
<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
   -------------------------------- 
