EX-10.6 ASSET PURCHASE AGREEMENT



 





Exhibit 10.6




Execution Version




ASSET PURCHASE AGREEMENT




DATED OCTOBER 31, 2005




among




CMP KC CORP.

as BUYER,




and




1051FM, LLC,




SUSQUEHANNA KANSAS CITY PARTNERSHIP




and




SUSQUEHANNA RADIO CORP.

as SELLERS




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	SECTION 1 CERTAIN DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1 Terms Defined in this Section
	 	 	1	 
	1.2 Terms Defined Elsewhere in this Agreement
	 	 	9	 
	 
	 	 	 	 
	SECTION 2 EXCHANGE AND TRANSFER OF ASSETS; ASSET VALUE
	 	 	11	 
	 
	 	 	 	 
	2.1 Agreement to Exchange and Transfer
	 	 	11	 
	2.2 Excluded Assets
	 	 	12	 
	2.3 Purchase Price
	 	 	13	 
	2.4 Closing Payment; Escrow Amount
	 	 	13	 
	2.5 Certain Closing Adjustments
	 	 	13	 
	2.6 Assumed Obligations
	 	 	15	 
	2.7 Assignments of Assumed Contracts
	 	 	16	 
	2.8 Certain Debt, Payables and Expenses
	 	 	16	 
	2.9 Escrow Agreement
	 	 	16	 
	 
	 	 	 	 
	SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS
	 	 	16	 
	 
	 	 	 	 
	3.1 Organization and Good Standing
	 	 	17	 
	3.2 Enforceability; Authority; No Conflict
	 	 	18	 
	3.3 Capitalization
	 	 	19	 
	3.4 Financial Statements
	 	 	19	 
	3.5 Books And Records
	 	 	20	 
	3.6 Condition of Tangible Personal Property
	 	 	20	 
	3.7 Owned Real Property
	 	 	20	 
	3.8 Leased Real Property
	 	 	20	 
	3.9 Title to Real and Tangible Personal Property; Encumbrances
	 	 	21	 
	3.10 Condition of Facilities
	 	 	22	 
	3.11 Commission Authorizations
	 	 	22	 
	3.12 Insolvency
	 	 	23	 
	3.13 Intellectual Property Assets
	 	 	23	 
	3.14 Taxes
	 	 	24	 
	3.15 Employee Benefits
	 	 	24	 
	3.16 Labor and Employment Matters
	 	 	25	 
	3.17 Compliance With Legal Requirements; Governmental Authorizations
	 	 	26	 
	3.18 Legal Proceedings; Orders
	 	 	26	 
	3.19 Absence of Certain Changes and Events
	 	 	27	 
	3.20 Material Contracts
	 	 	28	 
	3.21 Insurance
	 	 	29	 
	3.22 Environmental Matters
	 	 	30	 
	3.23 Relationships With Related Persons
	 	 	31	 
	3.24 Brokers or Finders
	 	 	31	 
	 
	 	 	 	 
	SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
	 	 	31	 
	 
	 	 	 	 
	4.1 Organization, Standing and Authority
	 	 	31	 
	4.2 Authorization and Binding Obligation
	 	 	31	 
	4.3 Absence of Conflicting Agreements and Required Consents
	 	 	32	 






(i)









 






	 	 	 	 	 
	4.4 Brokers
	 	 	32	 
	4.5 Qualifications of Buyer
	 	 	32	 
	4.6 Certain Proceedings
	 	 	32	 
	 
	 	 	 	 
	SECTION 5 OPERATION OF THE STATIONS PRIOR TO CLOSING
	 	 	33	 
	 
	 	 	 	 
	5.1 Contracts
	 	 	33	 
	5.2 Compensation and Benefits
	 	 	33	 
	5.3 Encumbrances
	 	 	34	 
	5.4 Dispositions
	 	 	34	 
	5.5 Access to Information
	 	 	34	 
	5.6 Insurance
	 	 	34	 
	5.7 Governmental Authorizations
	 	 	34	 
	5.8 Obligations
	 	 	35	 
	5.9 No Inconsistent Action
	 	 	35	 
	5.10 Maintenance of Assets
	 	 	35	 
	5.11 Consents
	 	 	35	 
	5.12 Books and Records
	 	 	35	 
	5.13 Cooperation, Notification
	 	 	35	 
	5.14 Financial Information
	 	 	36	 
	5.15 Compliance with Laws
	 	 	37	 
	5.16 Preservation of Business
	 	 	37	 
	5.17 Litigation
	 	 	37	 
	5.18 Accounting
	 	 	37	 
	5.19 Capital Expenditures
	 	 	37	 
	5.20 Station Formats
	 	 	38	 
	5.21 Promotions
	 	 	38	 
	 
	 	 	 	 
	SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
	 	 	38	 
	 
	 	 	 	 
	6.1 FCC Consent
	 	 	38	 
	6.2 HSR Act
	 	 	39	 
	6.3 Risk of Loss
	 	 	39	 
	6.4 Confidentiality
	 	 	39	 
	6.5 Cooperation
	 	 	39	 
	6.6 Control of the Stations
	 	 	40	 
	6.7 Allocation of Purchase Price
	 	 	40	 
	6.8 Access to Books and Records
	 	 	40	 
	6.9 Employee and Employee Benefits
	 	 	40	 
	6.10 Public Announcements
	 	 	42	 
	6.11 Bulk Sales Law
	 	 	42	 
	6.12 Title Insurance
	 	 	42	 
	6.13 Tax Matters
	 	 	42	 
	6.14 Employee Withholding and Reporting Matters
	 	 	43	 
	6.15 No Shop
	 	 	44	 
	6.16 Disclosure Schedules
	 	 	44	 
	 
	 	 	 	 
	SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
	 	 	44	 
	 
	 	 	 	 
	7.1 Conditions to Obligations of Buyer
	 	 	44	 






(ii)









 






	 	 	 	 	 
	7.2 Conditions to Obligations of Sellers
	 	 	46	 
	 
	 	 	 	 
	SECTION 8 CLOSING AND CLOSING DELIVERIES
	 	 	46	 
	 
	 	 	 	 
	8.1 Closing
	 	 	46	 
	8.2 Deliveries by Sellers
	 	 	47	 
	8.3 Deliveries by Buyer
	 	 	48	 
	 
	 	 	 	 
	SECTION 9 TERMINATION
	 	 	49	 
	 
	 	 	 	 
	9.1 Termination by Mutual Consent
	 	 	49	 
	9.2 Termination by Either Party
	 	 	49	 
	9.3 Termination by Sellers
	 	 	50	 
	9.4 Termination by Buyer
	 	 	50	 
	9.5 Automatic Termination
	 	 	50	 
	9.6 Rights on Termination
	 	 	50	 
	9.7 Survival
	 	 	51	 
	 
	 	 	 	 
	SECTION 10 SURVIVAL; INDEMNIFICATION; CERTAIN REMEDIES
	 	 	51	 
	 
	 	 	 	 
	10.1 Survival
	 	 	51	 
	10.2 Indemnification by Sellers
	 	 	51	 
	10.3 Indemnification by Buyer
	 	 	52	 
	10.4 Third Party Claim Indemnification Procedure
	 	 	53	 
	10.5 Consequential Damages
	 	 	55	 
	10.6 Payments
	 	 	55	 
	10.7 Characterization of Indemnification Payments
	 	 	56	 
	10.8 Remedies
	 	 	56	 
	 
	 	 	 	 
	SECTION 11 MISCELLANEOUS
	 	 	56	 
	 
	 	 	 	 
	11.1 Fees and Expenses
	 	 	56	 
	11.2 Notices
	 	 	56	 
	11.3 Benefit and Binding Effect
	 	 	57	 
	11.4 Further Assurances
	 	 	57	 
	11.5 Governing Law; Jurisdiction; Service of Process
	 	 	58	 
	11.6 Waiver of Jury Trial
	 	 	58	 
	11.7 Entire Agreement
	 	 	58	 
	11.8 Waiver of Compliance; Consents
	 	 	58	 
	11.9 Severability
	 	 	59	 
	11.10 Drafting
	 	 	59	 
	11.11 Headings
	 	 	59	 
	11.12 Counterparts
	 	 	59	 
	11.13 Use of Terms
	 	 	59	 
	11.14 Schedules
	 	 	59	 






(iii)









 






LIST OF EXHIBITS





			
	Exhibit 2.6	 	Form of Assignment and Assumption Agreement






			
	Exhibit 2.9	 	Form of Escrow Agreement





(iv)









 








LIST OF SCHEDULES




	 	 	 
	Schedule 1.1(a)

	 	Knowledge of Sellers
	Schedule 2.2(i)

	 	Excluded Assets
	Schedule 2.5(a)

	 	Sample Net Working Capital Calculation
	Schedule 3.1(a)(ii)

	 	Foreign Qualifications of Susquehanna
	Schedule 3.1(b)(i)

	 	Other Entities Owned Directly of Indirectly by Operating Sellers
	Schedule 3.1(c)

	 	Operations of Stations by Others Than Operating Sellers
	Schedule 3.2(b)

	 	Exceptions to Enforceability
	Schedule 3.3

	 	Operating Sellers’ Capitalization
	Schedule 3.6

	 	Tangible Personal Property
	Schedule 3.7

	 	Owned Real Property
	Schedule 3.8

	 	Real Property Leases
	Schedule 3.9(a)

	 	Real Estate Encumbrances
	Schedule 3.9(b)

	 	Non-Real Estate Encumbrances
	Schedule 3.9(c)

	 	Material Properties not Owned or Leased by Operating Sellers
	Schedule 3.10

	 	Encroachments
	Schedule 3.11(a)

	 	Commission Authorizations
	Schedule 3.11(b)

	 	Exception or Qualifications to Commission Authorizations for Stations
	Schedule 3.13

	 	Intellectual Property Assets
	Schedule 3.14

	 	Taxes
	Schedule 3.15(a)

	 	Employee Plans
	Schedule 3.15(b)

	 	Litigation with Respect to any Employee Plan
	Schedule 3.16

	 	Labor and Employment Matters
	Schedule 3.17(a)

	 	Compliance with Legal Requirements, Governmental Authorizations
	Schedule 3.17(b)

	 	Material Governmental Authorizations Other than Commission Authorizations
	Schedule 3.18

	 	Legal Proceedings, Orders
	Schedule 3.19

	 	Absence of Certain Changes and Events
	Schedule 3.19(d)

	 	2005 Capital Expenditure Plan
	Schedule 3.20(a)

	 	Material Contracts
	Schedule 3.20(b)

	 	Defaults in Material Contracts
	Schedule 3.21

	 	Material Insurance Policies
	Schedule 3.22

	 	Environmental Matters
	Schedule 3.23

	 	Relationships with Related Parties
	Schedule 4.4

	 	Buyer’s Broker
	Schedule 4.5

	 	Buyer’s Communications Act Qualifications
	Schedule 5.1(c)

	 	Additional Material Contracts
	Schedule 5.19(a)

	 	2006 Capital Expenditure Plan
	Schedule 5.19(b)

	 	Local Marketing Agreements
	Schedule 6.7

	 	Purchase Price Allocation Schedule
	Schedule 6.9(c)

	 	Severance Plans
	Schedule 7.1(g)

	 	Sellers’ Consents
	Schedule 7.1(i)

	 	Exceptions to Material Adverse Effect
	Schedule 8.2(f)

	 	Opinions of Sellers’ Counsel
	Schedule 8.3(g)

	 	Opinion of Buyer’s Counsel







(v)









 








ASSET PURCHASE AGREEMENT




     THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into on October 31, 2005 by and
among CMP KC Corp., a Delaware corporation (“Buyer”), 1051FM, LLC, a Kansas limited liability
company (“1051FM”) Susquehanna Kansas City Partnership, a Pennsylvania partnership (“Susquehanna”),
and Susquehanna Radio Corp., a Pennsylvania Corporation (“Radio”) (each a “Seller” and
collectively, “Sellers”; and 1051FM together with Susquehanna collectively the “Operating
Sellers”).



R E C I T A L S:




     WHEREAS, Sellers operate radio broadcast stations KCMO-AM and KCMO-FM, Kansas City, Missouri,
KCJK-FM, Garden City, Missouri and KCFX-FM, Harrisonville, Missouri (KCMO-AM, KCMO-FM, KCJK-FM and
KCFX-FM, collectively, the “Stations”);



     WHEREAS, Susquehanna is the licensee of KCFX-FM, KCMO-AM, and KCMO-FM, pursuant to certain
authorizations issued to it by the FCC;



     WHEREAS, 1051FM is the licensee of KCJK-FM, pursuant to certain authorizations issued to it by
the FCC;



     WHEREAS, Susquehanna is a wholly-owned subsidiary of Radio, and 1051FM is a wholly-owned
subsidiary of Susquehanna; and



     WHEREAS, the parties hereto desire to enter into this Agreement to provide for the sale,
assignment and transfer by Sellers to Buyer of substantially all of the assets owned, leased or
used by Sellers, in connection with the Business.



A G R E E M E N T S:




     In consideration of the above recitals and of the mutual agreements and covenants contained in
this Agreement, the parties to this Agreement, intending to be bound legally, agree as follows:



SECTION 1



CERTAIN DEFINITIONS




     1.1 Terms Defined in this Section.



     The following terms, as used in this Agreement, have the meanings set forth in this Section:



     “Accountants” means independent certified public accountants.



     “Accounting Expert” means PricewaterhouseCoopers LLP, an independent registered public
accounting firm as defined under the Exchange Act and, if PricewaterhouseCoopers LLP is not
available or otherwise unable to perform its duties, another impartial nationally recognized firm
of U.S. independent certified public accountants (other than Buyer’s Accountants or Seller’s



 









 







Accountants) appointed by Buyer’s Accountants and Seller’s Accountants jointly and reasonably
acceptable to Buyer and Sellers.



     “Accounts Receivable” means the rights of Sellers with respect to accounts receivable of the
Stations, as of the Closing Date, to payment in cash for the sale of advertising time and for the
provision of other goods and services by the Stations.



     “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under common control with
such Person. For purposes of this definition, (i) a Person shall be deemed to control another
Person if such Person (A) has sufficient power to enable such Person to elect a majority of the
board of directors or other governing body of such Person, or (B) owns a majority of the beneficial
interests in income and capital of such Person; and (ii) a Person shall be deemed to control any
partnership of which such Person is a general partner.



     “Applicable Employees” means all of the following:



     (a) All persons who are active Employees on the Closing Date, including Employees on vacation,
Employees on a regularly scheduled day off from work and Employees on temporary leave for purposes
of jury or annual two-week national service/military duty;



     (b) Employees who on the Closing Date are on nonmedical leave of absence; provided, however,
that no such Employee shall be guaranteed reinstatement to active service if his return to
employment is contrary to the terms of his leave, unless otherwise required by applicable Legal
Requirements (for purposes of the foregoing, nonmedical leave of absence shall include maternity or
paternity leave, leave under the Family and Medical Leave Act of 1993, educational leave, military
leave with veteran’s reemployment rights under federal law, and personal leave, unless any of the
foregoing is determined to be a medical leave); and



     (c) Employees who on the Closing Date are on disability or medical leave and for whom it has
been 180 calendar days or less since their last day of active employment; provided, however, that
no such Employee shall be guaranteed reinstatement to active service if he is incapable of working
in accordance with the policies, practices and procedures of Buyer.



     “Assumed Contracts” means (a) all Contracts set forth on Schedule 3.20, (b) Contracts
entered into prior to the date of this Agreement with advertisers for the sale of advertising time
or production services for cash at rates consistent with past practices, (c) Contracts entered into
by any Operating Seller prior to the date of this Agreement which are not required to be included
on Schedule 3.20 hereto, (d) any Contracts entered into by any Operating Seller between the
date of this Agreement and the Closing Date that Buyer agrees in writing to assume, and (e) other
contracts entered into by any Operating Seller between the date of this Agreement and the Closing
Date in compliance with Section 5.1.



     “Business” means the business and operations of the Stations.



     “Business Day” means any day other than (a) a Saturday or Sunday or (b) any other day on which
banks in the city of New York are permitted or required to be closed.



2









 





     “Business Records” means all statements, books and financial reports, advertising reports,
programming studies, consulting reports, marketing data, technical information specifications,
engineering drawings and reports, manuals, computer programs, tapes and software, personnel
records, marketing and listener lists, lists of vendors and other suppliers and other information
in tangible form used in or related to the operations of the Business.



     “Closing” means the consummation of the sale and acquisition of the Assets pursuant to this
Agreement on the Closing Date in accordance with the provisions of Section 8.1.



     “Closing Date” means the date on which the Closing occurs, as determined pursuant to Section
8.1.



     “Code” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.



     “Commission Authorizations” means all licenses, permits, approvals, construction permits, and
authorizations issued or granted by the FCC to any of the Operating Sellers, for the operation of,
or used directly or indirectly in connection with the operation of the Stations (and any and all
auxiliary and/or supportive transmitting and/or receiving facilities, boosters, and repeaters
associated with the Stations), including, without limitation, all of those listed in Schedule
3.11(a) hereto, together with any and all renewals, extensions, or modifications thereof and
additions thereto between the date of this Agreement and the Closing Date.



     “Communications Act” means the Communications Act of 1934, as amended.



     “Consents” means the consents, permits, or approvals of government authorities and other third
parties necessary to transfer the Assets to Buyer or otherwise to consummate the transactions
contemplated by this Agreement.



     “Contracts” means all contracts, agreements, orders, commitments, arrangements and
understandings, written or oral, to which either Operating Seller in connection with the Business
or any Affiliate or predecessor thereof, is a party, including all leases, program licenses,
contracts to broadcast products or programs on the Stations, and employment, confidentiality and
indemnification agreements, advertising contracts, Real Property Leases and leases for Tangible
Personal Property.



     “Debt” of any Person means all obligations (including premiums, breakage fees, prepayment
penalties and accrued interest) of such Person for borrowed money, all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, all such obligations of such
Person to pay the deferred purchase price of property or services (except trade accounts payable in
the Ordinary Course of Business), all obligations of such Person under any lease of any property
(whether real, personal or mixed) which is or should be accounted for as a capital lease on the
balance sheet of that Person in accordance with GAAP, all obligations of such Person to reimburse
any bank or other Person in respect of amounts payable under a banker’s acceptance, letter of
credit, guaranty or similar instrument, all overdraft obligations, and all similar obligations of
other Persons secured by an Encumbrance on any asset of such Person.



3









 





     “Employees” means all employees of the Sellers who are currently employed primarily in the
conduct of the Business. “Employees” does not include any individual performing services in
connection with the Business who Sellers have classified as an independent contractor as of
immediately prior to the Closing.



     “Encumbrance” means any charge, claim, condition, equitable interest, lien, option, pledge,
security interest, mortgage, deed of trust, right of way, easement, encroachment, servitude, defect
in title, right of first option, right of first refusal or similar restriction, including any
restriction on use, voting (in the case of any security or equity interest), transfer, receipt of
income or exercise of any other attribute of ownership.



     “Environmental Laws” means any Legal Requirement (including common law), Governmental
Authorization or agreement with any Governmental Body or third party relating to (i) the protection
of the environment or human health and safety (including air, surface water, ground water, drinking
water supply, and surface or subsurface land or structures), (ii) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling, labeling,
management, release or disposal of, any Hazardous Material or (iii) noise or odor.



     “Environmental Complaint” means any claim, lawsuit, complaint, administrative or judicial
order, citation or other written communication, whether from a governmental authority, citizens
group, employee or other person with regard to Environmental Liabilities or any environmental,
health, or safety matter affecting or relating to any of the Real Property or the operation of the
Stations.



     “Environmental Liabilities” means any loss, liability, Environmental Complaint, damage,
injury, fine, penalty, cost or expense (including attorneys’ fees) arising from or in connection
with (i) the use, management, treatment, handling, disposal, transport, storage, spill, escape,
leakage, emission, release, discharge or presence of any Hazardous Substance on, at, from or under
any of the Real Property on or prior to the Closing Date; (ii) the failure to obtain any license or
permit required in connection with any such Hazardous Substance on or prior to the Closing Date;
(iii) any noncompliance with any Environmental Laws, and/or any Environmental Complaint on or prior
to the Closing Date; or (iv) the remediation, cleanup or investigation of any release, spill,
discharge or disposal of Hazardous Substance at or from the Real Property relating to conditions or
circumstances existing on or prior to the Closing.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



     “Exchange Act” means the Securities Exchange Act of 1934.



     “Excluded Tangible Personal Property” means those assets listed Schedule 2.2(i).



     “Existing Stockholders” means the Persons having beneficial or record ownership of the capital
stock of Susquehanna Pfaltzgraff Co., a Delaware corporation, immediately prior to the Closing.



     “FAA” means the Federal Aviation Administration.



4









 





     “FCC” means the Federal Communications Commission.



     “FCC Consents” means action by the FCC granting the Assignment Applications and providing its
consent to the assignment of the Commission Authorizations by Sellers to Buyer as contemplated by
this Agreement.



     “FCC Logs” means all FCC logs and similar records that relate to the operation of the
Stations.



     “Final Order” means an FCC Consent with respect to which no action, request for stay, petition
for rehearing or reconsideration, appeal, request for stay or review by the FCC on its own motion
is pending and as to which the time for filing or initiation of any such request, petition, appeal
or review has expired.



     “Financial Statements” means collectively the financial statements described in Section 3.4
and 5.13 hereof.



     “GAAP” means generally accepted accounting principles for financial reporting in the United
States, applied on a consistent basis.



     “Governing Documents” means, with respect to any particular entity, (a) if a corporation, the
articles or certificate of incorporation and the bylaws; (b) if a general partnership, the
partnership agreement and any statement of partnership; (c) if a limited partnership, the limited
partnership agreement and the certificate of limited partnership; (d) if a limited liability
company, the articles of organization and operating agreement; (e) if another type of Person, any
other charter or similar document adopted or filed in connection with the creation, formation or
organization of the Person; (f) all equityholders’ agreements, voting agreements, voting trust
agreements, joint venture agreements, registration rights agreements or other agreements or
documents relating to the organization, management or operation of any Person or relating to the
rights, duties and obligations of the equityholders of any Person; and (g) any amendment or
supplement to any of the foregoing.



     “Governmental Authorization” means all licenses (including Commission Authorizations), permits
(including construction permits), certificates, waivers, amendments, consents, exemptions,
variances, expirations and terminations of any waiting period requirements (including pursuant to
the HSR Act), other actions by, and notices, filings, registrations, qualifications, declarations
and designations with, and other authorizations and approvals and issued by or obtained from a
Governmental Body or pursuant to any Legal Requirement, excluding authorization, approvals or
filings related to service marks, trademarks, patents or copyrights.



     “Governmental Body” means any domestic, foreign, federal, territorial, state or local
government authority, quasi-governmental authority, instrumentality, court, government or
self-regulatory organization, commission, tribunal or organization, or any regulatory,
administrative or other agency or any political or other subdivision, department or branch of any
of the foregoing with competent jurisdiction.



5









 





     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Acts of 1976, as amended, and all
Legal Requirements promulgated pursuant thereto or in connection therewith.



     “Hazardous Materials” means and includes any and all pollutants, contaminants, hazardous
substances or materials (as defined in any of the Environmental Laws), hazardous wastes, toxic
pollutants, toxic substances (as defined in any of the Environmental Laws), deleterious substances,
caustics, radioactive substances or materials, hazardous materials, and any and all other sources
of pollution or contamination, or terms of similar import, that are identified, listed either
individually or as part of a category or subcategory or regulated under any Environmental Law as
any such Environmental Law existed prior to or as of the Closing Date (i.e., without regard to any
amendment, modification or interpretation after the Closing Date in a manner increasing liabilities
or obligations with respect to any such substance), and including crude oil or any fraction
thereof, petroleum and its derivatives and by-products, natural or synthetic gas, any other
hydrocarbons, heavy metals, asbestos, lead, lead-based paint, nuclear fuel and polychlorinated
biphenyls.



     “Improvements” means all antenna towers, guy anchors, ground radials, buildings, structures,
fixtures and improvements that are located on the Land, including those under construction.



     “Intangibles” means the call letters of the Stations, and all copyright registrations,
trademarks, trademark registrations, patents, service marks, logos, slogans, jingles, service
names, trade names, applications for any of the foregoing, domain names and names of web sites held
or used in connection with the operation of the Stations and any licenses (other than for
shrink-wrap software), and all goodwill associated with any of the foregoing.



     “Knowledge” means (i) with respect to Sellers, the collective actual knowledge the following
officers of Radio: the President, the Senior Vice President/Controller, the Vice
President/Administration and the Vice President/Director of Engineering, and the other persons
identified on Schedule 1.1(a); and (ii) with respect to Buyer, the collective actual
knowledge of Buyer’s executive officers.



     “Land” means all parcels and tracts of real property in which the Operating Sellers have a
Real Property Interest.



     “Leased Real Property” means all real property and all buildings and other improvements
thereon and appurtenant thereto leased or held by any Seller and used in the Business.



     “Legal Requirement” means any federal, state, local, municipal, foreign, international,
multinational or other constitution, law, ordinance, principle of common law, code, regulation,
rule, statute or treaty.



     “Losses” means any damages, losses, charges, liabilities, claims, demands, actions, suits,
proceedings, payments, judgments, settlements, assessments, deficiencies, Taxes, interest,
penalties and costs and expenses (including reasonable attorneys’ fees and reasonable out of pocket
disbursements).



6









 





     “Material Adverse Effect” means any change, event, circumstance or occurrence that
individually or in the aggregate is (or would reasonably be expected to be) materially adverse to
the condition (financial or otherwise), assets, liabilities, results of operations or prospects of
the Business, taken as a whole, or any material impairment or delay of Sellers’ ability to effect
the Closing or to perform their respective obligations under this Agreement, other than any (i)
change, event, circumstance, occurrence, impairment or delay occurring or arising after the date
hereof (A) relating to any general, national, international or regional economic or financial
conditions generally affecting the commercial radio broadcast industry that does not
disproportionately (compared with other radio operators) affect the Business, (B) resulting from or
otherwise attributable to the public announcement of the transaction contemplated by this Agreement
or the identity of Buyer or the public announcement of any other transaction by Buyer, (C)
relating to the radio industry generally due to competition from outside the terrestrial commercial
radio broadcast industry that does not disproportionately (compared with other radio operators)
affect the Business, (D) due to, resulting from or otherwise attributable to any violation of the
terms of this Agreement by Buyer; or (E) any change, event, circumstance or occurrence described
and referred to in Schedule 7.1(i); or (ii) change in a Legal Requirement or accounting
standards or interpretations thereof that is of general application.



     “Merger Agreement” means the Agreement and Plan of Merger dated as of the date hereof by and
among CMP Susquehanna Corp., CMP Merger Co., Susquehanna Pfaltzgraff Co. and the Stockholders’
Representative.



     “Net Working Capital” means all current assets of the Operating Sellers on a consolidated
basis, minus all current liabilities of the Operating Sellers on a consolidated basis, determined
in accordance with GAAP on a basis consistent with the preparation of the Balance Sheets, excluding
cash, Tax assets and liabilities, any Excluded Liabilities, and any intercompany liabilities
between Operating Sellers and any Affiliate or among the Operating Sellers. Current liabilities
shall include (i) all amounts paid for the sale of airtime to be aired after the Closing Date and
(ii) the value of any trade or barter received for airtime to be aired after the Closing Date.



     “Net Working Capital Target Amount” means Three Million One Hundred Forty Seven Thousand Two
Hundred One Dollars ($3,147,201).



     “Order” means any order, decision, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.



     “Ordinary Course of Business” means an action taken by a Person consistent in nature, scope
and magnitude with the past practices of such Person and taken in the ordinary course of the
normal, day-to-day operations of such Person.



     “Owned Real Property” means that certain parcel of real property and all buildings and other
improvements thereon and appurtenant thereto owned by Sellers and used in the Business.



     “Permitted Encumbrances” means (i) the Real Estate Encumbrances, and (ii) the Non-Real Estate
Encumbrances.



7









 





     “Person” means an individual, corporation, association, partnership, joint venture, trust,
estate, limited liability company, limited liability partnership, or other entity or organization.



     “Proceeding” means any action, arbitration, audit, hearing, investigation, litigation or suit
(whether civil, criminal, administrative, judicial or investigative, whether formal or informal,
whether public or private) commenced, brought, conducted or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.



     “Programs” means all computer systems (including without limitation, management information
and order systems, hardware, software, servers, computers, printers, scanners, monitors, peripheral
and accessory devices, and the related media, manuals, documentation, and user guides) of or used
by or in the operation of the Business, all related claims, credits, and rights of recovery and
set-off with respect thereto, and all of the right, title, and interest (including by reason of
license or lease) of the Operating Sellers or the Stations in or to any software, computer program,
or software product owned, used, developed, or being developed by or for any of the Stations or
otherwise by the Operating Sellers, whether for internal use or for sale or license to others, and
any software, computer program, or software product licensed by Sellers, and all proprietary rights
of the Operating Sellers or the Stations, whether or not patented or copyrighted, associated
therewith.



     “Real Property” means collectively the Owned Real Property and Leased Real Property.



     “Real Property Interests” means all interests in Owned Real Property and Leased Real Property,
including fee estates, leaseholds and subleaseholds, purchase options, easements, licenses, rights
to access, and rights of way, and all buildings and other improvements thereon and appurtenant
thereto, owned or held by any Operating Seller or otherwise used in the Business, together with any
additions, substitutions and replacements thereof and thereto between the date of this Agreement
and the Closing Date.



     “Related Person” means (i) with respect to a particular individual, (a) each other member of
such individual’s Family, (b) any Person that is directly or indirectly controlled by any one or
more members of such individual’s Family, (c) any Person in which members of such individual’s
Family hold (individually or in the aggregate) a Material Interest, and (d) any Person with respect
to which one or more members of such individual’s Family serves as a director, officer, partner,
executor or trustee (or in a similar capacity) and (ii) with respect to a specified Person other
than an individual, (a) any Person that is an Affiliate of such specified Person, (b) any Person
that holds a Material Interest in such specified Person, (c) each Person that serves as a director,
officer, partner, executor or trustee of such specified Person (or in a similar capacity), (d) any
Person in which such specified Person holds a Material Interest, and (e) any Person with respect to
which such specified Person serves as a general partner or a trustee (or in a similar capacity).
For purposes of this definition, (i) the “Family” of an individual includes (a) the individual, (b)
the individual’s spouse, (c) the individual’s mother, father, mother-in-law or father-in-law and
(d) any other natural person who resides with such individual and (ii) “Material Interest” means
direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of voting
securities or other voting interests representing at least 10% of the outstanding voting power of a
Person or equity securities or other equity interests representing at least 10% of the outstanding
equity securities or equity interests in a Person.



8









 





     “Release” means any release, spill, emission, leaking, pumping, pouring, dumping, emptying,
injection, deposit, disposal, discharge, dispersal, leaching or migration on or into the
environment or into or out of any property.



     “SEC” means the United States Securities and Exchange Commission.



     “Securities Act” means the Securities Act of 1933.



     “Tangible Personal Property” means all antennas, studio equipment, electrical devices,
transmission equipment (including transmitter towers and transmitters), machinery, equipment,
tools, furniture, office equipment, computer hardware, supplies, spare parts, music libraries,
vehicles and other items of tangible personal property of every kind owned or leased by an
Operating Seller or used in the Business (wherever located and whether or not carried on the books
of an Operating Seller), together with (i) all replacements thereof, additions and alterations
thereto, and substitutions therefor, made between the date hereof and the Closing Date (ii) any
express or implied warranty by the manufacturers or sellers or lessors of any item or component
part thereof and all maintenance records and other documents relating thereto.



     “Tax” means any foreign, United States federal, state or local income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added, alternative or add-on
minimum, abandoned or unclaimed property, escheat, estimated, or other tax, fee, assessment, levy,
tariff or charge of any kind whatsoever imposed by or under the authority of a Governmental Body,
including any interest, penalty or addition thereto, whether disputed or not, and including any
obligations to indemnify or otherwise assume or succeed to the liability of any other Person for
any of the foregoing items.



     “Tax Return” means any return (including any amended return or information return), report,
statement, claim for refund or other document or information filed with or submitted to, or
required to be filed with or submitted to, any governmental authority in connection with the
determination, assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal Requirement relating
to any Tax.



     “Transferred Employees” means those Applicable Employees who accept offers of employment with
Buyer.



     “WARN” means the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any
similar state law.



1.2 Terms Defined Elsewhere in this Agreement.




     For purposes of this Agreement, the following terms have the meanings set forth in the
sections indicated:



9









 





	 	 	 
	Term	 	Section
	1051FM

	 	Preamble
	Accounting Expert

	 	Section 2.5(e)
	Agreement

	 	Preamble
	Assets

	 	Section 2.1
	Assignment and Assumption Agreement

	 	Section 2.6
	Assignment Applications

	 	Section 6.1(b)
	Assumed Liabilities

	 	Section 2.6
	Background Check

	 	Section 6.9(a)
	Balance Sheets

	 	Section 3.4(a)
	Base Purchase Price

	 	Section 2.3
	Buyer

	 	Preamble
	Buyer Documents

	 	Section 4.1
	Buyer Indemnified Parties

	 	Section 10.2(a)
	Buyer Plan

	 	Section 6.9(c)
	Claim Notice

	 	Section 10.4(a)
	Closing Date Financial Statements

	 	Section 2.5(b)
	Closing Payment

	 	Section 2.4(a)
	COBRA

	 	Section 6.9(e)
	Escrow Agreement

	 	Section 2.9
	Escrow Amount

	 	Section 2.4(b)
	ERISA Affiliate

	 	Section 3.15(a)
	Employee Plans

	 	Section 3.15(a)
	Escrow Account

	 	Section 2.9
	Escrow Agent

	 	Section 2.9
	Escrow Agreement

	 	Section 2.9
	Excluded Assets

	 	Section 2.2
	Excluded Liabilities

	 	Section 2.6
	Final Net Working Capital

	 	Section 2.5(b)
	Final Net Working Capital Adjustment Amount

	 	Section 2.5(b)
	Financing

	 	Section 5.13
	FMLA

	 	Section 3.15(d)
	HSR Filing

	 	Section 6.2
	Indemnified Parties

	 	Section 10.3
	Indemnifying Party

	 	Section 10.4(a)
	Intellectual Property Assets

	 	Section 3.13
	Interim Balance Sheets

	 	Section 3.4(a)
	MAC Notice

	 	Section 9.3
	Material Contract

	 	Section 3.20(a)
	Material Insurance Policies

	 	Section 3.21
	Non-Real Estate Encumbrances

	 	Section 3.9(b)
	Notice Period

	 	Section 10.4(a)
	Noticed MAC

	 	Section 9.3
	Operating Sellers

	 	Preamble
	Pending Applications

	 	Section 3.11(a)






10









 






	 	 	 
	Term	 	Section
	Preliminary Net Working Capital

	 	Section 2.5(a)
	Preliminary Net Working Capital Adjustment Amount

	 	Section 2.5(a)
	Purchase Price

	 	Section 2.3
	Purchase Price Allocation Schedule

	 	Section 6.7
	Real Estate Encumbrances

	 	Section 3.9(a)
	Real Property Leases

	 	Section 3.8(a)
	Review Period

	 	Section 2.5(c)
	Seller Indemnified Parties

	 	Section 10.3
	Sellers

	 	Preamble
	Seller Documents

	 	Section 3.2(a)
	Statement of Objections

	 	Section 2.5(d)
	Stations

	 	Recitals
	Susquehanna

	 	Preamble
	Third-Party Claim

	 	Section 10.4(a)






SECTION 2



EXCHANGE AND TRANSFER OF ASSETS; ASSET VALUE




     2.1 Agreement to Exchange and Transfer.



     Subject to the terms and conditions set forth in this Agreement with respect to the Stations,
the Operating Sellers hereby covenant and agree to sell, transfer, convey, assign and deliver to
Buyer on the Closing Date, and Buyer covenants and agrees to acquire all of the Operating Sellers’
right, title and interest in and to all business, properties, assets, machinery, equipment,
furniture, fixtures, franchises, goodwill and rights of the Operating Sellers, of every nature,
kind and description, tangible and intangible, wheresoever located and whether or not carried on or
reflected on the books and records of the Operating Sellers, to the extent used, held for use, or
necessary in connection with the conduct of the Business, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding Excluded Assets, free and
clear of any Encumbrances (except for Permitted Encumbrances), including the following
(collectively, the “Assets”):



     (a) The Tangible Personal Property;



     (b) The Real Property Interests;



     (c) The Governmental Authorizations and Pending Applications;



     (d) The Assumed Contracts;



     (e) The Intangibles;



     (f) The Accounts Receivable;



     (g) The Programs;



     (h) The FCC Logs;



11









 





     (i) All of Sellers’ proprietary information, technical information and data, machinery and
equipment warranties, maps, computer discs and tapes, plans, diagrams, blueprints and schematics,
including filings with the FCC, in each case to the extent relating to the Business;



     (j) All choses in action of any Seller relating to the Stations to the extent they relate to
the period on or after the Closing Date;



     (k) All Business Records, including executed copies of the Assumed Contracts, and all records
required by the FCC to be kept by the Stations;



     (l) All goodwill in and going concern value of the Stations; and



     (m) All of the Operating Sellers’ advance payments, prepaid expenses, deposits, claims for
refunds, credits, rebates and rights to offset (other than refunds, credits, rebates and rights to
offset related to Taxes and described in Section 2.2(f)).



     2.2 Excluded Assets.



     The Assets shall exclude the following (collectively, the “Excluded Assets”):



     (a) All of each of the Operating Sellers’ cash, cash equivalents and deposits, all interest
payable in connection with any such items and rights in and to bank accounts, marketable and other
securities and similar investments of the Operating Sellers;



     (b) Any insurance policies, promissory notes, amounts due to any Operating Seller from
employees, bonds, letters of credit, certificates of deposit, or other similar items, and any cash
surrender value in regard thereto; provided, that in the event the Operating Sellers are
obligated to assign to Buyer the proceeds of any such insurance policy or to cause the assignment
of such proceeds at the time a Closing occurs under Section 6.3, such proceeds shall be included in
the Assets;



     (c) Any Employee Plan;



     (d) All Tangible Personal Property disposed of or consumed in the Ordinary Course of Business
as permitted by this Agreement;



     (e) All Tax Returns and supporting materials (including Tax software), all original financial
statements and supporting materials, all books and records that the Operating Sellers are required
by law to retain (provided that copies of the same are provided to Buyer), all of the Operating
Sellers’ organizational documents, corporate books and records (including minute books and stock
ledgers) and originals of account books of original entry, all records of the Operating Sellers
relating to the sale of the Assets and all records and documents related to any assets excluded
pursuant to this Section 2.2;



     (f) Any interest in and to any claims for refunds, credits, rebates and abatements of federal,
state, or local franchise, income, or other Taxes for periods (or portions thereof) ending on or
prior to the Closing Date and any net operating losses of Sellers;



12









 





     (g) Any Contracts which are not Assumed Contracts;



     (h) All rights of Sellers under or pursuant to this Agreement (or any other agreements
contemplated hereby);



     (i) The assets listed on Schedule 2.2(i) hereto; and



     (j) All shares of capital stock, partnership interests, interests in limited liability
companies or other equity interest, including, but not limited to, any options, warrants or voting
trusts relating thereto which are owned by the Sellers and not expressly specified in Section 2.1.



     2.3 Purchase Price.



     Subject to and upon the terms and conditions of this Agreement, in reliance on the
representations, warranties, covenants, and agreements of Sellers contained herein, and in full
payment for the sale, conveyance, assignment, transfer and delivery of the Purchased Assets as
described herein by Sellers, Buyer shall pay to Sellers an amount equal to (i) the sum of Sixty
Million Dollars ($60,000,000) (the “Base Purchase Price”), (ii) plus or minus the
Preliminary Net Working Capital Adjustment Amount, (iii) plus or minus the Final
Net Working Capital Adjustment Amount (the “Purchase Price”), payable as provided in Section 2.4
below.



     2.4 Closing Payment; Escrow Amount.



     (a) At Closing, Buyer shall deliver to Sellers the Base Purchase Price, (ii) plus or
minus the Preliminary Net Working Capital Adjustment Amount, (iii) minus the Escrow Amount
(the “Closing Payment”).



     (b) On the Closing Date, Buyer shall deposit with the Escrow Agent, pursuant to the terms and
conditions of the Escrow Agreement, One Million Eight Hundred Thousand Dollars ($1,800,000) (the
“Escrow Amount”).



     2.5 Certain Closing Adjustments.



     (a) Preliminary Net Working Capital Adjustment. No later than twenty (20) calendar
days before the Closing Date, Sellers shall prepare and deliver to Buyer an unaudited balance
sheet, prepared in good faith in accordance with GAAP on a basis consistent with preparation of the
Balance Sheets, estimated as of the Closing, pro forma as to, and giving effect for, any
transactions or operations previously occurring or anticipated to occur subsequent to its
preparation and on or before the Closing Date, along with the computation by Sellers of the Net
Working Capital as reflected in such balance sheet (the “Preliminary Net Working Capital”), with
such computation to be in the form of the sample calculation set forth in Schedule 2.5(a).
Absent an objection of Buyer, delivered no later than five (5) calendar days prior to the Closing,
as to such estimated balance sheet and Sellers’ computation of the Preliminary Net Working Capital,
such estimate by Sellers of Preliminary Net Working Capital shall be used solely to effectuate the
Closing and for calculation of the Closing Payment. Any objection by Buyer shall be made in good
faith and be based on reasonable assumptions on specific facts and circumstances. Should Buyer
issue such an objection, it shall provide in writing its proposed adjustment to the estimated
balance sheet prepared by Sellers and computation of the



13









 







Preliminary Net Working Capital and such Buyer-adjusted amount shall be considered the
Preliminary Net Working Capital solely to effectuate the Closing and for calculation of the Closing
Payment. The “Preliminary Net Working Capital Adjustment Amount” shall mean the Preliminary Net
Working Capital (so determined above) less the Net Working Capital Target Amount. If the
Preliminary Net Working Capital Adjustment Amount is a positive number, it shall be added to the
sub-items comprising the Closing Payment calculated in Section 2.4(a), and if the Preliminary Net
Working Capital Adjustment Amount is a negative number, it shall be subtracted from such items.



     (b) Preparation of Closing Date Financial Statements. As soon as practicable, but in
no event later than seventy-seven (77) calendar days after the Closing Date, Buyer shall cause
Buyer’s Accountants to perform a review of the consolidated financial statements of Sellers as of
the Closing Date, including a computation as of the Closing Date of Net Working Capital (the “Final
Net Working Capital”) (the “Closing Date Financial Statements”). The Closing Date Financial
Statements with respect to, as well as the financial information supporting the computations of the
Final Net Working Capital, shall be prepared in accordance with GAAP, on a basis consistent with
the preparation of the Balance Sheets. The Final Net Working Capital Adjustment Amount shall be
determined by deducting the Preliminary Net Working Capital from the Final Net Working Capital (the
“Final Net Working Capital Adjustment Amount”), subject to final determination of such amounts
pursuant to this Section 2.5.



     (c) Examination by Sellers. Upon receipt of the Closing Date Financial Statements,
the Sellers and the Sellers’ Accountants shall be permitted during the succeeding thirty (30) day
period (the “Review Period”) full access at all reasonable times to: (i) the books and records and
the personnel of the Business; (ii) the work papers prepared by Buyer’s Accountants to the extent
that they relate to the Business; and (iii) such historical financial information (to the extent in
Buyer’s possession) relating to the Operating Sellers as the Sellers may reasonably request for the
purpose of reviewing the Closing Date Financial Statements.



     (d) Objection by the Sellers. On or prior to the last day of the Review Period, the
Sellers may object to the Closing Date Financial Statements by delivering to Buyer a written
statement setting forth a reasonably specific description of the Sellers’ objections to the Closing
Date Financial Statements and any of the computations accompanying same (the “Statement of
Objections”). If the Sellers fail to deliver the Statement of Objections within the Review Period,
the Closing Date Financial Statements shall be deemed to have been accepted by the Sellers and the
Final Net Working Capital, reflected in the Closing Date Financial Statements shall be used in
computing the Final Net Working Capital Adjustment Amount. If the Sellers deliver the Statement of
Objections within the Review Period, the Sellers and Buyer shall negotiate in good faith to resolve
such objections, and, if the same are so resolved, the Closing Date Financial Statements and the
Final Net Working Capital reflected in the Closing Date Financial Statements with such changes as
may have been previously agreed in writing by the Sellers and Buyers, shall be final and binding.



     (e) Resolution of Disputes. If the Sellers and Buyer shall fail to reach an agreement
with respect to any of the matters set forth in the Statement of Objections, then such matters
shall, not later than ten (10) Business Days after one of the parties affirmatively terminates
discussions in writing with respect to the Statement of Objections, be submitted for resolution to



14









 







the Accounting Expert who shall, acting as an expert and not as an arbitrator, resolve the
disputes set forth in the Statement of Objections and make any adjustments to the Closing Date
Financial Statements and the Final Net Working Capital reflected in the Closing Date Financial
Statements. The parties hereto agree that all adjustments shall be made without regard to
materiality. The Seller and Buyer and their respective Accountants shall each make readily
available to the Accounting Expert all relevant work papers and books and records relating to the
Business. The Accounting Expert shall make a determination as soon as practicable but in any event
within thirty (30) calendar days (or such other time as the parties hereto shall agree in writing)
after its engagement, and its resolution of the dispute and its adjustments to the Closing Date
Financial Statements and the Final Net Working Capital reflected in the Closing Date Financial
Statements shall be conclusive and binding upon the parties hereto. The fees of the Accounting
Expert shall be divided equally between the Sellers and Buyer.



     (f) Final Purchase Price Adjustments. Within five (5) Business Days of the final
determination of the Closing Date Financial Statements (and the Final Net Working Capital included
therein), the Buyer or Sellers, as applicable, shall pay, or cause to be paid, the Final Net
Working Capital Adjustment Amount.



     2.6 Assumed Obligations.



     Buyer hereby covenants and agrees, at the Closing, to execute and deliver to Sellers an
Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”), substantially in
the form of Exhibit 2.6 hereto pursuant to which each of the Operating Sellers shall assign
to Buyer its rights in the Assumed Contracts, and Buyer shall assume (a) all obligations arising
under such Assumed Contracts after the Closing Date, but not as a result of any previous breach, or
default thereof or performance thereunder, and (b) all current liabilities to the extent reflected
in the calculation of the Final Net Working Capital (but only to the extent of the specific amounts
reflected therein)(the “Assumed Liabilities”). Except as expressly provided in the Assignment and
Assumption Agreement, Buyer shall not and does not assume any liability or obligation of any
nature, known or unknown, fixed or contingent, legal, statutory, contractual or otherwise,
disclosed or undisclosed, of Sellers or otherwise relating to or arising from the Assets or the
Stations, or the ownership or operation thereof on or prior to the Closing Date (collectively the
“Excluded Liabilities”), all of which shall be retained and discharged by Sellers. Excluded
Liabilities include, without limitation, (i) all Environmental Liabilities; (ii) any and all
liabilities for violations of Contracts, or Legal Requirements by Sellers which exist at or as of
the Closing Date or which arise after the Closing Date but which are based upon or arise from any
act, transaction, circumstance, sale or providing of air time, goods or services, state of facts or
other condition which occurred or existed, or the content of any program, advertisement or
transmission broadcast or aired, on or before the Closing Date, whether or not then known; (iii)
any Debt, trade payable or accounts payable of Sellers to the extent not included in Assumed
Liabilities; (iv) any obligations or liabilities of Sellers to any of their employees or to any
other Person under any collective bargaining agreement, employment contract or Employee Plans, or
for wages, salaries, other compensation or employee benefits, or with respect to compliance with
applicable legal requirements relating to minimum wages, overtime rates, labor or employment; (v)
any litigation arising from or relating to facts or circumstances existing as of the Closing Date
or any conduct of Sellers; (vi) any liabilities in



15









 







respect of or arising out of any and all Taxes of Sellers; (vii) any liabilities arising in
connection with Excluded Assets; and (viii) any other liabilities of Sellers of any nature.



     2.7 Assignments of Assumed Contracts.



     Buyer and Sellers acknowledge that certain of the Assumed Contracts to be included in the
Assets, and the rights and benefits thereunder necessary or appropriate or relating to the conduct
of the business and activities of the Operating Sellers and/or any of the Stations, may not, by
their terms, be assignable. Anything in this Agreement or in the Assignment and Assumption
Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any such Assumed Contract, and Buyer shall not be deemed to have assumed the same or to be
required to perform any obligations thereunder, if an attempted assignment thereof, without the
consent of a third party thereto, would constitute a breach thereof or in any way affect the rights
under any such Assumed Contract of Buyer or the Operating Sellers thereunder. In such event,
Sellers will cooperate with Buyer to provide for Buyer all benefits to which either of the
Operating Sellers is entitled under such Assumed Contracts, and Buyer agrees to perform all
obligations accruing or arising after the Closing thereunder, but not as a result of any previous
breach, or default thereof or performance thereunder (including subleasing or subcontracting, if
permitted). Any transfer or assignment to Buyer by the Operating Sellers of any such Assumed
Contract or any right or benefit arising thereunder or resulting therefrom which shall require the
consent or approval of any third party shall be made subject to such consent or approval being
obtained. Each of Sellers will use its commercially reasonable efforts prior to, and if requested
by Buyer after, the Closing Date to obtain all necessary consents to the transfer and assignment of
Assumed Contracts.



     2.8 Certain Debt, Payables and Expenses.



     Prior to or contemporaneously with the Closing, Sellers shall pay and discharge all
liabilities and obligations of Sellers secured by a security interest in any of the Assets or owed
to any vendors and other persons and entities with which Buyer reasonably expects to maintain
business relations at any time after such Closing.



     2.9 Escrow Agreement.



     At Closing Sellers, Buyer and an escrow agent to be mutually selected by Sellers and Buyer
(the “Escrow Agent” shall execute an Escrow Agreement (the “Escrow Agreement”) substantially in the
form attached hereto as Exhibit 2.9, pursuant to which Buyer shall place into an escrow
account (the “Escrow Account”) on the Closing the Escrow Amount, which shall be held and
distributed by the Escrow Agent in accordance with the terms of the Escrow Agreement.



16









 





SECTION 3



REPRESENTATIONS AND WARRANTIES OF SELLERS




     Each of Sellers, jointly and severally, represents and warrants to Buyer as follows:



     3.1 Organization and Good Standing.



     (a) 1051FM is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Kansas. 1051FM has all requisite limited liability company
power and authority to conduct its business as it is now being conducted and to own, lease and
operate its properties. 1051FM is not qualified to do business as a foreign limited liability
company in any jurisdiction as the character of its assets owned or held under lease or the nature
of its activities does not make such qualification necessary under applicable Legal Requirements,
except where the failure to be so qualified and in good standing would not have a Material Adverse
Effect. 1051FM has made available to Buyer true, correct and complete copies of 1051FM’s Governing
Documents (in each case, as amended to the date hereof). Susquehanna is a partnership duly formed,
validly existing and in good standing under the laws of the Commonwealth of Pennsylvania.
Susquehanna has all requisite partnership power and authority to conduct its business as it is now
being conducted and to own, lease and operate its properties. Susquehanna is duly qualified to do
business as a foreign partnership and is in good standing in each jurisdiction in which the
character of its assets owned or held under lease or the nature of its activities makes such
qualification necessary under applicable Legal Requirements, except where the failure to be so
qualified and in good standing would not have a Material Adverse Effect, each of such jurisdictions
being listed on Schedule 3.1(a)(ii) hereto. Susquehanna has made available to Buyer true,
correct and complete copies of Susquehanna’s Governing Documents (in each case, as amended to the
date hereof). Radio is a corporation duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania. Radio has all requisite corporate power and
authority to conduct its business as it is now being conducted and to own, lease and operate its
properties. Radio is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of its assets owned or held under lease or the
nature of its activities makes such qualification necessary under applicable Legal Requirements,
except where the failure to be so qualified and in good standing would not have a Material Adverse
Effect. Radio has made available to Buyer true, correct and complete copies of Radio’s Governing
Documents (in each case, as amended to the date hereof).



     (b) Schedule 3.1(b)(i) sets forth a true and complete list of each entity or joint
venture, together with its jurisdiction of organization and the percentage ownership interests
thereof owned, directly or indirectly, by either of the Operating Sellers as of the date of this
Agreement.



     (c) Except as listed in Schedule 3.1(b)(i), neither of the Operating Sellers has any
subsidiaries or interest, direct or indirect, or any commitment to purchase any interest, direct or
indirect, in any corporation or in any partnership, joint venture or other business enterprise or
entity. Except as described in Schedule 3.1(c), the operations of the Stations and the
Business have not been conducted through any direct or indirect subsidiary, or Affiliate of or
Related Person to the Operating Sellers, and none of the Assets or Businesses is owned, held, used
or conducted by any Person other than the Operating Sellers.



17









 





     3.2 Enforceability; Authority; No Conflict.



     (a) This Agreement constitutes and, when executed and delivered at Closing, each other
agreement, document and instrument to be executed, delivered or performed by Sellers in connection
with this Agreement (collectively, the “Seller Documents”) will constitute, the legal, valid and
binding obligation of each of Sellers, enforceable against each of them in accordance with its
terms (assuming this Agreement is a legal, valid and binding obligation of, and enforceable
against, Buyer), subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors’ rights and general principles of equity relating to enforceability. Each of
Sellers has the requisite right, power and authority to execute, deliver and perform this Agreement
and has or will have prior to Closing the requisite right, power and authority to perform its
obligations under this Agreement and to execute, deliver and perform each other Seller Document and
to carry out the transactions contemplated hereby and thereby, and such action has or will have
prior to Closing been duly authorized by all necessary limited liability company, partnership or
corporate action, as applicable. All limited liability, partnership or corporate proceedings, as
applicable, and any action required to be taken by Sellers relating to the execution, delivery and
performance of this Agreement and the Seller Documents and the consummation of the transactions
contemplated hereby and thereby have been duly taken or will have been duly taken prior to Closing.



     (b) Except as set forth in Schedule 3.2(b), none of the execution, delivery or
performance of this Agreement and the Seller Documents nor the consummation or performance hereof
or thereof will (with or without notice or lapse of time):




     (i) contravene, conflict with or result in a violation or breach of any of the terms or
requirements of (A) any provision of any of the Governing Documents of any of the Sellers,
or (B) any resolution adopted by the managers or members of 1051FM, the partners of
Susquehanna, or the directors or shareholders of Radio;




     (ii) contravene, conflict with or result in a violation or breach of any of the terms
or requirements of, or give any Governmental Body or other Person the right to challenge the
transactions contemplated by this Agreement or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which Sellers may be subject;




     (iii) contravene, conflict with or result in a violation or breach of any of the terms
or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate or modify, any Commission Authorization or any material Governmental
Authorization that is not a Commission Authorization or any Legal Requirement relating to
the Business that is held by any of the Sellers;




     (iv) result in a breach of, or violate, or be in conflict with, or constitute a default
under, or permit the termination of, or require any consent or authorization under, or cause
or permit acceleration of the maturity or performance of or payment under any Material
Contract, other than as indicated on Schedule 3.20(b), or adversely affect any
Intangible that is material to the Business or the operation of any of the Stations; or



18









 






     (v) result in the imposition or creation of any material Encumbrance upon or with
respect to any of the Assets.



     (c) The execution, delivery and performance of this Agreement and the Seller Documents by
Sellers does not, and the consummation by Sellers of the transactions contemplated by this
Agreement will not, require any consent of any Governmental Body or self-regulatory organization,
except for:




     (i) the pre-merger notification requirements of the HSR Act and the rules and
regulations thereunder;




     (ii) applicable filings with and approvals of the FCC pursuant to the Communications
Act and any regulations promulgated thereunder; or




     (iii) as otherwise set forth in Schedule 3.17(a).



     3.3 Capitalization.



     As of the date hereof, the authorized, issued and outstanding equity interests of each of the
Operating Sellers is as set forth on Schedule 3.3.



     3.4 Financial Statements.



     (a) Sellers have delivered to Buyer: (i) an unaudited consolidating balance sheet of each
Operating Seller as of December 31, 2004 (the “Balance Sheets”), and the related unaudited
consolidating statement of operations for the fiscal year then ended; (ii) unaudited consolidating
balance sheets of each Operating Seller as of December 31 in each of the fiscal years 2002 and
2003, and the related unaudited consolidating statement of operations for each of the fiscal years
then ended; and (iii) an unaudited condensed consolidating balance sheet of each Operating Seller
as of June 30, 2005, (the “Interim Balance Sheets”) and the related unaudited condensed
consolidating statement of operations for the six months then ended, certified by the Operating
Sellers’ controller.



     (b) The Financial Statements delivered pursuant to paragraph (a) above fairly present (and the
Financial Statements delivered pursuant to Section 5.13 will fairly present) the financial
condition and the results of operations of the Operating Sellers and the Business as at the
respective dates of and for the periods referred to in such Financial Statements all in accordance
with GAAP (subject to the absence of footnotes and normal year end audit adjustments, none of which
individually or in the aggregate are material). The Financial Statements referred to in this
Section 3.4 and delivered pursuant to Section 5.13 reflect and will reflect the consistent
application of GAAP throughout the periods involved, except as disclosed therein or herein. The
Financial Statements have been and will be prepared from and are in accordance with the books and
records of Operating Sellers. Such Financial Statements do not contain any material items of
special or nonrecurring income or any income not earned in the Ordinary Course of Business, except
as expressly specified therein, and include all adjustments, which consist only of normal recurring
accruals, necessary for such fair presentation. To the Knowledge of Sellers, the revenue pacing
reports for the Stations heretofore or hereafter delivered to Buyer are and shall be true and
accurate in all material respects. All accounts receivable of the Operating Sellers arising



19









 







prior to the date hereof have arisen, and all accounts receivable of the Operating Sellers
arising after the date hereof and prior to Closing will have arisen, only from bona fide
transactions with unrelated third parties in the Ordinary Course of Business, and represent and
will represent valid obligations arising from sales actually made in the Ordinary Course of
Business, except as reserved for in the Financial Statements or as are, with aggregation,
immaterial in amount.



     (c) Except as and to the extent reflected in the Financial Statements, neither of the
Operating Sellers has any material debts, liabilities or obligations (whether absolute, accrued,
contingent or otherwise) relating to or arising out of any act, transaction, circumstance, or state
of facts which has heretofore occurred or existed, due or payable, other than current liabilities
arising since the date of the Interim Balance Sheets in the Ordinary Course of Business.



     3.5 Books And Records.



     The financial books and records of the Operating Sellers, all of which have been, or will be
prior to Closing, made available to Buyer, are complete and correct and represent actual, bona fide
transactions. The FCC Logs of the Stations are complete and correct in all material respects.



     3.6 Condition of Tangible Personal Property.



     The Tangible Personal Property, in the aggregate, is in good operating condition, ordinary
wear and tear excepted, and is sufficient to continue to operate the Business after Closing in the
Ordinary Course of Business as currently operated by Sellers. No item of Tangible Personal
Property is in need of repair or replacement other than as part of routine maintenance in the
Ordinary Course of Business. Except as disclosed in Schedule 3.6, all Tangible Personal
Property is in the possession of the Operating Sellers. All material items of transmitting and
studio equipment included in the Tangible Personal Property (a) have been maintained in a manner
consistent with generally accepted standards of good engineering practice customary to the radio
industry, and (b) will permit the Business to operate in accordance with the terms of the
Commission Authorizations, the Communications Act and the policies, rules and regulations of the
FCC and FAA and in all material respects with all other applicable Legal Requirements.



     3.7 Owned Real Property.



     Schedule 3.7 sets forth a correct legal description, street address and tax parcel
identification number of all tracts of Land comprising the Owned Real Property and, to the extent
applicable, the particular Station(s) whose operations (including specifically transmission
facilities) are located on such tract of the Owned Real Property. The Operating Sellers do not have
an ownership interest in any real property other than the Owned Real Property nor is any real
property owned by any Affiliate of or Related Person to the Operating Sellers used in the Business.



     3.8 Leased Real Property.



     (a) Schedule 3.8 sets forth a correct legal description, except with respect to
multi-tenant properties, and street address of all tracts of Real Property comprising the Leased
Real Property and an accurate description (with, to the extent applicable, location, name of lessor



20









 







or lessee, description of space, and the particular Station(s) whose operations (including
specifically transmission facilities) are located on such tract of Leased Real Property) for all
leases in respect thereof (“Real Property Leases”). Except for the Leased Real Property, Sellers
do not have a leasehold interest in, any other real property nor is any other leased real property
used in the Business.



     (b) Prior to the date hereof, Sellers have provided to Buyer true and correct copies of all
Real Property Leases together with true and correct copies of any written amendments or
modifications or other agreements with respect to, or relating to, the Real Property Leases, and
written disclosure of any oral agreements with respect to, or relating to, the Real Property
Leases.



     (c) The Real Property Leases are all presently in full force and effect and are the entire
agreement between the Operating Sellers and the other parties thereunder. Each of the Operating
Sellers has fully and completely performed in all material respects all of its duties and
obligations under the Real Property Leases arising on or before the date hereof. To the Knowledge
of Sellers, there are no material defaults by any of the other parties under any of the Real
Property Leases, or any existing conditions that could become defaults with the passage of time.



     3.9 Title to Real and Tangible Personal Property; Encumbrances.



     (a) Each of the Operating Sellers owns good and marketable title to its respective estates in
the Real Property, free and clear of any Encumbrances, other than:




     (i) liens for Taxes for the current tax year which are not yet due and payable;




     (ii) any matter of public record, provided that such matter does not have a material
adverse effect on such Seller’s operation of the Station or Stations to which such matter
pertains;




     (iii) rights-of-way granted pursuant to Governmental Authorizations, provided that such
rights-of-way do not have a material adverse effect on such Seller’s operation of the
related Station(s); and




     (iv) those described in Schedule 3.9(a) (the “Real Estate Encumbrances”).



     True and complete copies of (A) all deeds, existing title insurance policies, surveys, plans,
specifications, environmental, engineering, soil and mechanical reports and audits, real property
and other ad valorem tax bills, service and other agreements and Governmental Authorizations with
respect to the Real Property and Improvements, to the extent available, of or pertaining to the
Real Property either have been or will be made available to Buyer upon request or in any event will
be prior to the Closing Date and (B) all instruments, agreements and other documents evidencing,
creating or constituting any Real Estate Encumbrances have been made available to Buyer.



     (b) Each of the Operating Sellers owns good and transferable title to its respective items of
the Tangible Personal Property that are not subject to a Personal Property Lease, free



21









 







and clear of any Encumbrances other than those described in Schedule 3.9(b) (the
“Non-Real Estate Encumbrances”).



     (c) Except as set forth on Schedule 3.9(c), the Operating Sellers own or lease all
material properties and other assets currently used in the conduct of the Business and the Assets
comprise all such properties and assets.



     (d) None of the Sellers has received notice or has Knowledge of any pending, threatened or
contemplated material condemnation Proceeding affecting the Real Property or the Real Property
Leases or any part thereof, or of any sale or other disposition of the Real Property or any part
thereof in lieu of condemnation, or any pending, threatened or contemplated material Proceeding
against, by or affecting Sellers affecting the Real Property or the Real Property Leases.



     3.10 Condition of Facilities.



     Use of the Land for the various purposes for which it is presently being used is permitted as
of right under all applicable zoning Legal Requirements. All Improvements are in material
compliance with all applicable Legal Requirements, including those pertaining to zoning, building
and the disabled and are in good repair and good condition, ordinary wear and tear excepted.
Except as set forth on Schedule 3.10, no part of any such Improvement encroaches on any
real property not included in the Land, and there are no buildings, antenna towers, guy anchors,
ground radials or other improvements primarily situated on adjoining property that encroach on any
part of the Land. The Land for each Station facility abuts on and has direct vehicular access to a
public road or has access to a public road via a permanent, irrevocable, appurtenant easement
benefiting such Land and comprising a part of the Real Property Interests, is supplied with public
or quasi-public utilities, if necessary for the operations currently being conducted thereon, and
other services necessary for the operation of the Station facilities located thereon.



     3.11 Commission Authorizations.



     (a) Schedule 3.11(a) sets forth a true and complete list of (i) all Commission
Authorizations issued to either of the Operating Sellers by the FCC, and (ii) all applications
(collectively, the “Pending Applications”) currently pending before the FCC filed by or on behalf
of the Operating Sellers.



     (b) Except as set forth on Schedule 3.11(b), (i) the entities identified in
Schedule 3.11(a) as being FCC licensees hold the Commission Authorizations for the
respective Stations; (ii) the Commission Authorizations are all of the Commission Authorizations,
permits or other authorizations from the FCC necessary for the entity identified as licensee
therein to operate the class of station, and to serve the community of license, identified in
Schedule 3.11(a); (iii) all of the Commission Authorizations are in full force and effect;
(iv) each of the Stations is being operated in all material respects in accordance with the
applicable Commission Authorizations, the Communications Act and the FCC’s rules, regulations and
policies; (v) the Commission Authorizations are not subject to any conditions other than those set
forth on the Commission Authorizations themselves or those conditions applicable under the



22









 







Communications Act and the FCC’s policies, rules and regulations to radio stations in the same
service and of the same class; (vi) to the Knowledge of Sellers, no Station is causing interference
in violation of the FCC’s rules, regulations and policies with the transmissions of any other
station or communications facility, and none of the Sellers has received any complaints with
respect thereto, and, to the Knowledge of Sellers, no station or communications facility is causing
interference in violation of the FCC rules, regulations and policies with any transmissions of any
Station or the public’s reception of such transmissions; (vii) where required by Legal
Requirements, all antenna towers used in connection with any Station have been registered with the
FCC and the FAA in accordance with the FCC’s and the FAA’s respective rules, regulations and
policies; (viii) to the Knowledge of Sellers, there is no rulemaking, investigation or other
Proceeding pending or threatened in any Governmental Body that might result in the revocation,
non-renewal or adverse modifications of any Commission Authorization or otherwise adversely affect
the operation or business of any Station, other than such rulemakings, investigations or
Proceedings that would affect the industry generally; (ix) there is no FCC Order outstanding
relating to any one or more of the Stations which has not been satisfied; and (x) none of the
Sellers has any Knowledge of facts that would cause the FCC not to renew any of the Commission
Authorizations for a full term without adverse modification or to impose any nonstandard conditions
on such renewal.



     (c) To the extent there is any conflict between the representations in this Section 3.11 and
the representations in any other section herein, the representations in this Section 3.11 shall
govern.



     3.12 Insolvency.



     No insolvency proceedings of any character, including bankruptcy, receivership,
reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting
either of the Operating Sellers or the Assets, are pending or, to Knowledge of Sellers, threatened.
Neither of the Operating Sellers has made an assignment for the benefit of creditors. Neither of
the Operating Sellers will become insolvent as a result of entering into or performing this
Agreement.



     3.13 Intellectual Property Assets.



     Set forth on Schedule 3.13 is a true and complete list of all Intangibles material to
the Business or any of the Stations and all contracts, agreements, commitments or licenses relating
to such Intangibles, owned or licensed by the Operating Sellers (the “Intellectual Property
Assets”). Except as set forth on Schedule 3.13, the Operating Sellers own or are licensed
to use all Intangibles material to the Business or any of the Stations, and currently used in the
conduct of the Business free and clear of any material Encumbrances. No such rights and interests
will be adversely affected by the transaction contemplated by this Agreement. None of the Sellers
has any Knowledge of any infringement or unlawful, unauthorized or conflicting use of or rights in
any of the Intellectual Property Assets (other than in immaterial respects). Except as set forth
on Schedule 3.13, none of the Operating Sellers is infringing upon or otherwise acting
adversely to any material trademarks, trade names, copyrights, patents, patent applications,
know-how, methods or processes owned by any other Person or Persons, and there is no claim or
action pending, or to the Knowledge of Sellers, threatened with respect thereto.



23









 





     3.14 Taxes.



     Except as set forth on Schedule 3.14:



     (a) All material Tax Returns required to have been filed by the Operating Sellers have been or
will be filed on a timely basis (taking into account valid extensions of the time for filing), and
all such Tax Returns are true, correct and complete in all material respects.



     (b) The Operating Sellers have paid, or made provision for the payment of, all material Taxes
due and payable by any of them, except such Taxes as to which adequate reserves (determined in
accordance with GAAP) have been provided in the Balance Sheets and the Interim Balance Sheets.



     (c) Neither of the Operating Sellers currently is the beneficiary of any extension of time
within which to file any Tax Return.



     (d) No unresolved claim exists with respect to either of the Operating Sellers by any taxing
authority in a jurisdiction where either of the Operating Sellers do not file Tax Returns.



     (e) None of the Assets is subject to an Encumbrance for any Tax, except Taxes the payment of
which is not delinquent.



     (f) Each of the Operating Sellers has withheld or will withhold and has timely paid or will
timely pay or cause to be paid to the appropriate taxing authority all material amounts required to
have been withheld under applicable Tax withholding requirements.



     3.15 Employee Benefits.



     (a) Set forth in Schedule 3.15(a) is a complete and correct list of all “employee
benefit plans,” as defined by Section 3(3) of ERISA, and all other deferred-compensation,
profit-sharing, stock-option, stock-appreciation-right, stock-bonus, stock-purchase,
employee-stock-ownership, savings, severance, change-in-control, supplemental-unemployment, layoff,
salary-continuation, retirement, pension, health, life-insurance, disability, accident,
group-insurance, vacation, holiday, sick-leave, fringe-benefit or welfare plan, and any other
employee compensation or benefit plan, agreement, policy, practice, commitment, contract or
understanding (written or unwritten) (i) that is maintained or contributed to by the Operating
Sellers or any other corporation or trade or business controlled by, controlling or under common
control with the Operating Sellers, within the meaning of Section 414(b) or (c) of the Code or
Section 4001(a)(14) or 4001(b) of ERISA (“ERISA Affiliate”), and (ii) under which any current
Employee or former employee of the Operating Sellers, or the dependents of any thereof receive
benefits as a result of their employment by the Operating Sellers (collectively, the “Employee
Plans”). Schedule 3.15(a) identifies any such Employee Plan that is (w) a “Defined Benefit
Plan,” as defined in Section 414(j) of the Code and (x) a plan intended to meet the requirements of
Section 401(a) of the Code. The Operating Sellers have provided or made available to Buyer true
and complete copies of all Employee Plans and, with respect to each Employee Plan, to the extent
applicable, its most recent summary plan description, actuarial report, Form 5500 and determination
letter.



24









 





     (b) All Employee Plans have been established, maintained and administered in substantial
compliance with all applicable Legal Requirements, including ERISA and the Code. Neither Operating
Seller has been a party to or contributed to a Multiemployer Plan, as defined in Section 3(37) of
ERISA, nor engaged in a transaction with respect to any Employee Plan that is subject to ERISA or
the Code that could subject the Operating Sellers to a Tax or penalty imposed by either Section
4975 of the Code or Section 502(i) of ERISA. No Employee Plan is a Multiple Employer Plan within
the meaning of Section 413(c) of the Code. No employee welfare benefit plan of the Operating
Sellers is a multiple employer welfare arrangement as defined in Section 3(40) of ERISA. Except as
set forth on Schedule 3.15(b), no actions, suits, claims, litigation, audits,
administrative proceedings or disputes are pending, or, to the Knowledge of Sellers, threatened,
with respect to (i) any Employee Plan that would be material to the Business or (ii) any stock fund
or trust in any Benefit Plan, and, to the Knowledge of Sellers, no facts or circumstances exist
that could reasonably give rise to any such actions, suits, claims, litigation, audits,
administrative proceedings or disputes.



     (c) Neither Operating Seller maintains an Employee Plan providing post-employment or
post-retirement health, medical or life insurance benefits that cannot be terminated by the sponsor
without action or consent by any other Person.



     (d) The Sellers have provided Buyer with a copy of the Operating Sellers’ policies for
providing leaves of absence under the Family and Medical Leave Act (“FMLA”) and maintain records
which have been made available to Buyer which identify each employee working in the Business who
currently is on FMLA leave and his or her job title and each employee working in the Business who
has requested FMLA leave to begin after the date of this Agreement.



     (e) No assets of the Operating Sellers are subject to any lien under Section 412(n) of the
Code or Section 4068 of ERISA.



     (f) Except for any severance plan and policy set forth in Schedule 3.15(a), the
consummation of the transactions contemplated by this Agreement will not entitle any employee to
severance pay, accelerate the time of payment of compensation due to any employee, result in an
excess parachute payment within the meaning of Section 280G(b) of the Code or constitute a
prohibited transaction under ERISA.



     3.16 Labor and Employment Matters.



     (a) The Employees are not represented by a labor organization or group that was either
certified by any labor relations board, including the NLRB, or any other Governmental Body or
voluntarily recognized by Sellers as the exclusive bargaining representative of a unit of
employees, and, to the Knowledge of Sellers, no Employee is represented by any other labor union or
organization. Neither Operating Seller is a party to or has any obligation under any union
Contract, or any obligation (other than under any applicable Legal Requirement) to recognize or
deal with any labor union or organization, and there are no such Contracts pertaining to or which
determine the terms or conditions of employment of any Employee.



     (b) To the Knowledge of Sellers, (i) no representation, election, petition, or application for
certification has been filed by the Employees or is pending with the NLRB or any



25









 







other Governmental Body relating to the Business, and (B) no overt union organizing campaign
or other overt attempt to organize or establish a labor union, employee organization or labor
organization or group involving Employees is in progress or is threatened.



     (c) No labor dispute, walk out, strike, slowdown, hand billing, picketing, work stoppage
(sympathetic or otherwise), or other “concerted action” organized by the Employees is in progress
or, to the Knowledge of Sellers, has been threatened.



     (d) Except for any severance plan and policy set forth in Schedule 3.15(a) and for
Employees that parties to Material Contracts set forth in Schedule 3.20, all Employees may
be terminated at any time with or without cause and without any severance or other liability.



     (e) Except as set forth on Schedule 3.15, 3.16, 3.17(a), 3.18
and/or 3.22, to the Knowledge of Sellers, the Operating Sellers have complied with each,
and are not in violation in any material respect of any, Legal Requirement relating to
anti-discrimination and equal employment opportunities, and there are, and have been, no material
violations of any other Legal Requirements respecting the hiring, hours, wages, occupational safety
and health, employment, promotion, termination or benefits of any Employee or other Person.



     3.17 Compliance With Legal Requirements; Governmental Authorizations.



     (a) Except as set forth in Schedule 3.11(a), Schedule 3.17(a) or Schedule
3.22,




     (i) the Operating Sellers and each Station have been since December 31, 2003, and
currently are being, operated in compliance in all material respects with all applicable
Legal Requirements and Governmental Authorizations, including the Communications Act and the
Copyright Act of 1976;




     (ii) since December 31, 2003, none of the Sellers has received any notice alleging any
material violation by the Operating Sellers of any applicable Legal Requirements; and




     (iii) each of the Operating Sellers has all Commission Authorizations and all material
Governmental Authorizations other than Commission Authorizations, including any required by
the FAA, necessary for the conduct of its business as currently conducted and such
Governmental Authorizations are in full force and effect.



     (b) Set forth in Schedule 3.17(b) is a complete and accurate list of each material
Governmental Authorization (other than the Commission Authorizations) that is held by the Operating
Sellers and that relates to the Business. Each Governmental Authorization listed or required to be
listed in Schedule 3.17(b) is valid and in full force and effect.



     3.18 Legal Proceedings; Orders.



     Except as set forth on Schedule 3.11(a), Schedule 3.17(a), Schedule
3.18, or Schedule 3.22, there is no Proceeding or Order now pending, or, to the
Knowledge of Sellers, threatened against either of the Operating Sellers. There is no Proceeding
or Order now pending, or, to the Knowledge of Sellers, threatened against any of the Sellers, that
challenges or would



26









 







challenge the transactions contemplated by this Agreement and would reasonably be expected to
prevent or materially interfere with or delay the performance or consummation of the transactions
contemplated by this Agreement. To the Knowledge of Sellers, there are no facts or circumstances
primarily relating to the Sellers or the Stations which could reasonably be expected to cause the
FCC to deny the Assignment Applications, designate the Assignment Applications for an oral
evidentiary hearing, or to materially delay the issuance of the FCC Consent.



     3.19 Absence of Certain Changes and Events.



     Except as set forth in Schedule 3.19, since December 31, 2004, there has not been any
Material Adverse Effect, and the Operating Sellers have conducted the Business in the Ordinary
Course of Business and have not, solely with respect to the Business:



     (a) Mortgaged, pledged or subjected to an Encumbrance any of the Assets of the Operating
Sellers that is material to the Business (other than Permitted Encumbrances);



     (b) Sold, conveyed, transferred, leased, subleased, mortgaged, pledged, had any material liens
imposed (other than Permitted Encumbrances), licensed or otherwise disposed of, to any third party
or Affiliates, any material properties or assets used in the conduct of the Business other than in
the Ordinary Course of Business or dissolved any Subsidiaries;



     (c) Acquired any assets or any business in one or a series of related transactions, other than
(i) pursuant to agreements in effect as of the date hereof that were disclosed to Buyer prior to
the date hereof, (ii) capital expenditures or capital additions consistent with plans provided to
Buyer and (iii) assets acquired by Operating Sellers in the Ordinary Course of Business;



     (d) Failed to make capital expenditures or additions consistent (in amount) with the 2005
capital expenditure plan attached as Schedule 3.19(d) (except as expressly noted therein);



     (e) Made any material changes to the formats of the Stations;



     (f) Assigned, transferred or conveyed to any Affiliates of or Related Person to the Operating
Sellers any material properties or assets not related to or used in the conduct of the Business;



     (g) (i) Entered into any transaction, Contract or commitment except in the Ordinary Course of
Business; (ii) modified or renewed a Material Contract, other than modifications and renewals of
cash time sales agreements and production agreements in the Ordinary Course of Business; or (iii)
rejected, repudiated or terminated any Material Contract;



     (h) (i) Increased the compensation of any Employee, except for increases in salary or wage
rates (A) in the Ordinary Course of Business, (B) as required by the terms of existing agreements
or plans or (C) in connection with the renewal of contracts with on-air personnel in a manner
which would not cause any 2005 budget line item for or related to personnel expenses to be
exceeded; (ii) established, amended, paid, agreed to grant or increased any special bonus, sale
bonus, stay bonus, retention bonus, deal bonus or change in control bonus or any similar benefit



27









 







under any plan, agreement, award or arrangement, other than such as will be fully paid and
satisfied at or prior to the Closing Date or other than as required pursuant to any existing plan,
agreement, award or arrangement listed on Schedule 3.15(a); (iii) hired any employee for
the Business with annual compensation in excess of the amount of compensation for a Person in a
similar position consistent with past practice; (iv) entered into any new employment or severance
agreement or amended (except as required to satisfy applicable Legal Requirements) any such
existing agreement with any Employee; (v) established, adopted, entered into, amended (except as
required to satisfy applicable Legal Requirements) or terminated any Employee Plan; or (vi) engaged
in any hiring practices that are not in the Ordinary Course of Business;



     (i) Surrendered, revoked or otherwise terminated any Governmental Authorization;



     (j) Incurred any Debt or made any material loans, advances or capital contributions to, or
investments in, any other Person (other than, to the extent not in violation of applicable Legal
Requirements, customary loans or advances to Employees in amounts not material to the maker of such
loan or advance in the Ordinary Course of Business) or incurred any other obligation or liability,
absolute, accrued, contingent or otherwise, whether due or to become due, except in the Ordinary
Course of Business, none of which, singly or in the aggregate, materially adversely affects the
condition (financial or otherwise), assets, liabilities, operations or prospects of the Operating
Sellers;



     (k) Disposed of, licensed, abandoned, invalidated, waived, released or assigned any rights of
material value in connection with the Business;



     (l) Made any material change in any method of accounting, keeping of books of account or
accounting practices or in any material method of Tax accounting of either of the Operating Sellers
unless required by applicable Legal Requirements or in order to comply with any GAAP requirements,
FASB interpretations or a request by the Operating Sellers’ independent auditors;



     (m) Entered into any program production or distribution arrangements, including without
limitation joint venture arrangements obligating the Operating Sellers to pay any consideration,
except for those entered into in the Ordinary Course of Business and with a term not in excess of
three years;



     (n) Undertaken the collection of outstanding accounts receivable or failed to pay or discharge
outstanding accounts payable other than in Ordinary Course of Business;



     (o) Had any material adverse change in its relations with any Governmental Body; or



     (p) Agreed, whether in writing or otherwise, to do any of the foregoing, except as expressly
contemplated by this Agreement.



     3.20 Material Contracts.



     (a) Schedule 3.20(a) sets forth a list of each Contract that exists as of the date
hereof and falls within any of the following categories: (i) Contracts that require performance of
services or delivery of consideration by the Operating Sellers or to the Operating Sellers in



28









 







connection with the Business of an amount or value in excess of $50,000 during the current
calendar year or any next succeeding three calendar years (ii) Contracts for the sale of airtime on
the Stations other than those entered into in the Ordinary Course of Business, at customary rates
for the period at issue, (iii) Contracts establishing joint ventures or partnerships constituting a
portion of the Business, (iv) employment agreements, not including oral agreements or agreements
terminable at will without penalty, of the Operating Sellers related to the Business, (v) Contracts
between either of the Operating Sellers, on the one hand, and any Affiliate of any Seller, on the
other, providing for annual payments in excess of $50,000 and relating primarily to the conduct of
the Business that will not be terminated on or prior to the Closing Date, (vi) Contracts in respect
of the Leased Real Property, and (vii) Contracts in respect of any Intangibles that are material to
the operation of any of the Stations (collectively the “Material Contracts”). Sellers have
provided Buyer with access and opportunity to review true and complete copies of all contracts set
forth on Schedule 3.20(a).



     (b) Each of the Material Contracts is in full force and effect in all material respects,
except as the enforceability of such contracts may be affected by bankruptcy, insolvency, or
similar laws affecting creditors’ rights generally and by judicial discretion in the enforcement of
equitable remedies. Except as set forth on Schedule 3.20(b), the Operating Sellers and, to
the Knowledge of Sellers, any other party thereto, is not in material default under any Material
Contract and no circumstance exists that (with or without notice or the lapse of time) would give
any Person the right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify any Material Contract. To the
Knowledge of Sellers, no party to a Material Contract has given notice of termination under any
Material Contract, nor do the Sellers have Knowledge that any Person intends not to renew or extend
any Material Contract or to abrogate or fail to comply with any material terms of a Material
Contract.



     3.21 Insurance.



     Set forth on Schedule 3.21 is a list of all material insurance policies for which
either of the Operating Sellers is an insured party in connection with the Business (including
policies providing property, fire, theft, casualty, liability and workers’ compensation coverage,
but excluding policies relating to Employee Plans) (the “Material Insurance Policies”), which are
in full force and effect in all material respects. With such exceptions as would not be material
all premiums due in respect of the Insurance Policies have been paid by the Operating Sellers or an
Affiliate and the Operating Sellers or the applicable Affiliates are otherwise in compliance with
the terms of such policies. The assets of the Operating Sellers are insured at replacement cost
against loss or damage by fire or other risks as set forth in the policies, subject to the
applicable limits of such policies, and the Operating Sellers, as applicable, maintains liability
insurance. To the Knowledge of Sellers, there has not been any threatened termination of, pending
premium increase (other than with respect to customary annual premium increases) with respect to,
or alteration of coverage under, any Material Insurance Policy. Except as set forth on
Schedule 3.21, there are no pending claims against such insurance policies as to which the
applicable insurer has denied liability and there exist no material claims that have not been
timely submitted by the Operating Sellers, as applicable, to the applicable insurer.



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     3.22 Environmental Matters.



     Except as set forth on Schedule 3.22:



     (a) Neither of the Operating Sellers has handled, used, managed, transported, treated, stored,
disposed of, or arranged for the transportation, treatment, storage or disposal of any Hazardous
Materials, at or from any of the Real Property, or at any other property or location except for
maintenance, cleaning and emergency generator fuel supplies customary for the operation of radio
stations and maintained in compliance with all Environmental Laws in the Ordinary Course of
Business;



     (b) To the extent related to the Real Property or the Business, all material environmental
permits, licenses or approvals required by Environmental Laws necessary for the conduct of the
Business in a manner substantially similar to the operation of the Business have been obtained,
have not been rescinded or terminated and are transferable, and the Operating Sellers are, in their
operation of the Business and their ownership or use of the Real Property, in compliance with such
permits;



     (c) None of the Sellers has received any notice within the last five (5) years from any
Governmental Body or any other Person alleging a violation of, or liability under, any
Environmental Laws with respect to the operation of the Business or ownership or use of the Real
Property;



     (d) Neither of the Operating Sellers has caused, nor to the Knowledge of Sellers, has there
been any material Release of any Hazardous Materials at any other property or other location where
Sellers has directly or indirectly arranged for the transportation, treatment, storage or disposal
of any Hazardous Material for which Sellers may have liability, and neither of the Operating
Sellers has caused, nor to the Knowledge of Sellers, has there been any Release of any Hazardous
Materials at, on or under any of the Real Property in amounts or under circumstances that would
require remediation by the Operating Sellers pursuant to Environmental Laws or in amounts that
would form the basis of a material claim by any third party for personal injury or property damage
under Environmental Laws or other Legal Requirement based on the exposure to such Hazardous
Materials;



     (e) There are no pending or, to the Knowledge of Sellers, material threatened claims, actions,
suits, inquiries, Proceedings or investigations by any Governmental Bodies concerning compliance by
the Operating Sellers with any Environmental Laws;



     (f) To the Knowledge of Sellers, there are no underground tanks regulated by any applicable
Environmental Laws at, on or under any Real Property; and



     (g) To the Knowledge of Sellers, neither the Real Property nor any other location identified
on Schedule 3.22 as having received Hazardous Materials, directly or indirectly from
Sellers has been proposed for listing on the National Priorities List promulgated pursuant to
CERCLA, or CERCLIS (as defined in CERCLA) or on any similar federal, state, local or foreign list
of sites requiring investigation or cleanup.



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     3.23 Relationships With Related Persons.



     Except as disclosed in Schedule 3.19 or Schedule 3.20(a), neither of the
Operating Sellers have been involved in any business arrangement or relationship with any Related
Persons since December 31, 2004, and no such Related Person owns any property or right, tangible or
intangible, that is material to the operations of the Business. Except as described in
Schedule 3.23, to the Knowledge of Sellers, no equity holder, member, officer, director,
manager or partner of the Operating Sellers, as applicable, possesses, directly or indirectly, any
beneficial interest in or is a director, officer or employee of, any corporation, firm,
partnership, association or business organization that is a client, supplier, customer, lessor,
lessee, creditor, borrower, debtor or contracting party with the Operating Sellers (except as a
stockholder holding less than a one percent (1%) interest in a corporation whose shares are traded
on a national or regional securities exchange or in the over-the-counter market).



     3.24 Brokers or Finders.



     Except for UBS Securities LLC, whose fees shall be paid by Sellers at or prior to Closing,
there is no investment banker, broker, finder or other intermediary that has been retained by or is
authorized to act on behalf of Sellers that might be entitled to any fee or commission in
connection with the Transaction.



SECTION 4



REPRESENTATIONS AND WARRANTIES OF BUYER




     Buyer represents and warrants to Sellers as follows:



     4.1 Organization, Standing and Authority.



     Buyer is a corporation duly organized, validly existing and in good standing under the laws of
the State of Delaware and has the requisite corporate power and authority to execute, deliver and
perform this Agreement and each other agreement, document and instrument to be executed or
delivered by Buyer in connection with this Agreement (the “Buyer Documents”) and to carry out the
transactions contemplated hereby and thereby. Prior to the Closing Date, Buyer will be qualified
to do business in the State of Missouri.



     4.2 Authorization and Binding Obligation.



     The execution, delivery and performance of this Agreement by Buyer have been duly authorized
by all necessary corporate action on the part of Buyer. This Agreement constitutes, and when
executed and delivered at Closing, each other Buyer Document will constitute, a legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement or any Buyer Document may be affected by bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and by judicial discretion in the enforcement of
equitable remedies.



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     4.3 Absence of Conflicting Agreements and Required Consents.



     Except for the filing of the Assignment Application and the granting of the FCC Consents
provided for in Section 6.1 and the filings required by HSR Act provided for in Section 6.2, the
execution, delivery and performance of this Agreement and the Buyer Documents and the consummation
of the transactions contemplated hereby and thereby, will not (i) conflict with or violate any
provision of the Certificate of Incorporation or the Bylaws of Buyer, (ii) with or without the
giving of notice or the passage of time, or both, result in a breach of, or violate, or be in
conflict with, or constitute a default under, or permit the termination of, or cause or permit
acceleration under, any agreement or instrument of any debt or obligation to which Buyer is a
party, (iii) require the consent of any party to any material agreement or commitment to which
Buyer is a party or by which Buyer is subject or bound, (iv) violate any law, rule or regulation or
any order, judgment, decree or award of any court, governmental authority or arbitrator to or by
which Buyer is subject or bound; no consent, approval or authorization of, or declaration, filing
or registration with, or notice to, any governmental or regulatory authority or any other third
party is required to be obtained or made by Buyer in connection with the execution, delivery and
performance of this Agreement or the Buyer Documents or the consummation of the transactions
contemplated hereby and thereby.



     4.4 Brokers.



     Except as set forth on Schedule 4.4 hereto, neither Buyer nor any of its agents or
representatives have incurred any obligation or liability, contingent or otherwise, for brokerage
or finders’ fees or agents’ commissions or other similar payments in connection with the
transactions contemplated by this Agreement.



     4.5 Qualifications of Buyer.



     Except as set forth in Schedule 4.5, to the Knowledge of Buyer, Buyer is qualified
under the Communications Act and the published rules, regulations and policies of the FCC to
acquire the Commission Authorizations. Except as disclosed in Schedule 4.5, there are no
facts or Proceedings which would reasonably be expected to disqualify Buyer, or require a waiver
under the Communications Act or the published FCC rules and policies (including under any
applicable multiple ownership rules) or the HSR Act or otherwise from acquiring or operating the
Stations or would cause the FCC to deny or materially delay issuance of the FCC Consent or the
Department of Justice and the Federal Trade Commission not to allow the waiting period under the
HSR Act to terminate as provided for in Section 6.2. Except as disclosed in Schedule 4.5,
no waiver of any FCC rule or policy is necessary to be obtained on behalf of Buyer for the grant of
the Assignment Applications for the FCC Consents, and Buyer has no reason to request that the FCC
process the Assignment Applications pursuant to any special procedure to find Buyer qualified under
the Communications Act and the FCC’s published rules and policies to acquire the Commission
Authorizations.



     4.6 Certain Proceedings.



     There is no pending Proceeding that has been commenced against Buyer and that challenges, or
may have the effect of preventing, delaying, making illegal or otherwise



32









 







interfering with, the transaction contemplated by this Agreement. To Buyer’s Knowledge, no
such Proceeding has been threatened.



SECTION 5



OPERATION OF THE STATIONS PRIOR TO CLOSING




     Sellers covenant and agree that between the date hereof and the Closing Date, Sellers will
operate the Stations in the Ordinary Course of Business in accordance with such Sellers’ past
practices (except where such conduct would conflict with the following covenants or with other
obligations of Sellers under this Agreement, and, except as contemplated by this Agreement or with
the prior written consent of Buyer (such consent not to be unreasonably withheld)), Sellers will
act in accordance with the following insofar as such actions relate to the Stations:



     5.1 Contracts.



     Sellers will not (i) enter into any Contract except in the Ordinary Course of Business; (ii)
modify, renew, suspend, abrogate or amend in any material respect any material Governmental
Authorization or Material Contract, other than (A) renewals of contracts with on-air or programming
personnel consistent with the provisions of Section 5.2) made in the Ordinary Course of Business
and (B) modifications, renewals and amendments of contracts, including cash time sales agreements
and production agreements in the Ordinary Course of Business, (iii) reject, repudiate or terminate
any Material Contract, or (iv) renew or enter into any new Material Contracts of the type
identified on Schedule 3.20(a)(i) or otherwise identified on Schedule 5.1. Prior
to the Closing Date, Sellers shall deliver to Buyer a list of all Contracts entered into between
the date of this Agreement and the Closing Date and shall make available to Buyer copies of such
Contracts.



     5.2 Compensation and Benefits.



     Sellers shall not (i) increase the compensation, salary or wage rate of any Employee, except
for increases (A) in the Ordinary Course of Business, (B) as required by the terms of agreements or
plans currently in effect and listed on Schedule 3.15(a) or (C) in connection with the
renewal of contracts with on-air or programming personnel for the calendar year 2005, not provide
for any increases that in the aggregate would, together with other previous increases, cause any
2005 budget line item for or in respect of personnel expenses to be exceeded, or in connection with
the renewal of contracts with on-air or programming personnel for the calendar year 2006 and
thereafter, not provide for any increases that in the aggregate would, together with other previous
increases, cause any 2005 budget line item for or in respect of personnel expenses to be exceeded
by more than four percent (4%) per annum; (ii) establish, amend, pay, agree to grant or increase
any special bonus, sale bonus, stay bonus, retention bonus, deal bonus or change in control bonus
or any similar benefit under any plan, agreement, award or arrangement, other than such as will be
fully paid and satisfied at or prior to the Closing Date or other than as required pursuant to any
existing plan, agreement, award or arrangement listed on Schedule 3.15(a); (iii) hire any
employee for the Business with annual compensation in excess of the amount of compensation for a
Person in a similar position consistent with past practice; (iv) enter into any new employment or
severance agreement or amend (except as required to satisfy applicable Legal Requirements) any such
existing agreement with any Employee;



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(v) establish, adopt, enter into, amend (except as required to satisfy applicable Legal
Requirements) or terminated any Employee Plan; or (vi) engage in any hiring practices that are not
in the Ordinary Course of Business



     5.3 Encumbrances.



     Sellers will not create, assume, or permit to exist any Encumbrance affecting any of the
Assets, except for Permitted Encumbrances.



     5.4 Dispositions.



     Sellers will not sell, assign, lease, or otherwise transfer or dispose of any of the Assets
except (a) Assets that are no longer used or required in the Business, and (b) Assets that are
replaced with Assets of equivalent kind and value that are acquired after the date of this
Agreement, nor will Sellers obligate themselves to do any of the foregoing without the consent of
Buyer, which consent shall not be unreasonably withheld.



     5.5 Access to Information.



     Upon prior reasonable notice by Buyer, Sellers will give to Buyer and its investors, lenders,
counsel, accountants, engineers and other authorized representatives, reasonable access to the
Stations and all books, records and documents of Sellers which are material to the business and
operation of the Stations and will furnish or cause to be furnished to Buyer and its authorized
representatives all information that they reasonably request (including any financial reports and
operations reports produced with respect to the Stations). Prior to the Closing Date, Buyer and
such third party consultants as may be engaged by Buyer may, with reasonable prior notice, at
mutually agreed times and at Buyer’s own expense, physically inspect the properties and Assets of
the Operating Sellers, including performing environmental audits; provided, however, that Buyer
shall not conduct any environmental sampling or invasive testing without the prior written consent
of Sellers and, in the case of any invasive testing, prior written consent of the applicable
lessee, which consent shall not be unreasonably withheld.



     5.6 Insurance.



     Sellers or their Affiliates shall maintain in full force and effect policies of insurance of
the same type, character and coverage as the policies currently carried with respect to the
business, operations and assets of the Stations.



     5.7 Governmental Authorizations.



     The Sellers shall not cause or permit, by any act or failure to act, any Governmental
Authorizations to expire or to be forfeited, revoked, suspended or modified, or take any action
that could reasonably be expected to cause the FCC or any other Governmental Body to institute
Proceedings for the suspension, revocation or adverse modification of any of the Governmental
Authorizations. Sellers shall prosecute with due diligence any applications to any Governmental
Body necessary for the continued operation of the Stations as presently conducted. Sellers shall
give or cause to be given to Buyer as soon as reasonably possible, but in no event later than five
(5) calendar days after receipt or submission to the FCC copies of reports, statements,



34









 







applications, responses, schedules, pleadings or other communications (including emails)
received from or filed with the FCC on or prior to the Closing Date that relate to any Sellers or
any Commission Authorization, including a copy of any FCC inquiry to which the filing is responsive
(and in the event of an oral FCC inquiry, Sellers will furnish a written summary thereof).



     5.8 Obligations.



     Sellers shall pay all their obligations insofar as they relate to the Stations as they become
due.



     5.9 No Inconsistent Action.



     Sellers shall not take any action or fail to take any action that is inconsistent with their
obligations under this Agreement or that could reasonably be expected to hinder or delay the
consummation of the transactions contemplated by this Agreement.



     5.10 Maintenance of Assets.



     Sellers shall maintain the Assets in good condition (reasonable wear and tear excepted), and
use, operate and maintain the Assets in a reasonable manner. Sellers shall maintain inventories of
spare parts and expendable supplies at levels consistent with past practices. If any loss, damage,
impairment, confiscation, or condemnation of or to any of the Assets occurs, Sellers shall apply
any insurance proceeds received with respect thereto to the prompt repair, replacement or
restoration of the Assets to the condition of such Asset or other property before such event or, if
required to such other (better) condition as may be required by Legal Requirement.



     5.11 Consents.



     Subject to Section 6.5 hereof, Sellers shall use their commercially reasonable efforts to
obtain all Consents described in Section 3.2, without any adverse change in the terms or conditions
of any Assumed Contract or Governmental Authorizations. Sellers shall promptly advise Buyer of any
difficulties experienced in obtaining any of the Consents and of any conditions proposed,
considered or requested for any of the Consents.



     5.12 Books and Records.



     Sellers shall maintain their books and records and the FCC Logs in the Ordinary Course of
Business.



     5.13 Cooperation, Notification.



     Each party shall:



     (a) Confer on a regular and frequent basis with one or more representatives of the other party
to discuss, subject to applicable Legal Requirements, material operational matters and the general
status of its ongoing operations,



35









 





     (b) Promptly notify the other party of any significant changes in its business, properties,
assets, condition (financial or other), results of operations or prospects,



     (c) Promptly advise the other party of any material inaccuracy in any of its representations
or warranties or nonperformance of any of its covenants in this Agreement or of any change or event
which has had or, insofar as reasonably can be foreseen, is reasonably likely to result in, a
material adverse effect on the condition (financial or otherwise), assets, liabilities, results of
operations or prospects of such party, or materially impair such party’s ability to effect the
Closing or perform its respective obligations under this Agreement, and



     (d) Promptly provide the other party with copies of all filings made by such party with any
Governmental Body in connection with this Agreement and the transactions contemplated by this
Agreement.



     5.14 Financial Information.



     Between the date hereof and the Closing, Sellers shall use their commercially reasonable
efforts to cause the respective officers, and advisors, including legal and accounting, of Sellers
to, provide to Buyer at Buyer’s expense (other than with respect to clause (iii) below), all
cooperation reasonably requested by Buyer that is reasonably necessary, proper or advisable in
connection any financing to be undertaken by the Buyer (the “Financing”), including (i) to the
extent reasonably necessary to effectuate the Financing, participation in meetings, presentations,
road shows, due diligence sessions and sessions with rating agencies, (ii) using its commercially
reasonable efforts to assist with the preparation of materials for rating agency presentations,
offering documents, private placement memoranda, bank information memoranda, prospectuses and
similar documents required in connection with the Financing, (iii) furnish Buyer and its financing
sources with financial statements and related information in respect of the Business for each of
the three fiscal years ended December 31, 2003, December 31, 2004 and December 31, 2005, and other
financial and other pertinent information regarding the Business, as may be reasonably requested by
Buyer, including all financial statements and financial data of the type required by Regulation S-X
and Regulation S-K under the Securities Act and of type and form customarily included in offering
memoranda for private placements under Rule 144A of the Securities Act, to consummate the offerings
of debt securities contemplated by the Financing at the time during the Business’ fiscal year such
offerings will be made, (iv) furnish Buyer with weekly pacing reports, rating books and similar
reports, (v) use commercially reasonable efforts to obtain accountants’ comfort letters as
reasonably requested by Buyer, (vi) use its commercially reasonable efforts to provide monthly
financial statements (excluding footnotes) within thirty (30) days of the end of each month prior
to the Closing, and (vii) use all reasonable efforts to take all actions necessary and appropriate
to (A) permit the prospective lenders involved in the Financing to evaluate the Business’ current
assets, cash management and accounting systems, policies and procedures relating thereto for the
purposes of establishing collateral arrangements and (B) establishing bank and other accounts and
blocked account agreements and lock box arrangements effective with respect to the period
commencing at the Closing. Sellers hereby consent to the use of their logos in connection with the
Financing. Buyer agrees to indemnify, defend and hold harmless all officers and employees of
Sellers who assist Buyer in respect of the Financing as provided in this Section 5.13, from and
against all



36









 







Losses sustained, incurred or suffered by any such Person and arising from such assistance,
except to the extent of the gross negligence or willful misconduct of such Person.



     5.15 Compliance with Laws.



     Sellers shall comply in all material respects with all Legal Requirements.



     5.16 Preservation of Business.



     Sellers shall use commercially reasonable efforts to preserve intact the goodwill of the
Operating Sellers relative to the Stations, and shall use commercially reasonable efforts to
maintain material relationships of the Operating Sellers with advertisers, customers, suppliers,
employees, contracting parties, Governmental Bodies, creditors, Employees (provided, that no
increase in any compensation or any incentive compensation or similar compensation shall be
required in respect thereof except to the extent such increase in required in the Ordinary Course
of Business) and others having business relations with Sellers relative to the Stations. Sellers
shall use commercially reasonable efforts to retain and appropriately motivate the key employees of
the Business, and keep Buyer promptly informed of, and provide Buyer an opportunity to regularly
meet with Sellers regarding, issues concerning the overall workforce of the Business, and the
retention and continued motivation of key employees of the Business.



     5.17 Litigation.



     Except with respect to any matter set forth on Schedule 3.15(b) and Schedule
3.18, Sellers shall not settle any material claims, actions, arbitrations, disputes or other
proceedings in respect of the Operating Sellers or the Stations (except matters which will not have
an adverse effect on Buyer), without the consent of Buyer, which consent shall not be unreasonably
withheld.



     5.18 Accounting.



     Sellers shall not make any material change in any method of accounting, keeping of books of
account or accounting practices or in any material method of Tax accounting of the Operating
Sellers unless required by applicable Legal Requirements or in order to comply with any GAAP
requirements, a request by Sellers’ independent auditors or FASB interpretations and not make any
material change in the Operating Sellers’ internal controls over financial reporting (as defined in
Rules 13a-15(f) and 15D-15(f) of the Exchange Act).



     5.19 Capital Expenditures.



     The Operating Sellers shall continue making capital expenditures and additions (i) consistent
with the 2005 capital expenditure plan attached hereto as a part of Schedule 3.19 (except
as expressly noted thereon), and expend in 2005 the entire amount that is budgeted in the 2005
capital expenditure plan (except as expressly noted thereon), (ii) consistent with the 2006 “high
definition” capital expenditure plan attached hereto as Schedule 5.19(a) (both in timing,
based upon ratable expenditures throughout 2006, and amount), and thereafter consistent with such
“high definition” capital expenditure plan as may be adopted in order to continue to equip all of
the Stations with “high definition” capabilities (except Stations operating under local



37









 





marketing agreements listed on Schedule 5.19(b)), and (iii) as are reasonably required
in respect of maintenance, consistent with historical practices.



     5.20 Station Formats.



     Sellers shall not make any material changes to the formats of the Stations.



     5.21 Promotions.



     Sellers shall continue marketing, advertising and promotional activities, sales of advertising
time, the purchasing and scheduling of programming and the performance of research, all with
respect to the Business in the Ordinary Course of Business.



SECTION 6



SPECIAL COVENANTS AND AGREEMENTS




     6.1 FCC Consent.



     (a) The exchange and transfer of the Assets as contemplated by this Agreement is subject to
the prior consent and approval of the FCC.



     (b) Within fifteen (15) calendar days after the date hereof, Sellers and Buyer shall file one
or more assignment applications (the “Assignment Applications”) with the FCC to obtain the FCC
Consents. Buyer and Sellers shall cooperate with each other in the preparation and filing of the
Assignment Applications and all information, data, exhibits, statements, and other materials
required thereby. Each party further agrees to (i) expeditiously prepare and file with the FCC any
amendments or any other filings in connection therewith which are requested by the FCC or required
by its rules and policies, (ii) cooperate in the timely filing of extensions of any FCC
consummation deadline (as long as the Agreement has not been terminated in accordance with its
terms) if the conditions for Closing have not yet been satisfied, and (iii) take such other actions
as may be necessary or appropriate to obtain the issuance of the FCC Consents at the earliest
practicable time and having each FCC Consent become a Final Order. For purposes of this Agreement,
each party shall be deemed to be using its commercially reasonable efforts with respect to
obtaining the FCC Consents and having each FCC Consent become a Final Order, and to be otherwise
complying with the foregoing provisions of this Section 6.1(b), so long as it (x) truthfully and
promptly provides information necessary or appropriate to complete and file its portion of the
Assignment Applications and any amendments thereto in a timely manner, (y) timely provides its
comments on any documents and other materials to be filed by the other party and (z) uses its
reasonable efforts to oppose any and every petition to deny, informal objection or other challenge
to the Assignment Applications and any and every reconsideration petition, application for review,
or judicial appeal seeking a reversal of an FCC Consent or, as the case may be, a Final Order, all
without prejudice to the parties’ termination rights under this Agreement; provided, that Sellers,
on the one hand, and Buyer, on the other, shall not be required to expend any funds or efforts
contemplated under this Section 6.1(b) unless the other is concurrently and likewise complying with
its respective obligations under this Section 6.



     (c) Except as otherwise provided herein, each party will be solely responsible for the
expenses incurred by it in the preparation, filing, and prosecution of the Assignment



38









 







Applications and the fulfillment of its obligations under clause (b) hereof. All filing fees
imposed by the FCC or any governmental authority in connection with the filing of the Assignment
Applications and the prosecution thereof shall be paid one-half (1/2) by Sellers, on the one hand,
and one-half (1/2) by Buyer, on the other.



     (d) Sellers shall, at their own expense, give timely notice of the filing of the Assignment
Applications by such means and in such manner as may be required by the rules and regulations of
the FCC.



     6.2 HSR Act.



     As soon as reasonably possible, but in any event no later than twenty (20) calendar days
following the execution of this Agreement, Sellers and Buyer shall complete any filing that may be
required pursuant to the HSR Act (each an “HSR Filing”). Sellers and Buyer shall diligently take,
or fully cooperate in the taking of, all necessary and proper steps, and provide any additional
information reasonably requested in order to comply with, the requirements of the HSR Act. All
filing fees in connection with the HSR Filing shall be paid by Sellers.



     6.3 Risk of Loss.



     The risk of any loss, damage, impairment, confiscation, or condemnation of any of the Assets
of Sellers for any cause whatsoever shall be borne by Sellers at all times prior to the Closing.
In the event of loss or damage prior to the Closing Date, Sellers shall use commercially reasonable
efforts to fix, restore, or replace such loss, damage, impairment, confiscation, or condemnation to
its former operational condition or such other (better) condition as may be required by applicable
Legal Requirements. If Sellers have adequate replacement cost insurance, Buyer may elect to have
Sellers assign such insurance proceeds to Buyer, in which case, Buyer shall proceed with the
Closing, and receive at the Closing the insurance proceeds or an assignment of the right to receive
such insurance proceeds, as applicable, to which Sellers otherwise would be entitled, whereupon
Sellers shall have no further liability to Buyer for such loss or damage.



     6.4 Confidentiality.



     Except as necessary for the consummation of the transaction contemplated by this Agreement,
including Buyer’s obtaining of financing related hereto, and except as and to the extent required
by law, each party will keep confidential any information obtained from the other party in
connection with the transactions specifically contemplated by this Agreement. If this Agreement is
terminated, each party will return to the other party all information obtained by the such party
from the other party in connection with the transactions contemplated by this Agreement.



     6.5 Cooperation.



     Buyer and Sellers shall reasonably cooperate with each other and their respective counsel and
accountants in connection with any actions required to be taken as part of their respective
obligations under this Agreement, and in connection with any litigation after the Closing Date
which relate to the Stations for periods prior to the Closing Date. Buyer and Sellers shall
execute



39









 







such other documents as may be reasonably necessary and desirable to the implementation and
consummation of this Agreement, and otherwise use their commercially reasonable efforts to
consummate the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Sellers shall use their commercially reasonable efforts to obtain all consents,
provided that Sellers shall have no obligation (a) to expend funds to obtain any of the Consents,
other than ministerial processing fees, filing fees in accordance with Sections 6.1 and 6.2., and
Sellers’ out-of-pocket expenses to its attorney or other agents incurred in connection with
obtaining such consents, or (b) to agree to any material adverse change in any Governmental
Authorizations or Assumed Contract in order to obtain a Consent required with respect thereto.



     6.6 Control of the Stations.



     Prior to the Closing, Buyer shall not, directly or indirectly, control, supervise or direct,
or attempt to control, supervise or direct, the operations of the Stations; those operations,
including complete control and supervision of all of each Stations’ finances, programs, Employees
and policies, shall be the sole responsibility of Sellers.



     6.7 Allocation of Purchase Price.



     Seller and Buyer agree to allocate the Purchase Price (and, as appropriate under Section 1060
of the Code, the Assumed Liabilities, transaction costs and any other relevant items) among the
Assets in accordance with the allocation schedule to be attached hereto as Schedule 6.7,
which allocation schedule will be determined prior to the Closing (the “Purchase Price Allocation
Schedule”). If the parties are unable to agree on the final Allocation Schedule prior to Closing,
a third-party appraiser mutually acceptable to Buyer and Seller, the fees of which shall be borne
equally by Buyer and Seller, shall resolve the allocation of the consideration to any items with
respect to which there is a dispute between the parties. Such Allocation Schedule shall be
adjusted, as necessary, to reflect any adjustment to the Closing Payment pursuant to Section 2.5.
Seller and Buyer will each file an IRS Form 8594 for each Operating Seller, as appropriate,
consistent with the Allocation Schedule, as adjusted.



     6.8 Access to Books and Records.



     To the extent reasonably requested by Buyer, Sellers shall provide Buyer access and the right
to copy from and after the Closing Date any books and records relating to the Assets within their
possession but not included in the Assets. To the extent reasonably requested by Sellers, Buyer
shall provide Sellers access and the right to copy from and after the Closing Date any books and
records relating to the Assets that are included in the Assets. Buyer and Sellers shall each
retain any such books and records, for a period of three years (or such longer period as may be
required by law or good business practice) following the Closing Date.



     6.9 Employee and Employee Benefits.



     (a) Prior to the Closing Date, Buyer shall make offers of employment commencing on the Closing
Date to all Applicable Employees, and such offers shall be contingent only upon (i) the Closing,
(ii) such Employee being an Applicable Employee on the Closing Date, and (iii) such Applicable
Employee’s satisfaction of customary employment conditions applicable to all Buyer employees (the
“Background Check”). Buyer shall cooperate with Sellers from and



40









 







after the date hereof to communicate with Applicable Employees regarding the offers of
employment to be made by Buyer to Applicable Employees hereunder. Not later than thirty (30) days
prior to Closing, Buyer shall provide to Sellers a list of the Applicable Employees who do not
satisfy the Background Check and as to whom Buyer has not made offers of employment pursuant to
this Section 6.9(a) as a result of such Background Check failure. The parties hereto shall
cooperate with each other to give effect to this Section 6.9(a), and neither Seller shall take any
actions that would interfere with the process of the Applicable Employees so offered employment
becoming employed by Buyer. If any Employee, other than a Transferred Employee, becomes entitled
to any payments or benefits under any severance policy, plan, agreement, arrangement or program
that exists or arises under any applicable Legal Requirements or otherwise as a result of the
consummation of this transaction, Sellers shall be liable for such amounts, which liability shall
constitute an Excluded Liability.



     (b) Beginning on the Closing Date, Buyer shall provide each Transferred Employee with (or
shall cause the Transferred Employees to be provided with) compensation and employee benefits that
are substantially comparable with the compensation and employee benefits of Cumulus Media Inc.
(other than retiree welfare benefits or equity incentives), taking into account, to the extent
relevant, the applicable market and the geographic location.



     (c) With respect to any plan that is a “welfare benefit plan,” as defined in Section 3(1) of
ERISA, or any plan that would be a welfare benefit plan if it were subject to ERISA, maintained by
Buyer, Buyer shall (i) provide coverage for Transferred Employees under its medical, dental and
health plans commencing on the first day of the month following the month in which the Closing Date
occurs in accordance with the terms of such plans, (ii) cause the waiver of any pre-existing
conditions, actively at work requirements and waiting periods or other eligibility requirements to
the extent such conditions, requirements or waiting periods were satisfied by a Transferred
Employee under a corresponding Employee Plan, and (iii) cause such plans to take into account any
expenses incurred by the Transferred Employees and their dependents or beneficiaries under similar
plans of Sellers and their Affiliates during the portion of the calendar year ending with the end
of the month in which the Closing Date occurs for purposes of satisfying applicable deductible,
co-insurance and maximum out-of-pocket expenses.



     (d) For purposes of participation, eligibility and vesting under each employee benefit plan of
Buyer, as defined in Section 3(3) of ERISA (each, a “Buyer Plan”), in which Transferred Employees
are or become eligible to participate, such Transferred Employees shall be given credit for service
with Seller or any of its Affiliates prior to the Closing Date in accordance with the provisions of
such Buyer Plan; provided, however, that nothing in this Section 6.9(c) shall result in any
duplication of benefits or result in Transferred Employees receiving credit in a Buyer Plan for
benefit accrual purposes.



     (e) With respect to any accrued but unused vacation time (including flexible time-off and sick
time) to which any Transferred Employee is entitled pursuant to the vacation policy applicable to
such Transferred Employee immediately prior to the Closing Date, Buyer shall honor such accrued
vacation and allow such Transferred Employee to use such accrued vacation to the extent such
accrued but unused vacation time is accrued as a current liability in the Closing Date Financial
Statements and included in the calculation of Final Net Working Capital.



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     (f) The parties hereto hereby acknowledge and agree that no provision of this Agreement shall
be construed to create any right to continued employment after the Closing Date or to any
compensation or benefits whatsoever on the part of any Employee or other future, present or former
employee of Seller or any of its Affiliates. Nothing in this Section 6.9 or elsewhere in this
Agreement shall be deemed to make any employee of the parties or their respective Affiliates a
third-party beneficiary of this Section 6.9 or any rights relating hereto.



     (g) To the extent that any of the Transferred Employees become covered under a group health
benefit plan maintained by Buyer, Buyer shall have any liability under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”) (contained in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA) and under any similar state Legal Requirement arising after the
Closing with respect to the Transferred Employees. Sellers shall retain all obligations with
respect to continued coverage under COBRA and any similar state Legal Requirements for all
Employees who do not become Transferred Employees and for all other Persons who experienced a
“qualifying event” (as defined in COBRA) in connection with an Employee who does not become a
Transferred Employee. Each of Sellers shall comply with all applicable requirements (including
requirements concerning the furnishing of notices) of COBRA, with regard to the termination of
employment, of all employees working in the Business who are not Transferred Employees as of the
Closing Date.



     6.10 Public Announcements.



     Sellers and Buyer shall consult with each other before issuing any press releases or otherwise
making any public statements with respect to this Agreement or the transactions contemplated herein
and shall not issue any such press release or make any such public statement without the prior
written consent of the other party, which shall not be unreasonably withheld; provided,
however, that a party may, without the prior written consent of the other party, issue such
press release or make such public statement as may be required by applicable Legal Requirement or
any listing agreement with a national securities exchange to which Buyer is a party if it has used
all reasonable efforts to consult with the other party and to obtain such party’s consent but has
been unable to do so in a timely manner.



     6.11 Bulk Sales Law.



     Buyer hereby waives compliance by Sellers, in connection with the transactions contemplated
hereby, with the provisions of any applicable bulk transfer statute that applies to the
transactions contemplated by this Agreement.



     6.12 Title Insurance.



     Contemporaneously with the execution of this Agreement, each Seller shall deliver to Buyer its
existing title insurance policies with respect to the Owned Real Property and Leased Real Property,
if any.



     6.13 Tax Matters.



     (a) Sellers shall pay all sales taxes, transfer taxes and intangible taxes and similar
governmental charges, filing fees, and recording and registration fees applicable to the



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transactions contemplated by this Agreement, including, without limitation, all taxes and
similar charges, if any, payable upon the transfer of title to any Asset, excluding any taxes,
governmental charges, or fees incurred upon the granting or recording of mortgages or deeds of
trust by Buyer to Buyer’s lenders. Buyer and Sellers will cooperate to prepare and file with the
proper public officials, as and to the extent necessary, all appropriate sales tax exemption
certificates or similar instruments as may be necessary to avoid the imposition of sales, transfer,
and similar taxes on the transfer of Purchased Assets pursuant hereto. The provisions of this
Section 6.13(a) shall not apply to filing and grant fees associated with the Assignment
Application. The payment of such fees shall be governed by Section 6.1 hereof.



     (b) To the extent necessary to determine the liability for Taxes for a portion of a taxable
year or period that begins before and ends after the Closing Date, the determination of the Taxes
for the portion of the year or period ending on, and the portion of the year or period beginning
after, the Closing Date shall be determined by assuming that the taxable year or period ended as of
the close of business on the Closing Date, except that property taxes and any other Tax that is a
fixed amount without regard to activities during the taxable period shall be prorated on a daily
basis.



     (c) Sellers and Buyer will (i) each provide the other which such assistance as may reasonably
be requested by any of them in connection with the preparation of any Tax Return, audit or other
examination by any Governmental Authority or judicial or administrative proceedings relating to the
liability for Taxes, (ii) each retain and provide the other with any records or other information
that may be relevant to such Tax Return, audit or examination, proceeding or determination, and
(iii) each provide the other with any final determination of any such audit or examination,
proceeding or determination that affects any amount required to be shown on any Tax Return of the
other for any period. In addition, Sellers will retain until the applicable statutes of
limitations (including any extensions) have expired copies of all Tax Returns, supporting work
schedules, and other records or information that may be relevant to such Tax Returns for all tax
periods or portions thereof ending on or before or which include the Closing Date and will not
destroy or otherwise dispose of any such records without first providing Buyer with a reasonable
opportunity to review and copy the same.



     6.14 Employee Withholding and Reporting Matters.



     With respect to those Transferred Employees who are employed by Buyer within the same calendar
year as the Closing, Buyer shall, in accordance with and to the extent permitted pursuant to
Revenue Procedure 2004-53, 2004-34 I.R.B. 320, assume all responsibility for preparing and filing
Form W-2, Wage and Tax Statement, Form 941, Employer’s Quarterly Federal Tax Return, Form W-4,
Employee’s Withholding Allowance Certificate and Form W-5, Earned Income Credit Advance Payment
Certificate. Sellers and Buyer agree to comply with the procedures described in Section 5 of
Revenue Procedure 2004-53. Notwithstanding any provision of this Agreement to the contrary, all
Taxes required to have been withheld by Sellers from their respective Employees with respect to any
taxable periods, or portions thereof, ending on or before the Closing Date shall be Excluded
Liabilities and shall not be Assumed Liabilities.



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     6.15 No Shop.



     Each of Sellers agrees that from and after the date hereof and until the termination of this
Agreement, Sellers will not sell, transfer, or otherwise dispose of any direct or indirect interest
in the Operating Sellers or any assets of the Operating Sellers to be included in the Assets (or
any rights in any such stock or assets). Further, from and after the date hereof and until the
termination of this Agreement, each of Sellers shall not, and shall cause each other
representative, agent and officer, director or manager not to respond to inquiries or proposals, or
encourage, solicit, participate in, initiate or pursue any discussions, or enter into any
Contracts, or provide any information to any Person with respect to, the sale or purchase of any
direct or indirect interest in the Operating Sellers, or the merger or consolidation of any of the
Operating Subsidiaries, or the sale, lease or other disposition of all or any portion of the
assets, business, rights or Governmental Authorizations of Sellers or the Stations. Each of
Sellers shall promptly notify Buyer if any such inquiries are received.



     6.16 Disclosure Schedules.



     The disclosure of any matter in any Section relating to representations of Sellers or Buyer
shall not be deemed to constitute an admission by Sellers or Buyer or to otherwise imply that any
such matter is material for the purposes of this Agreement, unless the inclusion of such matter in
such Schedule is required to make the representation true.



SECTION 7



CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER




     7.1 Conditions to Obligations of Buyer.



     All obligations of Buyer at the Closing hereunder with respect to the Stations are subject at
Buyer’s option to the fulfillment prior to or at the Closing Date of each of the following
conditions:



     (a) Representations and Warranties. All representations and warranties of Sellers
contained in this Agreement, and any exhibits or schedules hereto, or any certificates or documents
delivered in connection with this Agreement shall be true and correct in all material respects, as
of the date of this Agreement and at and as of the Closing Date as though made at and as of that
time (except for representations and warranties that speak as of a specific date or time which need
only be true and complete as of such date or time); provided, however, that each of Sellers’
representations and warranties set forth in Sections 3.2(a) and 3.9(a), (b) and (c), and each of
Sellers’ representations that contain an express materiality or Material Adverse Effect
qualifications shall be accurate in all respects, as of the date of this Agreement and at and as of
the Closing Date as though made at and as of that time (except for representations and warranties
that speak of a specific date need only be true and complete as of such date or time).



     (b) Covenants and Conditions. Sellers shall have performed and complied in all
material respects with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date.



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     (c) FCC Consent. Each of the FCC Consents shall have been granted without any
conditions materially adverse to Buyer and each shall have become a Final Order, and the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby shall
have been approved by all Governmental Bodies whose approvals are required by Legal Requirements.



     (d) HSR Act. All applicable waiting periods under the HSR Act shall have expired or
terminated.



     (e) Governmental Authorizations. Sellers shall be the holder of all Governmental
Authorizations (other than Commission Authorizations) and there shall not have been any
modification, revocation, or non-renewal of any Governmental Authorizations (other than Commission
Authorizations) that has (or could reasonably be expected to have) a Material Adverse Effect upon
the Business.



     (f) Actions. No action, suit, or proceeding shall have been instituted against any of
Sellers or against Buyer by, in or before any Governmental Body, and be unresolved, and no Order
shall have been issued to restrain, prevent, enjoin, or prohibit, or to obtain substantial damages
by reason of the transactions contemplated by this Agreement.



     (g) Consents. All Consents set forth on Schedule 7.1(g) shall have been
obtained (or available upon consummation of the Closing).



     (h) Merger Transaction. The Merger Agreement shall not have been terminated and all
of the conditions precedent described therein shall have been waived or satisfied, other than the
condition precedent set forth in Section 6.1(e) of the Merger Agreement with respect to the
consummation of the transactions contemplated by this Agreement.



     (i) Material Adverse Changes. Since December 31, 2004, no changes or events shall
have occurred that, individually or in the aggregate, have (or would reasonably be expected to
have) a material adverse change to the condition (financial or otherwise), assets, liabilities,
results of operations or prospects of the Business, taken as a whole, or any material impediment or
delay to Sellers’ ability to effect the Closing or perform its obligations under this Agreement,
other than any (i) change, event, circumstance, occurrence, impairment or delay (A) relating to any
general, national, international or regional economic or financial conditions generally affecting
the commercial radio broadcast industry that does not disproportionately (compared to other radio
operations) affect the Business; (B) relating to the radio industry generally due to competition
from outside the terrestrial commercial radio broadcast industry that does not disproportionately
(compared to other radio operations) affect the Business; (C) resulting from or otherwise
attributable to the public announcement of the Transaction or the identity of the Buyer or the
public announcement of any other transaction by Buyer; (D) due to, resulting from or otherwise
attributable to any violation of the terms of this Agreement by Buyer; or (E) any change, event,
circumstance or occurrence described and referred to in Schedule 7.1(i); or (ii) change in
a Legal Requirement or accounting standards or interpretations thereof that is of general
application.



45









 





     (j) Deliveries. Sellers shall have made or stand willing to make all the deliveries
to Buyer described in Section 8.2.



     7.2 Conditions to Obligations of Sellers.



     All obligations of Sellers at the Closing hereunder are subject at Sellers’ option to the
fulfillment prior to or at the Closing Date of each of the following conditions:



     (a) Representations and Warranties, All representations and warranties of Buyer
contained in this Agreement and any exhibits or schedules hereto, or any certificates or documents
delivered in connection with this Agreement shall be true and correct in all material respects,
taken as a whole, at and as of the Closing Date as though made at and as of that time (except for
representations and warranties that speak as of a specific date or time which need only be true and
complete as of such date or time).



     (b) Covenants and Conditions. Buyer shall have performed and complied in all material
respects with all covenants, agreements and conditions required by this Agreement to be performed
or complied with by it prior to or on the Closing Date.



     (c) FCC Consent. Each of the FCC Consents shall have been granted without any
conditions materially adverse to Sellers and each shall have become effective, and the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby shall
have been approved by all Governmental Bodies whose approvals are required by Legal Requirements.



     (d) HSR Act. All applicable waiting periods under the HSR Act shall have expired or
terminated.



     (e) Merger Transaction. The Merger Agreement shall not have been terminated and all
of the conditions precedent described therein shall have been waived or satisfied, other than the
condition precedent set forth in Section 6.1(e) of the Merger Agreement with respect to the
consummation of the transactions contemplated by this Agreement.



     (f) Deliveries. Buyer shall have made or stand willing to make all the deliveries
described in Section 8.3.



SECTION 8



CLOSING AND CLOSING DELIVERIES




     8.1 Closing.



     (a) Closing Date. The Closing under this Agreement (the “Closing”) will take place at
a time and on the date selected by Buyer and reasonably acceptable to Sellers that is no later than
the thirtieth (30th) calendar day after the conditions set forth in Section 7 (other
than those conditions that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions) are satisfied or waived. The Closing shall be effective
as of 11:59 p.m. on the Closing Date. All proceedings to be taken and all documents to be executed
and delivered by the parties at the Closing shall be deemed to have been taken and executed



46









 







simultaneously and no proceedings shall be deemed taken nor any documents executed or
delivered until all have been taken, executed and delivered. The parties shall use their
respective commercially reasonable best efforts to satisfy all conditions to Closing described in
Article 7 hereof prior to the grant of the FCC Consents.



     (b) Closing Place. The Closing hereunder shall be held at the offices of Sellers’
counsel at Hunton & Williams LLP, 200 Park Avenue, 52nd Floor, New York, New York 10166.



     8.2 Deliveries by Sellers.



     Prior to or on Closing Date, Sellers shall deliver to Buyer the following, in form and
substance reasonably satisfactory to Buyer and its counsel:



     (a) Conveyance Documents. Duly executed deeds in form and quality equivalent to the
deeds by which Sellers obtained title, bills of sale, motor vehicle titles, assignments, and other
transfer documents that are sufficient to vest good and marketable title to the Assets being
transferred at the Closing in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims and obligations except for Permitted Encumbrances;



     (b) Officer’s Certificate. A certificate, dated as of the Closing Date, executed by
an officer of Sellers, certifying to the fulfillment of the conditions set forth in Sections 7.1(a)
and 7.1(b) hereof.



     (c) Secretary’s Certificates. A certificate, dated as of the Closing Date, executed
by the Secretary of each of the Sellers’ directors, partners or members: (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by such Sellers’ directors,
partners or members, authorizing and approving the execution of this Agreement and the consummation
of the transaction contemplated hereby and that such resolutions remain in full force and effect;
and (ii) providing, as attachments thereto, the organizational documents of such Seller;



     (d) Consents. A manually executed copy of any instrument evidencing receipt of any
Consent which has been received by Sellers which relate to the Stations or, the Assets of which are
being transferred at the Closing;



     (e) Good Standing Certificates. To the extent available from the applicable
jurisdictions, certificates as to the formation and/or good standing of each Seller issued by the
appropriate governmental authorities in the states of organization and each jurisdiction in which
such Sellers are qualified to do business, each such certificate (if available) to be dated a date
not more than a reasonable number of days prior to the Closing Date;



     (f) Opinions of Counsel. Opinions of Sellers’ corporate counsel and FCC counsel dated
as of the Closing Date, opining as to matters included in Schedule 8.2(f) in form and
substance reasonably satisfactory to Buyer;



     (g) Escrow Agreement. An executed copy of the Escrow Agreement;



     (h) Assignment and Assumption Agreement. An executed copy of the Assignment and
Assumption Agreement;



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     (i) Assignment of Programs. To the extent that any of the Programs used in the
operation of the Business are owned or licensed by Affiliates of Sellers, appropriate assignments
or sublicenses pursuant to which such Affiliates shall grant Buyer the right to utilize such
Programs.



     (j) FIRPTA. An affidavit of each of the Operating Sellers stating, under penalty of
perjury, such Seller’s taxpayer identification number and that such Sellers is not a foreign
person, in form and substance required by Section 1445(b)(2) of the Code and the Treasury
Regulations thereunder; and



     (k) Other Documents. Such other documents reasonably requested by Buyer or its
counsel for complete implementation of this Agreement and consummation of the transaction
contemplated hereby.



     8.3 Deliveries by Buyer.



     Prior to or on the Closing Date, Buyer shall deliver to Sellers the following, in form and
substance reasonably satisfactory to Sellers and their counsel:



     (a) Closing Payment. The delivery of the Closing Payment as described in Section
2.4(a);



     (b) Escrow Deposit. The delivery of the Escrow Amount to the Escrow Agent described
in Section 2.4(b);



     (c) Officer’s Certificate. A certificate, dated as of the Closing Date, executed on
behalf of an officer of the Buyer, certifying to the fulfillment of the conditions set forth in
Sections 7.2(a) and 7.2(b) hereof;



     (d) Secretary’s Certificate. A certificate, dated as of the Closing Date, executed by
Buyer’s Secretary: (i) certifying that the resolutions, as attached to such certificate, were duly
adopted by Buyer’s members, authorizing and approving the execution of this Agreement and the
consummation of the transaction contemplated hereby and that such resolutions remain in full force
and effect; and (ii) providing, as an attachment thereto, Buyer’s Certificate of Organization and
Operating Agreement;



     (e) Assignment and Assumption Agreement. An executed copy of the Assignment and
Assumption Agreement;



     (f) Good Standing Certificates. To the extent available from the applicable
jurisdictions, certificates as to the formation and/or good standing of Buyer issued by the
appropriate governmental authorities in the State of Delaware and the State of Missouri, each such
certificate (if available) to be dated a date not more than a reasonable number of days prior to
the Closing Date;



     (g) Opinions of Counsel. Opinions of Buyer’s corporate counsel dated as of the
Closing Date, opining as to matters included in Schedule 8.3(g) in form and substance
reasonably satisfactory to Sellers;



48









 





     (h) Escrow Agreement. An executed copy of the Escrow Agreement;



     (i) Other Documents, Such other documents reasonably requested by Sellers or their
counsel for complete implementation of this Agreement and consummation of the transactions
contemplated hereby.



SECTION 9



TERMINATION




     9.1 Termination by Mutual Consent.



     This Agreement may be terminated at any time prior to Closing by the mutual written consent of
the parties.



     9.2 Termination by Either Party.



     This Agreement may be terminated by either Buyer or Sellers upon written notice from Buyer or
Sellers, as applicable, if



     (a) The Closing shall not have occurred on or before November 1, 2006, so long as the party
proposing to terminate has not breached in any material respect any of its representations,
warranties, covenants or other obligations under this Agreement in any manner that has proximately
contributed to the failure of the Closing to so occur, provided, however, that no party may
provide such notice if a delay in any decision by the FCC with respect to the Assignment
Applications has been caused or materially contributed by (i) the failure of such party to timely
furnish, file or make available to the FCC information within its control, (ii) by the willful
furnishing by such party of incorrect, inaccurate or incomplete information to the FCC, or (iii) by
any other action or omission which has caused or materially contributed to any delay in the
issuance of the FCC’s decision with respect to the Assignment Applications.



     (b) A United States federal or state court of competent jurisdiction or United States federal
or state governmental, regulatory or administrative agency or commission shall have issued an Order
permanently restraining, enjoining or otherwise prohibiting the Transaction and such Order shall
have become final and non-appealable; provided, that the party seeking to terminate this Agreement
pursuant to this clause (b) shall have used all reasonable efforts to remove such Order.



     (c) The FCC shall have issued an Order denying the Assignment Applications or designating the
Assignment Applications for an oral evidentiary hearing, and such Order shall have become a Final
Order.



     If the Acquiror (as defined in the Merger Agreement) exercises its option to extend the
termination date of the Merger Agreement pursuant to Section 8.2 of the Merger Agreement, the
parties agree that the date referenced in Section 9.2(a) hereof shall be extended to the same date
as such extended termination date in the Merger Agreement.



49









 





     9.3 Termination by Sellers.



     This Agreement may be terminated by Seller at any time before the Closing Date upon written
notice to Buyer if (y) fifty (50) days after Sellers provides written notice to Buyer that the
circumstances described in Section 7.1(i) hereof have occurred by reason of a change or event
occurring after the date of this Agreement (“Noticed MAC”), which notice (“MAC Notice”) identifies
and describes such change or event, and the actual or reasonably expected effects (including
financial or economic effects) thereof, in reasonable detail, unless Buyer agrees in writing within
such fifty (50) day period to waive such condition in respect of the identified circumstances to
the extent described in the MAC Notice for the purposes (only) of the condition to Closing provided
for in Section 7.1(i), which shall not constitute a waiver by Buyer of any other rights or remedies
that Buyer may have hereunder by reason of the occurrence of such circumstances or the related
failure of such condition, nor shall it constitute a waiver by Buyer of the conditions to Closing
provided for in Section 7.1(i) in respect of the Noticed MAC if the actual or reasonably expected
effects (including financial or economic effects) thereof are more adverse than as indicated in MAC
Notice in respect thereof or (z) Buyer is then in material breach of any representation, warranty,
covenant or obligation of Buyer in this Agreement such that an executive officer of Buyer would be
unable to deliver the closing certificate to Sellers regarding, respectively, Buyer’s
representations and warranties and Buyer’s performance of its obligations as required pursuant to
Section 8.3(c), and (i) such breach, condition or circumstance is not curable or, (ii) if curable,
such breach, condition or circumstance is not cured within 30 days after written notice thereof is
given by Sellers to Buyer.



     9.4 Termination by Buyer.



     This Agreement may be terminated by Buyer at any time before the Closing Date upon written
notice to Sellers, if Sellers are then in material breach of any representation, warranty, covenant
or obligation in this Agreement such that Sellers would be unable to deliver the closing
certificate to Buyer regarding the representations and warranties of Sellers and the performance of
the obligations of Sellers as required pursuant to Section 8.2(b), and (i) such breach is not
curable or, (ii) if curable, such breach is not cured within 30 days after written notice thereof
is given by Buyer to Sellers.



     9.5 Automatic Termination.



     If the Merger Agreement terminates prior to Closing hereunder, this Agreement shall terminate
automatically.



     9.6 Rights on Termination.



     Each party’s respective right of termination under this Section 9 is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of such right of termination
will not be an election of remedies. If this Agreement is terminated pursuant to this Section 9,
no party to this Agreement shall have any liability to any other party to this Agreement, and this
Agreement shall be deemed null and void and of no further force and effect; provided, however,
that, if this Agreement is terminated because of an intentional or willful breach of this Agreement
by the nonterminating party or because one or more of the conditions



50









 







to the terminating party’s obligations under this Agreement is not satisfied and the other
party has proximately contributed to the failure of the Closing based on an intentional or willful
breach of its obligations under this Agreement, the terminating party shall retain all rights and
remedies available to it in respect of such termination.



     9.7 Survival.



     Notwithstanding the termination of this Agreement pursuant to this Section 9, the obligations
of Buyer and Sellers set forth in Sections, 6.4, 9, 10, and 11 shall survive such termination and
the parties hereto shall have any and all rights and remedies to enforce such obligations provided
at law or in equity or otherwise (including without limitations, specific performance).



SECTION 10



SURVIVAL; INDEMNIFICATION; CERTAIN REMEDIES




     10.1 Survival.



     (a) All of the representations and warranties, and all of the covenants and obligations to the
extent such covenants and obligations are to be performed prior to or at Closing, of the parties
set forth in this Agreement or any other certificate or document signed by an officer of Sellers
delivered or required to be delivered pursuant to this Agreement shall survive the Closing until
two (2) years after the Closing Date, except for the representations and warranties
contained in (i) Section 3.2(a) (Enforceability; Authority) and Sections 3.9 (a) and (b) (Title)
which shall survive the Closing indefinitely; and (ii) Section 3.14 (Taxes) which shall survive
until thirty (30) days after the expiration of all relevant statutes of limitation (including
extensions thereof). All covenants, agreements and undertakings of the parties contained in this
Agreement to be performed after Closing shall survive until fully performed or fulfilled;
except that the indemnification obligation of the Sellers in Section 10.2(a)(iv) shall
expire four (4) years after the Closing Date. The foregoing survival periods shall in all cases be
subject to the provisions of Section 10.1(b) below.



     (b) No action for indemnification, reimbursement or any other remedy pursuant to this Section
10 may be brought with respect to breaches of representations, warranties, covenants or agreements
beyond the date upon which the representation, warranty, covenant or agreement survives as provided
above; provided, however, that, if, prior to such applicable date, an Indemnified
Party shall have notified Sellers or Buyer, as the case may be, in writing of a specific matter or
claim for indemnification under this Section 10 (whether or not a suit or other action shall have
been commenced in connection with such matter or claim) and such notice identifies the nature of
such action with reasonable specificity, such Indemnified Party shall be entitled to be indemnified
with respect to such matter or claim in accordance with this Section 10 notwithstanding the passage
of such applicable date.



     10.2 Indemnification by Sellers.



     (a) General. Effective from and after the Closing Date and subject to the limitations
set forth in this Agreement including, but not limited to, Sections 10.1 and 10.2(b), Sellers, in
the manner further specified below, shall jointly and severally indemnify and hold harmless Buyer



51









 







and its respective successors, assigns, stockholders, directors, officers, employees, agents
and Related Persons (collectively, the “Buyer Indemnified Parties”) from and against, and shall
reimburse the Buyer Indemnified Parties for, any and all Losses, caused by, directly or indirectly
resulting from or arising in connection with: (i) any breach of any representation or warranty made
by Sellers in this Agreement or any other certificate or document signed by an officer of Sellers
delivered or required to be delivered pursuant to this Agreement; (ii) any breach or violation of,
or failure to perform, any covenant, agreement, undertaking or obligation of Sellers set forth in
this Agreement or any other certificate or document signed by an officer of Sellers delivered or
required to be delivered pursuant to this Agreement; (iii) any of the Excluded Liabilities; and
(iv) the failure of Sellers to comply with the provisions of any bulk sales law applicable to the
transfer of the Assets. Losses of the Buyer Indemnified Parties as to any matter or claim as to
which indemnification hereunder may be due shall be reduced by the amount of any such payment in
respect thereof received by any such party from the Escrow Account pursuant to the terms of the
Escrow Agreement or otherwise to the extent subtracted from the Base Purchase Price when
calculating the Closing Payment.



     (b) Limitations on Indemnification.




     (i) Except as provided in clause (iii) below, Sellers shall have no liability for
indemnification pursuant to this Section 10 in excess of the Escrow Amount.




     (ii) Except for the matters subject to indemnification which are referenced in clause
(iii) below, Sellers shall not be liable for Losses arising in connection with its
indemnification obligations pursuant to Section 10.2(a)(i) and 10.2(a)(ii) (excluding
indemnification in respect to the covenants in Section 2 hereof, which shall not be subject
to the limitations in this Section 10.2(b)(ii)), until the amount of Losses incurred by the
Buyer Indemnified Parties exceeds $100,000 in the aggregate. If the aggregate amount of
such Losses exceed $100,000, the Sellers shall be liable for all such Losses only to the
extent in excess of $100,000.




     (iii) Without regard to any of the limitations provided for in Sections 10.2(b)(i) or
10.2(b)(ii), but subject to the provisions of Section 10.1, Sellers shall be liable for all
indemnification obligations under (A) Section 10.2(a)(i) in respect of the representations
and warranties in Sections 3.2(a), 3.9(a) and (b) and 3.14, and (B) Sections 10.2(a)(iii)
and (iv). Any claim against Sellers made in accordance with the provisions of this
Agreement by any Person shall be satisfied solely from the assets owned or held by the
Sellers in trust or otherwise and amounts held under the Escrow Agreement, and no trustee,
member, stockholder, director, officer or employee of Sellers shall have any personal
liability with respect to any such claim.



     10.3 Indemnification by Buyer.



     Buyer hereby agrees that from and after the Closing, they shall, jointly and severally
indemnify, defend and hold harmless Sellers, their respective Affiliates and their respective
directors, officers, stockholders, partners, members, attorneys, accountants, agents,
representatives and employees and their respective heirs, successors and permitted assigns, each in
their capacity as such (the “Seller Indemnified Parties” and collectively with the Buyer



52









 







Indemnified Parties, the “Indemnified Parties”) from, against and in respect of any Losses
imposed on, sustained, incurred or suffered by, or asserted against, any of the Seller Indemnified
Parties, whether in respect of third-party claims, claims between the parties hereto, or otherwise,
directly or indirectly relating to, arising out of or resulting from (a) any breach of any
representation or warranty made by Buyer in this Agreement or any other certificate or document
signed by an officer of Buyer delivered or required to be delivered pursuant to this Agreement, (b)
any breach of a covenant or obligation of Buyer contained in this Agreement or any other
certificate or document delivered or required to be delivered pursuant to this Agreement, (c) the
ownership of the Assets or the operation of the Business following the Closing other than matters
covered by the indemnification obligations of Sellers pursuant to Section 10.2, (d) the Assumed
Liabilities or (e) (i) any Taxes imposed with respect to the Business or any Asset or any income or
gain derived with respect thereto for any taxable period beginning after the Closing Date, (ii)
with respect to any taxable period that begins before and ends after the Closing Date, any Taxes
imposed with respect to the Business or any Asset or any income or gain derived with respect
thereto for the portion of such taxable period that begins after the Closing Date and (iii) with
respect to any property tax or other Tax with respect to the Business or any Asset that is a fixed
amount without regard to activities during the taxable period and which is due after the Closing
Date, the portion of such Tax allocable to the portion of the taxable period that begins after the
Closing Date (determined in accordance with Section 6.13(b)).



     10.4 Third Party Claim Indemnification Procedure.



     (a) Upon any Indemnified Party’s receipt of notice of assertion of any claim or demand by a
third party against an Indemnified Party for which an indemnifying party (an “Indemnifying Party”)
may have liability to any Indemnified Party hereunder (a “Third-Party Claim”), such Indemnified
Party shall promptly, but in no event more than twenty (20) days following such Indemnified Party’s
receipt of a Third-Party Claim, notify the Indemnifying Party in writing of such Third-Party Claim,
the amount or the estimated amount of damages sought thereunder to the extent then reasonably
ascertainable (which estimate shall not be conclusive of the final amount of such Third-Party
Claim), any other remedy sought thereunder, any relevant time constraints relating thereto and, to
the extent practicable, any other material details pertaining thereto (a “Claim Notice”); provided,
however, that the failure timely to give a Claim Notice shall not affect the rights of an
Indemnified Party hereunder, except to the extent that such failure materially prejudices the
Indemnifying Party’s defense of, or other rights available to the Indemnifying Party with respect
to, such Third-Party Claim. The Indemnifying Party shall have twenty (20) days (or such lesser
number of days set forth in the Claim Notice as may be required by a Proceeding in the event of a
litigated matter) after receipt of the Claim Notice (the “Notice Period”) to notify the Indemnified
Party that it desires to defend the Indemnified Party against such Third-Party Claim; provided,
however, that the Indemnifying Party shall not be entitled to assume or maintain control of the
defense of any Third-Party Claim and shall pay the reasonable fees and expenses of counsel retained
by the Indemnified Party if (i) the Third-Party Claim relates to or arises in connection with any
criminal proceeding, action, indictment, allegation or investigation, (ii) the Indemnifying Party
has failed to defend or is failing to defend in good faith the Third-Party Claim, or (iii) the
Indemnifying Party and the Indemnified Party are both named parties to the Proceedings and the
Indemnified Party shall have reasonably concluded that representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests between them;
provided, further, that prior to assuming



53









 







control of such defense, the Indemnifying Party must acknowledge that it would have an
indemnity obligation for any Losses resulting from such Third-Party Claim.



     (b) In the event that the Indemnifying Party notifies the Indemnified Party within the Notice
Period that it desires to defend the Indemnified Party against a Third-Party Claim and subject to
Section 10.4(a), the Indemnifying Party shall have the right to defend the Indemnified Party by
appropriate proceedings and shall have the sole power to direct and control such defense at its
expense. Once the Indemnifying Party has duly assumed the defense of a Third-Party Claim, the
Indemnified Party shall have the right, but not the obligation, to participate in any such defense
and to employ separate counsel of its choosing. In the event the Indemnified Party elects to
participate in any such defense, the Indemnifying Party shall not be liable to the Indemnified
Party for any fees of counsel or other expenses incurred by the Indemnified Party in connection
with the defense of such Third-Party Claim. The Indemnifying Party shall not, without the prior
written consent of the Indemnified Party, settle, compromise or offer to settle or compromise any
Third-Party Claim unless (i) the Indemnifying Party shall have agreed to indemnify and hold the
Indemnified Party harmless from and against any and all Losses caused by or arising out of any such
settlement or compromise, (ii) such settlement or compromise shall include as an unconditional term
thereof the giving by the claimant of a release of the Indemnified Party from all liability with
respect to such Third-Party Claim, and (iii) such settlement or compromise involves no relief
affecting the Indemnified Party including any adverse tax impact.



     (c) If the Indemnifying Party (i) is not entitled to defend a Third-Party Claim, (ii) elects
not to defend the Indemnified Party against a Third-Party Claim, whether by not giving the
Indemnified Party timely notice of its desire to so defend or otherwise or (iii) after assuming the
defense of a Third-Party Claim, fails to take reasonable steps necessary to defend diligently such
Third-Party Claim within 10 days after receiving written notice from the Indemnified Party to the
effect that the Indemnifying Party has so failed, the Indemnified Party shall have the right but
not the obligation to assume its own defense; provided, however, that the Indemnified Party’s right
to indemnification for a Third-Party Claim shall not be adversely affected by assuming the defense
of such Third-Party Claim. The Indemnified Party shall not settle a Third-Party Claim for which
the Indemnifying Party may have liability hereunder without the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld.



     (d) With respect to any Third-Party Claim subject to indemnification under Section 10: (i)
both the Indemnified Party and the Indemnifying Party, as the case may be, shall keep the other
Person fully informed of the status of such Third-Party Claim and any related Proceedings at all
stages thereof where such other Person is not represented by its own counsel, (ii) the parties
agree (each at its own expense) to render to each other such assistance as they may reasonably
require of each other and to cooperate in good faith with each other in order to ensure the proper
and adequate defense of any Third-Party Claim and (iii) if Sellers are the Indemnifying Party,
Buyer shall, take all actions and do all things necessary or desirable to permit or otherwise
enable the Sellers to assume and maintain control of the defense of any Third-Party Claim,
including by executing, signing and delivering all instruments, agreements, contracts or other
documents necessary or desirable in connection with the foregoing (including, where applicable,
powers of attorney or IRS Form 8821 (Tax Information Authorization) or a successor form).



54









 





     10.5 Consequential Damages.



     Notwithstanding anything to the contrary contained in this Agreement, no Person shall be
liable under this Agreement for any consequential, punitive, special, incidental or indirect
damages, including lost profits, except to the extent awarded by a court of competent jurisdiction
in connection with a Third-Party Claim.



     10.6 Payments.



     (a) The amount of any indemnification payable under any of the provisions of this Section 10
shall be (i) net of any income Tax benefit (as determined by the Indemnified Party in reasonably
good faith and in accordance with established Tax principles) actually realized by the Indemnified
Party in any taxable period that includes the indemnification payment, or in any taxable period
immediately succeeding the taxable period that includes the indemnification payment, by reason of
the accrual or the payment of the liability giving rise to the indemnification (including, for the
avoidance of doubt, any Tax benefit arising in a taxable period beginning after the Closing Date
attributable to any adjustment to any Tax related to a taxable period (or portion thereof) ending
on or before the Closing Date), and (ii) increased by the amount of any Tax detriment to the
Indemnified Party arising out of the accrual or receipt of the indemnification payment (including
any amount payable pursuant to this clause (ii)). For purposes of the first sentence of this
Section 10.6(a), the amount of any state income Tax benefit or cost shall take into account the
federal income Tax effect of such benefit or cost. Also for purposes of this Section 10.6(a), a
Tax benefit shall be treated as “actually realized” by any Person at the time at which the amount
of Taxes payable by such Person is reduced (by comparing the Taxes payable with and without the Tax
benefit) below the amount of Taxes that such Person would be required to pay (or the refund to
which such Person is entitled is increased above the refund to which such Person otherwise would
have been entitled) but for such incremental Tax benefit. In the event such Tax benefit is
subsequently disallowed, the Indemnifying Party shall reimburse the Indemnified Party for the
amount of such Tax benefit so disallowed (including interest).



     (b) The Indemnifying Party shall pay all amounts payable pursuant to this Section 10 promptly
following receipt from the Indemnified Party of proof reasonably satisfactory to the Indemnifying
Party of the Indemnified Party’s right to payment, in an amount equal to the Loss that is the
subject of indemnification hereunder, unless the Indemnifying Party in good faith disputes the
Loss, in which event it shall so notify the Indemnified Party. In any event, the Indemnifying
Party shall pay to the Indemnified Party (i) in the case of a payment by Seller in respect of
Sellers’ indemnification obligation pursuant to Section 10.2(a), by wire transfer of immediately
available funds from the Escrow Account pursuant to the Escrow Agreement to an account designated
by Buyer, and otherwise at the election of Buyer either by wire transfer directly from Sellers or
from the Escrow Account as aforesaid, and (ii) in the case of a payment by Buyer, by wire transfer
of immediately available funds to an account designated by Sellers, in each case in an amount equal
to the amount of any loss for which it is liable hereunder no later than three (3) days following
any final determination of such loss and the Indemnifying Party’s liability therefor. A “final
determination” shall exist when (A) the parties to the dispute have reached an agreement in
writing, (B) a court of competent jurisdiction shall have entered a final



55









 







and nonappealable order, or (C) an arbitration or like panel shall have rendered a final
nonappealable determination with respect to disputes the parties have agreed to submit thereto.



     10.7 Characterization of Indemnification Payments.



     All payments made to a Claimant in respect of any claim pursuant to this Section 10 shall be
treated as adjustments to the Purchase Price for all income Tax purposes. The parties agree to
treat, and to cause their respective Affiliates to treat, any such payments in the foregoing
manner, for all income Tax purposes (unless otherwise required by applicable income Tax Legal
Requirement).



     10.8 Remedies.



     From and after the Closing, the rights and remedies of Sellers and Buyer under this Section 10
shall be exclusive and in lieu of any and all other rights and remedies that Seller and Buyer may
have under this Agreement or otherwise against each other with respect to the transaction for
monetary relief with respect to (a) any breach of any representation or warranty or any failure to
perform any covenant or obligation set forth in this Agreement and (b) the Excluded Liabilities,
and Buyer and Sellers each expressly waive any and all other rights or causes of action it or its
Affiliates may have against the other party or its Affiliates for monetary relief now or in the
future under any Legal Requirement with respect to the transactions contemplated by this Agreement.



SECTION 11



MISCELLANEOUS




     11.1 Fees and Expenses.



     (a) Buyer and Sellers shall each pay one-half of any fees charged by the FCC in connection
with obtaining the FCC Consents.



     (b) Except as otherwise provided in this Agreement, each party shall pay its own expenses
incurred in connection with the authorization, preparation, execution and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents and representatives, and
each party shall be responsible for all fees or commissions payable to any finder, broker, advisor,
or similar Person retained by or on behalf of such party.



     11.2 Notices.



     All notices, demands and requests required or permitted to be given under the provisions of
this Agreement shall be (a) in writing, (b) sent by telecopy (with receipt personally confirmed by
telephone), delivered by personal delivery, or sent by commercial delivery service or certified
mail, return receipt requested, (c) deemed to have been given on the date telecopied with receipt
confirmed, the date of personal delivery, or the date set forth in the records of the delivery
service or on the return receipt, and (d) addressed as follows:



56









 





	 	 	 
	To Buyer:

	 	With copies to:
	CMP KC Corp.

	 	Jones Day
	3535 Piedmont Road, Building 14, 14th Floor

	 	1420 Peachtree Street NE, Suite 800
	Atlanta, Georgia 30305

	 	Atlanta, Georgia 30309
	Attention: Lewis W. Dickey, Jr.

	 	Attention: John E. Zamer, Esq.
	Telephone: (404) 260-6600

	 	Telephone: (404) 581-8266
	Telecopy: (404) 243-0742

	 	Telecopy: (404) 581-8330
	 
	 	 
	To Sellers:

	 	With copies to:
	 
	 	 
	Susquehanna Media Co.

	 	Hunton & Williams LLP
	140 East Market Street

	 	One Bank of America Plaza, Suite 1400
	York, Pennsylvania 17401

	 	421 Fayetteville Street Mall
	Attention: Craig W. Bremer, Esq.

	 	Raleigh, North Carolina 27601
	Telephone: (717) 852-2305

	 	Attention: Timothy S. Goettel, Esq.
	Telecopy: (717) 771-1440

	 	Telephone: (919) 899-3094
	 

	 	Telecopy: (919) 899-3222





or to any other or additional persons and addresses as the parties may from time to time designate
in a writing delivered in accordance with this Section 11.2.




     11.3 Benefit and Binding Effect.



     (a) No party may assign any of its rights or delegate any of its obligations under this
Agreement without the prior written consent of the other party; provided, that Buyer shall
have the right to assign all or any portion of its rights under this Agreement to (i) any Affiliate
or Related Person to Buyer, or (ii) any lender or any agent for such lender(s) for collateral
purposes only; provided, that no such assignment shall relieve Buyer of its obligations
hereunder. Notwithstanding the foregoing, Sellers shall have the right to assign all or a portion
of their rights and delegate any of their obligations under this Agreement to any entity wholly
controlled or owned by the Existing Stockholders; provided, that no such delegation shall
relieve Sellers of their obligations hereunder. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted assigns. No
Person, other than the parties hereto, is or shall be entitled to bring any action to enforce any
provision of this Agreement against any of the parties hereto, and the covenants and agreements set
forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the
parties hereto or their respective successors and assigns as permitted hereunder. Other than as
expressly set forth in this Section 11.3(a), no party may assign or transfer all or any portion of
its rights under this Agreement without the prior written consent of the parties hereto.



     11.4 Further Assurances.



     The parties shall take any actions and execute any other documents that may be necessary or
desirable to the implementation and consummation of this Agreement.



57









 





     11.5 Governing Law; Jurisdiction; Service of Process.



     (a) THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).



     (b) Any proceeding arising out of or relating to this Agreement may be brought in the courts
of the State of New York, or, if it has or can acquire jurisdiction, in the United States District
Court for the Southern District of New York, and each of the parties irrevocably submits to the
exclusive jurisdiction of each such court in any such proceeding, waives any objection it may now
or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the
proceeding shall be heard and determined only in any such court and agrees not to bring any
proceeding arising out of or relating to this Agreement in any other court. The parties agree that
either or both of them may file a copy of this paragraph with any court as written evidence of the
knowing, voluntary and bargained agreement between the parties irrevocably to waive any objections
to venue or to convenience of forum. Process in any proceeding referred to in the first sentence
of this section may be served on any party anywhere in the world.



     11.6 Waiver of Jury Trial.



     EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.



     11.7 Entire Agreement.



     This Agreement, the Schedules hereto, and all documents, certificates and other documents to
be delivered by the parties pursuant hereto, collectively, represent the entire understanding and
agreement between Buyer and Sellers with respect to the subject matter of this Agreement. This
Agreement supersedes all prior negotiations between the parties and cannot be amended,
supplemented, or changed except by an agreement in writing duly executed by each of the parties
hereto.



     11.8 Waiver of Compliance; Consents.



     Except as otherwise provided in this Agreement, any failure of any of the parties to comply
with any obligation, representation, warranty, covenant, agreement, or condition herein may be
waived by the party entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict compliance with such
obligation, representation, warranty, covenant, agreement, or condition shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance as set forth in
this Section 11.7.



58









 





     11.9 Severability.



     If any provision of this Agreement is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.



     11.10 Drafting.



     No party shall be deemed to have drafted this Agreement but rather this Agreement is a
collaborative effort of the undersigned parties and their attorneys.



     11.11 Headings.



     The headings of the sections and subsections contained in this Agreement are inserted for
convenience only and do not form a part or affect the meaning, construction or scope thereof.



     11.12 Counterparts.



     This Agreement may be signed in two or more counterparts with the same effect as if the
signature on each counterpart were upon the same instrument.



     11.13 Use of Terms.



     Whenever required by the context, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa. The use of the words “include” or “including” in
this Agreement shall be by way of example rather than by limitation. Reference to any agreement,
document or instrument means such agreement, document or instrument as amended or otherwise
modified from time to time in accordance with the terms thereof. Unless otherwise indicated,
reference in this Agreement to a “Section” or “Article” means a Section or Article, as applicable,
of this Agreement. When used in this Agreement, words such as “herein”, “hereinafter”, “hereof”,
“hereto”, and “hereunder” shall refer to this Agreement as a whole, unless the context clearly
requires otherwise. The use of the words “or,” “either” and “any” shall not be exclusive. The
parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.



     11.14 Schedules.



     The Schedules referred to in this Agreement are the Schedules that have been delivered on or
before the date hereof to Buyer and Sellers, attached to officer’s certificates from the party
responsible for delivering such Schedules under this Agreement.



[Signatures Begin on Following Page]




59









 





     IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized officers of Buyer
and Sellers as of the date first written above.



	 	 	 	 	 	 	 	 	 	 	 
	Buyer:	 	 	 	Sellers:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CMP KC Corp.	 	 	 	1051FM, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Susquehanna Kansas City Partnership, its Sole Member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Susquehanna Radio Corp, its General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Lewis W. Dickey, Jr.	 	 	 	By:
	 	/s/ John L. Finlayson	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Name:

	 	Lewis W. Dickey, Jr.	 	 	 	Name:
	 	John L. Finlayson	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Title:

	 	Chairman, President and	 	 	 	Title:
	 	Vice President	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 

	 	Cheif Executive Officer	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SUSQUEHANNA KANSAS CITY PARTNERSHIP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Susquehanna Radio Corp, its General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ John L/ Finlayson	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	John L. Finlayson	 	 
	 

	 	 	 	 	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SUSQUEHANNA RADIO CORP.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ John L. Finlayson	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	John L. Finlayson	 	 
	 

	 	 	 	 	 	Title:
	 	Vice President	 	 






Signature Page to Asset Purchase Agreement




S-1




 









 





EXHIBIT 2.6




Form of Assignment and Assumption Agreement




See attached




A-1




 









 





EXHIBIT 2.9




Form of Escrow Agreement




     See attached



B-1