company consists of (i) 40,000,000 shares of Company Class A Common Stock, (ii) 10,000,000 shares of Company Class B Common Stock, (iii) 10,000,000 shares of Class C Common Stock, $0.01 par value ("Company Class C Common Stock"), of the Company, and (iv) 10,000,000 shares of preferred stock, $0.01 par value, of which 2,300,000 have been designated as Company Convertible Preferred 21 Stock. The authorized capital stock of Radio Broadcasting consists of 1,000 shares of common stock, $0.01 par value ("Radio Broadcasting Common Stock"), and 10,000,000 shares of preferred stock, $0.01 par value, of which 1,000,000 have been designated as Radio Broadcasting 12 1/4% Preferred Stock and 3,600,000 have been designated as Radio Broadcasting 12% Preferred Stock. At the close of business on February 18, 1997: (i) 10,437,212 shares of Company Class A Common Stock were issued and outstanding, 1,926,152 shares of Company Class A Common Stock were reserved for issuance pursuant to outstanding options or warrants to purchase shares of Company Class A Common Stock which have been granted to directors, officers or employees of the Company or others ("Company Stock Options"), 3,343,465 shares of Company Class A Common Stock were reserved for issuance upon conversion of the Company Convertible Preferred Stock, and 8,547,910 shares of Company Class A Common Stock were reserved for issuance upon the conversion of the Company Class B Common Stock; (ii) 8,547,910 shares of Company Class B Common Stock were issued and outstanding and no shares of Company Class B Common Stock were reserved for issuance for any purpose; (iii) no shares of Company Class C Common Stock were issued and outstanding and none may be issued in the future, and (iv) 2,200,000 shares of Company Convertible Preferred Stock were issued and outstanding, no shares of Company Convertible Preferred Stock were held in the treasury of the Company and no shares of Company Convertible Preferred Stock were reserved for issuance for any purpose. At the close of business on February 18, 1997: (i) 1,000 shares of Radio Broadcasting Common Stock were issued and outstanding and no shares of Radio Broadcasting Common Stock were reserved for issuance for any purpose; (ii) 1,000,000 shares of Radio Broadcasting 12 1/4% Preferred Stock were issued and outstanding, no shares of Radio Broadcasting 12 1/4% Preferred Stock were held in treasury by Radio Broadcasting and no shares of Radio Broadcasting 12 1/4% Preferred Stock were reserved for issuance for any purpose; and (iii) 2,000,000 shares of Radio Broadcasting 12% Preferred Stock were issued and outstanding, no shares of Radio Broadcasting 12% preferred Stock were held in treasury by Radio Broadcasting and 1,600,000 shares of Radio Broadcasting 12% Preferred Stock were reserved for issuance in lieu of cash dividends. Except as set forth above, at the close of business on February 18, 1997, no shares of capital stock or other equity securities of the Company and Radio Broadcasting were authorized, issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company and Radio Broadcasting, and all shares which may be issued pursuant to the Company's stock option plans, as amended to the date hereof (the"Company Stock Option Plans")or any outstanding Company Stock Options will be, when issued, duly authorized, validly issued,fully paid 22 and nonassessable and not subject to preemptive rights. No bonds, debentures, notes or other indebtedness of the Company or any subsidiary of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which the stockholders of the Company or any subsidiary of the Company may vote are issued or outstanding. All the outstanding shares of capital stock of each subsidiary of the Company have been validly issued and are fully paid and nonassessable and, except for the Radio Broadcasting Preferred Stock, are owned by the Company or its subsidiaries, free and clear of all Liens, except for Liens arising out of the Radio Broadcasting's senior credit facility and those that, individually or in the aggregate, could not reasonably be expected to have a Company Material Adverse Effect. Except as set forth above and except (i) for certain provisions of the Certificate of Incorporation and Bylaws of the Company relating to transfers of the Company Class B Common Stock and "alien ownership", and (ii) as provided in the Exchange and Registration Rights Agreement entered into by Radio Broadcasting in connection with the sale of the Radio Broadcasting 12% Preferred Stock, neither the Company nor any subsidiary of the Company has any outstanding option, warrant, subscription or other right, agreement or commitment that either (i) obligates the Company or any subsidiary of the Company to issue, sell or transfer, repurchase, redeem or otherwise acquire or vote any shares of the capital stock of the Company or any Significant Subsidiary of the Company or (ii) restricts the transfer or Shares. No shares of capital stock of the Company are owned of record or beneficially by any subsidiary of the Company. Since the close of business on February 18, 1997 to the date hereof, neither the Company nor any subsidiary of the Company has issued any capital stock or securities or other rights convertible into or exercisable or exchangeable for capital stock other than securities issued upon the exercise of Company Stock Options outstanding on February 18, 1997 or other convertible securities outstanding on February 18, 1997. 3.3 AUTHORITY; NONCONTRAVENTION. Each of the Company and Radio --------------------------- Broadcasting has all requisite corporate power and authority to enter into this Agreement and, subject to the Company Stockholder Approval, to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by each of the Company and Radio Broadcasting and the consummation by each of them of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of the Company and Radio Broadcasting, subject, in the case of the consummation of the Merger, to the Company Stockholder Approval. The Company has 23 executed a written consent as stockholder of Radio Broadcasting approving the Merger and this Agreement, and such written consent is the only vote of any stockholders of Radio Broadcasting required in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and Radio Broadcasting and, assuming this Agreement constitutes the valid and binding agreement of Evergreen, constitutes a valid and binding obligation of each of the Company and Radio Broadcasting, enforceable against each of them in accordance with its terms except that the enforcement thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditor's rights generally and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions of this Agreement will not (i) conflict with any of the provisions of the Certificate of Incorporation or Bylaws of the Company or the comparable documents of any subsidiary of the Company, (ii) subject to the governmental filings and other matters referred to in the following sentence, conflict with, result in a breach of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a material benefit under, or require the consent of any person under, any indenture, or other agreement, permit, concession, franchise, license or similar instrument or undertaking to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their assets is bound or affected, (iii) except as may be the case with respect to Dissenting Shares, result in an obligation by the Company, the Surviving Corporation or any of their respective subsidiaries to redeem, repurchase or retire (or offer to redeem, repurchase or retire) any outstanding debt (other than Radio Broadcasting's senior credit facility) or equity security of the Company, the Surviving Corporation or any of their respective subsidiaries, or (iv) subject to the governmental filings and other matters referred to in the following sentence, contravene any law, rule or regulation of any state or of the United States or any political subdivision thereof or therein, or any order, writ, judgment, injunction, decree, determination or award currently in effect, except for (x) breaches with respect to the Radio Broadcasting's senior credit facility, (y) breaches resulting from the Surviving Corporation's ownership of radio stations in certain markets where such ownership may be in excess of the numerical limits imposed on local multiple radio station 24 ownership under the 1996 Telecom Act or where such ownership otherwise may be subject to challenge by any Governmental Entity under any antitrust or similar law, rule or regulation, or (z) breaches that, individually or in the aggregate, could not reasonably be expected to have a Company Material Adverse Effect or to materially hinder the Company's and Radio Broadcasting's ability to consummate the transactions contemplated by this Agreement. No consent, approval or authorization of, or declaration or filing with, or notice to, any Governmental Entity which has not been received or made is required by or with respect to the Company or Radio Broadcasting in connection with the execution and delivery of this Agreement by the Company and Radio Broadcasting or the consummation by the Company and Radio Broadcasting of any of the transactions contemplated by this Agreement, except for (i) the filing of premerger notification and report forms under the HSR Act with respect to the Merger, (ii) such filing with and approvals required by the FCC under the Communications Act including those required in connection with the transfer of the Company FCC Licenses (as defined in Section 3.9) for the operation of the Company Licensed Facilities (as defined in Section 3.9), (iii) the Joint Proxy Statement relating to the Company Stockholder Approval and such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement, and (iv) the filing of the certificate of merger with the Delaware Secretary of State, and appropriate documents with the relevant authorities of the other states in which the Company and Radio Broadcasting are qualified to do business. 3.4 SEC DOCUMENTS. The Company and its subsidiaries have filed all ------------- required reports, schedules, forms, statements and other documents with the SEC since January 1, 1995 (the "Company SEC Documents"). As of their respective dates, the Company SEC Documents complied with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents, and none of the Company SEC Documents as of such dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Company SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of 25 unaudited statements, as permitted by Rule 10-01 of Regulation S-X) and fairly present, in all material respects, the consolidated or combined financial position of the Company and its subsidiaries as of the dates thereof and the consolidated or combined results of their operations and cash flows for the periods then ended (on the basis stated therein and subject, in the case of unaudited statements, to normal year-end audit adjustments). 3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the ------------------------------------ Company SEC Documents filed and publicly available prior to the date of this Agreement (the "Filed Company SEC Documents") and except as set forth on Schedule 3.5 hereto or as it relates to the Viacom Transaction or as otherwise - ------------ disclosed in writing by the Company to Evergreen prior to the execution and delivery of this Agreement, since the date of the most recent audited financial statements included in the Filed Company SEC Documents, the Company and its subsidiaries have conducted their business only in the ordinary course, and there has not been (i) any change which could reasonably be expected to have a Company Material Adverse Effect (including as a result of the consummation of the transactions contemplated by this Agreement), (ii) any declaration, setting aside or payment of any dividend or distribution (whether in cash, stock or property) with respect to any of the Company's outstanding capital stock (other than the payment of regular cash dividends on the Company Convertible Preferred Stock in accordance with usual record and payment dates), (iii) any split, combination or reclassification of any of its outstanding capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iv) (x) any granting by the Company or any of its subsidiaries to any director, officer or other employee or independent contractor of the Company or any of its subsidiaries of any increase in compensation or acceleration of benefits, except in the ordinary course of business consistent with prior practice or as was required under employment agreements in effect as of the date of the most recent audited financial statements included in the Filed Company SEC Documents, (y) any granting by the Company or any of its subsidiaries to any director, officer or other employee or independent contractor of any increases in, or acceleration of benefits in respect of, severance or termination pay, or pay in connection with any change of control of the Company, except in the ordinary course of business consistent with prior practice or as was required under any employment, severance or termination agreements in effect as of the date of the most recent audited financial statements included in the Filed Company SEC Documents or (z) any entry by the 26 Company or any of its subsidiaries into any employment, severance, change of control, or termination or similar agreement with any such director, officer or other employee or independent contractor, or (v) any exchange in accounting methods, principles or practices by the Company or any of its subsidiaries materially affecting its assets, liability or business, except insofar as may have been required by a change in generally accepted accounting principles. 3.6 NO EXTRAORDINARY PAYMENTS OR CHANGE IN BENEFITS. No current or former ----------------------------------------------- director, officer, employee or independent contractor of the Company or any of its subsidiaries is entitled to receive any payment under any agreement, arrangement or policy (written or oral) relating to employment, severance, change of control, termination, stock options, stock purchases, compensation, fringe benefits or other employee benefits currently in effect (collectively, the "Company Benefits Plans"), nor will any benefit received or to be received by any current or former director, officer, employee or independent contractor of the Company or any of its subsidiaries under any Company Benefit Plan be accelerated or modified, as a result of or in connection with the execution and delivery of, or the consummation of the transactions contemplated by, this Agreement. 3.7 VOTING REQUIREMENTS. The affirmative vote of the Principal Company ------------------- Stockholders with respect to the approval of this Agreement and the Merger are the only votes of the holders of any class or series of the Company's capital stock necessary to approve this Agreement and the transactions contemplated by this Agreement. 3.8 STATE TAKEOVER STATUTES. The Board of Directors of the Company has ----------------------- approved the terms of this Agreement and the Stockholders Agreement and the consummation of the transactions contemplated by this Agreement and by the Stockholders Agreement, and such approval is sufficient to render inapplicable to the Merger and the other transactions contemplated by this Agreement and by the Stockholders Agreement the provisions of Section 203 of the Delaware Code. To the Company's knowledge, no other state takeover statue or similar statute or regulation applies or purports to apply to the Merger, this Agreement, the Stockholders Agreement or any of the transactions contemplated by this Agreement or the Stockholders Agreement and no provision of the Certificate of Incorporation, Bylaws or other governing instrument of the Company or any of its subsidiaries would, directly or indirectly, restrict or impair the ability of the Company or Evergreen to consummate the transactions contemplated by this Agreement or the Stockholders Agreement. 27 3.9 COMPANY FCC LICENSES; OPERATIONS OF COMPANY LICENSED FACILITIES. The --------------------------------------------------------------- Company and its subsidiaries have operated the radio stations for which the Company and any of its subsidiaries holds licenses from the FCC, in each case which are owned or operated by the Company and its subsidiaries (the "Company Licensed Facilities") in material compliance with the terms of the licenses issued by the FCC to the Company and its subsidiaries (the "Company FCC Licenses") (complete and correct copies of each of which have been made available to Evergreen), and in material compliance with the Communications Act, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. The Company and its subsidiaries have, since acquired by the Company, timely filed or made all applications, reports and other disclosures required by the FCC to be made with respect to the Company Licensed Facilities and have timely paid all FCC regulatory fees with respect thereto, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. The Company and each of its subsidiaries have, and are the authorized legal holders of, all the Company FCC Licenses necessary or used in the operation of the businesses of the Company Licensed Facilities as presently operated. All such Company FCC Licenses are validly held and are in full force and effect, unimpaired by any act or omission of the Company, each of its subsidiaries (or to the Company's and Radio Broadcasting's knowledge, their respective predecessors) or their respective officers, employees or agents, except where such impairments could not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. As of the date hereof, except as disclosed in writing by the Company to Evergreen prior to the execution and delivery of this Agreement, no application, action or proceeding is pending for the renewal or material modification of any of the Company FCC Licenses and, to the best of the Company's knowledge, there is not now before the FCC any material investigation, proceeding, notice of violation, order of forfeiture or complaint against the Company or any of its subsidiaries relating to the Company Licensed Facilities that, if adversely determined, would have a Company Material Adverse Effect, and the Company is not aware of any basis that would cause the FCC not to renew any of the Company FCC Licenses. There is not now pending and, to the Company's knowledge, there is not threatened, any action by or before the FCC to revoke, suspend, cancel rescind or modify in any material respect any of the Company FCC Licenses that, if adversely determined, would have a Company Material Adverse Effect (other than proceedings to amend FCC rules or the Communications Act of general applicability to the radio industry). 28 3.10 BROKERS. Except with respect to HM2/Management Partners, L.P. ("Hicks ------- Muse") Star Media, Inc. ("Star Media"), Greenhill & Co., LLC ("Greenhill") and Goldman Sachs & Co. ("Goldman Sachs"), all negotiations relating to this Agreement, the transactions contemplated hereby and by the Viacom Transaction have been carried out by the Company directly with Evergreen, without the intervention of any person on behalf of the Company in such a manner as to give rise to any valid claim by any person against the Company, Evergreen, the Surviving Corporation or any subsidiary of any of them for a finder's fee, brokerage commission, or similar payment. The Company has provided Evergreen with a written summary of the terms of its agreements with Hicks Muse, Star Media, Greenhill and Goldman Sachs, and the Company has no other agreements or understandings (written or oral) with respect to such services. 3.11 OPINION OF FINANCIAL ADVISOR. The Company has received the opinions of ---------------------------- Greenhill and Goldman Sachs, dated the date hereof, to the effect that, as of such date, the Exchange Ratio is fair, from a financial point of view, to the Company's stockholders. 3.12 FCC QUALIFICATION. The Company and its subsidiaries are fully ----------------- qualified under the Communications Act to be the transferors of control of the Company FCC Licenses; provided, however, that the parties recognize that the --------- -------- consummation of the Merger could cause the Surviving Corporation and Thomas O. Hicks to exceed in certain cases the numerical limits on local multiple radio station ownership imposed by Section 202(b) of the 1996 Telecom Act and that a waiver of these limits may be required prior to the grant of such transfer of control of the Evergreen FCC Licenses and Company FCC Licenses. Each individual or entity that is an officer, director or attributable stockholder of the Company that is proposed to be an officer, director or attributable stockholder of the Surviving Corporation is fully qualified under the Communications Act to be an officer, director or attributable stockholder of the Surviving Corporation other than with respect to the numerical limits on multiple ownership described in the preceding sentence. 3.13 COMPLIANCE WITH APPLICABLE LAWS. Each of the Company and its ------------------------------- subsidiaries has in effect all Federal, state, local and foreign governmental Permits necessary for it to own, lease or operate its properties and assets and to carry on its business as now conducted other than such Permits the absence of which would not, individually or in the aggregate, have a Company Material Adverse Effect, and there has occurred no default under any such Permit other than such defaults which, individually or in the 29 aggregate, would not have a Company Material Adverse Effect. Except as disclosed in the Filed Company SEC Documents, the Company and its subsidiaries are in compliance with all applicable statutes, laws, ordinances, rules orders and regulations of any Governmental Entity, expect for such noncompliance which individually or in the aggregate would not have a Company Material Adverse Effect. 3.14 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the ---------------------------------- Filed Company SEC Documents, and except for (A) liabilities contemplated by this Agreement or disclosed in writing by the Company to Evergreen prior to the execution and delivery of this Agreement, and (B) the Company's and Radio Broadcasting's obligations with respect to the Viacom Transaction, the Company and its subsidiaries do not have any material indebtedness, obligations or liabilities of any kind (whether accrued, absolute, contingent or otherwise) (i) required by GAAP to be reflected on a consolidated balance sheet of the Company and its consolidated subsidiaries or in the notes, exhibits or schedules thereto or (ii) which reasonably could be expected to have a Company Material Adverse Effect. 3.15 LITIGATION. Except as disclosed in the Filed Company SEC ---------- Documents, there is no litigation, administrative action, arbitration or other proceeding pending against the Company or any of its subsidiaries or, to the knowledge of the Company, threatened that, individually or in the aggregate, could reasonably be expected to (i) have a Company Material Adverse Effect or (ii) prevent, or significantly delay the consummation of the transactions contemplated by this Agreement. Except as set forth in the Filed Company SEC Documents, there is no judgment, order injunction or decree of any Governmental Entity outstanding against the Company or any of its subsidiaries that, individually or in the aggregate, could reasonably be expected to have any effect referred to in the foregoing clauses (i) and (ii) of this Section 3.15. 3.16 TRANSACTION WITH AFFILIATES. Other than the transactions --------------------------- contemplated by this Agreement, the Viacom Transaction and except to the extent disclosed in the Filed Company SEC Documents or disclosed in writing by Chancellor to Evergreen prior to the execution and delivery of this Agreement, there have been no transactions, agreements, arrangements or understandings between the Company or its subsidiaries, on the one hand, and the Company's affiliates (other than subsidiaries of the Company) or any other person, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act. 30 ARTICLE IV ADDITIONAL AGREEMENTS 4.1 PREPARATION OF FORM S-4 AND THE JOINT PROXY STATEMENT; INFORMATION ------------------------------------------------------------------ SUPPLIED. (a) As soon as practicable following the date of this Agreement, the - -------- Company and Evergreen shall prepare and file with the SEC the Joint Proxy Statement and Evergreen shall prepare and file with the SEC the Form S-4, in which the Joint Proxy Statement will be included as a prospectus. Each of the Company and Evergreen shall use its best efforts to have the Form S-4 declared effective under the Securities Act as promptly as practicable after such filing. The Company will use its best efforts to cause the Joint Proxy Statement to be mailed to the Company's stockholders, and Evergreen will use its best efforts to cause the Joint Proxy Statement to be mailed to Evergreen's stockholders, in each case as promptly as practicable after the Form S-4 is declared effective under the Securities Act. Evergreen shall also take any action (other than qualifying to do business in any jurisdiction in which it is not now so qualified or take any action that would subject it to the service of process in suits, other than as to matters and transactions relating to the Form S-4, in any jurisdiction where it is not so subject) required to be taken under any applicable state securities laws in connection with the issuance of Evergreen Common Stock in the Merger and the Company shall furnish all information concerning the Company and the holders of the Shares as may be reasonably requested in connection with any such action. (b) the Company agrees that none of the information supplied or to be supplied by the Company specifically for inclusion or incorporation by reference in (i) the Form S-4 will not, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, or (ii) the Joint Proxy Statement will not, at the date it is first mailed to the Company's stockholders or at the time of the Stockholders Meeting (as defined in Section 4.2), contain any statement which, at the time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the 31 same meeting or subject matter thereof which has become false or misleading. The Company agrees that the Joint Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except with respect to statements made or incorporated by reference therein based on information supplied by Evergreen specifically for inclusion or incorporated by reference in the Joint Proxy Statement. (c) Evergreen agrees that none of the information supplied or to be supplied by Evergreen specifically for inclusion or incorporation by reference in (i) the Form S-4 will not, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therin, in light of the circumstances under which they are made, not misleading, or (ii) the Joint Proxy Statement will not, at the date the Joint Proxy Statement is first mailed to Evergreen's stockholders, contain any statement which, at the time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter thereof which has become false or misleading. Evergreen agrees that the Form S-4 will comply as to form in all material respects with the requirements of the Securities Act and the rules and regulations promulgated thereunder and the Joint Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder, except with respect to statements made or incorporated by reference in either the Form S-4 or the Joint Proxy Statement based on information supplied by the Company specifically for inclusion or incorporation by reference therein. 4.2 MEETINGS OF COMPANY STOCKHOLDERS AND EVERGREEN STOCKHOLDERS. (a) The ---------------------------------------------------------- Company will take all action necessary in accordance with applicable law and its Certificate of Incorporation and Bylaws to convene a meeting of its stockholders (the "Stockholders Meeting") to submit this Agreement, together with the affirmative recommendation of the Company's Board of Directors, to the Company's stockholders so that they may consider and vote upon the approval of this Agreement. The Company will use its best efforts to hold the Stockholders Meeting as soon as practicable after the date hereof and to 32 obtain the favorable votes of its stockholders. Pursuant to the Stockholders Agreement, the Principal Company Stockholders have agreed to vote all Shares owned by them or for which they have the right to vote in favor of the approval of this Agreement and the Merger, which vote the Company represents and warrants shall be sufficient to obtain the Company Stockholder Approval. (b) Evergreen will take all action necessary in accordance with applicable law and its Certificate of Incorporation and Bylaws to convene a meeting of its stockholders (the "Evergreen Stockholders Meeting") to submit this Agreement, together with the affirmative recommendation of Evergreen's Board of Directors, to Evergreen's stockholders so that they may consider and vote upon the approval of this Agreement. Evergreen will use its best efforts to hold the Evergreen Stockholders Meeting as soon as practicable after the date hereof and to obtain the favorable votes of its stockholders. Pursuant to the Stockholders Agreement, the Principal Evergreen Stockholder has agreed to vote all shares of Evergreen Common Stock owned by him or for which he has the right to vote in favor of the approval of this Agreement and the Merger. (c) Each of Evergreen and the Company agrees to cooperate and use its respective best efforts to hold the Evergreen Stockholders Meeting and the Stockholders Meeting on the same day. 4.3 ACCESS TO INFORMATION; CONFIDENTIALITY. Upon reasonable notice, each -------------------------------------- of the Company and Evergreen shall, and shall cause each of its respective subsidiaries to, afford to the other party and to the officers, employees, counsel, financial advisors and other representatives of such other party reasonable access during normal business hours during the period prior to the Effective Time to all its properties, books, contracts, commitments, personnel and records and, during such period, each of the Company and Evergreen shall, and shall cause each of its respective subsidiaries to, furnish as promptly as practicable to the other party such information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. Except as required by law, each of the Company and Evergreen will hold, and will cause its respective directors, officers, partners, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold, any nonpublic information obtained from Evergreen or the Company, respectively, in confidence to the extent required by and in accordance with the provisions of the letters dated January 27, 1997, each between Evergreen and the Company (collectively, the "Confidentiality 33 Agreements"), and each of the Company and Evergreen agrees that prior to the Effective Time neither party will use any of such nonpublic information to directly or indirectly divert or attempt to divert any business, customer or employee of the other. 4.4 PUBLIC ANNOUNCEMENTS. Evergreen, on the one hand, and the Company, on -------------------- the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement, including the Merger, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to rules of The Nasdaq Stock Market. 4.5 ACQUISITION PROPOSALS. (a) The Company shall not, nor shall it permit --------------------- any of its subsidiaries to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative of, the Company or any of its subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage the submission of any Acquisition Proposal (as hereinafter defined) or (ii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal. The Company will notify Evergreen immediately of any inquiries or proposals with respect to any Acquisition Proposal that is received by, or any such negotiations or discussions that are sought to be initiated with, the Company. For purposes of this Agreement, "Acquisition Proposal" means any proposal with respect to a merger, consolidation, share exchange or similar transaction involving the Company or Evergreen or any Significant Subsidiary of the Company or Evergreen, or any purchase of all or any significant portion of the assets of the Company or Evergreen or any Significant Subsidiary of the Company or Evergreen, or any equity interest in the Company or Evergreen or any Significant Subsidiary of the Company or Evergreen, other than the transactions contemplated hereby; provided, however, that an Acquisition Proposal shall not -------- ------- include a currently planned acquisition or disposition of broadcast properties disclosed in writing prior to execution and delivery of this Agreement by either the Company or Evergreen to the other. (b) Evergreen shall not, nor shall it permit any of its subsidiaries to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, 34 attorney or other advisor or representative of, Evergreen or any of its subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage the submission of any Acquisition Proposal or (ii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may be reasonably be expected to lead to, any Acquisition Proposal. Evergreen will notify the Company immediately of any inquiries or proposals with respect to any Acquisition Proposal that is received by, or any negotiations or discussions that are sought to be initiated with, Evergreen. (c) Nothing contained in this Section 4.5 shall prohibit the respective Board of Directors of the Company or Evergreen from taking and disclosing to its stockholders a position in accordance with Rules 14d-9 and 14e-2 under the Exchange Act with respect to a tender offer or any exchange offer commenced by a third party. 4.6 CONSENTS, APPROVALS AND FILINGS. The Company and Evergreen will make ------------------------------- and cause their respective subsidiaries and, to the extent necessary, their other affiliates to make all necessary filings, as soon as practicable, including, without limitation, those required under the HSR Act, the Securities Act, the Exchange Act, and the Communications Act (including filing an application with the FCC for the transfer of control of the Company FCC Licenses and the Evergreen FCC Licenses, which the parties shall file as soon as practicable (and in any event not more than 30 days) after the date of this Agreement), in order to facilitate prompt consummation of the Merger and the other transactions contemplated by this Agreement. In addition, the Company and Evergreen will each use its best efforts, and will cooperate fully and in good faith with each other, (i) to comply as promptly as practicable with all governmental requirements applicable to the Merger and the other transactions contemplated by this Agreement and the Viacom Transaction, and (ii) to obtain as promptly as practicable all necessary permits, orders or other consents of Governmental Entities and consents of all third parties necessary for the consummation of the Merger and the other transactions contemplated by this Agreement and the Viacom Transaction, including without limitation, the consent of the FCC to the transfer of control of the Company FCC Licenses and the Evergreen FCC Licenses, and the transfer of any FCC licenses in connection with the Viacom Transaction. Each of the Company and Evergreen shall use its best efforts to promptly provide such information and communications to Governmental Entities as such Governmental Entities may reasonably request. Each of the parties shall provide to the other party copies of all applications in 35 advance of filing or submission of such applications to Governmental Entities in connection with this Agreement and shall make such revisions thereto as reasonably requested by such other party. Each party shall provide to the other party the opportunity to participate in all meetings and material conversations with Governmental Entities. 4.7 AFFILIATES LETTERS. Prior to the Closing Date, the Company shall ------------------ deliver to Evergreen a letter identifying all persons who may be, at the time the Merger is submitted for approval to the stockholders of the Company, "affiliates" of the Company for purposes of Rule 145 under the Securities Act. The Company shall use its best efforts to cause each such person to deliver to Evergreen on or prior to the Closing Date a written agreement substantially in the form attached as Exhibit A hereto. --------- 4.8 NASDAQ LISTING. Evergreen shall use its best efforts to cause the -------------- shares of Surviving Corporation Common Stock to be issued in the Merger to be approved for quotation on the Nasdaq National Market, subject to official notice of issuance, prior to the Closing Date. 4.9 STOCKHOLDER LITIGATION. Each of the Company and Evergreen shall give ---------------------- the other party the opportunity to participate in the defense or settlement of any stockholder litigation against it and its directors relating to the transactions contemplated by this Agreement; provided, however, that no such settlement shall be agreed to by the Company or Evergreen without the other party's consent, which consent shall not be unreasonably withheld. 4.10 INDEMNIFICATION. The Certificate of Incorporation and Bylaws of the --------------- Surviving Corporation and each of its subsidiaries shall contain, respectively, the provisions with respect to indemnification set forth in the Amended and Restated Certificate of Incorporation of the Surviving Corporation attached hereto as Annex I and the Bylaws of the Surviving Corporation attached hereto ------- as Annex II, and such provisions shall not be amended, repealed or otherwise -------- modified for a period of six years after the Effective Time in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors or officers of the Company or Evergreen or any of their respective subsidiaries (the "Indemnified Parties") in respect of actions or omissions occurring at or prior to the Effective Time (including, without limitation, the transactions contemplated by this Agreement), unless such modification is required by law. Evergreen will cause to be maintained for a period of not less than six years 36 from the Effective Time the Company's current directors' and officers' insurance and indemnification policies to the extent that they provide coverage for events occurring prior to the Effective Time (the "D&O Insurance") for all persons who are directors and executive officers of the Company or Evergreen on the date of this Agreement, so long as the annual premium therefor would not be in excess of 250% of the last annual premium paid prior to the date of this Agreement; provided, however, that the Surviving Corporation may, in lieu of maintaining - -------- ------- such existing D&O Insurance as provided above, cause coverage to be provided under any policy maintained for the benefit of Evergreen or any of its subsidiaries so long as the terms thereof are not less advantageous to the beneficiaries thereof than the existing D&O Insurance. The provisions of this Section 4.10 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his heirs and his personal representatives and shall be binding on all successors and assigns of Evergreen, the Company and the Surviving Corporation. 4.11 LETTER OF THE COMPANY'S ACCOUNTANTS. The Company shall use its ----------------------------------- reasonable best efforts to cause to be delivered to Evergreen a letter of Coopers & Lybrand LLP, the Company's independent public accountants, and any other independent public accountants whose report would be required to be included in the Form S-4 pursuant to the rules and regulations under the Securities Act, each dated a date within two business days before the date on which the Form S-4 shall become effective and an additional letter from each of them dated a date within two business days before the Closing Date, each addressed to Evergreen, in form and substance reasonably satisfactory to Evergreen and customary in scope and substance for letters delivered by independent public accountants in connection with registration statements similar to the Form S-4. 4.12 LETTER OF EVERGREEN'S ACCOUNTANTS. Evergreen shall use its reasonable --------------------------------- best efforts to cause to be delivered to the Company a letter of KPMG Peat Marwick LLP, Evergreen's independent public accountants, and any other independent public accountants whose report would be required to be included in the Form S-4 pursuant to the rules and regulations under the Securities Act, each dated a date within two business days before the date on which the Form S-4 shall become effective and an additional letter from each of them dated a date within two business days before the Closing Date, each addressed to the Company, in form and substance reasonably satisfactory to the Company and customary in scope and substance for letters 37 delivered by independent public accountants in connection with registration statements similar to the Form S-4 ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER 5.1 CONDUCT OF BUSINESS. Except as contemplated by this Agreement, during ------------------- the period from the date of this Agreement to the Effective Time, the Company and Evergreen shall, and shall cause their respective subsidiaries to, act and carry on their respective businesses in the ordinary course of business and, to the extent consistent therewith, use reasonable efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve the goodwill of those engaged in material business relationships with them. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time and except as set forth in the Filed Company SEC Documents or the Filed Evergreen SEC Documents (including any pending station acquisitions, dispositions and/or swaps and the financing thereof described therein), as applicable, or in connection with the Viacom Transaction or as otherwise disclosed in writing by one party hereto to the other parties hereto prior to the execution and delivery of this Agreement, the Company and Evergreen shall not, and shall not permit any of their respective subsidiaries to, without the prior consent of the other party hereto: (i) (w) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of the Company's or Evergreen's or any of their respective subsidiaries' outstanding capital stock (other than, with respect to the Company and its subsidiaries, the payment of regular cash dividends by the Company on the Company Convertible Preferred Stock and the payment by Radio Broadcasting of dividends on the Radio Broadcasting 12% Preferred Stock in additional shares of such preferred stock, in each case in accordance with usual record and payment dates), (x) split, combine or reclassify any of its outstanding capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock, (y) purchase, redeem or otherwise acquire any shares of outstanding capital stock or any rights, warrants or options to acquire any such shares (other than, with respect to the Company and its subsidiaries, in connection with Radio Broadcasting's offer to exchange its 12% Series A Exchangeable Preferred Stock for the Radio Broadcasting 12% 38 Preferred Stock (the "Exchange Offer")), or (z) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock, any other equity securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, equity securities or convertible securities other than (1) upon the exercise of Company Stock Options and Evergreen Stock Options outstanding on the date of this Agreement, (2) pursuant to employment agreements or other contractual arrangements in effect on the date of this Agreement, or (3) with respect to the Company and its subsidiaries, in connection with the Exchange Offer or upon the conversion of the Company Convertible Preferred Stock; (ii) amend its Certificate of Incorporation, Bylaws or other comparable charter or organizational documents (other than, in the case of Radio Broadcasting, as necessary to consummate the Exchange Offer); (iii) acquire any business (including the assets thereof) or any corporation, partnership, joint venture, association or other business organization or division thereof; (iv) sell, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets that are material to the Company or Evergreen and their respective subsidiaries taken as a whole; (v) (x) other than working capital borrowings in the ordinary course of business and consistent with past practices incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, other than indebtedness owning to or guarantees of indebtedness owing to the Company or Evergreen or any of their respective direct or indirect wholly-owned subsidiaries or (y) make any material loans or advances to any other person, other than to the Company or Evergreen, or to any of their respective direct or indirect wholly-owned subsidiaries and other than routine advances to employees; (vi) make any tax election or settle or compromise any income tax liability that could reasonably be expected to be material to the Company or Evergreen and their respective subsidiaries taken as a whole; (vii) pay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of 39 business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company or Evergreen included in the Filed Company SEC Documents or the Filed Evergreen SEC Documents, respectively, or incurred since the date of such financial statements in the ordinary course of business consistent with past practice; (viii) make any material commitments or agreements for capital expenditures or capital additions or betterments except as materially consistent with the budget for capital expenditures as of the date of this Agreement and consistent with past practices; (ix) except as may be required by law, (1) other than in the ordinary course of business and consistent with past practices, make any representation or promise, oral or written, to any employee or former director, officer or employee of the Company or Evergreen or any of their respective subsidiaries which is inconsistent with the terms of any Company Benefit Plan or Evergreen Benefit Plan, respectively; (2) other than in the ordinary course of business and consistent with past practices, make any change to, or amend in any way, the contracts, salaries, wages, or other compensation of any director, employee or any agent or consultant of the Company or Evergreen or any of their amendments that are required under existing contracts; (3) adopt, enter into, amend, alter or terminate, partially or completely, any Company Benefit Plan or Evergreen Benefit Plan or any election made pursuant to the provisions of any Company Benefit Plan or Evergreen Benefit Plan, to accelerate any payments, obligations or vesting schedules under any Company Benefit Plan or Evergreen Benefit Plan; or (4) other than in the ordinary course of business consistent with past practices, approve any general or company-wide pay increases for employees; (x) except in the ordinary course of business modify, amend or terminate any material agreement, permit, concession, franchise, license or similar instrument to which the 40 Company or Evergreen or any of their respective subsidiaries is a party or waive, release or assign any material rights or claims thereunder; or (xi) authorize any of, or commit or agree to take any of, the foregoing actions. Notwithstanding the foregoing, nothing herein shall prevent Evergreen or the Company from selling or acquiring (or agreeing to sell or acquire) all or substantially all of the assets (by purchase, stock purchase, merger or otherwise) of one or more radio broadcast stations and entering into financing transactions in connection therewith, provided that the value of the consideration (as determined in good faith by the Board of Directors of the Company or Evergreen, as the case may be) to be paid or received (as appropriate) in such transactions does not exceed $100,000,000 in the aggregate for all such radio stations. 5.2 COMPANY STOCK OPTIONS. At the Effective Time, each Company Stock --------------------- Option shall be deemed to have been assumed by Evergreen, without further action by Evergreen, and shall thereafter be deemed an option to acquire, on the same terms and conditions as were applicable under such Company Stock Option, that number of shares of Surviving Corporation Common Stock that would have been received in respect of such Company Stock Option if it had been exercised immediately prior to the Effective Time (such Company Stock Options assumed by Evergreen, the "Assumed Chancellor Stock Options"); provided, however, that, for -------- ------- each optionholder, (i) the aggregate fair market value of Surviving Corporation Common Stock subject to Assumed Chancellor Stock Options immediately after the Effective Time shall not exceed the aggregate exercise price thereof by more than the excess of the aggregate fair market value of Company Common Stock subject to Company Stock Options immediately before the Effective Time over the aggregate exercise price thereof and (ii) on a share-by-share comparison, the ratio of the exercise price of the Assumed Chancellor Stock Option to the fair market value of the Surviving Corporation Common Stock immediately after the Effective Time is no more favorable to the optionholder than the ratio of the exercise price of the Company Stock Option to the fair market value of the Company Common Stock immediately before the Effective Time; and provided, -------- further, that no fractional shares shall be issued on the exercise of such - ------- Assumed Chancellor Stock Option and, in lieu thereof, the holder of such Assumed Chancellor Stock Option shall only be entitled to a cash payment in the amount of such fraction multiplied by the closing price per share of Surviving Corporation Common Stock on the Nasdaq 41 National Market on the business day immediately prior to the date of such exercise. 5.3 OTHER ACTIONS. The Company and Evergreen shall not, and shall not ------------- permit any of their respective subsidiaries to, take any action that would, or that could reasonably be expected to, result in any of the conditions of the Merger set forth in Article VI not being satisfied. ARTICLE VI CONDITIONS PRECEDENT 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The ---------------------------------------------------------- respective obligation of each party to effect the Merger is subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions: (a) Stockholder Approval. The Company Stockholder Approval and the -------------------- Evergreen Stockholder Approval shall have been obtained. (b) FCC Order. The FCC shall have issued an order (the "FCC Order") --------- approving the transfer of the Company FCC Licenses for the operation of the Company Licensed Facilities pursuant to the Merger without the imposition of any conditions or restrictions that would have a material adverse effect on the business, properties, results of operations, or condition (financial or otherwise) of the Surviving Corporation and its subsidiaries, considered as a whole (a "Surviving Corporation Material Adverse Effect"), and which FCC Order has not been reversed, stayed, enjoined, set aside or suspended and with respect to which no timely request for stay, petition for reconsideration or appeal has been filed and as to which the time period for filing of any such appeal or request for reconsideration or for any sua --- sponte action by the FCC with respect to the FCC Order has expired, or, in ------ the event that such a filing or review sua sponte has occurred, as to which --- ------ such filing or review shall have been disposed of favorably to the grant of the FCC Order and the time period for seeking further relief with respect thereto shall have expired without any request for such further relief having been filed or review initiated; provided, however, that -------- ------- notwithstanding anything in this Agreement to the contrary, that reasonable conditions of divestiture of certain Company Licensed Facilities or Evergreen Licensed Facilities to comply with the multiple 42 ownership requirements under the Telecom Act shall not be deemed to result in a Surviving Corporation Material Adverse Effect. (c) Governmental and Regulatory Consents. All required consents, ------------------------------------ approvals, permits and authorizations to the consummation of the transactions contemplated hereby by the Company, Radio Broadcasting and Evergreen shall be obtained from any Governmental Entity (other than the FCC) whose consent, approval, permission or authorization is required by reason of a change in law after the date of this Agreement, unless the failure to obtain such consent, approval, permission or authorization could not reasonably be expected to have a Surviving Corporation Material Adverse Effect, or to materially and adversely affect the validity or enforceability of this Agreement or the Merger. (d) HSR Act. The waiting period (and any extension thereof) ------- applicable to the Merger under the HSR Act shall have been terminated or shall have otherwise expired. (e) No Injunctions or Restraints. No temporary restraining order, ---------------------------- preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect; provided, however, that -------- ------- the party invoking this condition shall use best reasonable efforts to have any such order or injunction vacated. (f) Nasdaq Listing. The shares of Surviving Corporation Common Stock -------------- issuable to the Company's stockholders pursuant to this Agreement shall have been approved for quotation on the Nasdaq National Market, subject to official notice of issuance. (g) Form S-4. The Form S-4 shall have become effective under the -------- Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order. 6.2 CONDITIONS TO OBLIGATIONS OF EVERGREEN. The obligation of Evergreen to -------------------------------------- effect the Merger are further subject to the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of the Company and Radio Broadcasting contained in this Agreement shall have been 43 true and correct on the date of this Agreement (except to the extent that they expressly relate only to an earlier time, in which case they shall have been true and correct as of such earlier time), other than such breaches of representations and warranties which in the aggregate could not reasonably be expected to have a Company Material Adverse Effect. The Company and Radio Broadcasting shall have delivered to Evergreen a certificate dated as of the Closing Date, signed by a senior executive officer of the Company and Radio Broadcasting, to the effect set forth in this Section 6.2(a). (b) Performance of Obligations of the Company and Radio Broadcasting. ---------------------------------------------------------------- The Company and Radio Broadcasting shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and Evergreen shall have received a certificate signed on behalf of the Company and Radio Broadcasting by a senior executive officer of the Company and Radio Broadcasting to such effect. (c) Tax Opinion. Evergreen shall have received an opinion of Latham & ----------- Watkins, dated the Closing Date, substantially in the form of Exhibit G, to the effect that (i) the Merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code; (ii) each of Evergreen, the Company and Radio Broadcasting will be a party to the reorganization within the meaning of Section 368(b) of the Code; (iii) no gain or loss will be recognized by the Company, Radio Broadcasting or Evergreen as a result of the Merger; and (iv) no gain or loss will be recognized by any holder of Evergreen Class A Common Stock or Evergreen Class B Common Stock on the exchange of such stock for shares of Surviving Corporation Common Stock pursuant to the Merger. In rendering such opinion, Latham & Watkins shall receive and may rely upon representations contained in certificates of Evergreen, the Company, Radio Broadcasting, and certain stockholders of the Company and Radio Broadcasting, substantially in the form of Exhibits B through F. 6.3 CONDITIONS TO OBLIGATION OF THE COMPANY, AND RADIO BROADCASTING. The --------------------------------------------------------------- obligation of the Company and Radio Broadcasting to effect the Merger is further subject to the following conditions: (a) Representations and Warranties. The representations and ------------------------------ warranties of Evergreen contained in 44 this Agreement shall have been true and correct on the date of this Agreement (except to the extent that they expressly relate only to an earlier time, in which case they shall have been true and correct as of such earlier time), other than such breaches of representations and warranties which in the aggregate could not reasonably be expected to have an Evergreen Material Adverse Effect. Evergreen shall have delivered to the Company and Radio Broadcasting a certificate dated as of the Closing Date, signed by a senior executive officer of Evergreen, to the effect set forth in this Section 6.3(a). (b) Performance of Obligations of Evergreen. Evergreen shall have --------------------------------------- performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and the Company shall have received a certificate signed on behalf of Evergreen by a senior executive officer of Evergreen to such effect. (c) Tax Opinion. The Company shall have received an opinion of Weil, ----------- Gotshal & Manges LLP, dated as of the Closing Date and substantially in the form of Exhibit H, to the effect that the Merger will be treated as a --------- reorganization under Section 368(a) of the Code and that no gain or loss will be recognized by the stockholders of the Company and of Radio Broadcasting on the receipt pursuant to the Merger of shares of Surviving Corporation Common Stock or Merger Preferred Stock in exchange for Shares, shares of Company Convertible Preferred Stock and/or shares of Radio Broadcasting Preferred Stock, except with respect to cash received by dissenters or in lieu of fractional shares of Surviving Corporation Common Stock. In rendering such opinion, Weil, Gotshal & Manges LLP shall receive and may rely upon representations contained in certificates of Evergreen, the Company, Radio Broadcasting, and certain stockholders of the Company and Radio Broadcasting, substantially in the form of Exhibits B through F. ARTICLE VII TERMINATION, AMENDMENT AND WAIVER 7.1 TERMINATION. This Agreement may be terminated and abandoned at any ----------- time prior to the Effective Time, whether before or after approval of matters presented in connection with the Merger by the stockholders of the Company or Evergreen: 45 (a) by mutual written consent of Evergreen and the Company; (b) by either Evergreen or the Company: (i) if, upon a vote at a duly held Stockholders Meeting or Evergreen Stockholders Meeting or any adjournment thereof, any required approval of the stockholders of the Company or Evergreen, as the case may be, shall not have been obtained; (ii) if the Merger shall not have been consummated on or before February 19, 1998, unless the failure to consummate the Merger is the result of a willful and material breach of this Agreement by the party seeking to terminate this Agreement; (iii) if any Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become final and nonappealable; or (iv) if the other party hereto shall have breached the requirements of Sections 4.2 or 4.5 hereof, unless the party seeking to invoke this clause (iv) shall at such time be in material breach of this Agreement. 7.2 EFFECT OF TERMINATION. In the event of termination of this Agreement --------------------- by either the Company or Evergreen as provided in Section 7.1, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Evergreen or the Company, other than the last sentence of Section 4.3 and Sections 2.10, 3.10, 7.2 and 10.2. Nothing contained in this Section 7.2 shall relieve any party from any liability resulting from any material breach of the representations, warranties, covenants or agreements set forth in this Agreement. 7.3 AMENDMENT. Subject to the applicable provisions of the Delaware Code, --------- at any time prior to the Effective Time, the parties hereto may modify or amend this Agreement, by written agreement executed and delivered by duly authorized officers of the respective parties; provided, however, that after the Company -------- ------- Stockholder Approval and Evergreen Stockholder Approval has been 46 obtained, no amendment shall be made which reduces the consideration payable in the Merger or adversely affects the rights of the Company's or Evergreen's stockholders hereunder without the approval of their respective stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. 7.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the ----------------- parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties of the other parties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to Section 7.3, waive compliance with any of the agreements or conditions of the other parties contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights. 7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER. A --------------------------------------------------------- termination of this Agreement pursuant to Section 7.1, an amendment of this Agreement pursuant to Section 7.3 or an extension or waiver pursuant to Section 7.4 shall, in order to be effective, require in the case of Evergreen or the Company, action by its Board of Directors or the duly authorized designee of its Board of Directors. ARTICLE VIII SURVIVAL OF PROVISIONS 8.1 SURVIVAL. The representations and warranties respectively required to -------- be made by the Company and Evergreen in this Agreement, or in any certificate, respectively, delivered by the Company or Evergreen pursuant to Section 6.2 or Section 6.3 hereof will not survive the Closing. 47 ARTICLE IX NOTICES 9.1 NOTICES. All notices and other communications under this ------- Agreement must be in writing and will be deemed to have been duly given if delivered, telecopied or mailed, by certified mail, return receipt requested, first-class postage prepaid, to the parties at the following addresses: If to Evergreen, to: Evergreen Media Corporation 433 East Las Colinas Boulevard Suite 1130 Irving, Texas 75039 Attention: Scott K. Ginsburg Telephone: (972) 869-9020 Telecopy: (972) 869-3671 with copies to: Latham & Watkins 1001 Pennsylvania Ave., N.W. Suite 1300 Washington, D.C. 20004 Attention: Eric L. Bernthal, Esq. Daniel T. Lennon, Esq. Telephone: (202) 637-2200 Telecopy: (202) 637-2201 If to the Company or Radio Broadcasting, to: Chancellor Broadcasting Company 12655 N. Central Expressway Suite 405 Dallas, Texas 75243 Attention: Steven Dinetz Telephone: (972) 239-6220 Telecopy: (972) 239-0220 48 With copies to: Hicks, Muse, Tate & Furst Incorporated 200 Crescent Court, Suite 1600 Dallas Texas 75201 Attention: Thomas O. Hicks Lawrence D. Stuart, Jr. Telephone: (214) 740-7300 Telecopy: (214) 740-7313 and Weil, Gotshal & Manges LLP 100 Crescent Court, Suite 1300 Dallas, Texas 75201 Attention: Jeremy W. Dickens, Esq. Telephone: (214) 746-7720 Telecopy: (214) 746-7777 All notices and other communications required or permitted under this Agreement that are addressed as provided in this Article IX will, if delivered personally, be deemed given upon delivery, will, if delivered by telecopy, be deemed delivered when confirmed and will, if delivered by mail in the manner described above, be deemed given on the third business day after the day it is deposited in a regular depository of the United States mail. Any party from time to time may change its address for the purpose of notices to that party by giving a similar notice specifying a new address, but no such notice will be deemed to have been given until it is actually received by the party sought to be charged with the contents thereof. ARTICLE X MISCELLANEOUS 10.1 ENTIRE AGREEMENT. Except for documents executed by the Company ---------------- and Evergreen pursuant hereto, this Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter of this Agreement, and this Agreement (including the exhibits hereto and other documents delivered in connection herewith), the Stockholders Agreement and the Confidentiality Agreements contain the sole and entire agreement between the parties hereto with respect to the subject matter hereof. 49 10.2 EXPENSES. Whether or not the Merger is consummated, each of the -------- Company and Evergreen will pay its own costs and expenses incident to preparing for, entering into and carrying out this Agreement and the consummation of the transactions contemplated hereby; provided that the fees and expenses incurred -------- in connection with (i) the filings and registrations with the Department of Justice and Federal Trade Commission pursuant to the HSR Act, (ii) the filings with the FCC under the Communications Act, and (iii) the printing, mailing and distribution of the Joint Proxy Statement and the preparation and filing of the Form S-4, shall be borne equally by Evergreen and the Company. 10.3 COUNTERPARTS. This Agreement may be executed in one or more ------------ counterparts, each of which will be deemed an original but all of which will constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 10.4 NO THIRD PARTY BENEFICIARY. Except as otherwise provided herein, -------------------------- the terms and provisions of this Agreement are intended solely for the benefit of the parties hereto, and their respective successors or assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other person. 10.5 GOVERNING LAW. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. 10.6 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of -------------------------- the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, and any such assignment that is not consented to shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. 10.7 HEADINGS, GENDER, ETC. The headings used in this Agreement have --------------------- been inserted for convenience and do not constitute matter to be construed or interpreted in connection with this Agreement. Unless the context of this Agreement otherwise requires, (a) words of any gender are deemed to include each other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the 50 terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement; (d) the terms "Article" or "Section" refer to the specified Article or Section of this Agreement; (e) all references to "dollars" or "$" refer to currency of the United States of America; and (f) the term "person" shall include any natural person, corporation, limited liability company, general partnership, limited partnership, or other entity, enterprise, authority or business organization. 10.8 INVALID PROVISIONS. If any provision of this Agreement is held to be ------------------ illegal, invalid, or unenforceable under any present or future law, and if the rights or obligations of the Company or Evergreen under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable; (b) this Agreement will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof; and (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom. 10.9 VIACOM TRANSACTION. On February 16, 1997, EMCLA and Viacom ------------------ International Inc. ("Viacom") entered into a Stock Purchase Agreement (the "Viacom Purchase Agreement") whereby EMCLA agreed to purchase all the outstanding shares of stock of certain subsidiaries of Viacom that own and operate the radio broadcast stations described in the Viacom Purchase Agreement. Concurrently with the execution and delivery of this Agreement, Evergreen, EMCLA, the Company and Radio Broadcasting have entered into an agreement (the "Joint Purchase Agreement") whereby, as between Evergreen and the Company, the Company has agreed to assume certain obligations under the Viacom Purchase Agreement and Evergreen has agreed to grant to the Company certain rights under the Viacom Purchase Agreement. Notwithstanding any provision hereof to the contrary, no provision of this Agreement shall be deemed to prohibit any transaction contemplated by the Joint Purchase Agreement or the Viacom Purchase Agreement. The transactions contemplated by the Viacom Purchase Agreement and the Joint Purchase Agreement are referred to collectively as the "Viacom Transaction." [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] 51 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the Company, Radio Broadcasting and Evergreen effective as of the date first written above. CHANCELLOR BROADCASTING COMPANY By: _______________________________ Name: Title: CHANCELLOR RADIO BROADCASTING COMPANY By: _______________________________ Name: Title: EVERGREEN MEDIA CORPORATION By: ______________________________ Name: Title: ANNEX I ------- AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF CHANCELLOR MEDIA CORPORATION - ------------------------------------------------------------------------------- FIRST: The name of the corporation is Chancellor Media Corporation (the "Corporation"). SECOND: The registered office of the Corporation in the State of Delaware is located at Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of the registered agent of the Corporation at such address is The Corporation Trust Company. THIRD: The purpose for which the Corporation is organized is to engage in any and all lawful acts and activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 250,000,000 shares consisting of (a) 50,000,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock") and (b) 200,000,000 shares of Common Stock, par value $.01 per share (the "Common Stock"). The designations, powers, preferences, rights, qualifications, limitations, and restrictions of the Preferred Stock and the Common Stock are as follows: 1. Provisions Relating to the Preferred Stock. ------------------------------------------- (a) The Preferred Stock may be issued from time to time in one or more classes or series, the shares of each class or series to have such designations, powers, preferences and rights and such qualifications, limitations and restrictions thereof as are stated and expressed herein and in the resolution or resolutions providing for the issue of such class or series adopted by the Board of Directors of the Corporation (the "Board of Directors") as hereafter prescribed. (b) Authority is hereby expressly granted to and vested in the Board of Directors to authorize the issuance of the Preferred Stock from time to time in one or more classes or series, and with respect to each class or series of the Preferred Stock, to fix and state by the resolution or resolutions from time to time adopted providing for the issuance thereof the following: (i) whether or not the class or series is to have voting rights, full, special or limited, or is to be without voting rights, and whether or not such class or series is to be entitled to vote as a separate class either alone or together with the holders of one or more other classes or series of stock; (ii) the number of shares to constitute the class or series and the designations thereof; (iii) the preferences and relative, participating, optional or other special rights, if any, and the qualifications, limitations or restrictions thereof, if any, with respect to any class or series; (iv) whether or not the shares of any class or series shall be redeemable at the option of the Corporation or the holders thereof or upon the happening of any specified event, and, if redeemable, the redemption price or prices (which may be payable in the form of cash, notes, securities or other property) and the time or times at which, and the terms and conditions upon which, such shares shall be redeemable and the manner of redemption; (v) whether or not the shares of a class or series shall be subject to the operation of retirement or sinking funds to be applied to the purchase or redemption of such shares for retirement, and, if such retirement or sinking fund or funds are to be established, the annual amount thereof and the terms and provisions relative to the operation thereof; (vi) the dividend rate, whether dividends are payable in cash, securities of the Corporation or other property, the conditions upon which and the times when such dividends are payable, the preference to or the relation to the payment of dividends payable on any other class or classes or series of 2 stock, whether or not such dividends shall be cumulative or noncumulative and, if cumulative, the date or dates from which such dividends shall accumulate; (vii) the preferences, if any, and the amounts thereof which the holders of any class or series thereof shall be entitled to receive upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Corporation; (viii) whether or not the shares of any class or series, at the option of the Corporation or the holder thereof or upon the happening of any specified event, shall be convertible into or exchangeable for the shares of any other class or classes or of any other series of the same or any other class or classes of stock, securities, or other property of the Corporation and the conversion price or prices or ratio or ratios or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated and expressed or provided for in such resolution or resolutions; and (ix) such other special rights and protective provisions with respect to any class or series as may to the Board of Directors seem advisable. (c) The shares of each class or series of the Preferred Stock may vary from the shares of any other class or series thereof in any or all of the foregoing respects. The Board of Directors may increase the number of shares of the Preferred Stock designated for any existing class or series by a resolution adding to such class or series authorized and unissued shares of the Preferred Stock not designated for any other class or series. The Board of Directors may decrease the number of shares of the Preferred Stock designated for any existing class or series by a resolution subtracting from such class or series authorized and unissued shares of the Preferred Stock designated for such existing class or series, and the shares so subtracted shall become authorized, unissued and undesignated shares of the Preferred Stock. 2. Provisions Relating to the Common Stock. ---------------------------------------- (a) Each share of Common Stock of the Corporation shall have identical rights and privileges in every respect. The holders of shares of Common Stock shall be entitled to vote upon all matters submitted to a vote of the stockholders of the Corporation and shall be entitled to one vote for each share of Common Stock held. 3 (b) Subject to the prior rights and preferences, if any, applicable to shares of the Preferred Stock or any series thereof, the holders of shares of the Common Stock shall be entitled to receive such dividends (payable in cash, stock, or otherwise) as may be declared thereon by the board of directors at any time and from time to time out of any funds of the Corporation legally available therefor. (c) In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, after distribution in full of the preferential amounts, if any, to be distributed to the holders of shares of the Preferred Stock or any series thereof, the holders of shares of the Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of the Common Stock held by them. A liquidation, dissolution, or winding-up of the Corporation, as such terms are used in this Paragraph (c), shall not be deemed to be occasioned by or to include any consolidation or merger of the Corporation with or into any other corporation or corporations or other entity or a sale, lease, exchange, or conveyance of all or a part of the assets of the Corporation. 3. General. ------- (a) Subject to the foregoing provisions of this Certificate of Incorporation, the Corporation may issue shares of its Common Stock from time to time for such consideration (not less than the par value thereof) as may be fixed by the Board of Directors, which is expressly authorized to fix the same in its absolute and uncontrolled discretion subject to the foregoing conditions. Shares so issued for which the consideration shall have been paid or delivered to the Corporation shall be deemed fully paid stock and shall not be liable to any further call or assessment thereon, and the holders of such shares shall not be liable for any further payments in respect of such shares. (b) The Corporation shall have authority to create and issue rights and options entitling their holders to purchase shares of the Corporation's capital stock of any class or series or other securities of the Corporation, and such rights and options shall be evidenced by instrument(s) approved by the Board of Directors. The Board of Directors shall be empowered to set the exercise price, duration, times for exercise, and other terms of such options or rights; provided, however, that the consideration to be received for any shares of capital stock subject thereto shall not be less than the par value thereof. 4 FIFTH: The number of directors constituting the Board of Directors shall be no less than five and no more than thirteen, plus such number of directors as may be elected from time to time by the holders of any class or series of Preferred Stock. Commencing on the date on which this Amended and Restated Certificate of Incorporation shall become effective pursuant to the General Corporation Law of the State of Delaware, the directors of the Corporation shall be divided into three classes (the "Classified Directors") with the first class ("Class I"), second class ("Class II") and the third class ("Class III") each to consist as nearly as practicable of an equal number of directors. The term of office of the Class I directors shall expire at the 1998 annual meeting of stockholders, the term of office of the Class II directors shall expire at the 1999 annual meeting of stockholders and the term of office of the Class III directors shall expire at the 2000 annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the 1998 annual meeting, Classified Directors elected to succeed those Classified Directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election. SIXTH: The directors of the Corporation need not be elected by written ballot unless the bylaws of the Corporation otherwise provide. SEVENTH: The following provisions are included for the purpose of ensuring that control and management of the Corporation complies with the Communications Act of 1934, and the rules and regulations of the Federal Communication Commission, as the same may be amended from time to time (collectively, the "Communications Act"): (a) The Corporation shall not issue in excess of 25% of its capital stock outstanding at any time to or for the account of any of the following: (i) a person who is a citizen of a country other than the United States; (ii) any entity organized under the laws of a government other than the government of the United States or any state, territory, or possession of the United States; (iii) a government other than the government of the United States or of any state, territory, or possession of the United States; or (iv) a representative of, or an individual or entity controlled by, any of the foregoing (individually, an "Alien"; collectively, "Aliens"), if to do so would violate the Communications Act. The Corporation shall not permit the transfer on the books of the Corporation of any capital stock to any Alien if, after giving effect to such transfer, the capital stock held by or for the account of any Alien or 5 Aliens would exceed 25% of the Corporation's capital stock outstanding at any time, and if exceeding such 25% limit would violate the Communications Act. (b) No Alien or Aliens, individually or collectively, shall be entitled to vote or direct or control the vote of more than 25% of (i) the total number of all shares of capital stock of the Corporation outstanding at any time and from time to time or (ii) the total voting power of all shares of capital stock of the Corporation outstanding and entitled to vote at any time and from time to time, if to do so would violate the Communications Act. (c) The Board of Directors shall have all powers necessary to implement the provisions of this Article Seventh and to ensure compliance with the alien ownership restrictions (the "Alien Ownership Restrictions") of the Communications Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (collectively, the "Communications Act"), including, without limitation, the power to prohibit the transfer of any shares of capital stock of the Corporation to any Alien and to take or cause to be taken such action as it deems appropriate to implement such prohibition, including placing a legend regarding restrictions on foreign ownership of the capital stock on certificates representing such stock. (d) Without limiting the generality of the foregoing and notwithstanding any other provision of this Amended and Restated Certificate of Incorporation to the contrary, any shares of capital stock of the Corporation determined by the Board of Directors to be owned beneficially by an Alien or Aliens shall always be subject to redemption by the Corporation by action of the Board of Directors, pursuant to Section 151 of the General Corporation Law of the State of Delaware, or any other applicable provision of law, to the extent necessary in the judgment of the Board of Directors to comply with the Alien Ownership Restrictions. The terms and conditions of such redemption shall be as follows: (i) the redemption price of the shares to be redeemed pursuant to this Article Seventh shall be equal to the lower of (A) the fair market value of the shares to be redeemed, as determined by the Board of Directors in good faith, and (B) such Alien's purchase price for such shares; (ii) the redemption price of such shares may be paid in cash, securities or any combination thereof; 6 (iii) if less than all the shares held by Aliens are to be redeemed, the shares to be redeemed shall be selected in any manner determined by the Board of Directors to be fair and equitable; (iv) at least 10 days' written notice of the redemption date shall be given to the holders of record of the shares selected to be redeemed (unless waived in writing by any such holder), provided that the redemption date may be the date on which written notice shall be given to holders if the cash or securities necessary to effect the redemption shall have been deposited in trust for the benefit of such holders and subject to immediate withdrawal by them upon surrender of the stock certificates for their shares to be redeemed duly endorsed in blank or accompanied by duly executed proper instruments of transfer; (v) from and after the redemption date, the shares to be redeemed shall cease to be regarded as outstanding and any and all rights of the holders in respect of the shares to be redeemed or attaching to such shares of whatever nature (including without limitation any rights to vote or participate in dividends declared on stock of the same class or series as such shares) shall cease and terminate, and the holders thereof thereafter shall be entitled only to receive the cash or securities payable upon redemption; and (vi) such other terms and conditions as the Board of Directors shall determine. For purposes of this Article Seventh, the determination of beneficial ownership of shares of capital stock of the Corporation shall be made pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended. EIGHTH: No contract or transaction between the Corporation and one or more of its directors, officers, or stockholders or between the Corporation and any Person (as hereinafter defined) in which one or more of its directors, officers, or stockholders are directors, officers, or stockholders, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee which authorizes the contract or transaction, or solely because his, her, or their votes are counted for such purpose, if: (i) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board of directors or committee in good faith authorizes the 7 contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved, or ratified by the board of directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction. "Person" as used herein means any corporation, partnership, association, firm, trust, joint venture, political subdivision or instrumentality. NINTH: The Corporation shall indemnify any Person who was, is, or is threatened to be made a party to a proceeding (as hereinafter defined) by reason of the fact that he or she (i) is or was a director, officer, employee or agent of the Corporation, or (ii) is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise, to the fullest extent permitted under the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended. Such right shall be a contract right and as such shall run to the benefit of any director or officer who is elected and accepts the position of director or officer of the Corporation or elects to continue to serve as a director or officer of the Corporation while this Article Ninth is in effect. Any repeal or amendment of this Article Ninth shall be prospective only and shall not limit the rights of any such director or officer or the obligations of the Corporation with respect to any claim arising from or related to the services of such director or officer in any of the foregoing capacities prior to any such repeal or amendment to this Article Ninth. Such right shall include the right to be paid by the Corporation expenses incurred in investigating or defending any such proceeding in advance of its final disposition to the maximum extent permitted under the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended. To the extent that a director, officer, employee or agent of the corporation shall be successful on the merits or otherwise in defense of any proceeding, or in defense of any claim, issue, or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. If a claim for indemnification or advancement of expenses hereunder is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the 8 Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim, and if successful in whole or in part, the claimant shall also be entitled to be paid the expenses of prosecuting such claim. It shall be a defense to any such action that such indemnification or advancement of costs of defense is not permitted under the General Corporation Law of the State of Delaware, but the burden of proving such defense shall be on the Corporation. None of (i) the failure of the Corporation (including its board of directors or any committee thereof, independent legal counsel, or stockholders) to have made its determination prior to the commencement of such action that indemnification of, or advancement of costs of defense to, the claimant is permissible in the circumstances, (ii) an actual determination by the Corporation (including its board of directors or any committee thereof, independent legal counsel, or stockholders) that such indemnification or advancement is not permissible, or (iii) the termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall be a defense to the action or create a presumption that such indemnification or advancement is not permissible. In the event of the death of any Person having a right of indemnification under the foregoing provisions, such right shall inure to the benefit of his or her heirs, executors, administrators, and personal representatives. The rights conferred above shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, bylaw, resolution of stockholders or directors, agreement, or otherwise. The Corporation may additionally indemnify any employee or agent of the Corporation to the fullest extent permitted by law. Without limiting the generality of the foregoing, to the extent permitted by then applicable law, the grant of mandatory indemnification pursuant to this Article Ninth shall extend to proceedings involving the negligence of such Person. The Board of Directors may authorize, by a vote of a majority of a quorum of the Board of Directors, the Corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have 9 the power to indemnify him or her against such liability under the provisions of this Article Ninth. As used herein, the term "proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative, any appeal in such an action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding. TENTH: A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or amendment of this Article Tenth by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation arising from an act or omission occurring prior to the time of such repeal or amendment. In addition to the circumstances in which a director of the Corporation is not personally liable as set forth in the foregoing provisions of this Article Tenth, a director shall not be liable to the Corporation or its stockholders to such further extent as permitted by any law hereafter enacted, including without limitation any subsequent amendment to the General Corporation Law of the State of Delaware. 10 ANNEX II BYLAWS OF CHANCELLOR MEDIA CORPORATION A Delaware Corporation ARTICLE ONE: OFFICES 1.1 Registered Office and Agent............................................... 1 1.2 Other Offices............................................................. 1 ARTICLE TWO: MEETINGS OF STOCKHOLDERS 2.1 Annual Meeting............................................................ 1 2.2 Special Meeting........................................................... 2 2.3 Place of Meetings......................................................... 2 2.4 Notice.................................................................... 2 2.5 Voting List............................................................... 2 2.6 Quorum.................................................................... 3 2.7 Required Vote; Withdrawal of Quorum....................................... 3 2.8 Method of Voting; Proxies................................................. 3 2.9 Record Date............................................................... 4 2.10 Conduct of Meeting........................................................ 5 2.11 Inspectors................................................................ 5 ARTICLE THREE: DIRECTORS 3.1 Management................................................................ 6 3.2 Number; Qualification; Election; Term..................................... 6 3.3 Change in Number.......................................................... 7 3.4 Removal................................................................... 7 3.5 Vacancies................................................................. 7 3.6 Meetings of Directors..................................................... 7 3.7 First Meeting............................................................. 8 3.8 Election of Officers...................................................... 8 3.9 Regular Meetings.......................................................... 8 3.10 Special Meetings.......................................................... 8 3.11 Notice.................................................................... 8 3.12 Quorum; Majority Vote..................................................... 8 3.13 Procedure................................................................. 9 3.14 Presumption of Assent..................................................... 9 3.15 Compensation.............................................................. 9 ARTICLE FOUR: COMMITTEES
i 4.1 Designation............................................................... 9 4.2 Number; Qualification; Term............................................... 9 4.3 Authority................................................................. 10 4.4 Committee Changes......................................................... 10 4.5 Alternate Members of Committees........................................... 10 4.6 Regular Meetings.......................................................... 10 4.7 Special Meetings.......................................................... 10 4.8 Quorum; Majority Vote..................................................... 10 4.9 Minutes................................................................... 11 4.10 Compensation.............................................................. 11 4.11 Responsibility............................................................ 11 ARTICLE FIVE: NOTICE 5.1 Method.................................................................... 11 5.2 Waiver.................................................................... 12 ARTICLE SIX: OFFICERS 6.1 Number; Titles; Term of Office............................................ 12 6.2 Removal................................................................... 12 6.3 Vacancies................................................................. 12 6.4 Authority................................................................. 12 6.5 Compensation.............................................................. 12 6.6 Chairman of the Board..................................................... 13 6.7 President................................................................. 13 6.8 Chief Operating Officer................................................... 13 6.9 Vice Presidents........................................................... 13 6.10 Treasurer................................................................. 13 6.11 Assistant Treasurers...................................................... 14 6.12 Secretary................................................................. 14 6.13 Assistant Secretaries..................................................... 14 ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS 7.1 Certificates for Shares................................................... 14 7.2 Replacement of Lost or Destroyed Certificates............................. 15 7.3 Transfer of Shares........................................................ 15 7.4 Registered Stockholders................................................... 15
ii 7.5 Regulations............................................................... 16 7.6 Legends................................................................... 16 ARTICLE EIGHT: MISCELLANEOUS PROVISIONS 8.1 Dividends................................................................. 16 8.2 Reserves.................................................................. 16 8.3 Books and Records......................................................... 16 8.4 Fiscal Year............................................................... 16 8.5 Seal...................................................................... 17 8.6 Resignations.............................................................. 17 8.7 Securities of Other Corporations.......................................... 17 8.8 Telephone Meetings........................................................ 17 8.9 Action Without a Meeting.................................................. 17 8.10 Invalid Provisions........................................................ 18 8.11 Mortgages, etc............................................................ 18 8.12 Headings.................................................................. 19 8.13 References................................................................ 19 8.14 Amendments................................................................ 19
iii BYLAWS OF CHANCELLOR MEDIA CORPORATION A Delaware Corporation PREAMBLE These bylaws are subject to, and governed by, the General Corporation Law of the State of Delaware (the "Delaware General Corporation Law") and the certificate of incorporation of Chancellor Media Corporation, a Delaware corporation (the "Corporation"). In the event of a direct conflict between the provisions of these bylaws and the mandatory provisions of the Delaware General Corporation Law or the provisions of the certificate of incorporation of the Corporation, such provisions of the Delaware General Corporation Law or the certificate of incorporation of the Corporation, as the case may be, will be controlling. ARTICLE ONE: OFFICES 1.1 Registered Office and Agent. The registered office and registered --------------------------- agent of the Corporation shall be as designated from time to time by the appropriate filing by the Corporation in the office of the Secretary of State of the State of Delaware. 1.2 Other Offices. The Corporation may also have offices at such other ------------- places, both within and without the State of Delaware, as the board of directors may from time to time determine or as the business of the Corporation may require. ARTICLE TWO: MEETINGS OF STOCKHOLDERS 2.1 Annual Meeting. An annual meeting of stockholders of the -------------- Corporation shall be held each calendar year on such date and at such time as shall be designated from time to time by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice of such meeting. At such meeting, the stockholders shall elect directors and transact such other business as may properly be brought before the meeting. 2.2 Special Meeting. A special meeting of the stockholders may be --------------- called at any time by the Chairman of the Board, the President, the board of directors, and shall be called by the President or the Secretary at the request in writing of the stockholders of record of not less than ten percent of all shares entitled to vote at such meeting or as otherwise provided by the certificate of incorporation of the Corporation. A special meeting shall be held on such date and at such time as shall be designated by the person(s) calling the meeting and stated in the notice of the meeting or in a duly executed waiver of notice of such meeting. Only such business shall be transacted at a special meeting as may be stated or indicated in the notice of such meeting or in a duly executed waiver of notice of such meeting. 2.3 Place of Meetings. An annual meeting of stockholders may be held at ----------------- any place within or without the State of Delaware designated by the board of directors. A special meeting of stockholders may be held at any place within or without the State of Delaware designated in the notice of the meeting or a duly executed waiver of notice of such meeting. Meetings of stockholders shall be held at the principal executive office of the Corporation unless another place is designated for meetings in the manner provided herein. 2.4 Notice. Written or printed notice stating the place, day, and time ------ of each meeting of the stockholders and, in case of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than ten nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or person(s) calling the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is to be sent by mail, it shall be directed to such stockholder at his address as it appears on the records of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices to him be mailed to some other address, in which case it shall be directed to him at such other address. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy and shall not, at the beginning of such meeting, object to the transaction of any business because the meeting is not lawfully called or convened, or who shall, either before or after the meeting, submit a signed waiver of notice, in person or by proxy. 2.5 Voting List. At least ten days before each meeting of stockholders, ----------- the Secretary or other officer of the Corporation who has charge of the Corporation's stock ledger, either directly or through another officer appointed by him or through a transfer agent appointed by the board of directors, shall prepare a complete list of stockholders 2 entitled to vote thereat, arranged in alphabetical order and showing the address of each stockholder and number of shares registered in the name of each stockholder. For a period of ten days prior to such meeting, such list shall be kept on file at a place within the city where the meeting is to be held, which place shall be specified in the notice of meeting or a duly executed waiver of notice of such meeting or, if not so specified, at the place where the meeting is to be held and shall be open to examination by any stockholder during ordinary business hours. Such list shall be produced at such meeting and kept at the meeting at all times during such meeting and may be inspected by any stockholder who is present. 2.6 Quorum. The holders of a majority of the outstanding shares ------ entitled to vote on a matter, present in person or by proxy, shall constitute a quorum at any meeting of stockholders, except as otherwise provided by law, the certificate of incorporation of the Corporation, or these by-laws. If a quorum shall not be present, in person or by proxy, at any meeting of stockholders, the stockholders entitled to vote thereat who are present, in person or by proxy, or, if no stockholder entitled to vote is present, any officer of the Corporation may adjourn the meeting from time to time, without notice other than announcement at the meeting (unless the board of directors, after such adjournment, fixes a new record date for the adjourned meeting), until a quorum shall be present, in person or by proxy. At any adjourned meeting at which a quorum shall be present, in person or by proxy, any business may be transacted which may have been transacted at the original meeting had a quorum been present; provided that, if the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. 2.7 Required Vote; Withdrawal of Quorum. When a quorum is present at ----------------------------------- any meeting, the vote of the holders of at least a majority of the outstanding shares entitled to vote who are present, in person or by proxy, shall decide any question brought before such meeting, unless the question is one on which, by express provision of statute, the certificate of incorporation of the Corporation, or these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. 2.8 Method of Voting; Proxies. Except as otherwise provided in the ------------------------- certificate of incorporation of the Corporation or by law, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a 3 meeting of stockholders. Elections of directors need not be by written ballot. At any meeting of stockholders, every stockholder having the right to vote may vote either in person or by a proxy executed in writing by the stockholder or by his duly authorized attorney-in-fact. Each such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after three years from the date of its execution, unless otherwise provided in the proxy. If no date is stated in a proxy, such proxy shall be presumed to have been executed on the date of the meeting at which it is to be voted. Each proxy shall be revocable unless expressly provided therein to be irrevocable and coupled with an interest sufficient in law to support an irrevocable power or unless otherwise made irrevocable by law. 2.9 Record Date. (a) For the purpose of determining stockholders ------------ entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of stock or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, for any such determination of stockholders, such date in any case to be not more than 60 days and not less than ten days prior to such meeting nor more than 60 days prior to any other action. If no record date is fixed: (i) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. (ii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. (iii) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix 4 a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by law or these bylaws, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office in the State of Delaware, principal place of business, or such officer or agent shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by law or these bylaws, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. 2.10 Conduct of Meeting. The Chairman of the Board, if such office has ------------------ been filled, and, if not or if the Chairman of the Board is absent or otherwise unable to act, the President shall preside at all meetings of stockholders. The Secretary shall keep the records of each meeting of stockholders. In the absence or inability to act of any such officer, such officer's duties shall be performed by the officer given the authority to act for such absent or non-acting officer under these bylaws or by some person appointed by the meeting. 2.11 Inspectors. The board of directors may, in advance of any meeting ---------- of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the chairman of the meeting shall, or if inspectors shall not have been appointed, the chairman of the meeting may, appoint one or more inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares of capital stock of the Corporation outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies and shall receive votes, ballots, or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or 5 consents, determine the results, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting, the inspectors shall make a report in writing of any challenge, request, or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be stockholders. ARTICLE THREE: DIRECTORS 3.1 Management. The business and property of the Corporation shall be ---------- managed by the board of directors. Subject to the restrictions imposed by law, the certificate of incorporation of the Corporation, or these bylaws, the board of directors may exercise all the powers of the Corporation. 3.2 Number; Qualification; Election; Term. The number of directors ------------------------------------- which shall constitute the entire board of directors shall be not less than five nor more than thirteen, plus such number of directors as may be elected from time to time by the holders of any class or series of preferred stock of the Corporation. The first board of directors shall consist of the number of directors named in the certificate of incorporation of the Corporation or, if no directors are so named, shall consist of the number of directors elected by the incorporator(s) at an organizational meeting or by unanimous written consent in lieu thereof. Thereafter, within the limits above specified, the number of directors which shall constitute the entire board of directors shall be determined by resolution of the board of directors or by resolution of the stockholders at the annual meeting thereof or at a special meeting thereof called for that purpose. Except as otherwise required by law, the certificate of incorporation of the Corporation, or these bylaws, the directors shall be elected at an annual meeting of stockholders at which a quorum is present. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy and entitled to vote on the election of directors. Except as otherwise required by law, the certificate of incorporation of the Corporation, or these bylaws, each director so chosen shall hold office until the first annual meeting of stockholders held after his election and until his successor is elected and qualified or, if earlier, until his death, resignation, or removal from office. None of the directors need be a stockholder of the Corporation or a resident of the State of Delaware. Each director must have attained the age of majority. 6 3.3 Change in Number. No decrease in the number of directors ---------------- constituting the entire board of directors shall have the effect of shortening the term of any incumbent director. 3.4 Removal. Except as otherwise provided by law or in the certificate ------- of incorporation of the Corporation or these by-laws, at any meeting of stockholders called expressly for that purpose, any director or the entire board of directors may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote on the election of directors. 3.5 Vacancies. Vacancies and newly-created directorships resulting from --------- any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by the sole remaining director, provided, however, that if pursuant to a provision of the certificate of incorporation a class of capital stock of the Corporation shall have the right to vote as a class to elect a director, then the vacancy as to a director so elected shall be filled by a vote of the holders of such class. Each director so chosen shall hold office until the first annual meeting of stockholders held after his election and until his successor is elected and qualified or, if earlier, until his death, resignation, or removal from office. If there are no directors in office, an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly-created directorship, the directors then in office shall constitute less than a majority of the whole board of directors (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly-created directorships or to replace the directors chosen by the directors then in office. Except as otherwise provided in these bylaws, when one or more directors shall resign from the board of directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in these bylaws with respect to the filling of other vacancies. 3.6 Meetings of Directors. The directors may hold their meetings and --------------------- may have an office and keep the books of the Corporation, except as otherwise provided by statute, in such place or places within or without the State of Delaware as the board of directors may from time to time determine or as shall be specified in the notice of such meeting or duly executed waiver of notice of such meeting. 7 3.7 First Meeting. Each newly elected board of directors may hold its ------------- first meeting for the purpose of organization and the transaction of business, if a quorum is present, immediately after and at the same place as the annual meeting of stockholders, and no notice of such meeting shall be necessary. 3.8 Election of Officers. At the first meeting of the board of -------------------- directors after each annual meeting of stockholders at which a quorum shall be present, the board of directors shall elect the officers of the Corporation. 3.9 Regular Meetings. Regular meetings of the board of directors shall be ---------------- held at such times and places as shall be designated from time to time by resolution of the board of directors. Notice of such regular meetings shall not be required. 3.10 Special Meetings. Special meetings of the board of directors shall be ---------------- held whenever called by the Chairman of the Board, the President, or any director. 3.11 Notice. The Secretary shall give notice of each special meeting to ------ each director at least 24 hours before the meeting. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting. 3.12 Quorum; Majority Vote. At all meetings of the board of directors, --------------------- a majority of the directors fixed in the manner provided in these bylaws shall constitute a quorum for the transaction of business. If at any meeting of the board of directors there be less than a quorum present, a majority of those present or any director solely present may adjourn the meeting from time to time without further notice. Unless the act of a greater number is required by law, the certificate of incorporation of the Corporation, or these bylaws, the act of a majority of the directors present at a meeting at which a quorum is in attendance shall be the act of the board of directors. At any time that the certificate of incorporation of the Corporation provides that directors elected by the holders of a class or series of stock shall have more or less than one vote per director on any matter, every reference in these bylaws to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of such directors. 8 3.13 Procedure. At meetings of the board of directors, business shall --------- be transacted in such order as from time to time the board of directors may determine. The Chairman of the Board, if such office has been filled, and, if not or if the Chairman of the Board is absent or otherwise unable to act, the President shall preside at all meetings of the board of directors. In the absence or inability to act of either such officer, a chairman shall be chosen by the board of directors from among the directors present. The Secretary of the Corporation shall act as the secretary of each meeting of the board of directors unless the board of directors appoints another person to act as secretary of the meeting. The board of directors shall keep regular minutes of its proceedings which shall be placed in the minute book of the Corporation. 3.14 Presumption of Assent. A director of the Corporation who is --------------------- present at the meeting of the board of directors at which action on any corporate matter is taken shall be presumed to have assented to the action unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as secretary of the meeting before the adjournment thereof or shall forward any dissent by certified or registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. 3.15 Compensation. The board of directors shall have the authority to ------------ fix the compensation, including fees and reimbursement of expenses, paid to directors for attendance at regular or special meetings of the board of directors or any committee thereof; provided, that nothing contained herein shall be construed to preclude any director from serving the Corporation in any other capacity or receiving compensation therefor. ARTICLE FOUR: COMMITTEES 4.1 Designation. The board of directors may, by resolution adopted by a ----------- majority of the entire board of directors, designate one or more committees. 4.2 Number; Qualification; Term. Each committee shall consist of one or --------------------------- more directors appointed by resolution adopted by a majority of the entire board of directors. The number of committee members may be increased or decreased from time to time by resolution adopted by a majority of the entire board of directors. Each committee member shall serve as such until the earliest of (i) the expiration of his term 9 as director, (ii) his resignation as a committee member or as a director, or (iii) his removal as a committee member or as a director. 4.3 Authority. Each committee, to the extent expressly provided in the --------- resolution establishing such committee, shall have and may exercise all of the authority of the board of directors in the management of the business and property of the Corporation except to the extent expressly restricted by law, the certificate of incorporation of the Corporation, or these bylaws. 4.4 Committee Changes. The board of directors shall have the power at ----------------- any time to fill vacancies in, to change the membership of, and to discharge any committee. 4.5 Alternate Members of Committees. The board of directors may ------------------------------- designate one or more directors as alternate members of any committee. Any such alternate member may replace any absent or disqualified member at any meeting of the committee. If no alternate committee members have been so appointed to a committee or each such alternate committee member is absent or disqualified, the member or members of such committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. 4.6 Regular Meetings. Regular meetings of any committee may be held ---------------- without notice at such time and place as may be designated from time to time by the committee and communicated to all members thereof. 4.7 Special Meetings. Special meetings of any committee may be held ---------------- whenever called by any committee member. The committee member calling any special meeting shall cause notice of such special meeting, including therein the time and place of such special meeting, to be given to each committee member at least two days before such special meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of any committee need be specified in the notice or waiver of notice of any special meeting. 4.8 Quorum; Majority Vote. At meetings of any committee, a majority of --------------------- the number of members designated by the board of directors shall constitute a quorum for the transaction of business. If a quorum is not present at a meeting of any committee, a majority of the members present may adjourn the meeting from time to 10 time, without notice other than an announcement at the meeting, until a quorum is present. The act of a majority of the members present at any meeting at which a quorum is in attendance shall be the act of a committee, unless the act of a greater number is required by law, the certificate of incorporation of the Corporation, or these bylaws. 4.9 Minutes. Each committee shall cause minutes of its proceedings to be ------- prepared and shall report the same to the board of directors upon the request of the board of directors. The minutes of the proceedings of each committee shall be delivered to the Secretary of the Corporation for placement in the minute books of the Corporation. 4.10 Compensation. Committee members may, by resolution of the board of ------------ directors, be allowed a fixed sum and expenses of attendance, if any, for attending any committee meetings or a stated salary. 4.11 Responsibility. The designation of any committee and the delegation -------------- of authority to it shall not operate to relieve the board of directors or any director of any responsibility imposed upon it or such director by law. ARTICLE FIVE: NOTICE 5.1 Method. Whenever by statute, the certificate of incorporation of ------ the Corporation, or these bylaws, notice is required to be given to any committee member, director, or stockholder and no provision is made as to how such notice shall be given, personal notice shall not be required and any such notice may be given (a) in writing, by mail, postage prepaid, addressed to such committee member, director, or stockholder at his address as it appears on the books or (in the case of a stockholder) the stock transfer records of the Corporation, or (b) by any other method permitted by law (including but not limited to overnight courier service, telegram, telex, or telefax). Any notice required or permitted to be given by mail shall be deemed to be delivered and given at the time when the same is deposited in the United States mail as aforesaid. Any notice required or permitted to be given by overnight courier service shall be deemed to be delivered and given at the time delivered to such service with all charges prepaid and addressed as aforesaid. Any notice required or permitted to be given by telegram, telex, or telefax shall be deemed to be delivered and given at the time transmitted with all charges prepaid and addressed as aforesaid. 11 5.2 Waiver. Whenever any notice is required to be given to any ------ stockholder, director, or committee member of the Corporation by statute, the certificate of incorporation of the Corporation, or these bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. Attendance of a stockholder, director, or committee member at a meeting shall constitute a waiver of notice of such meeting, except where such person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. ARTICLE SIX: OFFICERS 6.1 Number; Titles; Term of Office. The officers of the Corporation ------------------------------ shall be a President, one or more Chief Operating Officers, a Secretary, and such other officers as the board of directors may from time to time elect or appoint, including a Chairman of the Board, one or more Vice Presidents (with each Vice President to have such descriptive title, if any, as the board of directors shall determine), and a Treasurer. Each officer shall hold office until his successor shall have been duly elected and shall have qualified, until his death, or until he shall resign or shall have been removed in the manner hereinafter provided. Any two or more offices may be held by the same person. None of the officers need be a stockholder or a director of the Corporation or a resident of the State of Delaware. 6.2 Removal. Any officer or agent elected or appointed by the board of ------- directors may be removed by the board of directors whenever in its judgment the best interest of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. 6.3 Vacancies. Any vacancy occurring in any office of the Corporation (by --------- death, resignation, removal, or otherwise) may be filled by the board of directors. 6.4 Authority. Officers shall have such authority and perform such --------- duties in the management of the Corporation as are provided in these bylaws or as may be determined by resolution of the board of directors not inconsistent with these bylaws. 6.5 Compensation. The compensation, if any, of officers and agents shall ------------ be fixed from time to time by the board of directors; provided, however, that the board 12 of directors may delegate the power to determine the compensation of any officer and agent (other than the officer to whom such power is delegated) to the Chairman of the Board or the President. 6.6 Chairman of the Board. The Chairman of the Board, if elected by the --------------------- board of directors, shall have such powers and duties as may be prescribed by the board of directors. Such officer shall preside at all meetings of the stockholders and of the board of directors. Such officer may sign all certificates for shares of stock of the Corporation. 6.7 President. The President shall be the chief executive officer of --------- the Corporation and, subject to the board of directors, he shall have general executive charge, management, and control of the properties and operations of the Corporation in the ordinary course of its business, with all such powers with respect to such properties and operations as may be reasonably incident to such responsibilities. If the board of directors has not elected a Chairman of the Board or in the absence or inability to act of the Chairman of the Board, the President shall exercise all of the powers and discharge all of the duties of the Chairman of the Board. As between the Corporation and third parties, any action taken by the President in the performance of the duties of the Chairman of the Board shall be conclusive evidence that there is no Chairman of the Board or that the Chairman of the Board is absent or unable to act. 6.8 Chief Operating Officer. The Chief Operating Officer(s) shall have ----------------------- the day to day responsibility for the business operations of the Corporation, reporting to the President and subject to the control of the board of directors. 6.9 Vice Presidents. Each Vice President shall have such powers and --------------- duties as may be assigned to him by the board of directors, the Chairman of the Board, or the President, and (in order of their seniority as determined by the board of directors or, in the absence of such determination, as determined by the length of time they have held the office of Vice President) shall exercise the powers of the President during that officer's absence or inability to act. As between the Corporation and third parties, any action taken by a Vice President in the performance of the duties of the President shall be conclusive evidence of the absence or inability to act of the President at the time such action was taken. 6.10 Treasurer. The Treasurer shall have custody of the Corporation's --------- funds and securities, shall keep full and accurate account of receipts and disbursements, shall deposit all monies and valuable effects in the name and to the credit of the Corporation 13 in such depository or depositories as may be designated by the board of directors, and shall perform such other duties as may be prescribed by the board of directors, the Chairman of the Board, or the President. 6.11 Assistant Treasurers. Each Assistant Treasurer shall have such -------------------- powers and duties as may be assigned to him by the board of directors, the Chairman of the Board, or the President. The Assistant Treasurers (in the order of their seniority as determined by the board of directors or, in the absence of such a determination, as determined by the length of time they have held the office of Assistant Treasurer) shall exercise the powers of the Treasurer during that officer's absence or inability to act. 6.12 Secretary. Except as otherwise provided in these bylaws, the --------- Secretary shall keep the minutes of all meetings of the board of directors and of the stockholders in books provided for that purpose, and he shall attend to the giving and service of all notices. He may sign with the Chairman of the Board or the President, in the name of the Corporation, all contracts of the Corporation and affix the seal of the Corporation thereto. He may sign with the Chairman of the Board or the President all certificates for shares of stock of the Corporation, and he shall have charge of the certificate books, transfer books, and stock papers as the board of directors may direct, all of which shall at all reasonable times be open to inspection by any director upon application at the office of the Corporation during business hours. He shall in general perform all duties incident to the office of the Secretary, subject to the control of the board of directors, the Chairman of the Board, and the President. 6.13 Assistant Secretaries. Each Assistant Secretary shall have such --------------------- powers and duties as may be assigned to him by the board of directors, the Chairman of the Board, or the President. The Assistant Secretaries (in the order of their seniority as determined by the board of directors or, in the absence of such a determination, as determined by the length of time they have held the office of Assistant Secretary) shall exercise the powers of the Secretary during that officer's absence or inability to act. ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS 7.1 Certificates for Shares. Certificates for shares of stock of the ----------------------- Corporation shall be in such form as shall be approved by the board of directors. The certificates shall be signed by the Chairman of the Board or the President or a Vice President and also by the Secretary or an Assistant Secretary or by the Treasurer or an Assistant Treasurer. Any and all signatures on the certificate may be a facsimile and 14 may be sealed with the seal of the Corporation or a facsimile thereof. If any officer, transfer agent, or registrar who has signed, or whose facsimile signature has been placed upon, a certificate has ceased to be such officer, transfer agent, or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. The certificates shall be consecutively numbered and shall be entered in the books of the Corporation as they are issued and shall exhibit the holder's name and the number of shares. 7.2 Replacement of Lost or Destroyed Certificates. The board of directors --------------------------------------------- may direct a new certificate or certificates to be issued in place of a certificate or certificates theretofore issued by the Corporation and alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate or certificates representing shares to be lost or destroyed. When authorizing such issue of a new certificate or certificates the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond with a surety or sureties satisfactory to the Corporation in such sum as it may direct as indemnity against any claim, or expense resulting from a claim, that may be made against the Corporation with respect to the certificate or certificates alleged to have been lost or destroyed. 7.3 Transfer of Shares. Shares of stock of the Corporation shall be ------------------ transferable only on the books of the Corporation by the holders thereof in person or by their duly authorized attorneys or legal representatives. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, the Corporation or its transfer agent shall issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books. 7.4 Registered Stockholders. The Corporation shall be entitled to treat ----------------------- the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. 15 7.5 Regulations. The board of directors shall have the power and ----------- authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer, and registration or the replacement of certificates for shares of stock of the Corporation. 7.6 Legends. The board of directors shall have the power and authority ------- to provide that certificates representing shares of stock bear such legends as the board of directors deems appropriate to assure that the Corporation does not become liable for violations of federal or state securities laws or other applicable law. ARTICLE EIGHT: MISCELLANEOUS PROVISIONS 8.1 Dividends. Subject to provisions of law and the certificate of --------- incorporation of the Corporation, dividends may be declared by the board of directors at any regular or special meeting and may be paid in cash, in property, or in shares of stock of the Corporation. Such declaration and payment shall be at the discretion of the board of directors. 8.2 Reserves. There may be created by the board of directors out of -------- funds of the Corporation legally available therefor such reserve or reserves as the directors from time to time, in their discretion, consider proper to provide for contingencies, to equalize dividends, or to repair or maintain any property of the Corporation, or for such other purpose as the board of directors shall consider beneficial to the Corporation, and the board of directors may modify or abolish any such reserve in the manner in which it was created. 8.3 Books and Records. The Corporation shall keep correct and complete ----------------- books and records of account, shall keep minutes of the proceedings of its stockholders and board of directors and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders and the number and class of the shares held by each. 8.4 Fiscal Year. The fiscal year of the Corporation shall be fixed by ----------- the board of directors; provided, that if such fiscal year is not fixed by the board of directors and the selection of the fiscal year is not expressly deferred by the board of directors, the fiscal year shall be the calendar year. 16 8.5 Seal. The seal of the Corporation shall be such as from time to time ---- may be approved by the board of directors. 8.6 Resignations. Any director, committee member, or officer may resign ------------ by so stating at any meeting of the board of directors or by giving written notice to the board of directors, the Chairman of the Board, the President, or the Secretary. Such resignation shall take effect at the time specified therein or, if no time is specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 8.7 Securities of Other Corporations. The Chairman of the Board, the -------------------------------- President, or any Vice President of the Corporation shall have the power and authority to transfer, endorse for transfer, vote, consent, or take any other action with respect to any securities of another issuer which may be held or owned by the Corporation and to make, execute, and deliver any waiver, proxy, or consent with respect to any such securities. 8.8 Telephone Meetings. Stockholders (acting for themselves or through ------------------ a proxy), members of the board of directors, and members of a committee of the board of directors may participate in and hold a meeting of such stockholders, board of directors, or committee by means of a conference telephone or similar communications equipment by means of which persons participating in the meeting can hear each other, and participation in a meeting pursuant to this section shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. 8.9 Action Without a Meeting. (a) Unless otherwise provided in the ------------------------ certificate of incorporation of the Corporation, any action required by the Delaware General Corporation Law to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders (acting for themselves or through a proxy) of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which the holders of all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of 17 stockholders are recorded. Every written consent of stockholders shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered in the manner required by this Section 8.9(a) to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office, principal place of business, or such officer or agent shall be by hand or by certified or registered mail, return receipt requested. (b) Unless otherwise restricted by the certificate of incorporation of the Corporation or by these bylaws, any action required or permitted to be taken at a meeting of the board of directors, or of any committee of the board of directors, may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by all the directors or all the committee members, as the case may be, entitled to vote with respect to the subject matter thereof, and such consent shall have the same force and effect as a vote of such directors or committee members, as the case may be, and may be stated as such in any certificate or document filed with the Secretary of State of the State of Delaware or in any certificate delivered to any person. Such consent or consents shall be filed with the minutes of proceedings of the board or committee, as the case may be. 8.10 Invalid Provisions. If any part of these bylaws shall be held invalid ------------------ or inoperative for any reason, the remaining parts, so far as it is possible and reasonable, shall remain valid and operative. 8.11 Mortgages, etc. With respect to any deed, deed of trust, mortgage, -------------- or other instrument executed by the Corporation through its duly authorized officer or officers, the attestation to such execution by the Secretary of the Corporation shall not be necessary to constitute such deed, deed of trust, mortgage, or other instrument a valid and binding obligation against the Corporation unless the resolutions, if any, of the board of directors authorizing such execution expressly state that such attestation is necessary. 18 8.12 Headings. The headings used in these bylaws have been inserted for -------- administrative convenience only and do not constitute matter to be construed in interpretation. 8.13 References. Whenever herein the singular number is used, the same ---------- shall include the plural where appropriate, and words of any gender should include each other gender where appropriate. 8.14 Amendments. These bylaws may be altered, amended, or repealed or ---------- new bylaws may be adopted by the stockholders or by the board of directors at any regular meeting of the stockholders or the board of directors or at any special meeting of the stockholders or the board of directors if notice of such alteration, amendment, repeal, or adoption of new bylaws be contained in the notice of such special meeting. 19 EXHIBIT A --------- _________, 1997 Evergreen Media Corporation 433 East Las Colinas Boulevard, Suite 1130 Irving, Texas 75039 Ladies and Gentlemen: I have been advised that I have been identified as a possible "affiliate" of Chancellor Broadcasting Company, a Delaware corporation (the "Company"), as that term is defined for purposes of paragraphs (c) and (d) of Rule 145 of the General Rules and Regulations (the "Rules and Regulations") of the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933 (the "Securities Act"), although nothing contained herein should be construed as an admission of such fact. Pursuant to the terms of an Agreement and Plan of Merger dated as of February __, 1997 (the "Merger Agreement"), by and among the Company, Chancellor Radio Broadcasting Company, a Delaware corporation ("Radio Broadcasting") and Evergreen Media Corporation, a Delaware corporation ("Evergreen"), the Company and Radio Broadcasting will be merged with and into Evergreen (the "Merger"), with Evergreen continuing as the surviving corporation in the Merger (the "Surviving Corporation"). As a result of the Merger, I will receive Merger Consideration (as defined in the Merger Agreement), including shares of Common Stock, $0.01 par value, of the Surviving Corporation ("Surviving Corporation Common Stock") in exchange for shares of Class A Common Stock, $.01 par value, and/or shares of Class B Common Stock, $0.01 par value, of the Company (collectively, the "Shares") owned by me at the effective time of the Merger as determined pursuant to the Merger Agreement. A. In connection therewith, I represent, warrant and agree that: 1. I shall not make any sale, transfer or other disposition of the Surviving Corporation Common Stock I receive as a result of the Merger in violation of the Securities Act or the Rules and Regulations. 2. I have been advised that the issuance of Surviving Corporation Common Stock to me as a result of the Merger has been registered with the Commission under the Securities Act on a Registration Statement on Form S-4. However, I have also been advised that, if at the time the Merger was submitted for a vote of the stockholders of the Company I am determined to have been an "affiliate" of the Company, any sale by me of the shares of Surviving Corporation Common Stock I receive as a result of the Merger must be (i) registered under the Securities Act, (ii) made in conformity with the provisions of Rule 145 promulgated by the Commission under the Securities Act or (iii) made pursuant to a transaction which, in the opinion of counsel reasonably satisfactory to the Surviving Corporation or as described in a "no action" or interpretive letter from the staff of the Commission, is not required to be registered under the Securities Act. 3. I have carefully read this letter and the Merger Agreement and have discussed the requirements of the Merger Agreement and other limitations upon the sale, transfer or other disposition of the shares of Surviving Corporation Common Stock to be received by me, to the extent I have felt necessary, with my counsel or with counsel for the Company. B. Furthermore, in connection with the matters set forth herein, I understand and agree that: 1. I understand that the Surviving Corporation will give stop transfer instructions to its transfer agents with respect to the Surviving Corporation Common Stock and that the certificates for the Surviving Corporation Common Stock issued to the undersigned, or any substitutions therefor, will bear a legend substantially to the following effect: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY APPLY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT, DATED _____________ 1997, BETWEEN THE REGISTERED HOLDER HEREOF AND CHANCELLOR MEDIA CORPORATION (FORMERLY KNOWN AS EVERGREEN MEDIA CORPORATION), A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF CHANCELLOR MEDIA CORPORATION." 2. I also understand that unless the transfer by the undersigned of any Surviving Corporation Common Stock has been registered under the Securities Act or is a sale made in conformity with the provisions of Rule 145, the Surviving Corporation reserves the right to place the following legend on the certificates issued to any transferee: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED SUCH SECURITIES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY APPLY. THE SECURITIES HAVE NOT BEEN ACQUIRED BY THE HOLDER WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF SUCH ACT AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT. It is understood and agreed that the legends set forth in paragraphs (B) 1 and 2 above shall be removed by delivery of new certificates without such legend if the Surviving Corporation receives an opinion of counsel reasonably satisfactory to the Surviving Corporation to the effect that such legend is not required for purposes of the Securities Act. It is understood and agreed that such legends and the stop orders referred to above will be removed if (i) two years shall have elapsed from the date the undersigned acquired Surviving Corporation Common Stock received in the Merger and the provisions of Rule 145(d)(2) under the Securities Act are then available to the undersigned, (ii) three years shall have elapsed from the date the undersigned acquired Surviving Corporation Common Stock received in the Merger and the provisions of Rule 145(d)(3) under the Securities Act are then available to the undersigned, or (iii) the Surviving Corporation has received under the Securities Act an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Surviving Corporation, to the effect that the restrictions imposed by Rule 145 under the Securities Act no longer apply to the undersigned. The Surviving Corporation shall be under no further obligation to register the sale, transfer or other disposition of the shares of Surviving Corporation Common Stock received by me as a result of the Merger or to take any other action necessary in order to make compliance with an exemption from registration available. Very truly yours, Exhibit B EXECUTION COPY CHANCELLOR BROADCASTING COMPANY CERTIFICATE In connection with your tax opinion dated _________________ ___, 1997 regarding certain federal income tax consequences of the merger (the "Merger") of Chancellor Broadcasting Company, a Delaware corporation ("the Company"), with and into Evergreen Media Corporation, a Delaware corporation ("Evergreen"), pursuant to the Agreement and Plan of Merger dated as of February _____, 1997, as amended (the "Merger Agreement"), and recognizing that you will rely on this Certificate in delivering said opinion, the Company hereby represents that the facts relating to the Merger, as such facts are described in the Registration Statement of Evergreen filed with the Securities and Exchange Commission (the "Commission") on ____________ ___, 1997 (and all amendments thereto) are, insofar as such facts pertain to the Company, true, correct, and complete in all material respects in accordance with applicable rules of the Commission. The Company further represents the following: 1. The fair market value of the Evergreen stock, cash (if any) and any cash in lieu of fractional shares to be received by each Company shareholder will be approximately equal to the fair market value of the Company stock surrendered in the exchange. 2. There is no plan or intention by the shareholders of the Company who own 5 percent or more of the Company stock as of the date hereof, and to the best of the knowledge of the management of the Company, there is no plan or intention on the part of the remaining shareholders of the Company, to sell, exchange, or otherwise dispose of a number of shares of Evergreen stock received in the transaction that would reduce the Company shareholders' ownership of Evergreen stock to a number of shares having a value on the date of the Merger of less than 50 percent of the value of all of the formerly outstanding stock of the Company as of the same date. For purposes of this representation, shares of the Company stock surrendered by dissenters or exchanged for cash in EXECUTION COPY lieu of fractional shares of Evergreen stock will be treated as outstanding the Company stock on the date of the Merger. Moreover, shares of the Company stock and shares of Evergreen stock held by the Company shareholders and otherwise sold, redeemed, or disposed of prior or subsequent to the Merger will be considered in making this representation. 3. The liabilities of the Company to be assumed by Evergreen and the liabilities to which the transferred assets of the Company are subject were incurred by the Company in the ordinary course of its business. 4. The fair market value of the assets of the Company to be transferred to Evergreen in the Merger will equal or exceed the sum of the liabilities to be assumed by Evergreen plus the amount of liabilities, if any, to which the transferred assets are subject. 5. Evergreen, the Company and the shareholders of the Company will pay their respective expenses, if any, incurred in connection with the Merger. 6. There is no intercorporate indebtedness existing between the Company and Evergreen that was issued, acquired, or will be settled at a discount. 7. The Company is not an investment company as defined in Section 368(a) (2) (F) (iii) and (iv) of the Internal Revenue Code of 1986, as amended (the "Code"). 8. The Company is not under the jurisdiction of a court in a Title 11 or similar case within the meaning of Section 368(a) (3) (A) of the Code. 9. None of the compensation to be received by any shareholder-employee of the Company will be separate consideration for, or allocable to, any of their shares of the Company stock; none of the shares of Evergreen stock to be received by any shareholder-employee will be separate consideration for, or allocable to, any employment agreement; and the compensation to be paid to any EXECUTION COPY shareholder-employee will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm's-length for similar services. 10. The Merger Agreement represents the full and complete agreement between Evergreen and the Company regarding the Merger, and there are no other written or oral agreements regarding the Merger other than those expressly referred to in the Merger Agreement. IN WITNESS WHEREOF, the Company has executed this Certificate on this _____ day of _________, 1997. Chancellor Broadcasting Company By:_______________________ Exhibit C EXECUTION COPY CHANCELLOR RADIO BROADCASTING COMPANY CERTIFICATE In connection with your tax opinion dated ____________ __, 1997 regarding certain federal income tax consequences of the merger (the "Merger") of Chancellor Radio Broadcasting Company, a Delaware corporation ("Radio Broadcasting"), with and into Evergreen Media Corporation, a Delaware corporation ("Evergreen"), pursuant to the Agreement and Plan of Merger dated as of February ____, 1997, as amended (the "Merger Agreement"), and recognizing that you will rely on this Certificate in delivering said opinion, Radio Broadcasting hereby represents that the facts relating to the Merger, as such facts are described in the Registration Statement of Evergreen filed with the Securities and Exchange Commission (the "Commission") on ______________ ___, 1997 (and all amendments thereto) are, insofar as such facts pertain to Radio Broadcasting, true, correct, and complete in all material respects in accordance with applicable rules of the Commission. Radio Broadcasting further represents the following: 1. The fair market value of the Evergreen stock, cash (if any) and any cash in lieu of fractional shares to be received by each Radio Broadcasting shareholder will be approximately equal to the fair market value of the Radio Broadcasting stock surrendered in the exchange. 2. There is no plan or intention by the shareholders of Radio Broadcasting who own 5 percent or more of the Radio Broadcasting stock on the date hereof, and to the best of the knowledge of the management of Radio Broadcasting, there is no plan or intention on the part of the remaining shareholders of Radio Broadcasting, to sell, exchange, or otherwise dispose of a number of shares of Evergreen stock received in the transaction that would reduce the Radio Broadcasting shareholders' ownership of Evergreen stock to a number of shares having a value on the date of the Merger of less than 50 percent of the value of all of the formerly outstanding stock of Radio Broadcasting as of the same date. For purposes of this representation, shares of Radio Broadcasting stock surrendered by dissenters will be treated as outstanding Radio Broadcasting stock on the date of the Merger. Moreover, shares of Radio Broadcasting stock and shares of Evergreen stock held by Radio Broadcasting shareholders and EXECUTION COPY otherwise sold, redeemed, or disposed of prior or subsequent to the Merger will be considered in making this representation. 3. The liabilities of Radio Broadcasting to be assumed by Evergreen and the liabilities to which the transferred assets of Radio Broadcasting are subject were incurred by Radio Broadcasting in the ordinary course of its business. 4. The fair market value of the assets of Radio Broadcasting to be transferred to Evergreen in the Merger will equal or exceed the sum of the liabilities to be assumed by Evergreen plus the amount of liabilities, if any, to which the transferred assets are subject. 5. Evergreen, Radio Broadcasting and the shareholders of Radio Broadcasting will pay their respective expenses, if any, incurred in connection with the Merger. 6. There is no intercorporate indebtedness existing between Radio Broadcasting and Evergreen that was issued, acquired, or will be settled at a discount. 7. Radio Broadcasting is not an investment company as defined in Section 368 (a) (2) (F) (iii) and (iv) of the Internal Revenue Code of 1986, as amended (the "Code"). 8. Radio Broadcasting is not under the jurisdiction of a court in a Title 11 or similar case within the meaning of Section 368 (a) (3) (A) of the Code. 9. None of the compensation to be received by any shareholder- employee of Radio Broadcasting will be separate consideration for, or allocable to, any of their shares of Radio Broadcasting stock; none of the shares of Evergreen stock to be received by any shareholder-employee will be separate consideration for, or allocable to, any employment agreement; and the compensation to be paid to any shareholder-employees will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm's-length for similar service. EXECUTION COPY 10. The Merger Agreement represents the full and complete agreement between Evergreen and Radio Broadcasting regarding the Merger, and there are no other written or oral agreements regarding the Merger other than those expressly referred to in the Merger Agreement. IN WITNESS WHEREOF, Radio Broadcasting has executed this Certificate on this ______ day of ____________, 1997. Chancellor Radio Broadcasting Company By:_____________________________ Exhibit D EXECUTION COPY CERTIFICATE In connection with the merger (the "Merger") of Chancellor Broadcasting Company, a Delaware corporation, with and into Evergreen Media Corporation, a Delaware corporation, pursuant to the Agreement and Plan of Merger dated as of February ___, 1997, the undersigned hereby represents that he (it) has no plan or intention to sell, exchange, or otherwise dispose of, reduce the risk of loss by short sale or otherwise, enter into any contract or arrangement with respect to, or consent to the sale, exchange or other disposition of any interest in any stock received in the Merger by him (it). IN WITNESS WHEREOF, I have signed this Certificate on this ___ day of _________________, 1997. [Name of 5% shareholder of Chancellor Broadcasting Company] __________________________________ Exhibit E CERTIFICATE In connection with the merger (the "Merger") of Chancellor Radio Broadcasting Company, a Delaware corporation, with and into Evergreen Media Corporation, a Delaware corporation, pursuant to the Agreement and Plan of Merger dated as of February ____, 1997, the undersigned hereby represents that he (it) has no plan or intention to sell, exchange, or otherwise dispose of, reduce the risk of loss by short sale or otherwise, enter into any contract or arrangement with respect to, or consent to the sale, exchange or other disposition of any interest in any stock received in the Merger by him (it). IN WITNESS WHEREOF, I have signed this Certificate on this _____ day of _______________, 1997. [Name of 5% shareholder of Chancellor Radio Broadcasting Company] _______________________________________ Exhibit F EVERGREEN MEDIA CORPORATION CERTIFICATE In connection with your tax opinion dated ________________, 1997, regarding certain federal income tax consequences of the merger (the "Merger") of Chancellor Broadcasting Company, a Delaware corporation ("the Company"), and Chancellor Radio Broadcasting Company, a Delaware corporation ("Radio Broadcasting"), with and into Evergreen Media Corporation, a Delaware corporation ("Evergreen"), pursuant to the Agreement and Plan of Merger dated as of February ___, 1997 (the "Merger Agreement"), and recognizing that you will rely on this Certificate in delivering said opinion, Evergreen hereby represents that the facts relating to the Merger, as such facts are described in the Registration Statement of Evergreen filed with the Securities and Exchange Commission (the "Commission") on _____________________ ___, 1997 (and all amendments thereto) are, insofar as such facts pertain to Evergreen, true, correct, and complete in all material respects in accordance with applicable rules of the Commission. Evergreen further represents the following: 1. The fair market value of the Evergreen stock, cash (if any) and any cash in lieu of fractional shares to be received by each the Company and Radio Broadcasting shareholder will be approximately equal to the fair market value of the Company and Radio Broadcasting stock surrendered in the exchange. 2. Evergreen has no plan or intention to redeem or otherwise reacquire any Evergreen stock issued in the Merger. 3. Evergreen has no plan or intention to sell or otherwise dispose of any of the assets of the Company or of Radio Broadcasting to be acquired in the Merger, except for dispositions made in the ordinary course of business or transfers to a direct wholly-owned subsidiary of Evergreen./1/ _________________ /1/ May be modified on delivery of certificate to exclude any asset disposition not in the ordinary course, provided, however, that any such disposition -------- ------- does not prevent counsel for Evergreen and the Company and Radio Broadcasting from 4. Following the Merger, Evergreen will continue the historic business of each of the Company and Radio Broadcasting or use a significant portion of the Company's and Radio Broadcasting's historic business assets in Evergreen's business. 5. Evergreen, the Company and Radio Broadcasting and the shareholders of the Company and of Radio Broadcasting will pay their respective expenses, if any, incurred in connection with the Merger. 6. There is no intercorporate indebtedness existing between the Company or Radio Broadcasting and Evergreen that was issued, acquired, or will be settled at a discount. 7. None of the compensation to be received by any shareholder- employee of the Company and Radio Broadcasting will be separate consideration for, or allocable to, any of their shares of the Company and Radio Broadcasting stock; none of the shares of Evergreen stock to be received by any shareholder-employee will be separate consideration for, or allocable to, any employment agreement; and the compensation to be paid to any shareholder-employee will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm's-length for similar services. 8. Evergreen does not own, nor has Evergreen owned during the past five years, more than a de minimis number of shares of stock of -- ------- either the Company or Radio Broadcasting. 9. Evergreen is not an investment company as defined in Section 368 (a)(2)(F)(iii) and (iv) of the Internal Revenue Code of 1986, as amended. 10. The fair market value of the assets of the Company and of Radio Broadcasting to be transferred to Evergreen will equal or exceed the sum of the liabilities assumed by Evergreen plus the amount of liabilities, if any, to which the transferred assets are subject. ___________________ delivering the opinions required by Sections 6.2(c) and 6.3(c) of the Merger Agreement. xv 11. The payment of cash in lieu of fractional shares of Evergreen stock merely represents a mechanical rounding-off of fractional share interests as a result of the Merger and does not represent separately bargained for consideration. The total cash consideration that will be paid in the Merger in lieu of fractional shares of Evergreen stock to the Company stockholders and to the Radio Broadcasting stockholders, respectively, will not exceed one percent of the total consideration that will be issued in the Merger to the Company stockholders and to the Radio Broadcasting stockholders, respectively. 12. The Merger Agreement represents the full and complete agreement among Evergreen, the Company and Radio Broadcasting regarding the Merger, and there are no other written or oral agreements regarding the Merger other than those expressly referred to in the Merger Agreement. IN WITNESS WHEREOF, Evergreen has executed this Certificate on this _________ day of _________________, 1997. Evergreen Media Corporation By:_______________________ xvi Exhibit G ____________ _____, 1997 Evergreen Media Corporation 433 East Las Colinas Boulevard Suite 1130 Irving, Texas 75039 Ladies & Gentlemen: You have requested our opinion regarding certain federal income tax consequences of the merger (the "Merger") of Chancellor Broadcasting Company (the "Company"), a Delaware corporation, and Chancellor Radio Broadcasting Company ("Radio Broadcasting"), a Delaware corporation with and into Evergreen Media Corporation ("Evergreen"), a Delaware corporation. In formulating our opinion, we examined such documents as we deemed appropriate, including the Agreement and Plan of Merger among the Company, Radio Broadcasting and Evergreen dated as of February ____, 1997 (the "Merger Agreement"), the Joint Proxy Statement/Prospectus filed by the Company, Radio Broadcasting and Evergreen on __________ ___, 1997 (the "Joint Proxy Statement"), and the Registration Statement on Form S-4, as filed by Evergreen with the SEC on ____________ ___, 1997, in which the Joint Proxy Statement/Prospectus is included as a prospectus (with all amendments thereto, the "Registration Statement"). In addition, we have obtained such additional information as we deemed relevant and necessary through consultation with various officers and representatives of the Company, Radio Broadcasting and Evergreen. Our opinion set forth below assumes (1) the accuracy of the statements and facts concerning the Merger set forth in the Merger Agreement, the Joint Proxy Statement, and the Registration Statement, (2) the consummation of the Merger in the manner contemplated by, and in accordance with the terms set forth in, the Merger Agreement, the Joint Proxy Statement and the Registration Statement and (3) the accuracy of (i) the representations made by the Company and by Radio Broadcasting, which are set forth in the Certificates delivered to us by the Company and Radio Broadcasting, dated the date hereof, (ii) the representations made by Evergreen, which are set forth in the Certificate delivered to us by Evergreen, dated the date hereof and (iii) the representations made by certain shareholders of the Company and of Radio Broadcasting in Certificates delivered to us by such persons, dated the date hereof. Based upon the facts and statements set forth above, our examination and review of the documents referred to above and Evergreen Media Corporation Page xviii subject to the assumptions set forth herein, we are of the opinion that for federal income tax purposes: 1. The Merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"). 2. Each of the Company, Radio Broadcasting and Evergreen will be a party to the reorganization within the meaning of Section 368(b) of the Code. 3. No gain or loss will be recognized by the Company, Radio Broadcasting or Evergreen as a result of the Merger. 4. No gain or loss will be recognized by holders of Evergreen Class A Common Stock or holders of Evergreen Class B Common Stock on the exchange of such shares for shares of Evergreen Common Stock pursuant to the Merger, except with respect to cash received by dissenters or in lieu of fractional shares of Evergreen Corporation Common Stock. We express no opinion concerning any tax consequences of the Merger other than those specifically set forth herein. Our opinion is based on current provisions of the Code, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service and case law, any of which may be changed at any time with retroactive effect. Any change in applicable laws or facts and circumstances surrounding the Merger, or any inaccuracy in the statements, facts, assumptions and representations on which we have relied, may affect the continuing validity of the opinions set forth herein. We assume no responsibility to inform you of any such change or inaccuracy that may occur or come to our attention. Very truly yours, Exhibit H __________, 1997 Chancellor Broadcasting Company 12655 N. Central Expressway Suite 405 Dallas, Texas 75243 Ladies & Gentlemen: You have requested our opinion regarding certain federal income tax consequences of the merger (the "Merger") of Chancellor Broadcasting Company (the "Company"), a Delaware corporation, and Chancellor Radio Broadcasting Company ("Radio Broadcasting"), a Delaware corporation and a subsidiary of the Company, with and into Evergreen Media Corporation ("Evergreen"), a Delaware corporation. In formulating our opinion, we examined such documents as we deemed appropriate, including the Agreement and Plan of Merger among the Company, Radio Broadcasting and Evergreen dated as of February __, 1997 (the "Merger Agreement"), the Joint Proxy Statement and Prospectus (the "Joint Proxy Statement") included in the Registration Statement on Form S-4, as filed by Evergreen with the Securities and Exchange Commission on March __, 1997, in which the Joint Proxy Statement is included as a prospectus (with all amendments thereto, the "Registration Statement"). In addition, we have obtained such additional information as we have deemed relevant and necessary through consultation with various officers and representatives of the Company, Radio Broadcasting and Evergreen. Our opinion set forth below assumes (1) the accuracy of the statements and facts concerning the Merger set forth in the Merger Agreement, the Joint Proxy Statement, and the Registration Statement, (2) the consummation of the Merger in the manner contemplated by, and in accordance with the terms set forth in, the Merger Agreement, the Joint Proxy Statement and the Registration Statement and (3) the accuracy of (i) the representations made by the Company and by Radio Broadcasting, which are set forth in the Certificates delivered to us by the Company and Radio Broadcasting, dated the date hereof, (ii) the representations made by Evergreen, which are set forth in the Certificate delivered to us by Evergreen, dated the date hereof, and (iii) the representations made by certain shareholders of the Company and of Radio Broadcasting in Certificates delivered to us by such persons, dated the date hereof. Chancellor Broadcasting company _______________, 1997 Page xx Based on the facts and statements set forth above, our examination and review of the documents referred to above and subject to the assumptions set forth above, we are of the opinion that for federal income tax purposes: 1. The Merger will constitute a reorganization within the meaning of Section 368 (a) of the Internal Revenue Code of 1986, as amended (the "Code"). 2. No gain or loss will be recognized by stockholders of the Company with respect to shares of common stock of Evergreen received in the Merger in exchange for shares of common stock of the Company, or with respect to shares of Evergreen convertible preferred stock received in the Merger in exchanges for shares of Company convertible preferred stock, except with respect to cash received by dissenters or in lieu of fractional shares of Evergreen common stock. 3. No gain or loss will be recognized by stockholders of Radio Broadcasting with respect to shares of Evergreen preferred stock received in the Merger in exchange for shares of Radio Broadcasting preferred stock, except with respect to cash received by dissenters. We express no opinion concerning any tax consequences of the Merger other than those specifically set forth herein. Our opinion is based on current provisions of the Code, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service and case law, any of which may be changed at any time with retroactive effect. Any change in applicable laws or in the facts and circumstances surrounding the Merger, or any inaccuracy in the statements, facts, assumptions and representations on which we have relied, may affect the continuing validity of the opinions set forth herein. We assume no responsibility to inform you of any such change or inaccuracy that may occur or come to our attention. Very truly yours, EX-2.30 4 STOCKHOLDER'S AGREEMENT EXHIBIT 2.30 STOCKHOLDERS AGREEMENT ---------------------- This STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of February 19, 1997, is entered into by and among Chancellor Broadcasting Company, a Delaware corporation (the "Company"), Evergreen Media Corporation, a Delaware corporation ("Evergreen"), Scott K. Ginsburg (individually and as custodian for certain shares held by his children, the "Principal Evergreen Stockholder"), and HM2/Chancellor, L.P., a Texas limited partnership, Hicks, Muse, Tate & Furst Equity Fund II, L.P., a Delaware limited partnership, HM2/HMW, L.P., a Texas limited partnership, the Chancellor Business Trust, a Delaware business trust, HM2/HMD Sacramento GP, L.P., a Texas limited partnership, Hicks, Muse GP Partners, L.P., a Texas limited partnership, Thomas O. Hicks, as Trustee of the William Cree Hicks 1992 Irrevocable Trust, Thomas O. Hicks, as Trustee of the Catherine Forgrave Hicks 1993 Irrevocable Trust, Thomas O. Hicks, as Trustee of the John Alexander Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Mack Hardin Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Robert Bradley Hicks 1984 Trust, Thomas O. Hicks, as Trustee of the Thomas O. Hicks, Jr. 1984 Trust, Thomas O. Hicks and H. Rand Reynolds, as Trustees for the Muse Children's GS Trust, and Thomas O. Hicks (collectively, the "Principal Company Stockholders"). RECITALS -------- WHEREAS, concurrently herewith, Evergreen, the Company and Chancellor Radio Broadcasting Company, a Delaware corporation and a subsidiary of the Company ("Radio Broadcasting") are entering into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which the Company and Radio Broadcasting will be merged with and into Evergreen (the "Merger"), with Evergreen surviving the Merger as the surviving corporation (the "Surviving Corporation"); WHEREAS, pursuant to the terms of the Merger Agreement, (i) each share of CLass A Common Stock, $0.01 par value ("Company Class A Common Stock"), and each share of Class B Common Stock, $0.01 par value ("Company Class B Common Stock" and, collectively with Company Class A Common Stock, the "Shares"), of the Company outstanding immediately prior to the Merger shall be converted into the right to receive 0.9091 shares of Common Stock, $0.01 par value (the "Surviving Corporation Common Stock"), of the Surviving Corporation, and (ii) each share of Class A Common Stock, $0.01 par value ("Evergreen Class A Common Stock"), and each share of Class B Common Stock, $0.01 par value ("Evergreen Class B Common Stock" and, collectively with Evergreen Class A Common Stock, the "Evergreen Common Stock"), of Evergreen outstanding immediately prior to the Merger shall be converted into the right to receive one share of Surviving Corporation Common Stock; WHEREAS, as a condition to entering into the Merger Agreement, Evergreen is requiring that each of the Principal Company Stockholders, and the Company is requiring that the Principal Evergreen Stockholder, enter into this Agreement, upon the terms and subject to the conditions hereinafter set forth, with respect to the number of Shares and shares of Evergreen Common Stock owned by the Principal Company Stockholders and the Principal Evergreen Stockholder, respectively, as set forth opposite the name of such stockholder on Schedule I ---------- hereto; WHEREAS, in order to induce the Company to enter into the Merger Agreement, the Principal Evergreen Stockholder is willing to enter into this Agreement; and WHEREAS, in order to induce Evergreen to enter into the Merger Agreement, the Principal Company Stockholders are willing to enter into this Agreement. NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein and other good and valuable consideration, the parties hereto agrees as follows: ARTICLE I. AGREEMENT TO VOTE SHARES ------------------------ Section 1.1 Agreement to Vote. (a) Each Principal Company Stockholder, ----------------- severally and not jointly, hereby agrees that during the time this Agreement is in effect, at any meeting of the stockholders of the Company, however called, and in any action by consent of the stockholders of the Company, such stockholder will vote (A) all of the Shares set forth opposite such stockholder's name on Schedule I hereto and (B) any and all Shares acquired by ---------- such Stockholder on or after the date hereof, subject to the termination of this Agreement pursuant to Section 6.1 hereof, (i) in favor of the Merger, the Merger Agreement (as it may be amended from time to time) and the transactions 2 contemplated by the Merger Agreement and (ii) against any Acquisition Proposal (as defined in the Merger Agreement) or any other action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or which would result in any of the conditions to the Company's obligations under the Merger Agreement not being fulfilled. In order to effect the intentions of the parties hereunder, each Principal Company Stockholder hereby constitutes and appoints Scott K. Ginsburg and Matthew E. Devine, either of whom may act without the joinder of the other, as his or its true and lawful proxy and attorney-in-fact to vote any and all of the Shares owned by such stockholder at the Stockholders Meeting (as defined in the Merger Agreement). Each Principal Company Stockholder acknowledges that the proxy granted hereby is irrevocable, being coupled with an interest, and that such proxy will continue until the termination of this Agreement in accordance with its terms. (b) The Company, in its capacity as the holder of all of the issued and outstanding shares of capital stock of Chancellor Radio Broadcasting Company, a Delaware corporation, entitled to vote on the Merger, hereby agrees that during the time this Agreement is in effect, the Company will execute a written consent, subject to the termination of this Agreement pursuant to Section 6.1 hereof, approving the Merger, the Merger Agreement (as it may be amended from time to time) and the transactions contemplated by the Merger Agreement, and the Company shall not rescind or revoke such consent. (c) The Principal Evergreen Stockholder hereby agrees that during the time this Agreement is in effect, at any meeting of the stockholders of Evergreen, however called, and in any action by consent of the stockholders of Evergreen, such stockholder will vote (A) all of the shares of Evergreen Common Stock set forth opposite such stockholder's name on Schedule I hereto and (B) any and all ---------- shares of Evergreen Common Stock acquired by such stockholder on or after the date hereof, subject to the termination of this Agreement pursuant to Section 6.1 hereof, (i) in favor of the Merger, the Merger Agreement (as it may be amended from time to time) and the transactions contemplated by the Merger Agreement and (ii) against any Acquisition Proposal or any other action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of Evergreen 3 under the Merger Agreement or which would result in any of the conditions to Evergreen's obligations under the Merger Agreement not being fulfilled. In order to effect the intentions of the parties hereunder, the Principal Evergreen Stockholder hereby constitutes and appoints Thomas O. Hicks and Lawrence D. Stuart, Jr., either of whom may act without the joinder of the other, as his or its true and lawful proxy and attorney-in-fact to vote any and all of the shares of Evergreen Common Stock owned by such stockholder at the Evergreen Stockholders Meeting (as defined in the Merger Agreement). The Principal Evergreen Stockholder acknowledges that the proxy granted hereby is irrevocable, being coupled with an interest, and that such proxy will continue until the termination of this Agreement in accordance with its terms. Section 1.2 Adjustment upon Changes in Capitalization. In the event of ----------------------------------------- any change in the Shares or Evergreen Common Stock by reason of any stock dividends, splits, mergers, recapitalizations or other changes in the corporate or capital structure of the Company or Evergreen, the number and kind of Shares or Evergreen Common Stock, as applicable, subject to this Agreement shall be appropriately adjusted. ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL COMPANY STOCKHOLDERS -------------------------------------------------------------------- Each of the Principal Company Stockholders, severally and not jointly, hereby represents and warrants to Evergreen as follows: Section 2.1 Title to Shares. As of the date hereof, such stockholder is --------------- the record and beneficial owner of the number of Shares set forth opposite such stockholder's name on Schedule I hereto, and such Shares (other than Shares held ---------- of record by another Principal Company Stockholder party hereto but as to which such stockholder may be deemed to be the beneficial owner) are all of the Company Class A Common Stock or Company Class B Common Stock owned, either of record or beneficially, by such stockholder. Such Shares are owned free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges or other encumbrances of any nature whatsoever other than pursuant to this Agreement. Other than pursuant to this Agreement, such 4 stockholder has not appointed or granted any proxy, which appointment or grant is still in effect, with respect to such Shares. Section 2.2 Authority Relative to this Agreement. Such stockholder has ------------------------------------ all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by such stockholder and the consummation of the transactions contemplated hereby have been duly and validly authorized by all corporate or other proceedings on the part of such stockholder necessary to authorize this Agreement or to consummate such transactions. This Agreement has been duly and validly executed and delivered by such stockholder and, assuming the due authorization, execution and delivery by Evergreen, constitutes a legal, valid and binding obligation of such stockholder, enforceable against such stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). Section 2.3 No Conflict. ----------- (a) Neither the execution and delivery of this Agreement nor the consummation by such stockholder of the transactions contemplated hereby will (i) conflict with or violate the certificate of incorporation or bylaws or equivalent organizational documents of such stockholder, (ii) conflict with or violate any law, rule, regulation, order, judgement or decree applicable to such stockholder or by which the Shares are bound or affected or (iii) conflict with, or constitute a violation of, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the Shares pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which such stockholder is a party or by which such stockholder or the Shares are bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not 5 prevent or delay the performance by such stockholder of its obligations under this Agreement. (b) The execution and delivery of this Agreement by such stockholder do not, and the performance of this Agreement by such stockholder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, except (i) filings which may be required under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not prevent or delay the performance by such stockholder of its obligations under this Agreement. ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL EVERGREEN STOCKHOLDER --------------------------------------------------------------------- The Principal Evergreen Stockholder hereby represents and warrants to the Company as follows: Section 3.1 Title to Evergreen Common Stock. As of the date hereof, such ------------------------------- stockholder is the record and beneficial (except to the extent indicated on Schedule I hereto) owner of the number of shares of Evergreen Common Stock set - ---------- forth opposite such stockholder's name on Schedule I hereto, and such shares of ---------- Evergreen Common Stock are all of the Evergreen Class A Common Stock or Evergreen Class B Common Stock owned, either of record or beneficially, by such stockholder. Such shares of Evergreen Common Stock are owned free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges or other encumbrances of any nature whatsoever other than pursuant to this Agreement, except as disclosed to the Company prior to the execution and delivery of this Agreement. Other than pursuant to this Agreement, such stockholder has not appointed or granted any proxy, which appointment or grant is still in effect, with respect to such shares of Evergreen Common Stock. Section 3.2 Authority Relative to this Agreement. Such stockholder has ------------------------------------ all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions 6 contemplated hereby. The execution and delivery of this Agreement by such stockholder and the consummation of the transactions contemplated hereby have been duly and validly authorized by all corporate or other proceedings on the part of such stockholder necessary to authorize this Agreement or to consummate such transactions. This Agreement has been duly and validly executed and delivered by such stockholder and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of such stockholder, enforceable against such stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). Section 3.3 No Conflict. ----------- (a) Neither the execution and delivery of this Agreement nor the consummation by the Principal Evergreen Stockholder of the transactions contemplated hereby will (i) conflict with or violate and law, rule, regulation, order, judgement or decree applicable to such stockholder or by which the shares of Evergreen Common Stock are bound or affected or (ii) conflict with, or constitute a violation of, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the shares of Evergreen Common Stock pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which such stockholder is a party or by which such stockholder or the shares of Evergreen Common Stock are bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not prevent or delay the performance by such stockholder of its obligations under this Agreement. (b) The execution and delivery of this Agreement by the Principal Evergreen Stockholder do not, and the performance of this Agreement by such stockholder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, except (i) filings which may be required under the Exchange Act, or (ii) where the failure 7 to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not prevent or delay the performance by such stockholder of its obligations under this Agreement. ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND EVERGREEN ----------------------------------------------------------- Section 4.1 Representations and Warranties of the Company. The Company ---------------------------------------------- hereby represents and warrants to the Principal Evergreen Stockholder that the Company has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under any provision of, the certificate of incorporation or bylaws of the Company, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other material agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to the Company or to the Company's property or assets that could reasonably be expected to have a Company Material Adverse Effect (as defined in the Merger Agreement). The Board of Directors of the Company has approved the terms of the Merger Agreement and this Agreement and the consummation of the transactions contemplated thereby and hereby, and such approval is sufficient to render inapplicable the provisions of Section 203 of the General Corporation Law of the State of Delaware (the "DGCL"). 8 Section 4.2 Representations and Warranties of Evergreen. Evergreen hereby ------------------------------------------- represents and warrants to each Principal Company Stockholder that Evergreen has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Evergreen, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of Evergreen. This Agreement has been duly executed and delivered by Evergreen and constitutes a valid and binding obligation of Evergreen enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under any provision of, the certificate of incorporation or bylaws of Evergreen, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other material agreement, instrument, permit, concessions, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to Evergreen or to Evergreen's property or assets that could reasonably be expected to have an Evergreen Material Adverse Effect (as defined in the Merger Agreement). The Board of Directors of Evergreen has approved the terms of the Merger Agreement and this Agreement and the consummation of the transactions contemplated thereby and hereby, and such approval is sufficient to render inapplicable the provisions of Section 203 of the DGCL. ARTICLE V. COVENANTS OF THE STOCKHOLDERS ----------------------------- Section 5.1 No Inconsistent Agreements. Each Principal Company Stockholder -------------------------- and the Principal Evergreen Stockholder, severally and not jointly, for the benefit of Evergreen and the Company, respectively, hereby covenants 9 and agrees that, except as contemplated by this Agreement or the Merger Agreement, such stockholder shall not enter into any voting agreement or grant a proxy or power of attorney with respect to their respective Shares or shares of Evergreen Common Stock which is inconsistent with this Agreement. Section 5.2 Transfer of Title. Each Principal Company Stockholder and ----------------- the Principal Evergreen Stockholder, severally and not jointly, for the benefit of Evergreen and the Company, respectively, hereby covenants and agrees that, so long as this Agreement is in effect, such stockholder will not transfer record or beneficial ownership of any of the Shares or shares of Evergreen Common Stock, respectively, unless the transferee agrees in writing to be bound by the terms and conditions of this Agreement. Section 5.3 Other Actions. Each Principal Company Stockholder, for the ------------- benefit of Evergreen, and the Principal Evergreen Stockholder, for the benefit of the Company, solely in such stockholders capacity as a stockholder of the Company and Evergreen, respectively, shall use his or its best efforts to take all reasonable action in order to effect the consummation of the Merger and all other transactions contemplated by this Agreement and the Merger Agreement, including without limitation, the execution and delivery of all agreements, instruments, consents or other documents, or any other action reasonably necessary or advisable for the consummation of the transactions contemplated by this Agreement and the Merger Agreement. ARTICLE VI. TERMINATION ----------- Section 6.1 Termination. This Agreement shall terminate automatically ----------- upon the occurrence of (i) the Effective Time, or (ii) the valid termination of the Merger Agreement for any reason other than the failure to receive the Company Stockholder Approval (as defined in the Merger Agreement) or Evergreen Stockholder Approval (as defined in the Merger Agreement) as the result of a breach of this Agreement by any Principal Company Stockholder or the Principal Evergreen Stockholder. Section 6.2 Effect of Termination. In the event of the termination of --------------------- this Agreement pursuant to Section 6.1 hereof, this Agreement shall forthwith become void and have 10 no effect, without liability on the part of any party hereto or its trustees, partners, beneficiaries, directors, officers, stockholders or affiliates. ARTICLE VII. MISCELLANEOUS ------------- Section 7.1 Notices. All notices and other communications under this ------- Agreement must be in writing and will be deemed to have been duly given if delivered, telecopied, sent via overnight delivery service or mailed, by certified mail, return receipt requested, first-class postage prepaid, to the parties at the following addresses: If to Evergreen or the Principal Evergreen Stockholder, to: Evergreen Media Corporation 433 East Las Colinas Boulevard, Suite 1130 Irving, Texas 75039 Attention. Scott K. Ginsburg Telephone: (972) 869-9020 Telecopy: (972) 869-3671 with a copy to: Latham & Watkins 1001 Pennsylvania Avenue, N.W. Suite 1300 Washington, D.C. 20004 Attention: Eric L. Bernthal, Esq. Daniel T. Lennon, Esq. Telephone: (202) 637-2200 Telecopy: (202) 637-2201 If to the Company or the Principal Company Stockholders, to: Chancellor Broadcasting Company c/o Hicks, Muse, Tate & Furst Incorporated 200 Crescent Court, Suite 1600 Dallas, Texas 75201 Attention: Thomas O. Hicks Lawrence D. Stuart, Jr. Telephone: (214) 740-7300 Telecopy: (214) 740-7313 11 with a copy to: Weil, Gotshal & Manges LLP 100 Crescent Court, Suite 1300 Dallas, Texas 75201 Attention: Jeremy W. Dickens, Esq. Telephone: (214) 746-7720 Telecopy: (214) 746-7777 Any party from time to time may change its address for the purposes of notices hereunder by giving written notice to the other parties hereto of such new address. Section 7.2 Entire Agreement. This Agreement constitutes the entire ---------------- agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements or understandings, both written and oral, among the parties hereto with respect to the subject matter hereof. Section 7.3 Stockholder Capacity. No person executing this Agreement who -------------------- is or becomes during the term hereof a director or officer of the Company or Evergreen makes any agreement or understanding herein in his capacity as such director or officer. Each Principal Company Stockholder and the Principal Evergreen Stockholder signs solely in his capacity as the record holder and beneficial owner of such Shares or shares of Evergreen Common Stock and nothing contained herein shall limit or affect any actions taken by such stockholder in his capacity as an officer or director of the Company or Evergreen to the extent specifically permitted by the Merger Agreement. Section 7.4 Specific Performance. The parties agree that irreparable --------------------- damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is according1y agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of Delaware or in a Delaware state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit such party to the personal jurisdiction of any Federal court in the event any dispute arises out of this Agreement or any of the transactions contemplated hereby, (ii) agrees that 12 such party will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that such party will not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than a Federal court sitting in the state of Delaware or a Delaware state court and (iv) waives any right to trial by jury with respect to any claim or proceeding related to or arising out of this Agreement or any of the transactions contemplated hereby. Section 7.5 Severability. If any term or other provision of this ------------ Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect and shall not in any way be affected or impaired thereby so long as the economic or legal substance of this Agreement is not affected in any manner materially adverse to any party. Section 7.6 Amendment. This Agreement may be amended only by a written --------- instrument signed by each of the parties hereto. Section 7.7 Assignment. Except as required by operation of law, this ---------- Agreement shall not be assignable by the parties hereto without the prior written consent of each of the other parties. The Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns. Section 7.8 Governing Law. This Agreement shall be governed by the laws ------------- of the State of Delaware without giving effect to the principles of conflicts of laws thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 13 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, in two or more counterparts, each of which shall be deemed to be an original and all of which collectively shall be deemed to be one and the same instrument, as of the date first written above. EVERGREEN MEDIA CORPORATION By:______________________________________ Name: Title: CHANCELLOR BROADCASTING COMPANY By:______________________________________ Name: Title: PRINCIPAL EVERGREEN STOCKHOLDER: ------------------------------- _________________________________________ Scott K. Ginsburg SCOTT K. GINSBURG, AS CUSTODIAN FOR LAURA RYAN GINSBURG By:______________________________________ Scott K. Ginsburg, Custodian SCOTT K. GINSBURG, AS CUSTODIAN FOR DREW K. GINSBURG By:______________________________________ Scott K. Ginsburg, Custodian (Signature Page 1 of 6 of Stockholders Agreement) PRINCIPAL COMPANY STOCKHOLDERS: ------------------------------ HM2/CHANCELLOR, L.P. By: HM2/CHANCELLOR GP, L.P. its general partner By: HM2/CHANCELLOR HOLDINGS, INC., its general partner By:____________________________ Name: Title: HICKS, MUSE, TATE & FURST EQUITY FUND II, L.P. By: HM2/GP PARTNERS, L.P., its general partner By: HICKS, MUSE GP PARTNERS, L.P., its general partner By: HICKS, MUSE FUND II INCORPORATED, its general partner By:____________________________ Name: Title: (Signature Page 2 of 6 of Stockholders Agreement) HM2/HMW, L.P. By: HICKS, MUSE, TATE & FURST EQUITY FUND II, L.P., its general partner By: HM2/GP PARTNERS, L.P., its general partner By: HICKS, MUSE GP PARTNERS, L.P., its general partner By: HICKS, MUSE, FUND II INCORPORATED, its general partner By: _____________________ Name: Title: CHANCELLOR BUSINESS TRUST By: HM2/GP PARTNERS, L.P., its Manager By: HICKS, MUSE GP PARTNERS, L.P., its general partner By: HICKS, MUSE FUND II INCORPORATED, its general partner By: _____________________ Name: Title: (Signature Page 3 of 6 of Stockholders Agreement) HM2/HMD SACRAMENTO GP, L.P. By: HICKS, MUSE GP PARTNERS, L.P., its general partner By: HICKS, MUSE FUND II INCORPORATED, its general partner By: _____________________ Name: Title: HICKS, MUSE GP PARTNERS, L.P. By: HICKS, MUSE FUND II INCORPORATED, its general partner By: _____________________ Name: Title: ___________________________________ Thomas O. Hicks THOMAS O. HICKS, AS TRUSTEE OF THE WILLIAM CREE HICKS 1992 IRREVOCABLE TRUST By: _______________________________ Thomas O. Hicks, Trustee (Signature Page 4 of 6 of Stockholders Agreement) THOMAS O. HICKS, AS TRUSTEE OF THE CATHERINE FORGRAVE HICKS 1993 IRREVOCABLE TRUST By: ______________________________ Thomas O. Hicks, Trustee THOMAS O. HICKS, AS TRUSTEE OF THE JOHN ALEXANDER HICKS 1984 TRUST By: ______________________________ Thomas O. Hicks, Trustee THOMAS O. HICKS, AS TRUSTEE OF THE MACK HARDIN HICKS 1984 TRUST By: ______________________________ Thomas O. Hicks, Trustee THOMAS O. HICKS, AS TRUSTEE OF THE ROBERT BRADLEY HICKS 1984 TRUST By: ______________________________ Thomas O. Hicks, Trustee THOMAS O. HICKS, AS TRUSTEE OF THE THOMAS O. HICKS, JR, 1984 TRUST By: ______________________________ Thomas O. Hicks Trustee (Signature Page 5 of 6 of Stockholders Agreement) THOMAS O. HICKS AND H. RAND REYNOLDS, AS TRUSTEES OF THE MUSE CHILDREN'S GS TRUST BY:______________________________ Thomas O. Hicks, Co-Trustee (Signature Page 6 of 6 of Stockholders Agreement) SCHEDULE I ---------- PRINCIPAL - --------- EVERGREEN STOCKHOLDER EVERGREEN COMMON STOCK - --------------------- ---------------------- Scott K. Ginsburg Class B Common Stock 3,114,066 shares* *2,850 shares are held by Mr. Ginsburg as Custodian for Laura Ryan Ginsburg and 2,850 shares are held by Mr. Ginsburg as Custodian for Drew K. Ginsburg. PRINCIPAL - --------- COMPANY STOCKHOLDER SHARES - ------------------- ------ HM2/Chancellor, L.P. Class A Common Stock: 90,713 shares Class B Common Stock: 7,129,287 shares Hicks, Muse, Tate & Furst Equity Fund II, L.P. Class A Common Stock: 1,391 shares Class B Common Stock: 6,823 shares HM2/HMW, L.P. Class A Common Stock : 1,185,521 shares Chancellor Business Trust Class B Common Stock : 1,346,801 shares HM2/HMD Sacramento GP, L.P. Class B Common Stock: 166 shares Hicks, Muse GP Partners, L.P. Class B Common Stock: 1,333 shares Thomas O. Hicks Class A Common Stock: 346,672 shares I-1 Thomas O. Hicks, as Trustee of the William Cree Hicks 1992 Irrevocable Trust Class A Common Stock 37,080 shares Thomas O. Hicks, as Trustee of the Catherine Forgrave Hicks 1992 Irrevocable Trust Class A Common Stock 37,080 shares Thomas O. Hicks, as Trustee of the John Alexander Hicks 1984 Trust Class A Common Stock 29,138 shares Thomas O. Hicks, as Trustee of the Mack Hardin Hicks 1984 Trust Class A Common Stock 29,138 shares Thomas O. Hicks, as Trustee of the Robert Bradley Hicks 1984 Trust Class A Common Stock 29,138 shares Thomas O. Hicks, as Trustee of the Thomas O. Hicks, Jr 1984 Trust Class A Common Stock 29,138 shares Thomas O. Hicks and H. Rand Reynolds, as Trustees of the Muse Children's GS Trust Class A Common Stock 3,356 shares I-2 EX-2.31 5 JOINT PURCHASE AGREEMENT EXHIBIT 2.31 JOINT PURCHASE AGREEMENT This Joint Purchase Agreement ("Agreement") is made this 19th day of February, 1997, by and between Chancellor Radio Broadcasting Company, a Delaware Corporation ("Chancellor"), Chancellor Broadcasting Company, a Delaware corporation and sole common stockholder of Chancellor ("CBC"), Evergreen Media Corporation of Los Angeles, a Delaware corporation ("Evergreen") and Evergreen Media Corporation, a Delaware corporation and the sole stockholder of Evergreen ("EMC"). RECITALS: -------- A. Chancellor, CBC and EMC have entered into a Memorandum of Understanding dated as of February 17, 1997, under which the parties have agreed to execute and deliver, subject to approval by their respective boards of directors, an Agreement and Plan of Merger (the "Merger Agreement"), with EMC surviving the Merger (the "Surviving Entity"). B. Evergreen and Viacom International, Inc., a Delaware corporation ("Viacom") and the sole stockholder of certain companies owning certain radio stations (the "Viacom Radio Companies"), have entered into a Stock Purchase Agreement dated as of February 16, 1997, pursuant to which Evergreen has agreed to acquire (the "Viacom Acquisition") all of the outstanding shares of the Viacom Radio Companies. C. The parties hereto anticipate that the acquisition of the Viacom Radio Companies in connection with the consummation of the Merger would significantly enhance the operations and business of the Surviving Entity. D. The parties have reach certain understandings and agreements regarding the Viacom Acquisition, including without limitation the sharing of the risks and benefits related thereto. NOW, THEREFORE, in consideration of the foregoing premises, and in further consideration of the mutual agreements herein contained, the parties agree as follows: 1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Viacom Agreement. 2. Term. This Agreement shall automatically terminate, without further action by the parties hereto, upon consummation of the Merger. 3. Certain Matters with respect to the Viacom Agreement. (a) On February 19, 1997, Chancellor and Evergreen shall each pay $53,750,000 to Viacom at the Seller's Account, via wire transfer of immediately available funds. (b) Chancellor and Evergreen shall each pay one-half of the Interest Amount, and all fees and expenses payable by the Purchaser pursuant to the Viacom Agreement, including, without limitation, fees and expenses in connection with the FCC Consent and the HSR Act. (c) Evergreen shall notify Chancellor of all other payments due under the Viacom Agreement no later than three Business Days prior to the date such payment is to be made. Chancellor, at its option, shall pay its share of such payment either (i) to Evergreen by wire transfer of immediately available funds on the Business Day immediately prior to the date such payment is due, or (ii) directly to the party entitled to receive such payment. (d) In the event the Viacom Agreement is validly terminated under the circumstances specified in Section 9.02(a) thereof, Chancellor consents to the forfeiture of its portion of the Deposit and further agrees to pay one-half of any other Losses incurred by Viacom that a court finally determines is owed to Viacom by Purchaser, subject to reapportionment thereof as outlined below. Evergreen and Chancellor shall jointly control (and shall share equally the expenses associated with) the defense of any action initiated by Viacom under the Viacom Agreement, and neither party shall consent to the settlement or compromise of such action without the prior written consent of the other (not to be unreasonably withheld or delayed). Losses paid to Viacom by the parties shall be apportioned between Evergreen and Chancellor in accordance with their relative responsibility for the cause of such Losses and the applicable party shall promptly reimburse the other party for any excess portion of such Losses paid by the other party to Viacom. Absent agreement as to such reapportionment, the parties shall submit the issue of such proportional responsibility to binding arbitration in New York, New York, in accordance with local American Arbitration Association rules and procedures, promptly following the award and payment of such damages to Viacom. (e) In the event the Viacom Agreement is terminated based on the circumstances specified in Section 9.02(b) thereof, Evergreen shall promptly upon receipt deliver to Chancellor that portion of the Deposit funded by Chancellor pursuant to subparagraph (a) above, plus accrued interest repaid to Evergreen by Viacom. Evergreen and Chancellor shall jointly control (and shall share equally the expenses associated with) any action initiated by or on behalf of the Purchaser against Viacom under the Viacom Agreement to recover any Losses incurred by the Purchaser as a result of the termination of the Viacom Agreement. Evergreen shall immediately upon receipt thereof pay to Chancellor one-half of all damages that are paid to Purchaser in any such action. (f) The parties shall use their reasonable best efforts to cause the consummation of the transactions contemplated by the Viacom Agreement. Without the prior written consent of Chancellor, which consent shall not be unreasonably withheld or delayed, Evergreen agrees that it will not take any actions under the Viacom Agreement, including, without limitation, entering into any agreements (such as determination of working capital or other adjustments to the Base Purchase Price), amendments, waivers, or consents, without the prior written consent of Chancellor, which shall not be unreasonably withheld or delayed. Evergreen shall promptly forward to Chancellor copies of each notice, statement, certificate or other information received by Evergreen as the Purchaser. 2 4. Allocation of the Viacom Radio Companies under various contingent conditions. (a) The parties seek to cause the consummation of the Viacom Acquisition within the 120-day period contemplated by Section 2.07 thereof, if possible, and, in all events, within the nine-month period contemplated by Section 9.01(b) thereof. Accordingly, within three (3) days of the date hereof, the parties shall file mutually-contingent applications with the FCC seeking Commission consent to the transfer of control of the Viacom Radio Companies (the "Purchase Applications"). The Purchase Applications will propose that Evergreen shall be the transferee of the New York and DC Viacom Radio Companies, and Chancellor shall be the transferee of the Chicago, Detroit and Los Angeles Viacom Radio Companies. As between themselves, Evergreen and Chancellor agree that the Base Purchase Price allocable to the markets to be purchased by Chancellor is as follows: Los Angeles - $325 million; Chicago - $125 million; and Detroit - $30 million. Evergreen and Chancellor shall each secure on a timely basis adequate financing, on commercially-reasonable and materially comparable terms, to permit the timely consummation of the Viacom Acquisition through the purchases contemplated by the Purchase Applications. If the Merger has not been consummated prior to the required closing date for the Viacom Acquisition (or if the Merger Agreement has been terminated for any reason), the parties will proceed respectively to consummate each and all of the transactions contemplated by the Purchase Applications. (b) Upon final determination of the Working Capital under the Viacom Agreement, any adjustments to the estimated Working Capital shall be allocated between Evergreen and Chancellor based on the final aggregate Working Capital of the Viacom Radio Companies acquired by the parties respectively under Paragraph (a) hereof. (c) The parties shall cooperate promptly to identify and secure qualified parties to acquire those properties which must be divested in order to obtain FCC and/or HSR clearance of the Merger, taking into account the consummation of the Viacom Acquisition ("Divestitures"). Evergreen will negotiate the terms and conditions of such Divestitures, but all Divestiture transactions will be subject to the approval of Chancellor, which approval shall not be unreasonably withheld or delayed. All expenses associated with the Divestitures will be shared equally by Chancellor and Evergreen. In the event a Divestiture sale is consummated before the Merger has been consummated, proceeds of the Divestiture sale shall be applied (i) first, to reimburse any acquisition costs paid by the applicable party to Viacom to acquire the Divested property, and (ii) thereafter, divided equally by the parties. Evergreen agrees to seek a purchaser for the Detroit Radio Company as promptly as practicable after the date hereof. (d) The parties shall also cooperate in the prompt preparation, filing and prosecution of applications for FCC consent and HSR clearance for the Merger, and any other necessary consents (the "Merger Applications"). The parties will endeavor to prosecute the Merger Applications contemporaneously with the Purchase Applications and any applications related to the Divestitures. In the event the Merger Applications are approved prior to the consummation of the Viacom Acquisition pursuant to the Purchase Applications, the parties will proceed to consummate the Viacom Acquisition through the Surviving Entity. 3 (e) The failure by either party to make any of the payments or fulfill any of the material obligations under the Viacom Agreement or this Agreement (including, without limitation, the failure to secure the financing contemplated under Paragraph 4(a) hereof or the timely consummation of the Purchase Application transactions), shall be deemed a material breach hereof. In addition to any other remedies available at law or equity, the non-defaulting party shall have the right in such circumstances to assume the rights and obligations of the other party so as to permit the non-breaching party to preserve for itself the benefits of the Viacom Agreement and the Viacom Acquisition. Evergreen shall use its reasonable best efforts to obtain promptly after the date hereof Viacom's agreement to the provisions of this paragraph 4(e). (f) If the Merger Agreement is terminated at any time but the Viacom Transaction is nevertheless consummated, the parties shall retain each of the properties acquired by them under the Purchase Applications, provided, however, that Evergreen shall cause Viacom Broadcasting East, Inc. to promptly sell to Chancellor, and Chancellor shall purchase from Evergreen, Radio Stations WJZW/WBZS, for a total consideration of Sixty Five Million Dollars ($65,000,000), in a transaction to be structured in a manner mutually satisfactory to Evergreen and Chancellor. If Evergreen acquires WJZW and WBZS prior to the consummation of the Merger, Evergreen shall operate WJZW and WBZS only in the ordinary course of business and consistent with such station's past practices. 5. Representations and Warranties. (a) Chancellor and CBC represent and warrant to Evergreen and EMC as follows: (i) Each of Chancellor and CBC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to enter into this Agreement and consummate the transactions contemplated hereby to be consummated by it. The execution and delivery by each of Chancellor and CBC of this Agreement and the consummation by it of the transactions contemplated hereby to be consummated by it have been duly authorized by all necessary corporate action on the party of Chancellor or CBC, as the case may be. This Agreement has been duly executed and delivered by each of Chancellor and CBC and, assuming the due execution and delivery of this Agreement by Evergreen and EMC, constitutes a valid and binding obligation, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (ii) The execution and delivery of this Agreement by Chancellor and CBC does not, and the performance by Chancellor and CBC of the transactions contemplated hereby to be performed by it will not (a) conflict with the certificate of incorporation or by-laws of Chancellor or CBC, (b) conflict with, or result in any violation of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, any material contract or permit, 4 order, judgment or decree to which either Chancellor or CBC is a party or by which it is bound, or (c) constitute a violation of any law or regulation applicable to Chancellor or CBC. (b) Evergreen and EMC represent and warrant to Chancellor and CBC as follows: (i) Each of Evergreen and EMC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to enter into this Agreement and consummate the transactions contemplated hereby to be consummated by it. The execution and delivery by each of Evergreen and EMC of this Agreement and the consummation by it of the transactions contemplated hereby to be consummated by it have been duly authorized by all necessary corporate action on the part of Evergreen or EMC, as the case may be. This Agreement has been duly executed and delivered by each of Evergreen and EMC and, assuming the due execution and delivery of this Agreement by Chancellor and CBC, constitutes a valid and binding obligation, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (ii) The execution and delivery of this Agreement by Evergreen and EMC does not, and the performance by Evergreen and EMC of the transactions contemplated hereby to be performed by it will not (a) conflict with the certificate of incorporation or by-laws of Evergreen or EMC, (b) conflict with, or result in any violation of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a benefit under, any material contract or permit, order, judgment or decree to which either Evergreen or EMC is a party or by which it is bound, or (c) constitute a violation of any law or regulation applicable to Evergreen or EMC. 6. Miscellaneous. (a) The parties hereto shall cooperate fully with each other in taking any actions, including actions to obtain the required consent of any Governmental Authority or any third party, necessary or helpful to accomplish the transactions. (b) Any notices or other correspondence delivered pursuant to this Agreement shall be delivered in accordance with the terms of the Merger Agreement and to the respective addresses of the parties hereto set forth in the Merger Agreement. (c) No party hereto shall take any action which is materially inconsistent with its obligations under this Agreement. (d) Except as otherwise expressly provided herein, each party hereto will pay any expenses incurred by it incident to this Agreement and in preparing to consummate and consummating the transactions provided for herein. (e) This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by 5 any party hereto without the prior written consent of the other parties which shall not be unreasonably withheld. (f) This Agreement, including without limitation, the interpretation, construction and validity hereof, shall be governed by the Laws of the state of New York. (g) This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together with constitute one and the same agreement. [SIGNATURE PAGE FOLLOWS] 6 IN WITNESS WHEREOF, the parties hereto executed this Agreement as of the day and year first above written. CHANCELLOR RADIO BROADCASTING COMPANY By: -------------------------------------- Name: --------------------------------- Title: -------------------------------- CHANCELLOR BROADCASTING COMPANY By: -------------------------------------- Name: --------------------------------- Title: -------------------------------- EVERGREEN MEDIA CORPORATION OF LOS ANGELES By: -------------------------------------- Name: --------------------------------- Title: -------------------------------- EVERGREEN MEDIA CORPORATION By: -------------------------------------- Name: --------------------------------- Title: -------------------------------- 7 -----END PRIVACY-ENHANCED MESSAGE-----