<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 20, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
EVERGREEN MEDIA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 4832 75-2247009
(STATE OR OTHER (PRIMARY STANDARD (IRS EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
----------------
433 EAST LAS COLINAS BOULEVARD
IRVING, TEXAS 75039
(972) 869-9020
(NAME, ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
----------------
SCOTT K. GINSBURG
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
433 EAST LAS COLINAS BOULEVARD
IRVING, TEXAS 75039
(972) 869-9020
(NAME, ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
----------------
COPIES TO
JOHN D. WATSON, JR., ESQ. WINTHROP B. CONRAD, JR., ESQ.
WILLIAM A. VOXMAN, ESQ. JAMES M. LURIE, ESQ.
LATHAM & WATKINS DAVIS POLK & WARDWELL
1001 PENNSYLVANIA AVENUE, N.W. 450 LEXINGTON AVENUE
WASHINGTON, D.C. 20004-2505 NEW YORK, NEW YORK 10017
(202) 637-2200 (212) 450-4000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Evergreen Media
Corporation Class A
Common Stock, par
value $.01 per share.. 9,200,000 shares $30.88 $284,096,000 $97,964.14
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</TABLE>
(1) Includes 1,200,000 shares that the Underwriters have the option to
purchase to cover overallotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
----------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
DATED SEPTEMBER 20, 1996
8,000,000 Shares
[COMPANY LOGO] --------
EVERGREEN MEDIA CORPORATION
Class A Common Stock
All of the shares of Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), offered hereby are being sold by Evergreen Media
Corporation (the "Company"). The Class A Common Stock is traded on The Nasdaq
National Market under the symbol "EVGM." On September 19, 1996, the last
reported sale price of the Class A Common Stock was $31.00 per share. See
"Price Range of Class A Common Stock."
The Company's authorized capital stock consists of Class A Common Stock,
Class B Common Stock and preferred stock. The economic rights of each class of
Common Stock are identical, but the voting rights differ. Each share of Class B
Common Stock generally entitles its holder to ten votes whereas each share of
Class A Common Stock entitles its holder to one vote. Immediately after the
Offering, Scott K. Ginsburg, the Company's Chairman and Chief Executive Officer
and the beneficial owner of all of the Class B Common Stock (the "Principal
Stockholder"), will have approximately 48.6% of the combined voting power of
all currently outstanding shares of Common Stock in respect of matters
submitted for the vote of all holders of Common Stock, other than certain
"going private" transactions. See "Description of Common Stock."
--------
SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN MATTERS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
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<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)(3)
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<S> <C> <C> <C>
Per Share................................. $ $ $
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Total..................................... $ $ $
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</TABLE>
(1) See "Underwriting" for information relating to the indemnification of the
Underwriters.
(2) Before deducting expenses payable by the Company estimated at $ .
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 1,200,000 additional shares of Class A Common Stock on the terms set
forth above solely to cover over-allotments, if any. If such option is
exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ , and $ ,
respectively. See "Underwriting."
--------
The shares of Class A Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if delivered to and accepted by them, and
subject to the right of the Underwriters to reject any order in whole or in
part. It is expected that delivery of the shares of Class A Common Stock will
be made at the offices of Alex. Brown & Sons Incorporated, Baltimore, Maryland
on or about October , 1996.
--------
Alex. Brown & Sons
INCORPORATED
CS First Boston
Donaldson, Lufkin & Jenrette
SECURITIES CORPORATION
Morgan Stanley & Co.
INCORPORATED
Smith Barney Inc.
UBS Securities
THE DATE OF THIS PROSPECTUS IS OCTOBER , 1996
<PAGE>
EVERGREEN MEDIA CORPORATION BROADCAST PROPERTIES
[A map of the United States indicating the location of the Company's broadcast
properties is located on the inside front cover of the printed version of the
Prospectus]
* Pending Transaction.
** In order to comply with the FCC's multiple ownership rules, the Company
has agreed in the contract relating to the acquisition of WPNT-FM to
dispose of one FM station in Chicago on or prior to March 15, 1997.
Also to comply with such rules, the Company will dispose of one
Philadelphia FM station or will transfer one Philadelphia FM station to
a trust through which the Company would retain the economic interest in
the station but no control, pending sale of the station by the trust.
See "Prospectus Summary--Pending Transactions."
Information set forth or incorporated by reference in this Prospectus
contains "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, which can be identified by the use of
forward-looking terminology such as "may," "will," "should," "expect,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology. The matters set forth under the
caption "Risk Factors" in the Prospectus, including, without limitation,
competitive factors applicable to the radio broadcasting industry and
regulatory developments affecting the Company's operations and the acquisition
and disposition of radio broadcasting properties, constitute cautionary
statements identifying important factors with respect to such forward-looking
statements, including certain risks and uncertainties, that could cause actual
results to differ materially from those in such forward-looking statements.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. DURING THIS
OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING IN THE
DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE CLASS A COMMON STOCK PURSUANT TO EXEMPTIONS FROM
RULES 10B-6, 10B-7 AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS (AND SELLING GROUP
MEMBERS, IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET
MAKING TRANSACTIONS IN THE CLASS A COMMON STOCK ON NASDAQ IN ACCORDANCE WITH
RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus and in documents incorporated by reference into
this Prospectus. As used in this Prospectus, the term "broadcast cash flow"
means station operating income before depreciation, amortization and corporate
general and administrative expense. All information set forth herein has been
adjusted to reflect a three-for-two split of the Company's Class A and Class B
Common Stock (the "Common Stock"), effected in the form of a stock dividend,
paid on August 26, 1996 to stockholders of record at the close of business on
August 19, 1996. Unless otherwise indicated, share and per share data in this
Prospectus assume that the Underwriters' over-allotment option is not
exercised.
THE COMPANY
Evergreen Media Corporation (the "Company") owns and operates radio stations
across the United States, including stations in 11 of the nation's 12 largest
radio markets (Los Angeles, New York, Chicago, Dallas, San Francisco,
Washington, D.C., Philadelphia, Houston, Boston, Detroit and Miami). Measured
by gross revenue and after giving effect to announced transactions in the
industry (including the Pending Transactions discussed below), the Company is
the nation's largest radio-only ("pure play") broadcasting company and the
operator of the nation's second largest radio broadcasting group. On a pro
forma basis, after giving effect to the BPI Acquisition, the Pyramid
Acquisition, the Other Completed Transactions and the Pending Transactions (in
each case as defined below), the Company would have had net revenues of $325.6
million and broadcast cash flow of $123.7 million for the year ended December
31, 1995.
Assuming completion of all Pending Transactions and without giving effect to
two dispositions which are required to comply with the multiple ownership rules
of the Federal Communications Commission (the "FCC"), the Company's portfolio
of stations will consist of 30 FM and 12 AM radio stations in 11 markets. After
giving effect to the two required dispositions, the portfolio will include
clusters ("superduopolies") of five FM radio stations in Chicago, San
Francisco, Philadelphia and Detroit. The portfolio is diversified in terms of
format, target demographics, geographic location and phase of development. The
Company believes that the size, geographic breadth and diversity of its
portfolio of radio stations help to insulate it from downturns in specific
markets and changes in musical tastes.
The following table sets forth certain information regarding the Company's
portfolio and markets, assuming completion of all Pending Transactions:
<TABLE>
<CAPTION>
RANKING OF NO. OF STATIONS
STATION'S MARKET --------------- 1995 RADIO REVENUE
MARKET BY REVENUE(1) AM FM MARKET SHARE %(2)
------ ---------------- ------- ------- ------------------
<S> <C> <C> <C> <C>
Los Angeles.............. 1 -- 1 4.7
New York................. 2 -- 1 3.0
Chicago(3)............... 3 2 6 24.2
Dallas/Ft. Worth......... 4 1 -- --
San Francisco............ 5 1 5 24.1
Washington, D.C. ........ 6 2 2 17.8
Philadelphia(3).......... 7 1 6 27.2
Houston.................. 8 1 1 16.2
Boston................... 9 1 2 15.3
Detroit.................. 11 2 5 34.0
Miami/Fort Lauderdale.... 12 1 1 7.8
------- -------
Total.................. 12 30
</TABLE>
3
<PAGE>
- --------
(1) Ranking of the principal radio market served by the Company's station(s)
among all U.S. radio markets by 1995 gross radio broadcasting revenue as
reported by James H. Duncan, Duncan's Radio Market Guide (1996 ed.).
(2) Pro forma 1995 revenues in the market divided by 1995 gross radio
broadcasting market revenue as reported by Duncan's Radio Market Guide
(1996 ed.).
(3) In order to comply with the FCC's multiple ownership rules, the Company has
agreed in the contract relating to the acquisition of WPNT-FM to dispose of
one FM station in Chicago on or prior to March 15, 1997. Also to comply
with such rules, the Company will dispose of one Philadelphia FM station or
will transfer one Philadelphia FM station to a trust through which the
Company would retain the economic interest in the station but no control,
pending sale of the station by the trust.
The Company's strategy is to acquire and operate radio stations in the
nation's largest radio markets, focusing particularly on markets where the
Company has the opportunity to assemble FM superduopolies of as many as five FM
radio stations. In evaluating potential acquisition candidates in its target
markets, the Company seeks to identify underperforming radio stations or groups
of stations that have strong broadcast signals. After acquiring a station, the
Company seeks to improve broadcast cash flow by such means as improving
marketing, reducing station operating expenses or combining operations with an
existing station or stations operated by the Company in the same market. The
Company's general operational objective is to heighten a station's recognition
in its market by using promotional tie-ins with local community events and by
hiring popular on-air talent. The Company also conducts extensive market
research to help tailor programming formats to listener preferences. This
research has helped the Company to identify programming format opportunities,
as has been the case with WKTU-FM in New York, which the Company acquired as
part of the acquisition of Broadcasting Partners, Inc. ("BPI") in May of 1995
(the "BPI Acquisition"). After operating WKTU-FM for nine months under the call
letters and country music format inherited from BPI, in February of 1996 the
Company began to operate WKTU-FM as a rhythmic contemporary hits station.
According to information derived from The Arbitron Company's Local Market
Reports, WKTU-FM ranked first in several key demographic groups (including its
target demographic group) in the New York market in the spring of 1996
(compared to a ranking of eleventh in its target demographic group in the
winter of 1995, which was the latest rating period prior to consummation of the
BPI Acquisition).
The Company is actively pursuing acquisition opportunities; however, no
agreements have been reached with respect to any potential acquisitions other
than with respect to the Pending Transactions described below. The opportunity
to assemble superduopolies in multiple markets has been made possible by the
Telecommunications Act of 1996 (the "1996 Act"), which contains two provisions
that have significantly accelerated the pace of local and national
consolidation in the radio industry. First, the 1996 Act increased the number
of radio stations a single entity may own and operate in a given market.
Depending on the size of the market, industry participants may now own as many
as eight stations in a market (including up to five AM or FM stations). Second,
the 1996 Act eliminated the ceiling on the number of stations that a single
entity may own and operate on a national basis. The Company expects that the
consolidation permitted by the 1996 Act will provide it with several
competitive advantages, including the ability to (i) create major market
superduopolies that deliver to advertisers a larger combined audience, (ii)
capture a larger percentage of a market's total radio advertising revenue and
(iii) achieve operating efficiencies through consolidation of studios, offices
and certain administrative functions.
The Company's principal executive office is located at 433 East Las Colinas
Boulevard, Irving, Texas 75039, and its telephone number at that location is
(972) 869-9020.
4
<PAGE>
RECENT DEVELOPMENTS
Since January 1, 1996, the Company has acquired 14 radio stations for $393.5
million and has disposed of three radio stations for $32.0 million. In
addition, the Company has entered into binding contracts to purchase an
additional 13 radio stations for $615.0 million (including $20.0 million
already advanced by the Company to various sellers in the form of escrow
deposits or other upfront payments and the issuance of a $5.0 million letter of
credit in favor of a seller) and has agreed in three separate transactions to
swap or sell a total of eight stations (including one of the stations that the
Company has agreed to acquire) in exchange for four other stations and $10.0
million (collectively, the "Pending Transactions"). There can be no assurance
that the Pending Transactions will be consummated. As of September 20, 1996,
seven of the stations to be acquired in the Pending Transactions were being
operated by the Company under time brokerage agreements.
Completed Transactions
. On January 17, 1996, the Company acquired Pyramid Communications, Inc.
("Pyramid") a radio broadcasting company with nine FM and three AM radio
stations in five radio markets (Chicago, Philadelphia, Boston, Charlotte and
Buffalo) (the "Pyramid Acquisition") for $306.5 million in cash, plus an
additional payment of $9.0 million attributable to net working capital. The
Pyramid Acquisition has (i) advanced the Company's strategy of building a
larger portfolio of major market radio stations that provide the Company with
greater geographic and programming format diversity, (ii) provided entry into
two major markets--Boston and Philadelphia--in which the Company had lacked a
presence and (iii) enabled the Company to develop a larger presence in
Chicago.
. On May 3, 1996, the Company acquired WKLB-FM in Boston from Fairbanks
Communications, Inc. for $34.0 million in cash. As discussed below, the
Company has agreed with Greater Media Radio, Inc. ("Greater Media") to
exchange WKLB-FM for WGAY-FM in Washington, D.C.
. On July 19, 1996, the Company sold WHTT-FM and WHTT-AM in Buffalo to Mercury
Radio Communications, L.P. for $19.5 million in cash, and on August 1, 1996
the Company sold WSJZ-FM in Buffalo to American Radio Systems Corporation for
$12.5 million in cash (collectively, the "Buffalo Dispositions"). Each of
these Buffalo stations had been acquired as part of the Pyramid Acquisition.
The proceeds from the sale of WHTT-FM and WHTT-AM were applied toward the
purchase price of KYLD-FM in San Francisco (discussed below), while the $12.5
million in proceeds from the sale of WSJZ-FM remain available to be applied
by the Company in a future acquisition (which the Company expects to be the
acquisition of WEDR-FM discussed below).
. On August 14, 1996, the Company acquired KYLD-FM in San Francisco from
Crescent Communications, L.P. for $44.0 million in cash (the "KYLD-FM
Acquisition"). The Company had previously been operating KYLD-FM under a time
brokerage agreement since May 1, 1996. The KYLD-FM Acquisition has created an
FM superduopoly for the Company in the San Francisco market. The KYLD-FM
Acquisition and the Buffalo Dispositions are collectively referred to herein
as the "Other Completed Transactions."
Pending Transactions
. On June 13, 1996, the Company entered an asset exchange agreement with
Greater Media under which the Company will exchange WKLB-FM for WGAY-FM.
After also initially agreeing to purchase from Greater Media WWRC-AM in
Washington, D.C. for $22.5 million in cash, the Company has subsequently
agreed with Greater Media to exchange WQRS-FM in Detroit (which, as discussed
below, the Company has agreed to acquire from Secret Communications, L.P. for
$32.0 million in cash) for WWRC-AM and $9.5 million in cash. The Company has
been operating WGAY-FM and WWRC-AM under a time brokerage agreement with
Greater Media, and Greater Media has been operating WKLB-FM under a time
brokerage agreement with the Company, in each case since June 17, 1996. The
Company expects that the exchange of WKLB-FM for WGAY-FM will be completed in
the fourth quarter of 1996 and that the exchange of WQRS-FM for WWRC-AM will
be completed in the first quarter of 1997. The Company retains the right to
acquire WWRC-AM from Greater Media under the original contract irrespective
of whether the acquisition of WQRS-FM from Secret Communications, L.P. is
consummated.
. On June 27, 1996, the Company entered into an agreement with an affiliate of
The Rivers Group to acquire WEDR-FM in Miami for $65.0 million in cash
(including $3.0 million paid by the Company in
5
<PAGE>
escrow). The Company expects that this transaction, which provides the Company
with a significant FM presence in the nation's twelfth largest radio market,
will be completed in the fourth quarter of 1996.
.On July 15, 1996, the Company entered into an agreement with Century Chicago
Broadcasting, L.P. to acquire WPNT-FM in Chicago for $73.8 million in cash
(including $5.0 million already paid by the Company for an option to purchase
the station and $0.5 million paid by the Company in escrow). Consummation of
the acquisition of WPNT-FM would result in the Company's ownership of six FM
radio stations in the Chicago market, or one station in excess of the maximum
number of FM stations under common ownership in a market of Chicago's size
established by the 1996 Act. Accordingly, under the terms of the contract to
purchase WPNT-FM, the Company has agreed to dispose of one FM station in
Chicago on or prior to March 15, 1997. The contract also requires the Company
to file an application with the FCC seeking approval of the disposition of one
of the Company's Chicago FM stations on or prior to September 30, 1996. The
acquisition of WPNT-FM is expected to be completed in the first quarter of
1997.
. On August 12, 1996, the Company entered into an agreement with Secret
Communications, L.P. ("Secret") to acquire WMXD-FM and WJLB-FM in Detroit for
$168.0 million in cash and WFLN-FM in Philadelphia for $37.8 million in cash.
The Company also agreed with Secret that the Company would operate the
stations to be acquired from Secret under time brokerage agreements effective
September 1, 1996. Under the agreement, the Company has the right to
consummate the acquisition of WFLN-FM prior to consummating the acquisition
of WMXD-FM and WJLB-FM. Finally, on August 12, 1996, the Company entered into
a separate agreement with Secret to purchase WQRS-FM in Detroit from Secret
for $32.0 million in cash, which station the Company, as discussed above,
will swap at closing to Greater Media for WWRC-AM in Washington and $9.5
million in cash. These transactions are expected to be completed in the first
quarter of 1997.
. On August 12, 1996, the Company entered into an agreement with Chancellor
Broadcasting Company ("Chancellor") to acquire WWWW-FM and WDFN-AM in Detroit
for $30.0 million in cash (including $1.5 million paid in escrow by the
Company). Prior to entering into this agreement, the Company had provided
certain sales and promotional functions to these Detroit stations and, since
April 1, 1996, has operated the stations under a time brokerage agreement.
The purchase agreement replaced a put and call arrangement regarding the
stations that had been in place between the Company and Chancellor since
January 9, 1996. The acquisition of WWWW-FM and WDFN-AM is expected to be
completed in the fourth quarter of 1996. Consummation of the acquisitions of
WWWW-FM from Chancellor and of WMXD-FM and WJLB-FM from Secret will result in
the Company's owning a superduopoly of five FM stations in the Detroit
market.
. On September 4, 1996, the Company entered into a binding letter of intent
with EZ Communications, Inc. ("EZ") to swap five of the Company's six
stations in the Charlotte market (WPEG-FM, WBAV-AM, WBAV-FM, WRFX-FM and
WFNZ-AM), which were acquired as part of the Pyramid Acquisition and the BPI
Acquisition, for WIOQ-FM and WUSL-FM in Philadelphia. As part of this
transaction, the Company has also agreed to sell to EZ its sixth radio
station in Charlotte, WNKS-FM, for $10.0 million in cash (the exchange and
the sale being referred to herein as the "Philadelphia/Charlotte
Transaction"). The consummation of the sale of WNKS-FM is contingent on
consummation of the exchange of the Company's five other Charlotte stations
for EZ's two Philadelphia stations, but consummation of the exchange is not
contingent on consummation of the sale. The consummation of the
Philadelphia/Charlotte Transaction would result in EZ's ownership of stations
in excess of the maximum number of stations under common ownership in a
market of Charlotte's size established by the 1996 Act. Accordingly, EZ has
agreed with a third party to dispose of certain of its Charlotte FM stations
in order to consummate the exchange with the Company. Following completion of
definitive agreements relating to the Philadelphia/Charlotte Transaction and
the expiration of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), it is
expected that the Company will begin operating WIOQ-FM and WUSL-FM under a
time brokerage agreement and that the Company's Charlotte stations will be
operated by EZ or a third party under time brokerage agreements. The
Philadelphia/Charlotte Transaction is expected to be completed in the first
quarter of 1997.
. On September 19, 1996, the Company entered into an agreement with The Brown
Organization to acquire KKSF-FM, KDFC-FM and KDFC-AM in San Francisco for
$115.0 million in cash (including $10.0 million paid
6
<PAGE>
by the Company in escrow) (the "San Francisco Transaction"). Following
expiration of the applicable waiting period under the HSR Act, the Company
expects to begin operating the two FM radio stations being acquired in the San
Francisco Transaction under a time brokerage agreement. KDFC-AM is currently
operated by a third party under a time brokerage agreement, and the Company
expects this arrangement to continue after consummation of the San Francisco
Transaction. The San Francisco Transaction is expected to be completed in the
first quarter of 1997. Upon consummation of the San Francisco Transaction, the
Company will own a superduopoly of five FM stations in the San Francisco
market.
. On September 19, 1996, the Company entered into an agreement with Beasley FM
Acquisition Corp. and certain of its affiliates to acquire WDAS-FM and WDAS-
AM in Philadelphia for $103.0 million in cash (the "WDAS-AM/FM Transaction").
In connection with the WDAS-AM/FM Transaction, the Company issued a $5.0
million letter of credit for the benefit of the seller. Consummation of the
WDAS-AM/FM Transaction, the Philadelphia/Charlotte Transaction and the
acquisition of WFLN-FM from Secret would result in the Company's ownership of
six FM radio stations in the Philadelphia market, or one station in excess of
the maximum number of FM stations under common ownership in a market of
Philadelphia's size established by the 1996 Act. Accordingly, in order to
comply with the FCC's multiple ownership rules, the Company will dispose of
one Philadelphia FM station or will transfer one Philadelphia FM station to a
trust through which the Company would retain the economic interest in the
station but no control, pending sale of the station by the trust. The
contract relating to the WDAS-AM/FM Transaction requires that such
disposition or transfer occur by May 1, 1997. The WDAS-AM/FM Transaction is
expected to be completed in the first quarter of 1997. Upon consummation of
the WDAS-AM/FM Transaction, the Philadelphia/Charlotte Transaction, the
acquisition of WFLN-FM from Secret and the disposition of one Philadelphia FM
station as described above, the Company will own a superduopoly of five FM
stations in the Philadelphia market.
Consummation of each Pending Transaction is subject to various conditions,
including approval from the FCC and review under the HSR Act. To date, only FCC
approval of the pending acquisition of WEDR-FM in Miami has been obtained, and
this approval has not become a "final" order. The Company believes that FCC
approval of the other Pending Transactions will be forthcoming in the ordinary
course, but there can be no assurance that this will be the case. See "Risk
Factors--Possible Non-consummation of the Pending Transactions."
The Financing Transaction
The total cash financing required to consummate the Pending Transactions is
expected to be $615.0 million. Of this amount, approximately $20.0 million has
already been advanced by the Company to various sellers in the form of escrow
deposits or other upfront payments, and $12.5 million in cash from the sale of
WSJZ-FM in Buffalo remains in a segregated account but is available as a source
of financing for the Pending Transactions. In addition, the Company expects to
receive $10.0 million in cash from the sale of WNKS-FM to EZ. Accordingly, the
Company will require $572.5 million in additional financing to consummate the
Pending Transactions, of which at September 19, 1996 approximately $290.7
million would have been available to the Company under the Company's current
$625.0 million credit facility (the "Senior Credit Facility"), after giving
effect to the application of net proceeds of the Offering to repay borrowings
thereunder and the reduction of available borrowings resulting from the
issuance of a $5.0 million letter of credit in connection with the WDAS-AM/FM
Transaction. See "Use of Proceeds."
The Company is actively engaged in negotiations with certain of the lenders
party to the Senior Credit Facility regarding the establishment of a new,
expanded credit facility (the "Financing Transaction") that would (i) replace
the Senior Credit Facility, (ii) provide the Company with as much as $1.2
billion in total borrowing capacity and (iii) fund the financing requirements
of the Pending Transactions as well as other potential acquisitions. In the
event that the Financing Transaction is not consummated, the Company will need
to consider sales of non-core assets or pursue other sources of debt or equity
capital in order to consummate the Pending Transactions, and the Company may
pursue these possible sources in any event. There can be no assurance that the
Company will be successful in establishing an expanded credit facility, or that
alternative sources of funding will be available on acceptable terms. See "Risk
Factors--Possible Non-consummation of the Pending Transactions." After giving
pro forma effect to the Offering, the Other Completed Transactions, the Pending
Transactions and the Financing Transaction, at June 30, 1996 the Company would
have had $913.3 million in long-term debt outstanding (including current
portion).
7
<PAGE>
THE OFFERING
<TABLE>
<C> <S>
Class A Common Stock to be offered by
the Company............................ 8,000,000 shares
Common Stock to be outstanding after
the Offering(1)........................ 38,040,076 shares of Class A Common
Stock
3,116,066 shares of Class B Common
Stock
41,156,142 shares of Common Stock.
Voting Rights........................... The shares of each class of Common
Stock have identical economic
rights, but the voting rights dif-
fer. The Class A Common Stock and
Class B Common Stock vote as a sin-
gle class with respect to all mat-
ters submitted to a vote of stock-
holders, except as otherwise pro-
vided by law. Each share of Class A
Common Stock is entitled to one vote
and each share of Class B Common
Stock is entitled to ten votes, ex-
cept with respect to any proposed
"going private" transactions with
the Principal Stockholder, in which
case each share of Common Stock is
entitled to one vote.
Use of Proceeds......................... To reduce borrowings under the Se-
nior Credit Facility. Such amounts
may be subsequently reborrowed for
general corporate purposes (includ-
ing financing of the Pending Trans-
actions), subject to compliance with
certain conditions. See "Use of Pro-
ceeds."
Nasdaq National Market Symbol of Class A
Common Stock........................... EVGM
</TABLE>
- --------
(1) Shares outstanding are as of September 1, 1996. Includes 5,030,445 shares
of Class A Common Stock issuable upon conversion of the Company's $3.00
Convertible Exchangeable Preferred Stock (the "Convertible Preferred
Stock"), which is convertible into Class A Common Stock at a price of
$16.00 per share and which became callable by the Company on August 16,
1996. Excludes (i) 1,496,043 shares of Class A Common Stock that may be
issued from time to time upon the exercise of vested employee and director
stock options having exercise prices ranging from $.01 to $23.33 per share,
(ii) 190,500 shares of Class A Common Stock that may be issued from time to
time upon exercise of currently unvested employee and director stock
options having exercise prices ranging from $23.91 to $26.75 per share and
(iii) 365,493 shares of Class A Common Stock issuable upon exercise of
options authorized but not yet granted under the Company's employee and
director stock option plans.
8
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(In thousands, except per share data)
<TABLE>
<CAPTION>
HISTORICAL COMPANY PRO FORMA COMBINED(2)
----------------------------------------------- -----------------------------------
TWELVE MONTHS TWELVE MONTHS
ENDED SIX MONTHS ENDED SIX MONTHS
DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30,
---------------------------- ----------------- -------------- ---------------
1993 1994 1995 1995 1996 1995 1996
-------- -------- -------- ------- -------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA(1):
Gross revenues........... $106,813 $125,478 $186,365 $77,338 $144,614 $ 372,316 $ 187,395
Net revenues............. 93,504 109,516 162,931 67,405 126,362 325,598 163,762
Station operating
expenses excluding
depreciation and
amortization............ 60,656 68,852 97,674 41,646 80,313 201,899 103,676
Depreciation and
amortization............ 33,524 30,596 47,005 16,532 44,012 145,134 71,500
Corporate general and
administrative expense.. 2,378 2,672 4,475 1,695 3,198 5,175 3,220
Other nonrecurring
costs(3)................ 7,002 -- -- -- -- -- --
-------- -------- -------- ------- -------- ------------- ---------------
Operating income (loss).. (10,056) 7,396 13,777 7,532 (1,161) (26,610) (14,634)
Interest expense......... 13,878 13,809 19,199 9,289 19,027 72,953 34,387
Other (income) expense,
net(4).................. (3,185) (6,452) 236 160 12 (369) (48)
-------- -------- -------- ------- -------- ------------- ---------------
Income (loss) before
income taxes and
extraordinary item...... (20,749) 39 (5,658) (1,917) (20,200) (99,194) (48,973)
Income tax expense
(benefit)............... -- -- 192 545 (3,705) (26,782) (13,223)
-------- -------- -------- ------- -------- ------------- ---------------
Income (loss) before
extraordinary item...... (20,749) 39 (5,850) (2,462) (16,495) (72,412) (35,750)
Extraordinary loss on
early extinguishment of
debt(5)................. -- 3,585 -- -- -- -- --
-------- -------- -------- ------- -------- ------------- ---------------
Net loss................. (20,749) (3,546) (5,850) (2,462) (16,495) (72,412) (35,750)
Preferred stock
dividends............... 4,756 4,830 4,830 2,415 2,415 4,830 2,415
Accretion of redeemable
preferred stock to
mandatory redemption
value, including $17,506
in 1993 relating to
early redemption(6)....... 18,823 -- -- -- -- -- --
-------- -------- -------- ------- -------- ------------- ---------------
Net loss attributable to
common stockholders..... $(44,328) $ (8,376) $(10,680) $(4,877) $(18,910) $ (77,242) $ (38,165)
======== ======== ======== ======= ======== ============= ===============
Net loss per common share
after extraordinary
item(6)................. $ (4.48) $ (0.64) $ (0.52) $ (0.33) $ (0.67) $ (2.14) $ (1.06)
======== ======== ======== ======= ======== ============= ===============
Weighted average common
shares outstanding(7)... 9,890 13,002 20,721 14,640 28,070 36,034 36,070
OTHER FINANCIAL DATA:
Broadcast cash flow(8)... $ 32,848 $ 40,664 $ 65,257 $25,759 $ 46,049 $ 123,699 $ 60,086
<CAPTION>
AS OF JUNE 30, 1996
-----------------------------------
COMPANY
PRO FORMA
ACTUAL COMBINED(2)
-------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital...................................................... $ 19,791 $ 19,791
Total assets......................................................... 956,544 1,559,044
Long-term debt (including current portion)........................... 554,000(9) 913,300
Stockholders' equity................................................. 286,194 529,394
</TABLE>
9
<PAGE>
- --------
(1) The consolidated historical financial results of the Company are not
comparable from period to period because of the acquisition and disposition
of various radio stations by the Company during the periods covered. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 and the Company's Quarterly
Reports on Form 10-Q for the quarterly periods ended March 31, 1996 and
June 30, 1996. The consolidated statement of operations data for the twelve
months ended December 31, 1995 include the results of BPI from May 12,
1995. The consolidated statement of operations data for the six months
ended June 30, 1996 include the results of Pyramid from January 17, 1996.
(2) The unaudited Company pro forma combined balance sheet data at June 30,
1996 present adjustments for the following transactions as if each had
occurred at June 30, 1996: (i) the Other Completed Transactions, (ii) the
Pending Transactions, (iii) the Financing Transaction and (iv) the Offering
and the application of estimated net proceeds therefrom. The unaudited
Company pro forma combined statements of operations data for the twelve
months ended December 31, 1995 and the six months ended June 30, 1996
present adjustments for the following transactions as if each had occurred
on January 1, 1995: (i) the BPI Acquisition, (ii) the sale on July 25,
1995 by the Company and certain warrant holders of shares of Class A Common
Stock in a public offering that resulted in net proceeds of $132,734 to the
Company (the "1995 Offering"), (iii) the Pyramid Acquisition, (iv) the
Other Completed Transactions, (v) the Pending Transactions, (vi) the
Financing Transaction and (vii) the Offering and the application of
estimated net proceeds therefrom. The pro forma information is not
necessarily indicative of the operating results or financial position that
would have been achieved had such transactions actually been consummated on
the dates specified, nor is it indicative of the Company's future results
or financial position. See "Unaudited Pro Forma Condensed Combined
Financial Statements."
(3) Consists of a non-cash charge resulting from the grant of employee stock
options prior to the Company's initial public offering.
(4) Includes gains on dispositions of assets of $3,392 and $6,991 in 1993 and
1994, respectively.
(5) In connection with its debt refinancings in 1994, the Company wrote off the
unamortized balance of deferred debt issuance costs of $3,585 as an
extraordinary charge.
(6) Due to the early redemption of the Company's Series A and Junior
Exchangeable Redeemable Preferred Stock in October 1993, a one-time
accretion charge of approximately $17,506 was incurred which increased loss
per common share for 1993 by $1.77.
(7) Gives effect to the three-for-two stock split, retroactively for all
periods presented.
(8) Data on station operating income excluding depreciation and amortization,
corporate general and administrative expense (commonly referred to as
broadcast cash flow), although not calculated in accordance with generally
accepted accounting principles, is widely used in the broadcast industry as
a measure of a company's operating performance. Nevertheless, this measure
should not be considered in isolation or as a substitute for operating
income, cash flows from operating activities or any other measure for
determining the Company's operating performance or liquidity that is
calculated in accordance with generally accepted accounting principles.
Broadcast cash flow does not take into account the Company's debt service
requirements and other commitments and, accordingly, broadcast cash flow is
not necessarily indicative of amounts that may be available for dividends,
reinvestment in the Company's business or other discretionary uses.
(9) The current portion of the Company's long-term debt at June 30, 1996 was
$29,250. Long-term debt excludes capital lease obligations of $626 at June
30, 1996, which are classified as other liabilities in the historical
financial statements.
10
<PAGE>
RISK FACTORS
In addition to the other information contained or incorporated by reference
in this Prospectus, prospective investors should consider carefully the
following factors before purchasing the shares of Class A Common Stock offered
hereby.
The Company's Expansion
Since consummation of the BPI Acquisition in May of 1995, the Company has
experienced significant expansion, including expansion into a number of
markets in which the Company has not previously operated. See "Prospectus
Summary--Recent Developments." The Company is regularly involved in
discussions with third parties regarding potential acquisitions and has
entered into binding agreements with respect to the Pending Transactions
described herein. In light of the Pending Transactions as well as the
Company's pursuit of additional acquisitions, the Company expects to
experience significant expansion in the future. As a result, the Company's
management is expected to be required to manage a substantially larger radio
station group than historically has been the case. The Company's acquisition
strategy involves numerous other risks, including difficulties in the
integration of operations and systems, the diversion of management's attention
from other business concerns and the potential loss of key employees of
acquired stations. There can be no assurance the Pending Transactions or other
acquisitions the Company may undertake will benefit the Company.
Possible Non-consummation of the Pending Transactions
The consummation of radio broadcasting acquisitions requires FCC approval
with respect to the transfer of the broadcast license of the acquired station.
The consummation of certain acquisitions, including the Pending Transactions,
is also subject to applicable waiting periods and possible review by the
Department of Justice or the Federal Trade Commission under the HSR Act. The
Company understands that since the passage of the 1996 Act several radio
broadcasting acquisitions (none of which directly involves the Company) have
been the subject of "second requests" for additional information by federal
authorities under the HSR Act and that the Department of Justice is currently
reviewing its internal guidelines for antitrust review of radio broadcasting
acquisitions. Although the Company does not believe that any of the Pending
Transactions or the Company's pursuit of other acquisitions will be adversely
affected by review under the HSR Act or by the potential development of new
Department of Justice guidelines, there can be no assurance that this will be
the case. Finally, the consummation of certain of the Pending Transactions
will also depend upon the Company's ability to establish a new, expanded
credit facility in the Financing Transaction or otherwise gain access to
additional financing, and the Company requires additional financing capacity
in order to implement its acquisition strategy. See "Prospectus Summary--
Recent Developments--The Financing Transaction." There can be no assurance
that the FCC will approve future acquisitions, including the Pending
Transactions for which approval has not been obtained, that the Company will
be able to consummate such acquisitions or that additional financing will be
available on acceptable terms under a new and expanded credit facility or
otherwise.
Substantial Leverage, Pledge of Assets and Covenants
As of June 30, 1996, the Company's total long-term debt (including current
portion) was approximately $554.0 million. Although consummation of the
Offering will result in a decrease in the Company's leverage, the Company will
incur substantial additional indebtedness in order to finance the Pending
Transactions, as well as other acquisitions that may be identified in the
future. After giving pro forma effect to the Offering, the Other Completed
Transactions, the Pending Transactions and the Financing Transaction, at June
30, 1996 the Company would have had $913.3 million in long-term debt
outstanding (including current portion). Because of the Company's substantial
indebtedness, a significant portion of the Company's operating income is, and
will continue to be, required for debt service. The Company's significant
leverage could make it vulnerable to a downturn in the operating performance
of its radio stations or a downturn in economic conditions.
Substantially all of the Company's assets are pledged to secure indebtedness
outstanding under the Senior Credit Facility and its Senior Secured Amended
and Restated Note Purchase Agreement dated
11
<PAGE>
January 17, 1996 (the "Senior Note Agreement"). The Senior Credit Facility and
the Senior Note Agreement each contain certain financial and operational
covenants and other restrictions with which the Company must comply,
including, among others, limitations on capital expenditures, corporate
overhead and the incurrence of additional indebtedness, paying cash dividends
and redeeming or repurchasing capital stock of the Company, restrictions on
the use of borrowings, and requirements to maintain certain financial ratios,
and the Senior Credit Facility also prohibits the Company from making certain
acquisitions unless certain financial conditions are satisfied or unless the
consent of lenders representing a majority of the commitments thereunder is
obtained. Any new credit facility is likely to contain similar provisions.
Such provisions may adversely affect the Company's operational flexibility and
its ability to pursue its strategy of further growth through acquisitions.
Radio Broadcasting Industry Subject to Federal Regulation
The radio broadcasting industry is subject to extensive regulation by the
FCC under the Communications Act of 1934, as amended (the "Communications
Act"). Approval of the FCC is required for the issuance, renewal or transfer
of radio broadcast station operating licenses. In particular, the Company's
business will be dependent upon its continuing to hold radio broadcasting
licenses from the FCC that are issued for terms of up to eight years. While in
the vast majority of cases such licenses are renewed by the FCC, there can be
no assurance that any of the stations' licenses will be renewed at their
expiration dates, or that renewals, if granted, will not include conditions or
qualifications that could adversely affect the Company's operations. In
addition, the Communications Act and FCC rules restrict alien ownership and
voting of capital stock of, and participations in the affairs of the Company.
Moreover, laws, regulations and policies may be changed significantly over
time and there can be no assurance that such changes will not have a material
adverse affect on the Company's business, financial condition and results of
operations.
The 1996 Act, which amended the Communications Act in a number of important
respects, has created significant new opportunities for radio broadcasters,
but also has created uncertainties as to how the FCC and the courts will
enforce and interpret the 1996 Act. Although the 1996 Act eliminated the
national ownership ceiling previously applicable to radio broadcasters and
also loosened restrictions previously applicable to ownership within single
markets, significant restrictions remain on permitted levels of local
ownership. In markets with 45 or more stations, ownership is limited to eight
stations, no more than five of which can be FMs or AMs; in markets with 30-44
stations, ownership is capped at seven stations, no more than four of which
can be FMs or AMs; in markets with 15-29 stations, ownership is limited to six
stations, no more than four of which can be FMs or AMs; and in markets with 14
or fewer stations, ownership is limited to no more than 50% of the market's
total and no more than three AMs or FMs. In order to comply with these
limitations, the Company has agreed in the contract relating to the
acquisition of WPNT-FM to dispose of one FM station in Chicago on or prior to
March 15, 1997. The contract also requires the Company to file an application
with the FCC seeking approval of the disposition of one of the Company's
Chicago FM stations on or prior to September 30, 1996. Also to comply with
such rules, the Company will dispose of one Philadelphia FM station or will
transfer one Philadelphia FM station to a trust through which the Company
would retain the economic interest in the station but no control, pending sale
of the station by the trust. The contract relating to the WDAS-AM/FM
Transaction requires that such disposition or transfer occur by May 1, 1997.
Compliance with the FCC's multiple ownership rules is expected to cause the
Company and other radio broadcasters to forego acquisition opportunities that
they might otherwise wish to pursue. Compliance with these rules by third
parties may also have a significant impact on the Company as, for example, in
precluding the consummation of swap transactions that would cause such third
parties to violate multiple ownership rules.
Influence by the Principal Stockholder
Upon consummation of the Offering, Scott K. Ginsburg, the Principal
Stockholder, as beneficial owner of all Class B Common Stock, will hold
approximately 48.6% of the outstanding combined voting power of all classes of
the Common Stock, approximately 45.0% of such combined voting power after
giving effect to the conversion of all shares of the Company's Convertible
Preferred Stock, and 44.0% of the outstanding combined voting power after
giving effect to the conversion of all of the Convertible Preferred Stock and
the exercise of all outstanding employee and director stock options (47.7%,
44.3%
12
<PAGE>
and 43.2%, respectively, if the underwriters' over-allotment option is
exercised in full). Each share of the Class A Common Stock has one vote on all
matters submitted to a vote of the holders of the Common Stock, whereas each
share of the Company Class B Common Stock generally has ten votes. As a result
of his voting power, the Principal Stockholder will have substantial influence
on all matters submitted to a vote of the holders of Company Stock, including
the election of directors. The voting power of the Principal Stockholder may
have the effect of discouraging certain types of transactions involving an
actual or potential change of control of the Company, including transactions
in which the holders of the Class A Common Stock might otherwise receive a
premium for their shares over then-current market prices.
Dependence on Key Personnel
The Company's business is dependent upon the performance of certain key
individuals, including Scott K. Ginsburg, its Chairman and Chief Executive
Officer; James de Castro, its President and Chief Operating Officer; and
Matthew E. Devine, its Chief Financial Officer. The loss of the services of
Mr. Ginsburg, Mr. de Castro or Mr. Devine could have a material and adverse
effect on the Company. In addition, an event of default under the Senior
Credit Facility and the Senior Note Agreement would occur if any two of Mr.
Ginsburg, Mr. de Castro or Mr. Devine were to cease to be employed by the
Company in senior executive capacities and replacements satisfactory to the
lenders representing two-thirds of the commitments thereunder were not found
within ninety days following the occurrence of such event.
Competitive Nature of Radio Broadcasting
The radio broadcasting industry is a highly competitive business. The
success of each of the Company's stations is dependent, to a significant
degree, upon its audience ratings and share of the overall advertising revenue
within its market. The Company's stations compete for listeners and
advertising revenue directly with other radio stations, as well as with other
media, within their respective markets. The Company also competes with other
broadcasting operators for acquisition opportunities, and prices for radio
stations in major markets have increased significantly in recent periods. As
the pace of consolidation in the radio broadcasting industry accelerates,
certain competitors are emerging which may have larger portfolios of major
market radio stations, greater ability to deliver large audiences to
advertisers and more access to capital resources than does the Company. The
Company's audience ratings and market share are subject to change and any
adverse change in a particular market could have a material and adverse effect
on the revenue of the Company's stations located in that market. There can be
no assurance that any one of the Company's stations will be able to maintain
or increase its current audience ratings or advertising revenue market share.
The radio broadcasting industry is also subject to competition from new
media technologies that are being developed or introduced, such as the
delivery of audio programming by cable television systems, direct broadcast
satellite ("DBS") systems and other digital audio broadcasting formats to
local and national audiences. In addition, the FCC has allocated spectrum to
and currently is preparing the service rules for a new satellite-delivered
Digital Audio Radio Service ("DARS"). These actions may result in the
introduction of several new national or regional satellite radio services. The
Company cannot predict at this time the effect, if any, that any such new
technologies may have on the radio broadcasting industry.
History of Net Losses
The Company and its subsidiaries have historically experienced, on a
consolidated basis, net losses, principally as a result of significant
interest charges, certain non-recurring expenses and depreciation and
amortization charges relating to the acquisition of radio broadcasting
stations. The Company's net loss attributable to common stockholders for the
years ended December 31, 1993, 1994, 1995 and the six months ended June 30,
1996 was $44.3 million, $8.4 million, $10.7 million and $18.9 million,
respectively. The acquisition of radio broadcasting stations is an integral
part of the Company's operating strategy and the Company expects that
amortization charges and interest expenses relating to past and possible
future acquisitions of radio broadcasting stations will continue to have a
significant adverse effect on the Company's reported net income (loss).
13
<PAGE>
After giving pro forma effect to the BPI Acquisition, the 1995 Offering, the
Pyramid Acquisition, the Other Completed Transactions, the Pending
Transactions, the Financing Transaction and the Offering and the application
of estimated net proceeds therefrom, net loss attributable to common
stockholders would have been $77.2 million and $38.2 million for the twelve
months ended December 31, 1995 and the six months ended June 30, 1996,
respectively.
Uncertainty as to Market Price of the Class A Common Stock
Because the market price of the Class A Common Stock is subject to
fluctuation, the market value of the shares of the Class A Common Stock may
increase or decrease prior to and following the consummation of the Offering.
There can be no assurance that at or after the consummation of the Offering
the shares of the Class A Common Stock will trade at the prices at which such
shares have traded in the past. The prices at which the Class A Common Stock
trades after the consummation of the Offering may be influenced by many
factors, including the liquidity of the Class A Common Stock, investor
perceptions of the Company and the radio broadcasting industry, the operating
results of the Company and its subsidiaries, the Company's dividend policy,
possible future changes in regulation of the radio broadcasting industry and
general economic and market conditions.
Dilution
Persons purchasing shares of Class A Common Stock at the offering price will
incur immediate dilution in net tangible book value per share of Common Stock.
As of June 30, 1996, after giving effect to the Other Completed Transactions
and the Pending Transactions, the Company had an adjusted consolidated
negative net tangible book value of approximately $1,130.6 million, or $34.11
per share of Common Stock. "Net Tangible Book Value" per share represents the
total amount of tangible assets of the Company, less the total amount of
liabilities of the Company, divided by the number of shares of Common Stock
outstanding (including for this purpose the assumed conversion of the
Company's Convertible Preferred Stock into shares of Class A Common Stock but
excluding shares of Class A Common Stock issuable upon exercise of outstanding
employee and director stock options). After giving effect to the Other
Completed Transactions, the Pending Transactions, the Financing Transaction
and the sale of 8,000,000 shares of Class A Common Stock offered hereby at the
assumed offering price of $32.00 per share (the last reported sale price of
Class A Common Stock on the Nasdaq National Market on September 16, 1996),
after deducting estimated underwriting discounts and commissions and estimated
offering expenses, the Company's adjusted consolidated negative net tangible
book value at June 30, 1996, would have been $887.4 million, or $21.57 per
share of Common Stock. This represents an immediate increase in net tangible
book value of $12.54 per share to existing stockholders and an immediate
dilution of $53.57 per share to new investors purchasing shares in this
Offering. "Dilution" per share represents the difference between the price per
share to be paid by the new investors and the pro forma consolidated negative
net tangible book value per share at June 30, 1996.
14
<PAGE>
CAPITALIZATION
The following table sets forth (i) the actual capitalization of the Company
at June 30, 1996 and (ii) such capitalization as adjusted to give effect to
the Other Completed Transactions, the Pending Transactions, the Financing
Transaction and this Offering at an assumed offering price of $32.00 and the
application of the net proceeds therefrom. See "Use of Proceeds" and
"Unaudited Pro Forma Condensed Combined Financial Statements."
<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
-------------------------
(DOLLARS IN THOUSANDS)
PRO FORMA
ACTUAL AS ADJUSTED
---------- -------------
<S> <C> <C>
Long-term debt(1):
Senior Credit Facility............................ $ 542,000 $ 901,300(2)
Senior Notes...................................... 12,000 12,000
---------- -----------
Total long-term debt............................ 554,000 913,300
Stockholders' equity:
Convertible Preferred Stock (6,000,000 shares
authorized; 1,610,000 shares issued and
outstanding)..................................... 80,500 80,500
Class A Common Stock ($0.01 par value; 75,000,000
shares authorized; 24,994,929 shares issued and
outstanding; 32,994,929 pro forma as
adjusted)(3)..................................... 249 329
Class B Common Stock ($0.01 par value; 4,500,000
shares authorized; 3,116,066 shares issued and
outstanding)..................................... 31 31
Additional paid-in capital........................ 317,823 560,943
Accumulated deficit............................... (112,409) (112,409)
---------- -----------
Total stockholders' equity...................... 286,194 529,394
---------- -----------
Total capitalization.......................... $ 840,194 $ 1,442,694
========== ===========
</TABLE>
- --------
(1) Includes current portion of long-term debt of $29,250 and excludes capital
lease obligations of $626 at June 30, 1996 which are classified as other
liabilities in the historical financial statements.
(2) Includes borrowings of $625.0 million under the Senior Credit Facility as
presently in effect. To consummate all of the Pending Transactions it will
be necessary for the Company to (i) replace the Senior Credit Facility
with a new, expanded credit facility or (ii) sell non-core assets or
obtain debt or equity financing from other sources. See "Prospectus
Summary--Recent Developments" and "Risk Factors--Possible Non-consummation
of Pending Transactions."
(3) The Class A Common Stock outstanding excludes (i) 5,030,455 shares of
Class A Common Stock issuable upon conversion of the Convertible Preferred
Stock, which is convertible into Class A Common Stock at a price of $16.00
per share and which became callable by the Company after August 16, 1996,
(ii) 1,521,173 shares of Class A Common Stock that may be issued from time
to time upon the exercise of vested employee and director stock options
having exercise prices ranging from $.01 to $23.33 per share, (iii)
190,500 shares of Class A Common Stock that may be issued from time to
time upon exercise of currently unvested employee and director stock
options having exercise prices ranging from $23.91 to $26.75 per share and
(iv) 355,065 shares of Class A Common Stock issuable upon exercise of
options authorized but not yet granted under the Company's employee and
director stock option plans.
15
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Class A
Common Stock offered hereby, after deducting estimated underwriting discounts
and commissions and the estimated expenses of the Offering, are estimated to
be $243.2 million, assuming an offering price of $32.00 per share. All of such
net proceeds will be used to repay borrowings outstanding under the Senior
Credit Facility. As of September 19, 1996, a total of $572.5 million in
borrowings was outstanding under the Senior Credit Facility and the effective
interest rate thereon was approximately 7.25%. Borrowings under the Senior
Credit Facility have been used to finance acquisitions, including the Pyramid
Acquisition and the KYLD-FM Acquisition, and for working capital purposes.
Borrowings under the Senior Credit Facility bear interest at a floating rate
based on the participating banks' prime rate or Eurodollar rate, plus an
incremental rate. Upon repayment of such borrowings, the amount repaid may be
subsequently reborrowed for general corporate purposes (including financing of
the Pending Transactions), subject to compliance with certain conditions. The
Company is actively engaged in negotiations regarding the Financing
Transaction, which involves the establishment of a new, expanded credit
facility that would replace the Senior Credit Facility. The Company expects
that amounts available under the Senior Credit Facility and amounts
potentially available under a new, expanded credit facility will be used to
finance the Pending Transactions as well as future acquisitions. See "Risk
Factors--Possible Non-consummation of Pending Transactions". Other potential
sources of financing for future acquisitions include cash flow from
operations, additional debt or equity financings, the sale of non-core assets
or a combination of those methods. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources" and Notes 4 and 7(a) of the Company's Consolidated Financial
Statements included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, incorporated herein by reference, for additional
information concerning the Senior Credit Facility.
PRICE RANGE OF CLASS A COMMON STOCK
The Class A Common Stock is listed on The Nasdaq National Market under the
symbol "EVGM." The following table sets forth for the periods indicated the
high and low closing sale prices per share as reported on The Nasdaq National
Market. The closing sale prices have been adjusted retroactively for the
three-for-two stock split, effected in the form of a stock dividend, paid on
August 26, 1996 to stockholders of record at the close of business on August
19, 1996.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
TWELVE MONTHS ENDED DECEMBER 31, 1994:
First Quarter.................................................. $12.33 $ 7.83
Second Quarter................................................. 12.33 8.00
Third Quarter.................................................. 12.17 10.17
Fourth Quarter................................................. 12.17 10.33
TWELVE MONTHS ENDED DECEMBER 31, 1995:
First Quarter.................................................. $12.00 $ 9.33
Second Quarter................................................. 18.00 10.67
Third Quarter.................................................. 23.75 17.17
Fourth Quarter................................................. 21.33 15.92
TWELVE MONTHS ENDED DECEMBER 31, 1996:
First Quarter.................................................. $24.50 $16.83
Second Quarter................................................. 29.50 21.83
Third Quarter(1)............................................... 33.25 25.74
</TABLE>
On September 13, 1996, there were 123 holders of record of the Class A
Common Stock.
- --------
(1)Data presented for the period July 1, 1996 through September 19, 1996.
16
<PAGE>
DIVIDEND POLICY
The Company intends to retain future earnings for use in its business and
does not anticipate paying any cash dividends on shares of its Common Stock in
the foreseeable future. The Company is currently subject to restrictions under
terms of the Senior Credit Facility and the Senior Note Agreement that limit
the amount of cash dividends that may be paid on its Common Stock. The Company
may pay cash dividends on its Common Stock in the future only if certain
financial tests set forth in the Senior Credit Facility and the Senior Note
Agreement are met and only if it fulfills its obligations to pay dividends to
the holders of its preferred stock. See "Description of Common Stock--
Dividends."
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements
are presented using the purchase method of accounting for all acquisitions
including the BPI Acquisition, the Pyramid Acquisition, the KYLD-FM
Acquisition and the Pending Transactions and reflect (i) the combination of
consolidated historical financial data of the Company, BPI, Pyramid, station
KYLD-FM and the stations to be acquired in the Pending Transactions and (ii)
elimination of the consolidated historical data of the stations sold in the
Buffalo Dispositions and of the Charlotte stations being swapped or sold in
the Philadelphia Transaction. The unaudited pro forma condensed combined
balance sheet data at June 30, 1996 presents adjustments for the following
transactions as if each had occurred at June 30, 1996: (i) the Other Completed
Transactions, (ii) the Pending Transactions, (iii) the Financing Transaction
and (iv) the Offering and the application of estimated net proceeds therefrom.
The unaudited pro forma condensed combined statement of operations data for
the twelve months ended December 31, 1995 and the six months ended June 30,
1996 present adjustments for the following transactions as if each had
occurred on January 1, 1995: (i) the BPI Acquisition, (ii) the 1995 Offering,
(iii) the Pyramid Acquisition, (iv) the Other Completed Transactions, (v) the
Pending Transactions, (vi) the Financing Transaction and (vii) the Offering
and the application of estimated net proceeds therefrom.
In the opinion of Company management, all adjustments have been made that
are necessary to present fairly the pro forma data.
The unaudited pro forma condensed combined financial statements should be
read in conjunction with the respective financial statements and related notes
thereto of the Company, BPI, Pyramid (and its predecessor), WEDR, Inc.,
Century Chicago Broadcasting, L.P., WJLB/WMXD, Detroit, and KYLD-FM (A
Division of Crescent Communications, L.P.), all of which are incorporated by
reference into this Prospectus. See "Incorporation of Certain Documents by
Reference." These unaudited pro forma condensed combined financial statements
are presented for illustrative purposes only and are not necessarily
indicative of the results of operations or financial position that would have
been achieved had the transactions reflected therein been consummated as of
the dates indicated, or of the results of operations or financial position for
any future dates or periods.
The unaudited pro forma condensed combined financial statements do not
reflect the dispositions of one FM station in Chicago and one FM station in
Philadelphia that the Company is required to effect in order to comply with
the FCC's multiple ownership rules. See "Risk Factors--Radio Broadcasting
Industry Subject to Federal Regulation."
17
<PAGE>
THE COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AT JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA ADJUSTMENTS FOR
ADJUSTMENTS FOR PRO FORMA THE PENDING
THE OTHER ADJUSTMENTS COMPANY PRO TRANSACTIONS COMPANY
COMPANY COMPLETED FOR THE FORMA AS AND FINANCING PRO FORMA
HISTORICAL TRANSACTIONS OFFERING ADJUSTED TRANSACTION COMBINED
---------- --------------- ----------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Current assets.......... $ 77,148 $ -- $ -- $ 77,148 $ -- $ 77,148
Assets held for sale.... 32,000 (32,000)(3) -- -- -- --
Property and equipment,
net.................... 46,293 584 (2) -- 46,877 10,877 (15) 57,754
Intangible assets, net.. 779,237 43,416 (2) -- 822,653 594,123 (15) 1,416,776
Other assets............ 21,866 (5,000)(2) -- 16,866 (9,500)(15) 7,366
--------- ------- --------- --------- -------- ----------
Total assets........ $ 956,544 $ 7,000 $ -- $ 963,544 $595,500 $1,559,044
========= ======= ========= ========= ======== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY:
Liabilities
Current portion of long-
term debt.............. $ 29,250 $ -- $ -- $ 29,250 $ -- $ 29,250
Other current
liabilities............ 28,107 -- -- 28,107 -- 28,107
--------- ------- --------- --------- -------- ----------
Total current
liabilities........ 57,357 -- -- 57,357 -- 57,357
Long-term debt,
excluding current
portion................ 524,750 39,000 (2) (243,200)(12) 288,550 595,500 (15) 884,050
(32,000)(3)
Other liabilities....... 1,497 -- -- 1,497 -- 1,497
Deferred Income Taxes... 86,746 -- -- 86,746 -- 86,746
--------- ------- --------- --------- -------- ----------
Total liabilities... 670,350 7,000 (243,200) 434,150 595,500 1,029,650
--------- ------- --------- --------- -------- ----------
STOCKHOLDERS' EQUITY:
Convertible Preferred
stock.................. 80,500 -- -- 80,500 -- 80,500
Common stock............ 280 -- 80 (12) 360 -- 360
Additional paid-in
capital................ 317,823 -- 243,120 (12) 560,943 -- 560,943
Accumulated deficit..... (112,409) -- -- (112,409) -- (112,409)
--------- ------- --------- --------- -------- ----------
Total stockholders'
equity............. 286,194 -- 243,200 529,394 -- 529,394
--------- ------- --------- --------- -------- ----------
Total liabilities and
stockholders' equity... $ 956,544 $ 7,000 $ -- $ 963,544 $595,500 $1,559,044
========= ======= ========= ========= ======== ==========
</TABLE>
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial
Statements
18
<PAGE>
THE COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS PRO FORMA
FOR THE PYRAMID ADJUSTMENTS
ACQUISITION PRO FORMA PENDING FOR THE PENDING
PYRAMID AND THE OTHER ADJUSTMENTS COMPANY PRO TRANSACTIONS TRANSACTIONS COMPANY
COMPANY HISTORICAL COMPLETED FOR THE FORMA AS HISTORICAL AND FINANCING PRO FORMA
HISTORICAL 1/1-1/17 TRANSACTIONS OFFERING ADJUSTED 1/1-6/30(16) TRANSACTION COMBINED
---------- ---------- --------------- ----------- ----------- ------------ --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED
STATEMENT OF
OPERATIONS DATA:
Gross revenues.... $144,614 $2,301 $2,151 (4) $ -- $149,066 $38,329 $ -- $ 187,395
Less: agency
commissions...... (18,252) (230) (349)(4) (18,831) (4,802) -- (23,633)
-------- ------ ------- ------ -------- ------- -------- ---------
Net revenues...... 126,362 2,071 1,802 -- 130,235 33,527 -- 163,762
Station operating
expenses excluding
depreciation and
amortization...... 80,313 1,692 1,681 (4) -- 83,686 19,990 -- 103,676
Depreciation and
amortization...... 44,012 519 749 (4) -- 47,732 864 22,904 (17) 71,500
2,452 (5)
Corporate general
and administrative
expenses.......... 3,198 123 256 (4) -- 3,220 2,787 (2,787)(18) 3,220
(357)(6)
-------- ------ ------- ------ -------- ------- -------- ---------
Operating income
(loss)............ (1,161) (263) (2,979) -- (4,403) 9,886 (20,117) (14,634)
Interest expense.. 19,027 343 1,094 (4) (8,816)(13) 11,659 3,250 18,681 (19) 34,387
11 (8) 797 (20)
Other (income)
expense, net...... 12 (5) (97)(4) -- (90) 42 -- (48)
-------- ------ ------- ------ -------- ------- -------- ---------
Income (loss)
before income
taxes............. (20,200) (601) (3,987) 8,816 (15,972) 6,594 (39,595) (48,973)
Income tax expense
(benefit)......... (3,705) -- (2,988)(10) 2,380 (10) (4,313) (368) (8,542)(10) (13,223)
-------- ------ ------- ------ -------- ------- -------- ---------
Net income (loss). (16,495) (601) (999) 6,436 (11,659) 6,962 (31,053) (35,750)
Preferred stock
dividends......... 2,415 -- -- -- 2,415 -- -- 2,415
-------- ------ ------- ------ -------- ------- -------- ---------
Income (loss)
attributable to
common
stockholders...... $(18,910) $ (601) $ (999) $6,436 $(14,074) $ 6,962 $(31,053) $ (38,165)
======== ====== ======= ====== ======== ======= ======== =========
Loss per common
share before
extraordinary item
(14).............. $ (0.67) -- -- -- $ (0.39) -- -- $ (1.06)
======== ======== =========
Weighted average
common shares
outstanding (14).. 28,070 -- -- 8,000 36,070 -- -- 36,070
OTHER FINANCIAL
DATA:
Broadcast cash
flow.............. $ 46,049 $ 379 $ 121 $ -- $ 46,549 $13,537 $ -- $ 60,086
</TABLE>
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial
Statements
19
<PAGE>
THE COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
FOR THE 1995
OFFERING, THE PRO FORMA
BPI ADJUSTMENT
ACQUISITION, FOR THE
THE PYRAMID PENDING
ACQUISITION PENDING TRANSACTIONS
BPI PYRAMID AND THE OTHER PRO FORMA COMPANY TRANSACTIONS AND
COMPANY HISTORICAL HISTORICAL COMPLETED ADJUSTMENTS PRO FORMA HISTORICAL FINANCING
HISTORICAL 1/1-5/12 1/1-12/31 TRANSACTIONS FOR THE OFFERING AS ADJUSTED 1/1-12/31(16) TRANSACTION
---------- ---------- ---------- ------------- ---------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED
STATEMENT OF
OPERATIONS DATA:
Gross revenues.. $186,365 $21,689 $ 75,858 $ 113 (4) $ -- $284,025 $88,291 $ --
Less agency
commissions..... (23,434) (2,630) (9,135) (284)(4) -- (35,483) (11,235) --
-------- ------- -------- -------- -------- -------- ------- --------
Net revenues.... 162,931 19,059 66,723 (171) -- 248,542 77,056 --
Station
operating
expenses
excluding
depreciation and
amortization.... 97,674 14,078 41,261 60 (4) -- 153,073 48,826 --
Depreciation and
amortization.... 47,005 3,087 11,038 510 (4) -- 94,848 4,425 45,861 (17)
33,208 (5)
Corporate
general and
administrative
expenses........ 4,475 1,465 4,890 549 (4) -- 5,175 4,968 (4,968)(18)
(6,204)(6)
Merger and
equity plan
expenses........ -- -- 10,932 (10,932)(7) -- -- -- --
-------- ------- -------- -------- -------- -------- ------- --------
Operating income
(loss).......... 13,777 429 (1,398) (17,362) -- (4,554) 18,837 (40,893)
Interest
expense......... 19,199 2,724 9,289 2,368 (4) (18,240)(13) 25,103 7,743 37,632 (19)
9,763 (8) 2,475 (20)
Other (income)
expense, net.... 236 -- 930 (1,370)(9) -- (204) (165) --
-------- ------- -------- -------- -------- -------- ------- --------
Income (loss)
before income
taxes........... (5,658) (2,295) (11,617) (28,123) 18,240 (29,453) 11,259 (81,000)
Income tax
expense
(benefit)....... 192 -- -- (13,069)(10) 4,925 (10) (7,952) 158 (18,988)(10)
-------- ------- -------- -------- -------- -------- ------- --------
Net income
(loss).......... (5,850) (2,295) (11,617) (15,054) 13,315 (21,501) 11,101 (62,012)
Preferred stock
dividends....... 4,830 -- 7,169 (7,169)(11) -- 4,830 -- --
-------- ------- -------- -------- -------- -------- ------- --------
Income (loss)
attributable to
common
stockholders.... $(10,680) $(2,295) $(18,786) $ (7,885) $ 13,315 $(26,331) $11,101 $(62,012)
======== ======= ======== ======== ======== ======== ======= ========
Loss per common
share before
extraordinary
item(14)........ $ (0.52) -- -- -- -- $ (0.73) -- --
======== ========
Weighted average
common shares
outstanding (14). 20,721 -- -- 7,313 (14) 8,000 36,034 -- --
OTHER FINANCIAL
DATA:
Broadcast cash
flow............ $ 65,257 $ 4,981 $ 25,462 $ (231) $ -- $ 95,469 $28,230 $ --
<CAPTION>
COMPANY PRO
FORMA
COMBINED
-----------
<S> <C>
CONSOLIDATED
STATEMENT OF
OPERATIONS DATA:
Gross revenues.. $372,316
Less agency
commissions..... (46,718)
-----------
Net revenues.... 325,598
Station
operating
expenses
excluding
depreciation and
amortization.... 201,899
Depreciation and
amortization.... 145,134
Corporate
general and
administrative
expenses........ 5,175
Merger and
equity plan
expenses........ --
-----------
Operating income
(loss).......... (26,610)
Interest
expense......... 72,953
Other (income)
expense, net.... (369)
-----------
Income (loss)
before income
taxes........... (99,194)
Income tax
expense
(benefit)....... (26,782)
-----------
Net income
(loss).......... (72,412)
Preferred stock
dividends....... 4,830
-----------
Income (loss)
attributable to
common
stockholders.... $(77,242)
===========
Loss per common
share before
extraordinary
item(14)........ $ (2.14)
===========
Weighted average
common shares
outstanding (14). 36,034
OTHER FINANCIAL
DATA:
Broadcast cash
flow............ $123,699
</TABLE>
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial
Statements
20
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(TABLES IN THOUSANDS, EXCEPT SHARE DATA)
(1) BASIS OF PRESENTATION. The purchase method of accounting has been used
in the preparation of the unaudited pro forma condensed combined financial
statements. Under this method of accounting, the aggregate purchase price is
allocated to assets acquired and liabilities assumed based on their estimated
fair values. For purposes of the unaudited pro forma condensed combined
financial statements, the purchase prices of Pyramid, KYLD-FM and the stations
to be acquired in the Pending Transactions have been allocated to the fair
value of net assets acquired by Company management based primarily on
information furnished by management of Pyramid, the seller of KYLD-FM and the
sellers of the stations to be acquired in the Pending Transactions,
respectively. The final allocation of the respective purchase price of the
Pyramid Acquisition, the KYLD-FM Acquisition and the stations to be acquired
in the Pending Transactions will not be determined until a reasonable time
after consummation of such transactions and will be based on a complete
evaluation of the assets acquired and liabilities assumed. Accordingly, the
information presented herein may differ from the final purchase price
allocation.
The Company acquired WKLB-FM in May of 1996, and the preliminary allocation
of the assets acquired and liabilities assumed are reflected in the Company's
June 30, 1996 historical balance sheet. The Company has agreed to exchange
WKLB-FM for Washington D.C. station WGAY-FM in one of the Pending
Transactions. The final allocation of the assets and liabilities assumed in
such exchange will not be determined until a reasonable period of time after
consummation of the exchange, and will be based on a complete evaluation of
the assets acquired and liabilities assumed.
Data on station operating income excluding depreciation and amortization and
corporate general and administrative expense (commonly referred to as
broadcast cash flow), although not calculated in accordance with generally
accepted accounting principles, is widely used in the broadcast industry as a
measure of a company's operating performance. Nevertheless, this measure
should not be considered in isolation or as a substitute for operating income,
cash flows from operating activities or any other measures for determining
operating performance or liquidity that is calculated in accordance with
generally accepted accounting principles. Broadcast cash flow does not take
into account the Company's debt service requirements and other commitments
and, accordingly, broadcast cash flow is not necessarily indicative of amounts
that may be available for dividends, reinvestment in the Company's business or
other discretionary uses.
ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET RELATED TO
THE OTHER COMPLETED TRANSACTIONS
(2) Reflects the aggregate purchase price of KYLD-FM as follows:
<TABLE>
<CAPTION>
PROPERTY AND
EQUIPMENT, INTANGIBLE ASSETS, DECREASE IN INCREASE IN LONG-
PURCHASE PRICE NET(a) NET(b) OTHER ASSETS(c) TERM DEBT
-------------- ------------ ------------------ --------------- -----------------
<S> <C> <C> <C> <C>
$44,000 $584 $43,416 $5,000 $39,000
</TABLE>
- --------
(a) The Company has assumed that historical balances of net property and
equipment approximate fair value for the preliminary allocation of the
purchase price. The Company did not assume the working capital accounts of
the acquired station.
(b) The Company, on a preliminary basis, has allocated the $43,416 of
intangible assets to broadcast licenses, noncompetition agreements and
other identifiable intangible assets. This preliminary allocation and the
estimated average eleven-year life used for pro forma amortization expense
are based on historical information from prior acquisitions. The Company
expects to definitively allocate the purchase price within a reasonable
time after consummation of the KYLD-FM Acquisition when a complete
evaluation of the assets and liabilities of KYLD-FM can be performed.
(c) Represents funds placed in escrow which were used to fund a portion of the
purchase price.
21
<PAGE>
(3) Reflects the sales proceeds from the disposition of Buffalo radio
stations WHTT-FM and WHTT-AM for $19,500 and WSJZ-FM for $12,500. These radio
stations are accounted for as assets held for sale as of June 30, 1996. The
net proceeds of $32,000 are used to reduce outstanding borrowings under the
Senior Credit Facility. No gain or loss was recognized by the Company as a
result of these dispositions.
ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
RELATED TO THE 1995 OFFERING, THE BPI ACQUISITION, THE PYRAMID ACQUISITION AND
THE OTHER COMPLETED TRANSACTIONS
(4) Reflects the results of operations for San Francisco radio station KYLD-
FM for the twelve months ended December 31, 1995 and the period from January
1, 1996 to April 30, 1996 and eliminates the results of operations of Buffalo
radio stations WHTT-FM, WHTT-AM and WSJZ-FM contained in the Pyramid
historical results for the twelve months ended December 31, 1995 and the
period from January 1, 1996 to January 17, 1996. Net revenues and station
operating expenses (excluding depreciation and amortization) for KYLD-FM for
the period May 1, 1996 to June 30, 1996 are included in the historical results
of the Company as the time brokerage agreement relating to KYLD-FM began May
1, 1996. The results of operations for WHTT-FM, WHTT-AM and WSJZ-FM for the
period January 18, 1996 to June 30, 1996 have been excluded from the Company's
consolidated statement of operations for the six months ended June 30, 1996 in
accordance with accounting for the stations as assets held for sale.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, 1995 JUNE 30, 1996
------------------------------ ---------------------------------
KYLD-FM BUFFALO NET KYLD-FM BUFFALO NET
HISTORICAL STATIONS ADJUSTMENT HISTORICAL STATIONS ADJUSTMENT
---------- -------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gross revenues.......... $ 6,140 $6,027 $ 113 $ 2,308 $157 $2,151
Less: agency
commissions............ (964) (680) (284) (363) (14) (349)
------- ------ ------- ------- ---- -------
Net revenues............ 5,176 5,347 (171) 1,945 143 1,802
Station operating
expenses excluding
depreciation and
amortization........... 4,331 4,271 60 1,885 204 1,681
Depreciation and
amortization........... 1,481 971 510 749 -- 749
Corporate general and
administrative expense. 549 -- 549 256 -- 256
------- ------ ------- ------- ---- -------
Operating income (loss). (1,185) 105 (1,290) (945) (61) (884)
Interest expense........ 2,368 -- 2,368 1,094 -- 1,094
Other (income) expense,
net.................... -- -- -- (97)(a) -- (97)
------- ------ ------- ------- ---- -------
Income (loss) before
income taxes........... $(3,553) $ 105 $(3,658) $(1,942) $(61) $(1,881)
======= ====== ======= ======= ==== =======
</TABLE>
- --------
(a) Reflects the elimination of payments made by the Company to Crescent
Communications, L.P. of $500 pursuant to a time brokerage agreement for
the period from May 1, 1996 through June 30, 1996.
(5) Reflects incremental amortization related to the BPI Acquisition, the
Pyramid Acquisition and the KYLD-FM Acquisition and is based on the allocation
of the total consideration as follows:
<TABLE>
<CAPTION>
TWELVE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, 1995 JUNE 30, 1996
----------------- -------------
<S> <C> <C>
Amortization expense for the period from
January 1, 1995 to May 12, 1995 on $264,650
additional intangible assets related to the
BPI Acquisition, which includes $234,938 of
intangible assets and $29,712 resulting from
the recognition of deferred tax liabilities,
amortized on a straight-line basis over a
weighted average period of 11 years........... $ 9,022
Less: historical BPI amortization expense...... (2,315)
-------
BPI adjustment for net increase in amortization
expense....................................... $ 6,707
=======
Amortization expense for the twelve months
ended December 31, 1995 and for the period
from January 1, 1996 to January 17, 1996 on
$355,995 additional intangible assets related
to the Pyramid Acquisition, which includes
$294,777 of intangible assets and $61,218
resulting from the recognition of deferred tax
liabilities, amortized on a straight-line
basis over a weighted average period of 11
years......................................... $32,363 $1,528
Less: historical Pyramid amortization expense.. (8,529) (409)
------- ------
Pyramid adjustment for net increase in
amortization expense.......................... $23,834 $1,119
======= ======
Amortization expense for the twelve months
ended December 31, 1995 and for the period
from January 1, 1996 to June 30, 1996 on
$43,416 additional intangible assets related
to the KYLD-FM Acquisition amortized on a
straight-line basis over a weighted average
period of 11 years............................ $ 3,947 $1,973
Less: historical KYLD-FM amortization expense (1,280) (640)
------- ------
KYLD-FM adjustment for net increase in
amortization expense.......................... $ 2,667 $1,333
======= ======
Total adjustment for net increase in
amortization expense.......................... $33,208 $2,452
======= ======
</TABLE>
22
<PAGE>
Historical depreciation expense, of BPI, Pyramid and KYLD-FM is assumed to
approximate depreciation expense on a pro forma basis. Actual amortization and
depreciation expense for Pyramid and KYLD-FM may differ based upon the final
allocation of the total consideration.
(6) For 1995, reflects the elimination of duplicate BPI corporate expenses
for the period from January 1, 1995 to May 12, 1995 of $1,265, the elimination
of duplicate Pyramid corporate expenses of $4,390 and the elimination of
duplicate KYLD-FM corporate expenses of $549, totaling $6,204. For the six
months ended June 30, 1995, reflects the elimination of duplicate Pyramid
corporate expenses of $100 for the period from January 1, 1996 to January 17,
1996, and the elimination of duplicate KYLD-FM corporate expenses of $257,
totalling $357.
(7) Reflects the elimination of merger and equity plan expenses incurred by
Pyramid in connection with the Pyramid Acquisition for the year ended December
31, 1995.
(8) Reflects the adjustment to interest expense in connection with the
consummation of the 1995 Offering, the BPI Acquisition, the Pyramid
Acquisition and the Other Completed Transactions:
<TABLE>
<CAPTION>
TWELVE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, 1995 JUNE 30, 1996
----------------- -------------
<S> <C> <C>
Interest expense on $184,000 additional bank
borrowings for the period January 1, 1995 to
May 12, 1995 (the Company borrowed $186,000
on May 12, 1995 and shortly thereafter repaid
$2,000 from available BPI cash) related to
the BPI Acquisition at 7.5%.................. $ 5,175
Less: historical BPI interest expense......... (2,724)
-------
Adjustment for net increase in interest
expense...................................... $ 2,451
=======
Interest expense on $316,500 additional bank
borrowings related to the Pyramid Acquisition
at 7.5% for the twelve months ended December
31, 1995 and 7.25% for the period January 1,
1996 to January 17, 1996..................... $23,738 $1,084
Less: historical Pyramid interest expense..... (9,289) (343)
------- ------
Adjustment for net increase in interest
expense...................................... $14,449 $ 741
======= ======
Interest expense on $12,000 additional bank
borrowings ($44,000 additional bank
borrowings offset by net proceeds of $32,000
received in connection with the Buffalo
Dispositions) related to the KYLD-FM
Acquisition at 7.5% for the twelve months
ended December 31, 1995 and 7.25% for the six
months ended June 30, 1996................... $ 900 $ 435
Less: historical interest expense paid on
escrow funds................................. -- (71)
Less: historical KYLD-FM interest expense..... (2,368) (1,094)
------- ------
Adjustment for net decrease in interest
expense...................................... $(1,468) $ (730)
======= ======
Reduction in interest expense on bank debt
related to the application of the net
proceeds of the 1995 Offering of $132,734 at
7.5% for the period from January 1, 1995 to
July 25, 1995................................ $(5,669)
=======
Total adjustment for net increase in interest
expense...................................... $ 9,763 $ 11
======= ======
</TABLE>
(9) Reflects the elimination of the Pyramid loss on forgiveness of employee
notes receivable of $568 and non-recurring other expenses of $802, totaling
$1,370 for the year ended December 31, 1995. The Pyramid employee notes
receivable were not assumed by the Company.
(10) Reflects income tax benefit related to pro forma adjustments. The
adjustment to income taxes reflects the application of the estimated effective
tax rate on a pro forma basis to income (loss) before income taxes for
historical and pro forma adjustment amounts. Income tax benefit reflects the
recognition of deferred tax assets to the extent such assets can be realized
through future reversals of existing taxable temporary differences.
23
<PAGE>
(11) Reflects elimination of preferred stock dividends and accretion to
redemption value of Pyramid preferred stock for the year ended December 31,
1995 as such stock was redeemed in connection with the Pyramid Acquisition.
ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
RELATED TO THE OFFERING
(12) Reflects the issuance of 8,000,000 shares of Class A Common Stock at an
assumed public offering price of $32.00 per share (the last reported sales
price per share of Class A Common Stock on the Nasdaq National Market on
September 16, 1996) and the application of the estimated net proceeds
therefrom to reduce bank debt as follows:
<TABLE>
<S> <C>
Shares to be issued.............................................. 8,000
Assumed public offering price per share.......................... $ 32.00
========
Gross proceeds to the Company.................................... $256,000
Less estimated underwriting discount and offering expenses....... (12,800)
--------
Estimated net proceeds to the Company used to repay bank debt.... $243,200
========
Increase in additional paid in capital........................... $243,120
========
Increase in Common Stock......................................... $ 80
========
</TABLE>
(13) Reflects the adjustment to interest expense for the repayment of long-
term debt in connection with the consummation of the Offering:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, 1995 JUNE 30, 1996
------------------- ----------------
<S> <C> <C>
Decrease in long-term debt................. $243,200 $243,200
Assumed interest rate...................... 7.5% 7.25%
Decrease in interest expense............... $(18,240) $ (8,816)
</TABLE>
(14) The pro forma combined loss per common share data is computed by
dividing pro forma loss attributable to common stockholders by the weighted
average common shares assumed to be outstanding. The calculation of pro forma
weighted average common shares outstanding for loss per common share excludes
(i) 5,030,455 shares of Class A Common Stock issuable upon conversion of the
Convertible Preferred Stock, which is convertible into Class A Common Stock at
a price of $16.00 per share and which became callable by the Company on August
16, 1996, (ii) 1,521,173 shares of Class A Common Stock that may be issued
from time to time upon the exercise of vested employee and director stock
options having exercise prices ranging from $.01 to $23.33 per share, (iii)
190,500 shares of Class A Common Stock that may be issued from time to time
upon exercise of currently unvested employee and director stock options having
exercise prices ranging from $23.91 to $26.75 per share and (iv) 355,065
shares of Class A Common Stock issuable upon exercise of options authorized
but not yet granted under the Company's employee and director stock option
plans.
A summary of shares used in the pro forma combined loss per common share
calculation follows:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, 1995 JUNE 30, 1996
------------------- ----------------
<S> <C> <C>
Historical weighted average shares
outstanding.............................. 20,721 28,070
Incremental weighted average shares
relating to the
BPI Acquisition.......................... 2,042
Incremental weighted average shares
relating to the
1995 Offering............................ 5,271
Shares relating to the Offering........... 8,000 8,000
------ ------
Shares used in the pro forma combined
earnings per share calculation........... 36,034 36,070
====== ======
</TABLE>
24
<PAGE>
ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET RELATED TO
THE PENDING TRANSACTIONS AND FINANCING TRANSACTION
(15) Reflects the Pending Transactions as follows:
<TABLE>
<CAPTION>
INCREASE
(DECREASE) IN
PURCHASE PROPERTY AND INTANGIBLE ASSETS, DECREASE IN OTHER LONG-TERM
ACQUISITION PRICE EQUIPMENT, NET(a) NET(b) ASSETS(c) DEBT(d)
----------- -------- ----------------- ------------------ ----------------- -------------
<S> <C> <C> <C> <C> <C>
WWWW-FM/WDFN-AM......... $ 30,000 $ 1,173 $ 28,827 $1,500 $ 28,500
WWRC-AM(e).............. 22,500 2,283 20,217 -- 22,500
WEDR-FM................. 65,000 781 64,219 3,000 62,000
WPNT-FM................. 73,750 745 73,005 5,000 68,750
WJLB-FM/WMXD-FM......... 168,000 1,102 166,898 -- 168,000
WFLN-FM................. 37,750 522 37,228 -- 37,750
KKSF-FM/KDFC-FM/AM...... 115,000 2,211 112,789 -- 115,000
WDAS-FM/AM.............. 103,000 2,060 100,940 -- 103,000
WUSL-FM/WIOQ-FM(f)...... -- -- (10,000) -- (10,000)
-------- ------- -------- ------ --------
Total................... $615,000 $10,877 $594,123 $9,500 $595,500
======== ======= ======== ====== ========
</TABLE>
- --------
(a) The Company has assumed that historical balances of net property and
equipment approximate fair value for the preliminary allocation of the
purchase prices. The Company will not assume the working capital accounts
of the acquired stations.
(b) The Company, on a preliminary basis, has allocated the $594,123 of
intangible assets to broadcast licenses, noncompetition agreements and
other identifiable intangible assets. This preliminary allocation and the
estimated average eleven-year life used for pro forma amortization expense
are based on historical information from prior acquisitions. The Company
expects to definitively allocate the purchase price within a reasonable
time after consummation of the Pending Transactions when a more complete
evaluation of the acquired assets and assumed liabilities can be
performed.
(c) Represents funds used to pre-fund a portion of the purchase prices. In the
case of the acquisition of WWWW-FM/WDFN-AM and WEDR-FM the funds were
placed in escrow; in the case of the acquisition of WPNT-FM, the funds
were paid to the seller in exchange for the option to purchase the
station. Does not include a total of $10,500 of escrow deposits made in
connection with certain of the Pending Transactions after June 30, 1996 or
a $5,000 letter of credit issued for the benefit of the seller in
connection with the WDAS-AM/FM Transaction.
(d) The unaudited pro forma condensed combined balance sheet does not reflect
the write-off as an extraordinary item of the unamortized balance of
deferred loan fees of $7,749 at June 30, 1996 and does not reflect an
estimate of the new loan fees to be incurred in connection with the
Financing Transaction because any such adjustments would be immaterial.
(e) The Company has agreed to swap Detroit station WQRS-FM (which the Company
is acquiring for $32,000 from Secret) to Greater Media in exchange for
Washington, D.C. station WWRC-AM and $9,500 in cash. The net purchase
price to the Company of WWRC-AM is therefore $22,500.
(f) The Company has entered into a binding letter of intent to swap five of
its six Charlotte stations for Philadelphia stations WUSL-FM and WIOQ-FM
and to sell its remaining Charlotte station, WNKS-FM, for $10,000 in cash.
The net proceeds of $10,000 are applied to repay long-term debt. In
accordance with generally accepted accounting principles, the historical
asset balances of the Charlotte stations, less the $10,000 sales proceeds,
represent the Company's asset basis in WUSL-FM and WIOQ-FM.
25
<PAGE>
ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
RELATED TO THE PENDING TRANSACTIONS AND FINANCING TRANSACTION
(16) The detail of the historical financial data of the stations to be
acquired or disposed of in the Pending Transactions for the year ended
December 31, 1995 and the six months ended June 30, 1996 has been obtained
from the historical financial statements of the respective stations and is
summarized below:
<TABLE>
<CAPTION>
WWWW-FM/ WGAY-FM/ WJLB-FM/ WUSL-FM/ KKSF-FM/ CHARLOTTE
WDFN-AM WWRC-AM WEDR-FM WPNT-FM WMXD-FM WFLN-FM WIOQ-FM KDFC-FM/AM WDAS-FM/AM STATIONS
HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL
1/1-12/31 1/1-12/31 1/1-12/31 1/1-12/31 1/1-12/31 1/1-12/31 1/1-12/31 1/1-12/31 1/1-12/31 1/1-12/31
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TWELVE MONTHS
ENDED DECEMBER
31, 1995
Gross revenues.. $ 8,937 $10,705 $ 9,555 $ 8,806 $21,585 $4,036 $16,599 $13,739 $14,510 $(20,181)
Less: agency
commissions..... (1,041) (1,310) (1,281) (1,206) (2,669) (482) (2,010) (1,773) (1,897) 2,434
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Net revenues.... 7,896 9,395 8,274 7,600 18,916 3,554 14,589 11,966 12,613 (17,747)
Station
operating
expenses
excluding
depreciation and
amortization.... 7,191 8,518 3,564 6,527 8,308 1,744 9,197 7,087 7,840 (11,150)
Depreciation and
amortization.... 376 410 49 217 2,475 277 1,331 2,283 2,640 (5,633)
Corporate
general and
administrative
expenses........ -- 781 1,454 180 625 975 508 -- 445 --
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Operating income
(loss).......... 329 (314) 3,207 676 7,508 558 3,553 2,596 1,688 (964)
Interest
expense......... -- -- -- 1,177 1,658 691 3,369 796 52 --
Other (income)
expense......... 36 60 (22) -- -- (216) 5 (53) 25 --
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Income (loss)
before income
taxes........... 293 (374) 3,229 (501) 5,850 83 179 1,853 1,611 (964)
Income tax
expense
(benefit)....... -- (55) -- -- 186 27 -- -- -- --
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Net income
(loss).......... $ 293 $ (319) $ 3,229 $ (501) $ 5,664 $ 56 $ 179 $ 1,853 $ 1,611 $ (964)
======= ======= ======= ======= ======= ====== ======= ======= ======= ========
<CAPTION>
WWWW-FM/ WGAY-FM/ WJLB-FM/ WUSL-FM KKSF-FM CHARLOTTE
WDFN-AM WWRC-AM WEDR-FM WPNT-FM WMXD-FM WFLN-FM WIOQ-FM KDFC-FM/AM WDAS-FM/AM STATIONS
HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL
1/1-2/14 1/1-6/16 1/1-6/30 1/1-6/30 1/1-6/30 1/1-6/30 1/1-6/30 1/1-6/30 1/1-6/30 1/1-6/30
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED
JUNE 30, 1996
Gross revenues.. $ 855 $ 3,264 $ 4,852 $ 3,623 $10,887 $1,875 $ 9,045 $ 7,742 $ 7,189 $(11,003)
Less: agency
commissions..... (102) (409) (652) (501) (1,319) (202) (1,056) (979) (981) 1,399
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Net revenues.... 753 2,855 4,200 3,122 9,568 1,673 7,989 6,763 6,208 (9,604)
Station
operating
expenses
excluding
depreciation and
amortization.... 822 3,493 1,711 3,280 4,170 755 4,677 3,593 3,302 (5,813)
Depreciation and
amortization.... 14 314 18 112 1,211 139 761 1,177 1,308 (4,190)
Corporate
general and
administrative
expenses........ -- 477 885 90 277 488 260 -- 310 --
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Operating income
(loss).......... (83) (1,429) 1,586 (360) 3,910 291 2,291 1,993 1,288 399
Interest
expense......... -- -- 637 683 -- 1,667 238 25 --
Other (income)
expense......... -- 5 (15) -- -- -- -- (4) 56 --
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Income (loss)
before income
taxes........... (83) (1,434) 1,601 (997) 3,227 291 624 1,759 1,207 399
Income tax
expense
(benefit)....... -- (453) -- -- 85 -- -- -- -- --
------- ------- ------- ------- ------- ------ ------- ------- ------- --------
Net income
(loss).......... $ (83) $ (981) $ 1,601 $ (997) $ 3,142 $ 291 $ 624 $ 1,759 $ 1,207 $ 399
======= ======= ======= ======= ======= ====== ======= ======= ======= ========
<CAPTION>
TOTAL
PENDING
TRANSACTIONS
1/1-12/31
------------
<S> <C>
TWELVE MONTHS
ENDED DECEMBER
31, 1995
Gross revenues.. $88,291
Less: agency
commissions..... (11,235)
------------
Net revenues.... 77,056
Station
operating
expenses
excluding
depreciation and
amortization.... 48,826
Depreciation and
amortization.... 4,425
Corporate
general and
administrative
expenses........ 4,968
------------
Operating income
(loss).......... 18,837
Interest
expense......... 7,743
Other (income)
expense......... (165)
------------
Income (loss)
before income
taxes........... 11,259
Income tax
expense
(benefit)....... 158
------------
Net income
(loss).......... $11,101
============
<CAPTION>
TOTAL
PENDING
TRANSACTIONS
1/1-6/30
------------
<S> <C>
SIX MONTHS ENDED
JUNE 30, 1996
Gross revenues.. $38,329
Less: agency
commissions..... (4,802)
------------
Net revenues.... 33,527
Station
operating
expenses
excluding
depreciation and
amortization.... 19,990
Depreciation and
amortization.... 864
Corporate
general and
administrative
expenses........ 2,787
------------
Operating income
(loss).......... 9,886
Interest
expense......... 3,250
Other (income)
expense......... 42
------------
Income (loss)
before income
taxes........... 6,594
Income tax
expense
(benefit)....... (368)
------------
Net income
(loss).......... $ 6,962
============
</TABLE>
26
<PAGE>
(17) Reflects incremental amortization related to the Pending Transactions
and is based on the allocation of the total consideration as follows:
<TABLE>
<CAPTION>
TWELVE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, 1995 JUNE 30, 1996
----------------- -------------
<S> <C> <C>
Amortization expense on $594,123 additional
intangible assets amortized on a straight-line
basis over a weighted average period of 11
years......................................... $54,011 $27,006
Less: historical amortization expense of the
stations being acquired in the Pending
Transactions.................................. (8,150) (4,102)
------- -------
Adjustment for net increase in amortization
expense....................................... $45,861 $22,904
======= =======
</TABLE>
Historical depreciation expense of the stations to be acquired in the
Pending Transactions is assumed to approximate depreciation expense on a pro
forma basis. Actual amortization and depreciation expense may differ based
upon the final allocation of the total consideration.
(18) Reflects the elimination of duplicate corporate expenses related to the
Pending Transactions.
(19) Reflects the adjustment to interest expense for additional borrowings
in connection with the consummation of the Pending Transactions (without
giving effect to the adjustment in note 20):
<TABLE>
<CAPTION>
TWELVE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, 1995 JUNE 30, 1996
----------------- -------------
<S> <C> <C>
Interest expense on $605,000 additional bank
debt borrowing (615,000 additional bank
borrowings offset by expected net proceeds of
$10,000 related to the Philadelphia/Charlotte
Transaction) at 7.5% for the twelve months
ended December 31, 1995 and 7.25% for the six
months ended June 30, 1996.................... $45,375 $21,931
Less: historical interest expense of the
stations being acquired in the Pending
Transactions.................................. (7,743) (3,250)
------- -------
Adjustment for net increase in interest
expense....................................... $37,632 $18,681
======= =======
</TABLE>
(20) Reflects the adjustment to interest expense in connection with the
purchase of WKLB-FM and its subsequent exchange for WGAY-FM:
<TABLE>
<CAPTION>
TWELVE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, 1995 JUNE 30, 1996
----------------- -------------
<S> <C> <C>
Interest expense on $33,000 of bank borrowings
at 7.5% for the twelve months ended December
31, 1995 and 7.25% for the six months ended
June 30, 1996................................. $2,475 $1,196
Less: historical interest expense (May 1,
1996--June 30, 1996).......................... -- (399)
------ ------
Adjustment for net increase in interest
expense....................................... $2,475 $ 797
====== ======
</TABLE>
27
<PAGE>
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
The selected consolidated historical financial data presented below as of
December 31, 1994 and 1995 and for the years ended December 31, 1993, 1994 and
1995 have been derived from the annual audited consolidated financial
statements of the Company incorporated by reference into this Prospectus. The
selected consolidated historical financial data as of June 30, 1996 and for
the six months ended June 30, 1995 and 1996 have been derived from the
unaudited historical consolidated financial statements of the Company
incorporated by reference in this Prospectus. In the opinion of management of
the Company, the unaudited consolidated financial data reflect all
adjustments, which are of a normal recurring nature, necessary for a fair
presentation of the financial position and results of operations for the
unaudited periods. The historical results of operations for the six months
ended June 30, 1996, are not necessarily indicative of the results to be
expected for the full year. The selected consolidated historical financial
data presented below as of December 31, 1993 has been derived from annual
audited consolidated financial statements of the Company which are not
included or incorporated by reference in this Prospectus. The consolidated
historical financial results of the Company are not comparable from year to
year because of the acquisition and disposition of various radio stations by
the Company during the periods covered (See "Unaudited Pro Forma Condensed
Combined Financial Statements"). The foregoing data should be read in
conjunction with the historical consolidated financial statements of the
Company and the related notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 and
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June
30, 1996, which are incorporated by reference in this Prospectus.
EVERGREEN MEDIA CORPORATION AND SUBSIDIARIES
(In thousands, except per share data)
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------------
TWELVE MONTHS SIX MONTHS
ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------------- -----------------
1993 1994 1995 1995 1996
-------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Gross Revenue........... $106,813 $125,478 $186,365 $77,338 $144,614
Net revenues............ 93,504 109,516 162,931 67,405 126,362
Station operating
expenses excluding
depreciation and
amortization........... 60,656 68,852 97,674 41,646 80,313
Depreciation and
amortization........... 33,524 30,596 47,005 16,532 44,012
Corporate general and
administrative
expenses............... 2,378 2,672 4,475 1,695 3,198
Other nonrecurring
costs(1)............... 7,002 -- -- -- --
-------- -------- -------- ------- --------
Operating income (loss). (10,056) 7,396 13,777 7,532 (1,161)
Interest expense........ 13,878 13,809 19,199 9,289 19,027
Other (income) expense,
net(2)................. (3,185) (6,452) 236 160 12
-------- -------- -------- ------- --------
Income (loss) before
income taxes and
extraordinary income... (20,749) 39 (5,658) (1,917) (20,200)
Income tax expense
(benefit).............. -- -- 192 545 (3,705)
-------- -------- -------- ------- --------
Income (loss) before
extraordinary item..... (20,749) 39 (5,850) (2,462) (16,495)
Extraordinary loss on
early extinguishment of
debt................... -- 3,585 (3) -- -- --
-------- -------- -------- ------- --------
Net loss................ (20,749) (3,546) (5,850) (2,462) (16,495)
Preferred stock
dividends.............. 4,756 4,830 4,830 2,415 2,415
Accretion of redeemable
preferred stock to
mandatory redemption
value, including
$17,506 in 1993
relating to
early redemption....... 18,823 (4) -- -- -- --
-------- -------- -------- ------- --------
Net loss attributable to
common stockholders.... $(44,328) $ (8,376) $(10,680) $(4,877) (18,910)
======== ======== ======== ======= ========
Loss per common share
before extraordinary
item................... $ (4.48)(4) $ (.37) $ (.52) $ (0.33) $ (0.67)
======== ======== ======== ======= ========
Net loss per common
share.................. $ (4.48)(4) $ (.64) $ (.52) $ (0.33) $ (0.67)
======== ======== ======== ======= ========
Weighted average common
shares outstanding(5).. 9,890 13,002 20,721 14,640 28,070
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------------------
TWELVE MONTHS SIX MONTHS
ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------- --------------
1993 1994 1995 1996
-------- -------- --------- --------------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA (AT PERIOD
END):
Working capital.............. $ 7,873 $ 15,952 $ 30,556 $ 19,791
Intangible assets net........ 212,517 223,494 458,787 779,237
Total assets................. 283,505 297,990 552,347 956,544
Long-term debt (including
current portion)............ 152,000 174,000 201,000 (6) 554,000 (6)
Stockholders' equity......... 120,968 112,353 304,577 286,194
CASH FLOW DATA:
Net cash provided by
operating activities........ $ 14,959 $ 19,880 $ 40,387 $ 17,365
Net cash used in investing
activities.................. (76,163) (32,928) (192,112) (365,969)
Net cash provided by
financing activities........ 62,043 11,683 153,939 347,051
OTHER FINANCIAL DATA:
Broadcast cash flow(7)....... $ 32,848 $ 40,664 $ 65,257 $ 46,049
</TABLE>
- --------
(1) Consists of a non-cash charge resulting from the grant of employee stock
options prior to the Company's initial public offering.
(2) Includes gain on dispositions of assets of $3,392 and $6,991 in 1993 and
1994, respectively.
(3) In connection with its debt refinancing in 1994, the Company wrote off the
unamortized balance of deferred debt issuance costs of $3,585 as an
extraordinary charge.
(4) Due to the early redemption of the Company's Series A and Junior
Exchangeable Redeemable Preferred Stock in October 1993, a one-time
accretion charge of approximately $17,506 was incurred which increased
loss per common share for 1993 by $1.77.
(5) The calculation of weighted average common shares outstanding excludes
common stock issuable upon the exercise of options and previously
outstanding warrants due to their anti-dilutive effect on loss per common
share.
(6) The current portion of the Company's long-term debt at December 31, 1995
and June 30, 1996 was $4,000 and $29,250, respectively. Long term debt
excludes capital lease obligations of $1,903, $1,547, $853 and $626 at
December 31, 1993, 1994 and 1995 and June 30, 1996, respectively. Capital
lease obligations are classified as other liabilities in the historical
financial statements.
(7) Data on station operating income before depreciation and amortization
expense and corporate general and administrative expenses (commonly
referred to as broadcast cash flow), although not calculated in accordance
with generally accepted accounting principles, is widely used in the
broadcast industry as a measure of a company's operating performance.
Nevertheless, this measure should not be considered in isolation or as a
substitute for operating income, cash flows from operating activities or
any other measure for determining the Company's operating performance or
liquidity that is calculated in accordance with generally accepted
accounting principles. Broadcast cash flow does not take into account the
Company's debt service requirements and other commitments and,
accordingly, broadcast cash flow is not necessarily indicative of amounts
that may be available for dividends, reinvestment in the Company's
business or other discretionary uses.
29
<PAGE>
THE COMPANY
GENERAL
The Company owns and operates radio stations across the United States,
including stations in 11 of the nation's 12 largest radio markets (Los
Angeles, New York, Chicago, Dallas, San Francisco, Washington, D.C.,
Philadelphia, Houston, Boston, Detroit and Miami). Measured by gross revenue
after giving effect to announced transactions in the industry (including the
Pending Transactions), the Company is the nation's largest pure play radio
broadcasting company and the operator of the nation's second largest radio
broadcasting group.
Assuming completion of all Pending Transactions and without giving effect to
two dispositions which are required to comply with the FCC's multiple
ownership rules, the Company's portfolio of stations will consist of 30 FM and
12 AM radio stations in 11 markets. After giving effect to the two required
dispositions, the portfolio will include superduopolies of five FM radio
stations in Chicago, San Francisco, Philadelphia and Detroit. The portfolio is
diversified in terms of format, target demographics, geographic location and
phase of development. Because of the size and geographic breadth of its
portfolio, the Company believes that it is not unduly reliant on the
performance of any one station or market. On a pro forma basis after giving
effect to the BPI Acquisition, the Pyramid Acquisition, the Other Completed
Transactions and the Pending Transactions (but without giving effect to the
two required dispositions described herein), the Company's Chicago operations
accounted for approximately 20.8% of the Company's consolidated gross revenues
and 16.5% of the Company's consolidated broadcast cash flow, the Company's
Detroit operations accounted for approximately 15.3% of the Company's
consolidated gross revenues and 17.7% of the Company's broadcast cash flow,
the Company's Philadelphia operations accounted for approximately 13.6% of the
Company's consolidated gross revenues and 13.9% of the Company's broadcast
cash flow and the Company's San Francisco operations accounted for
approximately 12.8% of the Company's consolidated gross revenues and 12.9% of
the Company's broadcast cash flow (in each case for the twelve months ended
December 31, 1995). Each of the Company's other markets accounted for less
than 10.0% of the Company's consolidated gross revenues and of the Company's
consolidated broadcast cash flow on a pro forma basis for the same period. The
Company believes that the diversity of its portfolio of radio stations helps
to insulate the Company from downturns in specific markets and changes in
musical tastes.
COMPANY STRATEGY
The Company's strategy is to acquire and operate radio stations in the
nation's largest radio markets, focusing particularly on markets where the
Company has the opportunity to develop superduopolies, or clusters of as many
as five FM radio stations. The Company believes that its presence in major
markets provides significant advantages, including strengthening the Company's
reputation among advertisers and advertising agencies as well as increasing
the Company's ability to attract highly skilled management employees and
popular on-air talent.
Operations. The Company uses a variety of techniques to maximize the
performance of its radio stations. These techniques are typically tailored to
fit the requirements of a particular market, but the Company's general
operational objective is to heighten a station's recognition in its market.
Depending on the market, the Company may employ one or more of a variety of
methods, including: developing new programming that responds to the needs of
the local market, hiring dynamic on-air personalities for key morning and
afternoon "drive" times, and engaging in creative promotional efforts designed
to create listener loyalty. In each of its markets, the Company seeks to
"institutionalize" its stations by hiring popular on-air talent and by using
promotional tie-ins with local community events. In implementing its operating
strategy, the Company emphasizes the use of an aggressive sales force, prudent
promotional spending and strict cost controls at each of its stations. In
1996, three of the Company's stations--KKBT-FM in Los Angeles, WKTU-FM in New
York and WRCX-FM in Chicago--were named "Station of the Year" in their
respective formats by Billboard Magazine, and in 1995 the Company was named
"Radio Group of the Year" by Duncan's Radio Comments.
30
<PAGE>
Each of the Company's stations is managed by a team of experienced
broadcasters who understand the musical tastes, demographics and competitive
opportunities of the particular market. The Company decentralizes station
operations and holds local management accountable for performance. Consistent
with this approach, local management develops an annual operating budget in
conjunction with corporate management. A general manager of a station receives
additional compensation if his or her station meets or exceeds the operating
targets established through the budget process. Likewise, a station's general
sales manager receives a bonus for surpassing revenue targets, and its program
director is rewarded for improving ratings in the targeted listening audience.
Corporate management oversees and controls station spending and is
responsible for long-range planning, establishing company policies, and
allocating resources. The Company has implemented local sales reporting
systems at each of its stations to provide local and corporate management with
timely information about station operations. Corporate management imposes
strict financial reporting requirements and budget limitations.
The Company believes that retaining managers and key employees is important
and prides itself on its low employee turnover. This low turnover results in
part from the Company's emphasis on finding experienced, self-motivated
managers who are rewarded for performance and on maintaining a comfortable,
creative work environment. The Company believes that this entrepreneurial
approach has made it a highly desirable employer in the radio broadcasting
industry and has significantly enhanced the Company's ability to attract
skilled employees, management and on-air talent.
Acquisitions. The Company's strategy is to acquire and operate radio
stations in the nation's largest radio markets, focusing particularly on
markets where the Company has the opportunity to assemble FM superduopolies of
as many as five FM radio stations. In evaluating potential acquisition
candidates in its target markets, the Company seeks to identify
underperforming radio stations or groups of stations that have strong
broadcast signals. The Company typically analyzes whether the broadcasting
signal of a target station is strong enough to ensure satisfactory market
penetration, and uses programming and demographic research to determine
whether the target station appeals, or can be made to appeal, to market
segments that are both sought by advertisers and not well-served by other
stations in the market. After acquiring a station, the Company seeks to
improve broadcast cash flow by such means as improving marketing, reducing
station operating expenses or combining operations with an existing station or
stations operated by the Company in the same market. See "Prospectus Summary--
Recent Developments."
Future acquisitions, including the Pending Transactions, are subject to the
Communications Act and the rules of the FCC, review under the HSR Act and the
availability of financing. The Company anticipates that it would fund any such
future acquisitions through funds generated from operations, additional
borrowings under the Senior Credit Facility or pursuant to a new, expanded
credit facility, possible dispositions of non-core assets, additional debt or
equity financing, or a combination of those methods. There can be no
assurance, however, that any such funds or financing will be available or, if
available, on favorable terms.
RECENT DEVELOPMENTS
Since January 1, 1996, the Company has acquired 14 radio stations for $393.5
million and has disposed of three radio stations for $32.0 million. In
addition, the Company has entered into binding contracts to acquire an
additional 13 radio stations for $615.0 million and has agreed to swap or sell
a total of eight stations (including one of the stations that the Company has
agreed to acquire) in exchange for four other stations and $10.0 million in
cash. As of September 20, 1996, seven of the stations to be acquired in the
Pending Transactions were being operated by the Company under time brokerage
agreements. There can be no assurance that the Pending Transactions will be
consummated. Consummation of each Pending Transaction is subject to various
conditions, including approval from the FCC, review under the HSR Act and
either the establishment of a new, expanded credit facility in the
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<PAGE>
Financing Transaction or the availability of other sources of financing. To
date, only FCC approval of the pending acquisition of WEDR-FM in Miami has
been obtained, and this approval has not become a "final" order. The Company
believes that FCC approval of the other Pending Transactions will be
forthcoming in the ordinary course, but there can be no assurance that this
will be the case. See "Risk Factors--Possible Non-consummation of the Pending
Transactions." For additional information relating to these transactions, see
"Prospectus Summary--Recent Developments."
BROADCAST PROPERTIES
The following table sets forth selected information with respect to the
Company's portfolio of radio stations.
<TABLE>
<CAPTION>
TOTAL
NUMBER
OF
STATIONS
STATION RANKED
RANKING IN TARGET EXPIR-
RANKING OF IN DEMO- ATION
STATION'S TARGET TARGET GRAPHICS DATE OF
MARKET BY DEMO- DEMO- IN FCC
MARKET(1) STATION(2) FREQUENCY REVENUE(4) STATION FORMAT GRAPHICS GRAPHICS(6) MARKET(6) LICENSES
--------- ---------- --------- ---------- ---------------------------- ------------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Los Angeles, CA KKBT-FM 92.3 MHz 1 Urban Contemporary Women 18-34 2 44 12/97
New York, NY WKTU-FM 103.5 MHz 2 Rhythmic Contemporary Hits Persons 25-54 1 44 6/98
Chicago, IL WLUP-FM 97.9 MHz 3 Hot Personality Men 25-54 4 43 12/96
Chicago, IL WMVP-AM 1000 KHz 3 Sports/Talk Men 25-54 22 43 12/96
Chicago, IL WRCX-FM 103.5 MHz 3 Album Rock Men 18-34 1 43 12/96
Chicago, IL WVAZ-FM 102.7 MHz 3 Black Adult Women 25-54 3 43 12/96
Chicago, IL WEJM-FM 106.3 MHz 3 Hip Hop Persons 18-34 12 43 12/96
Chicago, IL WEJM-AM 950 KHz 3 Hip Hop Persons 18-34 12 43 12/96
Chicago, IL WNUA-FM 95.5 MHz 3 Contemporary Jazz Persons 25-54 5 43 12/96
Chicago, IL WPNT-FM* 100.3 MHz 3 Adult Contemporary Women 25-54 6 43 12/96
Dallas, TX KSKY-AM 660 KHz 4 Inspirational N/M N/M N/M 8/97
San Francisco, CA KIOI-FM 101.3 MHz 5 Adult Contemporary Women 25-54 1 50 12/97
San Francisco, CA KMEL-FM 106.1 MHz 5 Contemporary Hits Persons 18-34 1 53 12/97
San Francisco, CA KYLD-FM 107.7 MHz 5 Contemporary Hits Persons 18-34 2 53 12/97
San Francisco, CA KKSF-FM* 103.7 MHz 5 Contemporary Jazz Persons 25-54 2 50 12/97
San Francisco, CA KDFC-FM* 102.1 MHz 5 Classical Persons 35-64 10 50 12/97
San Francisco, CA KDFC-AM*(3) 1220 KHz 5 Children's N/M N/M N/M 12/97
Washington, D.C. WTOP-AM 1500 KHz 6 News/Sports Men 25-54 1 35 10/02
Washington, D.C. WASH-FM 97.1 MHz 6 Adult Contemporary Women 25-54 2 35 10/02
Washington, D.C. WGAY-FM* 99.5 MHz 6 Adult Contemporary Persons 35-64 15 28 10/02
Washington, D.C. WWRC-AM* 980 KHz 6 News/Talk Persons 35-64 16 28 10/02
Philadelphia, PA WYXR-FM 104.5 MHz 7 Adult Contemporary Women 18-49 3 32 8/98
Philadelphia, PA WJJZ-FM 106.1 MHz 7 Contemporary Jazz Persons 35-54 7 32 8/98
Philadelphia, PA WUSL-FM* 98.9 MHz 7 Urban Contemporary Women 18-34 1 24 8/98
Philadelphia, PA WIOQ-FM* 102.1 MHz 7 Contemporary Hit Radio/Dance Women 18-34 2 24 8/98
Philadelphia, PA WFLN-FM* 95.7 MHz 7 Classical Persons 35-64 13 32 8/98
Philadelphia, PA WDAS-FM* 105.3 MHz 7 Urban Contemporary Persons 25-54 1 32 8/98
Philadelphia, PA WDAS-AM* 1480 KHz 7 Gospel N/M N/M N/M 8/98
Houston, TX KTRH-AM 740 KHz 8 News/Sports Men 25-54 4 30 8/97
Houston, TX KLOL-FM 101.1 MHz 8 Album Rock Men 18-34 1 30 8/97
Boston, MA WJMN-FM 94.5 MHz 9 Contemporary Hits Women 18-24 2 36 4/98
Boston, MA WXKS-FM 107.9 MHz 9 Contemporary Hits Women 25-34 1 36 4/98
Boston, MA WXKS-AM 1430 KHz 9 Nostalgia Women 45-54 14 36 4/98
Detroit, MI WKQI-FM 95.5 MHz 11 Adult Contemporary Women 25-54 4 29 10/96
Detroit, MI WNIC-FM 100.3 MHz 11 Adult Contemporary Women 25-54 1 29 10/96
Detroit, MI WDOZ-AM(3) 1310 KHz 11 Children's N/M N/M N/M 10/96
Detroit, MI WJLB-FM* 97.9 MHz 11 Urban Contemporary Persons 18-34 1 29 10/96
Detroit, MI WMXD-FM* 92.3 MHz 11 Black Adult Persons 25-54 9 29 10/96
Detroit, MI WWWW-FM* 106.7 MHz 11 Country Women 25-54 5 29 10/96
Detroit, MI WDFN-AM* 1130 KHz 11 Sports/Talk Men 25-49 17 28 10/96
Miami-Ft. Lauderdale,
FL. WVCG-AM 1080 KHz 12 Brokered(5) N/M N/M N/M 2/03
Miami-Ft. Lauderdale,
FL. WEDR-FM* 99.1 MHz 12 Urban Contemporary Persons 25-54 1 37 2/03
Charlotte, NC WPEG-FM+ 97.9 MHz 30 Urban Contemporary Persons 18-34 1 25 12/02
Charlotte, NC WBAV-AM+ 1600 KHz 30 Urban Adult Persons 25-54 20 26 12/02
Charlotte, NC WBAV-FM+ 101.9 MHz 30 Black Contemporary Hits Persons 25-54 5 26 12/02
Charlotte, NC WNKS-FM+ 95.1 MHz 30 Contemporary Hits Persons 18-34 3 27 12/02
Charlotte, NC WRFX-FM+ 99.7 MHz 30 Classic Rock Men 18-49 1 37 12/02
Charlotte, NC WFNZ-AM+ 610 KHz 30 Sports Men 18-49 15 37 12/02
</TABLE>
32
<PAGE>
- --------
* Indicates station to be acquired in a Pending Transaction.
+ Indicates station to be disposed in a Pending Transaction.
(1) Actual city of license may differ from metropolitan market served in
certain cases.
(2) Does not include WKLB-FM in Boston, which the Company acquired on May 3,
1996 and which the Company has agreed to exchange for WGAY-FM in
Washington, D.C.
(3) This station is operated by a third party under a time brokerage
agreement.
(4) Ranking of principal radio market served by the station among all U.S.
radio broadcast markets by aggregate 1995 gross radio broadcasting revenue
as reported by James H. Duncan, Duncan's Radio Market Guide (1996 ed.).
(5) The Company sells airtime on this station to third parties for broadcast
of specialty programming on a variety of topics.
(6) Information derived from The Arbitron Company, Spring 1996, Los Angeles,
New York, Chicago, San Francisco, Washington, D.C., Philadelphia, Houston,
Boston, Detroit, Miami and Charlotte Local Market Reports for the Target
Demographics specified for listening Monday to Sunday, 6:00 a.m. to
midnight. Copyright, The Arbitron Company.
N/M: Not meaningful.
DESCRIPTION OF COMMON STOCK
The Company's authorized common stock consists of 75,000,000 shares of Class
A Common Stock, par value $0.01 per share (the "Class A Common Stock"),
25,009,631 of which were issued and outstanding as of September 1, 1996 and
4,500,000 shares of Class B Common Stock, par value $0.01 per share (the
"Class B Common Stock"), 3,116,066 of which were issued and outstanding as of
September 1, 1996. The Class A Common Stock and Class B Common Stock are
sometimes collectively referred to herein as "Common Stock."
The rights of holders of Class A and Class B Common Stock are identical
except for voting and conversion rights. The shares of Common Stock currently
outstanding are, and the shares of Class A Common Stock offered hereby will
be, upon issuance, validly issued, fully paid and nonassessable.
DIVIDENDS
Holders of shares of Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors of the Company out of funds legally
available for such purpose. No dividend may be declared or paid in cash or
property on any share of any class of Common Stock unless simultaneously the
same dividend is declared or paid on each share of the other class of Common
Stock. Under the terms of the Senior Credit Facility, the Senior Note
Agreement and the instrument governing the Convertible Preferred Stock, the
Company is restricted in the amount of cash dividends it may pay on the Common
Stock.
The Company has not declared or paid any dividends with respect to the
Common Stock, and it is not anticipated that the Company will pay any cash
dividends in the foreseeable future. See "Dividend Policy."
VOTING RIGHTS
Holders of shares of Common Stock vote as a single class on all matters
submitted to a vote of the stockholders, except as otherwise provided by law.
Each share of Class A Common Stock is entitled to one vote and each share of
Class B Common Stock entitled to ten votes, except with respect to any
proposed "going private" transaction between the Company and the Principal
Stockholder. Holders of Common Stock are not entitled to cumulative votes in
the election of directors.
33
<PAGE>
All classes of Common Stock will vote as a single class with respect to any
proposed "going private" transaction with the Principal Stockholder, and each
share of Common Stock will be entitled to one vote in any such vote. The
Principal Stockholder will be able to exercise a substantial influence on any
proposed "going private" transaction between the Company and himself. However,
the Principal Stockholder does not have a present intention to effect a "going
private" transaction, and there is no agreement between the Principal
Stockholder and any other stockholder as to how they would vote their shares
of Common Stock if any such transaction were proposed in the future.
Under Delaware law, the affirmative vote of the holders of a majority of the
outstanding shares of any class of Common Stock is required to approve any
amendment to the Certificate of Incorporation of the Company that would
increase or decrease the aggregate number of authorized shares of any class,
increase or decrease the par value of the shares of any class, or modify or
change the powers, preferences or special rights of the shares of any class so
as to affect such class adversely.
LIQUIDATION RIGHTS
Upon liquidation, dissolution, or winding-up of the Company, the holders of
Class A Common Stock are entitled to share ratably with the holders of Class B
Common Stock in all assets available for distribution after payment in full of
creditors and the holders of preferred stock.
TRANSFER AGENT
The Bank of New York serves as the Transfer Agent and Registrar for the
Class A Common Stock.
ALIEN OWNERSHIP
The Company's Certificate of Incorporation restricts the ownership and
voting of the Company's capital stock, including its Common Stock, in
accordance with the Communications Act and the rules of the FCC, to prohibit
ownership of more than 25% of the Company's outstanding capital stock (or
control of more than 25% of the voting power it represents) by or for the
account of aliens, foreign governments, or non-U.S. corporations or
corporations otherwise subject to control by such persons or entities. The
Certificate of Incorporation also prohibits any transfer of the Company's
capital stock that would cause the Company to violate this prohibition. In
addition, the Certificate of Incorporation authorizes the Board of Directors
of the Company to adopt such provisions as its deems necessary to enforce
these prohibitions.
OTHER PROVISIONS
Each share of Class B Common Stock is convertible at any time, at the option
of its holder, into one share of Class A Common Stock. The Class B Common
Stock will convert automatically into Class A Common Stock, and thereby lose
its special voting rights, if such Class B Common Stock is sold or otherwise
transferred to any person or entity other than certain specified affiliates of
the Principal Stockholder.
The holders of Common Stock are not entitled to preemptive or similar
rights. The shares of Common Stock are not subject to redemption or a sinking
fund. In any merger, consolidation or business combination, the consideration
to be received per share by holders of Class A Common Stock must be identical
to that received by holders of Class B Common Stock, except that in any such
transaction in which shares of Common Stock are distributed, such shares may
differ as to voting rights to the extent that voting rights now differ among
the classes of Common Stock. No class of Common Stock may be subdivided,
consolidated, reclassified or otherwise changed unless concurrently the other
classes of Common Stock are subdivided, consolidated, reclassified or
otherwise changed in the same proportion and in the same manner.
34
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement dated the
date hereof (the "Underwriting Agreement"), the Underwriters named below have
severally agreed to purchase the following number of shares of Class A Common
Stock set forth opposite their respective names below at the public offering
price less the underwriting discounts and commissions set forth on the cover
page of this Prospectus.
<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
------------ ----------------
<S> <C> <C>
Alex. Brown & Sons Incorporated............................
CS First Boston Corporation................................
Donaldson, Lufkin & Jenrette Securities Corporation........
Morgan Stanley & Co. Incorporated..........................
Smith Barney Inc...........................................
UBS Securities LLC.........................................
---------
Total.................................................. 8,000,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all shares of the Class A Common Stock offered hereby if any of such
shares are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose to offer the shares of the Class A Common Stock to the public at the
public offering price set forth on the cover page of this Prospectus, and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may re-allow, a concession
not in excess of $ per share to certain other dealers. After the public
offering contemplated hereby, the offering price and other selling terms may
be changed by the Underwriters.
In connection with this Offering, certain Underwriters and selling group
members (if any) or their respective affiliates who are qualified registered
market makers on The Nasdaq National Market may engage in passive market
making on The Nasdaq National Market in accordance with Rule 10b-6A under the
Exchange Act during the two business day period before the commencement of the
offers or sales of the Class A Common Stock. The passive market making
transactions must comply with applicable volume and price limits and be
identified as such. In general, a passive market maker may display its bid at
a price not in excess of the highest independent bid for such security. If all
independent bids are lowered before the passive market maker's bid, however,
such bid must then be lowered when certain purchase limits are exceeded.
The Company has granted to the Underwriters an option, exercisable not later
than 30 days after the date of this Prospectus, to purchase up to 1,200,000
additional shares of Class A Common Stock at the public offering price less
the underwriting discounts and commission set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the
same percentage thereof that the number of shares of Class A Common Stock to
be purchased by it shown in the above table bears to 8,000,000, and the
Company will be obligated, pursuant to the option, to sell such shares to the
Underwriters. The Underwriters may exercise such option only to cover over-
allotments made in connection with the sale of Class A Common Stock offered
hereby. If purchased, the Underwriters will offer such additional shares on
the same terms as those in which the 8,000,000 shares are being offered.
The Underwriting Agreement contains covenants of indemnity among the
Underwriters and the Company against certain liabilities, including
liabilities under the Securities Act of 1993, as amended (the "Securities
Act").
The Company has agreed not to offer, sell or otherwise dispose of any shares
of Class A Common Stock for a period of 90 days after the date of this
Prospectus without the prior written consent of Alex.
35
<PAGE>
Brown & Sons Incorporated, provided that the Company may, without such
consent, grant options pursuant to the Company's existing employee stock
option plans or issue stock upon the exercise of outstanding options or
warrants to purchase shares of Class A Common Stock or the conversion of
outstanding securities of the Company convertible into shares of Class A
Common Stock.
LEGAL MATTERS
Certain legal matters in connection with the shares of Class A Common Stock
offered hereby will be passed upon for the Company by Latham & Watkins,
Washington, D.C. and for the Underwriters by Davis Polk & Wardwell, New York,
New York. Eric L. Bernthal, a director of the Company, is a partner of Latham
& Watkins and owns options to purchase 5,000 shares of Class A Common Stock.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, and the financial statements of WEDR, Inc. as of and
for the year ended December 31, 1995, are incorporated herein by reference in
reliance upon the reports of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated herein by reference, and upon the authority
of said firm as experts in accounting and auditing.
The consolidated balance sheets of Broadcasting Partners, Inc. as of June
30, 1993 and December 31, 1993 and 1994, and the related consolidated
statements of operations, changes in stockholders' equity (deficit), and cash
flows for each of the two years in the period ended June 30, 1993 and the six
month period from July 1, 1993 to December 31, 1993 and the year ended
December 31, 1994, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The consolidated financial statements of Pyramid Communications, Inc.
("Pyramid") as of December 31, 1994 and 1995, and for the period from November
22, 1993 through December 31, 1993 and the years ended December 31, 1994 and
1995, and the consolidated financial statements of KISS Limited Partnership
and its subsidiaries (the "KISS Partnership") for the year ended December 31,
1993 and for the period from January 1, 1994 through March 17, 1994
incorporated in this Prospectus by reference from the Evergreen Media
Corporation Current Report on Form 8-K dated June 26, 1996 have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report,
which is incorporated herein by reference (which report contained an
explanatory paragraph emphasizing that Pyramid's financial statements were not
comparable to the financial statements of its predecessor, the KISS
Partnership), and has been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The financial statements of Century Chicago Broadcasting, L.P. as of and for
the year ended Decem- ber 31, 1995, are incorporated herein by reference in
reliance upon the report of Price Waterhouse LLP, independent accountants,
given upon the authority of said firm as experts in auditing and accounting.
The combined balance sheets of WJLB/WMXD, Detroit as of June 30, 1996 and
1995 and the related combined statements of operations and cash flows for the
year ended June 30, 1996 and the eleven month period ended June 30, 1995,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report
with respect thereto, and are incorporated herein by reference in reliance
upon the authority of said firm as experts in giving said report.
The financial statements of KYLD-FM (A Division of Crescent Communications,
L.P.) as of and for the year ended December 31, 1995, are incorporated herein
by reference in reliance upon the report of Miller, Kaplan, Arase & Co.,
independent certified public accountants, incorporated herein by reference,
and upon the authority of said firm as experts in accounting and auditing.
36
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information filed by the Company with the
Commission may be inspected and copied at the public reference facilities of
the Commission located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the Regional Offices of the Commission in New York
(Seven World Trade Center, Suite 1300, New York, New York 10048); Los Angeles
(Suite 500 East, Tishman Building, 5757 Wilshire Boulevard, Los Angeles,
California 90036); and Chicago (500 West Madison Street, Chicago, Illinois
60661). Copies of such material can also be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, material filed by the Company can be
inspected at the offices of The Nasdaq National Market, Report Section, 1735 K
Street, N.W., Washington, D.C. 20006. Such material may also be accessed
electronically by means of the Commission's homepage on the Internet at
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the registration of the shares
of Class A Common Stock offered hereby. The Prospectus does not contain all of
the information set forth in the Registration Statement and the exhibits
thereto filed by the Company, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. Statements contained
in this Prospectus or in any document incorporated by reference as to the
contents of any contract or other documents referred to herein or therein are
not necessarily complete and, in each instance, reference is made to the copy
of such documents filed as an exhibit to the Registration Statement or such
other documents, which may be obtained from the Commission as indicated above
upon payment of the fees prescribed by the Commission. Each such statement is
qualified in its entirety by such reference. The Registration Statement and
exhibits thereto may be inspected without charge at the offices of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies may
be obtained at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(ii) The description of the Company's Common Stock contained in the
section entitled "Description of Capital Stock--Common Stock"
contained in the Prospectus of Evergreen Media Corporation filed
with the Securities and Exchange Commission on March 25, 1993 (No.
33-60036) and incorporated by reference into the Registration
Statement on Form 8-A under the Securities Act of 1934, as
amended, of Evergreen Media Corporation filed with the Commission
on April 19, 1993 (No. 0-215-70).
(iii) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1996.
(iv) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1996.
(v) The consolidated balance sheets of Broadcasting Partners, Inc. as
of June 30, 1993 and December 31, 1993 and 1994, and the related
consolidated statements of operations, changes in stockholders'
equity (deficit), and cash flows for each of the two years in the
period ended June 30, 1993 and the six month period from July 1,
1993 to December 31, 1993 and the year ended December 31, 1994
contained in the Company's Current Report on Form 8-K dated May 12,
1995 filed with the Commission on May 26, 1995 and amended on Form
8-K/A dated May 12, 1995 and filed with the Commission on May 30,
1995.
37
<PAGE>
(vi) The Company's Current Report on Form 8-K, dated June 26, 1996,
filed with the Commission on June 26, 1996.
(vii) The Company's Current Report on Form 8-K, dated August 23, 1996,
filed with the Commission on August 23, 1996.
(viii) The Company's Current Report on Form 8-K, dated September 3,
1996, filed with the Commission on September 3, 1996 and amended
on Form 8-K/A dated September 3, 1996 and filed with the
Commission on September 18, 1996.
(ix) The Company's Current Report on Form 8-K, dated September 20,
1996, filed with the Commission on September 20, 1996.
Any document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering of the Class A Common Stock made hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents.
Any statement contained herein, or any document, all or a portion of which
is incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Prospectus and the
Registration Statement of which this Prospectus is a part to the extent that a
statement contained herein, or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus and the Registration Statement of which this Prospectus is a part.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents (other than exhibits thereto)
are available without charge, upon written request by any person to whom this
Prospectus has been delivered, from Matthew E. Devine, Secretary, Evergreen
Media Corporation, 433 East Las Colinas Boulevard, Irving, Texas 75039,
telephone number (972) 869-9020.
38
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, OR THE UNDER-
WRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY AN-
YONE IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITA-
TION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................................................... 3
Risk Factors............................................................... 11
Capitalization............................................................. 15
Use of Proceeds............................................................ 16
Price Range of Class A Common Stock........................................ 16
Dividend Policy............................................................ 17
Unaudited Pro Forma Condensed Combined Financial Statements................ 17
Selected Consolidated Historical Financial Data............................ 28
The Company................................................................ 30
Description of Common Stock................................................ 33
Underwriting............................................................... 35
Legal Matters.............................................................. 36
Experts.................................................................... 36
Available Information...................................................... 37
Incorporation of Certain Documents by Reference............................ 37
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8,000,000 Shares
[COMPANY LOGO]
EVERGREEN MEDIA CORPORATION
Class A Common Stock
------------
PROSPECTUS
------------
Alex. Brown & Sons
INCORPORATED
CS First Boston
Donaldson, Lufkin & Jenrette
SECURITIES CORPORATION
Morgan Stanley & Co.
INCORPORATED
Smith Barney Inc.
UBS Securities
October , 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder. Except
for the SEC registration fee and NASD filing fee, all amounts are estimates.
<TABLE>
<S> <C>
SEC Registration Fee............................................. $97,964.14
NASD Filing Fee.................................................. 28,909.60
Printing and Mailing Expenses.................................... *
Blue Sky Fees.................................................... *
Legal Fees and Expenses.......................................... *
Accounting Fees and Expenses..................................... *
Miscellaneous.................................................... *
----------
Total........................................................ $
==========
</TABLE>
- --------
* To be supplied by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who is, or is threatened to be made, a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was an officer or director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided that he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the
right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses which he
actually and reasonably incurred in connection therewith.
The Company's Amended and Restated Certificate of Incorporation provides
that no director of the Company shall be liable to the Company 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 Company or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
The Company's Restated Bylaws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another Company,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him
II-1
<PAGE>
in connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of noncontendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
The Restated Bylaws also provide that the Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Company to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer, employee or agent of
another Company, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless
and only to the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the Company
shall be successful on the merits or otherwise in defense of any action, suit
or proceeding referred to above, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
The Restated Bylaws further provide that any indemnification (unless ordered
by a court) shall be made by the Company only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in the bylaws. Such determination
shall be made (1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable
a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or (3) by the stockholders.
Expenses incurred by an officer or director in defending a civil or criminal
action, suit or proceeding may be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Company as authorized in the bylaws. Such expenses incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the Board
of Directors deems appropriate.
The Board of Directors may authorize, by a vote of a majority of a quorum of
the Board of Directors, the Company to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another Company, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of the bylaws.
II-2
<PAGE>
The Restated Bylaws also provide that the indemnification and advancement of
expenses provided by, or granted pursuant to the bylaws shall, unless
otherwise provided when authorized or ratified, continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
ITEM 16. EXHIBITS.
A. Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
* 1.1 Form of Underwriting Agreement.
(a) 2.9 Plan of Reorganization and Merger by and between Evergreen Media
Corporation and Broadcasting Partners, Inc., dated as of January
31, 1995, as amended, including the Form of Registration Rights
Agreement among MLGA Fund I, L.P., MLGA Fund II, L.P MLGA/BPI
Partners I, L.P., MLGAL Partners, Limited Partnership and
Evergreen Media Corporation (see table of contents for a list of
omitted schedules).
(b) 2.9A Agreement dated as of January 31, 1995 among Evergreen Media
Corporation, Broadcasting Partners, Inc., the holders of the
shares of capital stock of Broadcasting Partners, Inc. and Scott
K. Ginsburg, holder of shares of capital stock of Evergreen Media
Corporation.
(a) 2.10 Plan and Agreement of Merger among Evergreen Media Partners
Corporation, Evergreen Media Corporation and Broadcasting
Partners, Inc., dated as of April 12, 1995.
(c) 2.11 Agreement and Plan of Merger by and among Pyramid Communications,
Inc., Evergreen Media Corporation and Evergreen Media/Pyramid
Corporation dated as of July 14, 1995. (See table of contents for
list of omitted exhibits and schedules).
(d) 2.11A Amendment to Plan and Agreement of Merger by and among Pyramid
Communications, Inc., Evergreen Media Corporation and Evergreen
Media/Pyramid Corporation dated September 7, 1995.
(d) 2.11B Amendment to Plan and Agreement of Merger by and among Pyramid
Communications, Inc., Evergreen Media Corporation and Evergreen
Media/Pyramid Corporation dated January 11, 1996.
(e) 2.12 Purchase Agreement between Fairbanks Communications, Inc., and
Evergreen Media Corporation dated October 12, 1995 (see table of
contents for list of omitted exhibits and schedules).
(f) 2.13 Option Agreement dated as of January 9, 1996 between Chancellor
Broadcasting Company and Evergreen Media Corporation (including
Form of Advertising Brokerage Agreement and Form of Asset Purchase
Agreement).
(g) 2.14 Asset Purchase Agreement dated April 4, 1996 between American
Radio Systems Corporation and Evergreen Media Corporation of
Buffalo (see table of contents for list of omitted exhibits and
schedules).
(g) 2.15 Asset Purchase Agreement dated April 11, 1996 between Mercury
Radio Communications, L.P. and Evergreen Media Corporation of Los
Angeles, Evergreen Media/Pyramid Holdings Corporation, WHTT (AM)
License Corp. and WHTT (FM) License Corp. (see table of contents
for list of omitted exhibits and schedules).
(g) 2.16 Asset Purchase Agreement dated April 19, 1996 between Crescent
Communications L.P. and Evergreen Media Corporation of Los Angeles
(see table of contents for list of omitted exhibits and
schedules).
(h) 2.17 Asset Purchase Agreement dated June 13, 1996 between Evergreen
Media Corporation of Los Angeles and Greater Washington Radio,
Inc. (see table of contents for list of omitted exhibits and
schedules).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
(h) 2.18 Asset Exchange Agreement dated June 13, 1996 among Evergreen Media
Corporation of Los Angeles, Evergreen Media Corporation of the Bay
State, WKLB License Corp., Greater Media Radio, Inc. and Greater
Washington Radio, Inc. (see table of contents and schedules).
(h) 2.19 Purchase Agreement dated June 27, 1996 between WEDR, Inc., Seller
and Evergreen Media Corporation of Los Angeles, Buyer. (See table
of contents for list of omitted schedules).
(h) 2.20 Time Brokerage Agreement dated July 10, 1996 by and between
Evergreen Media Corporation of Detroit, as Licensee, and Kidstar
Interactive Media Incorporated, as Time Broker.
(h) 2.21 Asset Purchase Agreement dated July 5, 1996 by and among Century
Chicago Broadcasting L.P., an Illinois limited partnership,
("Seller"), Century Broadcasting Corporation, a Delaware
Corporation ("Century"), Evergreen Media Corporation of Los
Angeles, a Delaware Corporation ("Parent"), and Evergreen Media
Corporation of Chicago, a Delaware Corporation ("Buyer").
(h) 2.22 Asset Purchase Agreement dated August 12, 1996 by and among
Chancellor Broadcasting Company, Shamrock Broadcasting, Inc. and
Evergreen Media Corporation of the Great Lakes.
(h) 2.23 Asset Purchase Agreement dated as of August 12, 1996 between
Secret Communications Limited Partnership and Evergreen Media
Corporation of Los Angeles (WQRS-FM). (See table of contents for
list of omitted exhibits and schedules).
(h) 2.24 Asset Purchase Agreement dated as of August 12, 1996 between
Secret Communications Limited Partnership and Evergreen Media
Corporation of Los Angeles. (See table of contents for list of
omitted schedules).
*2.25 Letter of intent dated August 27, 1996 between EZ Communications,
Inc. and Evergreen Media Corporation.
**2.26 Asset Purchase Agreement dated September 19, 1996 between Beasley-
FM Acquisition Corp., WDAS License Limited Partnership and
Evergreen Media Corporation of Los Angeles.
**2.27 Asset Purchase Agreement dated September 19, 1996 between The
Brown Organization and Evergreen Media Corporation of Los Angeles.
(i) 4.1 Specimen Class A Common Stock certificate.
(j) 4.1A Specimen Convertible Preferred Stock certificate.
(j) 4.1B Form of Indenture between the Company and the Bank of New York, as
Trustee, relating to the Company's Exchange Debentures that may be
issued in exchange for shares of the Convertible Preferred Stock.
(d) 4.8 Amended and Restated Loan Agreement dated as of January 17, 1996
among Evergreen Media Corporation of Los Angeles, the financial
institutions whose names appear as Lenders on the signature pages
thereof (the "Lenders"), The Toronto Dominion Bank, The Bank of
New York and NationsBank of Texas, N.A., as Arranging Agents, The
Bank of New York, as Syndication Agent, NationsBank of Texas,
N.A., as Documentation Agent, and Toronto Dominion (Texas), Inc.
as Administrative Agent for the Lenders together with certain
collateral documents attached thereto as exhibits, including
Assignment of Partnership Interests, Borrower's Pledge Agreement,
Parent Company Guarantee, Security Agreement, Stock Pledge
Agreement, Subsidiary Guarantee, Subsidiary Pledge Agreement and
Subsidiary Security Agreement.
(g) 4.8A First Amendment to Loan Agreement, dated May 8, 1996, between the
Company, the Banks, the Co-Agents and the Agent.
(d) 4.9 Amended and Restated Note Purchase Agreement dated as of January
17, 1996 among Evergreen Media Corporation of Los Angeles and
Teachers Insurance and Annuity Association of America.
**5.1 Opinion of Latham & Watkins
**23.1 Consent of Latham & Watkins (included as part of their opinion
listed as Exhibit 5.1).
*23.2 Consent of KPMG Peat Marwick LLP
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
*23.3 Consent of Deloitte & Touche LLP
*23.4 Consent of Coopers & Lybrand LLP
*23.5 Consent of Price Waterhouse LLP
*23.6 Consent of Arthur Andersen LLP
*23.7 Consent of Miller, Kaplan, Arase & Co.
24.1 Powers of Attorney (included on signature pages)
</TABLE>
- --------
* Filed herewith.
** To be filed by amendment.
(a) Incorporated by reference to the identically numbered exhibit to the
Company's Registration Statement on Form S-4, as amended (Reg. No. 33-
89838).
(b) Incorporated by referenced to Exhibit No. 4.8 to the Company's
Registration Statement on Form S-4, as amended (Reg. No. 33-89838).
(c) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 8-K dated July 14, 1995
(d) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 8-K dated January 17, 1996.
(e) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-Q for the quarterly period ended September 30,
1995.
(f) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-K for the fiscal year ended December 31, 1995.
(g) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-Q for the quarterly period ended March 31,
1996.
(h) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-Q for the quarterly period ended June 30,
1996.
(i) Incorporated by reference to the identically numbered exhibit to the
Company's Registration Statement on Form S-1, as amended (Reg. No. 33-
60036).
(j) Incorporated by reference to the identically numbered exhibit to the
Company's Registration Statement on Form S-1, as amended (Reg. No. 33-
69752).
The Company hereby agrees to furnish supplementary a copy of any omitted
schedule or exhibit to the Commission upon request.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expense incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted against the registrant by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-5
<PAGE>
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrant hereby understands that:
(1) for purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF IRVING, STATE OF TEXAS, ON SEPTEMBER 20, 1996.
Evergreen Media Corporation
/s/ Matthew E. Devine
By: _________________________________
MATTHEW E. DEVINE
SENIOR VICE PRESIDENT
We, the undersigned directors and officers of Evergreen Media Corporation
(the "Corporation"), do hereby severally constitute and appoint Scott K.
Ginsburg, James de Castro, and Matthew E. Devine and each of them, our true
and lawful attorneys and agents, to do and say any and all acts and things in
our name and behalf in our capacities as directors and officers and to execute
any and all instruments for us in our name in the capacities indicated below
which said attorneys and agents, or any one of them, may deem necessary or
advisable to enable the Company to comply with the Securities Act of 1933, as
amended (the "Act") and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement on Form S-3, including specifically but without limitation, power
and authority to sign for us or any of us, in our names in the capacities
indicated below, any and all amendments (including post-effective amendments)
hereto and any registration statement for the same offering covered by this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) under the Act; and we do each hereby ratify and confirm all that said
attorneys and agents, or any one of them, shall do or cause to be done by
virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES TITLE DATE
/s/ Scott K. Ginsburg Chairman of the September 20,
- ------------------------------------- Board and Chief 1996
SCOTT K. GINSBURG Executive Officer
(Principal
Executive Officer)
/s/ James de Castro President, Chief September 20,
- ------------------------------------- Operating Officer 1996
JAMES DE CASTRO and Director
/s/ Matthew E. Devine Senior Vice September 20,
- ------------------------------------- President 1996
MATTHEW E. DEVINE (Principal
Financial Officer
and Principal
Accounting Officer)
and Director
II-7
<PAGE>
SIGNATURES TITLE DATE
/s/ Kenneth O'Keefe Executive Vice September 20,
- ------------------------------------- President and 1996
KENNETH O'KEEFE Director
/s/ Joseph M. Sitrick Director September 20,
- ------------------------------------- 1996
JOSEPH M. SITRICK
/s/ Thomas J. Hodson Director September 20,
- ------------------------------------- 1996
THOMAS J. HODSON
/s/ Perry J. Lewis Director September 20,
- ------------------------------------- 1996
PERRY J. LEWIS
/s/ Eric L. Bernthal Director September 20,
- ------------------------------------- 1996
ERIC L. BERNTHAL
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
* 1.1 Form of Underwriting Agreement.
(a) 2.9 Plan of Reorganization and Merger by and between Evergreen Media
Corporation and Broadcasting Partners, Inc., dated as of January
31, 1995, as amended, including the Form of Registration Rights
Agreement among MLGA Fund I, L.P., MLGA Fund II, L.P MLGA/BPI
Partners I, L.P., MLGAL Partners, Limited Partnership and
Evergreen Media Corporation (see table of contents for a list of
omitted schedules).
(b) 2.9A Agreement dated as of January 31, 1995 among Evergreen Media
Corporation, Broadcasting Partners, Inc., the holders of the
shares of capital stock of Broadcasting Partners, Inc. and Scott
K. Ginsburg, holder of shares of capital stock of Evergreen Media
Corporation.
(a) 2.10 Plan and Agreement of Merger among Evergreen Media Partners
Corporation, Evergreen Media Corporation and Broadcasting
Partners, Inc., dated as of April 12, 1995.
(c) 2.11 Agreement and Plan of Merger by and among Pyramid Communications,
Inc., Evergreen Media Corporation and Evergreen Media/Pyramid
Corporation dated as of July 14, 1995. (See table of contents for
list of omitted exhibits and schedules).
(d) 2.11A Amendment to Plan and Agreement of Merger by and among Pyramid
Communications, Inc., Evergreen Media Corporation and Evergreen
Media/Pyramid Corporation dated September 7, 1995.
(d) 2.11B Amendment to Plan and Agreement of Merger by and among Pyramid
Communications, Inc., Evergreen Media Corporation and Evergreen
Media/Pyramid Corporation dated January 11, 1996.
(e) 2.12 Purchase Agreement between Fairbanks Communications, Inc., and
Evergreen Media Corporation dated October 12, 1995 (see table of
contents for list of omitted exhibits and schedules).
(f) 2.13 Option Agreement dated as of January 9, 1996 between Chancellor
Broadcasting Company and Evergreen Media Corporation (including
Form of Advertising Brokerage Agreement and Form of Asset Purchase
Agreement).
(g) 2.14 Asset Purchase Agreement dated April 4, 1996 between American
Radio Systems Corporation and Evergreen Media Corporation of
Buffalo (see table of contents for list of omitted exhibits and
schedules).
(g) 2.15 Asset Purchase Agreement dated April 11, 1996 between Mercury
Radio Communications, L.P. and Evergreen Media Corporation of Los
Angeles, Evergreen Media/Pyramid Holdings Corporation, WHTT (AM)
License Corp. and WHTT (FM) License Corp. (see table of contents
for list of omitted exhibits and schedules).
(g) 2.16 Asset Purchase Agreement dated April 19, 1996 between Crescent
Communications L.P. and Evergreen Media Corporation of Los Angeles
(see table of contents for list of omitted exhibits and
schedules).
(h) 2.17 Asset Purchase Agreement dated June 13, 1996 between Evergreen
Media Corporation of Los Angeles and Greater Washington Radio,
Inc. (see table of contents for list of omitted exhibits and
schedules).
(h) 2.18 Asset Exchange Agreement dated June 13, 1996 among Evergreen Media
Corporation of Los Angeles, Evergreen Media Corporation of the Bay
State, WKLB License Corp., Greater Media Radio, Inc. and Greater
Washington Radio, Inc. (see table of contents and schedules).
(h) 2.19 Purchase Agreement dated June 27, 1996 between WEDR, Inc., Seller
and Evergreen Media Corporation of Los Angeles, Buyer. (See table
of contents for list of omitted schedules).
(h) 2.20 Time Brokerage Agreement dated July 10, 1996 by and between
Evergreen Media Corporation of Detroit, as Licensee, and Kidstar
Interactive Media Incorporated, as Time Broker.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
(h) 2.21 Asset Purchase Agreement dated July 5, 1996 by and among Century
Chicago Broadcasting L.P., an Illinois limited partnership,
("Seller"), Century Broadcasting Corporation, a Delaware
Corporation ("Century"), Evergreen Media Corporation of Los
Angeles, a Delaware Corporation ("Parent"), and Evergreen Media
Corporation of Chicago, a Delaware Corporation ("Buyer").
(h) 2.22 Asset Purchase Agreement dated August 12, 1996 by and among
Chancellor Broadcasting Company, Shamrock Broadcasting, Inc. and
Evergreen Media Corporation of the Great Lakes.
(h) 2.23 Asset Purchase Agreement dated as of August 12, 1996 between
Secret Communications Limited Partnership and Evergreen Media
Corporation of Los Angeles (WQRS-FM). (See table of contents for
list of omitted exhibits and schedules).
(h) 2.24 Asset Purchase Agreement dated as of August 12, 1996 between
Secret Communications Limited Partnership and Evergreen Media
Corporation of Los Angeles. (See table of contents for list of
omitted schedules).
*2.25 Letter of Intent dated August 27, 1996 between EZ Communications,
Inc. and European Mech. Corporation
**2.26 Asset Purchase Agreement dated September 19, 1996 between Beasley-
FM Acquisition Corp., WDAS License Limited Partnership and
Evergreen Media Corporation of Los Angeles
**2.27 Asset Purchase Agreement dated September 19, 1996 between The
Brown Organization and Evergreen Media Corporation of Los Angeles.
(i) 4.1 Specimen Class A Common Stock certificate.
(j) 4.1A Specimen Convertible Preferred Stock certificate.
(j) 4.1B Form of Indenture between the Company and the Bank of New York, as
Trustee, relating to the Company's Exchange Debentures that may be
issued in exchange for shares of the Convertible Preferred Stock.
(d) 4.8 Amended and Restated Loan Agreement dated as of January 17, 1996
among Evergreen Media Corporation of Los Angeles, the financial
institutions whose names appear as Lenders on the signature pages
thereof (the "Lenders"), The Toronto Dominion Bank, The Bank of
New York and NationsBank of Texas, N.A., as Arranging Agents, The
Bank of New York, as Syndication Agent, NationsBank of Texas,
N.A., as Documentation Agent, and Toronto Dominion (Texas), Inc.
as Administrative Agent for the Lenders together with certain
collateral documents attached thereto as exhibits, including
Assignment of Partnership Interests, Borrower's Pledge Agreement,
Parent Company Guarantee, Security Agreement, Stock Pledge
Agreement, Subsidiary Guarantee, Subsidiary Pledge Agreement and
Subsidiary Security Agreement.
(g) 4.8A First Amendment to Loan Agreement, dated May 8, 1996, between the
Company, the Banks, the Co-Agents and the Agent.
(d) 4.9 Amended and Restated Note Purchase Agreement dated as of January
17, 1996 among Evergreen Media Corporation of Los Angeles and
Teachers Insurance and Annuity Association of America.
**5.1 Opinion of Latham & Watkins
**23.1 Consent of Latham & Watkins (included as part of their opinion
listed as Exhibit 5.1).
*23.2 Consent of KPMG Peat Marwick LLP
*23.3 Consent of Deloitte & Touche LLP
*23.4 Consent of Coopers & Lybrand L.L.P.
*23.5 Consent of Price Waterhouse LLP
*23.6 Consent of Arthur Andersen LLP
*23.7 Consent of Miller, Kaplan, Arase & Co.
24.1 Powers of Attorney (included on signature pages)
</TABLE>
<PAGE>
- --------
* Filed herewith.
** To be filed by amendment.
(a) Incorporated by reference to the identically numbered exhibit to the
Company's Registration Statement on Form S-4, as amended (Reg. No. 33-
89838).
(b) Incorporated by referenced to Exhibit No. 4.8 to the Company's
Registration Statement on Form S-4, as amended (Reg. No. 33-89838).
(c) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 8-K dated July 14, 1995
(d) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 8-K dated January 17, 1996.
(e) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-Q for the quarterly period ended September 30,
1995.
(f) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-K for the fiscal year ended December 31, 1995.
(g) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-Q for the quarterly period ended March 31,
1996.
(h) Incorporated by reference to the identically numbered exhibit to the
Company's Report on Form 10-Q for the quarterly period ended June 30,
1996.
(i) Incorporated by reference to the identically numbered exhibit to the
Company's Registration Statement on Form S-1, as amended (Reg. No. 33-
60036).
(j) Incorporated by reference to the identically numbered exhibit to the
Company's Registration Statement on Form S-1, as amended (Reg. No. 33-
69752).
<PAGE>
EXHIBIT 1.1
-----------
8,000,000 Shares
EVERGREEN MEDIA CORPORATION
Class A Common Stock
($0.01 par value per share)
UNDERWRITING AGREEMENT
____ __, 1996
ALEX. BROWN & SONS INCORPORATED
CS FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
UBS SECURITIES LLC
As Representatives of the
several underwriters
named in Schedule I hereto
c/o Alex. Brown & Sons Incorporated
135 East Baltimore Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
Evergreen Media Corporation, a Delaware corporation (the "Company")
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 8,000,000 shares (the "Firm Shares")
of its Class A Common Stock ($0.01 par value per share) (the "Class A Common
Stock").
The Company also propose to issue and sell to the several Underwriters
up to 1,200,000 additional shares of the Class A Common Stock (the "Additional
Shares"), if requested by the Underwriters as provided in Section 2 hereof. The
Firm Shares and the Additional Shares are herein collectively referred to as the
"Shares". The shares of common stock (of all classes) of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "Common Stock".
1. Registration Statement and Prospectus. The Company has prepared
-------------------------------------
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-3, including a prospectus, relating
to the Shares, which may be amended. The registration statement as amended at
the time when it becomes effective, including information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the Registration
<PAGE>
Statement; and the prospectus in the form first used to confirm sales of Shares
is hereinafter referred as the Prospectus (including, in the case of all
references to the Registration Statement and the Prospectus, documents
incorporated therein by reference). If the Company has filed an abbreviated
registration statement to register additional shares of Class A Common Stock
pursuant to Rule 462(b) under the Act (the "Rule 462 Registration Statement"),
then any reference herein to the term "Registration Statement" shall be deemed
to include such Rule 462 Registration Statement. The terms "supplement" and
"amendment" or "amend" as used in this Agreement shall include all documents
subsequently filed by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that are deemed to be
incorporated by reference in the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the
-------------------------------
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell the Firm Shares to
the several Underwriters and (ii) each Underwriter, agrees, severally and not
jointly, to purchase the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto.
The purchase price to be paid to the Company for the Firm Shares shall
be $_____ per share (the "Share Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the Underwriters the Additional Shares, if any, and the Underwriters
shall have a one-time right to purchase, severally and not jointly, up to
1,200,000 Additional Shares from the Company at the Share Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The Underwriters may
exercise their right to purchase Additional Shares in whole or in part by giving
written notice thereof to the Company at any time within 30 days after the date
of the Prospectus. You shall give such notice on behalf of the Underwriters and
the notice shall specify the aggregate number of Additional Shares to be
purchased and the date for payment and delivery thereof. The date specified in
the notice shall be a business day (i) no earlier than the Closing Date (as
hereinafter defined) and (ii) no later than ten business days after such notice
has been given. Each Underwriter, severally and not jointly, agrees to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as you may determine) which bears the same proportion to the
total number of Additional Shares to be purchased as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.
The Company hereby agrees not to offer, sell, contract to sell, grant
any option to purchase, or otherwise dispose of any Common Stock of the Company
or any securities convertible into or exercisable or exchangeable for such
Common Stock, except to the Underwriters pursuant to this Agreement, and not to
file any registration statement with respect to any such securities (other than
on Form S-8), in each case for a period of 90 days after the date of the
Prospectus, without the prior written consent of Alex. Brown & Sons
Incorporated. Notwithstanding the foregoing, during such period (i) the Company
may grant stock options pursuant to the Company's existing stock option plans
and (ii) the Company may issue shares of its Common Stock upon the
2
<PAGE>
exercise of any option or warrant or the conversion of any security outstanding
on the date hereof.
3. Terms of Public Offering. The Company is advised by you that the
------------------------
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement and
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of the Firm
--------------------
Shares shall take place at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York. Payment for the Firm Shares shall be made by wire
transfer at 10:00 A.M., New York City time, on ________ __, 1996 (the "Closing
Date") of same day funds to such bank account as the Company shall designate.
The Closing Date and the location of delivery of and the form of payment for the
Firm Shares may be varied by agreement between you and the Company.
Delivery to the Underwriters of the Additional Shares to be purchased
by the Underwriters shall take place at the offices of Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York. Payment for the Additional Shares
shall be made by wire transfer at 10:00 A.M., New York City time, on the date
specified in the exercise notice given by you pursuant to Section 2 (the "Option
Closing Date") of same day funds to such bank account as the Company may
designate. The Option Closing Date and the location of delivery of and the form
of payment for the Additional Shares may be varied by agreement between you and
the Company.
Certificates representing the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date or the Option Closing Date, as
the case may be. Such certificates shall be made available to you for
inspection not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date or the Option Closing Date, as the case may be.
Certificates in definitive form evidencing the Shares shall be delivered to you
on the Closing Date or the Option Closing Date, as the case may be, with any
transfer taxes thereon duly paid by the Company for the respective accounts of
the several Underwriters, against payment of the Share Price.
5. Agreements of the Company. The Company agrees with you:
-------------------------
(a) To file, if necessary, an amendment to the Registration Statement
(including, if necessary pursuant to Rule 430A under the Act, a post-
effective amendment to the Registration Statement), as soon as practicable
after the execution and delivery of this Agreement, and to use its best
efforts to cause the Registration Statement (or such post-effective
amendment) to become effective at the earliest possible time. The Company
will comply fully and in a timely manner with the applicable provisions of
Rule 424 and Rule 430A under the Act.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the
3
<PAGE>
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purposes, and (iv) of the happening of any event during the period referred
to in paragraph (e) below which makes any statement of a material fact made in
the Registration Statement or the Prospectus untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
in order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Shares under state securities or Blue Sky laws, the Company
will make every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) To furnish to you, without charge, six signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including in each case all exhibits thereto and (as requested by you)
documents incorporated by reference therein, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without exhibits
thereto but including documents incorporated by reference therein, as you may
reasonably request and to furnish to you in New York City, without charge, prior
to 10:00 A.M. on the business day next succeeding the date of this Agreement and
during the period mentioned in paragraph (e) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the Registration
Statement as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or to
make any amendment or supplement to the Prospectus of which you shall not
previously have been advised or to which you shall reasonably object; and to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus which
may be necessary or advisable in connection of the distribution of the Shares by
you, and to use its best efforts to cause the same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel for
the Underwriters a prospectus is required by law to be delivered in connection
with sales by an Underwriter or a dealer, to furnish to each Underwriter and
dealer as many copies of the Prospectus, any documents incorporated by reference
therein, and any amendment or supplement to the Prospectus) as such Underwriter
or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters, it
becomes necessary to amend or supplement
4
<PAGE>
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if it is necessary to amend or supplement the Prospectus to comply with any
law, forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with law, and
to furnish to each Underwriter and to such dealers as you shall specify, such
number of copies thereof as such Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification (provided however, that the Company shall not be obligated to
-------- -------
register or qualify as a foreign corporation in any jurisdiction in which it is
not so qualified or to take any action that would subject it to consent to
service of process or to taxation in any jurisdiction in which it is not now so
subject, other than as to matters and transactions relating to the offer and
sale of Shares).
(h) To mail and make generally available to its securityholders as
soon as reasonably practicable an earnings statement covering a period of at
least twelve months after the effective date of the Registration Statement (but
in no event commencing later than 90 days after such date) which shall satisfy
the provisions of Section 11(a) of the Act, and to advise you in writing when
such statement has been so made available.
(i) During the period of five years after the date of this Agreement
and for so long as the Company's Class A Common Stock is traded on a National
Securities Exchange or NASDAQ (whether or not designated a national market
system security) or any other comparable inter-dealer system, to comply with the
reporting requirements of the Exchange Act.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Class A Common Stock or
filed with the Commission and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement (including financial statements and exhibits), each preliminary
prospectus and all amendments and supplements to any of them prior to or during
the period specified in paragraph (e), (ii) the printing and delivery of the
Prospectus and any amendments or supplements thereto during the period
5
<PAGE>
specified in paragraph (e), (iii) the printing and delivery of the
Preliminary and Supplemental Blue Sky Memoranda (including in each
case any disbursements of counsel for the Underwriters relating to
such printing and delivery), (iv) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of
the several states (including in each case the reasonable fees and
disbursements of counsel for the Underwriters relating to such
registration or qualification and memoranda relating thereto), (v)
filings and clearance with the National Association of Securities
Dealers, Inc. in connection with the offering, (vi) the listing of the
Shares on the National Association of Securities Dealers Automated
Quotation system ("NASDAQ") National Market System and (vii)
furnishing such copies of the Registration Statement, the Prospectus
and all amendments and supplements thereto as may be requested for use
in connection with the offering or sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold. It is
understood that nothing in this paragraph (k) obligates the Company to
pay fees and disbursements of counsel for the Underwriters except as
set forth in subparagraphs (iii) and (iv).
(l) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date or the Option Closing Date, as
the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
6. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Underwriter that:
(a) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act, and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the
Commission thereunder; (ii) the Registration Statement and any
amendments thereto will comply in all material respects with the
provisions of the Act and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
and (iii) the Prospectus and any supplements thereto will comply in
all material respects with the provisions of the Act and will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except that the representations and warranties contained
in this paragraph (a) shall not apply to statements or omissions in
the Registration Statement or the Prospectus (or any supplement or
amendment to them) based upon information relating to any Underwriter
furnished to the Company in writing by or on behalf of such
Underwriter through you expressly for use therein.
(b) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the Act.
6
<PAGE>
(c) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as it is currently being conducted and to
own, lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the Company and its subsidiaries, taken as
a whole.
(d) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned, directly or indirectly, by the Company, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature, [other
than the stock pledge securing certain obligations of the Company and Evergreen
Media Corporation of Los Angeles ("Evergreen LA"), under the Senior Credit
Facility and the Senior Note Agreement (as such terms are defined in the
Prospectus)].
(e) All the shares of capital stock of the Company outstanding prior
to the issuance of the Shares have been duly authorized and validly issued and
are fully paid, non-assessable and not subject to any preemptive or similar
rights; and the Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor as provided by this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company enforceable
in accordance with its terms (except as rights to indemnity and contribution
hereunder may be limited by applicable law).
(h) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws (or other organizational documents) or in
default in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in any
other agreement or instrument material to the conduct of the business of the
Company and its subsidiaries, taken as a whole, to which the Company or any of
its subsidiaries is a party or by which it or any of its subsidiaries or their
respective property is bound.
(i) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the consummation of
the transactions contemplated hereby will not (A) require any consent, approval,
authorization
7
<PAGE>
or other order of any court, regulatory body, administrative agency or other
governmental body, including the Federal Communications Commission (the "FCC")
(except as such may be required under the Act or other securities or Blue Sky
laws of the various states); (B) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws (or other
organizational documents) of the Company or any of its subsidiaries; (C) require
any consent or approval (which has not been obtained) of the parties to, or
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, any agreement or other instrument to which it or any of its
subsidiaries is a party or by which it or any of its subsidiaries or their
respective property is bound; (D) violate or conflict with any laws or
administrative regulations, including without limitation the Communications Act
of 1934, as amended, and the rules and regulations of the FCC thereunder
(collectively called the "Communications Act"), rulings or court decrees
applicable to the Company, any of its subsidiaries or their respective property;
(E) result in termination or revocation of any of the permits, licenses,
approvals, orders, certificates, franchise or authorization of governmental or
regulatory authorities, including those relating to the Communications Act,
owned or held by the Company or any of its subsidiaries in order to conduct the
broadcast operations of the stations owned or operated by them ("Licenses") or
result in any other material impairment of the rights of the holder of any such
License; or (F) result in the creation or imposition of any lien on any asset of
the Company or any of its subsidiaries.
(j) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any of their respective property
(including without limitation Licenses) is the subject, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated.
(k) No contract or document of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement is not so described or filed as required.
(l) Each of the Company and its subsidiaries is operating in
compliance with all (and has not violated any) laws, regulations, administrative
orders or rulings or court decrees applicable to it or to any of its
property(including without limitation those relating to broadcast operations,
environmental, safety or similar matters, federal or state laws relating to the
hiring, promotion or pay of employees, the Employees Retirement Income Security
Act or the rules and regulations promulgated thereunder), except for violations
which will not result in any material adverse change in the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(m) Each of the Company and its subsidiaries has such Licenses as are
necessary to own, lease and operate its respective properties and to conduct its
business; each of the Company and its subsidiaries has fulfilled and performed
all of its material
8
<PAGE>
obligations with respect to such Licenses and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
of any such permit.
(n) Except as otherwise set forth in the Prospectus or such as are
not material to the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole, the Company and
each of its subsidiaries has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions except liens for taxes not yet due
and payable, to, and enjoys peaceful and undisturbed possession of, all property
and assets described in the Registration Statement as being owned by it.
(o) KPMG Peat Marwick LLP are independent public accountants with
respect to the Company as required by the Act.
(p) The financial statements, together with related schedules and
notes included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) (other than the BPI
Financials, the Pyramid Financials, the WEDR Financials, the Century Financials,
the Secret Financials and the Crescent Financials, each as defined below),
present fairly the consolidated financial position, results of operations and
changes in cash flows of the Company and/or its subsidiaries on the basis stated
in the Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and related schedules and notes
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; the pro forma financial information included or incorporated by
--- -----
reference in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) has been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and the
--- -----
assumptions used in the preparation thereof are, in the Company's opinion,
reasonable; and the other financial and statistical information and data
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(q) After due inquiry, the Company has no reason to believe that (A)
the financial statements and related schedules and notes of Broadcasting
Partners, Inc. (the "BPI Financials") included in the Company's Current Report
on Form 8-K, dated September __, 1996 and incorporated by reference in the
Registration Statement and the Prospectus do not fairly present, as applicable,
the consolidated financial position, results of operations and changes in cash
flows of Broadcasting Partners, Inc. ("BPI") and/or its subsidiaries on the
basis stated in the Registration Statement at the respective dates or for the
respective periods to which they apply or (B) the BPI Financials have not been
prepared in
9
<PAGE>
accordance with generally accepted accounting principles consistently applied,
except as disclosed therein.
(r) After due inquiry the Company has no reason to believe that (A)
the financial statements and related schedules and notes of Pyramid
Communications, Inc. and Kiss Limited Partnership (collectively, the "Pyramid
Financials") included in the Company's Current Report on Form 8-K, dated
September __, 1996 and incorporated by reference in the Registration Statement
and the Prospectus do not fairly present, as applicable, the consolidated
financial position, results of operations and changes in cash flows of Pyramid
Communications, Inc. ("Pyramid") and/or its subsidiaries and Kiss Limited
Partnership ("Kiss") and/or its subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply or (B) the Pyramid Financials have not been prepared in
accordance with generally accepted accounting principals consistently applied,
except as disclosed therein.
(s) After due inquiry the Company has no reason to believe that (A)
the financial statements and related schedules and notes of WEDR, Inc. (the
"WEDR Financials") included in the Company's Current Report on Form 8-K, dated
September __, 1996 and incorporated by reference in the Registration Statement
and the Prospectus do not fairly present, as applicable, the consolidated
financial position, results of operations and changes in cash flows of WEDR,
Inc. [and/or its subsidiaries] on the basis stated in the Registration Statement
at the respective dates or for the respective periods to which they apply or (B)
the WEDR Financials have not been prepared in accordance with generally accepted
accounting principals consistently applied, except as disclosed therein.
(t) After due inquiry the Company has no reason to believe that (A)
the financial statements and related schedules and notes of Century Chicago
Broadcasting, L.P. (the "Century Financials") included in the Company's Current
Report on Form 8-K, dated September __, 1996 and incorporated by reference in
the Registration Statement and the Prospectus do not fairly present, as
applicable, the consolidated financial position, results of operations and
changes in cash flows of Century Chicago Broadcasting, L.P. ("Century") and/or
its subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply or (B) the
Century Financials have not been prepared in accordance with generally accepted
accounting principals consistently applied, except as disclosed therein.
(u) After due inquiry the Company has no reason to believe that (A)
the financial statements and related schedules and notes of [Secret
Communications L.P.] (the "Secret Financials") included in the Company's Current
Report on Form 8-K, dated September __, 1996 and incorporated by reference in
the Registration Statement and the Prospectus do not fairly present, as
applicable, the consolidated financial position, results of operations and
changes in cash flows of [Secret Communications L.P.] ("Secret") and/or its
subsidiaries on the basis stated in the Registration Statement at the respective
dates or for the respective periods to which
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<PAGE>
they apply or (B) the Secret Financials have not been prepared in accordance
with generally accepted accounting principals consistently applied, except as
disclosed therein.
(v) After due inquiry the Company has no reason to believe that (A)
the financial statements and related schedules and notes of [Crescent
Communications, Inc.] (the "Crescent Financials") included in the Company's
Current Report on Form 8-K, dated September __, 1996 and incorporated by
reference in the Registration Statement and the Prospectus do not fairly
present, as applicable, the consolidated financial position, results of
operations and changes in cash flows of [Crescent Communications, Inc.]
("Crescent") and/or its subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which they
apply or (B) the Crescent Financials have not been prepared in accordance with
generally accepted accounting principals consistently applied, except as
disclosed therein.
(w) The agreements relating to each of the pending transactions
described in the Registration Statement under the caption "Prospectus Summary -
Recent Development - Pending Transactions" (the "Pending Transactions
Agreements") have been duly authorized, executed and delivered by the Company
[and/or one or more of its subsidiaries] and constitute the valid and binding
agreements of the Company [and/or such subsidiaries], as the case may be,
(except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting creditors'
rights generally or by general equity principles) and, except as described in
the Registration Statement and the Prospectus, the Company has no reason to
believe based on information known to it as of the date of this Agreement that
the transactions contemplated by the Pending Transactions Agreements will not be
consummated on the basis described therein.
(x) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(y) No holder of any security of the Company has any right, not
effectively satisfied or waived, to require inclusion of shares of Common Stock
or any other security of the Company in the Registration Statement.
(z) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to the disclosure of
business with Cuba.
7. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
11
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omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriters furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein; provided,
--------
however, that the foregoing indemnity agreement with respect to any preliminary
- -------
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter if required by law to have been so sent or given to such person at
or prior to the written confirmation of the sale of the Shares to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability.
(b) In case any action shall be instituted involving any person in
respect of which indemnity may be sought pursuant to Section (a), based upon any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses. Any indemnified
party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnifying party and the
indemnified party and such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for (a) the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Underwriters and all persons, if
any, who control any Underwriters within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, which firm shall be designated in writing by
Alex. Brown & Sons Incorporated and (b) the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section,
which firm shall be designated in writing by the Company, and that all such fees
and expenses shall be reimbursed as they are incurred). The indemnifying party
shall not be liable for any settlement of any such action effected without its
written consent but if settled with the written consent of
12
<PAGE>
such indemnifying party, such indemnifying party agrees to indemnify and hold
harmless the indemnified party from and against any loss or liability by reason
of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Underwriter but only with
reference to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any preliminary prospectus and any amendment or
supplement thereto. In case any action shall be brought against the Company,
any of its directors, any such officer or any person controlling the Company
based on any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement thereto and in respect of which
indemnity may be sought against any Underwriter, the Underwriter shall have the
rights and duties given to the Company (except that if the Company shall have
assumed the defense thereof, such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Company, its directors, any such officers and any
controlling person of the Company shall have the rights and duties given to the
Underwriters by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters, bear to the total price to the
public of the Shares, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company and the Underwriters shall
be determined by reference to, among other things,
13
<PAGE>
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
8. Conditions of Underwriters' Obligations. The several
---------------------------------------
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the
Closing Date.
(b) The Registration Statement shall have become effective not
later than 11:00 A.M., New York City time, on the date of this
Agreement or at such later date and time as you may approve in
writing, and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been commenced or shall be
pending before or contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus, there shall not have been any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, affairs or
business prospects, whether or not arising in the ordinary course of
business, of the Company, (ii) since the date of the latest balance
sheet included or incorporated by reference in the Registration
Statement and the Prospectus there shall not have been any change, or
any development involving a
14
<PAGE>
prospective material adverse change, in the capital stock or in the long-term
debt of the Company from that set forth in the Registration Statement and
Prospectus, (iii) the Company and its subsidiaries shall have no liability or
obligation, direct or contingent, which is material to the Company and its
subsidiaries, taken as a whole, other than those reflected in the Registration
Statement and the Prospectus and (iv) on the Closing Date you shall have
received a certificate dated the Closing Date, signed by Scott K. Ginsburg and
Matthew E. Devine, in their capacities as the Chief Executive Officer and Chief
Financial Officer of the Company, confirming the matters set forth in paragraphs
(a), (b), and (c) of this Section 8.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Latham & Watkins, counsel for the Company, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority required to carry on its business and to own, lease and
operate its properties as described in the Prospectus;
(ii) based solely on certificates of public officials, the
Company is qualified to do business in each jurisdiction listed in
such opinion;
(iii) all the shares of capital stock of the Company outstanding
prior to the issuance of the Shares have been duly authorized and
validly issued and are fully paid, non-assessable and not subject to
any preemptive or, to the best knowledge of such counsel, similar
rights that entitle or will entitle any person to acquire shares of
capital stock from the Company upon the issuance of the Shares by the
Company;
(iv) the Shares have been duly authorized, and when issued and
delivered to the Underwriters against payment therefor as provided by
this Agreement, will have been validly issued and will be fully paid
and non-assessable, and the issuance of such Shares is not subject to
any preemptive or, to the best knowledge of such counsel, similar
rights that entitle or will entitle any person to acquire shares of
capital stock from the Company upon the issuance thereof by the
Company;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Registration Statement has become effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending its effectiveness has been issued and no proceedings for
that purpose are pending before or have been threatened by the
Commission;
15
<PAGE>
(vii) the statements (A) in the Prospectus under the captions
"Prospectus Summary - Recent Development - Pending Acquisitions",
"Risk Factors- Radio Industry Subject to Federal Regulation," [other?]
and "Description of Common Stock", (B) in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995 under the captions
"Item 1. Business - Regulation of Radio Broadcasting Industry" and
"Item 3. Legal Proceedings", (C) in the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996 under the caption "Part
II -- Item 1 Legal Proceedings" and (D) in Item 15 of Part II of the
Registration Statement, insofar as such statements constitute a
summary of legal matters, documents or proceedings referred to
therein, are accurate in all material respects;
(viii) the execution, delivery and performance of this Agreement
by the Company will not (A) require any consent, approval,
authorization or other order of any Federal or New York State court,
regulatory body, administrative agency or other governmental body,
including the FCC (except as such may be required under the Act or
other securities or Blue Sky laws); (B) result in a violation of the
Certificate of Incorporation or by-laws of the Company; (C) [except
for the necessity of obtaining certain waivers as set forth in such
opinion,] require any consent or approval (which has not been
obtained) of the parties to, or result in a breach of or a default
under, any agreement or other instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective properties are bound that is
identified to such counsel in a certificate of an officer of the
Company as being material to the business of the Company and its
subsidiaries; or (D) violate or conflict with any Federal or New York
State laws or administrative regulations (except that for purposes of
the opinion set forth in this clause (viii) such counsel need express
no opinion with respect to federal or New York State securities laws)
including without limitation the Communications Act, court decrees or
rulings known to such counsel and applicable to the Company or any of
its subsidiaries or their respective properties; or (E) result in
termination or revocation of any of the FCC Licenses listed in Exhibit
A to such opinion or result in any other material impairment of the
rights of the holder of any such FCC License; except with respect to
(A), (C) and (D), where the failure to obtain such consent or approval
or such breach, default, violation or conflict could not reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or impair the ability of the Company
and its subsidiaries to consummate the transactions contemplated
hereby;
(ix) to the best knowledge of such counsel, there is no legal
or governmental proceeding pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of their
respective property (including without limitation Licenses) is subject
which is required to be described in the Registration Statement or the
Prospectus and is not so described, and there is no contract or other
16
<PAGE>
document which is required to be described in the Registration
Statement or the Prospectus or is required to be filed as an exhibit
to the Registration Statement which is not described or filed as
required;
(x) The Company's subsidiaries hold the FCC Licenses listed on
Exhibit A to such opinion, each of which is valid and in effect on the
date hereof, and, to such counsel's knowledge, based on inquiry of the
Company and review of the FCC's public files, the FCC Licenses
constitute the only material licenses or other authorizations of the
FCC as are required by the Communications Act of 1934, as amended, and
the rules, regulations and orders of the FCC in order to conduct the
broadcast operations of Stations KKBT-FM, WKTU-FM, WLUP-FM, WMVP-AM,
WRCX-FM, WVAZ-FM, WEJM-AM, WEJM-FM, WNUA-FM, KYLD-FM, KI0I-FM, KMEL-
FM, WTOP-AM , WASH-FM, KSKY-AM, WYXR-FM, WJJZ-FM, KTRH-AM, KLOL-FM,
WJMN-FM, WXKS-FM, WXKS-AM, WNIC-FM, WKQI-FM, WDOZ-AM, WVCG-AM, WPEG-
FM, WBAV-AM, WBAV-FM, WNKS-FM, WRFX-FM and WFNZ-AM.
(xi) To such counsel's knowledge, based on inquiry of officers
of the Company and review of the FCC's public files, the Company and
its subsidiaries are in compliance in all material respects with all
provisions of the FCC Licenses and with the Communications Act of
1934, as amended, and all applicable rules, regulations and orders of
the FCC, subject to such qualifications and circumstances as are
disclosed in the Prospectus.
(xii) to the best of such counsel's knowledge, no holder of any
security of the Company has any right, not effectively satisfied or
waived, to require inclusion of shares of Common Stock or any other
security of the Company in the Registration Statement except as set
forth in such opinion;
(xiii) each subsidiary listed in such opinion (a "Significant
Subsidiary") has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority required to
carry on its business and to own, lease and operate its properties as
described in the Prospectus;
(xiv) all of the outstanding shares of capital stock of such
Significant Subsidiary have been duly authorized and validly issued
and are fully paid and non-assessable, and to the best knowledge of
such counsel, based solely on a review of each such subsidiary's stock
records and inquiries of officers of the Company, are owned, directly
or indirectly, by the Company, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature
[other than the stock pledge securing certain obligations of the
Company and Evergreen LA under the Senior Credit Facility and the
Senior Note Agreement];
17
<PAGE>
(xv) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xvi) each document filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and the
Prospectus (except for financial statements and schedules as to which
no opinion need be expressed) complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder;
(xvii) the Registration Statement and the Prospectus and any
supplements or amendments thereto (except for financial statements and
schedules as to which no opinion need be expressed) comply as to form
in all material respects with the requirements for registration
statements on Form S-3 under the Act; and
(xviii) each of the Pending Transactions Agreements has been duly
authorized, executed and delivered by the Company [and/or one or more
subsidiaries of the Company and constitutes the valid and binding
agreement of the Company and/or such subsidiary or subsidiaries party
thereto], subject to (i) the effect of bankruptcy, insolvency
reorganization, moratorium or other similar laws relating to or
affecting the rights or remedies of creditors, (ii) the effect of
general principles of equity, whether enforcement is considered in a
proceeding in equity or law and the discretion of the court before
which any proceeding therefor may be brought, (iii) the
unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy and (iv)
the unenforceability of any provision requiring the payment of
attorneys' fees, except to the extent that a court determines such
fees to be reasonable.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the Underwriters, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and, although
they are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and have not made any independent
check or verification thereof (except as stated), during the course of such
participation (relying as to materiality to a large extent upon the statements
of officers and other representatives of the Company), no facts came to their
attention that caused them to believe that the Registration Statement, at the
time it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as of its
date or as of the Closing Date,
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<PAGE>
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; it being
understood that such counsel shall express no belief with respect to
the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the
Prospectus.
In rendering its opinion, such counsel may state that any
statement therein that is qualified by "to the best of our knowledge"
or a similar phrase, is intended to indicate that those attorneys in
the firm who have rendered legal services to the Company in connection
with the offering of the Shares, the BPI Acquisition (as defined in
the Prospectus), the Pyramid Acquisition (as defined in the
Prospectus) and the Other Completed Transactions (as defined in the
Prospectus), the transactions described in the Prospectus under the
Caption "Recent Developments - Pending Transactions" and in connection
with matters relating to the FCC do not have current actual knowledge
of the inaccuracy of such statement and that, except as otherwise
expressly indicated, such counsel has not undertaken any independent
investigation to determine the accuracy of such statement.
The opinion of Latham & Watkins described in this paragraph
(d) shall be rendered to you at the request of the Company and shall
so state therein.
(e) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Davis Polk & Wardwell, counsel for the
Underwriters, as to the matters referred to in clauses (iv), (v), (vi)
and (xvii) of, and the disclosure opinion referred to in, the
foregoing paragraph (d), and to the further effect that the statements
in the Prospectus under the caption "Underwriting," insofar as such
statements constitute a summary of the documents referred to therein,
fairly present the information called for with respect to such
documents and fairly summarize the matters referred to therein. In
giving such disclosure opinion such counsel may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto (other than the documents
incorporated by reference therein) and review and discussion of the
contents thereof (including documents incorporated by reference
therein), but are without independent check or verification except as
specified.
(f) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from KPMG Peat
Marwick LLP, independent public accountants, with respect to the
financial statements and certain financial information included or
incorporated by reference in the Registration Statement and the
Prospectus and substantially in the form and substance of the letter
delivered to you by KPMG Peat Marwick LLP on the date of this
Agreement, provided that the letter delivered on the Closing Date
--------
shall use a "cut-off date" not earlier than the date of this
Agreement. (g) You shall have received a letter on and as of the
Closing Date, in form and substance satisfactory to you, from
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Coopers & Lybrand LLP, independent public accountants, with respect to
the BPI Financials and certain financial information relating to BPI
incorporated by reference in the Registration Statement and the
Prospectus and substantially in the form and substance of the letter
delivered to you by Coopers & Lybrand LLP on the date of this
Agreement, provided that the letter delivered on the Closing
--------
Date shall use a "cut-off date" not earlier than the date of this
Agreement.
(h) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Deloitte &
Touche LLP, independent public accountants, with respect to the
Pyramid Financials and certain financial information relating to
Pyramid and/or Kiss incorporated by reference in the Registration
Statement and the Prospectus and substantially in the form and
substance of the letter delivered to you by Deloitte & Touche LLP on
the date of this Agreement, provided that the letter delivered on the
--------
Closing Date shall use a "cut-off date" not earlier than the date of
this Agreement.
(i) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from KPMG Peat
Marwick LLP, independent public accountants, with respect to the WEDR,
Inc. Financials and certain financial information relating to WEDR,
Inc. incorporated by reference in the Registration Statement and the
Prospectus and substantially in the form and substance of the letter
delivered to you by KPMG Peat Marwick LLP on the date of this
Agreement, provided that the letter delivered on the Closing Date
--------
shall use a "cut-off date" not earlier than the date of this
Agreement.
(j) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Price Waterhouse
L.L.P., independent public accountants, with respect to the Century
Financials and certain financial information relating to Century
incorporated by reference in the Registration Statement and the
Prospectus and substantially in the form and substance of the letter
delivered to you by Price Waterhouse L.L.P. on the date of this
Agreement, provided that the letter delivered on the Closing Date
--------
shall use a "cut-off date" not earlier than the date of this
Agreement.
(k) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Arthur Andersen
L.L.P., independent public accountants, with respect to the Secret
Financials and certain financial information relating to [Secret]
incorporated by reference in the Registration Statement and the
Prospectus and substantially in the form and substance of the letter
delivered to you by Arthur Andersen L.L.P. on the date of this
Agreement, provided that the letter delivered on the Closing Date shal
--------
l use a "cut-off date" not earlier than the date of this Agreement.
(l) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Miller, Kaplan,
Arase & Co., independent public accountants, with respect to the
Crescent Financials and certain financial information relating to
[Crescent] incorporated by reference in
20
<PAGE>
the Registration Statement and the Prospectus and substantially in the
form and substance of the letter delivered to you by Coopers & Lybrand
LLP on the date of this Agreement, provided that the letter delivered
--------
on the Closing Date shall use a "cut-off date" not earlier than the
date of this Agreement.
(m) The Company shall not have failed at or prior to the Closing
Date to perform or comply in any material respect with any of the
agreements herein contained and required to be performed or complied
with by the Company at or prior to the Closing Date.
(n) The Company shall have complied with the provisions with
respect to printing and furnishing of Prospectuses set forth in
Section 5(c) hereof by the business day next succeeding the date of
this Agreement.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of such Shares.
9. Effective Date of Agreement and Termination. This Agreement shall
-------------------------------------------
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company or any of its subsidiaries or the
earnings, affairs, or business prospects of the Company or any of its
subsidiaries, whether or not arising in the ordinary course of business, which
would, in your judgment, make it impracticable to market or consummate the sale
of the Shares on the terms and in the manner contemplated in the Prospectus,
(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus,
(iii) trading of the Shares shall have been suspended on the NASDAQ National
Market System, (iv) the suspension or material limitation of trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National Market System or limitation on prices for securities on any such
exchange or National Market System, (v) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or any Subsidiary, (vi) the declaration of a banking
moratorium by either federal or New York State authorities or (vii) the taking
of any action by any federal, state or local government or agency in respect of
its monetary or fiscal
21
<PAGE>
affairs which in your opinion has a material adverse effect on the financial
markets in the United States.
If on the Closing Date or on the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Securities which it or they have agreed to purchase hereunder on such date and
the aggregate number of Shares which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase is
not more than one-tenth of the total number of Shares to be purchased on such
date by all Underwriters, each non-defaulting Underwriter shall be obligated
severally, in the proportion which the number of Firm Shares set forth opposite
its name in Schedule I bears to the total number of Firm Shares which all the
non-defaulting Underwriters, as the case may be, have agreed to purchase, or in
such other proportion as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters, as the case may be, agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
--------
Shares which any Underwriter has agreed to purchase pursuant to Section 2 hereof
be increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If on
the Closing Date or on the Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date by
all Underwriters and arrangements satisfactory to you and the Company for
purchase of such Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter and the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date or the Option Closing Date, as the case may be, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
10. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to Evergreen
Media Corporation, 433 East Las Colinas Boulevard, Irving, Texas 75039
(Attention: Scott K. Ginsburg) and (b) if to any Underwriter or to you, to you
c/o Alex Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore,
Maryland 21202, Attention: Syndicate Department or in either case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the several Underwriters set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Shares, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter or any
controlling person of any Underwriter or by or on behalf of the Company, the
officers or directors of the Company or any controlling person of the Company,
(ii) acceptance of the Shares, and payment for them hereunder and (iii)
termination of this Agreement.
22
<PAGE>
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
23
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
EVERGREEN MEDIA CORPORATION
By
---------------------------
Title:
Accepted and Agreed
________ __, 1996
ALEX. BROWN & SONS INCORPORATED
CS FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
UBS SECURITIES LLC
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By ALEX. BROWN & SONS INCORPORATED
By
----------------------------
24
<PAGE>
SCHEDULE I
----------
Number of
Shares to
be Purchased
Underwriters ------------
------------
Alex. Brown & Sons
Incorporated
CS First Boston
Corporation
Donaldson, Lufkin & Jenrette
Securities Corporation
Morgan Stanley & Co.
Incorporated
Smith Barney Inc.
UBS Securities LLC
Total ----------
8,000,000
==========
<PAGE>
EXHIBIT 2.25
EZ COMMUNICATIONS, INC.
10800 Main Street, P.O. Box 10103
Fairfax, VA 22030-8003 703/591-1000 Fax 703/934-1200
August 27, 1996
Mr. Scott Ginsburg, Chairman
Evergreen Media Corporation
433 E. Las Colinas Blvd.
Irving, TX 75039
Re: Asset Exchange of WRFX(FM), WPEG(FM), WBAV(FM),
WBAV(AM) and WFNZ(AM), Charlotte, North Carolina for
WIOQ(FM) and WUSL(FM), Philadelphia, Pennsylvania and Asset
Purchase of WNKS(FM), Charlotte, North Carolina
-----------------------------------------------
Dear Scott:
This letter is intended to set forth the basic terms of a possible
like-kind exchange within the meaning of Section 1031 of the Internal Revenue
Code and the regulations thereunder and asset purchase (the "Subject
Transactions") between EZ Communications, Inc., a Virginia corporation, and its
wholly-owned subsidiary, Professional Broadcasting, Inc., and its wholly owned
subsidiary, EZ Philadelphia, Inc. ("EZ"), licensee and owner of substantially
all of the assets that are used or useful in the operation of WIOQ(FM) and
WUSL(FM), Philadelphia, Pennsylvania (the "Philadelphia Stations") and Evergreen
Media Corporation, ("Evergreen"), a Delaware corporation, through its
subsidiaries is licensee and owner of substantially all of the assets that are
used or useful in the operation of radio stations WRFX(FM), WNKS(FM), WPEG(FM),
WBAV(FM), WBAV(AM) and WFNZ(AM), Charlotte, North Carolina, (the "Charlotte
Stations", and, with the Philadelphia Stations the "Stations").
1. Nature of the Subject Transactions. The Subject Transactions
----------------------------------
shall involve the transfer and delivery by EZ and Evergreen at Closing of all
the tangible and intangible assets, both real and personal, used or useful in
the operation of the Philadelphia and Charlotte Stations, respectively, and
related real property, but excluding cash, cash equivalents, and accounts
receivable. The assets to be exchanged will be transferred free and clear of
all liabilities, liens, and encumbrances, including liabilities under financing
agreements. The transfer and delivery of the assets comprising WNKS(FM),
Charlotte, North Carolina shall be excluded from the like-kind exchange
described above, but shall be the subject of a separate asset purchase agreement
pursuant to which EZ shall pay to Evergreen at Closing for such assets Ten
Million Dollars ($10,000,000) in immediately available funds (the "Asset
Purchase Agreement").
2. Working Capital Adjustments. Within sixty (60) days following the
---------------------------
Closing Date, the parties shall establish a net working capital adjustment based
on customary accounting principles, including, without limitation, the amount of
the Stations' respective
<PAGE>
Mr. Scott Ginsburg
August 27, 1996
Page 2
aggregate net trade balance at closing, if and to the extent such balance is
negative and exceeds mutually agreed levels as to the Charlotte Stations and the
Philadelphia Stations, respectively, and otherwise by the amount of any
prorations for rent, utility payments, employee benefits (including vacation and
sick leave), and other normal income and expense items related to the operation
of the Stations. Income and expense of the Stations will be prorated as of 12:01
a.m., Eastern time, of the day of Closing.
3. Accounts Receivable. Each party will use its best efforts to
-------------------
collect the accounts receivable of the Stations acquired by it in the Subject
Transactions and existing as of the Closing for a period of 90 days after the
Closing. Prior to the fifteenth day after the end of the 90-day collection
period, the parties will remit to the other all amounts collected with respect
to those accounts receivable, and all records, or copies thereof, with respect
to any accounts receivable.
4. Definitive Agreement. The parties will negotiate a definitive
--------------------
Asset Exchange Agreement and Asset Purchase Agreement (together, the
"Agreements"), setting forth the terms and conditions of the exchange, which
will supersede all prior agreements, if any, between EZ and Evergreen. The
parties may assign their rights and obligations under this letter agreement and
the definitive Agreements to a wholly owned subsidiary, provided however that
each party shall remain liable to the other party for the satisfactory
performance of such assignee's obligations under this letter agreement or the
Agreements, as the case may be.
a. Terms of Agreements. The Agreements will contain provisions
-------------------
appropriate for a radio station asset exchange transaction, including
appropriate representations, warranties, covenants (which, as to stations
WBAV(AM) and WFNZ(AM), shall be no greater than those granted by Evergreen's
predecessor), and indemnification agreements, such as the following:
i. FCC Approval. The sale and exchange of the Stations will
------------
be conditioned on the prior consent of the FCC as to EZ's acquisition of the
Charlotte Stations and Evergreen's acquisition of the Philadelphia Stations,
with the consent having become a Final Order (as that term is commonly
understood) and the parties having complied with any statutory or regulatory
requirements imposed or administered by the FCC, provided, however, that the
Closing shall not occur until the earlier of either (i) the date two days
following the close of the proposed merger between EZ and American Radio Systems
Corporation, or (ii) June 30, 1997.
ii. Governmental Approvals. The exchange of the Stations
----------------------
will also be conditioned on the prior consent and approval of any other Federal,
state, or local governmental agencies, the compliance by the parties with any
statutory or regulatory requirements imposed or administered by any of those
agencies and authorities, and the expiration of any applicable waiting periods.
The Agreements shall provide that it shall be the primary responsibility of EZ,
in the case of the Charlotte Stations, and Evergreen, in the case of the
Philadelphia Stations, to obtain necessary regulatory consents, including,
without limitation,
<PAGE>
Mr. Scott Ginsburg
August 27, 1996
Page 3
making arrangements with third parties to insure regulatory compliance of the
Subject Transactions within the respective markets.
iii. Other Approvals. The exchange of the Stations will
---------------
also be conditioned on the receipt of all material third-party consents without
the imposition of any conditions that would be adverse to EZ or Evergreen. Each
of Evergreen and EZ will covenant in the Agreements that it will use its best
efforts to obtain all material consents required under this paragraph prior to
the Closing.
iv. Assumption of Liabilities. At Closing EZ in the case of
-------------------------
the Charlotte Stations and Evergreen in the case of the Philadelphia Stations
will assume the obligations of ongoing agreements of the Stations to the extent
that the obligations relate to the period after the Closing, and to the extent
such obligations are disclosed in the Agreements or are entered into thereafter
in the ordinary course of business. However, the parties will not assume any
obligations arising under financing arrangements or under agreements entered
into other than in the ordinary course of business.
v. Philadelphia Studio Buildout. The Asset Exchange
----------------------------
Agreement shall provide that EZ shall be responsible for the substantial
completion of the tenant improvement construction currently underway at the
studio building for the Philadelphia Stations; including all costs for
construction, equipment and furniture, and shall have expended at the completion
of the project One Million Two Hundred Thousand Dollars ($1,200,000) in costs
related thereto.
vi. Charlotte Studio Upgrade. The Asset Exchange Agreement
------------------------
shall provide that EZ is accepting the Charlotte Stations with the knowledge
that their office and studio facilities require significant improvement,
including the necessity of repair, renovation or relocation. Evergreen shall not
be required to perform any such facility improvements as a condition under
either Agreement.
vii. Conditional Nature of WNKS Agreement. The Asset
------------------------------------
Purchase Agreement shall provide that the closing under the Asset Exchange
Agreement is a condition precedent to closing the Asset Purchase Agreement, but
the closing of the Asset Purchase Agreement shall not be a condition to closing
the Asset Exchange Agreement.
viii. Specific Performance. The Agreements shall provide
--------------------
that either party shall be entitled to obtain specific performance of the
other's obligation in the event such other party wrongfully breaches its
obligations to close the transaction pursuant to the terms of the Agreements.
ix. Upset Date. The Agreements will provide that either
----------
party, if not then in default, could terminate the agreement at any time after
December 31, 1997.
<PAGE>
Mr. Scott Ginsburg
August 27, 1996
Page 4
b. Delivery of Draft Agreement. EZ is prepared to deliver a
---------------------------
first draft of the Agreements to Evergreen within ten (10) days after the date
that this letter is countersigned on behalf of Evergreen.
c. Execution of Asset Exchange Agreement; Filing of FCC
----------------------------------------------------
Application. Unless otherwise mutually agreed, the parties shall use their
- -----------
best efforts to execute and deliver the Agreements by September 15, 1996, and to
prepare and file an FCC Assignment Application with respect to the Stations'
licenses within twenty (20) days following such execution and delivery of the
Agreements. Prior to the execution of the Agreements, EZ shall have secured an
eighteen month extension for the tower site used in connection with WUSL(FM),
Philadelphia, Pennsylvania, at a monthly rental cost not to exceed one hundred
and ten percent (110%) the current monthly rental payment of that site.
5. Time Brokerage Agreement. EZ and Evergreen agree to mutually
------------------------
negotiate in good faith and enter into Time Brokerage Agreements, which shall
become effective as of September 15, 1996, pursuant which EZ (or its assignee),
in the case of the Charlotte Stations, and Evergreen, in the case of the
Philadelphia Stations, shall be entitled to program, promote and sell
advertising times on such respective Stations to the fullest extent allowable by
law. The parties agree that the respective fees provided for under the Time
Brokerage Agreements, shall be equal and offsetting, subject to adjustment to
reflect the projected 1996 monthly cash flow of the Charlotte and Philadelphia
stations, respectively.
6. Broker Expenses of Transactions. EZ will pay any transfer taxes,
-------------------------------
sales taxes, document stamps, or other charges levied by any governmental entity
on account of the exchange of the Charlotte Stations and Evergreen will pay any
transfer taxes, taxes, document stamps, or other charges levied by any
governmental entity on account of the exchange of the Philadelphia Stations, but
FCC, FTC and other filing fees shall be shared equally by the parties.
Evergreen and EZ hereby represent and warrant to the other that neither has
retained any broker or agent in connection with the purchase or sale or exchange
of the Stations other than Star Media Group, whose fee shall be paid by
Evergreen.
7. Exclusive Negotiations. During the period of negotiation of the
----------------------
Agreements, the parties hereby agree, in consideration of expenses to be
incurred in pursuing exchange of the Stations, that they will not discuss or
negotiate with any other possible party, or entertain or consider any inquiries
or proposals relating to, the possible disposition of the Stations or of any
material portion thereof.
8. Operations in Ordinary Course. In the Agreements, and except to
-----------------------------
the extent provided for otherwise in the respective Time Brokerage Agreements,
the parties will agree that they will operate their respective Stations only in
the ordinary course of business, including, without limitation, using its
reasonable best efforts to maintain all existing individual employment
agreements and arrangements, and to maintain levels of marketing and promotion
<PAGE>
Mr. Scott Ginsburg
August 27, 1996
Page 5
efforts and expenditures in the period prior to Closing at levels no less than
those currently budgeted in 1996 business plans.
9. Confidentiality. During the course of the negotiation of the
---------------
Agreements, the parties will continue to discuss and obtain information
regarding the Stations. The parties and their affiliates and agents agree to
maintain in confidence all such information and any other information obtained
from the other, whether written or oral. Subject to the requirements of law, EZ
and Evergreen shall keep confidential their negotiations regarding, and any
definitive agreement reached for, the exchange of the Stations. Upon request,
the parties will return all written information obtained from the other, any
written record of all oral information obtained from the other and all copies
thereof, including any corporate data files with respect thereto. Subject to
applicable FCC and other legal requirements, no public announcement regarding
this letter of intent or the underlying transaction shall be made without the
express written approval of both EZ and Evergreen.
10. Binding Nature. The parties intend that this letter constitutes
--------------
a preliminary agreement which contains all the essential terms and conditions of
the Subject Transactions, and that they are bound hereby. Each party agrees to
provide to the other telephonic and facsimile written confirmation of its
board's action no later than 5:00 p.m. EDT on August 29, 1996. This agreement
has been approved by the respective Boards of Directors of EZ and Evergreen.
If the foregoing is acceptable, please countersign below to confirm your intent
to proceed with negotiations consistent with the terms of this letter no later
than three (3) business days following its receipt. By so doing, the parties
(i) agree to be bound by the terms set forth herein, which represent the
essential terms of the Subject Transactions, and agree to negotiate in good
faith such supplemental terms as are customary in similar transactions, and (ii)
represent and warrant to each other that said negotiation, execution, delivery
and performance of the Agreements substantially as described above would not
violate, conflict with, or result in the breach of the terms of any agreement,
written or oral, or by which the parties or any of their property is bound.
Very truly yours,
EZ COMMUNICATIONS, INC.
By: /s/ Alan Box
--------------------
Alan Box, President
<PAGE>
Mr. Scott Ginsburg
August 27, 1996
Page 6
ACCEPTED:
EVERGREEN MEDIA CORPORATION
By: /s/ Scott K. Ginsburg
---------------------
Its: Chairman/CEO
---------------------
Date: August 31, 1996
---------------------
In acknowledgment that EZ and American Radio Systems Corporation
("ARS") have entered into an Agreement and Plan of Merger dated August 5, 1996,
ARS hereby acknowledges receipt of notice of the Subject Transactions and
consents to the terms herein.
AMERICAN RADIO SYSTEMS CORPORATION
By: /s/ Steve Dodge
--------------------------------
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors Evergreen Media Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-3 of Evergreen Media Corporation of (a) our report dated February 9, 1996,
except for note 14(b), which is as of February 14, 1996, and note 1(m), which
is as of August 8, 1996, relating to the consolidated balance sheets of
Evergreen Media Corporation and subsidiaries as of December 31, 1994 and 1995
and the related consolidated statements of operations, stockholders' equity,
and cash flows for each of the years in the three-year period ended December
31, 1995, which report appears in the Form 8-K/A dated September 3, 1996 filed
by Evergreen Media Corporation, and (b) our report dated June 28, 1996,
relating to the balance sheet of WEDR, Inc. as of December 31, 1995 and the
related statements of operations and retained earnings and cash flows for the
year then ended, which report appears in the Form 8-K dated August 23, 1996
filed by Evergreen Media Corporation. We also consent to the reference to our
firm under the heading "Experts" in the Prospectus.
KPMG Peat Marwick LLP
Dallas, Texas
September 18, 1996
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Evergreen Media Corporation on Form S-3 of our report dated January 19, 1996
(which contained an explanatory paragraph emphasizing that the financial
statements of Pyramid Communications, Inc. were not comparable to the
financial statements of its predecessor, KISS Limited Partnership) on the
consolidated financial statements of Pyramid Communications, Inc. for the year
ended December 31, 1995 appearing in a Current Report on Form 8-K of Evergreen
Media Corporation dated June 26, 1996, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
Deloitte & Touche LLP
Boston, Massachusetts
September 16, 1996
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Evergreen Media Corporation on Form S-3 of our report dated February 24, 1995,
on our audits of the consolidated financial statements of Broadcasting
Partners, Inc. and Subsidiaries as of June 30, 1993 and December 31, 1993 and
1994, and the related consolidated statements of operations, changes in
stockholders' equity (deficit) and cash flows for each of the two years in the
period ended June 30, 1993 and the six month period from July 1, 1993 to
December 31, 1993 and the year ended December 31, 1994 which report is
included in Form 8-K/A of Evergreen Media Corporation dated May 12, 1995. We
also consent to the reference to our firm under the caption "Experts."
Coopers & Lybrand L.L.P.
New York, New York
September 19, 1996
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Evergreen
Media Corporation of our report dated August 22, 1996 relating to the
financial statements of Century Chicago Broadcasting, L.P. as of December 31,
1995 and for the year then ended, which is incorporated by reference in the
Current Report on Form 8-K of Evergreen Media Corporation dated September 20,
1996. We also consent to the reference to us under the heading "Experts" in
such Prospectus.
PRICE WATERHOUSE LLP
Chicago, Illinois,
September 20, 1996
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 registration statement of our report dated
September 10, 1996 relating to the financial statements of WJLB/WMXD, Detroit
included in Evergreen Media Corporation's Form 8-K dated September 20, 1996
and to all references to our Firm, included in this registration statement for
Evergreen Media Corporation dated September 20, 1996.
Arthur Andersen LLP
Chicago, Illinois,
September 20, 1996
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated March 1, 1996 (except for Note 9 as to which the date is August 14,
1996) relating to the financial statements of KYLD-FM (A Division of Crescent
Communications, L.P.) as of December 31, 1995 and for the year then ended,
included in Evergreen Media Corporation's Form 8-K dated September 20, 1996.
We also consent to the reference to us under the heading "Experts" in the
prospectus.
/s/ Miller, Kaplan, Arase & Co.
Miller, Kaplan, Arase & Co.
North Hollywood, California
September 20, 1996
