TABLE OF CONTENTS

		Page
ARTICLE I ASSETS TO BE CONVEYED		1
1.1	Station Assets	1
1.2	Excluded Assets	3
1.3	Assumption of Obligations	4
1.4	Retained Liabilities	5
1.5	Purchase Price	5
1.6	Closing	5
1.7	General Proration.	5
1.8	Accounts Receivable	8
1.9	Allocation	8
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER		9
2.1	Existence and Power	9
2.2	Corporate Authorization	9
2.3	Governmental Authorization	9
2.4	Noncontravention	9
2.5	Absence of Litigation	10
2.6	Financial Statements	10
2.7	FCC Licenses	10
2.8	Tangible Personal Property	11
2.9	Station Contracts	11
2.10	Intangible Property	11
2.11	Real Property	11
2.12	Environmental	12
2.13	Employee Information	12
2.14	Compliance with Laws	12
2.15	Taxes	12
2.16	Sufficiency and Title to Station Assets	12
2.17	No Finder
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER		13
3.1	Existence	13
3.2	Corporate Authorization and Power	13
3.3	Governmental Authorization	13
3.4	Noncontravention	13
3.5	Absence of Litigation	14
3.6	FCC Qualifications	14
3.7	Financing	14
3.8	No Finder	14
ARTICLE IV COVENANTS		14
4.1	Governmental Approvals	14
4.2	Conduct of Business.	16
4.3	Access to Information; Inspections; Confidentiality; Publicity	18
4.4	Risk of Loss	18
4.5	Consents to Assignment; Estoppel Certificates	19
4.6	Notification	19

 

i

 

 

 

4.7	Employee Matters	19
4.8	Further Assurances	21
4.9	Public Filings	21
4.10	No Solicitation	22
ARTICLE V CONDITIONS PRECEDENT		22
5.1	To Buyer’s Obligations	22
5.2	To Seller’s Obligations	23
ARTICLE VI DOCUMENTS TO BE DELIVERED AT THE CLOSING		24
6.1	Documents to be Delivered by Both Parties	24
6.2	Documents to be Delivered by Seller	24
6.3	Documents to be Delivered by Buyer	24
ARTICLE VII SURVIVAL; INDEMNIFICATION		25
7.1	Survival	25
7.2	Indemnification	25
7.3	Procedures	26
7.4	Computation of Indemnifiable Losses	27
7.5	Sole Remedy	27
ARTICLE VIII TERMINATION RIGHTS		27
8.1	Termination	27
8.2	Effect of Termination	28
8.3	Specific Performance	28
ARTICLE IX TAX MATTERS		29
9.1	Bulk Sales	29
9.2	Transfer Taxes	29
9.3	Taxpayer Identification Numbers	29
ARTICLE X OTHER PROVISIONS		29
10.1	Expenses	29
10.2	Benefit and Assignment	29
10.3	No Third Party Beneficiaries	30
10.4	Entire Agreement; Waiver; Amendment	30
10.5	Headings	30
10.6	Computation of Time	30
10.7	Governing Law; Waiver of Jury Trial	30
10.8	Construction	31
10.9	Notices	31
10.10	Severability	32
10.11	Counterparts	32
ARTICLE XI DEFINITIONS		33
11.1	Defined Terms	33
11.2	Terms Generally	38

ii

 

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT, made as of the 18 th  day of August, 2006, is between CBS Radio Stations Inc., a Delaware corporation ( Seller ”), and Entercom Communications Corp., a Pennsylvania corporation (“ Buyer ”).

RECITALS

Seller is the licensee of and operates the following radio broadcast stations (each a “ Station ,” and collectively, the “ Stations ”), pursuant to licenses issued by the Federal Communications Commission (the “ FCC ”):

WCMF-FM, Rochester, New York (Facility ID No. 1905)

WPXY-FM, Rochester, New York (Facility ID No. 53966)

WRMM-FM, Rochester, New York (Facility ID No. 1907)

WZNE(FM), Brighton, New York (Facility ID No. 6859)

Seller and Buyer have agreed that Seller will sell and Buyer will acquire substantially all of the assets of the Stations on the terms and subject to the conditions set forth in this Agreement, including the FCC’s consent to the assignment of the FCC Licenses (as defined below) to Buyer.  Definitions of certain capitalized terms used in this Agreement are set forth in Article XI .

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I
ASSETS TO BE CONVEYED

1.1           Station Assets.   Pursuant to the terms and subject to the conditions of this Agreement, at the Closing, Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest in, to and under all of the assets, properties, interests and rights of Seller of whatsoever kind and nature, real and personal, tangible and intangible, which are used or held for use in the operation of the Stations, but excluding the Excluded Assets as hereinafter defined.  Except as provided in Section 1.2 , the Station Assets include the following:

(a)            all licenses, permits and other authorizations issued to Seller by the FCC with respect to the Stations, including those described on Schedule 1.1(a) , and including any pending applications for or renewals or modifications thereof between the date hereof and the Closing (the “ FCC Licenses ”);

 

(b)            all equipment, electrical devices, antennas, cables, tools, hardware, office furniture and fixtures, office materials and supplies , inventory, motor vehicles, spare parts and other tangible personal property of every kind and description, used or held for use in the operation of the Stations, except any retirements or dispositions of Tangible Personal Property made between the date hereof and Closing in the ordinary course of business and consistent with Section 4.2 (the “ Tangible Personal Property ”);

(c)            all contracts, agreements, leases and licenses used in the operation of the Stations (except agreements with Station Employees to the extent such agreements are subsequently excluded pursuant to Section 4.7 ) that (i) are listed on Schedule 1.1(c) , except to the extent otherwise indicated on such Schedule, (ii) were entered into in the ordinary course of business and are reflected on the Reference Financial Statements, provided that such contracts do not require Buyer to make annual payments of more than $250,000 per market in the aggregate, (iii) were entered into in the ordinary course of business and relate to marketing, promotions or contests, or (iv) were or are made between June 30, 2006 and Closing in the ordinary course of business consistent with Section 4.2 (collectively, the “ Station Contracts ”);

(d)            to the extent transferable, all of Seller’s rights in and to the Stations’ call letters, registered and unregistered trademarks and associated goodwill, trade names, service marks, copyrights, jingles, logos, slogans, Internet domain names, Internet URLs, Internet web sites, content and databases, computer software, programs and programming material and other intangible property rights and interests applied for, issued to or owned by Seller that are used primarily in the operation of the Stations, including those listed on Schedule 1.1(d) (the “ Intangible Property ”);

(e)            all files, documents, records and books of account (or copies thereof) relating primarily to the operation of the Stations, including the Stations’ public inspection files, programming information and studies, blueprints, technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs but excluding any such documents relating to Excluded Assets (as defined below); and

(f)             all interests in real property, including any leases or licenses to occupy, used or held for use in the operation of the Stations described on Schedule 1.1(f) (the “ Real Property ”).

The assets to be transferred to Buyer hereunder are collectively referred to herein as the “ Station Assets. ”   The Station Assets shall be delivered as is, where is, without any representation or warranty by Seller except as expressly set forth in this Agreement, and Buyer acknowledges that it has not relied on or been induced to enter into this Agreement by any representation or warranty other than those expressly set forth in this Agreement.  The Station Assets shall be transferred to Buyer free and clear of liens, mortgages, pledges, security interests, claims and encumbrances (“ Liens ”) except for Permitted Liens, if any, and except as otherwise expressly provided in this Agreement.

2

 

 

1.2           Excluded Assets.   Notwithstanding anything to the contrary contained herein, Buyer expressly acknowledges and agrees that the following assets and properties of Seller (the “ Excluded Assets ”) shall not be acquired by Buyer and are excluded from the Station Assets:

(a)            Seller’s books and records pertaining to the corporate organization, existence or capitalization of Seller;

(b)            all cash, cash equivalents, or similar type investments of Seller, such as certificates of deposit, treasury bills, marketable securities, asset or money market accounts or similar accounts or investments;

(c)            all accounts receivable existing at the Effective Time (the “ Accounts Receivable ”), notes receivable, promissory notes or amounts due from employees;

(d)            intercompany accounts receivable and accounts payable;

(e)            all insurance policies or any proceeds payable thereunder, except as otherwise contemplated by Section 4.4 ;

(f)             all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement;

(g)            all interest in and to refunds of Taxes relating to all periods prior to the Effective Time;

(h)            all tangible and intangible personal property disposed of or consumed between the date of this Agreement and the Closing Date, as permitted under this Agreement;

(i)             all rights to the CBS Eye Design and the names “CBS” and “CBS Radio” and logos or variations thereof, including trademarks, trade names and domain names, and all goodwill associated therewith;

(j)             all rights to marks not currently but previously used in the operation of the Stations, where such use has been abandoned by the Stations, and all goodwill associated therewith;

(k)            (i) all rights to marks identified on Schedule 1.2(k) and all goodwill associated therewith and (ii) all rights to marks used in the operation of the Stations and in connection with the operation of another station or business of Seller or any of its Affiliates other than or in addition to the Stations and all goodwill associated with such marks; provided that, in each case, Seller or one of its Affiliates shall grant Buyer, at Buyer’s request, the right, assignable in connection with an assignment of the Stations, to continue to use such mark royalty-free in the manner used by Seller at the applicable Station on a basis exclusive in the Nielsen Television Designated Market Area

3

 

in which the Stations are located so long as Buyer uses such mark, but non-exclusive in that no right is granted to Buyer hereunder with respect to other markets (some of which may overlap), and such right is limited to the extent of Seller’s rights;

(l)             the Oracle Financial System and Infinium payroll system used by Seller and its Affiliates, whether in hard copy, stored on a computer, disk or otherwise;

(m)           (i) Group Contracts, except to the extent that Schedule 1.1(c) specifically provides for the partial assignment and assumption of any such Group Contract and (ii) agreements relating to the employment of Station Employees that do not become Transferred Employees as provided in Section 4.7 ;

(n)            any asset or property which is used or held for use by Seller or an Affiliate of Seller not located at the Stations’ offices in Rochester, New York or the Stations’ transmitter sites and not used primarily in the operation of the Stations;

(o)            all ASCAP, BMI and SESAC licenses;

(p)            all items of personal property owned by personnel at the Stations;

(q)            any cause of action or claim relating to any event or occurrence prior to the Effective Time;

(r)             all rights of Seller under this Agreement or the transactions contemplated hereby; and

(s)            the contracts identified on Schedule 1.2(s) .

1.3           Assumption of Obligations.   At the Closing, Buyer shall assume and agrees to pay, discharge and perform the following (collectively, the “ Assumed Obligations ”):

(a)            all liabilities, obligations and commitments of Seller under the Station Contracts to the extent they accrue or relate to any period at or after the Effective Time;

(b)            all liabilities, obligations and commitments relating to Transferred Employees as provided for in Section 4.7 ;

(c)            any current liability of Seller to the extent Buyer has received a credit under Section 1.7 ; and

(d)            all liabilities and obligations relating to the Station Assets arising out of Environmental Laws at or after the Effective Time, except to the extent that Seller is obligated under Section 7.2(a) (Indemnification) to indemnify Buyer for Losses arising out of or resulting from Seller’s breach of any representation or warranty in Section 2.12 (Environmental).

4

 

1.4           Retained Liabilities.   Buyer does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or documents delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform, any liabilities, obligations or commitments of Seller of any nature whatsoever whether accrued, absolute, contingent or otherwise, other than the Assumed Obligations (the “ Retained Liabilities ”).

1.5           Purchase Price.  In consideration for the sale of the Station Assets, Buyer shall, at the Closing, in addition to assuming the Assumed Obligations, pay to Seller the sum of $42,000,000 (the “ Purchase Price ”) by wire transfer of immediately available federal funds pursuant to wire instructions that Seller shall provide to Buyer.

1.6           Closing.  Subject to Section 8.1 hereof and except as otherwise mutually agreed upon by Seller and Buyer, the consummation of the sale and purchase of the Station Assets and the assumption of the Assumed Obligations hereunder (the “ Closing ”) shall take place (by electronic exchange of the documents to be delivered at the Closing) on the later of (a) five Business Days after the day that the FCC Consent becomes effective and (b) the date on which each of the other conditions to Closing set forth in Article V has been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time).  Alternatively, the Closing may take place at such other place, time or date as the parties may mutually agree in writing.  The date on which the Closing is to occur is referred to herein as the “ Closing Date .”  The effective time of the Closing shall be 12:01 a.m., local Station time, on the Closing Date (the “ Effective Time ”).

1.7           General Proration.

(a)            All Station Assets that would be classified as assets in accordance with GAAP, and all Assumed Obligations that would be classified as liabilities in accordance with GAAP (including accrued but unpaid commissions, but excluding equity non-cash compensation), shall be prorated between Buyer and Seller as of the Effective Time, including by taking into account the elapsed time or consumption of an asset during the month in which the Effective Time occurs (respectively, the “ Prorated Station Assets ” and the “ Prorated Assumed Obligations ”).  Such Prorated Station Assets and Prorated Assumed Obligations relating to the period prior to the Effective Time shall be for the account of Seller and those relating to the period on or after the Effective Time for the account of Buyer and shall be prorated accordingly.

(b)            Such prorations shall include all ad valorem and other property taxes, utility expenses, liabilities and obligations under Station Contracts, rents and similar prepaid and deferred items and all other expenses and obligations, such as accrued but unpaid commissions, deferred revenue and prepayments, attributable to the ownership and operation of the Stations that straddle the period before and after the Effective Time.  If such amounts were prepaid by Seller prior to the Effective Time and Buyer will receive a benefit after the Effective Time, then Seller shall receive a credit for such amounts.  If Seller was entitled to receive a benefit prior to the Effective Time and such amounts will be paid by Buyer after the Effective Time, Buyer will receive a credit for such amounts.  To the extent not known, real estate and personal property taxes shall be apportioned on the basis of Taxes assessed for the preceding

5

 

year, with a reapportionment as soon as the new tax rate and valuation can be ascertained even if such is ascertained after the Settlement Statement is so determined.  Notwithstanding anything in this Section 1.7 to the contrary, there shall be no proration under this Section 1.7 for Tradeout Agreements.

(c)            Accrued vacation liabilities for Transferred Employees shall be included in the prorations, but there shall be no proration under this Section 1.7 for sick leave for Transferred Employees.

(d)            Within 45 days after the Closing Date, Buyer shall prepare and deliver to Seller a proposed pro rata adjustment of assets and liabilities in the manner described in Section 1.7(a) and Section 1.7(b) , for the Stations, as of the Effective Time (the “ Settlement Statement ”) setting forth the Prorated Assumed Obligations and the Prorated Station Assets together with a schedule setting forth, in reasonable detail, the components thereof.

(e)            During the 30-day period following the receipt of the Settlement Statement (i) Seller and its independent auditors, if any, shall be permitted to review and make copies reasonably required of (A) the financial statements of Buyer relating to the Settlement Statement; (B) the working papers of Buyer and its independent auditors, if any, relating to the Settlement Statement; (C) the books and records of Buyer relating to the Settlement Statement; and (D) any supporting schedules, analyses and other documentation relating to the Settlement Statement and (ii) Buyer shall provide reasonable access, upon reasonable advance notice and during normal business hours, to such employees of Seller and its independent auditors, if any, as Seller reasonably believes is necessary or desirable in connection with its review of the Settlement Statement.

(f)             The Settlement Statement shall become final and binding upon the parties on the 30th day following delivery thereof, unless Seller gives written notice of its disagreement with the Settlement Statement (the “ Notice of Disagreement ”) to Buyer prior to such date.  The Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted.  If a Notice of Disagreement is given to Buyer in the period specified, then the Settlement Statement (as revised in accordance with clause (i) or (ii) below) shall become final and binding upon the parties on the earlier of (i) the date Buyer and Seller resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (ii) the date any disputed matters are finally resolved in writing by the Accounting Firm.

(g)            Within 10 Business Days after the Settlement Statement becomes final and binding upon the parties, (i) Buyer shall be required to pay to Seller the amount, if any, by which the Prorated Station Assets exceeds the Prorated Assumed Obligations or (ii) Seller shall be required to pay to Buyer the amount, if any, by which the Prorated Assumed Obligations exceeds the Prorated Station Assets.  All payments made pursuant to this Section 1.7(g) must be made via wire transfer in immediately available funds to an account designated by the recipient party, together with interest thereon at the prime rate (as reported by The Wall Street Journal or, if not reported thereby, by another authoritative source) as in effect from time to time from the Effective Time to the date of actual payment.

6

 

(h)            Notwithstanding the foregoing, in the event that Seller delivers a Notice of Disagreement, Seller or Buyer shall be required to make a payment of any undisputed amount to the other regardless of the resolution of the items contained in the Notice of Disagreement, and Seller or Buyer, as applicable, shall within 10 Business Days of the receipt of the Notice of Disagreement make payment to the other by wire transfer in immediately available funds of such undisputed amount owed by Seller or Buyer to the other, as the case may be, pending resolution of the Notice of Disagreement together with interest thereon, calculated as described above.

(i)             During the 30-day period following the delivery of a Notice of Disagreement to Buyer that complies with the preceding paragraphs, Buyer and Seller shall seek in good faith to resolve in writing any differences they may have with respect to the matters specified in the Notice of Disagreement. During such period:  (i) Buyer and its independent auditors, if any, at Buyer’s sole cost and expense, shall be, and Seller and its independent auditors, if any, at Seller’s sole cost and expense, shall be, in each case permitted to review and make copies reasonably required of: (A) the financial statements of the Seller, in the case of Buyer, and Buyer, in the case of Seller, relating to the Notice of Disagreement; (B) the working papers of Seller, in the case of Buyer, and Buyer, in the case of Seller, and such other party’s auditors, if any, relating to the Notice of Disagreement; (C) the books and records of Seller, in the case of Buyer, and Buyer, in the case of Seller, relating to the Notice of Disagreement; and (D) any supporting schedules, analyses and documentation relating to the Notice of Disagreement; and (ii) Seller, in the case of Buyer, and Buyer, in the case of Seller, shall provide reasonable access, upon reasonable advance notice and during normal business hours, to such employees of such other party and such other party’s independent auditors, if any, as such first party reasonably believes is necessary or desirable in connection with its review of the Notice of Disagreement.

(j)             If, at the end of such 30-day period, Buyer and Seller have not resolved such differences, Buyer and Seller shall submit to the Accounting Firm for review and resolution any and all matters that remain in dispute and that were properly included in the Notice of Disagreement. Within 60 days after selection of the Accounting Firm, Buyer and Seller shall submit their respective positions to the Accounting Firm, in writing, together with any other materials relied upon in support of their respective positions.  Buyer and Seller shall use commercially reasonable efforts to cause the Accounting Firm to render a decision resolving the matters in dispute within 30 days following the submission of such materials to the Accounting Firm.  Buyer and Seller agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced.  Except as specified in the following sentence, the cost of any arbitration (including the fees and expenses of the Accounting Firm) pursuant to this Section 1.7 shall be borne by Buyer and Seller in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportional allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the matters submitted.  The fees and expenses (if any) of Buyer’s independent auditors and attorneys incurred in connection with the review of the Notice of Disagreement shall be borne by Buyer, and the fees and expenses (if any) of Seller’s independent auditors and attorneys incurred in connection with their review of the Settlement Statement shall be borne by Seller.

7

 

1.8           Accounts Receivable.

(a)            At the Effective Time, Seller shall designate Buyer as its agent solely for the purpose of collecting the Accounts Receivable.  Seller shall deliver to Buyer, on or immediately after the Effective Time, a statement of the Accounts Receivable.  Buyer shall use commercially reasonable efforts in the ordinary course of business to collect the Accounts Receivable during the period (the “ Collection Period ”) beginning at the Effective Time and ending on the 120 th  day following the Effective Time consistent with Buyer’s practices for collection of its accounts receivable.  Any payment received by Buyer (i) at any time following the Effective Time, (ii) from a customer of the Stations after the Effective Time that was also a customer of the Stations prior to the Effective Time and that is obligated with respect to any Accounts Receivable and (iii) that is not designated as a payment of a particular invoice or invoices or as a security deposit or other prepayment, shall be presumptively applied to the accounts receivable for such customer outstanding for the longest amount of time and, if such accounts receivable shall be an Accounts Receivable, remitted to Seller in accordance with Section 1.8(b); provided further, however, that if, prior to the Effective Time, Seller or, after the Effective Time, Seller or Buyer received or receives a written notice of dispute from a customer with respect to an Accounts Receivable that has not been resolved, then Buyer shall apply any payments from such customer to such customer’s oldest, non-disputed accounts receivable, whether or not an Accounts Receivable.  Buyer shall not refer any of the Accounts Receivable to a collection agency or to an attorney for collection.

(b)            On or before the 10 th  day following the end of each calendar month in the Collection Period, Buyer shall deposit into an account identified by Seller the amounts collected during the preceding month of the Collection Period with respect to the Accounts Receivable in immediately available funds by wire transfer.  Buyer shall furnish Seller with a list of the amounts collected during such calendar month and in any prior calendar months with respect to the Accounts Receivable and a schedule of the amount remaining outstanding under each particular account.  Following the Collection Period, Seller shall be entitled to inspect and/or audit the records maintained by Buyer pursuant to this Section 1.8 , upon reasonable advance notice and during normal business hours.

(c)            Following the expiration of the Collection Period, Buyer shall have no further obligations under this Section 1.8 , except that Buyer shall promptly pay over to Seller any amounts subsequently paid to it with respect to any Accounts Receivable.  Following the Collection Period, Seller may pursue collections of all the Accounts Receivable, and Buyer shall deliver to Seller all files, records, notes and any other materials relating to the Accounts Receivable and shall otherwise cooperate with Seller for the purpose of collecting any outstanding Accounts Receivable.

(d)            If Buyer fails to remit any amounts collected pursuant to this Section 1.8 , such amount shall bear interest at the prime rate (as reported by The Wall Street Journal or, if not reported thereby, by another authoritative source) as in effect from time to time from the date such amount was due until the date of actual payment.

1.9           Allocation.   Seller and Buyer will each allocate the Purchase Price in accordance with the respective fair market values of the Station Assets being purchased and sold,

8

 

as determined by an appraisal (the “ Appraisal ”) to be performed by Bond & Pecaro, and in accordance with the requirements of Section 1060 of the Code, and shall each file its federal income tax returns and its other Tax Returns reflecting such allocation; provided, however that nothing contained herein shall prevent Buyer or Seller from settling any proposed deficiency or adjustment by any Tax authority based on or arising out of such allocation, and neither Buyer nor Seller shall be required to litigate before any court any proposed deficiency or adjustment by any Tax authority challenging such allocation.  Bond & Pecaro shall be jointly retained by Buyer and Seller to perform the Appraisal, and the cost of the Appraisal shall be borne equally by each.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

2.1           Existence and Power.  Seller is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  Seller is qualified to do business and is in good standing in each jurisdiction where such qualification is necessary.  Seller has the requisite corporate power and authority to own and operate the Stations as currently operated.

2.2           Corporate Authorization.

(a)            The execution and delivery by Seller of this Agreement and all of the other agreements, certificates and instruments to be executed and delivered by Seller pursuant hereto or in connection with the transactions contemplated hereby (the “ Seller Ancillary Agreements ”) , the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby are within Seller’s corporate powers and have been duly authorized by all requisite corporate action on the part of Seller.

(b)            This Agreement has been, and each Seller Ancillary Agreement will be, duly executed and delivered by Seller.  This Agreement (assuming due authorization, execution and delivery by Buyer) constitutes, and each Seller Ancillary Agreement will constitute when executed and delivered by Seller, the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity).

2.3           Governmental Authorization.  The execution, delivery and performance by Seller of this Agreement and each Seller Ancillary Agreement and the consummation of the transactions contemplated hereby and thereby require no material action by or in respect of, or material filing with or notification to, any Governmental Authority other than (a) compliance with any applicable requirements of the HSRA and (b) the FCC.

2.4           Noncontravention.  Except as disclosed on Schedule 2.4 , the execution, delivery and performance of this Agreement and each Seller Ancillary Agreement by Seller and

9

 

the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate or conflict with the organizational documents of Seller; (b) assuming compliance with the matters referred to in Section 2.3 , conflict with or violate any Law or Governmental Order applicable to Seller; (c) require any consent or other action by or notification to any Person under, constitute a default under, give to any Person any rights of termination, amendment, acceleration or cancellation of any right or obligation of Seller under, any provision of (i) any Station Contract other than Real Property Leases or (ii) any Real Property Lease; or (d) result in the creation or imposition of any Lien on any of the Station Assets, except for Permitted Liens, except, in the case of clauses (b), (c)(i) and (d), for any such violations, consents, actions, defaults, rights or losses as would not have a Seller Material Adverse Effect.

2.5           Absence of Litigation. There is no Action pending or, to Seller’s knowledge, threatened against Seller (a) that in any manner challenges or seeks to prevent, enjoin, alter or delay materially the transactions contemplated by this Agreement or (b) that, if adversely determined, would reasonably be expected to have a Seller Material Adverse Effect, unless all liability that may result from such adverse determination is a Retained Liability.

2.6           Financial Statements.   The unaudited results of operations of the Stations for calendar years 2003, 2004 and 2005 and the first six months of calendar year 2006 included at Schedule 2.6 (the “ Reference Financial Statements ”) are derived from the books and records of the Stations and were prepared in accordance with the internal accounting policies of CBS Radio Inc. and CBS Corporation, as applicable to financial reporting at the radio station level.  The Reference Financial Statements present fairly, in all material respects, the results of operations of the Stations for the periods then ended consistent with the internal accounting policies of CBS Radio Inc. and CBS Corporation, as applicable to financial reporting at the radio station level.  During the period from June 30, 2006 to the date hereof, inclusive, there has been no change in the financial condition or the results of operations of the Stations and no event has occurred which has had or would reasonably be expected to have a Seller Material Adverse Effect.

2.7           FCC Licenses.

(a)            Seller has made available to Buyer true, correct and complete copies of the FCC Licenses, including any and all amendments and modifications thereto.  The FCC Licenses were validly issued by the FCC, are validly held by Seller and are in full force and effect.  The FCC Licenses are not subject to any condition except for those conditions that appear on the face of the FCC Licenses, those conditions applicable to radio broadcast licenses generally or those conditions disclosed in Schedule 2.7(a) .  The FCC Licenses listed on Schedule 1.1(a) constitute all authorizations issued by the FCC necessary for the operation of the Stations as currently conducted by Seller, except for immaterial licenses ancillary to the operation of the Stations.

(b)            Except as otherwise set forth on Schedule 2.7(b) , the FCC Licenses for each Station have been issued or renewed for the full terms customarily issued to radio broadcast stations licensed to the state in which the Station’s community of license is located.  Except as set forth on Schedule 2.7(b) , Seller has no applications pending before the FCC relating to the operation of the Stations.

10

 

(c)            Except as set forth on Schedule 2.7(c) , Seller has operated the Stations in compliance with the Communications Act of 1934, as amended (the “ Communications Act ”) and the FCC Licenses, has filed or made all applications, reports and other disclosures required by the FCC to be made in respect of the Stations and has timely paid all FCC regulatory fees in respect thereof, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Seller Material Adverse Effect.

(d)            Except as set forth on Schedule 2.7(d) , to the knowledge of Seller after due inquiry by its FCC counsel and consultation by Seller with such counsel, there are no petitions, complaints, orders to show cause, notices of violation, notices of apparent liability, notices of forfeiture, proceedings or other actions pending or threatened before the FCC relating to the Stations that would reasonably be expected to have an adverse effect on the operation of the Stations, other than proceedings affecting the radio broadcast industry generally.

2.8           Tangible Personal Property.  Except as disclosed on Schedule 2.8(a) , Seller has title to the Tangible Personal Property free and clear of Liens other than Permitted Liens.  Except as disclosed on Schedule 2.8(b) , the Tangible Personal Property is in normal operating condition, ordinary wear and tear excepted.

2.9           Station Contracts.  Each of the Station Contracts (including each of the Real Property Leases) is in effect and is binding upon Seller and, to Seller’s knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally).  Seller is not in material default under any Station Contract, and, to Seller’s knowledge, no other party to any of the Station Contracts is in default thereunder in any material respect.  Except as otherwise set forth on Schedule 1.1(c) , Seller has provided to Buyer prior to the date of this Agreement true and complete copies of all material Station Contracts (including each Real Property Lease).

2.10         Intangible Property.  Schedule 1.1(d) contains a description of the call letters of the Stations and all owned and registered Intangible Property.  Except as set forth on Schedule 2.10, Seller has received no notice of any claim that its use of any material Intangible Property infringes upon or conflicts with any third party rights.  Seller owns or has the right to use the Intangible Property free and clear of Liens other than Permitted Liens.

2.11         Real Property.   Schedule 1.1(f) includes a list of each lease, sublease, license or similar agreement pertaining to the Real Property (the “ Real Property Leases ”).   Seller has good and valid leasehold interest in the Real Property conveyed by the Real Property Leases or has a valid license to occupy the Real Property.  The Real Property Leases provide sufficient access to the Stations’ facilities.  To Seller’s knowledge, the Real Property is not subject to any suit for condemnation or other taking by any public authority.  Seller has received no notice of default under or termination of any Real Property Leases, and Seller has no knowledge of any default under any Real Property Lease.  Seller has delivered to Buyer true and correct copies of the Real Property Leases together with all amendments thereto.  Except as set forth on Schedule 1.1(c) or Schedule 1.1(f) , Seller has not granted any oral or written right to any Person (other than Seller) to lease, sublease, license or otherwise occupy any of the Real Property.

11

 

2.12         Environmental.   Except as set forth on Schedule 2.12 , to Seller’s knowledge, no hazardous or toxic substance or waste regulated under any applicable Environmental Law has been generated, stored, transported or released on, in, from or to the Real Property in violation of any applicable Environmental Law.  Except as set forth on Schedule 2.12 , (a) Seller has complied in all material respects with all Environmental Laws applicable to the Stations or any of the Real Property, (b) there are no underground storage tanks used by Seller in the operations of the Stations, and (c) to Seller’s knowledge, there is no friable asbestos or PCBs contained in any of the Station Assets.  To Seller’s knowledge, Seller has delivered to Buyer true and complete copies of all environmental assessments or reports in its possession relating to the Real Property, which are listed on Schedule 2.12 .  “ Environmental Laws ” are those environmental, health or safety laws and regulations applicable to Seller’s activities at the Real Property in effect.

2.13         Employee Information.

(a)            Schedule 2.13(a) contains a true and complete list as of the date set forth thereon of all Station Employees , including the names, date of hire, current rate of compensation, employment status (i.e., active, disabled, on authorized leave and reason therefor), title, whether such Station Employee is a union or non-union employee, whether such Station Employee is full-time, part-time or per-diem and a general description of benefits, including severance and vacation benefits, if any.  Each Station Employee listed on Schedule 2.13(a) is employed by Seller or an Affiliate of Seller as of the date set forth in Schedule 2.13(a) .

(b)            Except as otherwise set forth on Schedule 2.13(b) , none of the Stations is subject to or bound by any labor agreement or collective bargaining agreement. To the knowledge of Seller, there is no activity involving any Station Employee seeking to certify a collective bargaining unit or engaging in any other organization activity.

2.14         Compliance with Laws.   Except as set forth on Schedule 2.14 , Seller has complied in all material respects with all laws, regulations, rules, writs, injunctions, ordinances, franchises, decrees or orders of any Governmental Authority that are applicable to Seller’s operation of the Stations and ownership of the Station Assets.

2.15         Taxes.  Seller has, in respect of the Stations’ business, filed all material Tax Returns required to have been filed by it under applicable Law and has paid all Taxes which have become due pursuant to such Tax Returns or pursuant to any assessments which have become payable.

2.16         Sufficiency and Title to Station Assets.  Except for the Excluded Assets, the Station Assets constitute all the assets used or held for use by Seller in the business or operation of the Stations.  Seller, or an Affiliate of Seller, owns, leases or is licensed to use all of the Station Assets free and clear of Liens, except for Permitted Liens.  Seller will cause any Station Assets currently owned or held for use by any Affiliate of Seller to be transferred to Seller prior to the Closing.  Since January 1, 2006, no material properties or assets that were or are used in the operation of the Stations have been transferred or assigned by Seller to any Affiliate of Seller, except as set forth on Schedule 2.16 .

12

 

2.17         No Finder.  No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement, the Seller Ancillary Agreements or the transactions contemplated hereby or thereby as a result of any agreements or action of Seller or any party acting on Seller’s behalf.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

3.1           Existence.   Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania.  As of the Closing, Buyer will be duly qualified to do business and in good standing in each jurisdiction where such qualification is necessary.

3.2           Corporate Authorization and Power.

(a)            The execution and delivery by Buyer of this Agreement and all of the other agreements, certificates and instruments to be executed and delivered by Buyer pursuant hereto or in connection with the transactions contemplated hereby (the “ Buyer Ancillary Agreements ”) , the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated hereby and thereby are within Buyer’s corporate powers and have been duly authorized by all requisite corporate action on the part of Buyer.

(b)            This Agreement has been, and each Buyer Ancillary Agreement will be, duly executed and delivered by Buyer.  This Agreement (assuming due authorization, execution and delivery by Seller) constitutes, and each Buyer Ancillary Agreement will constitute when executed and delivered by Buyer, the legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity).

3.3           Governmental Authorization.   The execution, delivery and performance by Buyer of this Agreement and each applicable Buyer Ancillary Agreement and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with or notification to, any Governmental Authority other than (a) compliance with any applicable requirements of the HSRA, (b) the FCC and (c) any such action by or in respect of or filing with any Governmental Authority as to which the failure to take, make or obtain would not have a Buyer Material Adverse Effect.

3.4           Noncontravention.  The execution, delivery and performance of this Agreement and each Buyer Ancillary Agreement by Buyer and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate or conflict with the organizational documents of Buyer; (b) assuming compliance with the matters referred to in Section 3.3 , conflict with or violate any Law or Governmental Order applicable to Buyer; or (c)

13

 

except as set forth on Schedule 3.4 , require any consent or other action by or notification to any Person under, constitute a default under, give to any Person any rights of termination, amendment, acceleration or cancellation of any right or obligation of Buyer under, any provision of any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other agreement or instrument to which Buyer is a party or by which any of Buyer’s assets is or may be bound, except, in the case of clauses (b) and (c), for any such violations, consents, actions, defaults, rights or losses as could not have, individually or in the aggregate, a Buyer Material Adverse Effect.

3.5           Absence of Litigation.  There is no Action pending or, to Buyer’s knowledge, threatened against Buyer that in any manner challenges or seeks to prevent, enjoin, alter or delay materially the transactions contemplated by this Agreement.

3.6           FCC Qualifications.  Except for the matters set forth on Schedule 3.6 , (a) Buyer is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Stations under the Communications Act , and the rules, regulations and policies of the FCC, (b) there are no facts that would, under existing Law and the existing rules, regulations, policies and procedures of the FCC, disqualify Buyer as an assignee of the FCC Licenses or as the owner and operator of the other Station Assets, and (c) no waiver of any FCC rule or policy relating to the qualifications of Buyer is necessary for the FCC Consent to be obtained.

3.7           Financing.  Buyer, as of the Closing Date, will have sufficient cash, available lines of credit or other sources of immediately available funds to enable it to make payment of the Purchase Price and any other amounts to be paid by it in accordance with the terms of this Agreement and the Buyer Ancillary Agreements.

3.8           No Finder.  No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement, the Buyer Ancillary Agreements or the transactions contemplated hereby or thereby as a result of any agreements or action of Buyer or any party acting on Buyer’s behalf.

ARTICLE IV
COVENANTS

4.1           Governmental Approvals.

(a)            Further Assurances.   Subject to the terms and conditions of this Agreement, Buyer and Seller shall take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary or desirable under applicable Law to consummate the transactions contemplated by this Agreement, including, in the case of Buyer, to sell or otherwise dispose of, hold separate (through the establishment of a trust or otherwise), divest itself of, or limit the ownership or operations of all or any portion of its businesses, assets or operations.  Buyer and Seller will cooperate with each other in making such filings with the FCC as may be necessary or appropriate in connection with any divestiture by Buyer of its interests in radio stations, including the Stations, pursuant to the terms of this Section 4.1(a) .

(b)            FCC Application.

14

 

(i)             The assignment of the FCC Licenses as contemplated by this Agreement is