10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                        to

Commission File Number:  001-14461

Entercom Communications Corp.

(Exact name of registrant as specified in its charter)

Pennsylvania	23-1701044
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

401 City Avenue, Suite 809
Bala Cynwyd, Pennsylvania 19004

(Address of principal executive offices and zip code)

(610) 660-5610

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                                                       Yes  x   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer  x                                   Accelerated filer  o                                                  Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes  o   No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class A common stock,  $.01 par value – 32,337,412 Shares Outstanding as of October 25, 2006

Class B common stock,  $.01 par value – 8,271,805 Shares Outstanding as of October 25, 2006

ENTERCOM COMMUNICATIONS CORP.

INDEX

Part I       Financial Information
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53
Part II      Other Information
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Submission of Matters to a Vote of Security Holders	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
Signatures		57
Exhibit Index		58

Private Securities Litigation Reform Act Safe Harbor Statement

This report contains, in addition to historical information, statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute forward- looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements are presented for illustrative purposes only and reflect our current expectations concerning future results and events.  All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, without limitation, any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

You can identify forward-looking statements by our use of words such as “anticipates,” “believes,” “continues,” “expects,” “intends,” “likely,” “may,” “opportunity,” “plans,” “potential,” “project,” “will,” and similar expressions which identify forward-looking statements, whether in the negative or the affirmative.  We cannot guarantee that we actually will achieve these plans, intentions or expectations.  These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond our control, which could cause actual results to differ materially from those forecasted or anticipated in such forward-looking statements.  You should not place undue reliance on these forward-looking statements, which reflect our view only as of the date of this report.  We undertake no obligation to update these statements or publicly release the result of any revision(s) to these statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Key risks to our company are described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2006 and as may be supplemented by the risks described herein under Part II, Item 1A, of our quarterly reports on Form 10-Q.

ii

PART I

FINANCIAL INFORMATION

ITEM 1.  Financial Statements

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2006 AND DECEMBER 31, 2005

(amounts in thousands)

(unaudited)

ASSETS

	SEPTEMBER 30,			DECEMBER 31,
	2006			2005
CURRENT ASSETS:
Cash and cash equivalents	$	14,229		$	16,071
Accounts receivable, net of allowance for doubtful accounts	86,550			76,927
Prepaid expenses and deposits	6,256			6,521
Prepaid and refundable income taxes	6,245			6,362
Deferred tax assets	3,281			3,002
Total current assets	116,561			108,883
INVESTMENTS	3,972			6,251
PROPERTY AND EQUIPMENT:
Land, land easements and land improvements	14,498			14,510
Buildings	20,844			14,462
Equipment	109,130			107,626
Furniture and fixtures	14,806			14,668
Leasehold improvements	15,303			15,098
	174,581			166,364
Accumulated depreciation	(89,799		)	(81,604		)
	84,782			84,760
Capital improvements in progress	2,891			6,052
Net property and equipment	87,673			90,812
RADIO BROADCASTING LICENSES - Net	1,321,598			1,321,598
GOODWILL - Net	157,227			157,227
DEFERRED CHARGES AND OTHER ASSETS - Net	18,251			12,987
TOTAL	$	1,705,282		$	1,697,758

See notes to condensed consolidated financial statements.

1

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2006 AND DECEMBER 31, 2005

(amounts in thousands)

(unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITY

	SEPTEMBER 30,			DECEMBER 31,
	2006			2005
CURRENT LIABILITIES:
Accounts payable	$	3,346		$	1,326
Accrued expenses	11,654			19,240
Accrued liabilities:
Salaries	6,732			7,076
Interest	1,795			4,438
Advertiser obligations and commissions	1,525			1,670
Other	3,776			1,188
Current portion of long-term debt	20			19
Total current liabilities	28,848			34,957
LONG-TERM LIABILITIES:
Senior debt	511,225			427,240
7.625% senior subordinated notes	150,000			150,000
Deferred tax liabilities	219,575			192,783
Other long-term liabilities	7,657			7,063
Total long-term liabilities	888,457			777,086
Total liabilities	917,305			812,043
SHAREHOLDERS’ EQUITY:
Preferred stock	—			—
Class A, B and C common stock	406			428
Additional paid-in capital	644,960			738,384
Retained earnings	143,014			148,141
Unearned compensation for unvested shares of restricted stock	—			(2,242		)
Accumulated other comprehensive income (deficit)	(403		)	1,004
Total shareholders’ equity	787,977			885,715
TOTAL	$	1,705,282		$	1,697,758

See notes to condensed consolidated financial statements.

2

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(amounts in thousands, except share and per share data)

(unaudited)

	NINE MONTHS ENDED
	SEPTEMBER 30,
	2006			2005
NET REVENUES	$	321,937		$	328,797
OPERATING (INCOME) EXPENSE:
Station operating expenses, including non-cash compensation expense of $678 in 2006	190,516			187,248
Expenses related to a natural disaster	—			1,714
Depreciation and amortization	11,926			11,884
Corporate general and administrative expenses, including non-cash compensation expense of $2,916 in 2006 and $661 in 2005	18,632			14,209
Time brokerage agreement income	—			(24		)
Net (gain) loss on sale or disposal of assets	1,144			(5,436		)
Total operating expense	222,218			209,595
OPERATING INCOME	99,719			119,202
OTHER (INCOME) EXPENSE:
Interest expense, including amortization of deferred financing costs of $986 in each of 2006 and 2005	32,455			21,620
Interest income	(449		)	(237		)
Dividend income from investments	(74		)	—
Net gain on derivative instruments	(371		)	(1,071		)
Net gain on investments	—			(2,612		)
TOTAL OTHER EXPENSE	31,561			17,700
INCOME BEFORE INCOME TAXES	68,158			101,502
INCOME TAXES	27,112			38,912
NET INCOME	$	41,046		$	62,590
NET INCOME PER SHARE - BASIC	$	1.02		$	1.35
NET INCOME PER SHARE - DILUTED	$	1.02		$	1.34
DIVIDENDS PER SHARE	$	1.14		$	—
WEIGHTED AVERAGE SHARES:
Basic	40,145,454			46,430,274
Diluted	40,315,763			46,616,870

See notes to condensed consolidated financial statements.

3

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(amounts in thousands, except share and per share data)

(unaudited)

	THREE MONTHS ENDED
	SEPTEMBER 30,
	2006			2005
NET REVENUES	$	114,343		$	115,001
OPERATING (INCOME) EXPENSE:
Station operating expenses, including non-cash compensation expense of $403 in 2006	64,709			63,247
Expenses related to a natural disaster	—			1,714
Depreciation and amortization	4,077			3,901
Corporate general and administrative expenses, including non-cash compensation expense of $1,417 in 2006 and $215 in 2005	6,142			4,611
Net loss on sale or disposal of assets	999			56
Total operating expense	75,927			73,529
OPERATING INCOME	38,416			41,472
OTHER (INCOME) EXPENSE:
Interest expense, including amortization of deferred financing costs of $329 in each of 2006 and 2005	11,705			7,618
Interest income	(163		)	(103		)
Dividend income from investments	(25		)	—
Net gain (loss) on derivative instruments	138			(527		)
Net gain on investments	—			(1,543		)
TOTAL OTHER EXPENSE	11,655			5,445
INCOME BEFORE INCOME TAXES	26,761			36,027
INCOME TAXES	10,601			13,949
NET INCOME	$	16,160		$	22,078
NET INCOME PER SHARE - BASIC AND DILUTED	$	0.41		$	0.48
DIVIDENDS PER SHARE	$	0.38		$	—
WEIGHTED AVERAGE SHARES:
Basic	39,528,392			45,825,058
Diluted	39,842,440			46,001,462

See notes to condensed consolidated financial statements.

4

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(amounts in thousands)

(unaudited)

	NINE MONTHS ENDED
	SEPTEMBER 30,
	2006			2005
NET INCOME	$	41,046		$	62,590
OTHER COMPREHENSIVE LOSS, NET OF TAX BENEFIT:
Unrealized loss on investments, net of a tax benefit of $892 in 2006 and $1,226 in 2005	(1,406		)	(1,942		)
COMPREHENSIVE INCOME	$	39,640		$	60,648

See notes to condensed consolidated financial statements.

5

ENTERCOM COMMUNICATIONS CORP.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(amounts in thousands)

(unaudited)

	THREE MONTHS ENDED
	SEPTEMBER 30,
	2006		2005
NET INCOME	$	16,160	$	22,078
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX PROVISION OR BENEFIT:
Unrealized gain (loss) on investments, net of a tax provision of $5 in 2006 and a tax benefit of $546 in 2005	8		(864		)
COMPREHENSIVE INCOME	$	16,168	$	21,214

See notes to condensed consolidated financial statements.

6

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2006 AND YEAR ENDED DECEMBER 31, 2005

(amounts in thousands, except share data)

(unaudited)

																		Other Compre-
	Common Stock								Additional						Unearned			hensive
	Class A					Class B			Paid-in			Retained			Compen-			Income
	Shares		Amount			Shares	Amount		Capital			Earnings			sation			(Loss)			Total
Balance, December 31, 2004	40,364,085		$	404		8,271,805	$	82	$	925,883		$	69,780		$	(2,853	)	$	2,777		$	996,073
Net income	—		—			—	—		—			78,361			—			—			78,361
Compensation expense valuation adjustment for restricted stock issued in 2004	—		—			—	—		(204		)	—			204			—			—
Compensation expense related to granting of restricted stock	15,015		—			—	—		466			—			407			—			873
Tax benefit adjustment related to the issuance of restricted stock	—		—			—	—		251			—			—			—			251
Issuance of Class A common stock related to an incentive plan	18,540		—			—	—		509			—			—			—			509
Exercise of stock options	5,874		—			—	—		175			—			—			—			175
Tax benefit adjustment related to option exercises	—		—			—	—		(391		)	—			—			—			(391		)
Class A common stock repurchase	(5,793,400	)	(58		)	—	—		(188,305		)	—			—			—			(188,363		)
Net unrealized loss on investments	—		—			—	—		—			—			—			(1,773		)	(1,773		)
Balance, December 31, 2005	34,610,114		$	346		8,271,805	$	82	$	738,384		$	148,141		$	(2,242	)	$	1,004		$	885,715
Net income	—		—			—	—		—			41,046			—			—			41,046
Reclassification of unearned compensation	—		—			—	—		(2,242		)	—			2,242			—			—
Compensation expense related to granting of stock options	—		—			—	—		93			—			—			—			93
Compensation expense related to granting of restricted stock	970,891		10			—	—		3,171			—			—			—			3,181
Issuance of Class A common stock related to an incentive plan	18,273		—			—	—		480			—			—			—			480
Exercise of stock options	21,334		—			—	—		540			—			—			—			540
Class A common stock repurchase	(3,285,200	)	(32		)	—	—		(95,466		)	—			—			—			(95,498		)
Payments of dividends	—		—			—	—		—			(45,425		)	—			—			(45,425		)
Accrued dividends on restricted stock units	—		—			—	—		—			(748		)	—			—			(748		)
Net unrealized gain on investments	—		—			—	—		—			—			—			(1,407		)	(1,407		)
Balance, September 30, 2006	32,335,412		$	324		8,271,805	$	82	$	644,960		$	143,014		$	—		$	(403	)	$	787,977

See notes to condensed consolidated financial statements.

7

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(amounts in thousands)

(unaudited)

	NINE MONTHS ENDED
	SEPTEMBER 30,
	2006			2005
OPERATING ACTIVITIES:
Net income	$	41,046		$	62,590
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (includes amortization of station operating expenses of $7 in each of 2006 and 2005)	11,933			11,891
Amortization of deferred financing costs	986			986
Deferred taxes	26,719			26,840
Tax benefit on exercise of options	18			11
Provision for bad debts	1,897			2,513
(Gain) loss on sale or dispositions of assets	1,144			(5,436		)
Non-cash stock-based compensation expense	3,594			661
Gain on investments	—			(2,612		)
Gain on derivative instruments	(371		)	(1,071		)
Deferred rent	97			759
Unearned revenue - long-term	(27		)	364
Deferred compensation	609			478
Expenses related to a natural disaster	—			1,714
Changes in assets and liabilities (net of effects of acquisitions and dispositions):
Accounts receivable	(11,514		)	(11,777		)
Prepaid expenses and deposits	265			(2,940		)
Prepaid and refundable income taxes	117			2,202
Accounts payable and accrued liabilities	(8,137		)	(1,967		)
Net cash provided by operating activities	68,376			85,206
INVESTING ACTIVITIES:
Additions to property and equipment	(9,649		)	(7,636		)
Proceeds from sale of property, equipment, intangibles and other assets	277			7,824
Deferred charges and other assets	(268		)	(113		)
Purchases of investments	(48		)	(72		)
Proceeds from investments	29			5,579
Station acquisition deposits and costs	(4,553		)	(6,131		)
Net cash used in investing activities	(14,212		)	(549		)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt	126,000			104,500
Payments of long-term debt	(42,014		)	(94,513		)
Proceeds from issuance of stock under the employee stock plan	409			406
Purchase of the Company’s Class A common stock	(95,498		)	(94,071		)
Proceeds from the exercise of stock options	522			137
Payment of cash dividends	(45,425		)	—
Net cash used in financing activities	(56,006		)	(83,541		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,842		)	1,116
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	16,071			11,844
CASH ADJUSTMENT FOR REVERSAL OF DECONSOLIDATED SUBSIDIARIES	—			2
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	14,229		$	12,962

See notes to condensed consolidated financial statements.

8

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

(amounts in thousands, except share data)

(unaudited)

	NINE MONTHS ENDED
	SEPTEMBER 30,
	2006		2005
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	34,098	$	23,476
Income taxes paid	$	152	$	9,699

SUPPLEMENTAL DISCLOSURES ON NON-CASH INVESTING AND FINANCING ACTIVITIES -

For the nine months ended September 30, 2006 and 2005, the Company increased its additional paid-in-capital by $16.3 and $0.3 million,  respectively, in connection with the issuance of certain awards of Restricted Stock for 970,891 and 13,550 shares, respectively, of Class A common stock.

For the nine months ended September 30, 2005, the Company decreased its additional paid-in-capital by $0.4 million in connection with tax benefits associated with the exercise of stock options.

9

ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

1.BASIS OF PRESENTATION

The condensed consolidated interim unaudited financial statements included herein have been prepared by Entercom Communications Corp. and its subsidiaries (collectively, the “Company”) in accordance with: (i) generally accepted accounting principles for interim financial information; and (ii) the instructions of the Securities and Exchange Commission (the “SEC”) for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, the financial statements reflect all adjustments considered necessary for a fair statement of the results of operations and financial position for the interim periods presented.  All such adjustments are of a normal, recurring nature. The Company’s results are subject to seasonal fluctuations and, therefore, the results shown on an interim basis are not necessarily indicative of results for a full year.

This Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s audited financial statements as of and for the year ended December 31, 2005 and filed with the SEC on February 24, 2006, as part of the Company’s Annual Report on Form 10-K.

Principles Of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Entercom Communications Corp. and its subsidiaries, all of which are wholly-owned. All inter-company transactions and balances have been eliminated in consolidation. The Company also considers the applicability of Financial Accounting Standards Board (“FASB”) Financial Interpretation No. (“FIN”) 46R (as revised), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,” which would include any variable interest entities that are required to be consolidated by the primary beneficiary.

Reportable Segment

The Company operates under one reportable business segment, radio broadcasting, for which segment disclosure is consistent with the management decision-making process that determines the allocation of resources and the measuring of performance.

Use Of Estimates

The Company makes estimates and assumptions that affect the amounts reported in the financial statements and the disclosures made in the accompanying notes. The Company uses estimates to determine the remaining economic lives and carrying values of property and equipment and other definite-lived intangible assets. The Company estimates the fair value of the Company’s radio broadcasting licenses and goodwill for purposes of testing for impairment. The Company also uses assumptions when employing the Black-Scholes valuation model to estimate the fair value of stock options and lattice models for certain restricted stock units (see Note 2). Despite the Company’s intention to establish accurate estimates and assumptions, actual results may differ from the Company’s estimates.

Sports Programming Costs

The Company records the costs associated with sports programming agreements in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 63, “Financial Reporting by Broadcasters.”  Programming costs which are for a specified number of events are amortized on an event-by-event basis, and programming costs which are for a specified season are amortized pro rata over the number of games in each season.

Recent Accounting Pronouncements

FAS No. 157

On September 15, 2006, the FASB issued FAS No. 157, “Fair Value Measurements,” which provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for more information about: (1) the extent to which companies measure assets and liabilities at fair value; (2) the information used to measure fair value; and (3) the effect that fair value measurements have on earnings. SFAS No. 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair

10

value to any new circumstances. SFAS No. 157 is effective for the Company as of January 1, 2008. The Company is currently evaluating SFAS No. 157 and its effect on the Company’s financial position, results of operations or cash flows.

SAB No. 108

On September 13, 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” SAB No. 108 provides guidance on the consideration of effects of the prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. The SEC staff believes registrants must quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB No. 108 is effective for the Company in its fourth quarter of 2006. The Company is currently assessing SAB No. 108 and its effect on the Company’s financial position, results of operations or cash flows.

FIN 48

On July 13, 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes, and Related Implementation Issues,” that provides guidance on the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions that a company has taken or expects to take on a tax return.  Under FIN 48, financial statements should reflect expected future tax consequences of such positions presuming the taxing authorities have full knowledge of the position and all relevant facts.  The interpretation also revises the disclosure requirements and is effective for the Company as of January 1, 2007. The Company is currently evaluating FIN 48 and its effect on the Company’s financial position, results of operations or cash flows.

FSP No. FAS 13-1

On October 6, 2005, the FASB issued FASB Staff Position (“FSP”) No. FAS 13-1, “Accounting for Rental Costs Incurred during a Construction Period.”  Under FSP No. FAS 13-1, rental costs associated with ground or building operating leases, that are incurred during a construction period, shall be recognized as rental expense and included in income from continuing operations. The guidance in this FSP was effective January 1, 2006. The adoption of FSP No. FAS 13-1 did not have a material effect on the Company’s financial position, results of operations or cash flows.

SFAS No. 154

On June 1, 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” which requires entities that voluntarily make a change in accounting principle to apply that change retrospectively to prior periods’ financial statements, unless this would be impracticable. SFAS No. 154 supersedes Accounting Principles Board (“APB”) Opinion No. 20, “Accounting Changes,” which previously required that most voluntary changes in accounting principle be recognized by including in the current period’s net income the cumulative effect of changing to the new accounting principle. SFAS No. 154 makes a distinction between “retrospective application” of an accounting principle and the “restatement” of financial statements to reflect the correction of an error.  In addition, another significant change in practice under SFAS No. 154 is that if an entity changes its method of depreciation, amortization, or depletion for long-lived, non-financial assets, the change must be accounted for as a change in accounting estimate.  Under APB Opinion No. 20, such a change would have been reported as a change in accounting principle. SFAS No. 154 applies to accounting changes and error corrections that were made by the Company beginning January 1, 2006.  The adoption of SFAS No. 154 did not have a material effect on the Company’s financial position, results of operations or cash flows.

2.SHARE-BASED COMPENSATION

Under the Entercom Equity Compensation Plan (the “Plan”), the Company may issue up to 10.0 million shares of Class A common stock, which amount is increased by 1.5 million shares, or a lesser number as may be determined by the Company’s Board of Directors, on January 1 of each subsequent year. As a result of a March 23, 2006 amendment to the Plan in connection with the Option Exchange Program (the “OEP”), as described below, the number of shares that can be issued under the Plan was effectively reduced by 3.6 million. As of September 30, 2006, 2.5 million shares are available for future grant. The Plan allows for key employees, directors and consultants to receive share-based compensation awards. The restricted stock units and options that have been issued vest over periods of up to four years. The options expire ten years from the date of grant. The Company issues new shares upon the exercise of stock options and the issuance of restricted stock (or restricted stock units).

On December 13, 2005, the Company accelerated the vesting of unvested “out-of-the-money” options with grant dates prior to January 1, 2005 and with exercise prices above $29.27 per share, that were held by employees, officers and directors.  The primary purpose of accelerating the vesting was to avoid recognizing pretax stock-based compensation

11

expense of $18.5 million in future periods under SFAS No. 123R for the subject options. The vesting of options to purchase approximately 2.1 million shares of the Company’s Class A common stock with exercise prices ranging from $31.67 per share to $57.15 per share, with a weighted average exercise price of $42.56 per share, was accelerated, including options to purchase 645,831 shares held by the Company’s executive officers and options to purchase 38,750 shares held by the Company’s non-employee directors. All other terms of the awards remain unchanged.

Adoption Of SFAS No. 123R

On January 1, 2006, the Company adopted SFAS No. 123R, as revised, “Share-Based Payment,” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases based on estimated fair values. SFAS No. 123R supersedes the Company’s previous accounting under APB Opinion No. 25. In March 2005, the SEC issued SAB No. 107 relating to SFAS No. 123R. The Company has applied the provisions of SAB No. 107 in its adoption of SFAS No. 123R.

The Company determined its additional paid-in capital pool as of December 31, 2005 without the use of the transition method allowed under FSP No. FAS 123R-3, “Transition Election Related to Accounting for Tax Effects of Share-Based Payment Award,” that was issued on November 10, 2005. The purpose of determining the additional paid-in capital pool was to establish the excess tax benefits related to share-based payment awards that will be available to absorb tax deficiencies recognized subsequent to the adoption of SFAS No. 123R.

SFAS No. 123R requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statement of operations. Prior to the adoption of SFAS No. 123R, the Company accounted for stock-based awards to employees and directors using the intrinsic value method in accordance with APB Opinion No. 25 as allowed under SFAS No. 123. Under the intrinsic value method, stock-based compensation expense was recognized in the Company’s consolidated statement of operations for: (1) stock options granted to employees when the exercise price was less than the fair market value of the underlying stock at the date of grant; (2) for certain holders of stock options where the exercise period was extended; and (3) the granting of restricted stock units.

Stock-based compensation expense recognized in the Company’s condensed consolidated statement of operations for the nine months and three months ended September 30, 2006 included compensation expense for share-based payment awards granted subsequent to December 31, 2005 based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R and compensation expense for share-based payment awards granted prior to, but not yet vested as of, January 1, 2006 based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123. The Company used the straight-line single option method for recognizing compensation expense under SFAS No. 123 and SFAS No. 123R. For the nine months and three months ended September 30, 2006, stock-based compensation expense, which is based on awards ultimately expected to vest, was reduced for estimated forfeitures. SFAS No. 123R requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Under the provisions of SFAS No. 123, for the periods prior to January 1, 2006, the Company accounted for forfeitures as they occurred.

The Company chose to use the modified prospective application implementation strategy. Accordingly, the financial statements for the nine months and three months ended September 30, 2005 were not restated, but disclosure of the pro forma effect on net income for the nine months and three months ended September 30, 2005, prior to adoption of SFAS No. 123R, is included below in Note 2, Share-Based Compensation - Pro Forma Information Under SFAS No. 123.

Under the provisions of SFAS No. 123R, net income was negatively impacted for the nine months and three months ended September 30, 2006 by $2.7 million and $1.3 million, respectively ($0.07 per basic and fully diluted share and $0.03 per basic and fully diluted share, respectively). If SFAS No. 123R had been adopted for the nine months and three months ended September 30, 2005, net income would have been negatively impacted by $7.4 million and $2.4 million, respectively ($0.16 per basic and fully diluted share and $0.05 per basic and fully diluted share, respectively).

Options

Valuation Model

The Company used the Black-Scholes option-pricing model method of valuation for share-based awards under the provisions of SFAS No. 123 for grants awarded prior to January 1, 2006. The Company’s determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables

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include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.  Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. The Company’s stock options have certain characteristics that may be different from traded options, and changes in the subjective assumptions can affect the estimated value.

Valuation Model Assumptions

The Company applied modification accounting under the provisions of SFAS No. 123R for those options subject to the option exchange program as described below under Note 2, Share-Based Compensation - Option Exchange Program.  It was not necessary for the Company to apply the option-pricing model method of valuation for share-based awards issued under the provisions of SFAS No. 123R as there were no options granted during the nine months ended September 30, 2006.

The weighted average fair value of each option granted for the nine months ended September 30, 2005 was $9.44 (no options were issued during the three months ended September 30, 2005). For the nine months ended September 30, 2005, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: 

	Nine Months Ended September 30, 2005
Expected life (years)	5
Expected volatility factor (%)	22
Risk-free interest rate (%)	4.0
Expected dividend yield (%)	—

The expected volatility was based on the historical volatility of the Company’s stock. The observation of the volatility was on a daily basis. In determining the expected term, the Company used its historical share option exercise experience of similar grants as the best estimate of future exercise patterns.  The risk-free rate was consistent with the expected term of the stock options and was based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield assumption was based on the Company’s history and expectation of dividend payouts.

Option Activity

During the nine months ended September 30, 2005, the Company issued non-qualified options to purchase 0.1 million shares of its Class A Common Stock at prices per share ranging from $32.17 to $35.05 and decreased its additional paid-in capital by $0.4 million in connection with tax benefits associated with the exercise of stock options. All of these options vest over a four-year period.

The total intrinsic value of options exercised was $49 thousand and $29 thousand during the nine months ended September 30, 2006 and 2005, respectively. Cash received from stock option exercises for the nine months ended September 30, 2006 and 2005 was $540 thousand and $148 thousand, respectively. The income tax benefit from stock option exercises was $18 thousand and $11 thousand for the nine months ended September 30, 2006 and 2005, respectively.

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The following table presents the option activity under our stock option plan for the nine months ended September 30, 2006:

						Aggregate
					Weighted-	Intrinsic
			Weighted-		Average	Value
			Average		Remaining	As of
	Number of		Exercise		Contractual	September 30,
	Options		Price		Term	2006
	(amounts in thousands)
Options outstanding as of December 31, 2005	6,159,838		$	41.35
Options granted	—		$	—
Options exercised	(21,334	)	$	24.47
Options forfeited	(3,750	)	$	33.90
Options exchanged for restricted stock units	(3,828,893	)	$	45.81
Options expired	(338,273	)	$	43.29
Outstanding as of September 30, 2006	1,967,588		$	32.51	6.2	$	1,168,188
Options vested and expected to vest as of September 30, 2006	1,960,342		$	32.51	6.2	$	1,168,188
Options vested and exercisable as of September 30, 2006	1,920,588		$	32.51	6.1	$	1,168,188
Weighted average remaining recognition period in years	1.5

As of September 30, 2006, $0.3 million of accumulated unrecognized compensation costs related to unvested stock options, net of forfeitures, is expected to be recognized in future periods over a weighted average period of 1.5 years.

The following table summarizes significant ranges of outstanding and exercisable options as of September 30, 2006:

				Options Outstanding				Options Exercisable
				Number of	Weighted			Number of
				Options	Average	Weighted		Options	Weighted
				Outstanding	Remaining	Average		Exercisable	Average
				at Sept. 30,	Contractual	Exercise		at Sept. 30,	Exercise
Exercise Prices				2006	Life	Price		2006	Price
$	18.00	$	22.50	232,659	2.3	$	20.18	232,659	$	20.18
$	27.75	$	27.75	459,618	4.1	$	27.75	459,618	$	27.75
$	28.19	$	34.44	111,625	6.6	$	32.43	65,000	$	32.28
$	35.05	$	35.05	954,750	8.1	$	35.05	954,375	$	35.05
$	35.06	$	52.05	208,936	5.6	$	45.19	208,936	$	45.19
				1,967,588	6.2	$	32.51	1,920,588	$	32.51

Restricted Stock Units

Based upon trends in long-term compensation awards and market conditions, the Company modified its approach towards equity compensation awards issued to its key employees by granting a combination of restricted stock units with service conditions and restricted stock units with service and market conditions, in lieu of stock options. The adoption of SFAS No. 123R resulted in certain changes to the Company’s accounting for its restricted stock units. The fair value of restricted stock units with service conditions is estimated based on the market value stock price on the date of the grant, and the fair value of restricted stock units with service and market conditions is estimated using a lattice model as described below.

Restricted Stock Units With Service And Market Conditions

During the nine months and three months ended September 30, 2006, the Company issued to its executive officers 240,000 restricted stock units with service and market conditions. These shares will vest based on the achievement of market conditions, which are specified stock price appreciation milestones over a period of less than four years. Shares will vest if a particular milestone is reached and maintained, based upon the closing price of the Company’s stock on the

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New York Stock Exchange for ten consecutive trading days.  The market condition allows for vesting of portions of the award as each milestone is reached.

Valuation Model For Restricted Stock Units With Service And Market Conditions

To determine the fair value of restricted stock units with service conditions and market conditions, the Company used the Monte Carlo simulation model. The Company’s determination of the fair value was based on the number of shares granted, the Company’s stock price on the date of grant and the use of certain assumptions regarding a number of highly complex and subjective variables. If other reasonable assumptions are used, the results may differ. The Company used the following assumptions when applying the Monte Carlo simulation model:

Expected Volatility Term Structure - The Company estimated the volatility term structure of an amount that ranged between 19% and 23% using: (1) the historical volatility of its stock; and (2) the implied volatility provided by its traded options from a trailing month’s average of the closing bid-ask price quotes.

Risk-Free Interest Rate – The Company estimated the risk-free interest rate at 5.1% based upon the implied yield available on U.S. Treasury issues using a constant maturity treasury bond rate as of the date of grant.

Expected Dividends – The Company calculated the expected dividend yield of 5.3% by annualizing the cash dividend declared by the Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant.

The Company calculated a derived service period of approximately 14 months using the Monte Carlo simulation model to calculate a range of possible future stock prices for the Company.  The weighted average expected fair value of the restricted stock units with market and service conditions was $11.89 per share and is amortized over the derived service periods. If vesting occurs as a result of market performance of the Company’s common stock, the compensation expense related to the vested awards that have not previously been amortized is recognized upon vesting. The compensation expense is recognized even if the market condition is not satisfied.  The compensation is only reversed in the event the service period is not fulfilled.

Restricted Stock Unit Activity

The total number of restricted stock units expected to vest is adjusted by estimated forfeitures. As of September 30, 2006, there was $15.1 million of unamortized compensation expense, net of estimated forfeitures, related to unvested restricted stock units, which is expected to be recognized over a remaining weighted-average recognition period of 2.1 years. During the nine months ended September 30, 2006 and 2005, 38 units and 2,152 units, respectively, of restricted stock were both vested and released. There were no releases of vested restricted stock units during the three months ended September 30, 2006 and 2005.

The unamortized compensation expense of $2.2 million related to unvested restricted stock units was recorded as unearned compensation for unvested shares of restricted stock in shareholders’ equity at December 31, 2005. In connection with the adoption of SFAS No. 123R on January 1, 2006, such amount was reclassified to a component of paid-in capital.

During the nine months ended September 30, 2006, the Company issued 1.0 million units of restricted stock at a weighted average fair value of $22.80 (net of a fair value adjustment for restricted stock units with service and market based conditions as described above in Note 2) and increased its additional paid-in capital by $16.3 million (amounts include restricted stock units issued with service and market conditions and exclude restricted stock units issued in connection with the Option Exchange Program as described under Note 2 – Option Exchange Program). During the nine months ended September 30, 2005, the Company issued 13,550 units of restricted stock at a weighted average fair value of $31.90 and increased its additional paid-in capital by $0.3 million (net of a valuation adjustment from previously issued shares of restricted stock).

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A summary of the Company’s outstanding restricted stock units, as of September 30, 2006, and changes in restricted stock units under the Plan during the nine months ended September 30, 2006, is as follows:

					Weighted-	Aggregate
	Number of		Weighted-		Average	Intrinsic
	Restricted		Average		Remaining	Value As Of
	Stock		Purchase		Contractual	June 30,
	Units		Price		Term	2006
	(amounts in thousands)
Restricted stock units outstanding as of December 31, 2005	104,055		$	—
Restricted stock units awarded	719,337		—
Restricted stock units issued in exchange for options	255,267		—
Restricted stock units released	(38	)	—
Restricted stock units forfeited	(3,713	)	—
Restricted stock units outstanding as of September 30, 2006	1,074,908		$	—	2.1	$	27,087,682
Restricted stock units expected to vest	1,068,998		$	—	2.1	$	26,938,750
Weighted average remaining recognition period in years	5,910

Recognized Non-Cash Compensation Expense

Stock-based compensation expense recognized under SFAS No. 123R for the nine months ended September 30, 2006 was $3.6 million, which consisted of: (1) $3.4 million for awards of restricted stock units; and (2) $0.2 million for stock-based compensation expense related to employee stock options and employee stock purchases. Stock-based compensation expense recognized under SFAS No. 123R for the three months ended September 30, 2006 was $1.8 million, which consisted of: (i) $1.7 million for awards of restricted stock units; and (ii) $0.1 million for stock-based compensation expense related to employee stock options and employee stock purchase plan purchases.  In connection with the recognition of this expense, the Company recorded an income tax benefit of $0.8 million and $0.5 million for the nine months and three months ended September 30, 2006, respectively. The income tax benefits were reduced to reflect limitations for tax purposes on deductible compensation for certain key employees.

Stock-based compensation expense recognized under SFAS No. 123 for the nine months and three months ended September 30, 2005 was $0.7 million and $0.3 million, respectively, which consisted of awards of restricted stock units.

The following table summarizes recognized stock-based compensation expense related to employee stock options, employee stock purchase plan purchases and awards of restricted stock units for the nine months ended September 30, 2006 and 2005:

	Nine Months Ended
	September 30,
	2006			2005
	(amounts in thousands)
Station operating expenses	$	678		$	—
Corporate general and administrative expenses	2,916			661
Stock-based compensation expense included in operating expenses	3,594			661
Tax benefit	(849		)	(204		)
Recognized stock-based compensation expense related to employee stockoptions, employee stock purchase plan purchases and restricted stock units	$	2,745		$	457

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The following table summarizes recognized stock-based compensation expense related to employee stock options, employee stock purchase plan purchases and awards of restricted stock units for the three months ended September 30, 2006 and 2005:

	Three Months Ended
	September 30,
	2006			2005
	(amounts in thousands)
Station operating expenses	$	403		$	—
Corporate general and administrative expenses	1,417			215
Stock-based compensation expense included in operating expenses	1,820			215
Tax benefit	(555		)	(31		)
Recognized stock-based compensation expense related to employee stock options, employee stock purchase plan purchases and restricted stock units	$	1,265		$	184

Option Exchange Program

On March 23, 2006, the Company’s Board of Directors approved an amendment to the Plan to permit a one time OEP, which was approved at the May 16, 2006 shareholders’ meeting. On June 5, 2006, the Company commenced the OEP by making an offer to exchange to the Company’s eligible employees and non-employee directors. The Company offered such persons the opportunity to make a one-time election to exchange all of their outstanding stock options with exercise prices equal to or greater than $40.00 per share for a lesser number of shares of the Company’s restricted stock. The exchange ratio under the OEP was fifteen-to-one such that, for each fifteen eligible options surrendered, the holder received one share of restricted stock. On July 7, 2006, following the July 6, 2006 expiration of the OEP, the Company granted 0.3 million restricted stock units in exchange for 3.8 million options. All shares of restricted stock issued under the OEP were granted under the Plan. Options which were exchanged, net of shares of restricted stock issued, are not available for re-grant under the Plan.

In accordance with SFAS No. 123R, the Company applied modification accounting for the OEP. Under this accounting guidance, the Company did not recognize additional share-based compensation expense, as the fair value of the new shares at the time the Company first made the offer to exchange was not greater than the fair value of the surrendered options. Otherwise, any difference in fair value would have been recognized as an expense on a straight-line basis over the vesting period of the new shares.

On June 5, 2006, the fair value of each option grant was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: (1) a historical volatility of 46% over a period commensurate with the expected term of 6.25 years with the observation of the volatility on a daily basis; (2) an expected term of 6.25 years based upon the simplified plain-vanilla method as allowed under the provisions of SAB No. 107; (3) a risk-free interest rate of 5.2% that was consistent with the expected term of the stock options and was based on the U.S. Treasury yield curve in effect at the time of the grant; and (4) a dividend yield of 5.6% based upon the Company’s most recent quarterly dividend of $0.38 per share.  The Company recorded the effect of the OEP on outstanding awards during the third quarter of 2006.

Pro Forma Information Under SFAS No. 123

Prior to the adoption of SFAS No. 123R, the Company accounted for stock compensation under the intrinsic value method in accordance with the requirements of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations, including FIN 44, “Accounting for Certain Transactions Involving Stock Compensation.”  Under these provisions, the Company has presented in the table below the required disclosure of the pro forma effects on net income and net income per share had the fair value recognition provisions of SFAS No. 123 been adopted for the nine and three months ended September 30, 2005.

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	Nine		Three
	Months		Months
	Ended		Ended
	September 30, 2005
	(amount in thousands,
	except per share data)
Net income - as reported	$	62,590	$	22,078
Add: Compensation expense included in net income, net of taxes of $256 and $83 for the nine and three months ended September 30, 2005, respectively	405		132
Subtract: Stock-based employee compensation expense determined under the fair value based method for all awards, net of taxes of $4,928 and $1,606 for the nine and three months ended September 30, 2005, respectively	7,782		2,536
Net income - pro forma	$	55,213	$	19,674
Basic net income per share - as reported	$	1.35	$	0.48
Basic net income per share - pro forma	$	1.19	$	0.43
Diluted net income per share - as reported	$	1.34	$	0.48
Diluted net income per share - pro forma	$	1.18	$	0.43

3.INTANGIBLE ASSETS AND GOODWILL

(A) Indefinite-Lived Intangibles

Under the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” goodwill and certain intangible assets are not amortized. Instead, these assets are reviewed at least annually for impairment and charged to results of operations only in the periods in which the recorded value of goodwill and certain intangibles is more than its fair value. The Company has determined that broadcasting licenses are deemed to have indefinite useful lives.

Other than goodwill, the Company uses a direct value method to determine the fair value of all intangible assets required: (i) to be recognized under SFAS No. 141; and (ii) to be tested for impairment under the provisions of SFAS No. 142.

Broadcasting Licenses

SFAS No. 142 requires the Company to test broadcasting licenses, at a minimum, on an annual basis. The Company performs its annual impairment test in the first quarter of each year by: (i) determining the reporting unit; and (ii) comparing the carrying amount of the broadcasting licenses reflected on the balance sheet in each reporting unit to the fair value of the reporting unit’s broadcasting licenses.

If actual market conditions are less favorable than those projected by the industry or the Company, or if events occur or circumstances change that would, more likely than not, reduce the fair value of the Company’s broadcasting licenses below the amount reflected in the balance sheet, the Company is required to retest and may be required to recognize impairment charges in future periods. The amount of unamortized broadcasting licenses reflected in the balance sheet as of September 30, 2006 was $1.3 billion.

The Company determines the fair value of the broadcasting licenses by relying primarily on a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are broadcasting licenses. The fair value contains assumptions incorporating variables that are based on past experiences and judgments about future performance using industry normalized information for an average station within a market. These variables would include but not be limited to: (1) the forecast growth rate of each radio market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values.

During each of the first quarters of 2006 and 2005, the Company completed the non-amortizing intangible asset impairment test for broadcasting licenses and determined that: (1) the reporting unit was a radio market; and (2) the fair value of the broadcasting licenses was equal to or greater than the amount reflected in the balance sheet for each of the Company’s markets. Based upon the results of each of the asset impairment tests, no impairment charges were recorded.  No events occurred or circumstances changed since these tests were conducted that would, more likely than not, change

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the fair value of broadcasting licenses below the amount reflected in the balance sheets and, accordingly, no impairment charges were recorded for the nine months ended September 30, 2006 and 2005.

Goodwill

SFAS No. 142 requires the Company to test goodwill, at a minimum, on an annual basis. The Company performs its annual impairment test during the second quarter of each year by: (1) determining the reporting unit; and (2) comparing the fair value for each reporting unit with the amount reflected on the balance sheet. If the fair value for any reporting unit is less than the amount reflected in the balance sheet, an indication exists that the amount of goodwill attributed to a reporting unit may be impaired, and the Company is required to perform a second step of the impairment test. In the second step, the Company compares the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and liabilities in a manner similar to a purchase price allocation in accordance with SFAS No. 141, to the amount reflected in the balance sheet.

To determine the fair value, the Company uses an income or market approach for each reporting unit. The market approach compares recent sales and offering prices of similar properties. The income approach uses the subject property’s income generated over a specified time and capitalized at an appropriate market rate to arrive at an indication of the most probable selling price.  The amount of goodwill reflected in the balance sheet as of September 30, 2006 was $157.2 million.

The Company performed its annual impairment test during each of the second quarters of 2006 and 2005 and, as a result, the Company determined that it was not necessary to record an impairment charge at that time. No events occurred or circumstances changed since these tests were conducted that would, more likely than not, change the fair value of goodwill below the amount reflected in the balance sheets and, accordingly, no impairment charges were recorded for the nine months ended September 30, 2006 and 2005. If actual market conditions are less favorable than those projected by the industry or the Company, or if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the Company’s goodwill below the amount reflected in the balance sheet, the Company is required to retest and may be required to recognize impairment charges in future periods.

There were no changes in the carrying amount of goodwill for the nine months ended September 30, 2006.

(B) Definite-Lived Intangibles

The Company has definite-lived intangible assets that consist of advertiser lists and customer relationships,  acquired advertising contracts and income leases that are amortized in accordance with SFAS No. 142. These assets are amortized over the period for which the assets are expected to contribute to the Company’s future cash flows and are reviewed for impairment in accordance with SFAS No. 144 whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The amount of the amortization expense for definite-lived intangible assets was $0.2 million and $0.3 million for the nine months ended September 30, 2006 and 2005, respectively, and $0.1 for each of the three months ended September 30, 2006 and 2005.  As of September 30, 2006, the Company reflected $0.4 million in unamortized definite-lived assets, which amounts are included in deferred charges and other assets on the balance sheet.

The following is an estimate of the amortization expense for definite-lived assets, in thousands, for each of the succeeding years ending December 31:

	Definitive-
	Lived
	Assets
Years ending December 31,
2006 (excludes the nine months ended September 30, 2006)	$	55
2007	144
2008	84
2009	44
2010	13
Thereafter	22
Total	$	362

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4.ACQUISITIONS, DISPOSITIONS, OTHER EVENTS AND UNAUDITED PRO FORMA SUMMARY

Acquisitions For The Nine Months Ended September 30, 2006

There were no acquisitions or dispositions during the nine months ended September 30, 2006.  See Note 8 for further information on pending acquisitions and required divestitures.

Other

Seattle, Washington

On August 9, 2006, the Company entered into a rights agreement with the owners of the Seattle SuperSonics, a National Basketball Association (“NBA”) team, by entering into a multi-year agreement effective with the start of the 2006 season to broadcast the programming and sell the advertising time, but not to produce the games.

Boston, Massachusetts

On May 7, 2006, the Company renewed its rights agreement with the owners of the Boston Red Sox, a Major League Baseball (“MLB”) team, by entering into a multi-year agreement, effective with the start of the 2007 season, to broadcast and produce games, including related programming and promotional events, and to sell advertising time. The rights agreement is subject to the approval of the Office of the Commissioner of MLB.

Dispositions For The Nine Months Ended September 30, 2005

Longview, Washington

On March 31, 2005, the Company completed the transaction to sell the radio station assets of KBAM-AM, KEDO-AM, KLYK-FM and KRQT-FM, Longview, Washington, for $2.2 million in cash. The Company recorded a gain on the sale of assets of less than $0.1 million during the first quarter of 2005.

Seattle, Washington

On January 21, 2005, the Company completed the transaction to sell the radio station assets of KDDS-AM (the call letters were changed from KNWX-AM in December 2004), Seattle, Washington, for $6.0 million in cash. The Company recorded a gain on sale of assets of $5.5 million during the first quarter of 2005. The Company believes that the elimination of this station did not alter the competitive position of the seven stations the Company continues to operate in this market.

Other Events

Boston, Massachusetts

On August 23, 2005, the Company entered into a definitive multi-year agreement with the Boston Celtics, an NBA basketball team, effective with the start of the 2005/2006 NBA season, to broadcast and produce the games, including related programming and promotional events, and sell the advertising time.

Seattle, Washington

On January 18, 2005, the Company restructured its agreement with the Seattle Seahawks, a National Football League (“NFL”) football team, effective with the start of the 2005 NFL season. Under the restructured agreement, the Company agreed to continue to broadcast the games, but not produce the games nor sell the advertising time.

Unaudited Pro Forma Summary Of Financial Information

The following unaudited pro forma summary of financial information presents the consolidated results of operations as if any acquisitions which occurred during the period of January 1, 2005 through September 30, 2006 had all occurred as of the beginning of the respective periods. The summary also includes certain adjustments, including depreciation and amortization of assets and interest expense on any debt incurred to fund acquisitions which would have been incurred had such acquisitions occurred as of the beginning of the respective periods. There were no acquisitions during the nine months and three months ended September 30, 2006; therefore, actual information appears in the tables below. These unaudited pro forma results, which do not reflect: (1) dispositions of radio stations; and (2) acquisitions and dispositions of certain contracts or joint sales agreements, have been prepared for comparative purposes only and do not

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purport to be indicative of what would have occurred had the acquisitions been made as of that date or of results which may occur in the future.

	Nine Months Ended September 30,
	2006		2005
	(amounts in thousands, except per share data)
	Actual		Pro Forma
Net revenues	$	321,937	$	334,478
Net income	$	41,046	$	62,371
Net income per share - basic and diluted	$	1.02	$	1.34

	Three Months Ended September 30,
	2006		2005
	(amounts in thousands, except per share data)
	Actual		Pro Forma
Net revenues	$	114,343	$	117,011
Net income	$	16,160	$	22,191
Net income per share - basic and diluted	$	0.41	$	0.48

5.SENIOR DEBT

Bank Revolver

On September 22, 2006, the Company entered into an amendment to its Bank Revolver with a syndicate of banks which provided for the elimination of a restrictive covenant that would have required the Company to enter into certain interest rate transactions to hedge a portion of its variable rate debt.

On August 12, 2004, the Company entered into a bank credit agreement (the “Bank Revolver”) with a syndicate of banks for a five-year senior secured revolving credit facility of $800.0 million. The Company uses the Bank Revolver to: (1) provide for working capital; and (2) provide for general corporate purposes, including capital expenditures and any or all of the following: repurchases of Class A common stock, acquisitions and dividends. The Bank Revolver is secured by a pledge of 100% of the capital stock and other equity interest in all of the Company’s wholly owned subsidiaries. The Bank Revolver requires the Company to comply with certain financial covenants and leverage ratios which are defined terms within the agreement, including: (1) Total Debt to Operating Cash Flow; (2) Operating Cash Flow to Interest Expense; and (3) Operating Cash Flow to Fixed Charges. Upon the occurrence of certain events, the Company’s borrowing costs can increase to a maximum of Eurodollar rate plus 1.375% or prime rate plus 0.875%. The Company also pays a commitment fee that varies, depending on certain financial covenants and the amount of the unused commitment, to a maximum of 0.375% per annum, on the average unused balance of the Bank Revolver.

As of September 30, 2006, the Company had $511.0 million outstanding, as well as a $0.8 million Letter of Credit, under the Bank Revolver. Subject to covenant compliance at the time of each borrowing, the amount available under the Bank Revolver as of September 30, 2006 was $288.2 million.  Management believes that, as of September 30, 2006, the Company was in compliance with all financial covenants and leverage ratios and all other terms of the Bank Revolver.  Any borrowings necessary to consummate closing on any of the pending transactions as described under Note 8, Commitments and Contingencies, is conditioned on compliance under the Bank Revolver at the time of closing.

Interest Rate Transactions

The Company enters into interest rate transactions with different banks to diversify its risk, associated with interest rate fluctuations against the variable rate debt under the Bank Revolver. Under these transactions, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed notional principal amount against the variable debt.  See Note 7, Derivative and Hedging Activities, for further discussion.

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6.SENIOR SUBORDINATED NOTES

On March 5, 2002, the Company issued $150.0 million of 7.625% Senior Subordinated Notes (the “Notes”) due March 1, 2014 and received net proceeds of $145.7 million.  There were approximately $4.3 million in deferred offering costs recorded in connection with this issuance, which are amortized to interest expense over the life of the Notes using the effective interest rate method.

Interest on the Notes accrues at the rate of 7.625% per annum and is payable semi-annually in arrears on March 1 and September 1. The Company may redeem the Notes on and after March 1, 2007 at an initial redemption price of approximately 103.8% of their principal amount plus accrued interest. The Notes are unsecured and rank junior to the Company’s senior indebtedness. In addition to the parent, Entercom Communications Corp., all of the Company’s subsidiaries (other than Entercom Radio, LLC, the issuer of the Notes) have fully and unconditionally guaranteed jointly and severally these Notes (the “Subsidiary Guarantors”).  Under certain covenants, the Subsidiary Guarantors are restricted from paying dividends or distributions in excess of amounts defined under the Notes, and the Subsidiary Guarantors cannot incur additional indebtedness under certain restrictive covenants.

7.DERIVATIVE AND HEDGING ACTIVITIES

In accordance with the provisions of SFAS No. 133, “Accounting for Derivative and Hedging Activities,” which was amended by SFAS No. 137, SFAS No. 138 and SFAS No. 149, the Company follows established accounting and reporting standards for: (1) derivative instruments, including certain derivative instruments embedded in other contracts, which are collectively referred to as derivatives; and (2) hedging activities. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. All derivatives, whether designated in hedging relationships or not, are required to be recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and the hedged item are recognized in the statement of operations. If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded in other comprehensive income (loss) and are recognized in the statement of operations when the hedged item affects net income (loss). SFAS No. 133 defined new requirements for designation and documentation of hedging relationships as well as ongoing effectiveness assessments in order to use hedge accounting under this standard.  A derivative that does not qualify as a hedge is marked to fair value through the statement of operations. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedging transactions. This process includes relating all derivatives that are designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item.  If it is determined that a derivative is not highly effective as a hedge or if a derivative ceases to be a highly effective hedge, the Company will discontinue hedge accounting prospectively (see Note 5, Senior Debt - Interest Rate Transactions).

As of September 30, 2006, the Company had an interest rate transaction outstanding with a notional amount of $30.0 million and an initial term of 10 years, that expires in February 2008. This interest rate transaction effectively fixes the interest at a rate of 5.8% on borrowings equal to the total notional amount.

During the nine months ended September 30, 2006 and 2005, the Company had a derivative outstanding with a notional amount of $30.0 million that did not qualify for hedge accounting treatment. For the nine months ended September 30, 2006 and 2005, the Company recorded to the statement of operations a net gain of $0.4 million and $1.1 million, respectively, under net gain on derivative instruments. For the three months ended September 30, 2006 and 2005, the Company recorded to the statement of operations a net loss of $0.1 million and a net gain of $0.5 million, respectively, under net (gain) loss on derivative instruments.

Under an amendment dated September 22, 2006 to the Bank Revolver, certain interest rate hedging requirements under a restrictive covenant were eliminated.

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8.COMMITMENTS AND CONTINGENCIES

Pending Acquisitions

Austin, Texas

Memphis, Tennessee

Cincinnati, Ohio

On August 18, 2006, the Company entered into an asset purchase agreement with CBS Radio Stations Inc. (“CBS”) to acquire the assets of eleven radio stations serving the Memphis, Austin and Cincinnati radio markets for $220.0 million in cash. Concurrently with entering into the asset purchase agreement, the Company also entered into a Local Marketing Agreement (also known as a time brokerage agreement or “TBA”), under the provisions of which the Company commenced operations on November 1, 2006.  During the period of the TBA, the Company will include the net revenues, station operating expenses and TBA fees associated with operating these stations in the Company’s condensed consolidated financial statements. This transaction, which is subject to approval by the Federal Communications Commission (“FCC”), is expected to close in early 2007. With the Austin and Cincinnati acquisitions, the Company will enter into two new radio markets. In Memphis, the acquisition of three radio stations from CBS will add to the three radio stations that the Company currently owns and operates in this market.

On October 31, 2006, the Company entered into an agreement to exchange WGRR-FM, a radio station included in the CBS acquisition noted above, for WPRV-FM (including certain intellectual property of WYGY-FM), a radio station owned by a subsidiary of Cumulus Media Partners, LLC (“Cumulus”).  Each of these stations serves the Cincinnati, Ohio, radio market. Concurrently with entering into the asset exchange agreement, the Company also entered into two time brokerage agreements. Pursuant to these TBAs, the Company commenced operations of WPRV-FM and Cumulus commenced operations of WGRR-FM on November 1, 2006. The Company cannot complete the sale of WGRR-FM to Cumulus until the Company has completed the acquisition of WGRR-FM from CBS. The fair value of the assets acquired in exchange for the assets sold cannot be determined at this time as it will be dependent on the results of an appraisal for both WGRR-FM and WPRV-FM. Upon completion of the transaction with CBS and with Cumulus, the Company will own four radio stations in the Cincinnati, Ohio market. See Note 15, Subsequent Events, for a further description of this transaction.

Rochester, New York

On August 18, 2006, the Company entered into an asset purchase agreement with CBS to acquire the assets of four radio stations serving the Rochester radio market for $42.0 million in cash. Under the Communications Act (“Act”), the FCC imposes specific limits on the number of commercial radio stations an entity can own in a single market. Due to these restrictions, the Company cannot own or operate more than five FM radio stations in this market. In addition, the Company is required to meet certain requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSRA”).  As a result, the Company agreed to divest three FM radio stations. Such divestiture must be approved by the U. S. Department of Justice under the HSRA and by the FCC.  Due to the requirement to divest stations, the Company cannot determine when closing will occur. Upon the divestiture of three radio stations and the expected closing on the CBS transaction, the Company would own and operate five radio stations in the Rochester, New York market.

Boston, Massachusetts

On August 18, 2006, the Company entered into an asset purchase agreement with Radio One, Inc. (“One”) to acquire the assets of WKAF-FM (formerly WILD-FM), serving the Boston, Massachusetts, radio market for $30.0 million in cash, of which $5.0 million was paid as a deposit on August 21, 2006. Concurrently with entering into the asset purchase agreement, the Company also entered into a Local Programming and Marketing Agreement (also known as a TBA), which was effective on August 21, 2006.  The Company included the net revenues and station operating expenses associated with operating this station in the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2006. The initial financial statement impact of the TBA on revenues and station operating expenses was minimal as the Company did not assume any advertising contracts nor hire any employees under the agreements with One. There was no TBA fee provided for under the agreement.

With the commencement of the TBA, the Company began simulcasting the format of WAAF-FM (another radio station owned and operated by the Company in this market) on WKAF-FM, thereby providing a complement to the signal coverage of the WAAF-FM format in the Boston metropolitan market. This transaction, which is subject to approval by the FCC, is expected to close in late fourth quarter of 2006. Upon the expected closing of this transaction, the Company will own and operate five radio stations in the Boston, Massachusetts, radio market.

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Springfield, Massachusetts

On February 10, 2006, the Company entered into an asset purchase agreement to acquire the radio station assets of WVEI-FM (formerly WBEC-FM), serving the Springfield, Massachusetts, radio market, for $5.8 million in cash, of which $0.3 million was paid as a deposit on February 10, 2006.  On October 17, 2006, the Company entered into a TBA under the provisions of which the Company paid a deposit of $1.5 million and commenced operations on October 26, 2006. The net revenues, station operating expenses and TBA fees associated with operating these stations will be included in the Company’s condensed consolidated financial statements for the year ended December 31, 2006. This transaction, which is subject to approval by the Federal Communications Commission, is expected to close in the fourth quarter of 2006. The Company does not currently own or operate any other radio stations in this market.

Contingencies

In recent years, the FCC has engaged in more vigorous enforcement, against the broadcasting industry as a whole, of FCC rules concerning the broadcast of obscene, indecent, or profane material.  A recent change in federal law has increased the FCC’s authority to impose a fine for the broadcast of such material to $325,000 for a single incident.  As a consequence, the Company could face increased costs in the form of fines and a greater risk that the Company could lose any one or more of its broadcasting licenses were the FCC to conclude that programming broadcast by a Company station was obscene, indecent or profane.  In the past, the FCC has issued Notices of Apparent Liability and a Forfeiture Order with respect to several of the Company’s stations proposing fines for certain programming which the FCC deemed to have been “indecent.” These cases are the subject of pending administrative appeals.   The FCC has also commenced several other investigations based on allegations received from the public that some of the Company’s stations broadcast indecent programming.  The Company has cooperated in these investigations, which remain pending.  The Company estimates that the imposition of the proposed fines would not materially impact the Company’s financial position, results of operations or cash flows.

In January 2005, the Company received a subpoena from the Office of the Attorney General of the State of New York, as did several other radio broadcasting companies and record companies operating in the State of New York.  These subpoenas were issued in connection with the New York Attorney General’s investigation of promotional practices involved in record companies’ dealings with radio stations. The Company has cooperated with this investigation and will continue to do so. In connection with this investigation, the New York Attorney General’s Office has entered into settlement agreements with various record companies, which included both business practice reforms and financial penalties. On March 8, 2006, the Attorney General of the State of New York filed an action in the Supreme Court of the State of New York against the Company alleging that the Company engaged in and continues to engage in deceptive acts and practices in connection with the airplay of current music. In response, on April 10, 2006, the Company filed a motion to dismiss this complaint.  On October 16, 2006, the court denied that motion. The Company cannot predict the outcome of this litigation and whether it will have a material impact on the Company’s financial position, results of operations or cash flows.

As a result of the New York Attorney General’s investigation of promotional practices involved in record companies’ dealings with radio stations, the FCC has announced increased enforcement activity in the area of sponsorship identification and payola, which is prohibited by the Communications Act. The Company has responded to inquiries by the FCC and has cooperated with the FCC in this investigation.  On April 19, 2006, the Company received a Letter of Inquiry from the FCC requesting additional information. The Company has cooperated with this investigation and will continue to do so. The Company cannot predict the outcome of this litigation and whether it will have a material impact on the Company’s financial position, results of operations or cash flows.

The Company has filed on a timely basis renewal applications for those radio stations for which their radio broadcasting licenses are subject to renewal with the FCC. Certain licenses may not be renewed prior to the renewal date, which is not unusual. The Company will continue to operate these radio stations under their existing licenses until the licenses are renewed.

On May 19, 2003, the Company acquired the assets of radio station KWOD-FM, Sacramento, California, from Royce International Broadcasting Corporation (“Royce”) for a purchase price of $21.2 million in cash. This acquisition was accomplished following extensive litigation.  Although the Company successfully secured the assets of KWOD-FM through court-ordered specific performance of the agreement, Royce has continued to appeal its case through the California judicial system.  While the order granting specific performance of the transfer of the station is final, the court’s determination that the Company was entitled to $3.8 million in damages as an offset against the original $25.0 million purchase price is subject to final adjustment and is subject to appeal. The allocation of the purchase price and transaction costs was based upon information available at the time and, pending the outcome of this litigation, could be subject to change. The Company cannot determine the amount of time required for the appeal process to be completed. The

24

Company estimates that the impact of an unfavorable outcome will not materially impact the Company’s financial position, results of operations or cash flows.

The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers’ compensation, general liability, property, directors and officers’ liability, vehicle liability and employee health care benefits. Liabilities associated with the risks that are retained by the Company are estimated, in part, by considering claims experience, demographic factors, severity factors, outside expertise and other actuarial assumptions.

The Company’s six radio stations located in New Orleans, Louisiana, were significantly affected by Hurricane Katrina and the subsequent flooding. As a result, for the year ended December 31, 2005, the Company recorded as a separate line item, under operating expenses, $1.7 million of expenses related to a natural disaster. This amount was comprised of an increase to the Company’s accounts receivable reserve and the abandonment of certain broadcasting facilities and equipment. The Company has had discussions with its insurance company concerning its property coverage. The Company cannot determine at this time the amount that will be recoverable under the Company’s insurance policies. The Company has not accrued for any recoveries as any such recoveries will only be recognized for financial statement purposes upon receipt.

The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings.  In the opinion of management, any potential liability of the Company which may arise out of, or with respect to, these matters will not materially affect the Company’s financial position, results of operations or cash flows.

Guarantor Arrangements

Under the provisions of FIN 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34,”  a guarantor recognizes, at the inception of a guarantee, a liability for the fair value of the obligation undertaken by issuing the guarantee. The following is a summary of agreements that the Company has determined are within the scope of FIN 45.

Under the Company’s Bank Revolver, the Company is required to reimburse lenders for any increased costs that they may incur in the event of a change in law, rule or regulation resulting in their reduced returns from any change in capital requirements. The Company cannot estimate the potential amount of any future payment under this provision nor can the Company predict if such an event will occur.

The Company enters into indemnification agreements in the ordinary course of business and other agreements which include indemnification provisions. Under these agreements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements could be unlimited. The Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has not recorded liabilities for these agreements as of September 30, 2006.

9.SHAREHOLDERS’ EQUITY

Dividends

The following table presents a summary of the Company’s dividend activity, which commenced during the first quarter of 2006:

(amounts in millions, except per share data)

	Amount
	Per				Total
Declaration	Common		Record	Payment	Amount
Date	Share		Date	Date	Paid
February 20, 2006	$	0.38	March 14, 2006	March 30, 2006	$	15.4
May 16, 2006	$	0.38	June 15, 2006	June 29, 2006	$	15.0
September 5, 2006	$	0.38	September 15, 2006	September 29, 2006	$	15.0

Grants of restricted stock units made on and after April 6, 2006 included the right, upon vesting, to receive a dividend equivalent amount equal to the aggregate of all dividends which would have been paid on the restricted stock

25

units. The dividend equivalent amount, accrued and unpaid on unvested restricted stock units, was $0.7 million as of September 30, 2006.

Share Repurchase Programs

The Company’s Board of Directors has authorized in the past, and may authorize in the future, share repurchase programs over a defined period of time. Any repurchases under these programs may be made in the open market, through block trades or otherwise. Depending on market conditions and other factors, these repurchases may be commenced or suspended at any time or from time to time without prior notice. All shares repurchased are immediately restored to authorized but unissued status.

During the nine months ended September 30, 2006, the Company repurchased 3.3 million shares in the amount of $95.5 million at an average price of $29.07 per share.  There were no repurchases during the three months ended September 30, 2006.

On December 13, 2005, March 17, 2005, November 1, 2004 and May 13, 2004, the Company’s Board of Directors authorized one-year share repurchase programs of up to $100.0 million for each program. Under these programs, the Company repurchased an aggregate of 12.1 million shares in the amount of $399.8 million at an average price of $33.08 per share. Under the December 13, 2005 program, $0.2 million remained authorized as available for repurchase.

On May 8, 2006, the Company announced that its Board of Directors approved a continuation of the Company’s share repurchase program by authorizing an additional one-year share repurchase program of up to $100.0 million, with the amount and timing of repurchases over the next year subject to the discretion of management, depending on market conditions and other factors.

10.DEFERRED COMPENSATION PLANS

Under two separate deferred compensation plans, the Company provides a select group of the Company’s management (including highly compensated employees) and the Board of Directors with an opportunity to defer a portion of their compensation on a tax-favored basis. The obligations by the Company to pay these benefits under these plans represent unsecured general obligations that rank equally with the Company’s other unsecured and unsubordinated indebtedness.  As of September 30, 2006, $1.7 million was deferred under these plans and was included in other long-term liabilities in the consolidated balance sheet. For each of the nine and three months ended September 30, 2006, the Company recorded a gain of $0.1 million to corporate general and administrative expense. The Company also recorded a deferred tax asset of $0.7 million in connection with this liability as the deferred tax asset is not realized for tax purposes until the liability is paid.

11.NET INCOME PER SHARE

The net income per share is calculated in accordance with SFAS No. 128, “Earnings Per Share,” which requires presentation of basic net income per share and diluted net income per share. Basic net income per share excludes dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period.  Diluted net income per share is computed in the same manner as basic net income after assuming issuance of common stock for all potentially dilutive equivalent shares, which includes the potential dilution that could occur: (1) if all of the Company’s outstanding stock options that are in-the-money were exercised (using the treasury stock method); (2) if the restricted stock units with service conditions were fully vested (using the treasury stock method); (3) if the restricted stock units with service and market conditions were considered contingently issuable; and (4) if the participation by employees in an Employee Stock Purchase Plan is considered as an option (using the treasury stock method).  Anti-dilutive instruments are not considered in this calculation. For the nine and three months ended September 30, 2006 and 2005, stock options and restricted stock units were included in the calculation of net income per share as they were dilutive.

	Nine Months Ended
	September 30, 2006					September 30, 2005
	(amounts in thousands, except share and per share data)
	Income		Shares	EPS		Income		Shares	EPS
Basic net income per share:
Net income	$	41,046	40,145,454	$	1.02	$	62,590	46,430,274	$	1.35
Impact of options and restricted stock			170,309					186,596
Diluted net income per share:
Net income	$	41,046	40,315,763	$	1.02	$	62,590	46,616,870	$	1.34

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For the nine months ended September 30, 2006 and 2005, potentially dilutive options to purchase 4.6 million and 5.5 million shares, respectively, of Class A common stock at option exercise prices per share ranging from $26.96 to $57.63 and from $32.99 to $57.63, respectively, were excluded from the computation of diluted net income per share as the exercise price of such options was greater than the average market price of the stock during the period.  For each of the nine-month periods ended September 30, 2006 and 2005, a minimal number of shares of unvested restricted stock units were excluded from the computation of diluted net income per share as they were anti-dilutive under the treasury stock method.  Restricted stock units with market conditions in the amount of 0.2 million were not included in the computation of diluted net income per share as the market conditions were not satisfied as of September 30, 2006.

	Three Months Ended
	September 30, 2006					September 30, 2005
	(amounts in thousands, except share and per share data)
	Income		Shares	EPS		Income		Shares	EPS
Basic net income per share:
Net income	$	16,160	39,528,392	$	0.41	$	22,078	45,825,058	$	0.48
Impact of options and restricted stock			314,048					176,404
Diluted net income per share:
Net income	$	16,160	39,842,440	$	0.41	$	22,078	46,001,462	$	0.48

For the three months ended September 30, 2006 and 2005, potentially dilutive options to purchase 2.1 million and 5.5 million shares, respectively, of Class A common stock at option exercise prices per share ranging from $24.80 to $57.63 and from $32.21 to $57.63, respectively, were excluded from the computation of diluted net income per share as the exercise price of such options was greater than the average market price of the stock during the period.  For the three months ended September 30, 2006 and 2005, 0.5 million and a minimal number, respectively, of shares of unvested restricted stock units were excluded from the computation of diluted net income per share as they were anti-dilutive under the treasury stock method. Restricted stock units with market conditions in the amount of 0.2 million were not included in the computation of diluted net income per share as the market conditions were not satisfied as of September 30, 2006.

12.GUARANTOR FINANCIAL INFORMATION

Entercom Radio, LLC, which is a 100% owned subsidiary of Entercom Communications Corp., holds the ownership interest in various subsidiary companies that own operating assets, including broadcasting licenses, permits and authorizations.  Entercom Radio LLC is: (1) the borrower of the Company’s senior debt under the Bank Revolver described in Note 5; and (2) the issuer of the Company’s 7.625% Senior Subordinated Notes described in Note 6. Entercom Communications Corp. and each of its direct and indirect 100% owned subsidiaries (other than Entercom Radio LLC) is a guarantor of such debt.

Under the Bank Revolver, Entercom Radio LLC is permitted to make distributions to Entercom Communications Corp. in amounts, as defined, that are required to pay Entercom Communications Corp.’s reasonable overhead costs, including income taxes and other costs associated with conducting the operations of Entercom Radio LLC and its subsidiaries. Under the Company’s 7.625% Senior Subordinated Notes, Entercom Radio LLC is permitted to make distributions to Entercom Communications Corp. in amounts, as defined, that are required to pay Entercom Communications Corp.’s overhead costs and other costs associated with conducting the operations of Entercom Radio LLC and its subsidiaries.

The equity method of accounting has been used to report Entercom Communications Corp.’s investment in its subsidiaries. Separate financial statements of Entercom Radio LLC’s subsidiaries, which are full and unconditional guarantors jointly and severally under the Bank Revolver and the Senior Subordinated Notes, as described above, are not presented as the Company’s management has determined that they would not be material to investors.

The following tables set forth condensed consolidating financial information for Entercom Communications Corp. and Entercom Radio LLC:

·the balance sheets as of September 30, 2006 and December 31, 2005;

·the statements of operations for the nine months and three months ended September 30, 2006 and 2005; and

·the statements of cash flows for the nine months ended September 30, 2006 and 2005.

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Condensed Balance Sheets as of September 30, 2006

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC			Eliminations			Total
ASSETS:
Current assets	$	2,410		$	114,151		$	—		$	116,561
Net property and equipment	930			86,743			—			87,673
Radio broadcasting licenses - Net	—			1,321,598			—			1,321,598
Goodwill - Net	—			157,227			—			157,227
Other long-term assets - Net	2,430			19,793			—			22,223
Investment in subsidiaries	789,259			—			$	(789,259	)	—
Total assets	$	795,029		$	1,699,512		$	(789,259	)	$	1,705,282
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities	$	1,834		$	27,014		$	—		$	28,848
Long-term liabilities	5,218			883,239			—			888,457
Total liabilities	7,052			910,253			—			917,305
Shareholders’ equity
Preferred stock
Class A, B and C common stock	406			—			—			406
Additional paid-in capital	644,960			—			—			644,960
Retained earnings	143,014			789,662			(789,662		)	143,014
Accumulated other comprehensive loss	(403		)	(403		)	403			(403		)
Total shareholders’ equity	787,977			789,259			(789,259		)	787,977
Total liabilities and shareholders’ equity	$	795,029		$	1,699,512		$	(789,259	)	$	1,705,282

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Condensed Balance Sheets as of December 31, 2005

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC		Eliminations			Total
ASSETS:
Current assets	$	1,634		$	107,249	$	—		$	108,883
Net property and equipment	963			89,849		—			90,812
Radio broadcasting licenses - Net	—			1,321,598		—			1,321,598
Goodwill - Net	—			157,227		—			157,227
Other long-term assets - Net	1,308			17,930		—			19,238
Investment in subsidiaries	891,340			—		$	(891,340	)	—
Total assets	$	895,245		$	1,693,853	$	(891,340	)	$	1,697,758
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities	$	5,538		$	29,419	$	—		$	34,957
Long-term liabilities	3,992			773,094		—			777,086
Total liabilities	9,530			802,513		—			812,043
Shareholders’ equity
Preferred stock	—			—		—			—
Class A, B and C common stock	428			—		—			428
Additional paid-in capital	738,384			—		—			738,384
Retained earnings	148,141			890,336		(890,336		)	148,141
Unearned compensation for shares of unvested restricted stock	(2,242		)	—		—			(2,242		)
Accumulated other comprehensive income	1,004			1,004		(1,004		)	1,004
Total shareholders’ equity	885,715			891,340		(891,340		)	885,715
Total liabilities and shareholders’ equity	$	895,245		$	1,693,853	$	(891,340	)	$	1,697,758

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Statements of Operations for the Nine Months Ended September 30, 2006

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC			Eliminations			Total
NET REVENUES	$	417		$	321,937		$	(417	)	$	321,937
OPERATING (INCOME) EXPENSES:
Station operating expenses	—			190,933			(417		)	190,516
Depreciation and amortization	476			11,450			—			11,926
Corporate G&A expenses	18,572			60			—			18,632
Net loss on sale or disposal of assets	—			1,144			—			1,144
Total operating expenses	19,048			203,587			(417		)	222,218
OPERATING INCOME (LOSS)	(18,631		)	118,350			—			99,719
OTHER (INCOME) EXPENSE:
Interest expense	—			32,455			—			32,455
Interest income	(25		)	(424		)	—			(449		)
Dividend income on investments	—			(74		)	—			(74		)
Net gain on derivative instruments	—			(371		)	—			(371		)
Income from equity investment in subsidiaries	(86,789		)	—			86,789			—
Total (income) expense	(86,814		)	31,586			86,789			31,561
INCOME BEFORE INCOME TAXES	68,183			86,764			(86,789		)	68,158
INCOME TAXES	27,137			(25		)	—			27,112
NET INCOME	$	41,046		$	86,789		$	(86,789	)	$	41,046

30

Statements of Operations for the Nine Months Ended September 30, 2005

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC			Eliminations			Total
NET REVENUES	$	595		$	328,797		$	(595	)	$	328,797
OPERATING (INCOME) EXPENSES:
Station operating expenses	—			187,843			(595		)	187,248
Expenses related to a natural disaster	—			1,714			—			1,714
Depreciation and amortization	471			11,413			—			11,884
Corporate G&A expenses	14,135			74			—			14,209
Time brokerage agreement income	—			(24		)	—			(24		)
Net gain on sale or disposal of assets	(11		)	(5,425		)	—			(5,436		)
Total operating expenses	14,595			195,595			(595		)	209,595
OPERATING INCOME (LOSS)	(14,000		)	133,202			—			119,202
OTHER (INCOME) EXPENSE:
Interest expense	—			21,620			—			21,620
Interest income	(12		)	(225		)	—			(237		)
Net gain on derivative instruments	—			(1,071		)	—			(1,071		)
Gain on investments	—			(2,612		)	—			(2,612		)
Income from equity investment in subsidiaries	(114,132		)	—			114,132			—
Total (income) expense	(114,144		)	17,712			114,132			17,700
INCOME BEFORE INCOME TAXES	100,144			115,490			(114,132		)	101,502
INCOME TAXES	37,554			1,358			—			38,912
NET INCOME	$	62,590		$	114,132		$	(114,132	)	$	62,590

r

31

Statements of Operations for the Three Months Ended September 30, 2006

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC			Eliminations			Total
NET REVENUES	$	139		$	114,343		$	(139	)	$	114,343
OPERATING (INCOME) EXPENSES:
Station operating expenses	—			64,848			(139		)	64,709
Depreciation and amortization	164			3,913			—			4,077
Corporate G&A expenses	6,138			4			—			6,142
Net loss on sale or disposal of assets	—			999			—			999
Total operating expenses	6,302			69,764			(139		)	75,927
OPERATING INCOME (LOSS)	(6,163		)	44,579			—			38,416
OTHER (INCOME) EXPENSE:
Interest expense	—			11,705			—			11,705
Interest income	(1		)	(162		)	—			(163		)
Dividend income on investments	—			(25		)	—			(25		)
Net loss on derivative instruments	—			138			—			138
Income from equity investment in subsidiaries	(34,527		)	—			34,527			—
Total (income) expense	(34,528		)	11,656			34,527			11,655
INCOME BEFORE INCOME TAXES	28,365			32,923			(34,527		)	26,761
INCOME TAXES	12,205			(1,604		)	—			10,601
NET INCOME	$	16,160		$	34,527		$	(34,527	)	$	16,160

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Statements of Operations for the Three Months Ended September 30, 2005

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC			Eliminations			Total
NET REVENUES	$	139		$	115,001		$	(139	)	$	115,001
OPERATING (INCOME) EXPENSES:
Station operating expenses	—			63,386			(139		)	63,247
Expenses related to a natural disaster	—			1,714			—			1,714
Depreciation and amortization	155			3,746			—			3,901
Corporate G&A expenses	4,595			16			—			4,611
Net loss on sale or disposal of assets	—			56			—			56
Total operating expenses	4,750			68,918			(139		)	73,529
OPERATING INCOME (LOSS)	(4,611		)	46,083			—			41,472
OTHER (INCOME) EXPENSE:
Interest expense	—			7,618			—			7,618
Interest income	—			(103		)	—			(103		)
Net gain on derivative instruments	—			(527		)	—			(527		)
Gain on investments	—			(1,543		)	—			(1,543		)
Income from equity investment in subsidiaries	(39,936		)	—			39,936			—
Total (income) expense	(39,936		)	5,445			39,936			5,445
INCOME BEFORE INCOME TAXES	35,325			40,638			(39,936		)	36,027
INCOME TAXES	13,247			702			—			13,949
NET INCOME	$	22,078		$	39,936		$	(39,936	)	$	22,078

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Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2006

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC			Eliminations		Total
OPERATING ACTIVITIES:
Net cash provided by operating activities	$	38,891		$	29,485		$	—	$	68,376
INVESTING ACTIVITIES:
Additions to property and equipment	(262		)	(9,387		)	—		(9,649		)
Proceeds from sale of property, equipment and other assets	—			277			—		277
Deferred charges and other assets	(59		)	(209		)	—		(268		)
Purchase of investments	—			(48		)	—		(48		)
Proceeds from investments	—			29			—		29
Station acquisition deposits and costs	—			(4,553		)	—		(4,553		)
Net inter-company loans	102,081			(102,081		)	—		—
Net cash provided by (used in) investing activities	101,760			(115,972		)	—		(14,212		)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt	—			126,000			—		126,000
Payments on long-term debt	—			(42,014		)	—		(42,014		)
Proceeds from issuance of common stock related to incentive plans	409			—			—		409
Purchase of the Company’s Class A common stock	(95,498		)	—			—		(95,498		)
Proceeds from the exercise of stock options	522			—			—		522
Payment of cash dividends	(45,425		)	—			—		(45,425		)
Net cash provided by (used in) financing activities	(139,992		)	83,986			—		(56,006		)
Net increase (decrease) in cash and cash equivalents	659			(2,501		)	—		(1,842		)
Cash and cash equivalents, beginning of year	257			15,814			—		16,071
Cash and cash equivalents, end of period	$	916		$	13,313		$	—	$	14,229

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Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2005

(amounts in thousands)

	Entercom
	Communications			Entercom
	Corp.			Radio, LLC			Eliminations		Total
OPERATING ACTIVITIES:
Net cash provided by operating activities	$	61,783		$	23,423		$	—	$	85,206
INVESTING ACTIVITIES:
Additions to property and equipment	(130		)	(7,506		)	—		(7,636		)
Proceeds from sale of property, equipment and other assets	—			7,824			—		7,824
Deferred charges and other assets	(68		)	(45		)	—		(113		)
Purchase of investments	—			(72		)	—		(72		)
Proceeds from investments	—			5,579			—		5,579
Station acquisition deposits and costs	—			(6,131		)	—		(6,131		)
Net inter-company loans	31,846			(31,846		)	—		—
Net cash provided by (used in) investing activities	31,648			(32,197		)	—		(549		)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt	—			104,500			—		104,500
Payments on long-term debt	—			(94,513		)	—		(94,513		)
Proceeds from issuance of common stock related to incentive plans	406			—			—		406
Purchase of the Company’s Class A common stock	(94,071		)	—			—		(94,071		)
Proceeds from exercise of stock options	137			—			—		137
Net cash provided by (used in) financing activities	(93,528		)	9,987			—		(83,541		)
Net increase (decrease) in cash and cash equivalents	(97		)	1,213			—		1,116
Cash and cash equivalents, beginning of year	288			11,556			—		11,844
Cash adjustment for deconsolidated entity	—			—			2		2
Cash and cash equivalents, end of period	$	191		$	12,769		$	2	$	12,962

35

13.INCOME TAXES

Effective Tax Rates

The effective tax rates for the nine months ended September 30, 2006 and 2005 were 39.8% and 38.3%, respectively, and for the three months ended September 30, 2006 and 2005 were 39.6% and 38.7%, respectively.  The effective tax rate for 2006 increased primarily due to the impact of limitations on deductibility for tax purposes of share-based compensation for certain key employees. During the nine months ended September 30, 2006, the Company included in income taxes a net income tax credit of $0.3 million, primarily from changes in the taxable income in several jurisdictions in which the Company operates and federal income tax credits from the effect of Hurricane Katrina.

The Company made income tax payments of $0.2 million and $9.7 million for the nine months ended September 30, 2006 and 2005, respectively, and $0.1 million and $2.8 million for the three months ended September 30, 2006 and 2005, respectively. 

The Company’s effective tax rates, for each of the nine months and three months ended September 30, 2006 and 2005, were based on the estimated annual effective tax rates for 2006 and 2005 of 39.0% and 38.8%, respectively, which include the effects of permanent differences between income subject to income tax for book and tax purposes. Any subsequent fluctuation in the estimated annual rate for 2006 could be due to: (1) changes in the level of income in any of the Company’s taxing jurisdictions; (2) changes in the statutes and rules applicable to taxable income in the jurisdictions in which the Company operates; (3) changes in the expected outcome of tax audits; (4) changes in the estimate of expenses that are not deductible for tax purposes; (5) additional states in which the Company conducts business as a result of pending acquisitions; and (6) changes in the deferred tax valuation allowance. The Company’s effective tax rate is higher than the federal statutory rate of 35% primarily as a result of the provision for state taxes (net of a federal tax deduction) in the tax rate.

See Note 2, Recent Accounting Pronouncements, for a discussion of FIN 48, “Accounting for Uncertainty in Income Taxes, and Related Implementation Issues,” which is effective for the Company as of January 1, 2007. The Company is currently evaluating FIN 48 and its effect on the Company’s financial position, results of operations or cash flows.

Deferred Tax Liabilities

The deferred tax liabilities were $219.6 million as of September 30, 2006 and $192.8 million as of December 31, 2005. The income tax accounting process to determine the deferred tax liabilities involves estimating all temporary differences between the tax and financial reporting bases of the Company’s assets and liabilities, based on enacted tax laws and statutory tax rates applicable to the period in which the differences are expected to affect taxable income. The Company estimated the current exposure by assessing the temporary differences and computing the provision for income taxes by applying the estimated effective tax rate to income.

Deferred Tax Assets

The Company’s net deferred tax assets as of September 30, 2006 and December 31, 2005 were $3.3 million and $3.0 million, respectively. As required under the provisions of SFAS No. 109, the Company establishes a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized.  In assessing a valuation allowance for deferred tax assets, the Company estimates future taxable income and provides a valuation allowance when it is more likely than not to be recovered. Future taxable income could be materially different than amounts estimated, in which case the valuation allowance would be adjusted. The Company recorded a partial valuation allowance of $0.8 million primarily due to the five-year limitation for tax purposes of recognizing a loss on investments for federal and state income taxes as only investment gains can be used to offset these losses. Based upon the years in which taxable temporary differences are anticipated to reverse, as of September 30, 2006, management believes it is more likely than not that the Company will realize the benefits of the deferred tax asset balance (net of recorded allowances). On a quarterly basis, management will assess whether it remains more likely than not that the deferred tax assets will be realized. 

Under the provisions of SFAS No. 123R, “Share-Based Payment,”  the Company’s amount of deferred tax assets will increase substantially beginning in 2006 due to the effect of the recognition of share-based payment timing differences for book and tax purposes (see Note 2, Share-Based Compensation, for further discussion). 

36

Federal And State Income Tax Audits

The Company is subject to various federal and state income tax audits from time to time that could result in proposed assessments. The Company cannot predict with certainty how these audits will be resolved and whether the Company will be required to make additional tax payments, which may or may not include penalties and interest. Management believes that the Company has provided sufficient tax provisions for tax periods within the statutory period of limitations not previously audited and that are potentially open for examination by the taxing authorities. Potential liabilities associated with these years will be resolved when an event occurs to warrant closure, primarily through the completion of audits by the taxing jurisdictions, or when the statute of limitations relating to the period subject to audit expires. To the extent audits or other events result in a material adjustment to the accrued estimates, the effect would be recognized during the period of the event.

14.TRADE RECEIVABLES AND RELATED ALLOWANCE FOR DOUBTFUL ACCOUNTS

Trade receivables are primarily comprised of unpaid advertising by advertisers on our radio stations, net of agency commissions, and an estimated provision for doubtful accounts. Estimates of the allowance for doubtful accounts are recorded based on management’s judgment of the collectibility of the accounts receivable based on historical information, relative improvements or deteriorations in the age of the accounts receivable and changes in current economic conditions. 

The trade receivable balances and reserve for doubtful accounts as of September 30, 2006 and December 31, 2005 are presented in the following table:

	September 30,			December 31,
	2006			2005
	(amounts in thousands)
Accounts receivable	$	89,414		$	80,441
Allowance for doubtful accounts	(2,864		)	(3,514		)
Accounts receivable, net of allowance for doubtful accounts	$	86,550		$	76,927

15.SUBSEQUENT EVENTS

Cincinnati, Ohio

On October 31, 2006, the Company entered into an agreement to exchange WGRR-FM, a radio station included in the CBS acquisition noted above, for WPRV-FM (including certain intellectual property of WYGY-FM), a radio station owned by Cumulus. Each of these stations serves the Cincinnati, Ohio, radio market. Concurrently with entering into the asset exchange agreement, the Company also entered into two time brokerage agreements. Pursuant to these TBAs, the Company commenced operations of WPRV-FM and Cumulus commenced operations of WGRR-FM on November 1, 2006.  See Note 8, Commitments and Contingencies for a further description of this transaction.

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ITEM 2.Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

General

We are one of the largest radio broadcasting companies in the United States based on net revenues. We were organized in 1968 as a Pennsylvania corporation. Today we operate in 23 markets, including Boston, Seattle, Denver, Sacramento, Cincinnati, Portland, Kansas City, Indianapolis, Milwaukee, Austin, Norfolk, Buffalo, New Orleans, Providence, Memphis, Greensboro, Rochester, Greenville/Spartanburg, Madison, Wichita, Wilkes-Barre/Scranton, Springfield and Gainesville/Ocala.

A radio broadcasting company derives its revenues primarily from the sale of broadcasting time to local and national advertisers.  The advertising rates that a radio station is able to charge and the number of advertisements that can be broadcast without jeopardizing listener levels largely determine those revenues.  Advertising rates are primarily based on four factors:

·a station’s audience share in the demographic groups targeted by advertisers, as measured principally by quarterly reports issued by The Arbitron Ratings Company;

·the number of radio stations in the market competing for the same demographic groups;

·the supply of and demand for radio advertising time, both nationally and in the regions in which the station operates; and

·the market’s size based upon available radio advertising revenue.

A growing source of revenues is from the station websites and streaming audio. This emerging category represents an opportunity for enhanced audience interaction and participation as well as integrated advertising.

Several factors may adversely affect a radio broadcasting company’s performance in any given period.  In the radio broadcasting industry, seasonal revenue fluctuations are common and are due primarily to variations in advertising expenditures by local and national advertisers.  Typically, revenues are lowest in the first calendar quarter of the year. 

As opportunities arise, we may, on a selective basis, change or modify a station’s format due to changes in listeners’ tastes or changes in a competitor’s format. A format change or modification could have an immediate negative impact on a station’s ratings and/or revenues, and there are no guarantees that the modification or change will be beneficial at some future time. Our management is continually focused on these opportunities as well as the risks and associated uncertainties. We believe that the diversification of formats on our stations helps to insulate us from the effects of changes in the musical tastes of the public. We strive to develop compelling content and strong brand images to maximize audience ratings that are crucial to our stations’ financial success.

Our results of operations include net revenues and station operating expenses from stations we own and those net revenues and station operating expenses recognized under a time brokerage agreement or similar sales agreement for stations operated by us prior to acquiring the stations. Depending on the facts and circumstances relating to each pending asset purchase agreement (e.g., whether or not there is an associated time brokerage agreement or similar agreement) and the provisions of Financial Interpretation No. 46R (“FIN 46R”) (as revised), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,” which would include any variable interest entities that are required to be consolidated by the primary beneficiary, we may include: (1) the assets and liabilities of the entity holding the assets to be acquired, in our consolidated balance sheet; and (2) the net revenues and station operating expenses of the entity holding the assets to be acquired, in our consolidated statement of operations. 

You should read the following discussion and analysis of our financial condition and results in conjunction with our consolidated financial statements and related notes included elsewhere in this report. The following results of operations include a discussion of the nine months and the three months ended September 30, 2006 as compared to the nine months and three months ended September 30, 2005, respectively. Our results of operations represent the operations of the radio stations owned or operated pursuant to time brokerage agreements or joint sales agreements during the relevant periods.

We discuss net revenues, station operating expenses and operating income by comparing the performance of stations owned or operated by us throughout a relevant period to the performance of those same stations in the prior period whether or not owned or operated by us. Included in the comparisons that follow under the heading “Same Station Considerations” is summary information regarding significant contracts that: (1) relate to station operations; (2) have a significant effect on the net revenues and/or station operating expenses of a particular market; and (3) we account for as

38

separate business units. We use these comparisons to assess the performance of our operations by analyzing the effect of acquisitions and dispositions of stations and changes in status of significant contracts on net revenues and station operating expenses throughout the periods measured.

Results of Operations

The following significant factors affected our results of operations for the nine months ended September 30, 2006 as compared to the nine months ended September 30, 2005 and many of the following significant factors affected our results of operations for the three months ended September 30, 2006, as compared to the three months ended September 30, 2005:

Acquisitions

·on August 21, 2006, we began operating WKAF-FM (formerly WILD-FM) in Boston, Massachusetts under a time brokerage agreement by simulcasting the format of WAAF-FM (another radio station owned and operated by us in this market), which in 2006 increased station operating expenses; and

·on October 7, 2005, we acquired for $45.0 million three radio stations in Greenville, South Carolina, which in 2006 increased our net revenues, station operating expenses, depreciation and amortization and interest expense.

Dispositions

·on October 6, 2005, we sold for $6.7 million three radio stations in Greenville, South Carolina, which in 2006 decreased our net revenues, station operating expense, depreciation and amortization and interest expense;

·on March 31, 2005, we sold for $2.2 million four radio stations in Longview, Washington, that the buyer began operating on November 15, 2004 under a time brokerage agreement, which in 2006 decreased depreciation and amortization expense and interest expense; and

·on January 21, 2005, we sold for $6.0 million a radio station in Seattle, Washington, that the buyer began operating on December 12, 2004 under a time brokerage agreement, which in 2006 decreased depreciation and amortization expense and interest expense and, in 2005, increased gains on sale of assets by $5.5 million.

Financing

·in 2006, we paid quarterly cash dividends to our shareholders in an aggregate amount of $45.4 million, which in 2006 increased our interest expense due to increased borrowings under our senior credit facility to finance the payment of the dividends; and

·under our authorized share repurchase programs, we repurchased shares of our Class A common stock in the amount of $95.5 million during the first nine months of 2006 and in the amount of $188.4 million in 2005, which in 2006 increased our interest expense due to increased borrowings and increased borrowing costs under our senior credit facility to finance the repurchase of our stock.

Other

·on January 1, 2006, we adopted a new accounting standard which required the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases based on estimated fair values, which in 2006 increased our station operating expenses and corporate general and administrative expenses; and

·since August 2005, Hurricane Katrina and its aftermath have continued to impact the operations of our radio stations in New Orleans, Louisiana, which in 2006 decreased our net revenues.

Nine Months Ended September 30, 2006 As Compared To The Nine Months Ended September 30, 2005

Net Revenues:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Net Revenues	$	321.9		$	328.8
Amount of Change	$	- 6.9
Percentage Change	- 2.1		%

39

Many of our markets were affected by a sluggish advertising environment that negatively impacted our net revenues during the first nine months of 2006, with the largest declines in our Denver, Milwaukee, Norfolk and Seattle markets. These declines were offset by an increase in net revenues in our Boston, Greenville, Portland, Providence and Rochester markets.  The increase in net revenues in our Greenville market was primarily attributable to the acquisition of three Greenville radio stations in October 2005.

Same Station Considerations:

·Net revenues in 2006 were not affected by any acquisitions or dispositions of radio stations or significant contracts which were not owned or operated by us for the entire period ended September 30, 2006.

·Net revenues in 2005 would have been higher by $4.4 million if we had adjusted net revenues to give effect to acquisitions and dispositions of radio stations and significant contracts as of January 1, 2005.

Station Operating Expenses:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Station Operating Expenses	$	190.5		$	187.2
Amount of Change	$	3.3
Percentage Change	1.8		%

The increase of $3.3 million in station operating expenses in 2006 was primarily due to the acquisition in October 2005 of three radio stations in our Greenville market, the impact of non-cash operating expense and the effects of inflation. In connection with the adoption on January 1, 2006 of Statement of Financial Accounting Standards No. 123R (“SFAS No. 123R”), non-cash stock-based compensation expense in the amount of $0.7 million was recorded in station operating expenses for the nine months ended September 30, 2006.  The increase in station operating expenses was offset by a correlating decrease in the variable expenses associated with the decrease in net revenues as described under net revenues.

Same Station Considerations:

·Station operating expenses in 2006 were not affected by any acquisitions or dispositions of radio stations or significant contracts which were not owned or operated by us for the entire period ended September 30, 2006.

·Station operating expenses for 2005 would have been higher by $2.4 million if we had adjusted station operating expenses to give effect to acquisitions and dispositions of radio stations and significant contracts as of January 1, 2005.

Depreciation And Amortization Expenses:

	Nine Months Ended
	September 30, 2006		September 30, 2005
	(dollars in millions)
Depreciation and Amortization Expenses	$	11.9	$	11.9
Amount of Change	No change
Percentage Change	No change

Depreciation and amortization expenses remained flat from the prior year primarily as the effect on depreciation and amortization expenses from an acquisition in 2005 in our Greenville market was offset by dispositions in 2005 in our Seattle, Greenville and Longview markets.

40

Corporate General And Administrative Expenses:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Corporate General and Administrative Expenses	$	18.6		$	14.2
Amount of Change	$	4.4
Percentage Change	31.0		%

The increase in corporate general and administrative expenses of $4.4 million was primarily due to: (1) an increase in non-cash compensation expense of $2.2 million for the reasons described below; (2) an increase in legal expenses of $1.8 million primarily for the write-off of transaction costs of $1.2 million during the first quarter of 2006 that were associated with an acquisition that did not materialize; and (3) the effects of inflation.

Non-cash compensation expense increased $2.2 million to $2.9 million for the nine months ended September 30, 2006 as compared to $0.7 million for the nine months ended September 30, 2005, primarily due to: (1) a change in our approach towards equity compensation awards issued to our key employees during the second quarter of 2006 by granting a combination of restricted stock units with service conditions and restricted stock units with service and market conditions, in lieu of stock options; and (2) the adoption on January 1, 2006 of SFAS No. 123R.

Operating Income:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Operating Income	$	99.7		$	119.2
Amount of Change	$	- 19.5
Percentage Change	- 16.4		%

The decrease in operating income of $19.5 million was primarily due to: (1) a decrease in net revenues coupled with an increase in station operating expenses, for the reasons described under net revenues and station operating expenses; (2) a decrease in net gain on sale or disposal of assets to a net loss on sale or disposal of assets of $1.1 million for the nine months ended September 30, 2006 as compared to a net gain on sale or disposal of assets of $5.5 million for the six months ended June 30, 2005, primarily due to the sale in 2005 of a radio station in Seattle; and (3) an increase in corporate general and administrative expenses of $4.4 million, due to the factors described above under corporate general and administrative expenses.

Same Station Considerations:

·Operating income in 2006 was not affected by any acquisitions and dispositions of radio stations or significant contracts which were not owned or operated by us for the entire period ended September 30, 2006.

·Operating income in 2005 would have been higher by $2.0 million if we had adjusted operating income to give effect to acquisitions and dispositions of radio stations and significant contracts as of January 1, 2005 (exclusive of depreciation and amortization expenses where applicable).

Interest Expense:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Interest Expense	$	32.5		$	21.6
Amount of Change	$	10.9
Percentage Change	50.5		%

The increase in interest expense of $10.9 million was primarily attributable to: (1) higher average outstanding debt under our senior credit agreement used to finance: (a) the repurchase of our Class A common stock in the amount of $95.5 million for the nine months ended September 30, 2006 and $188.4 million during the year ended December 31, 2005, under several stock repurchase programs; (b) an acquisition (net of a disposition) in the amount of $38.3 million in

41

Greenville during the fourth quarter of 2005; and (c) quarterly dividend payments in 2006 in the aggregate of $45.4 million; and (2) higher interest rates and higher borrowing costs on outstanding debt during the nine months ended September 30, 2006 as compared to the nine months ended September 30, 2005.

Income Before Income Taxes:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Income Before Income Taxes	$	68.2		$	101.5
Amount of Change	$	- 33.3
Percentage Change	- 32.8		%

The decrease in income before income taxes of $33.3 million was mainly attributable to: (1) a decrease in operating income of $19.5 million to $99.7 million for the nine months ended September 30, 2006 from $119.2 million for the nine months ended September 30, 2005, due to the factors described above under operating income; (2) an increase in interest expense of $10.9 million to $32.5 million for the nine months ended September 30, 2006 from $21.6 million for the nine months ended September 30, 2005, for the reasons described above under interest expense; and (3) a decrease of $2.6 million in net gain on investments due to the sale of certain investments during the nine months ended September 30, 2005.

Income Taxes:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Income Tax	$	27.1		$	38.9
Amount of Change	$	- 11.8
Percentage Change	- 30.3		%

The decrease in income taxes of $11.8 million was primarily a result of a decrease in income before income taxes, for the reasons described above under income before income taxes. This decrease in income taxes was partially offset by an increase in our effective tax rate.

Our effective income tax rate, which is based on the estimated annual effective tax rate, was 39.8% for the nine months ended September 30, 2006 as compared to 38.3% for the nine months ended September 30, 2005. The increase in our effective tax rate was primarily attributable to the impact of limitations on deductibility for tax purposes of share-based compensation for certain key employees. This increase was partially offset by changes in apportioned income to the states in which we operate and federal income tax credits from the effect of Hurricane Katrina. The current and deferred portions of our income tax expense were $0.4 million and $26.7 million, respectively, for the nine months ended September 30, 2006. The current and deferred portions of our income tax expense were $12.1 million and $26.8 million, respectively, for the nine months ended September 30, 2005.

We estimate that our annual effective tax rate for 2006 will be 39.0%, which amount may fluctuate from quarter to quarter. Our effective tax rate may be materially impacted by: (1) changes in the level of income in any of our taxing jurisdictions; (2) regulatory changes in certain states in which we operate; (3) changes in the expected outcome of tax audits; (4) changes in the estimate of expenses that are not deductible for tax purposes; (5) additional states in which we do business as a result of pending acquisitions; and (6) changes in the deferred tax valuation allowance.

Our net non-current deferred tax liabilities were $219.6 million and $192.8 million as of September 30, 2006 and December 31, 2005, respectively. The deferred tax liability primarily relates to differences between book and tax bases of our FCC licenses. Under the provisions of SFAS No. 142, we do not amortize our FCC licenses for financial statement purposes, but instead test them annually for impairment. As our FCC licenses continue to amortize for tax purposes, our deferred tax liability will increase over time. We do not expect the significant portion of our deferred tax liability to reverse over time unless: (1) our FCC licenses become impaired; or (2) our FCC licenses are sold for cash, which would typically only occur in connection with the sale of the assets of a station or groups of stations or the entire Company in a taxable transaction.

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Net Income:

	Nine Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Net Income	$	41.0		$	62.6
Amount of Change	$	- 21.6
Percentage Change	- 34.5		%

The decrease in net income of $21.6 million was primarily attributable to the reasons described above under income before income taxes, net of income tax expense.

Three Months Ended September 30, 2006 As Compared To The Three Months Ended September 30, 2005

Net Revenues:

	Three Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Net Revenues	$	114.3		$	115.0
Amount of Change	$	- 0.7
Percentage Change	- 0.6		%

Many of our markets were affected by a sluggish advertising environment that negatively impacted our net revenues during the quarter, with the largest declines in our Denver, Milwaukee and Norfolk markets. These declines were offset by an increase in net revenues in our Boston, Greenville, Providence and Sacramento markets.  The increase in net revenues in our Greenville market was primarily attributable to the acquisition of three Greenville radio stations in October 2005.

Same Station Considerations:

·Net revenues in 2006 were not affected by any acquisitions or dispositions of radio stations and significant contracts which were not owned or operated by us for the entire period ended September 30, 2006.

·Net revenues in 2005 would have been higher by $1.7 million if we had adjusted net revenues to give effect to acquisitions and dispositions of radio stations and significant contracts as of January 1, 2005.

Station Operating Expenses:

	Three Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Station Operating Expenses	$	64.7		$	63.2
Amount of Change	$	1.5
Percentage Change	2.4		%

The increase of $1.5 million in station operating expenses in 2006 was primarily due to the acquisition in October 2005 of three stations in our Greenville market, the impact of non-cash compensation expense and the effects of inflation. In connection with the adoption on January 1, 2006 of SFAS No. 123R, non-cash stock-based compensation expense in the amount of $0.4 million was recorded in station operating expenses for the three months ended September 30, 2006. The increase in station operating expenses was offset by a correlating decrease in the variable expenses associated with the decrease in net revenues as described under net revenues.

Same Station Considerations:

·Station operating expenses in 2006 were not affected by any acquisitions or dispositions of radio stations or significant contracts which were not owned or operated by us for the entire period ended September 30, 2006.

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·Station operating expenses for 2005 would have been higher by $0.9 million if we had adjusted station operating expenses to give effect to acquisitions and dispositions of radio stations and significant contracts as of January 1, 2005.

Depreciation And Amortization Expenses:

	Three Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Depreciation and Amortization Expenses	$	4.1		$	3.9
Amount of Change	$	0.2
Percentage Change	5.1		%

Depreciation and amortization expenses increased $0.2 million primarily due to the effect on depreciation and amortization expenses of an acquisition in the Greenville market during the fourth quarter of 2005.

Corporate General And Administrative Expenses:

	Three Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Corporate General and Administrative Expenses	$	6.1		$	4.6
Amount of Change	$	1.5
Percentage Change	32.6		%

The increase in corporate general and administrative expenses of $1.5 million was primarily due to: (1) an increase of $1.2 million in non-cash compensation expense related to the grant of restricted stock for the reasons described below; and (2) the effects of inflation.

Non-cash compensation expense increased $1.2 million to $1.4 million for the three months ended September 30, 2006 as compared to $0.2 million for the three months ended September 30, 2005, primarily due to: (1) a change in our approach towards equity compensation awards issued to our key employees during the second quarter of 2006 by granting a combination of restricted stock units with service conditions and restricted stock units with service and market conditions, in lieu of stock options; and (2) the adoption on January 1, 2006 of SFAS No. 123R.

Operating Income:

	ThreeMonths Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Operating Income	$	38.4		$	41.5
Amount of Change	$	- 3.1
Percentage Change	- 7.5		%

The decrease in operating income of $3.1 million was primarily due to: (1) a decrease in net revenues coupled with an increase in station operating expenses, for the reasons described under net revenues and station operating expenses; and (2) an increase in corporate general and administrative expenses of $1.5 million, due to the factors described above under corporate general and administrative expenses.

Same Station Considerations:

·Operating income in 2006 was not affected by any acquisitions or dispositions of radio stations and significant contracts which were not owned or operated by us for the entire period ended September 30, 2006.

·Operating income in 2005 would have been higher by $0.8 million if we had adjusted operating income to give effect to acquisitions and dispositions of radio stations and significant contracts as of January 1, 2005 (exclusive of depreciation and amortization expenses where applicable).

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Interest Expense:

	Three Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Interest Expense	$	11.7		$	7.6
Amount of Change	$	4.1
Percentage Change	53.9		%

The increase in interest expense of $4.1 million was primarily attributable to: (1) higher average outstanding debt under our senior credit agreement used to finance: (a) the repurchase of our Class A common stock in the amount of $95.5 million for the nine months ended September 30, 2006 and in the amount of $188.4 million during the year ended December 31, 2005 under several stock repurchase programs; (b) an acquisition (net of a disposition) in the amount of $38.3 million in Greenville during the fourth quarter of 2005; and (c) quarterly dividend payments in 2006 of $45.4 million; and (2) higher interest rates on outstanding debt during the three months ended September 30, 2006 as compared to the three months ended September 30, 2005.

Income Before Income Taxes:

	Three Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Income Before Income Taxes	$	26.8		$	36.0
Amount of Change	$	- 9.2
Percentage Change	- 25.6		%

The decrease in income before income taxes of $9.2 million was mainly attributable to: (1) a decrease in operating income of $3.1 million to $38.4 million for the three months ended September 30, 2006 from $41.5 million for the three months ended September 30, 2005, for the factors described above under operating income; (2) an increase in interest expense of $4.1 million to $11.7 million for the three months ended September 30, 2006 from $7.6 million for the three months ended September 30, 2005, for the reasons described above under interest expense; and (3) a decrease of $1.5 million in net gain on investments due to the sale of certain investments during the three months ended September 30, 2005.

Income Taxes:

	Three Months Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Income Tax	$	10.6		$	13.9
Amount of Change	$	- 3.3
Percentage Change	- 23.7		%

The decrease in income taxes of $3.3 million was primarily a result of a decrease in income before income taxes, offset by an increase in our effective income tax rate. Our effective income tax rate, which is based on the estimated annual effective tax rate, was 39.6% for the three months ended September 30, 2006 as compared to 38.7% for the three months ended September 30, 2005. The increase in our effective tax rate was primarily attributable to the impact of limitations on deductibility for tax purposes of share-based compensation for certain key employees. The current and deferred portions of our income tax expense were $2.2 million and $8.4 million, respectively, for the three months ended September 30, 2006. The current and deferred portions of our income tax expense were $4.4 million and $9.5 million, respectively, for the three months ended September 30, 2005.

We estimate that our annual effective tax rate for 2006 will be 39.0%, which amount may fluctuate from quarter to quarter. Our effective tax rate may be materially impacted by: (1) changes in the level of income in any of our taxing jurisdictions; (2) regulatory changes in certain states in which we operate; (3) changes in the expected outcome of tax audits; (4) changes in the estimate of expenses that are not deductible for tax purposes; (5) additional states in which we do business as a result of pending acquisitions; and (6) changes in the deferred tax valuation allowance.

Our net non-current deferred tax liabilities were $219.6 million and $192.8 million as of September 30, 2006 and December 31, 2005, respectively. The deferred tax liability primarily relates to differences between book and tax bases of

45

our FCC licenses. Under the provisions of SFAS No. 142, we do not amortize our FCC licenses for financial statement purposes, but instead test them annually for impairment. As our FCC licenses continue to amortize for tax purposes, our deferred tax liability will increase over time. We do not expect the significant portion of our deferred tax liability to reverse over time unless: (1) our FCC licenses become impaired; or (2) our FCC licenses are sold for cash, which would typically only occur in connection with the sale of the assets of a station or groups of stations or the entire Company in a taxable transaction.

Net Income:

	ThreeMonths Ended
	September 30, 2006			September 30, 2005
	(dollars in millions)
Net Income	$	16.2		$	22.1
Amount of Change	$	- 5.9
Percentage Change	- 26.7		%

The decrease in net income of $5.9 million was primarily attributable to the reasons described above under income before income taxes, net of income tax expense.

Liquidity And Capital Resources

Since we began our share repurchase initiative in May 2004, we have used a significant portion of our capital resources to repurchase shares of our Class A common stock (see Liquidity and Capital Resources - Share Repurchase Programs below). Generally, our acquisitions, share repurchases, reductions of our outstanding debt, dividends and other capital requirements are funded from one or a combination of the following sources: (1) our credit agreement; (2) the issuance and sale of securities; (3) internally generated cash flow; and (4) the swapping of our radio stations in transactions which qualify as “like-kind” exchanges under Section 1031 of the Internal Revenue Code.

We have also used a portion of our capital resources to pay dividends in the aggregate amount of $45.4 million during the nine months ended September 30, 2006. Prior to the payment of our first quarterly dividend in March 2006 and since becoming a public company in January 1999, we had not declared any dividends on any class of our common stock. We expect to continue to declare and pay quarterly cash dividends. In the future, any payment of dividends will be at the discretion of the Board of Directors and will depend upon, among other factors, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions, including the provisions of our senior and subordinated debt, and other considerations that the Board of Directors deems relevant.

Our Bank Revolver

On September 22, 2006, we entered into an amendment to our Bank Revolver with a syndicate of banks which provided for the elimination of a restrictive covenant that would have required us to enter into certain interest rate transactions to hedge a portion of our variable rate debt.

On August 12, 2004, we entered into a bank credit agreement, our Bank Revolver, with a syndicate of banks, for a five-year senior secured revolving credit facility of $800.0 million. The Bank Revolver is secured by a pledge of 100% of the capital stock and other equity interest in all of our wholly owned subsidiaries. The Bank Revolver requires us to comply with certain financial covenants and leverage ratios which are defined terms within the agreement, including: (1) Total Debt to Operating Cash Flow; (2) Operating Cash Flow to Interest Expense; and (3) Operating Cash Flow to Fixed Charges. Upon the occurrence of certain events, our interest rate can increase to a maximum of Eurodollar plus 1.375% or prime plus 0.875%. We also pay a commitment fee that varies depending on certain financial covenants and the amount of the unused commitment, to a maximum of 0.375% per annum, on the average unused balance of the Bank Revolver. Management believes we are in compliance with all financial covenants and leverage ratios and all other terms of the Bank Revolver.

Any borrowing necessary to consummate closing on any of the pending transactions as described below, under Liquidity, is conditioned on compliance under the Bank Revolver at the time of closing.

Liquidity

Our liquidity requirements are for working capital and general corporate purposes, including capital expenditures, and any one or more of the following: acquisitions, repurchases of stock and dividends. During the nine months ended September 30, 2006, we paid $0.2 million in income taxes that included certain state taxes for 2005 and certain estimated

46

state taxes for 2006. We anticipate that it will not be necessary to make any additional quarterly estimated federal and certain state income tax payments for the remainder of 2006 based upon existing prepayments and expected quarterly taxable income for the remaining quarters of 2006. Capital expenditures for the nine months ended September 30, 2006 were $9.6 million. We anticipate that capital expenditures in 2006 will consist of: (1) an amount between $7.0 million and $8.0 million for capital expenditures incurred in the ordinary course of business and for the conversion of our remaining FM stations to digital radio; and (2) $6.0 million incurred for the relocation and consolidation of our studio facilities in several of our markets.  Exclusive of the impact of our pending acquisitions on our capital expenditure needs in 2007, we anticipate that our capital expenditures for 2007 will be less than in 2006.

As of September 30, 2006, we have pending transactions under two separate agreements to purchase 15 radio stations serving the Rochester, Memphis, Austin and Cincinnati radio markets, for $262.0 million in cash. Subject to FCC approval and certain requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, closing on Memphis, Austin and Cincinnati is anticipated to occur in early 2007.  Due to the required divestiture of three radio stations in Rochester, we cannot determine when closing will occur in Rochester. We intend to finance the pending acquisitions primarily from available borrowings under the Bank Revolver.

As of September 30, 2006, we have two pending transactions under two separate agreements to purchase a radio station serving the Boston, Massachusetts, radio market, for $30.0 million in cash and a radio station serving the Springfield, Massachusetts radio market for $5.8 million in cash. Under these agreements, we have collectively funded $6.8 million into escrow accounts to be applied against the purchase prices upon closing.  Closing is anticipated to occur in the fourth quarter of 2006. We intend to finance the pending acquisitions primarily from available borrowings under the Bank Revolver.

We believe that cash on hand and cash from operating activities, together with available borrowings under the Bank Revolver, will be sufficient to permit us to meet our liquidity requirements for the foreseeable future, including cash to fund our operations and pending acquisitions (net of any divestitures and subject to bank approval), repurchases of our stock and any dividends. We also believe that we will maintain compliance with the terms of our Bank Revolver. If we are not in compliance, however, there can be no assurance that we will be successful in amending the Bank Revolver or entering into a new credit agreement, obtaining additional financing or that we will be able to obtain such financing on terms acceptable to us, which could delay or impair our efforts to consummate current and future acquisitions. Failure to comply with our financial covenants or other terms of the Bank Revolver could result in the acceleration of the maturity of our outstanding debt or the forfeiture of outstanding deposits in connection with any pending acquisitions.

Our ability to meet our financial obligations could be adversely impacted, however, by factors such as prolonged downturns in the economy, poor performance by our stations, increased competition from other media, and other factors that could be a result of world events. In addition, we may require additional financing for future acquisitions, and we cannot be certain that we will be able to obtain such financing at all or on terms considered favorable by us.

As of September 30, 2006, we had credit available of $288.2 million under the Bank Revolver, subject to compliance with the covenants under the Bank Revolver at the time of borrowing.  As of September 30, 2006, we had $14.2 million in cash and cash equivalents.  During the nine months ended September 30, 2006, we increased our net outstanding debt by $84.0 million, primarily to fund the repurchase of our Class A common stock and for the payment of dividends.  As of September 30, 2006, we had outstanding: (1) $511.0 million of senior debt; (2) $150.0 million in senior subordinated notes; and (3) $0.8 million in a letter of credit.

Operating Activities

Net cash flows provided by operating activities were $68.4 million and $85.2 million for the nine months ended September 30, 2006 and 2005, respectively. The decrease in 2006 was mainly attributable to: (1) a decrease in net income of $15.0 million (net of gain or loss on sale or disposal of assets) to $41.0 million for the nine months ended September 30, 2006 from $62.6 million for the nine months ended September 30, 2005; and (2) an increase in working capital requirements of $4.8 million to $19.3 million for the nine months ended September 30, 2006 as compared to working capital requirements of $14.5 million for the nine months ended September 30, 2005, primarily due to the payment during the nine months ended September 30, 2006 of an unfunded share repurchase obligation of $8.1 million as of December 31, 2005. The decrease in net gain on sale or disposal of assets of $6.6 million to a loss on sale or disposal of assets of $1.1 million for the nine months ended September 30, 2006 as compared to a gain on sale or disposal of assets of $5.5 million for the nine months ended September 30, 2005 was primarily from the disposition of a station in Seattle during the first quarter of 2005 that resulted in a gain of $5.5 million.

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Investing Activities

Net cash flows used in investing activities were $14.2 million and $0.5 million for the nine months ended September 30, 2006 and September 30, 2005, respectively.

The cash used in investing activities for the nine months ended September 30, 2006 reflects additions to property and equipment of $9.6 million and an increase to station acquisition deposits and costs of $4.6 million primarily due to a deposit required under a pending asset purchase agreement. The cash flows used in investing activities for the nine months ended September 30, 2005 reflect: (1) additions to property and equipment of $7.6 million; and (2) station acquisition deposits and costs of $6.1 million. The cash flows used in investing activities were offset by: (i) the proceeds of $7.8 million from the sale of stations in Seattle and Longview; and (ii) proceeds from investments of $5.6 million.

Financing Activities

Net cash flows used in financing activities were $56.0 million and $83.5 million for the nine months ended September 30, 2006 and 2005, respectively.

The cash flows used in financing activities reflect the repurchase of Class A common stock of $95.5 million and $94.1 million for the nine months ended September 30, 2006 and 2005, respectively, offset by net borrowings of long-term debt of $84.0 million and $10.0 million for the nine months ended September 30, 2006 and 2005, respectively.  During the nine months ended September 30, 2006, dividends were paid to stockholders in the aggregate amount of $45.4 million.

Credit Rating Agencies

On a continuing basis, credit rating agencies such as Moody’s Investor Services and Standard and Poor’s evaluate our debt in order to assign a credit rating. As a result of their reviews, our credit rating could change. Any significant downgrade in our credit rating could adversely impact our future liquidity. The effect of a change in our credit rating may limit or eliminate our ability to obtain debt financing, or include, among other things, interest rate changes under any future bank facilities, debentures, notes or other types of debt.

Share Repurchase Programs

On May 8, 2006, we announced that our Board of Directors approved a continuation of our share repurchase program by authorizing an additional one-year share repurchase program of up to $100.0 million, with the amount and timing of repurchases over the next year subject to the discretion of management, depending on market conditions and other factors.

On December 13, 2005, March 17, 2005, November 1, 2004 and May 13, 2004, our Board of Directors authorized one-year share repurchase programs of up to $100.0 million for each program. Under these programs, we repurchased an aggregate of 12.1 million shares in the amount of $399.8 million at an average price of $33.08 per share. Under the December 13, 2005 program, $0.2 million remained authorized as available for repurchase.

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Contractual Obligations

The following table reflects a summary as of September 30, 2006 of our contractual obligations for the remainder of the year 2006 and thereafter:

	Payments due by period
									More
			Less than		1 to 3		3 to 5		Than 5
Contractual Obligations:	Total		1 year		years		years		years
	(amounts in thousands)
Long-term debt obligations (1)	$	838,190	$	10,943	$	87,421	$	553,509	$	186,318
Operating lease obligations	71,001		2,674		22,504		17,801		28,022
Purchase obligations (2)	556,124		318,968		91,671		43,484		102,001
Other long-term liabilities (3)	227,232		1,857		1,091		992		223,292
Total	$	1,692,547	$	334,442	$	202,687	$	615,786	$	539,633

(1)(a)Our Bank Revolver had outstanding debt in the amount of $511.0 million as of September 30, 2006. The maturity under our Bank Revolver could be accelerated if we do not maintain certain covenants. The above table includes projected interest expense under the remaining term of the agreement.

(b)Under our $150.0 million 7.625% senior subordinated notes, the maturity could be accelerated if we do not maintain certain covenants or could be repaid in cash by us at our option prior to the due date of the notes. The above table includes projected interest expense under the remaining term of the agreement.

(2)(a) After extensive litigation, on May 19, 2003, we acquired a radio station for a purchase price of $21.2 million, which included an award by the court of $3.8 million in damages as an offset against the original $25.0 million purchase price. A successful appeal by the seller could reverse the $3.8 million in damages awarded by the court.

(b)We have obligations of $297.8 million to acquire the assets of 17 radio stations under several pending asset purchase agreements in the following markets: Boston, Massachusetts; Cincinnati, Ohio; Austin, Texas; Memphis, Tennessee; Rochester, New York;  and Springfield, Massachusetts.

(c)We have $1.7 million in liabilities related to: (i) construction obligations in connection with the relocation and consolidation of certain of our studio facilities; (ii) our obligation to provide a letter of credit; and (iii) obligations to increase our interest in certain partnerships.

(d)In addition to the above, purchase obligations of $252.8 million include contracts primarily for on-air personalities, sports programming rights, ratings services, music licensing fees, equipment maintenance and certain other operating contracts.

(3)Included within total other long-term liabilities of $227.2 million are deferred income tax liabilities of $219.6 million that are recognized for all temporary differences between the tax and financial reporting bases of our assets and liabilities based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax liabilities may vary according to changes in tax laws, tax rates and our operating results.  As a result, it is impractical to determine whether there will be a cash impact to an individual year. Therefore, deferred income tax liabilities have been reflected in the above table in the column labeled as “More Than 5 Years.”

Off-Balance Sheet Arrangements

We utilize letters of credit to back certain payment and performance obligations. Letters of credit are subject to limits based on amounts outstanding under our Bank Revolver.

We enter into interest rate swap contracts to hedge a portion of our variable rate debt. See Note 7 in the accompanying condensed consolidated financial statements for a detailed discussion of our derivative instruments.

Under several pending transactions to acquire radio station assets in the following markets: (1) Austin, Texas; (2) Boston, Massachusetts; (3) Cincinnati, Ohio; (4) Memphis, Tennessee; (5) Rochester, New York; and (6) Springfield, Massachusetts, we determined that FIN 46R was not applicable as of September 30, 2006. The sellers, as the primary beneficiaries, would incur the expected losses that could arise from the entities holding the assets to be acquired. As a result, we did not include in the condensed consolidated balance sheets as of September 30, 2006 the fair value of all of the assets and liabilities of the sellers’ entities that contained the assets that are to be acquired under the asset purchase

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agreements. Upon closing on these transactions, we expect to consolidate the assets that are to be acquired under the asset purchase agreements.

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet financial arrangements or other contractually narrow or limited purposes, at September 30, 2006. Accordingly, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Recent Accounting Pronouncements

FAS No. 157

On September 15, 2006, the Financial Accounting Standards Board (“FASB”) issued FAS No. 157, “Fair Value Measurements,” which provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for more information about: (1) the extent to which companies measure assets and liabilities at fair value; (2) the information used to measure fair value; and (3) the effect that fair value measurements have on earnings. SFAS No. 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value to any new circumstances. SFAS No. 157 is effective for us as of January 1, 2008. We are currently evaluating SFAS No. 157 and its effect on our financial position, results of operations or cash flows.

SAB No. 108

On September 13, 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” SAB No. 108 provides guidance on the consideration of effects of the prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. The SEC staff believes registrants must quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB No. 108 is effective for us in our fourth quarter of 2006. We are currently assessing SAB No. 108 and its effect on our financial position, results of operations or cash flows.

FIN 48

On July 13, 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes, and Related Implementation Issues,” that provides guidance on the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions that a company has taken or expects to take on a tax return.  Under FIN 48, financial statements should reflect expected future tax consequences of such positions presuming the taxing authorities have full knowledge of the position and all relevant facts.  The interpretation also revises the disclosure requirements and is effective for us as of January 1, 2007. We are currently evaluating FIN 48 and its effect on our financial position, results of operations or cash flows.

FSP No. FAS 13-1

On October 6, 2005, the FASB issued FASB Staff Position (“FSP”) No. FAS 13-1, “Accounting for Rental Costs Incurred during a Construction Period.”  Under FSP No. FAS 13-1, rental costs associated with ground or building operating leases, that are incurred during a construction period, shall be recognized as rental expense and included in income from continuing operations. The guidance in this FSP was effective January 1, 2006. The adoption of FSP No. FAS 13-1 did not have a material effect on our financial position, results of operations or cash flows.

SFAS No. 154

On June 1, 2005, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting Changes and Error Corrections,” which required entities that voluntarily make a change in accounting principle to apply that change retrospectively to prior periods’ financial statements, unless this would be impracticable. SFAS No. 154 supersedes Accounting Principles Board Opinion No. 20 (“APB No. 20”), “Accounting Changes,” which previously required that most voluntary changes in accounting principle be recognized by including in the current period’s net income the cumulative effect of changing to the new accounting principle. SFAS No. 154 makes a distinction between “retrospective application” of an accounting principle and the “restatement” of financial statements to reflect the correction of an error.  In addition, another significant change in practice under SFAS No. 154 will be that if an entity changes its method of depreciation, amortization, or depletion for long-lived, non-financial assets, the change must be accounted for as

50

a change in accounting estimate.  Under APB Opinion No. 20, such a change would have been reported as a change in accounting principle.  SFAS No. 154 applies to accounting changes and error corrections that were made by us beginning January 1, 2006.  The adoption of SFAS No. 154 did not have a material effect on our financial position, results of operations or cash flows.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the amount of reported revenues and expenses during the reporting period.  We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for our making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different circumstances or using different assumptions.

We consider the following policies to be important in understanding the judgments involved in preparing our financial statements and the uncertainties that could affect our financial position, results of operations or cash flows.

Revenue Recognition

We recognize revenue from the sale of commercial broadcast time to advertisers when the commercials are broadcast, subject to meeting certain conditions such as persuasive evidence that an arrangement exists, the price is fixed and determinable, and collection is reasonably assured. These criteria are generally met at the time an advertisement is broadcast, and the revenue is recorded net of advertising agency commission.

Allowance For Doubtful Accounts

We must make an estimated allowance for doubtful accounts for estimated losses resulting from our customers’ inability to make payments to us. We specifically review historical write-off activity by market, large customer concentrations, customer creditworthiness and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Our historical estimates have usually averaged less than 4.0% of our outstanding receivables and have been a reliable method to estimate future allowances. If the financial condition of our customers or markets were to deteriorate, resulting in an impairment of their ability to make payments, then additional allowances could be required. The effect of a 1% increase in our allowance for our outstanding receivables as of September 30, 2006, from 3.2% to 4.2%, or from $2.9 million to $3.8 million, would result in a decrease in net income of $0.5 million, net of taxes, for the nine months ended September 30, 2006.

Radio Broadcasting Licenses And Goodwill

We have made acquisitions in the past for which a significant amount of the purchase price was allocated to broadcasting licenses and goodwill assets. As of September 30, 2006, we recorded approximately $1.5 billion in radio broadcasting licenses and goodwill, which represented approximately 86.7% of our total assets. In assessing the recoverability of these assets, we must conduct annual impairment testing required by SFAS No. 142 and charge to operations an impairment expense only in the periods in which the recorded value of these assets is more than their fair value. We believe our estimate of the value of our radio broadcasting licenses and goodwill assets is a critical accounting estimate as the value is significant in relation to our total assets, and our estimate of the value contains assumptions incorporating variables that are based on past experiences and judgments about future performance of our stations. These variables would include but not be limited to: (1) the forecast growth rate of each radio market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values.

Changes in our estimates of the fair value of these assets could result in future period write-downs in the carrying value of our broadcasting licenses and goodwill assets. 

Contingencies And Litigation

On an ongoing basis, we evaluate our exposure related to contingencies and litigation and record a liability when available information indicates that a liability is probable and estimable. We also disclose significant matters that are reasonably possible to result in a loss or are probable but not estimable. 

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Estimation Of Effective Tax Rates And Tax Contingencies

Significant management judgment is required in determining our provision for income taxes, income tax liabilities, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. We evaluate our effective tax rates regularly and adjust rates when appropriate based on currently available information relative to statutory rates, apportionment factors and the applicable taxable income in the jurisdictions in which we operate, among other factors.  We are currently evaluating recently issued FIN 48 and its impact on our effective tax rate and tax contingencies (see Part 1, Item 2, Recent Accounting Pronouncements).

Tax contingencies are also recorded to address potential exposures involving tax positions we have taken that could be challenged by taxing authorities. To the extent that we establish a reserve, our provision for income taxes is increased. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary.

When appropriate, we record a valuation allowance against deferred tax assets to offset future tax benefits that may not be realized. In determining if a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events. These potential exposures result from the varying application of statutes, rules, regulations and interpretations. We believe our estimates of the value of our tax contingencies and valuation allowances are critical accounting estimates as they contain assumptions based on past experiences and judgments about potential actions by taxing jurisdictions. It is reasonably likely that the ultimate resolution of these matters may be greater or less than the amount that we have currently accrued. Our estimate of our effective tax rates has not changed significantly in past years, with rates that ranged from 37.5% to 40.0%.

The effect of a 1% increase in our estimated tax rate, as of September 30, 2006, would result in an increase in income tax expense of $0.7 million to $27.8 million from $27.1 million for the nine months ended September 30, 2006. The 1% increase in income tax expense would result in a decrease in net income of $0.7 million (net income per diluted share of $0.02) for the nine months ended September 30, 2006.

Intangibles

As of September 30, 2006, approximately 86.7% of our total assets consisted of radio broadcast licenses and goodwill, the value of which depends upon the operational results of our business.  We could not operate the radio stations without the related FCC license for each station. FCC licenses are renewed every eight years; consequently, we continually monitor the activities of our stations to ensure they comply with all regulatory requirements. Historically, all of our licenses have been renewed at the end of their respective eight-year periods, and we expect that all licenses will continue to be renewed in the future.

Valuation Of Share-Based Compensation

We determine the fair value of restricted stock units with service conditions and market conditions using a Monte Carlo simulation model. The fair value is based on the use of certain assumptions regarding a number of highly complex and subjective variables. If other reasonable assumptions were used, the results may differ.

We determine the fair value of our employee stock options at the date of grant using a Black-Scholes option-pricing model.  The Black-Scholes option-pricing model was developed for use in estimating the value of exchange-traded options that have no vesting restrictions and are fully transferable. Our employee stock options have characteristics significantly different from these traded options.  In addition, option-pricing models require the input of highly subjective assumptions, including the expected stock price volatility and expected term of the options granted. If other reasonable assumptions were used, the results may differ.

Inflation

Inflation has affected our performance in terms of higher costs for radio station operating expenses, including wages and equipment.  The exact impact is indeterminable.

ITEM 3.Quantitative And Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in interest rates on our variable rate senior debt.  Under certain covenants that are measured periodically, we may be required from time to time to protect ourselves from interest rate fluctuations through the use of derivative rate hedging instruments.  If the borrowing rates under LIBOR were to increase

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1% above the current rates as of September 30, 2006, our interest expense on our senior debt would increase by approximately $4.8 million on an annual basis, including any interest expense associated with the use of derivative rate hedging instruments as described below. We do not have interest rate risk related to our senior subordinated notes, which have a fixed interest rate of 7.625%.

As of September 30, 2006, we had a derivative rate hedging transaction in place for a notional amount of $30.0 million that effectively fixes LIBOR at 5.8% and expires in 2008.  The fair value of the rate hedging transaction as of September 30, 2006, based upon current market rates, is included as derivative instruments in other long-term liabilities according to the maturity date of the instrument. Our rate hedging transaction is tied to the three-month LIBOR interest rate, which may fluctuate significantly on a daily basis. The fair value of the hedging transaction is affected by a combination of several factors, including the change in the three-month LIBOR rate and the forward interest rate to maturity. Any increase in the three-month LIBOR rate and/or the forward interest rate to maturity results in a more favorable valuation, while any decrease in the three-month LIBOR rate and/or forward interest rate to maturity results in a less favorable valuation. Our credit exposure under this hedging agreement, or similar agreements we may enter into in the future, is the cost of replacing an agreement in the event of nonperformance by our counter-party.  Our derivative instrument liability as of September 30, 2006 was $0.3 million, which represented a decrease of $0.4 million from the balance as of December 31, 2005. This decrease in liability was due primarily to an increase in the forward interest rate to maturity and a decrease in the remaining period of our outstanding hedge. 

Our cash equivalents are money market instruments consisting of short-term government securities and repurchase agreements that are fully collateralized by government securities.  We do not believe that we have any material credit exposure with respect to these assets.

Our credit exposure related to our accounts receivable does not represent a significant concentration of credit risk due to the quantity of local advertisers with local business representing a high percentage of our business, the minimal reliance on any one advertiser, the multiple markets in which we operate and the wide variety of advertising business sectors.

See also additional disclosures regarding liquidity and capital resources made under Part 1, Item 2, Liquidity and Capital Resources above.

ITEM 4.Controls And Procedures

Evaluation Of Controls And Procedures

We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to ensure that: (i) information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms; and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.  Based on the foregoing, our President/Chief Executive Officer and Executive Vice President/Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes In Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1.Legal Proceedings

Except as described below, there have been no material developments relating to the legal proceedings described in our Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission on February 24, 2006.

In January 2005, we received a subpoena from the Office of Attorney General of the State of New York, as did several other radio broadcasting companies and record companies operating in the State of New York.  These subpoenas were issued in connection with the New York Attorney General’s investigation of promotional practices involved in record companies’ dealings with radio stations. We have cooperated with this investigation and will continue to do so.  In connection with this investigation, the New York Attorney General’s Office has entered into settlement agreements with two record companies, which included both business practice reforms and financial penalties. On March 8, 2006, the Attorney General of the State of New York filed an action in the Supreme Court of the State of New York against us alleging that we have engaged in and continue to engage in deceptive acts and practices in connection with the airplay of current music. In response, on April 10, 2006, we filed a motion to dismiss this complaint. On October 16, 2006, the Court denied that motion. We cannot predict the outcome of this litigation and whether it will have a material impact on us.

As a result of the New York Attorney General’s investigation of promotional practices involved in record companies’ dealings with radio stations, the FCC has announced increased enforcement activity in the area of sponsorship identification and payola, which is prohibited by the Communications Act. We have responded to inquiries by the FCC and have cooperated with the FCC in this investigation.  On April 19, 2006, we received a Letter of Inquiry from the FCC requesting additional information. We have cooperated with this investigation and will continue to do so. We cannot predict the outcome of this litigation and whether it will have a material impact on us.

ITEM 1A.Risk Factors

There have been no material changes from the Risk Factors described in our Form 10-K, filed with the SEC on February 24, 2006.

ITEM 2.Unregistered Sales Of Equity Securities And Use Of Proceeds

On July 7, 2006, we granted 0.3 million restricted stock units in exchange for 3.8 million options following a tender offer made in connection with an option exchange program.  See Option Exchange Program in Note 2 in the accompanying notes to the financial statements.

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Shares		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under The Plans or Programs
July 1, 2006 - July 31, 2006 (1) (2)	3,828,893		(1)	3,828,893		(3)(4)
August 1, 2006 - August 31, 2006 (2)	—			—		(4)
September 1, 2006 - September 30, 2006 (2)	—			—		(4)
Total	3,828,893			3,828,893

(1) On June 5, 2006, we commenced an option exchange program by making an offer to exchange to eligible employees and non-employee directors. We offered such persons the opportunity to make a one-time election to exchange all of their outstanding stock options with exercise prices equal to or greater than $40.00 per share for a lesser number of shares of the our restricted stock. The exchange ratio under the option exchange program was fifteen-to-one such that, for each fifteen eligible options surrendered, the holder received one share of restricted stock. On July 7, 2006, following the July 6, 2006 expiration of the option exchange program, we granted 0.3 million restricted stock units in exchange for 3.8 million options.

(2) On December 13, 2005, our Board of Directors announced the adoption of a plan to repurchase up to $100.0 million of our Class A common stock (the “December 2005 Plan”). The December 2005 Plan expires on December 12, 2006.  On May 8, 2006, our Board of Directors announced the adoption of a plan to repurchase up

54

to $100.0 million of our Class A common stock (the “May 2006 Plan” and together with the December 2005 Plan, the “Plans”). The May 2006 Plan expires on May 7, 2007.  No repurchases were made under the Plans during the three month periods ended September 30, 2006. 

(3) No further purchases may be made under the option exchange program.

(4) We may yet repurchase an aggregate of $214,958 of our Class A common stock under the December 2005 Plan and $100,000,000 of our Class A common stock under the May 2006 Plan.

ITEM 3.Defaults Upon Senior Securities

None.

ITEM 4.Submission Of Matters To A Vote Of Security Holders

None.

ITEM 5.Other Information

None.

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ITEM 6.Exhibits

Exhibit Number	Description
3.01	Amended and Restated Articles of Incorporation of the Entercom Communications Corp. (1)
3.02	Amended and Restated Bylaws of the Entercom Communications Corp. (2) (Originally filed as Exhibit 3.02)
4.01	Indenture dated as of March 5, 2002 by and among Entercom Radio, LLC and Entercom Capital, Inc., as co-issuers, the Guarantors named therein and HSBC Bank USA, as trustee. (2) (Originally filed as Exhibit 4.02)
4.02	First Supplemental Indenture dated as of March 5, 2002 by and among Entercom Radio, LLC and Entercom Capital, Inc., as co-issuers, the Guarantors named therein and HSBC Bank USA, as trustee. (2) (Originally filed as Exhibit 4.03)
10.01	Asset Purchase Agreement dated as of August 18, 2006 among CBS Radio Stations, Inc., Texas CBS Radio, L.P. and CBS Radio, Inc. of Illinois and Entercom Communications Corp. (3)
10.02	Asset Purchase Agreement dated as of August 18, 2006 between CBS Radio Stations, Inc. and Entercom Communications Corp. (3)
10.03	First Amendment To First Amended And Restated Credit Agreement dated as of September 22, 2006, by and among Entercom Radio, LLC, as the Borrower, Entercom Communications Corp., as the Parent, KeyBank National Association as Administrative Agent and L/C Issuer Bank of America, N.A. as Syndication Agent and certain the other Lenders parties. (3)
31.01	Certification of President and Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a), as created by Section 302 of the Sarbanes-Oxley Act of 2002. (3)
31.02	Certification of Executive Vice President and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a), as created by Section 302 of the Sarbanes-Oxley Act of 2002. (3)
32.01	Certification of President and Chief Executive Officer pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002. (4)
32.02	Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002. (4)

(1)Incorporated by reference to Exhibit 3.01 of our Amendment to Registration Statement on Form S-1, as filed on January 27, 1999. (File No. 333-61381)

(2)Incorporated by reference to an exhibit (as indicated above) of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, as filed on May 13, 2002.

(3)Filed herewith.

(4)These exhibits are submitted herewith as “accompanying” this Quarterly Report on Form 10-Q and shall not be deemed to be “filed” as part of such Quarterly Report on Form 10-Q.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ENTERCOM COMMUNICATIONS CORP.
	(Registrant)
Date: November 6, 2006	/S/ David J. Field
	Name: David J. Field
	Title: President and Chief Executive Officer
	(principal executive officer)
Date: November 6, 2006	/S/ Stephen F. Fisher
	Name: Stephen F. Fisher
	Title: Executive Vice President and Chief Financial Officer (principal financial and accounting officer)

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EXHIBIT INDEX

Exhibit Number	Description
3.01	Amended and Restated Articles of Incorporation of the Entercom Communications Corp. (1)
3.02	Amended and Restated Bylaws of the Entercom Communications Corp. (2) (Originally filed as Exhibit 3.02)
4.01	Indenture dated as of March 5, 2002 by and among Entercom Radio, LLC and Entercom Capital, Inc., as co-issuers, the Guarantors named therein and HSBC Bank USA, as trustee. (2) (Originally filed as Exhibit 4.02)
4.02	First Supplemental Indenture dated as of March 5, 2002 by and among Entercom Radio, LLC and Entercom Capital, Inc., as co-issuers, the Guarantors named therein and HSBC Bank USA, as trustee. (2) (Originally filed as Exhibit 4.03)
10.01	Asset Purchase Agreement dated as of August 18, 2006 among CBS Radio Stations, Inc., Texas CBS Radio, L.P. and CBS Radio, Inc. of Illinois and Entercom Communications Corp. (3)
10.02	Asset Purchase Agreement dated as of August 18, 2006 between CBS Radio Stations, Inc. and Entercom Communications Corp. (3)
10.03	First Amendment To First Amended And Restated Credit Agreement dated as of September 22, 2006, by and among Entercom Radio, LLC, as the Borrower, Entercom Communications Corp., as the Parent, KeyBank National Association as Administrative Agent and L/C Issuer Bank of America, N.A. as Syndication Agent and certain the other Lenders parties. (3)
31.01	Certification of President and Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a), as created by Section 302 of the Sarbanes-Oxley Act of 2002. (3)
31.02	Certification of Executive Vice President and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a), as created by Section 302 of the Sarbanes-Oxley Act of 2002. (3)
32.01	Certification of President and Chief Executive Officer pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002. (4)
32.02	Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002. (4)

(1)Incorporated by reference to Exhibit 3.01 of our Amendment to Registration Statement on Form S-1, as filed on January 27, 1999. (File No. 333-61381)

(2)Incorporated by reference to an exhibit (as indicated above) of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, as filed on May 13, 2002.

(3)Filed herewith.

(4)These exhibits are submitted herewith as “accompanying” this Quarterly Report on Form 10-Q and shall not be deemed to be “filed” as part of such Quarterly Report on Form 10-Q.

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EX-10.01

Exhibit 10.01

EXECUTION COPY

ASSET PURCHASE AGREEMENT

among

CBS RADIO STATIONS INC.
TEXAS CBS RADIO L.P.
CBS RADIO INC. OF ILLINOIS

and

ENTERCOM COMMUNICATIONS CORP.

TABLE OF CONTENTS

		Page
ARTICLE I ASSETS TO BE CONVEYED		2
1.1	Station Assets	2
1.2	Excluded Assets	3
1.3	Assumption of Obligations	5
1.4	Retained Liabilities	5
1.5	Purchase Price	5
1.6	Closing	5
1.7	General Proration	6
1.8	Effect of Local Marketing Agreement	8
1.9	Allocation	9
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER		9
2.1	Existence and Power	9
2.2	Corporate Authorization	9
2.3	Governmental Authorization	10
2.4	Noncontravention	10
2.5	Absence of Litigation	10
2.6	Financial Statements	10
2.7	FCC Licenses	10
2.8	Tangible Personal Property	11
2.9	Station Contracts	11
2.10	Intangible Property	11
2.11	Real Property	11
2.12	Environmental	12
2.13	Employee Information	12
2.14	Compliance with Laws	13
2.15	Taxes	13
2.16	Sufficiency and Title to Station Assets	13
2.17	No Finder	13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER		13
3.1	Existence	13
3.2	Corporate Authorization and Power	13
3.3	Governmental Authorization	14
3.4	Noncontravention	14
3.5	Absence of Litigation	14
3.6	FCC Qualifications	14
3.7	Financing	14
3.8	No Finder	14
ARTICLE IV COVENANTS		15
4.1	Governmental Approvals	15
4.2	Conduct of Business	16
4.3	Access to Information; Inspections; Confidentiality; Publicity	18
4.4	Risk of Loss	19
4.5	Consents to Assignment; Estoppel Certificates	20
4.6	Notification	20

i

4.7	Employee Matters	20
4.8	Title Insurance; Surveys	22
4.9	Environmental	23
4.10	Further Assurances	23
4.11	Public Filings	24
4.12	No Solicitation	24
4.13	Station KJCE	24
ARTICLE V CONDITIONS PRECEDENT		24
5.1	To Buyer’s Obligations	24
5.2	To Seller’s Obligations	26
ARTICLE VI DOCUMENTS TO BE DELIVERED AT THE CLOSING		27
6.1	Documents to be Delivered by Both Parties	27
6.2	Documents to be Delivered by Seller	27
6.3	Documents to be Delivered by Buyer	27
ARTICLE VII SURVIVAL; INDEMNIFICATION		28
7.1	Survival	28
7.2	Indemnification	28
7.3	Procedures	29
7.4	Computation of Indemnifiable Losses	29
7.5	Sole Remedy	30
ARTICLE VIII TERMINATION RIGHTS		30
8.1	Termination	30
8.2	Effect of Termination	31
8.3	Specific Performance	31
ARTICLE IX TAX MATTERS		32
9.1	Bulk Sales	32
9.2	Transfer Taxes	32
9.3	Taxpayer Identification Numbers	32
ARTICLE X OTHER PROVISIONS		32
10.1	Expenses	32
10.2	Benefit and Assignment	32
10.3	No Third Party Beneficiaries	33
10.4	Entire Agreement; Waiver; Amendment	33
10.5	Headings	33
10.6	Computation of Time	33
10.7	Governing Law; Waiver of Jury Trial	33
10.8	Construction	34
10.9	Notices	34
10.10	Severability	35
10.11	Counterparts	35
ARTICLE XI DEFINITIONS		35
11.1	Defined Terms	35
11.2	Terms Generally	41

ii

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT, made as of the 18th day of August, 2006, is among CBS Radio Stations Inc., a Delaware corporation (“CBS Radio”), Texas CBS Radio L.P., a Delaware limited partnership (“Texas CBS Radio”), and CBS Radio Inc. of Illinois, a Delaware corporation (“Illinois CBS Radio”, and collectively with CBS Radio and Texas CBS Radio, “Seller”), and Entercom Communications Corp., a Pennsylvania corporation (“Buyer”).

RECITALS

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

KAMX(FM), Luling, Texas (Facility ID No. 48651)

KJCE(AM), Rollingwood, Texas (Facility ID No. 1243)

KKMJ-FM, Austin, Texas (Facility ID No. 66489)

KXBT(FM), Taylor, Texas (Facility ID No. 63201)

WMC(AM), Memphis, Tennessee (Facility ID No. 19185)

WMC-FM, Memphis, Tennessee (Facility ID No. 59449)

WMFS(FM), Bartlett, Tennessee (Facility ID No. 4653)

WAQZ(FM), Ft. Thomas, Kentucky (Facility ID No. 40915)

WGRR(FM), Hamilton, Ohio (Facility ID No. 72126)

WKRQ(FM), Cincinnati, Ohio (Facility ID No. 11276)

WUBE-FM, Cincinnati, Ohio (Facility ID No. 10140)

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

Seller and Buyer are, simultaneously with the execution and delivery of this Agreement, entering into a Local Marketing Agreement for the Stations (the “Local Marketing Agreement”), pursuant to which, commencing on the LMA Commencement Date (as defined below), Buyer shall provide programming on the Stations pursuant to the terms and conditions contained therein, pending the Closing of the transactions contemplated by this Agreement.

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

ARTICLE I
ASSETS TO BE CONVEYED

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

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

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

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

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

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

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

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

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

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

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

(c)           (i) all accounts receivable existing at the earlier of (A) the date the term of the Local Marketing Agreement commences (the “LMA Commencement Date”) or (B) the Effective Time, and (ii) notes receivable, promissory notes or amounts due from employees;

(d)           intercompany accounts receivable and accounts payable;

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

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

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

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

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

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

(k)           (i) all rights to marks identified on Schedule 1.2(k) and all goodwill associated therewith and (ii) all rights to marks used in the operation of the Stations and in connection with the operation of another station or business of Seller or any of its Affiliates other than or in addition to the Stations and all goodwill associated with such marks; provided that, in each case, Seller or one of its Affiliates shall grant Buyer, at Buyer’s request, the right, assignable in connection with an assignment of the Stations, to continue to use such mark royalty-free in the manner used by Seller at the applicable Station on a basis exclusive in the Nielsen Television Designated Market Area in which the Stations are located so long as Buyer uses such mark, but non-exclusive in that no right is granted to Buyer hereunder with respect to other markets (some of which may overlap), and such right is limited to the extent of Seller’s rights;

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

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

(n)           any asset or property which is used or held for use by Seller or an Affiliate of Seller not located at the Stations’ offices in Austin, Texas, Memphis, Tennessee or Cincinnati, Ohio or the Stations’ transmitter sites and not used primarily in the operation of the Stations;

(o)           all ASCAP, BMI and SESAC licenses;

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

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

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

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

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

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

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

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

(d)           all liabilities and obligations relating to the Station Assets arising out of Environmental Laws at or after the Effective Time, except to the extent that Seller has undertaken to remediate an Environmental Condition under Section 4.9 (Environmental) or is obligated under Section 7.2(a) (Indemnification) to indemnify Buyer for Losses arising out of or resulting from Seller’s breach of any representation or warranty in Section 2.12 (Environmental).

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

1.5          Purchase Price.  In consideration for the sale of the Station Assets, Buyer shall, at the Closing, in addition to assuming the Assumed Obligations, pay to Seller the sum of $220,000,000 (the “Purchase Price”) by wire transfer of immediately available federal funds pursuant to wire instructions that Seller shall provide to Buyer.

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

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1.7          General Proration.

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

(b)           Except as provided in the Local Marketing Agreement, such prorations shall include all ad valorem and other property taxes, utility expenses, liabilities and obligations under Station Contracts, rents and similar prepaid and deferred items and all other expenses and obligations, such as accrued but unpaid commissions, deferred revenue and prepayments, attributable to the ownership and operation of the Stations that straddle the period before and after the Effective Time.  If such amounts were prepaid by Seller prior to the Effective Time and Buyer will receive a benefit after the Effective Time, then Seller shall receive a credit for such amounts.  If Seller was entitled to receive a benefit prior to the Effective Time and such amounts will be paid by Buyer after the Effective Time, Buyer will receive a credit for such amounts.  To the extent not known, real estate and personal property taxes shall be apportioned on the basis of Taxes assessed for the preceding year, with a reapportionment as soon as the new tax rate and valuation can be ascertained even if such is ascertained after the Settlement Statement is so determined.  Notwithstanding anything in this Section 1.7 to the contrary, there shall be no proration under this Section 1.7 for Tradeout Agreements.

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

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

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

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Seller reasonably believes is necessary or desirable in connection with its review of the Settlement Statement.

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

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

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

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

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employees of such other party and such other party’s independent auditors, if any, as such first party reasonably believes is necessary or desirable in connection with its review of the Notice of Disagreement.

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

1.8          Effect of Local Marketing Agreement.  Simultaneously with the execution of this Agreement, Seller and Buyer are executing and delivering the Local Marketing Agreement.  To the extent that any Station Assets are assigned, any Assumed Obligations are assumed or assets and liabilities are prorated under the Local Marketing Agreement, any obligation of the Seller under this Agreement to assign such Station Assets, of the Buyer to assume such Assumed Obligations or of the parties to prorate such Station Assets and Assumed Obligations, shall be deemed satisfied.  Notwithstanding anything contained herein to the contrary, Seller shall not be deemed to have breached any of its representations, warranties, covenants or agreements contained herein or to have failed to satisfy any condition precedent to Buyer’s obligation to perform under this Agreement (nor shall Seller have any liability or responsibility to Buyer in respect of any such representations, warranties, covenants, agreements or conditions precedent), in each case to the extent that the inaccuracy of any such representations, the breach of any such warranty, covenant or agreement or the inability to satisfy any such condition precedent arises out of or otherwise relates to (a) any actions taken by or under the authorization of Buyer or its Affiliates (or any of their respective officers, directors, employees, agents or representatives) in connection with Buyer’s performance of its obligations under the Local Marketing Agreement or (b) the failure of Buyer to perform any of its obligations under the Local Marketing Agreement.  Buyer acknowledges and agrees that Seller shall not be deemed responsible for or have authorized or consented to any action or failure to act on the part of Buyer or its Affiliates (or any of their respective officers, directors, employees, agents or representatives) in connection with the Local Marketing Agreement solely by reason of the fact that prior to Closing, Seller shall have the legal right to control, manage, and supervise the operation of the Stations and the conduct of the business, except to the extent Seller actually

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exercises control, management or supervision of the operation of the Stations or the conduct of the business.

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

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

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

2.2          Corporate Authorization.

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

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

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

2.4          Noncontravention.  Except as disclosed on Schedule 2.4, the execution, delivery and performance of this Agreement and each Seller Ancillary Agreement by Seller and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate or conflict with the organizational documents of Seller; (b) assuming compliance with the matters referred to in Section 2.3, conflict with or violate any Law or Governmental Order applicable to Seller; (c) require any consent or other action by or notification to any Person under, constitute a default under, give to any Person any rights of termination, amendment, acceleration or cancellation of any right or obligation of Seller under, any provision of (i) any Station Contract other than Real Property Leases or (ii) any Real Property Lease; or (d) result in the creation or imposition of any Lien on any of the Station Assets, except for Permitted Liens, except, in the case of clauses (b), (c)(i) and (d), for any such violations, consents, actions, defaults, rights or losses as would not have a Seller Material Adverse Effect.

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

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

2.7          FCC Licenses.

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

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as currently conducted by Seller, except for immaterial licenses ancillary to the operation of the Stations.

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

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

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

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

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

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

2.11        Real Property.  The Seller entity set forth on Schedule 1.1(f) has fee simple title to the owned Real Property identified on Schedule 1.1(f) (the “Owned Real Property”) free and clear of Liens other than Permitted Liens.  Schedule 1.1(f) includes a list of each lease, sublease, license or similar agreement pertaining to the Real Property (the “Real

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Property Leases”).  Seller has good and valid leasehold interest in the Real Property conveyed by the Real Property Leases (the “Leased Real Property”) or has a valid license to occupy the Leased Real Property.  The Owned Real Property includes, and the Real Property Leases provide, sufficient access to the Stations’ facilities.  To Seller’s knowledge, the Real Property is not subject to any suit for condemnation or other taking by any public authority.  Seller has received no notice of default under or termination of any Real Property Leases, and Seller has no knowledge of any default under any Real Property Lease.  Seller has delivered to Buyer true and correct copies of the Real Property Leases together with all amendments thereto.  Except as set forth on Schedule 1.1(c) or Schedule 1.1(f), Seller has not granted any oral or written right to any Person (other than Seller) to lease, sublease, license or otherwise occupy any of the Real Property.  Except as set forth on Schedule 2.11, Seller has no knowledge of any violations of zoning laws or any encroachments with respect to the Owned Real Property, or the property leased for the WMC AM/FM transmitter site (the “WMC Transmitter Site”) or the property leased for the KJCE-AM transmitter site (the “KJCE Transmitter Site”), either onto such Real Property by third parties, or by the Station Assets onto the property of others, for which there is not a valid easement or license.

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

2.13        Employee Information.

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

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

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

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

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

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

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

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

3.2          Corporate Authorization and Power.

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

(b)           This Agreement has been, and each Buyer Ancillary Agreement will be, duly executed and delivered by Buyer.  This Agreement (assuming due authorization, execution and delivery by Seller) constitutes, and each Buyer Ancillary Agreement will constitute when executed and delivered by Buyer, the legal, valid and binding obligation of

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Buyer enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity).

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

3.4          Noncontravention.  The execution, delivery and performance of this Agreement and each Buyer Ancillary Agreement by Buyer and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate or conflict with the organizational documents of Buyer; (b) assuming compliance with the matters referred to in Section 3.3, conflict with or violate any Law or Governmental Order applicable to Buyer; or (c) except as set forth on Schedule 3.4, require any consent or other action by or notification to any Person under, constitute a default under, give to any Person any rights of termination, amendment, acceleration or cancellation of any right or obligation of Buyer under, any provision of any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other agreement or instrument to which Buyer is a party or by which any of Buyer’s assets is or may be bound, except, in the case of clauses (b) and (c), for any such violations, consents, actions, defaults, rights or losses as could not have, individually or in the aggregate, a Buyer Material Adverse Effect.

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

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

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

3.8          No Finder.  No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement, the Buyer Ancillary

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Agreements or the transactions contemplated hereby or thereby as a result of any agreements or action of Buyer or any party acting on Buyer’s behalf.

ARTICLE IV
COVENANTS

4.1          Governmental Approvals.

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

(b)           FCC Application.

(i)            The assignment of the FCC Licenses as contemplated by this Agreement is subject to the prior consent and approval of the FCC.  Within five Business Days after execution of this Agreement, Buyer and Seller shall file the FCC Application.  Seller and Buyer shall thereafter prosecute the FCC Application with all commercially reasonable diligence and otherwise use commercially reasonable efforts to obtain the FCC Consent as expeditiously as practicable.  Each party shall promptly provide the other with a copy of any pleading, order or other document served on it relating to the FCC Application, and shall furnish all information required by the FCC.

(ii)           The parties acknowledge that license renewal applications are currently pending for certain of the FCC Licenses.  The parties further acknowledge that the FCC generally will not allow the consummation of an acquisition a radio broadcast station if a license renewal application for the station is pending.  The parties, however, desire to consummate the transactions contemplated by this Agreement as soon as possible, subject to the terms of this Agreement.  In order to ensure that the FCC acts on the FCC Application in the normal course and to allow the parties to consummate the transactions contemplated by this Agreement as soon as possible, Buyer agrees to advise the FCC in writing, either in a letter submitted to the FCC or in the FCC Application itself, of Buyer’s express willingness to abide by the procedures set forth in paragraph 35 of Stockholders of CBS, 11 FCC Rcd 3733, 3750 (1995), and to assume the consequences associated with Buyer succeeding to the place of Seller in such renewal applications.  Seller agrees to indemnify Buyer for all Losses relating to FCC matters that may arise out of or result from such agreement without regard to the limitations set forth in the last sentence of Section 7.2(a).

(c)           Compliance with Antitrust Laws.  Each of Buyer and Seller agrees to make appropriate filings pursuant to applicable Antitrust Laws, including a Notification and Report Form pursuant to the HSRA (including making a request for early termination of the

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waiting period thereunder), with respect to the transactions contemplated hereby within five Business Days after the date of this Agreement, to furnish to the other party all information that the other reasonably requests in connection with such filings, and to supply, as promptly as practicable, any additional information and documentary material that may be requested pursuant to the HSRA.  The consummation of the transactions contemplated by this Agreement and the commencement of the Local Marketing Agreement are each conditioned upon the termination or expiration of the waiting period under the HSRA without the institution or threat of any action with respect to such consummation or commencement.

(d)           Commercially Reasonable Efforts.  In connection with the efforts referenced in Section 4.1(a), Section 4.1(b) and Section 4.1(c) to obtain (i) all requisite approvals and authorizations for the transactions contemplated by this Agreement under the HSRA or any other Antitrust Law and (ii) the FCC Consent, each of Buyer and Seller shall use its commercially reasonable efforts to (A) cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party, (B) keep the other party informed in all material respects of any material communications received by such party from, or given by such party to, the Federal Trade Commission (the “FTC”), the Antitrust Division of the Department of Justice (the “DOJ”), the FCC or any other Governmental Authority and of any material communication received or given in connection with any proceeding by a private party and (C) permit the other party to review any material non-confidential communication given by it to, and consult with each other in advance of and be permitted to attend any meeting or conference with, the FTC, DOJ, the FCC or any such other Governmental Authority or, in connection with any proceeding by a private party, with any other Person, in each case regarding any of the transactions contemplated by this Agreement.

(e)           Governmental Filing or Grant Fees.  Except as otherwise provided in this Agreement, any filing or grant fees (including FCC and HSRA filing fees) imposed by any Governmental Authority, the consent of which is required for the transactions contemplated hereby, shall be borne equally by Seller and Buyer.  In addition, Seller and Buyer shall bear equally any fees incurred by Seller in the publication of the requisite local public notice regarding the FCC Application under Section 73.3580(d)(3) of the FCC’s rules.

4.2          Conduct of Business.

(a)           Prior to Closing.  Between the date of this Agreement and the Closing Date, except as expressly permitted by this Agreement or the Local Marketing Agreement, or with the prior written consent of Buyer, which consent shall not be unreasonably conditioned, withheld or delayed and which shall be deemed given if Buyer does not respond to Seller’s request within five Business Days of receipt thereof, Seller shall:

(i)            maintain the FCC Licenses in full force and effect;

(ii)           operate the Stations in all material respects in accordance with the FCC Licenses, the Communications Act, the FCC rules and regulations and all applicable Laws;

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(iii)          not adversely modify any of the FCC Licenses, except as may be provided in any pending application identified on Schedule 2.7(b);

(iv)          use commercially reasonable efforts to cause all Liens on the Station Assets, other than Permitted Liens, to be released in full prior to Closing;

(v)           use commercially reasonable efforts to provide Buyer with any financial information regarding the Stations as is maintained by Seller on a basis not consolidated with other stations and requested by Buyer that is reasonably necessary to satisfy any reporting obligations to the Securities and Exchange Commission or reasonably necessary to obtain acquisition financing for the Stations;

(vi)          not, other than in the ordinary course of business and consistent with past practice, terminate, rescind, or waive any rights under any Station Contracts;

(vii)         not enter into any new contracts or agreements in connection with the operation of the Stations (or amend any existing Station Contract) (i) other than in the ordinary course and consistent with past practice and (ii) provided that any such new contracts or amendments that are binding after the Closing, except for those contracts or agreements entered into pursuant to Section 4.2(a)(viii), Section 4.2(b)(x) or Section 4.5(b), shall require post-Closing payments by Buyer of less than $100,000 per market (in the aggregate under such new contracts or amendments);

(viii)        with respect to Station Employees, not (A) grant raises other than raises that would be given in the ordinary course of business consistent with past practice in connection with the October 1st focal point review, (B) pay substantial bonuses other than (x) stay bonuses or enhanced severance for which the Buyer has no liability or (y) bonuses contemplated under existing employee arrangements, (C) enter into any new employment agreements that are not terminable at will or (D) agree to do any of the foregoing; and

(ix)           repair the items and complete the capital projects set forth on Schedule 4.2.

(b)           Prior to Commencement of Local Marketing Agreement.  Between the date of this Agreement and the LMA Commencement Date, except as expressly permitted by this Agreement or the Local Marketing Agreement, or with the prior written consent of Buyer, which consent shall not be unreasonably conditioned, withheld or delayed and which shall be deemed given if Buyer does not respond to Seller’s request within five Business Days of receipt thereof, Seller shall:

(i)            notify Buyer promptly (A) if a Station is off the air for a continuous period of 12 hours or more or (B) if a Station’s normal broadcast transmissions are materially impaired for a continuous period of more than 24 hours;

(ii)           operate the Stations in the ordinary course of business consistent with past practice;

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(iii)          use commercially reasonable efforts to preserve the business and goodwill of the Stations and the Station Assets;

(iv)          not change the programming formats of any of the Stations;

(v)           adhere in all material respects to the Stations’ current practices, a summary of which has been delivered to Buyer, with respect to the amount of airtime available to broadcast commercials on the Stations;

(vi)          maintain the Tangible Personal Property and the Real Property in normal operating condition consistent with Seller’s past practices, ordinary wear and tear excepted;

(vii)         maintain the Stations’ inventories of spare parts and supplies in the ordinary course and at levels consistent with past practices;

(viii)        not sell, lease or dispose of or agree to sell, lease or dispose of any of the Station Assets, except (A) the ordinary course disposition of items that either are obsolete or unnecessary for the continued operation of the Stations as currently operated or are replaced by assets of comparable or superior utility or (B) pursuant to existing contracts or commitments listed on Schedule 1.1(c), if any, or agree to do any of the foregoing;

(ix)           make all capital expenditures with respect to the Stations in the ordinary course in accordance with past practices, including those relating to the capital projects set forth on Schedule 4.2; and

(x)            make expenditures on market research and promotional activities with respect to the Stations in the ordinary course in accordance with the past practices.

(c)           Control of Stations.  Subject to the provisions of this Section 4.2 and the terms of the Local Marketing Agreement, Buyer shall not, directly or indirectly, control, supervise or direct the operations of the Stations prior to the Closing.  Such operations shall be the sole responsibility of Seller and shall be in its complete discretion.

4.3          Access to Information; Inspections; Confidentiality; Publicity.

(a)           Between the date hereof and the Closing Date, Seller shall furnish Buyer with such information relating to the Station Assets as Buyer may reasonably request, at Buyer’s expense and provided such request does not interfere unreasonably with the business of the Stations.

(b)           Between the date hereof and the Closing Date, upon prior reasonable notice, Seller shall give Buyer and its representatives reasonable access to the Station Assets during regular business hours.

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(c)           Nothing contained herein should be deemed to negate or limit the Seller’s or any of its Affiliates’ rights or any obligations of the Buyer or any of its Affiliates under that certain letter agreement, dated April 5, 2006, by and between CBS Corporation and Entercom Communications Corp. (the “Confidentiality Agreement”), which is incorporated herein by reference.

(d)           No news release or other public announcement pertaining to the transactions contemplated by this Agreement will be made by or on behalf of any party hereto without the prior written approval of the other party (such consent not to be unreasonably conditioned, withheld or delayed) unless otherwise required by Law or any regulation or rule of any stock exchange binding upon such party.  Where any announcement, communication or circular concerning the transactions contemplated by this Agreement is required by Law or any regulation or rule of any stock exchange, it shall be made by the relevant party after consultation, where reasonably practicable, with the other party and taking into account the reasonable requirements (as to timing, contents and manner of making or dispatch of the announcement, communication or circular) of the other party.

4.4          Risk of Loss.

(a)           Seller shall bear the risk of any casualty loss or damage to any of the Station Assets prior to the LMA Commencement Date, and Buyer shall bear such risk on and after the LMA Commencement Date.  In the event of any casualty loss or damage to the Station Assets prior to the LMA Commencement Date, Seller shall be responsible for repairing or replacing (as appropriate under the circumstances) any lost or damaged Station Asset (the “Damaged Asset”) unless such Damaged Asset was obsolete and unnecessary for the continued operation of the Stations consistent with Seller’s past practice and the FCC Licenses.  If Seller is unable to repair or replace a Damaged Asset by the date on which the Closing would otherwise occur under this Agreement, then the proceeds of any insurance covering such Damaged Asset shall be assigned to Buyer at Closing, and to the extent such proceeds are not sufficient to cover the reasonable out-of-pocket costs incurred by Buyer in repairing or replacing the Damaged Asset after the Closing, Seller shall reimburse Buyer by an amount equal to the deficiency.

(b)           If a Station is off the air prior to the LMA Commencement Date, then Seller shall use commercially reasonable efforts to return the Station to the air as promptly as practicable in the ordinary course of business.  Notwithstanding anything herein to the contrary, if on the day otherwise scheduled for commencement of the Local Marketing Agreement, a Station is off the air or operating with a material reduction in coverage, then commencement of the Local Marketing Agreement as to the affected Station shall be postponed until the date five Business Days after such Station returns to the air, and, if applicable, such reduction in coverage is substantially corrected, and the fee payable pursuant to paragraph 1 of Schedule 1.5 of the Local Marketing Agreement during the deferral period shall be reduced by an amount equal to (i) the fee as set forth in paragraph 1 times (ii) the quotient of (x) the EBITDA for the affected Station or Stations during the first six months of 2006 as shown on the Reference Financial Statements divided by (y) the EBITDA for the Stations as a whole as shown on the Reference Financial Statements during the same six-month period.

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4.5          Consents to Assignment; Estoppel Certificates.

(a)           After the execution of this Agreement and prior to Closing, Seller shall use its commercially reasonable efforts to obtain (i) any third-party consents necessary for the assignment of any Station Contract or Real Property Lease and (ii) estoppel certificates duly executed by the lessors under the Real Property Leases in the form of Exhibit A attached hereto.  Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any Station Contract or any claim or right or any benefit arising thereunder or resulting therefrom if such assignment, without the consent of a third party thereto, would constitute a breach or other contravention of such Station Contract or in any way adversely affect the rights of Buyer or Seller thereunder.  If such consent is not obtained prior to the Closing Date, (A) Seller shall use its commercially reasonable efforts to (x) obtain such consent as soon as possible after the Closing Date, (y) provide to Buyer the financial and business benefits of any such Station Contract and (z) enforce, at the request of Buyer, for the account of Buyer, any rights of Seller arising from any such Station Contract; and (B) Buyer shall assume the obligations under such Station Contract in accordance with this Agreement.  Notwithstanding the foregoing, neither Seller nor any of its Affiliates shall be required to pay consideration (except as may be specifically contemplated by the relevant Station Contract) to any third party to obtain any consent or estoppel certificate.

(b)           Seller shall use its commercially reasonable efforts to obtain an agreement with the lessor thereunder to extend the Lease executed September 23, 1997 for KJCE-AM (7010 Johnny Morris Rd., Austin, Texas), as amended, for at least an additional five-year term, on the same terms and conditions as are currently in effect, or on other terms and conditions reasonably acceptable to Buyer.  Such an agreement is not a condition to Closing under this Agreement.

4.6          Notification. Each party shall notify the other party of the initiation or threatened initiation of any litigation, arbitration or administrative proceeding that challenges the transactions contemplated hereby, including any challenges to the FCC Application.

4.7          Employee Matters.

(a)           Buyer may, but is not obligated to, hire any of the Station Employees.  No later than five Business Days prior to the LMA Commencement Date, Buyer shall notify Seller in writing (i) whether or not it will offer employment to a Station Employee and (ii) whether or not it will assume the employment agreement (including any account executive agreement or bonus term sheet), if any, for such Station Employee.  Subject to the reimbursement obligation set forth in Section 4.7(b) below, in the event Buyer elects not to assume an employment agreement, such employment agreement shall be an Excluded Asset and shall not be assumed by Buyer.  Prior to the LMA Commencement Date, Buyer shall offer employment, effective the Employment Commencement Date (as defined below), to the Station Employees as identified on such notice at a monetary compensation (or compensation formula, including base salary, commission rate and bonus opportunity) at least as favorable as that provided by Seller immediately prior to the Employment Commencement Date.  With respect to any Transferred Employee (as defined below) who is party to an employment agreement with Seller, such employment agreement shall be assumed by Buyer, to the extent set forth on

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Schedule 1.1(c) or entered into in accordance with the provisions of Section 4.2(a), and included in the Station Contracts.  The “Employment Commencement Date” shall mean the LMA Commencement Date or, in the case of Station Employees identified on Schedule 4.1 of the Local Marketing Agreement, the Closing Date.

(b)           Notwithstanding anything herein to the contrary, Buyer shall, within three Business Days of Seller’s request, reimburse Seller for all severance, termination or separation payments (including costs for termination of employment agreements not assumed by Buyer and also including medical and dental plan coverage continuation) actually made to those Station Employees not offered employment by Buyer, but only to the extent that (i) such severance obligations arise under agreements or corporate policies of Seller in effect as of, and disclosed to Buyer prior to, the date of this Agreement, and (ii) such payments exceed, in the aggregate, $625,000, under this Agreement and that certain Asset Purchase Agreement of even date herewith between CBS Radio and Buyer.

(c)           With respect to the Station Employees who accept Buyer’s offer of employment and are hired by Buyer (either pursuant to the Local Marketing Agreement or pursuant to this Section 4.7) (the “Transferred Employees”), Seller shall be responsible for all compensation and benefits arising prior to the Employment Commencement Date (in accordance with Seller’s employment terms), and Buyer shall be responsible for all compensation and benefits arising on or after the Employment Commencement Date (in accordance with Buyer’s employment terms).  Seller shall remain responsible for satisfying the obligations, if any, to pay equity compensation to Transferred Employees under the terms of Seller’s equity compensation plans or agreements with Transferred Employees, which obligations were created under Seller’s equity compensation plans or agreements with Transferred Employees prior to the Employment Commencement Date.

(d)           Provided that Buyer receives an appropriate proration under Section 1.7, Buyer shall grant credit to each Transferred Employee for all unused vacation accrued as of Closing as an employee of Seller, and Buyer shall assume and discharge Seller’s obligation to provide such leave to such Transferred Employees (such obligations being a part of the Assumed Obligations).  Notwithstanding any other provision contained herein, Buyer shall grant credit for all unused sick leave accrued by Transferred Employees on the basis of their service during the current calendar year as employees of Seller, provided that Buyer shall not be required to pay any Transferred Employee for unused sick leave.

(e)           Buyer shall permit Transferred Employees (and their spouses and dependents) to participate in its “employee welfare benefit plans” (including health insurance plans) and “employee pension benefit plans,” as defined in Section 3(1) and 3(2) of ERISA, respectively, to the extent similarly situated employees of Buyer are generally eligible to participate, with coverage effective immediately upon the Employment Commencement Date.  Buyer also shall ensure, to the extent permitted by applicable Law (including ERISA and the Code) and Buyer’s plans, that Transferred Employees receive credit under any welfare benefit plan of Buyer for any deductibles or co-payments paid by Transferred Employees and their spouses and dependents for the current plan year under a plan maintained by Seller.  For purposes of any length of service requirements, waiting periods, vesting periods or differential benefits based on length of service in any such employee welfare benefit plans (including any

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severance plans or policies) and defined contribution plans for which Transferred Employees may be eligible after Closing, Buyer shall ensure, to the extent permitted by applicable Law (including ERISA and the Code), that service with Seller (as shown on Schedule 2.13) shall be deemed to have been service with Buyer.

(f)            Buyer shall also permit each Transferred Employee who participates in Seller’s 401(k) plan to elect to make direct rollovers of their account balances into Buyer’s 401(k) plan as of the Employment Commencement Date, including the direct rollover of any outstanding loan balances such that they will continue to make payments under the terms of such loans under the Buyer’s 401(k) plan, subject to compliance with applicable law and subject to the reasonable requirements of Buyer’s 401(k) plan administrator.

(g)           Except as prohibited by applicable Law, after the Closing Seller shall deliver to Buyer originals or copies of all personnel files and records (excluding medical and benefit plan records) related to the Transferred Employees, and Seller shall have reasonable continuing access to such files and records thereafter.

(h)           From the date hereof until the eighteen-month anniversary of the Employment Commencement Date, Seller shall not solicit for employment any account executives, on-air talent or managers included in the Transferred Employees, other than pursuant to a general solicitation not specifically targeted at any employees of the Stations, and shall not during such period hire or transfer any of such employees to work for any radio station under the control of CBS Corporation, other than at the Stations.

4.8          Title Insurance; Surveys.

(a)           Seller shall deliver, within 45 days of the date of this Agreement, title commitments on the Owned Real Property, the WMC Transmitter Site and the KJCE Transmitter Site, sufficient in form to allow Buyer to obtain, at Buyer’s sole cost and expense, a standard form of title insurance policy (including, to the extent available, a zoning endorsement) insuring the fee simple interest in the Owned Real Property and the leasehold interests in the WMC Transmitter Site and the KJCE Transmitter Site, subject only to Permitted Liens and those matters set forth in Schedule 4.8; and

(b)           Seller shall cooperate with Buyer (provided that Seller shall not be required to pay any consideration to Buyer or any third party) so that Buyer may, at its option and at Buyer’s sole cost and expense, obtain, within 45 days of the date of this Agreement, ALTA surveys of the Owned Real Property, the WMC Transmitter Site and the KJCE Transmitter Site, which shall reflect (i) no encroachments upon such parcels or adjoining parcels by buildings, structures or improvements which would materially adversely affect title or materially interfere with or impair the use of the Owned Real Property for the purpose for which it is currently used or materially adversely affect the value of the property, and (ii) access to such parcels from a dedicated roadway or indirect access to a dedicated roadway.

(c)           Buyer acknowledges that Seller has no control over the KJCE Transmitter Site, except to the extent provided in the Lease between Seller and the lessor thereunder, and therefore Seller may not be able to provide Buyer with access to the KJCE

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Transmitter Site for the purpose of conducting a survey.  The obtaining of a title commitment and survey for the KJCE Transmitter Site as described in this Section 4.8 shall not be a condition to Buyer’s obligation to close under this Agreement.

4.9          Environmental.

(a)           Buyer may at its expense conduct Phase I environmental reviews within 45 days of the date of this Agreement, and if reasonably recommended by the consultant who performs that Phase I review, Phase II environmental reviews within 60 days of the date of this Agreement (the Phase I and Phase II reviews being collectively referred to as the “Environmental Reviews”), of the Owned Real Property, the WMC Transmitter Site and the KJCE Transmitter Site prior to Closing; provided, however, that no intrusive sampling shall be performed without Seller’s prior written approval (which shall not be unreasonably conditioned, withheld or delayed).  Seller shall use commercially reasonable efforts to enable Buyer to conduct such Environmental Reviews of the Leased Real Property within 45 days of the date of this Agreement.

(b)           If any such Environmental Review discloses a material violation of, or material condition that, if disclosed to the appropriate Governmental Authority, Buyer or Seller would reasonably be expected to be required to remediate under applicable Environmental Laws (an “Environmental Condition”) at any of the Owned Real Property, the WMC Transmitter Site or the KJCE Transmitter Site, and such Environmental Conditions, in the aggregate, have an estimated remediation cost less than $500,000, then Seller shall remediate or undertake to remediate such conditions in all material respects prior to Closing, provided that the completion of such remediation shall not be a condition to Buyer’s obligation to close hereunder if mutually satisfactory arrangements have been made to assure that Buyer will not be required to bear the expense of any remediation to be performed after the Closing.  If such Environmental Conditions, in the aggregate, have an estimated remediation cost of $500,000 or more, then within 10 Business Days after delivery to Seller of the determination of such estimated amount, Seller shall notify Buyer of its election to either (i) remediate or undertake to remedy such conditions in all material respects prior to Closing, provided that the completion of such remediation shall not be a condition to Buyer’s obligation to close hereunder if mutually satisfactory arrangements have been made to assure that Buyer will not be required to bear the expense of any remediation to be performed after the Closing, or (ii) not remediate or undertake to remedy such conditions, in which event Buyer may, except as provided in Section 4.13, terminate this Agreement on written notice to Seller.  This Section 4.9, together with Section 4.13, sets forth Buyer’s sole remedy if an Environmental Review prior to Closing discloses an Environmental Condition.  For the avoidance of any doubt, the pre-Closing discovery of such an Environmental Condition shall be deemed an exception to Seller’s representations and warranties in Section 2.12 and Buyer shall have no post-closing claim for breach of representation or warranty against Seller pursuant to the indemnification provisions or otherwise for such an Environmental Condition except as provided in this Section 4.9 and Section 4.13.  Seller’s obligations under this Section 4.9 shall survive the Closing.

4.10        Further Assurances. After Closing, each party hereto shall execute all such instruments and take all such actions as any other party may reasonably request, without payment of further consideration, to effectuate the transactions contemplated by this Agreement,

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including the execution and delivery of confirmatory and other transfer documents in addition to those to be delivered at Closing.

4.11        Public Filings. Seller acknowledges that Buyer may be obligated to use the pre-Closing financial statements of the Stations and other information in connection with filings under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Public Filings”), to be issued or filed by Buyer.  For a period of three (3) years from the Closing Date, Seller shall cooperate in a commercially reasonable manner with Buyer so that Buyer can obtain information sufficient for Buyer to prepare such Public Filings, in each case the out-of-pocket costs for which shall be borne solely by Buyer.  The foregoing cooperation of Seller shall include (a) granting Buyer and its accountants full and complete access to the books and records of the Stations and to any personnel knowledgeable about such books and records (including the accountants of Seller) in each case, to the extent reasonably requested by Buyer and (b) with respect to the period of time that the Stations and the Station Assets were owned or controlled by Seller or an Affiliate thereof, signing customary management representation letters related to the financial statements and any time the Stations were owned or controlled by Seller, Seller agrees to provide all relevant financial information in its possession with respect to such periods, to contact the former owners of the Stations on behalf of Buyer and to assist Buyer in arranging access to financial information of such former owners.

4.12        No Solicitation.  From the date hereof, until the earlier of the Closing Date or the termination of this Agreement, Seller and its Affiliates will not, directly or indirectly, encourage, solicit, or engage in discussions or negotiations with, or provide any information to, any Person (other than Buyer and its representatives) concerning any sale or disposition of all, or substantially all, of the Station Assets or the FCC Licenses, provided that this Section 4.12 shall not apply to any discussions or negotiations involving the securities of Seller or any Affiliate of Seller.

4.13        Station KJCE.  If Seller elects not to remediate or undertake to remediate an Environmental Condition at the KJCE Transmitter Site pursuant to Section 4.9(b), then Buyer may elect either (a) to treat the Real Property Lease for the KJCE Transmitter Site as an Excluded Asset and to sub-lease the KJCE Transmitter Site from Seller, subject to receipt of any consent necessary under such Real Property Lease, for the remainder of the term of such Real Property Lease, as in effect on the Closing Date, without payment of basic rent but with reimbursement of all costs relating to such Real Property Lease other than costs relating to the Environmental Condition or (b) terminate this Agreement with respect to Station KJCE and all Station Assets used exclusively in the operation of station KJCE, and in the case of an election pursuant to clause (b), the Purchase Price shall be reduced by $4,000,000.

ARTICLE V
CONDITIONS PRECEDENT

5.1          To Buyer’s Obligations. The obligations of Buyer hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:

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(a)           Representations, Warranties and Covenants.  The representations and warranties of Seller made in this Agreement shall be true and correct, disregarding all qualifiers and exceptions relating to materiality or Seller Material Adverse Effect, (i) as of the date of this Agreement and (ii) (except to the extent such representations and warranties speak as of an earlier date, in which case such representations and warranties shall have been true and correct, disregarding all qualifiers and exceptions relating to materiality or Seller Material Adverse Effect, as of such earlier date) as of the Closing Date as though made on and as of the Closing Date, except, in both cases, (A) for changes expressly contemplated by this Agreement or permitted under Section 4.2 (Conduct of Business Prior to Closing), (B) casualty losses or damages subject to Section 4.4 (Risk of Loss) or that are reimbursable by Buyer under the Local Marketing Agreement, or (C) where the failures to be true and correct, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in a Seller Material Adverse Effect.  Seller shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date.  Buyer shall have received a certificate dated as of the Closing Date from Seller, executed by an authorized officer of Seller to the effect that the conditions set forth in this Section 5.1(a) have been satisfied.

(b)           Governmental Consents.  The FCC Consent shall have been granted and shall be in full force and effect and shall contain no provision materially adverse to any of Buyer, Buyer’s Affiliates or the Stations and shall have become a Final Order; provided that the condition as to a Final Order shall not apply (i) if no filing shall have been made with the FCC by any third party that pertains to or becomes associated with the FCC Application, or (ii) if any such filing shall have been made, then if, in the reasonable opinion of Buyer’s FCC counsel, the objection set forth in the filing would not reasonably be expected to result in a denial of the FCC Consent or a designation for hearing of the FCC Application.  Any waiting period under the HSRA shall have been terminated or expired.

(c)           Adverse Proceedings.  No Governmental Order shall have been rendered against any party hereto that would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms, and no proceeding shall be pending before any Governmental Authority, other than the FCC, challenging this Agreement or the transactions contemplated hereby, which is reasonably likely to restrain, alter, prohibit or otherwise materially interfere with the Closing.

(d)           Authorization.  Buyer shall have received a true and complete copy, certified by an officer of Seller, of the resolutions duly and validly adopted by the board of directors or the general partner of each of CBS Radio, Illinois CBS Radio and Texas CBS Radio, as the case may be, evidencing its authorization of the execution and delivery of this Agreement and consummation of the transactions contemplated hereby.

(e)           Deliveries.  Seller shall have made or stand willing to make all the deliveries required under Sections 6.1 and 6.2.

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(f)            Title Commitments and Surveys.  Subject to Section 4.8(c), Seller shall have delivered the title commitments set forth in Section 4.8(a), and Buyer shall have been able to obtain (even if Buyer has not obtained) surveys set forth in Section 4.8(b).

5.2          To Seller’s Obligations. The obligations of Seller hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:

(a)           Representations, Warranties and Covenants.  The representations and warranties of Buyer made in this Agreement shall be true and correct, disregarding all qualifiers and exceptions relating to materiality or Buyer Material Adverse Effect, (i) as of the date of this Agreement and (ii) (except to the extent such representations and warranties speak as of an earlier date, in which case such representations and warranties shall have been true and correct, disregarding all qualifiers and exceptions relating to materiality or Buyer Material Adverse Effect, as of such earlier date) as of the Closing Date as though made on and as of the Closing Date except, in both cases, (A) for changes expressly contemplated by this Agreement or (B) where the failures to be true and correct, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in a Buyer Material Adverse Effect.  Buyer shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date.  Seller shall have received a certificate dated as of the Closing Date from Buyer executed by an authorized officer of Buyer, to the effect that the conditions set forth in this Section 5.2(a) have been satisfied.

(b)           Governmental Consents.  The FCC Consent shall have been granted and shall be in full force and effect and shall contain no provision materially adverse to Seller or Seller’s Affiliate.  Any waiting period under the HSRA shall have been terminated or expired.

(c)           Adverse Proceedings.  No Governmental Order shall have been rendered against any party hereto that would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms, and no proceeding shall be pending before any Governmental Authority, other than the FCC, challenging this Agreement or the transactions contemplated hereby, which is reasonably likely to restrain, alter, prohibit or otherwise materially interfere with the Closing.

(d)           Authorization.  Seller shall have received a true and complete copy, certified by an officer of Buyer, of the resolutions duly and validly adopted by the board of directors of Buyer evidencing its authorization of the execution and delivery of this Agreement and consummation of the transactions contemplated hereby.

(e)           Deliveries.  Buyer shall have made or stand willing to make all the deliveries required under Sections 6.1 and 6.3 and shall have paid or stand willing to pay the Purchase Price as provided in Section 1.5.

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ARTICLE VI
DOCUMENTS TO BE DELIVERED AT THE CLOSING

6.1          Documents to be Delivered by Both Parties. At the Closing, each of Buyer and Seller shall execute and deliver to the other as applicable:

(a)           a duly executed Assignment and Assumption Agreement, substantially in the form of Exhibit B-1; and

(b)           a duly executed Assignment and Assumption Agreement for the Real Property Leases, substantially in the form of Exhibit B-2.

6.2          Documents to be Delivered by Seller. At the Closing, Seller shall deliver to Buyer the following:

(a)           the certificate described in Section 5.1(a);

(b)           the documents described in Section 5.1(d);

(c)           a duly executed Bill of Sale, substantially in the form of Exhibit B-3;

(d)           a duly executed Assignment for the FCC Licenses, substantially in the form of Exhibit B-4;

(e)           a duly executed Assignment for the Intangible Property, substantially in the form of Exhibit B-5;

(f)            a duly executed special warranty deed for the Owned Real Property, substantially in the form of Exhibit B-6;

(g)           the consents to assignment required under those Station Contracts listed on Schedule 1.1(c) or Schedule 1.1(f) and marked with a “‡”, if any, duly executed by the appropriate Persons, and which shall be in full force and effect without conditions materially adverse to Buyer, except as expressly provided in such agreement;

(h)           an opinion of counsel to Seller substantially in the form attached hereto as Exhibit C;and

(i)            all customary landlord’s estoppel certificates and seller’s or owner’s affidavits required to delete the standard exceptions to the title policies insuring the Owned Real Property and the WMC Transmitter Site.

6.3          Documents to be Delivered by Buyer. At the Closing, Buyer shall deliver to Seller the following:

(a)           the certificate described in Section 5.2(a);

(b)           the documents described in Section 5.2(d); and

(c)           the Purchase Price.

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ARTICLE VII
SURVIVAL; INDEMNIFICATION

7.1Survival.  The representations and warranties in this Agreement shall survive the Closing for a period of 18 months from the Closing Date whereupon they shall expire and be of no further force or effect, except those under: (a) Section 2.15 (Taxes), which shall survive until the expiration of any applicable statute of limitations, (b) Section 2.17 (No Finder) and Section 3.8 (No Finder), each of which shall survive indefinitely, and (c) the provisions in Section 2.7 (FCC Licenses), Section 2.8 (Tangible Personal Property), Section 2.11 (Real Property) and Section 2.16 (Sufficiency and Title to Station Assets) relating to title, each of which shall survive indefinitely, and (d) Section 2.12 (Environmental), which shall survive indefinitely. None of the covenants and agreements shall survive the Closing except to the extent such covenants and agreements contemplate performance after the Closing, in which case such covenants and agreements shall survive until performed. No claim may be brought under this Agreement unless written notice describing in reasonable detail the nature and basis of such claim is given on or prior to the last day of the applicable survival period. In the event such notice is given, the right to indemnification with respect thereto shall survive the applicable survival period until such claim is finally resolved and any obligations thereto are fully satisfied.

7.2Indemnification.

(a)Subject to Section 7.1, from and after the Effective Time, Seller shall defend, indemnify and hold harmless Buyer, its Affiliates and their respective employees, officers, directors, shareholders and agents (collectively, the “Buyer Indemnified Parties”) from and against any and all losses, costs, damages, liabilities, expenses, obligations and claims of any kind (including any Action brought by any Governmental Authority or Person and including reasonable attorneys’ fees and expenses (“Losses”)) incurred by such Buyer Indemnified Party arising out of or resulting from (i) Seller’s breach of any of the representations or warranties contained in this Agreement, any Seller Ancillary Agreement or in any other certificate or document delivered pursuant hereto or thereto; (ii) any breach or nonfulfillment of any agreement or covenant of Seller under the terms of this Agreement or any Seller Ancillary Agreement; and (iii) the Retained Liabilities. Seller shall have no liability to Buyer under clause (i) of this Section 7.2(a) until, and only to the extent that, Buyer’s aggregate Losses exceed 1% of the Purchase Price, and the maximum liability of Seller under clause (i) of this Section 7.2(a) shall be an amount equal to 50% of the Purchase Price.

(b)Subject to Section 7.1, from and after the Effective Time, Buyer shall defend, indemnify and hold harmless Seller, its Affiliates and their respective employees, officers, directors, shareholders and agents (collectively, the “Seller Indemnified Parties”) from and against any and all Losses incurred by such Seller Indemnified Party arising out of or resulting from (i) Buyer’s breach of any of its representations or warranties contained in this Agreement, any Buyer Ancillary Agreement or in any other certificate or document delivered pursuant hereto or thereto; (ii) any breach or nonfulfillment of any agreement or covenant of Buyer under the terms of this Agreement or any Buyer Ancillary Agreement; and (iii) the Assumed Obligations. Buyer shall have no liability to Seller under clause (i) of this Section 7.2(b)

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until, and only to the extent that, Seller’s aggregate Losses exceed 1% of the Purchase Price, and the maximum liability of Buyer under clause (i) of this Section 7.2(b) shall be an amount equal to 50% of the Purchase Price.

7.3Procedures. The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (a “Claim”), but a failure to give or a delay in giving such notice shall not affect the indemnified party’s right to indemnification and the indemnifying party’s obligation to indemnify as set forth in this Agreement, except to the extent the indemnifying party’s ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced. The obligations and liabilities of the parties with respect to any Claim shall be subject to the following additional terms and conditions:

(a)The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim.

(b)In the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within 20 days after written notice (which shall include sufficient description of background information explaining the basis for such Claim) of any such Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof).

(c)Anything herein to the contrary notwithstanding (i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim, (ii) the indemnifying party shall not, without the indemnified party’s written consent, settle or compromise any Claim or consent to entry of any judgment, unless such judgment, settlement or compromise includes the giving by the claimant to the indemnified party of a release from all liability in respect of such Claim, and (iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim.

7.4Computation of Indemnifiable Losses.  Any amount payable pursuant to this Article VII shall be decreased to the extent of (a) any amounts actually recovered by the indemnified party from any third party (including insurance proceeds) in respect of an indemnifiable Loss, and (b) any net Tax benefit actually realized by the indemnified party arising

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out of an indemnifiable Loss. The indemnifying party and the indemnified party shall cooperate in good faith in providing each other the information necessary to determine the Tax benefits, as the case may be, in each case. The indemnified party shall use its commercially reasonable efforts to pursue payment under or from any insurer or third-party in respect of such Losses. While its indemnification obligations under this Article VII remain in effect, Buyer shall maintain insurance on the Stations and their assets in amounts and types substantially comparable to that maintained on other radio stations owned by Buyer and its Affiliates.

7.5Sole Remedy.  After the Closing, and except with respect to common law fraud or willful misconduct, the right to indemnification under this Article VII shall be the exclusive remedy of any party in connection with any breach or default by another party under this Agreement, any Buyer Ancillary Agreement or any Seller Ancillary Agreement, provided that nothing in this Section 7.5 shall limit a party’s right to seek equitable relief in connection with the non-performance of any agreement or covenant contained in this Agreement, any Buyer Ancillary Agreement or Seller Ancillary Agreement that contemplates performance after the Closing. Neither party shall have any liability to the other party under any circumstances for special, indirect, consequential, punitive or exemplary damages, or lost profits, diminution in value or any damages based on any type of multiple of any Indemnified Party.

ARTICLE VIII
TERMINATION RIGHTS

8.1Termination.

(a)This Agreement may be terminated prior to Closing by either Buyer or Seller upon written notice to the other following the occurrence of any of the following:

(i)if the other party is in material breach or default of this Agreement or does not perform in all material respects the obligations to be performed by it under this Agreement on the Closing Date such that the conditions set forth in Sections 5.1(a) and 5.2(a), as applicable, would not be satisfied and such breach or default has not been waived by the party giving such termination notice;

(ii)if there shall be any Law that prohibits consummation of the sale of the Stations or if a Governmental Authority of competent jurisdiction shall have issued a final, nonappealable Government Order enjoining or otherwise prohibiting consummation of the sale of the Stations;

(iii)if the FCC denies the FCC Application;

(iv)if the Closing has not occurred by the date that is 18 months from the date of this Agreement (the “Upset Date”); or

(v)as provided by Section 4.9 (Environmental).

(b)This Agreement may be terminated prior to Closing by mutual written consent of Buyer and Seller.

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(c)If either party believes the other to be in breach or default of this Agreement, the non-defaulting party shall, prior to exercising its right to terminate under Section 8.1(a)(i), provide the defaulting party with notice specifying in reasonable detail the nature of such breach or default. Except for a failure to pay the Purchase Price, the defaulting party shall have 20 days from receipt of such notice to cure such default; provided, however, that if the breach or default is incapable of cure within such 20-day period, the cure period shall be extended, as long as the defaulting party is diligently and in good faith attempting to effectuate a cure, provided that in no event shall such cure period extend beyond the date which would otherwise have been the Closing Date in the absence of such breach or default. Nothing in this Section 8.1(c) shall be interpreted to extend the Upset Date.

(d)If this Agreement is terminated by Seller pursuant to Section 8.1(a)(i), then Seller shall be entitled to an amount equal to 10% of the Purchase Price as liquidated damages. If Buyer contests Seller’s right to liquidated damages, then the prevailing party in any Action initiated by Seller to enforce its rights to liquidated damages shall be entitled to payment by the other party of the reasonable attorneys’ fees incurred by the prevailing party in such Action. The parties understand and agree that the amount of liquidated damages represents Seller’s and Buyer’s reasonable estimate of actual damages and does not constitute a penalty. Notwithstanding any other provision of this Agreement to the contrary, in the event that Seller terminates this Agreement pursuant to Section 8.1(a)(i), the payment of 10% of the Purchase Price, together with any attorneys’ fees pursuant to this Section 8.1(d), shall be Seller’s sole and exclusive remedy for damages of any nature or kind that Seller may suffer as a result of Buyer’s breach or default under this Agreement.

8.2Effect of Termination. In the event of a valid termination of this Agreement pursuant to Section 8.1, this Agreement (other than Sections 4.3(c) and 4.3(d), this Article VIII and Sections 10.1, 10.2, 10.3, 10.4, 10.5, 10.7 and 10.8, which shall remain in full force and effect) shall forthwith become null and void, and no party hereto (nor any of their respective Affiliates, directors, officers or employees) shall have any liability or further obligation, except as provided in this Article VIII; provided, however, that nothing in this Section 8.2 shall (subject to the limitations in Section 8.1(d)) relieve any party from liability for any breach of this Agreement prior to termination. A termination of this Agreement shall not terminate the Local Marketing Agreement nor affect the parties rights and obligations thereunder.

8.3Specific Performance.  In the event of failure or threatened failure by either party to comply with the terms of this Agreement, the other party shall be entitled to an injunction restraining such failure or threatened failure and, subject to obtaining any necessary FCC consent, to enforcement of this Agreement by a decree of specific performance requiring compliance with this Agreement; provided, however, that, if prior to Closing Seller terminates this Agreement pursuant to Section 8.1(a)(i), then Seller’s sole remedy shall be termination of this Agreement, receipt of the liquidated damages and the payment of any attorney’s fees pursuant to Section 8.1(d), except for any failure by Buyer to comply with its obligations related to confidentiality, as to which Seller shall be entitled to all available rights and remedies, including without limitation specific performance. The parties acknowledge that the Stations are unique properties as to which an adequate remedy at law may not exist. Each party waives any requirement that the other party post a bond or other security in connection with pursuing

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equitable or injunctive relief under this Agreement. As a condition to seeking specific performance of Seller’s obligation to consummate the assignment of the Station Assets to Buyer, Buyer shall not be required to have tendered the Purchase Price, but shall be ready, willing and able to do so.

ARTICLE IX
TAX MATTERS

9.1Bulk Sales.  Seller and Buyer hereby waive compliance with the provisions of any applicable bulk sales law and no representation, warranty or covenant contained in this Agreement shall be deemed to have been breached as a result of such non-compliance.

9.2Transfer Taxes.  Transfer Taxes arising out of or in connection with the transactions effected pursuant to this Agreement shall be paid both equally by Buyer and Seller. The party with primary responsibility under applicable Law for the payment of any particular Transfer Tax shall prepare and file the relevant Tax Return and notify the other party in writing of the Transfer Taxes shown on such Tax Return. Such other party shall pay an amount equal to one-half of the amount of such Transfer Taxes shown on such Tax Return in immediately available funds no later than the date that is the later of (a) five Business Days after the date of such notice or (b) two Business Days prior to the due date for such Transfer Taxes.

9.3Taxpayer Identification Numbers.  The taxpayer identification numbers of Buyer and Seller are set forth on Schedule 9.3.

ARTICLE X
OTHER PROVISIONS

10.1Expenses.  Except as otherwise provided herein or in the Local Marketing Agreement, each party shall be solely responsible for and shall pay all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement.

10.2Benefit and Assignment.

(a)This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Neither party may assign its rights under this Agreement without the other party’s prior written consent, which consent may not be unreasonably conditioned, withheld or delayed.

(b)Notwithstanding anything above to the contrary, either Buyer or Seller may, without the other party’s consent, (i) assign any or all of its rights and obligations under this Agreement to one or more Affiliates, provided that such assignment does not delay the receipt of the FCC Consent or the Closing and the assigning party is not relieved of liability under this Agreement, or (ii) assign any or all of its rights but not its obligations under this Agreement to any “qualified intermediary” as defined in Treas. Reg. Sec. 1.1031(k) 1(g)(4) or to any exchange accommodation titleholder as described in Revenue Procedure 2000-37 (“EAT”) (but any such assignment shall not relieve a party of its obligations under this Agreement),

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provided that such assignment does not delay the Closing. If Buyer or Seller gives notice of an assignment pursuant to this Section 10.2(b), the other party shall cooperate with all reasonable requests of Buyer or Seller, as the case may be, and the qualified intermediary or EAT in arranging and effecting the deferred like-kind exchange as one which qualifies under Section 1031 of the Code. Without limiting the generality of the foregoing, Buyer or Seller, as the case may be, shall provide the other party with a written acknowledgement of such notice prior to Closing, Buyer shall pay the Purchase Price (or such portion thereof as is designated in writing by the qualified intermediary) to or on behalf of the qualified intermediary at Closing and Seller shall convey the Station Assets (or such portion thereof as is designated in writing by the qualified intermediary) to or on behalf of the qualified intermediary at Closing.

10.3No Third Party Beneficiaries.  Nothing herein, express or implied, shall be construed to confer upon or give to any other Person other than the parties hereto or their permitted successors or assigns, any rights or remedies under or by reason of this Agreement.

10.4Entire Agreement; Waiver; Amendment.  This Agreement, the Confidentiality Agreement, the Buyer Ancillary Agreements, the Seller Ancillary Agreements and the exhibits and schedules hereto and thereto constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between Seller and Buyer with respect to the subject matter hereof and thereof, except as otherwise expressly provided herein. Any matter that is disclosed in a schedule hereto in such a way as to make its relevance to the information called for by another schedule readily apparent shall be deemed to have been included in such other schedule, notwithstanding the omission of an appropriate cross reference. No amendment, waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. No failure or delay on the part of Buyer or Seller in exercising any right or power under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.

10.5Headings.  The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement.

10.6Computation of Time.  If after making computations of time provided for in this Agreement, a time for action or notice falls on Saturday, Sunday or a Federal holiday, then such time shall be extended to the next Business Day.

10.7Governing Law; Waiver of Jury Trial.  The construction and performance of this Agreement shall be governed by the law of the State of New York without regard to its principles of conflict of law. The exclusive forum for the resolution of any disputes arising hereunder shall be the federal or state courts located in New York, New York, and each party irrevocably waives the reference of an inconvenient forum to the maintenance of any such action or proceeding. BUYER AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR

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PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT, INCLUDING ANY COUNTERCLAIM MADE IN SUCH ACTION OR PROCEEDING, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE DECIDED SOLELY BY A JUDGE. Buyer and Seller hereby acknowledge that they have each been represented by counsel in the negotiation, execution and delivery of this Agreement and that their lawyers have fully explained the meaning of the Agreement, including in particular the jury-trial waiver.

10.8Construction.  Any question of doubtful interpretation shall not be resolved by any rule providing for interpretation against the party who causes the uncertainty to exist or against the drafter of this Agreement.

10.9Notices.  Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, addressed to the following addresses, or to such other address as any party may request in writing.

If to Seller:

CBS Radio Inc.

1515 Broadway, 46th Floor

New York, NY 10036

Attention:  Walter Berger

Facsimile:  (212) 846-3999

With a copy, which shall not constitute notice, to:

CBS Corporation
51 W. 52nd Street
New York, NY 10019
Attention: General Counsel
Facsimile: (212) 975-4215

and

Leventhal Senter & Lerman PLLC
2000 K Street, N.W.
Suite 600
Washington, DC 20006-1809
Attention: Steven A. Lerman, Esq.
Facsimile: (202) 293-7783

If to Buyer:

Entercom Communications Corp.
401 City Avenue, Suite 809
Bala Cynwyd, PA 19004-1121
Attention:  David J. Field
Facsimile:  610-660-5661

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With a copy, which shall not constitute notice, to:

Entercom Communications Corp.
401 City Avenue, Suite 809
Bala Cynwyd, PA 19004-1121
Attention:  John C. Donlevie, Esq.
Facsimile:  610-660-5641

and

Latham & Watkins LLP
555 11th Street, NW
Washington, DC 20004
Attention:  David D. Burns, Esq.
Facsimile:  202-637-2201

Any such notice, demand or request shall be deemed to have been duly delivered and received (a) on the date of personal delivery, or (b) on the date of transmission, if sent by facsimile and received prior to 5:00 p.m. in the place of receipt (but only if a hard copy is also sent by overnight courier), or (c) on the date of receipt, if mailed by registered or certified mail, postage prepaid and return receipt requested, or (d) on the date of a signed receipt, if sent by an overnight delivery service, but only if sent in the same manner to all persons entitled to receive notice or a copy.

10.10Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced because of any Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

10.11Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. Facsimile or other electronically delivered copies of signature pages to this Agreement, any Buyer Ancillary Agreement, any Seller Ancillary Agreement or any other document or instrument delivered pursuant to this Agreement shall be treated as between the parties as original signatures for all purposes.

ARTICLE XI
DEFINITIONS

11.1Defined Terms.  Unless otherwise stated in this Agreement, the following terms when used herein shall have the meanings assigned to them below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

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“Accounting Firm” means (a) an independent certified public accounting firm in the United States of national recognition (other than a firm that then serves as the independent auditor for Seller, Buyer or any of their respective Affiliates) mutually acceptable to Seller and Buyer or (b) if Seller and Buyer are unable to agree upon such a firm, then the regular independent auditors for Seller and Buyer shall mutually agree upon a third independent certified public accounting firm, in which event, “Accounting Firm” shall mean such third firm.

“Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person, provided that, with respect to Seller, Affiliate means CBS Corporation and any other Person that is directly or indirectly through one or more intermediaries controlled by CBS Corporation.

“Agreement” shall mean this Asset Purchase Agreement, including the exhibits and schedules hereto.

“Antitrust Laws” means the Sherman Act, as amended, the Clayton Act, as amended, the HSRA, the Federal Trade Commission Act, as amended, and all other federal, state and foreign, if any, Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

“Appraisal” shall have the meaning set forth in Section 1.9.

“Assumed Obligations” shall have the meaning set forth in Section 1.3.

“Business Day,” whether or not capitalized, shall mean every day of the week excluding Saturdays, Sundays and Federal holidays.

“Buyer” shall have the meaning set forth in the Preamble to this Agreement.

“Buyer Ancillary Agreements” shall have the meaning set forth in Section 3.2(a).

“Buyer Indemnified Parties” shall have the meaning set forth in Section 7.2(a).

“Buyer Material Adverse Effect” means a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or any Buyer Ancillary Agreement.

“CBS Radio” shall have the meaning set forth in the Preamble to this Agreement.

“Claim” shall have the meaning set forth in Section 7.3.

“Closing” shall have the meaning set forth in Section 1.6.

“Closing Date” shall have the meaning set forth in Section 1.6.

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

“Communications Act” shall have the meaning set forth in Section 2.7(c).

“Confidentiality Agreement” shall have the meaning set forth in Section 4.3(c).

“Control” means, as to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The terms “Controlled” and “Controlling” shall have a correlative meaning.

“Damaged Asset” shall have the meaning set forth in Section 4.4.

“DOJ” shall have the meaning set forth in Section 4.1(e).

“EAT” shall have the meaning set forth in Section 10.2.

“Effective Time” shall have the meaning set forth in Section 1.6.

“Employment Commencement Date” shall have the meaning set forth in Section 4.7.

“Environmental Condition” shall have the meaning set forth in Section 4.9.

“Environmental Laws” shall have the meaning set forth in Section 2.12.

“Environmental Reviews” shall have the meaning set forth in Section 4.9.

“ERISA” shall mean the Employment Retirement Income Security Act of 1974, as amended.

“Excluded Assets” shall have the meaning set forth in Section 1.2.

“FCC” shall have the meaning set forth in the Recitals to this Agreement.

“FCC Application” shall mean the application or applications that Seller and Buyer must file with the FCC requesting its consent to the assignment of the FCC Licenses.

“FCC Consent” shall mean the initial action by the FCC granting the FCC Application.

“FCC Licenses” shall have the meaning set forth in Section 1.1(a).

“Final Order” means an action by the FCC (a) that has not been vacated, reversed, stayed, enjoined, set aside, annulled or suspended, (b) with respect to which no request for stay, motion or petition for rehearing, reconsideration or review, or application or request for review or notice of appeal or sua sponte review by the FCC is pending, and (c) as to which the

37

time for filing any such request, motion, petition, application, appeal or notice, and for the entry of orders staying, reconsidering or reviewing on the FCC’s own motion has expired.

“FTC” shall have the meaning set forth in Section 4.1(e).

“GAAP” means United States generally accepted accounting principles as in effect as of the date hereof, consistently applied.

“Governmental Authority” means any federal, state or local or any foreign government, legislature, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Group Contracts” means contracts that contemplate the provision of the products and services to or by another station or business of the Seller or any of its Affiliates other than or in addition to the Stations.

“HSRA” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Illinois CBS Radio” shall have the meaning set forth in the Preamble to this Agreement.

“Intangible Property” shall have the meaning set forth in Section 1.1(d).

“KJCE Transmitter Site” shall have the meaning set forth in Section 2.11.

“Law” means any United States (federal, state, local) or foreign statute, law, ordinance, regulation, rule, code, order, judgment, injunction or decree.

“Leased Real Property” shall have the meaning set forth in Section 2.11.

“Liens” shall have the meaning set forth in Section 1.1.

“LMA Commencement Date” shall have the meaning set forth in Section 1.2(c).

“Local Marketing Agreement” shall have the meaning set forth in the Recitals to this Agreement.

“Losses” shall have the meaning set forth in Section 7.2(a).

“Notice of Disagreement” shall have the meaning set forth in Section 1.7(g).

“Owned Real Property” shall have the meaning set forth in Section 2.11.

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“Permitted Liens” means, as to any property or asset or as to the Stations, (a) the Assumed Obligations, (b) Liens for Taxes, assessments and other governmental charges not yet due and payable; (c) zoning laws and ordinances and similar Laws that are not violated by any existing improvement or that do not prohibit the use of the Real Property as currently used in the operation of the Stations; (d) any right reserved to any Governmental Authority to regulate the affected property (including restrictions stated in the permits); (e) in the case of any leased asset, (1) the rights of any lessor under the applicable lease agreement or any Lien granted by any lessor and (2) the rights of the grantor of any easement or any Lien granted by such grantor on such easement property; (f) easements, rights of way, restrictive covenants and other encumbrances, encroachments or other similar matters affecting title that do not materially adversely affect title to the property subject thereto or impair the continued use of the property in the ordinary course of business of the Stations; (g) inchoate materialmen’s, mechanics’, workmen’s, repairmen’s or other like Liens arising in the ordinary course of business, which Liens are released at or prior to Closing, are the subject of a proration adjustment in favor of Buyer pursuant to Section 1.7 or are Retained Liabilities; and (h) any state of facts an accurate survey would show, provided same does not render title unmarketable, materially decrease the value of the property, or prevent the Real Property from being utilized in substantially the same manner currently used.

“Person” means any natural person, general or limited partnership, corporation, limited liability company, firm, association, trust or other legal entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Prorated Assumed Obligations” shall have the meaning set forth in Section 1.7(a).

“Prorated Station Assets” shall have the meaning set forth in Section 1.7(a).

“Public Filings” shall have the meaning set forth in Section 4.11.

“Purchase Price” shall have the meaning set forth in Section 1.5.

“Real Property” shall have the meaning set forth in Section 1.1(f).

“Real Property Leases” shall have the meaning set forth in Section 2.11.

“Reference Financial Statements” shall have the meaning set forth in Section 2.6.

“Retained Liabilities” shall have the meaning set forth in Section 1.4.

“Seller” shall have the meaning set forth in the Preamble to this Agreement.

“Seller Ancillary Agreements” shall have the meaning set forth in Section 2.2(a).

“Seller Indemnified Parties” shall have the meaning set forth in Section 7.2(b).

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“Seller Material Adverse Effect” means a material adverse effect on: (a) the ability of Seller to perform its obligations under this Agreement or any Seller Ancillary Agreement or (b) the condition (financial or otherwise), assets, results of operations of the business and operations of the Stations, or the Station Assets, taken as a whole; provided, however, that Seller Material Adverse Effect shall not include any material adverse effect to the extent attributable to (i) any change or development generally applicable to the radio broadcast industry (including legislative or regulatory matters), (ii) general economic conditions, including any downturn caused by terrorist activity or a natural disaster, such as an earthquake or hurricane, or (iii) any public announcement of the transactions contemplated by this Agreement.

“Settlement Statement” shall have the meaning set forth in Section 1.7(e).

“Station” or “Stations” shall have the meaning set forth in the Recitals to this Agreement.

“Station Assets” shall have the meaning set forth in Section 1.1.

“Station Contracts” shall have the meaning set forth in Section 1.1(c).

“Station Employees” means all persons employed by Seller primarily in the conduct and operation of the Stations.

“Tangible Personal Property” shall have the meaning set forth in Section 1.1(b).

“Tax” or “Taxes” means all federal, state, local or foreign income, excise, gross receipts, ad valorem, sales, use, employment, franchise, profits, gains, property, transfer, use, payroll, intangible or other taxes, fees, stamp taxes, duties, charges, levies or assessments of any kind whatsoever (whether payable directly or by withholding), together with any interest and any penalties, additions to tax or additional amounts imposed by any Tax authority with respect thereto.

“Tax Returns” means all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes.

“Texas CBS Radio” shall have the meaning set forth in the Preamble to this Agreement.

“To Buyer’s knowledge” or any variant thereof shall mean to the actual knowledge, after reasonable inquiry, of any of Buyer’s president, Buyer’s chief financial officer and Buyer’s general counsel.

“To Seller’s knowledge” or any variant thereof shall mean to the actual knowledge, after reasonable inquiry, of any of Seller’s chief executive officer, Seller’s chief financial officer, Seller’s director of engineering, Seller’s regional vice presidents and regional

40

engineers with responsibility for the Stations, and Seller’s general managers for each of the Stations.

“Tradeout Agreement” means, as to a Station, any contract, agreement or commitment, oral or written, pursuant to which Seller has agreed to sell or trade commercial air time or commercial production services of such Station in consideration for any property or service in lieu of or in addition to cash.

“Transferred Employees” shall have the meaning set forth in Section 4.7(b).

“Transfer Taxes” means all excise, sales, use, value added, registration stamp, recording, documentary, conveyancing, franchise, property, transfer and similar Taxes, levies, charges and fees.

“Upset Date” shall have the meaning set forth in Section 8.1(a)(iv).

“WMC Transmitter Site” shall have the meaning set forth in Section 2.11.

11.2        Terms Generally. The term “or” is disjunctive; the term “and” is conjunctive. The term “shall” is mandatory; the term “may” is permissive. Masculine terms apply to females; feminine terms apply to males. The term “include,” “includes” or “including” is by way of example and not limitation.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.

CBS RADIO STATIONS INC.
By:
	Name:
	Title:
TEXAS CBS RADIO L.P.
By:	CBS Radio of Portland Inc.,
	its general partner
	By:
		Name:
		Title:
CBS RADIO INC. OF ILLINOIS
By:
	Name:
	Title:
ENTERCOM COMMUNICATIONS CORP.
By:
	Name:
	Title:

SIGNATURE PAGE TO CBS AUSTIN, MEMPHIS & CINCINNATI

ASSET PURCHASE AGREEMENT

LIST OF SCHEDULES

Schedule 1.1(a) – FCC Licenses

Schedule 1.1(c) – Station Contracts

Schedule 1.1(d) – Intangible Property

Schedule 1.1(f) – Real Property

Schedule 1.2(k) – Excluded Marks

Schedule 1.2(s) – Excluded Contracts

Schedule 2.4 – Seller Noncontravention

Schedule 2.6 – Financial Statements

Schedule 2.7 – FCC License Exceptions

Schedule 2.7(a) – Conditions on FCC Licenses

Schedule 2.7(b) – Pending FCC Applications

Schedule 2.7(c) – Compliance with Communications Act and FCC Licenses

Schedule 2.7(d) – Pending Petitions, Complaints, Etc.

Schedule 2.8(a) – Exception to Title of Tangible Personal Property

Schedule 2.8(b) – Condition of Tangible Personal Property

Schedule 2.10 – Exceptions as to Intangible Property

Schedule 2.11 – Real Property

Schedule 2.12 – Environmental

Schedule 2.13(a) – Employee Information

Schedule 2.13(b) – Employee Labor and Collective Bargaining Agreements

Schedule 2.14 – Compliance with Laws

Schedule 2.16 – Transfer of Assets

Schedule 3.4 – Buyer Noncontravention

Schedule 3.6 – Buyer FCC Qualifications

Schedule 4.2 –Repairs and Capital Projects

Schedule 4.8 – Title Insurance; Surveys

Schedule 5.1(b) – Governmental Consents

Schedule 9.3 – Taxpayer Identification Numbers

EX-10.02

Exhibit 10.02

EXECUTION COPY

ASSET PURCHASE AGREEMENT

between

CBS RADIO STATIONS INC.

and

ENTERCOM COMMUNICATIONS CORP.

TABLE OF CONTENTS

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

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

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ASSET PURCHASE AGREEMENT

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

RECITALS

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

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

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

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

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

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

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

ARTICLE I
ASSETS TO BE CONVEYED

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

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

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

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

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

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

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

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

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

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

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

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

(d)intercompany accounts receivable and accounts payable;

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

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

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

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

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

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

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

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

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

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

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

(o)all ASCAP, BMI and SESAC licenses;

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

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

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

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

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

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

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

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

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

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

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

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

1.7General Proration.

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

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

5

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

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

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

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

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

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

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

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

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

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1.8Accounts Receivable.

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

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

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

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

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

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

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

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

2.2Corporate Authorization.

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

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

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

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

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

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

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

2.7FCC Licenses.

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

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

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

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

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

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

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

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

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

2.13Employee Information.

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

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

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

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

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

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

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

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

3.2Corporate Authorization and Power.

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

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

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

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

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

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

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

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

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

ARTICLE IV
COVENANTS

4.1Governmental Approvals.

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

(b)FCC Application.

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(i)The assignment of the FCC Licenses as contemplated by this Agreement is subject to the prior consent and approval of the FCC.  Within 10 Business Days after execution of this Agreement, Buyer and Seller shall file the FCC Application.  Seller and Buyer shall thereafter prosecute the FCC Application with all commercially reasonable diligence and otherwise use commercially reasonable efforts to obtain the FCC Consent as expeditiously as practicable.  Each party shall promptly provide the other with a copy of any pleading, order or other document served on it relating to the FCC Application, and shall furnish all information required by the FCC.

(ii)The parties acknowledge that license renewal applications are currently pending for the FCC Licenses.  The parties further acknowledge that the FCC generally will not allow the consummation of an acquisition a radio broadcast station if a license renewal application for the station is pending.  The parties, however, desire to consummate the transactions contemplated by this Agreement as soon as possible, subject to the terms of this Agreement.  In order to ensure that the FCC acts on the FCC Application in the normal course and to allow the parties to consummate the transactions contemplated by this Agreement as soon as possible, Buyer agrees to advise the FCC in writing, either in a letter submitted to the FCC or in the FCC Application itself, of Buyer’s express willingness to abide by the procedures set forth in paragraph 35 of Stockholders of CBS, 11 FCC Rcd 3733, 3750 (1995), and to assume the consequences associated with Buyer succeeding to the place of Seller in such renewal applications.  Seller agrees to indemnify Buyer for all Losses relating to FCC matters that may arise out of or result from such agreement without regard to the limitations set forth in the last sentence of Section 7.2(a).

(c)Compliance with Antitrust Laws.  Each of Buyer and Seller agrees to make appropriate filings pursuant to applicable Antitrust Laws, including a Notification and Report Form pursuant to the HSRA (including making a request for early termination of the waiting period thereunder), with respect to the transactions contemplated hereby (i) within 30 days after execution of this Agreement, if it is determined that HSRA notification with respect to this Agreement may be filed separately from the HSRA notification with respect to the Asset Purchase Agreement of even date herewith among Seller, Texas CBS Radio L.P., CBS Radio Inc. of Illinois and Buyer (the “Multi-Market Purchase Agreement”) or (ii) within five Business Days after execution of this Agreement, if a single HSRA notification must be filed for both this Agreement and the Multi-Market Purchase Agreement.  Buyer and Seller each agree to furnish to the other party all information that the other reasonably requests in connection with such filings, and to supply, as promptly as practicable, any additional information and documentary material that may be requested pursuant to the HSRA.  The consummation of the transactions contemplated by this Agreement is conditioned upon the termination or expiration of the waiting period under the HSRA without the institution or threat of any action with respect to such consummation.

(d)Commercially Reasonable Efforts.  In connection with the efforts referenced in Section 4.1(a), Section 4.1(b) and Section 4.1(c) to obtain (i) all requisite approvals and authorizations for the transactions contemplated by this Agreement under the HSRA or any other Antitrust Law and (ii) the FCC Consent, each of Buyer and Seller shall use its commercially reasonable efforts to (A) cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry,

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including any proceeding initiated by a private party, (B) keep the other party informed in all material respects of any material communications received by such party from, or given by such party to, the Federal Trade Commission (the “FTC”), the Antitrust Division of the Department of Justice (the “DOJ”), the FCC or any other Governmental Authority and of any material communication received or given in connection with any proceeding by a private party and (C) permit the other party to review any material non-confidential communication given by it to, and consult with each other in advance of and be permitted to attend any meeting or conference with, the FTC, DOJ, the FCC or any such other Governmental Authority or, in connection with any proceeding by a private party, with any other Person, in each case regarding any of the transactions contemplated by this Agreement.

(e)Governmental Filing or Grant Fees.  Except as otherwise provided in this Agreement, any filing or grant fees (including FCC and HSRA filing fees) imposed by any Governmental Authority, the consent of which is required for the transactions contemplated hereby, shall be borne equally by Seller and Buyer.  In addition, Seller and Buyer shall bear equally any fees incurred by Seller in the publication of the requisite local public notice regarding the FCC Application under Section 73.3580(d)(3) of the FCC’s rules.

4.2Conduct of Business.

(a)Prior to Closing.  Between the date of this Agreement and the Closing Date, except as expressly permitted by this Agreement, or with the prior written consent of Buyer, which consent shall not be unreasonably conditioned, withheld or delayed and which shall be deemed given if Buyer does not respond to Seller’s request within five Business Days of receipt thereof, Seller shall:

(i)maintain the FCC Licenses in full force and effect;

(ii)operate the Stations in all material respects in accordance with the FCC Licenses, the Communications Act, the FCC rules and regulations and all applicable Laws;

(iii)not adversely modify any of the FCC Licenses, except as may be provided in any pending application identified on Schedule 2.7(b);

(iv)use commercially reasonable efforts to cause all Liens on the Station Assets, other than Permitted Liens, to be released in full prior to Closing;

(v)use commercially reasonable efforts to provide Buyer with any financial information regarding the Stations as is maintained by Seller on a basis not consolidated with other stations and requested by Buyer that is reasonably necessary to satisfy any reporting obligations to the Securities and Exchange Commission or reasonably necessary to obtain acquisition financing for the Stations;

(vi)not, other than in the ordinary course of business and consistent with past practice, terminate, rescind, or waive any rights under any Station Contracts;

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(vii)not enter into any new contracts or agreements in connection with the operation of the Stations (or amend any existing Station Contract) (i) other than in the ordinary course and consistent with past practice and (ii) provided that any such new contracts or amendments that are binding after the Closing, except for those contracts or agreements entered into pursuant to Section 4.2(a)(viii), Section 4.2(a)(xix) or Section 4.5(b), shall require post-Closing payments by Buyer of less than $250,000 (in the aggregate under such new contracts or amendments);

(viii)with respect to Station Employees, not (A) grant raises other than raises that would be given in the ordinary course of business consistent with past practice in connection with the October 1st focal point review, (B) pay substantial bonuses other than (x) stay bonuses or enhanced severance for which the Buyer has no liability or (y) bonuses contemplated under existing employee arrangements, (C) enter into any new employment agreements that are not terminable at will or (D) agree to do any of the foregoing;

(ix)repair the items and complete the capital projects set forth on Schedule 4.2;

(x)notify Buyer promptly (A) if a Station is off the air for a continuous period of 12 hours or more or (B) if a Station’s normal broadcast transmissions are materially impaired for a continuous period of more than 24 hours;

(xi)operate the Stations in the ordinary course of business consistent with past practice;

(xii)use commercially reasonable efforts to preserve the business and goodwill of the Stations and the Station Assets;

(xiii)not change the programming formats of any of the Stations;

(xiv)adhere in all material respects to the Stations’ current practices, a summary of which has been delivered to Buyer, with respect to the amount of airtime available to broadcast commercials on the Stations;

(xv)maintain the Tangible Personal Property and the Real Property in normal operating condition consistent with Seller’s past practices, ordinary wear and tear excepted;

(xvi)maintain the Stations’ inventories of spare parts and supplies in the ordinary course and at levels consistent with past practices;

(xvii)not sell, lease or dispose of or agree to sell, lease or dispose of any of the Station Assets, except (A) the ordinary course disposition of items that either are obsolete or unnecessary for the continued operation of the Stations as currently operated or are replaced by assets of comparable or superior utility or (B) pursuant to existing contracts or commitments listed on Schedule 1.1(c), if any, or agree to do any of the foregoing;

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(xviii)make all capital expenditures with respect to the Stations in the ordinary course in accordance with past practices, including those relating to the capital projects set forth on Schedule 4.2; and

(xix)make expenditures on market research and promotional activities with respect to the Stations in the ordinary course in accordance with the past practices.

(b)Control of Stations.  Subject to the provisions of this Section 4.2, Buyer shall not, directly or indirectly, control, supervise or direct the operations of the Stations prior to the Closing.  Such operations shall be the sole responsibility of Seller and shall be in its complete discretion.

4.3Access to Information; Inspections; Confidentiality; Publicity.

(a)Between the date hereof and the Closing Date, Seller shall furnish Buyer with such information relating to the Station Assets as Buyer may reasonably request, at Buyer’s expense and provided such request does not interfere unreasonably with the business of the Stations.

(b)Between the date hereof and the Closing Date, upon prior reasonable notice, Seller shall give Buyer and its representatives reasonable access to the Station Assets during regular business hours.

(c)Nothing contained herein should be deemed to negate or limit the Seller’s or any of its Affiliates’ rights or any obligations of the Buyer or any of its Affiliates under that certain letter agreement, dated April 5, 2006, by and between CBS Corporation and Entercom Communications Corp. (the “Confidentiality Agreement”), which is incorporated herein by reference.

(d)No news release or other public announcement pertaining to the transactions contemplated by this Agreement will be made by or on behalf of any party hereto without the prior written approval of the other party (such consent not to be unreasonably conditioned, withheld or delayed) unless otherwise required by Law or any regulation or rule of any stock exchange binding upon such party.  Where any announcement, communication or circular concerning the transactions contemplated by this Agreement is required by Law or any regulation or rule of any stock exchange, it shall be made by the relevant party after consultation, where reasonably practicable, with the other party and taking into account the reasonable requirements (as to timing, contents and manner of making or dispatch of the announcement, communication or circular) of the other party.

4.4Risk of Loss.

(a)Seller shall bear the risk of any casualty loss or damage to any of the Station Assets prior to the Effective Time.  In the event of any casualty loss or damage to the Station Assets prior to the Effective Time, Seller shall be responsible for repairing or replacing (as appropriate under the circumstances) any lost or damaged Station Asset (the “Damaged Asset”) unless such Damaged Asset was obsolete and unnecessary for the continued operation of

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the Stations consistent with Seller’s past practice and the FCC Licenses.  If Seller is unable to repair or replace a Damaged Asset by the date on which the Closing would otherwise occur under this Agreement, then the proceeds of any insurance covering such Damaged Asset shall be assigned to Buyer at Closing, and to the extent such proceeds are not sufficient to cover the reasonable out-of-pocket costs incurred by Buyer in repairing or replacing the Damaged Asset after the Closing, Seller shall reimburse Buyer by an amount equal to the deficiency.

(b)If a Station is off the air prior to Closing, then Seller shall use commercially reasonable efforts to return the Station to the air as promptly as practicable in the ordinary course of business.  Notwithstanding anything herein to the contrary, if on the day otherwise scheduled for Closing, a Station is off the air or operating with a material reduction in coverage, then Closing shall be postponed until the date five Business Days after such Station returns to the air, and, if applicable, such reduction in coverage is substantially corrected.

4.5Consents to Assignment; Estoppel Certificates. After the execution of this Agreement and prior to Closing, Seller shall use its commercially reasonable efforts to obtain (a) any third-party consents necessary for the assignment of any Station Contract or Real Property Lease and (b) estoppel certificates duly executed by the lessors under the Real Property Leases in the form of Exhibit A attached hereto.  Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any Station Contract or any claim or right or any benefit arising thereunder or resulting therefrom if such assignment, without the consent of a third party thereto, would constitute a breach or other contravention of such Station Contract or in any way adversely affect the rights of Buyer or Seller thereunder.  If such consent is not obtained prior to the Closing Date, (i) Seller shall use its commercially reasonable efforts to (x) obtain such consent as soon as possible after the Closing Date, (y) provide to Buyer the financial and business benefits of any such Station Contract and (z) enforce, at the request of Buyer, for the account of Buyer, any rights of Seller arising from any such Station Contract; and (ii) Buyer shall assume the obligations under such Station Contract in accordance with this Agreement.  Notwithstanding the foregoing, neither Seller nor any of its Affiliates shall be required to pay consideration (except as may be specifically contemplated by the relevant Station Contract) to any third party to obtain any consent or estoppel certificate.

4.6Notification. Each party shall notify the other party of the initiation or threatened initiation of any litigation, arbitration or administrative proceeding that challenges the transactions contemplated hereby, including any challenges to the FCC Application.

4.7Employee Matters.

(a)Buyer may, but is not obligated to, hire any of the Station Employees.  No later than 30 days prior to Closing, Buyer shall notify Seller in writing (i) whether or not it will offer employment to a Station Employee and (ii) whether or not it will assume the employment agreement (including any account executive agreement or bonus term sheet), if any, for such Station Employee.  In addition, Buyer agrees to use good faith efforts to notify Seller of the key Station Employees to whom it intends to offer employment within 30 days of the date of this Agreement, but failure to make such notification shall not constitute a breach of this Agreement.  Subject to the reimbursement obligation set forth in Section 4.7(b) below, in the event Buyer elects not to assume an employment agreement, such employment

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agreement shall be an Excluded Asset and shall not be assumed by Buyer.  Prior to the Closing, Buyer shall offer employment, effective the Employment Commencement Date (as defined below), to the Station Employees as identified on such notice at a monetary compensation (or compensation formula, including base salary, commission rate and bonus opportunity) at least as favorable as that provided by Seller immediately prior to the Employment Commencement Date.  With respect to any Transferred Employee (as defined below) who is party to an employment agreement with Seller, such employment agreement shall be assumed by Buyer, to the extent set forth on Schedule 1.1(c) or entered into in accordance with the provisions of Section 4.2(a), and included in the Station Contracts.  The “Employment Commencement Date” shall mean the Closing Date.

(b)Notwithstanding anything herein to the contrary, Buyer shall, within three Business Days of Seller’s request, reimburse Seller for all severance, termination or separation payments (including costs for termination of employment agreements not assumed by Buyer and also including medical and dental plan coverage continuation) actually made to those Station Employees not offered employment by Buyer, but only to the extent that (i) such severance obligations arise under agreements or corporate policies of Seller in effect as of, and disclosed to Buyer prior to, the date of this Agreement, and (ii) such payments exceed, in the aggregate, $625,000, under this Agreement and the Multi-Market Purchase Agreement.

(c)With respect to the Station Employees who accept Buyer’s offer of employment and are hired by Buyer (the “Transferred Employees”), Seller shall be responsible for all compensation and benefits arising prior to the Employment Commencement Date (in accordance with Seller’s employment terms), and Buyer shall be responsible for all compensation and benefits arising on or after the Employment Commencement Date (in accordance with Buyer’s employment terms).  Seller shall remain responsible for satisfying the obligations, if any, to pay equity compensation to Transferred Employees under the terms of Seller’s equity compensation plans or agreements with Transferred Employees, which obligations were created under Seller’s equity compensation plans or agreements with Transferred Employees prior to the Employment Commencement Date.

(d)Provided that Buyer receives an appropriate proration under Section 1.7, Buyer shall grant credit to each Transferred Employee for all unused vacation accrued as of Closing as an employee of Seller, and Buyer shall assume and discharge Seller’s obligation to provide such leave to such Transferred Employees (such obligations being a part of the Assumed Obligations).  Notwithstanding any other provision contained herein, Buyer shall grant credit for all unused sick leave accrued by Transferred Employees on the basis of their service during the current calendar year as employees of Seller, provided that Buyer shall not be required to pay any Transferred Employee for unused sick leave.

(e)Buyer shall permit Transferred Employees (and their spouses and dependents) to participate in its “employee welfare benefit plans” (including health insurance plans) and “employee pension benefit plans,” as defined in Section 3(1) and 3(2) of ERISA, respectively, to the extent similarly situated employees of Buyer are generally eligible to participate, with coverage effective immediately upon the Employment Commencement Date.  Buyer also shall ensure, to the extent permitted by applicable Law (including ERISA and the Code) and Buyer’s plans, that Transferred Employees receive credit under any welfare benefit

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plan of Buyer for any deductibles or co-payments paid by Transferred Employees and their spouses and dependents for the current plan year under a plan maintained by Seller.  For purposes of any length of service requirements, waiting periods, vesting periods or differential benefits based on length of service in any such employee welfare benefit plans (including any severance plans or policies) and defined contribution plans for which Transferred Employees may be eligible after Closing, Buyer shall ensure, to the extent permitted by applicable Law (including ERISA and the Code), that service with Seller (as shown on Schedule 2.13) shall be deemed to have been service with Buyer.

(f)Buyer shall also permit each Transferred Employee who participates in Seller’s 401(k) plan to elect to make direct rollovers of their account balances into Buyer’s 401(k) plan as of the Employment Commencement Date, including the direct rollover of any outstanding loan balances such that they will continue to make payments under the terms of such loans under the Buyer’s 401(k) plan, subject to compliance with applicable law and subject to the reasonable requirements of Buyer’s 401(k) plan administrator.

(g)Except as prohibited by applicable Law, after the Closing Seller shall deliver to Buyer originals or copies of all personnel files and records (excluding medical and benefit plan records) related to the Transferred Employees, and Seller shall have reasonable continuing access to such files and records thereafter.

(h)From the date hereof until the eighteen-month anniversary of the Employment Commencement Date, Seller shall not solicit for employment any account executives, on-air talent or managers included in the Transferred Employees, other than pursuant to a general solicitation not specifically targeted at any employees of the Stations, and shall not during such period hire or transfer any of such employees to work for any radio station under the control of CBS Corporation, other than at the Stations.

4.8Further Assurances. After Closing, each party hereto shall execute all such instruments and take all such actions as any other party may reasonably request, without payment of further consideration, to effectuate the transactions contemplated by this Agreement, including the execution and delivery of confirmatory and other transfer documents in addition to those to be delivered at Closing.

4.9Public Filings. Seller acknowledges that Buyer may be obligated to use the pre-Closing financial statements of the Stations and other information in connection with filings under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Public Filings”), to be issued or filed by Buyer.  For a period of three (3) years from the Closing Date, Seller shall cooperate in a commercially reasonable manner with Buyer so that Buyer can obtain information sufficient for Buyer to prepare such Public Filings, in each case the out-of-pocket costs for which shall be borne solely by Buyer.  The foregoing cooperation of Seller shall include (a) granting Buyer and its accountants full and complete access to the books and records of the Stations and to any personnel knowledgeable about such books and records (including the accountants of Seller) in each case, to the extent reasonably requested by Buyer and (b) with respect to the period of time that the Stations and the Station Assets were owned or controlled by Seller or an Affiliate thereof, signing customary management representation letters related to the financial statements and any time the Stations

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were owned or controlled by Seller, Seller agrees to provide all relevant financial information in its possession with respect to such periods, to contact the former owners of the Stations on behalf of Buyer and to assist Buyer in arranging access to financial information of such former owners.

4.10No Solicitation.  From the date hereof, until the earlier of the Closing Date or the termination of this Agreement, Seller and its Affiliates will not, directly or indirectly, encourage, solicit, or engage in discussions or negotiations with, or provide any information to, any Person (other than Buyer and its representatives) concerning any sale or disposition of all, or substantially all, of the Station Assets or the FCC Licenses, provided that this Section 4.10 shall not apply to any discussions or negotiations involving the securities of Seller or any Affiliate of Seller.

ARTICLE V
CONDITIONS PRECEDENT

5.1To Buyer’s Obligations. The obligations of Buyer hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:

(a)Representations, Warranties and Covenants.  The representations and warranties of Seller made in this Agreement shall be true and correct, disregarding all qualifiers and exceptions relating to materiality or Seller Material Adverse Effect, (i) as of the date of this Agreement and (ii) (except to the extent such representations and warranties speak as of an earlier date, in which case such representations and warranties shall have been true and correct, disregarding all qualifiers and exceptions relating to materiality or Seller Material Adverse Effect, as of such earlier date) as of the Closing Date as though made on and as of the Closing Date, except, in both cases, (A) for changes expressly contemplated by this Agreement or permitted under Section 4.2 (Conduct of Business Prior to Closing), (B) casualty losses or damages subject to Section 4.4 (Risk of Loss), or (C) where the failures to be true and correct, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in a Seller Material Adverse Effect.  Seller shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date.  Buyer shall have received a certificate dated as of the Closing Date from Seller, executed by an authorized officer of Seller to the effect that the conditions set forth in this Section 5.1(a) have been satisfied.

(b)Governmental Consents.  The FCC Consent shall have been granted and shall be in full force and effect and shall contain no provision materially adverse to any of Buyer, Buyer’s Affiliates or the Stations and shall have become a Final Order; provided that the condition as to a Final Order shall not apply (i) if no filing shall have been made with the FCC by any third party that pertains to or becomes associated with the FCC Application, or (ii) if any such filing shall have been made, then if, in the reasonable opinion of Buyer’s FCC counsel, the objection set forth in the filing would not reasonably be expected to result in a denial of the FCC Consent or a designation for hearing of the FCC Application.  Any waiting period under the HSRA shall have been terminated or expired.

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(c)Adverse Proceedings.  No Governmental Order shall have been rendered against any party hereto that would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms, and no proceeding shall be pending before any Governmental Authority, other than the FCC, challenging this Agreement or the transactions contemplated hereby, which is reasonably likely to restrain, alter, prohibit or otherwise materially interfere with the Closing.

(d)Authorization.  Buyer shall have received a true and complete copy, certified by an officer of Seller, of the resolutions duly and validly adopted by the board of directors of Seller, evidencing its authorization of the execution and delivery of this Agreement and consummation of the transactions contemplated hereby.

(e)Deliveries.  Seller shall have made or stand willing to make all the deliveries required under Sections 6.1 and 6.2.

5.2To Seller’s Obligations. The obligations of Seller hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions:

(a)Representations, Warranties and Covenants.  The representations and warranties of Buyer made in this Agreement shall be true and correct, disregarding all qualifiers and exceptions relating to materiality or Buyer Material Adverse Effect, (i) as of the date of this Agreement and (ii) (except to the extent such representations and warranties speak as of an earlier date, in which case such representations and warranties shall have been true and correct, disregarding all qualifiers and exceptions relating to materiality or Buyer Material Adverse Effect, as of such earlier date) as of the Closing Date as though made on and as of the Closing Date except, in both cases, (A) for changes expressly contemplated by this Agreement or (B) where the failures to be true and correct, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in a Buyer Material Adverse Effect.  Buyer shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date.  Seller shall have received a certificate dated as of the Closing Date from Buyer executed by an authorized officer of Buyer, to the effect that the conditions set forth in this Section 5.2(a) have been satisfied.

(b)Governmental Consents.  The FCC Consent shall have been granted and shall be in full force and effect and shall contain no provision materially adverse to Seller or Seller’s Affiliate.  Any waiting period under the HSRA shall have been terminated or expired.

(c)Adverse Proceedings.  No Governmental Order shall have been rendered against any party hereto that would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms, and no proceeding shall be pending before any Governmental Authority, other than the FCC, challenging this Agreement or the transactions contemplated hereby, which is reasonably likely to restrain, alter, prohibit or otherwise materially interfere with the Closing.

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(d)Authorization.  Seller shall have received a true and complete copy, certified by an officer of Buyer, of the resolutions duly and validly adopted by the board of directors of Buyer evidencing its authorization of the execution and delivery of this Agreement and consummation of the transactions contemplated hereby.

(e)Deliveries.  Buyer shall have made or stand willing to make all the deliveries required under Sections 6.1 and 6.3 and shall have paid or stand willing to pay the Purchase Price as provided in Section 1.5.

ARTICLE VI
DOCUMENTS TO BE DELIVERED AT THE CLOSING

6.1Documents to be Delivered by Both Parties.  At the Closing, each of Buyer and Seller shall execute and deliver to the other as applicable:

(a)a duly executed Assignment and Assumption Agreement, substantially in the form of Exhibit B-1; and

(b)a duly executed Assignment and Assumption Agreement for the Real Property Leases, substantially in the form of Exhibit B-2.

6.2Documents to be Delivered by Seller.  At the Closing, Seller shall deliver to Buyer the following:

(a)the certificate described in Section 5.1(a);

(b)the documents described in Section 5.1(d);

(c)a duly executed Bill of Sale, substantially in the form of Exhibit B-3;

(d)a duly executed Assignment for the FCC Licenses, substantially in the form of Exhibit B-4;

(e)a duly executed Assignment for the Intangible Property, substantially in the form of Exhibit B-5;

(f)the consents to assignment required under those Station Contracts listed on Schedule 1.1(c) or Schedule 1.1(f) and marked with a “‡”, if any, duly executed by the appropriate Persons, and which shall be in full force and effect without conditions materially adverse to Buyer, except as expressly provided in such agreement; and

(g)an opinion of counsel to Seller substantially in the form attached hereto as Exhibit C.

6.3Documents to be Delivered by Buyer.  At the Closing, Buyer shall deliver to Seller the following:

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(a)the certificate described in Section 5.2(a);

(b)the documents described in Section 5.2(d); and

(c)the Purchase Price.

ARTICLE VII
SURVIVAL; INDEMNIFICATION

7.1Survival. The representations and warranties in this Agreement shall survive the Closing for a period of 18 months from the Closing Date whereupon they shall expire and be of no further force or effect, except those under: (a) Section 2.15 (Taxes), which shall survive until the expiration of any applicable statute of limitations, (b) Section 2.17 (No Finder) and Section 3.8 (No Finder), each of which shall survive indefinitely, and (c) the provisions in Section 2.7 (FCC Licenses), Section 2.8 (Tangible Personal Property), Section 2.11 (Real Property) andSection 2.16 (Sufficiency and Title to Station Assets) relating to title, each of which shall survive indefinitely, and (d) Section 2.12 (Environmental), which shall survive indefinitely.  None of the covenants and agreements shall survive the Closing except to the extent such covenants and agreements contemplate performance after the Closing, in which case such covenants and agreements shall survive until performed.  No claim may be brought under this Agreement unless written notice describing in reasonable detail the nature and basis of such claim is given on or prior to the last day of the applicable survival period. In the event such notice is given, the right to indemnification with respect thereto shall survive the applicable survival period until such claim is finally resolved and any obligations thereto are fully satisfied.

7.2Indemnification.

(a)Subject to Section 7.1, from and after the Effective Time, Seller shall defend, indemnify and hold harmless Buyer, its Affiliates and their respective employees, officers, directors, shareholders and agents (collectively, the “Buyer Indemnified Parties”) from and against any and all losses, costs, damages, liabilities, expenses, obligations and claims of any kind (including any Action brought by any Governmental Authority or Person and including reasonable attorneys’ fees and expenses (“Losses”)) incurred by such Buyer Indemnified Party arising out of or resulting from (i) Seller’s breach of any of the representations or warranties contained in this Agreement, any Seller Ancillary Agreement or in any other certificate or document delivered pursuant hereto or thereto; (ii) any breach or nonfulfillment of any agreement or covenant of Seller under the terms of this Agreement or any Seller Ancillary Agreement; and (iii) the Retained Liabilities.  Seller shall have no liability to Buyer under clause (i) of this Section 7.2(a) until, and only to the extent that, Buyer’s aggregate Losses exceed 1% of the Purchase Price, and the maximum liability of Seller under clause (i) of this Section 7.2(a) shall be an amount equal to 50% of the Purchase Price.

(b)Subject to Section 7.1, from and after the Effective Time, Buyer shall defend, indemnify and hold harmless Seller, its Affiliates and their respective employees, officers, directors, shareholders and agents (collectively, the “Seller Indemnified Parties”) from and against any and all Losses incurred by such Seller Indemnified Party arising out of or resulting from (i) Buyer’s breach of any of its representations or warranties contained in this

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Agreement, any Buyer Ancillary Agreement or in any other certificate or document delivered pursuant hereto or thereto; (ii) any breach or nonfulfillment of any agreement or covenant of Buyer under the terms of this Agreement or any Buyer Ancillary Agreement; and (iii) the Assumed Obligations.  Buyer shall have no liability to Seller under clause (i) of this Section 7.2(b) until, and only to the extent that, Seller’s aggregate Losses exceed 1% of the Purchase Price, and the maximum liability of Buyer under clause (i) of this Section 7.2(b) shall be an amount equal to 50% of the Purchase Price.

7.3Procedures.  The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (a “Claim”), but a failure to give or a delay in giving such notice shall not affect the indemnified party’s right to indemnification and the indemnifying party’s obligation to indemnify as set forth in this Agreement, except to the extent the indemnifying party’s ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced. The obligations and liabilities of the parties with respect to any Claim shall be subject to the following additional terms and conditions:

(a)The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim.

(b)In the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within 20 days after written notice (which shall include sufficient description of background information explaining the basis for such Claim) of any such Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof).

(c)Anything herein to the contrary notwithstanding (i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim, (ii) the indemnifying party shall not, without the indemnified party’s written consent, settle or compromise any Claim or consent to entry of any judgment, unless such judgment, settlement or compromise includes the giving by the claimant to the indemnified party of a release from all liability in respect of such Claim, and (iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim.

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7.4Computation of Indemnifiable Losses.  Any amount payable pursuant to this Article VII shall be decreased to the extent of (a) any amounts actually recovered by the indemnified party from any third party (including insurance proceeds) in respect of an indemnifiable Loss, and (b) any net Tax benefit actually realized by the indemnified party arising out of an indemnifiable Loss.  The indemnifying party and the indemnified party shall cooperate in good faith in providing each other the information necessary to determine the Tax benefits, as the case may be, in each case.  The indemnified party shall use its commercially reasonable efforts to pursue payment under or from any insurer or third-party in respect of such Losses.  While its indemnification obligations under this Article VII remain in effect, Buyer shall maintain insurance on the Stations and their assets in amounts and types substantially comparable to that maintained on other radio stations owned by Buyer and its Affiliates.

7.5Sole Remedy.  After the Closing, and except with respect to common law fraud or willful misconduct, the right to indemnification under this Article VII shall be the exclusive remedy of any party in connection with any breach or default by another party under this Agreement, any Buyer Ancillary Agreement or any Seller Ancillary Agreement, provided that nothing in this Section 7.5 shall limit a party’s right to seek equitable relief in connection with the non-performance of any agreement or covenant contained in this Agreement, any Buyer Ancillary Agreement or Seller Ancillary Agreement that contemplates performance after the Closing.  Neither party shall have any liability to the other party under any circumstances for special, indirect, consequential, punitive or exemplary damages, or lost profits, diminution in value or any damages based on any type of multiple of any Indemnified Party.

ARTICLE VIII
TERMINATION RIGHTS

8.1Termination.

(a)This Agreement may be terminated prior to Closing by either Buyer or Seller upon written notice to the other following the occurrence of any of the following:

(i)if the other party is in material breach or default of this Agreement or does not perform in all material respects the obligations to be performed by it under this Agreement on the Closing Date such that the conditions set forth in Sections 5.1(a) and 5.2(a), as applicable, would not be satisfied and such breach or default has not been waived by the party giving such termination notice;

(ii)if there shall be any Law that prohibits consummation of the sale of the Stations or if a Governmental Authority of competent jurisdiction shall have issued a final, nonappealable Government Order enjoining or otherwise prohibiting consummation of the sale of the Stations;

(iii)if the FCC denies the FCC Application; or

(iv)if the Closing has not occurred by the date that is 18 months from the date of this Agreement (the “Upset Date”).

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(b)This Agreement may be terminated prior to Closing by mutual written consent of Buyer and Seller.

(c)If either party believes the other to be in breach or default of this Agreement, the non-defaulting party shall, prior to exercising its right to terminate under Section 8.1(a)(i), provide the defaulting party with notice specifying in reasonable detail the nature of such breach or default.  Except for a failure to pay the Purchase Price, the defaulting party shall have 20 days from receipt of such notice to cure such default; provided, however, that if the breach or default is incapable of cure within such 20-day period, the cure period shall be extended, as long as the defaulting party is diligently and in good faith attempting to effectuate a cure, provided that in no event shall such cure period extend beyond the date which would otherwise have been the Closing Date in the absence of such breach or default.  Nothing in this Section 8.1(c) shall be interpreted to extend the Upset Date.

(d)If this Agreement is terminated by Seller pursuant to Section 8.1(a)(i), then Seller shall be entitled to an amount equal to 10% of the Purchase Price as liquidated damages.  If Buyer contests Seller’s right to liquidated damages, then the prevailing party in any Action initiated by Seller to enforce its rights to liquidated damages shall be entitled to payment by the other party of the reasonable attorneys’ fees incurred by the prevailing party in such Action.  The parties understand and agree that the amount of liquidated damages represents Seller’s and Buyer’s reasonable estimate of actual damages and does not constitute a penalty.  Notwithstanding any other provision of this Agreement to the contrary, in the event that Seller terminates this Agreement pursuant to Section 8.1(a)(i), the payment of 10% of the Purchase Price, together with any attorneys’ fees pursuant to this Section 8.1(d), shall be Seller’s sole and exclusive remedy for damages of any nature or kind that Seller may suffer as a result of Buyer’s breach or default under this Agreement.

8.2Effect of Termination. In the event of a valid termination of this Agreement pursuant to Section 8.1, this Agreement (other than Sections 4.3(c) and 4.3(d), this Article VIII and Sections 10.1, 10.2, 10.3, 10.4, 10.5, 10.7 and 10.8, which shall remain in full force and effect) shall forthwith become null and void, and no party hereto (nor any of their respective Affiliates, directors, officers or employees) shall have any liability or further obligation, except as provided in this Article VIII; provided, however, that nothing in this Section 8.2 shall (subject to the limitations in Section 8.1(d)) relieve any party from liability for any breach of this Agreement prior to termination.

8.3Specific Performance.  In the event of failure or threatened failure by either party to comply with the terms of this Agreement, the other party shall be entitled to an injunction restraining such failure or threatened failure and, subject to obtaining any necessary FCC consent, to enforcement of this Agreement by a decree of specific performance requiring compliance with this Agreement; provided, however, that, if prior to Closing Seller terminates this Agreement pursuant to Section 8.1(a)(i), then Seller’s sole remedy shall be termination of this Agreement, receipt of the liquidated damages and the payment of any attorney’s fees pursuant to Section 8.1(d), except for any failure by Buyer to comply with its obligations related to confidentiality, as to which Seller shall be entitled to all available rights and remedies, including without limitation specific performance.  The parties acknowledge that the Stations are unique properties as to which an adequate remedy at law may not exist.  Each party waives any

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requirement that the other party post a bond or other security in connection with pursuing equitable or injunctive relief under this Agreement.  As a condition to seeking specific performance of Seller’s obligation to consummate the assignment of the Station Assets to Buyer, Buyer shall not be required to have tendered the Purchase Price, but shall be ready, willing and able to do so.

ARTICLE IX
TAX MATTERS

9.1Bulk Sales.  Seller and Buyer hereby waive compliance with the provisions of any applicable bulk sales law and no representation, warranty or covenant contained in this Agreement shall be deemed to have been breached as a result of such non-compliance.

9.2Transfer Taxes.  Transfer Taxes arising out of or in connection with the transactions effected pursuant to this Agreement shall be paid both equally by Buyer and Seller.  The party with primary responsibility under applicable Law for the payment of any particular Transfer Tax shall prepare and file the relevant Tax Return and notify the other party in writing of the Transfer Taxes shown on such Tax Return.  Such other party shall pay an amount equal to one-half of the amount of such Transfer Taxes shown on such Tax Return in immediately available funds no later than the date that is the later of (a) five Business Days after the date of such notice or (b) two Business Days prior to the due date for such Transfer Taxes.

9.3Taxpayer Identification Numbers.  The taxpayer identification numbers of Buyer and Seller are set forth on Schedule 9.3.

ARTICLE X
OTHER PROVISIONS

10.1Expenses.  Except as otherwise provided herein, each party shall be solely responsible for and shall pay all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement.

10.2Benefit and Assignment.

(a)This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.  Neither party may assign its rights under this Agreement without the other party’s prior written consent, which consent may not be unreasonably conditioned, withheld or delayed; provided, however, that Seller shall consent to a partial assignment of the Buyer’s rights and obligations hereunder, to the extent such assignment is necessary or appropriate for Buyer to comply with the provisions of Section 4.1(a), provided, that Buyer agrees in writing to remain ultimately liable for the performance of such obligations and that such assignment shall not materially delay the transactions contemplated by this Agreement.

(b)Notwithstanding anything above to the contrary, either Buyer or Seller may, without the other party’s consent, (i) assign any or all of its rights and obligations under this Agreement to one or more Affiliates, provided that such assignment does not delay the

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receipt of the FCC Consent or the Closing and the assigning party is not relieved of liability under this Agreement, or (ii) assign any or all of its rights but not its obligations under this Agreement to any “qualified intermediary” as defined in Treas. Reg. Sec. 1.1031(k) 1(g)(4) or to any exchange accommodation titleholder as described in Revenue Procedure 2000-37 (“EAT”) (but any such assignment shall not relieve a party of its obligations under this Agreement), provided that such assignment does not delay the Closing.  If Buyer or Seller gives notice of an assignment pursuant to this Section 10.2(b), the other party shall cooperate with all reasonable requests of Buyer or Seller, as the case may be, and the qualified intermediary or EAT in arranging and effecting the deferred like-kind exchange as one which qualifies under Section 1031 of the Code.  Without limiting the generality of the foregoing, Buyer or Seller, as the case may be, shall provide the other party with a written acknowledgement of such notice prior to Closing, Buyer shall pay the Purchase Price (or such portion thereof as is designated in writing by the qualified intermediary) to or on behalf of the qualified intermediary at Closing and Seller shall convey the Station Assets (or such portion thereof as is designated in writing by the qualified intermediary) to or on behalf of the qualified intermediary at Closing.

10.3No Third Party Beneficiaries.  Nothing herein, express or implied, shall be construed to confer upon or give to any other Person other than the parties hereto or their permitted successors or assigns, any rights or remedies under or by reason of this Agreement.

10.4Entire Agreement; Waiver; Amendment.  This Agreement, the Confidentiality Agreement, the Buyer Ancillary Agreements, the Seller Ancillary Agreements and the exhibits and schedules hereto and thereto constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between Seller and Buyer with respect to the subject matter hereof and thereof, except as otherwise expressly provided herein.  Any matter that is disclosed in a schedule hereto in such a way as to make its relevance to the information called for by another schedule readily apparent shall be deemed to have been included in such other schedule, notwithstanding the omission of an appropriate cross reference.  No amendment, waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought.  No failure or delay on the part of Buyer or Seller in exercising any right or power under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.

10.5Headings.  The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement.

10.6Computation of Time.  If after making computations of time provided for in this Agreement, a time for action or notice falls on Saturday, Sunday or a Federal holiday, then such time shall be extended to the next Business Day.

10.7Governing Law; Waiver of Jury Trial. The construction and performance of this Agreement shall be governed by the law of the State of New York without

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regard to its principles of conflict of law.  The exclusive forum for the resolution of any disputes arising hereunder shall be the federal or state courts located in New York, New York, and each party irrevocably waives the reference of an inconvenient forum to the maintenance of any such action or proceeding.  BUYER AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT, INCLUDING ANY COUNTERCLAIM MADE IN SUCH ACTION OR PROCEEDING, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE DECIDED SOLELY BY A JUDGE.  Buyer and Seller hereby acknowledge that they have each been represented by counsel in the negotiation, execution and delivery of this Agreement and that their lawyers have fully explained the meaning of the Agreement, including in particular the jury-trial waiver.

10.8Construction.  Any question of doubtful interpretation shall not be resolved by any rule providing for interpretation against the party who causes the uncertainty to exist or against the drafter of this Agreement.

10.9Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, addressed to the following addresses, or to such other address as any party may request in writing.

If to Seller:

CBS Radio Inc.

1515 Broadway, 46th Floor

New York, NY  10036

Attention:  Walter Berger

Facsimile:  (212) 846-3999

With a copy, which shall not constitute notice, to:

CBS Corporation
51 W. 52nd Street
New York, NY 10019
Attention: General Counsel
Facsimile: (212) 975-4215

and

Leventhal Senter & Lerman PLLC
2000 K Street, N.W.
Suite 600
Washington, DC 20006-1809
Attention: Steven A. Lerman, Esq.
Facsimile: (202) 293-7783

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If to Buyer:

Entercom Communications Corp.
401 City Avenue, Suite 809
Bala Cynwyd, PA  19004-1121
Attention:  David J. Field
Facsimile:  610-660-5661

With a copy, which shall not constitute notice, to:

Entercom Communications Corp.
401 City Avenue, Suite 809
Bala Cynwyd, PA  19004-1121
Attention:  John C. Donlevie, Esq.
Facsimile:  610-660-5641

and

Latham & Watkins LLP
555 11th Street, NW
Washington, DC  20004
Attention:  David D. Burns, Esq.
Facsimile:  202-637-2201

Any such notice, demand or request shall be deemed to have been duly delivered and received (a) on the date of personal delivery, or (b) on the date of transmission, if sent by facsimile and received prior to 5:00 p.m. in the place of receipt (but only if a hard copy is also sent by overnight courier), or (c) on the date of receipt, if mailed by registered or certified mail, postage prepaid and return receipt requested, or (d) on the date of a signed receipt, if sent by an overnight delivery service, but only if sent in the same manner to all persons entitled to receive notice or a copy.

10.10Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced because of any Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to either party hereto.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

10.11Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.  Facsimile or other electronically delivered copies of signature pages to this Agreement, any Buyer Ancillary Agreement, any Seller Ancillary Agreement or any other document or instrument delivered pursuant to this Agreement shall be treated as between the parties as original signatures for all purposes.

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ARTICLE XI
DEFINITIONS

11.1Defined Terms.  Unless otherwise stated in this Agreement, the following terms when used herein shall have the meanings assigned to them below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

“Accounting Firm” means (a) an independent certified public accounting firm in the United States of national recognition (other than a firm that then serves as the independent auditor for Seller, Buyer or any of their respective Affiliates) mutually acceptable to Seller and Buyer or (b) if Seller and Buyer are unable to agree upon such a firm, then the regular independent auditors for Seller and Buyer shall mutually agree upon a third independent certified public accounting firm, in which event, “Accounting Firm” shall mean such third firm.

“Accounts Receivable” shall have the meaning set forth in Section 1.2(c).

“Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person, provided that, with respect to Seller, Affiliate means CBS Corporation and any other Person that is directly or indirectly through one or more intermediaries controlled by CBS Corporation.

“Agreement” shall mean this Asset Purchase Agreement, including the exhibits and schedules hereto.

“Antitrust Laws” means the Sherman Act, as amended, the Clayton Act, as amended, the HSRA, the Federal Trade Commission Act, as amended, and all other federal, state and foreign, if any, Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

“Appraisal” shall have the meaning set forth in Section 1.9.

“Assumed Obligations” shall have the meaning set forth in Section 1.3.

“Business Day,” whether or not capitalized, shall mean every day of the week excluding Saturdays, Sundays and Federal holidays.

“Buyer” shall have the meaning set forth in the Preamble to this Agreement.

“Buyer Ancillary Agreements” shall have the meaning set forth in Section 3.2(a).

“Buyer Indemnified Parties” shall have the meaning set forth in Section 7.2(a).

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“Buyer Material Adverse Effect” means a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or any Buyer Ancillary Agreement.

“CBS Radio” shall have the meaning set forth in the Preamble to this Agreement.

“Claim” shall have the meaning set forth in Section 7.3.

“Closing” shall have the meaning set forth in Section 1.6.

“Closing Date” shall have the meaning set forth in Section 1.6.

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

“Collection Period” shall have the meaning set forth in Section 1.8(a).

“Communications Act” shall have the meaning set forth in Section 2.7(c).

“Confidentiality Agreement” shall have the meaning set forth in Section 4.3(c).

“Control” means, as to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The terms “Controlled” and “Controlling” shall have a correlative meaning.

“Damaged Asset” shall have the meaning set forth in Section 4.4.

“DOJ” shall have the meaning set forth in Section 4.1(e).

“EAT” shall have the meaning set forth in Section 10.2.

“Effective Time” shall have the meaning set forth in Section 1.6.

“Employment Commencement Date” shall have the meaning set forth in Section 4.7.

“Environmental Laws” shall have the meaning set forth in Section 2.12.

“ERISA” shall mean the Employment Retirement Income Security Act of 1974, as amended.

“Excluded Assets” shall have the meaning set forth in Section 1.2.

“FCC” shall have the meaning set forth in the Recitals to this Agreement.

“FCC Application” shall mean the application or applications that Seller and Buyer must file with the FCC requesting its consent to the assignment of the FCC Licenses.

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“FCC Consent” shall mean the initial action by the FCC granting the FCC Application.

“FCC Licenses” shall have the meaning set forth in Section 1.1(a).

“Final Order” means an action by the FCC (a) that has not been vacated, reversed, stayed, enjoined, set aside, annulled or suspended, (b) with respect to which no request for stay, motion or petition for rehearing, reconsideration or review, or application or request for review or notice of appeal or sua sponte review by the FCC is pending, and (c) as to which the time for filing any such request, motion, petition, application, appeal or notice, and for the entry of orders staying, reconsidering or reviewing on the FCC’s own motion has expired.

“FTC” shall have the meaning set forth in Section 4.1(e).

“GAAP” means United States generally accepted accounting principles as in effect as of the date hereof, consistently applied.

“Governmental Authority” means any federal, state or local or any foreign government, legislature, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Group Contracts” means contracts that contemplate the provision of the products and services to or by another station or business of the Seller or any of its Affiliates other than or in addition to the Stations.

“HSRA” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Intangible Property” shall have the meaning set forth in Section 1.1(d).

“Law” means any United States (federal, state, local) or foreign statute, law, ordinance, regulation, rule, code, order, judgment, injunction or decree.

“Liens” shall have the meaning set forth in Section 1.1.

“Losses” shall have the meaning set forth in Section 7.2(a).

“Multi-Market Purchase Agreement” shall have the meaning set forth in Section 4.1(c).

“Notice of Disagreement” shall have the meaning set forth in Section 1.7(g).

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“Permitted Liens” means, as to any property or asset or as to the Stations, (a) the Assumed Obligations, (b) Liens for Taxes, assessments and other governmental charges not yet due and payable; (c) zoning laws and ordinances and similar Laws that are not violated by any existing improvement or that do not prohibit the use of the Real Property as currently used in the operation of the Stations; (d) any right reserved to any Governmental Authority to regulate the affected property (including restrictions stated in the permits); (e) in the case of any leased asset, (1) the rights of any lessor under the applicable lease agreement or any Lien granted by any lessor and (2) the rights of the grantor of any easement or any Lien granted by such grantor on such easement property; (f) easements, rights of way, restrictive covenants and other encumbrances, encroachments or other similar matters affecting title that do not materially adversely affect title to the property subject thereto or impair the continued use of the property in the ordinary course of business of the Stations; (g) inchoate materialmen’s, mechanics’, workmen’s, repairmen’s or other like Liens arising in the ordinary course of business, which Liens are released at or prior to Closing, are the subject of a proration adjustment in favor of Buyer pursuant to Section 1.7 or are Retained Liabilities; and (h) any state of facts an accurate survey would show, provided same does not render title unmarketable, materially decrease the value of the property, or prevent the Real Property from being utilized in substantially the same manner currently used.

“Person” means any natural person, general or limited partnership, corporation, limited liability company, firm, association, trust or other legal entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Prorated Assumed Obligations” shall have the meaning set forth in Section 1.7(a).

“Prorated Station Assets” shall have the meaning set forth in Section 1.7(a).

“Public Filings” shall have the meaning set forth in Section 4.9.

“Purchase Price” shall have the meaning set forth in Section 1.5.

“Real Property” shall have the meaning set forth in Section 1.1(f).

“Real Property Leases” shall have the meaning set forth in Section 2.11.

“Reference Financial Statements” shall have the meaning set forth in Section 2.6.

“Retained Liabilities” shall have the meaning set forth in Section 1.4.

“Seller” shall have the meaning set forth in the Preamble to this Agreement.

“Seller Ancillary Agreements” shall have the meaning set forth in Section 2.2(a).

“Seller Indemnified Parties” shall have the meaning set forth in Section 7.2(b).

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“Seller Material Adverse Effect” means a material adverse effect on: (a) the ability of Seller to perform its obligations under this Agreement or any Seller Ancillary Agreement or (b) the condition (financial or otherwise), assets, results of operations of the business and operations of the Stations, or the Station Assets, taken as a whole; provided, however, that Seller Material Adverse Effect shall not include any material adverse effect to the extent attributable to (i) any change or development generally applicable to the radio broadcast industry (including legislative or regulatory matters), (ii) general economic conditions, including any downturn caused by terrorist activity or a natural disaster, such as an earthquake or hurricane, or (iii) any public announcement of the transactions contemplated by this Agreement.

“Settlement Statement” shall have the meaning set forth in Section 1.7(e).

“Station” or “Stations” shall have the meaning set forth in the Recitals to this Agreement.

“Station Assets” shall have the meaning set forth in Section 1.1.

“Station Contracts” shall have the meaning set forth in Section 1.1(c).

“Station Employees” means all persons employed by Seller primarily in the conduct and operation of the Stations.

“Tangible Personal Property” shall have the meaning set forth in Section 1.1(b).

“Tax” or “Taxes” means all federal, state, local or foreign income, excise, gross receipts, ad valorem, sales, use, employment, franchise, profits, gains, property, transfer, use, payroll, intangible or other taxes, fees, stamp taxes, duties, charges, levies or assessments of any kind whatsoever (whether payable directly or by withholding), together with any interest and any penalties, additions to tax or additional amounts imposed by any Tax authority with respect thereto.

“Tax Returns” means all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes.

“To Buyer’s knowledge” or any variant thereof shall mean to the actual knowledge, after reasonable inquiry, of any of Buyer’s president, Buyer’s chief financial officer and Buyer’s general counsel.

“To Seller’s knowledge” or any variant thereof shall mean to the actual knowledge, after reasonable inquiry, of any of Seller’s chief executive officer, Seller’s chief financial officer, Seller’s director of engineering, Seller’s regional vice presidents and regional engineers with responsibility for the Stations, and Seller’s general managers for each of the Stations.

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“Tradeout Agreement” means, as to a Station, any contract, agreement or commitment, oral or written, pursuant to which Seller has agreed to sell or trade commercial air time or commercial production services of such Station in consideration for any property or service in lieu of or in addition to cash.

“Transferred Employees” shall have the meaning set forth in Section 4.7(b).

“Transfer Taxes” means all excise, sales, use, value added, registration stamp, recording, documentary, conveyancing, franchise, property, transfer and similar Taxes, levies, charges and fees.

“Upset Date” shall have the meaning set forth in Section 8.1(a)(iv).

11.2Terms Generally.  The term “or” is disjunctive; the term “and” is conjunctive. The term “shall” is mandatory; the term “may” is permissive. Masculine terms apply to females; feminine terms apply to males.  The term “include,” “includes” or “including” is by way of example and not limitation.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.

CBS RADIO STATIONS INC.
By:
	Name:
	Title:
ENTERCOM COMMUNICATIONS CORP.
By:
	Name:
	Title:

SIGNATURE PAGE TO CBS ROCHESTER
ASSET PURCHASE AGREEMENT

LIST OF SCHEDULES

Schedule 1.1(a) – FCC Licenses

Schedule 1.1(c) – Station Contracts

Schedule 1.1(d) – Intangible Property

Schedule 1.1(f) – Real Property

Schedule 1.2(k) – Excluded Marks

Schedule 1.2(s) – Excluded Contracts

Schedule 2.4 – Seller Noncontravention

Schedule 2.6 – Financial Statements

Schedule 2.7 – FCC License Exceptions

Schedule 2.7(a) – Conditions on FCC Licenses

Schedule 2.7(b) – Pending FCC Applications

Schedule 2.7(c) – Compliance with Communications Act and FCC Licenses

Schedule 2.7(d) – Pending Petitions, Complaints, Etc.

Schedule 2.8(a) – Exception to Title of Tangible Personal Property

Schedule 2.8(b) – Condition of Tangible Personal Property

Schedule 2.10 – Exceptions as to Intangible Property

Schedule 2.12 – Environmental

Schedule 2.13(a) – Employee Information

Schedule 2.13(b) – Employee Labor and Collective Bargaining Agreements

Schedule 2.14 – Compliance with Laws

Schedule 2.16 – Transfer of Assets

Schedule 3.4 – Buyer Noncontravention

Schedule 3.6 – Buyer FCC Qualifications

Schedule 4.2 –Repairs and Capital Projects

Schedule 5.1(b) – Governmental Consents

Schedule 9.3 – Taxpayer Identification Numbers

EX-10.03

Exhibit 10.03

FIRST AMENDMENT
TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT

This FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into as of September 22, 2006, by and among ENTERCOM RADIO, LLC, a Delaware limited liability company (the “Borrower”), ENTERCOM COMMUNICATIONS CORP., a Pennsylvania corporation (the “Parent”), KEYBANK NATIONAL ASSOCIATION, individually and as Administrative Agent and L/C Issuer (the “Administrative Agent”), BANK OF AMERICA, N.A., individually and as Syndication Agent (“Syndication Agent”), and the other Lenders party hereto.

RECITALS

A.The Borrower, the Parent, the Administrative Agent, the Syndication Agent, and the Lenders parties thereto entered into that certain First Amended and Restated Credit Agreement dated as of August 12, 2004 (as the same may be amended, restated or modified from time to time, the “Credit Agreement”).  Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

B.The Borrower has requested certain amendments to the Credit Agreement.

C.The Borrower and the Required Lenders have agreed, subject to the terms and conditions specified herein, to amend certain provisions of the Credit Agreement.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.AMENDMENTS.

Subject to the covenants, terms and conditions set forth in this Amendment, and in reliance upon the representations and warranties of the Borrower made herein, the undersigned Lenders (which Lenders constitute the Required Lenders required under Section 10.01 of the Credit Agreement to effect the following amendments) amend the Credit Agreement as follows:

(a)Section 1.1 of the Credit Agreement is hereby amended by adding the definitions of “First Amendment” and “First Amendment Effective Date” in alphabetical order as provided below:

“First Amendment” means that certain First Amendment to First Amended and Restated Credit Agreement, dated as of September 22, 2006, among the Borrower, the Lenders party thereto, the Administrative Agent and the Syndication Agent.

“First Amendment Effective Date” means the date that all of the conditions precedent set forth in Section 3 of the First Amendment have been satisfied.

(b)Section 6.15 of the Credit Agreement is hereby amended by deleting such section in its entirety.

Section 2.REPRESENTATIONS AND WARRANTIES.

By its execution and delivery hereof, the Borrower represents and warrants that, as of the date hereof:

(a)(i) the Borrower has full power and authority to execute and deliver this Amendment, (ii) this Amendment has been duly executed and delivered by the Borrower, and (iii) this Amendment and the Credit Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower, enforceable in accordance with the terms hereof (subject as to enforcement of remedies to any applicable bankruptcy, reorganization, moratorium, or other laws or principles of equity affecting the enforcement of creditors’ rights generally);

(b)there exists no Default under the Credit Agreement both before and after giving effect to this Amendment;

(c)the representations and warranties set forth in the Credit Agreement and other Loan Documents are true and correct in all material respects on the date hereof both before and after giving effect to this Amendment; except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement;

(d)the Borrower has complied in all material respects with all agreements and conditions to be complied with by it under the Credit Agreement and the other Loan Documents by the date hereof;

(e)the Credit Agreement, as amended hereby, and the other Loan Documents remain in full force and effect;

(f)neither the execution, delivery and performance of this Amendment or the Credit Agreement, as amended hereby, nor the consummation of any transactions contemplated herein or therein, will conflict with any Law or Organization Documents of the Borrower, or any indenture, agreement or other instrument to which the Borrower or any of its properties are subject; and

(g)no authorization, approval, consent, or other action by, notice to, or filing with, any governmental authority or other Person (including the board of directors of the Borrower)

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not previously obtained is required for the execution, delivery or performance by the Borrower of this Amendment.

Section 3.CONDITIONS PRECEDENT.

The parties hereto agree that the amendments set forth herein shall not be effective until the satisfaction in full of each of the following conditions precedent, each in a manner satisfactory to the Administrative Agent and the Lenders parties hereto in their sole discretion:

(a)Execution and Delivery of this Amendment.  The Administrative Agent shall have received a copy of this Amendment executed and delivered by the Borrower, the Guarantors and by Lenders constituting the Required Lenders.

(b)Representations and Warranties.  Each of the representations and warranties made herein shall be true and correct on and as of the date hereof, as if made on and as of such date, both before and after giving effect to the amendments set forth herein.

(c)Other Documents, Certificates and Instruments.  The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent and its counsel, resolutions authorizing execution of this Amendment and such other documents, certificates and instruments as the Administrative Agent shall require.

Section 4.MISCELLANEOUS.

(a)Guarantors Acknowledgement.  By signing below, each Guarantor (i) acknowledges, consents and agrees to the execution, delivery and performance by the Borrower of this Amendment, (ii) acknowledges and agrees that its obligations in respect of its Guaranty are not released, diminished, waived, modified, impaired or affected in any manner by this Amendment or any of the provisions contemplated herein, (iii) ratifies and confirms its obligations under its Guaranty, and (iv) acknowledges and agrees that it has no claims or offsets against, or defenses or counterclaims to, its Guaranty.

(b)Ratification and Confirmation of Loan Documents and Liens.  As a material inducement to the Lenders to agree to amend the Credit Agreement as set forth herein, the Borrower and the Guarantors hereby (i) ratify, acknowledge and confirm the continuing existence, validity and effectiveness of the Loan Documents (subject as to enforcement of remedies to any applicable bankruptcy, reorganization, moratorium, or other laws or principles of equity affecting the enforcement of creditors’ rights generally) to which they are parties, including, without limitation the Pledge Agreements and the Liens granted under the Pledge Agreement, (ii) agree that the execution, delivery and performance of this Amendment shall not in any way release, diminish, impair, reduce or otherwise adversely affect such Loan Documents and Liens and (iii) acknowledge and agree that the Liens granted under the Pledge Agreements secure (A) the payment of the Obligations under the Loan Documents in the same priority as on the date such Liens were created and perfected, and (B) the performance and observance by the Borrower and the other Loan Parties of the covenants, agreements and conditions to be performed and observed by each under the Credit Agreement, as amended hereby.

3

(c)Fees and Expenses.  The Borrower agrees to pay on demand all costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution, and delivery of this Amendment and the other documents prepared in connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent.

(d)Headings.  Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

(e)APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(f)Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  For purposes of this Amendment, a counterpart hereof (or signature page thereto) signed and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an original.  The signature of such Person thereon, for purposes hereof, is to be considered as an original signature, and the counterpart (or signature page thereto) so transmitted is to be considered to have the same binding effect as an original signature on an original document.

(g)FINAL AGREEMENT.  THIS AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT, THE NOTES, THE PLEDGE AGREEMENTS AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION THEREWITH, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

4

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

ENTERCOM RADIO, LLC
By:
Name:
Title:
BANK OF AMERICA, N.A., as Syndication Agent and a Lender
By:
Name:	Todd Shipley
Title:	Senior Vice President
KEYBANK, NATIONAL ASSOCIATION, as Administrative Agent, L/C Issuer and a Lender
By:
Name:
Title:
HARRIS NESBITT FINANCING, INC. as a Lender and HARRIS NESBITT as Co-Documentation Agent
By:
Name:
Title:
JPMORGAN CHASE BANK,
as Co-Documentation Agent and a Lender
By:
Name:
Title:
SUNTRUST BANK, as Co-Documentation Agent and a Lender
By:
Name:
Title:

Signature Pages for Entercom Radio, LLC
First Amendment to First Amended and Restated Credit Agreement

SUMITOMO MITSUI BANKING CORPORATION., NEW YORK, as a Lender

By:

Name:

Title:

DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender

By:

Name:

Title:

UNION BANK OF CALIFORNIA, N.A., as a Lender

By:

Name:

Title:

MIZUHO CORPORATE BANK, LTD., as a Lender

By:

Name:

Title:

NATIONAL AUSTRALIA BANK LIMITED, A.C.N. 004 044 937, as a Lender

By:

Name:

Title:

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as a Lender

By:

Name:

Title:

Signature Pages for Entercom Radio, LLC
First Amendment to First Amended and Restated Credit Agreement

THE BANK OF NEW YORK, as a Lender

By:

Name:

Title:

COMERICA BANK, as a Lender

By:

Name:

Title:

ING CAPITAL LLC, as a Lender

By:

Name:

Title:

WEBSTER BANK, NATIONAL ASSOCIATION, as a Lender

By:

Name:

Title:

UFJ BANK LIMITED, as a Lender

By:

Name:

Title:

MERRILL LYNCH CAPITAL CORPORATION, as a Lender

By:

Name:

Title:

THE ROYAL BANK OF SCOTLAND PLC, as a Lender

By:

Name:

Title:

Signature Pages for Entercom Radio, LLC
First Amendment to First Amended and Restated Credit Agreement

U.S. BANK NATIONAL ASSOCIATION, as a Lender
By:
Name:
Title:
BNP PARIBAS, as a Lender
By:
Name:
Title:
By:
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender
By:
Name:
Title:
ACKNOWLEDGED AND AGREED:
ENTERCOM COMMUNICATIONS CORP.
By:
	Name:	John C. Donlevie
	Title:	Executive Vice President

DELAWARE EQUIPMENT HOLDINGS, LLC

ENTERCOM CAPITAL, INC.

ENTERCOM BOSTON 1 TRUST

ENTERCOM BOSTON LICENSE, LLC

ENTERCOM BOSTON, LLC

ENTERCOM BUFFALO LICENSE, LLC

ENTERCOM BUFFALO, LLC

ENTERCOM DENVER LICENSE, LLC

ENTERCOM DENVER, LLC

ENTERCOM GAINESVILLE LICENSE, LLC

ENTERCOM GAINESVILLE, LLC

ENTERCOM GREENSBORO LICENSE, LLC

ENTERCOM GREENSBORO, LLC

ENTERCOM GREENVILLE LICENSE, LLC

Signature Pages for Entercom Radio, LLC
First Amendment to First Amended and Restated Credit Agreement

ENTERCOM GREENVILLE, LLC

ENTERCOM INDIANAPOLIS LICENSE, LLC

ENTERCOM INDIANAPOLIS, LLC

ENTERCOM KANSAS CITY LICENSE, LLC

ENTERCOM KANSAS CITY, LLC

ENTERCOM LONGVIEW LICENSE, LLC

ENTERCOM LONGVIEW, LLC

ENTERCOM MADISON LICENSE, LLC

ENTERCOM MADISON, LLC

ENTERCOM MEMPHIS LICENSE, LLC

ENTERCOM MEMPHIS, LLC

ENTERCOM MILWAUKEE LICENSE, LLC

ENTERCOM MILWAUKEE, LLC

ENTERCOM NEW ORLEANS LICENSE, LLC

ENTERCOM NEW ORLEANS, LLC

ENTERCOM NEW YORK, INC.

ENTERCOM NORFOLK LICENSE, LLC

ENTERCOM NORFOLK, LLC

ENTERCOM PORTLAND LICENSE, LLC

ENTERCOM PORTLAND, LLC

ENTERCOM PROVIDENCE LICENSE, LLC

ENTERCOM PROVIDENCE, LLC

ENTERCOM ROCHESTER LICENSE, LLC

ENTERCOM ROCHESTER, LLC

ENTERCOM SACRAMENTO LICENSE, LLC

ENTERCOM SACRAMENTO, LLC

ENTERCOM SEATTLE LICENSE, LLC

ENTERCOM SEATTLE, LLC

ENTERCOM WICHITA LICENSE, LLC

ENTERCOM WICHITA, LLC

ENTERCOM WILKES-BARRE SCRANTON, LLC

ENTERCOM SPRINGFIELD, LLC

ENTERCOM SPRINGFIELD LICENSE, LLC

By:
	Name:	John C. Donlevie
	Title:	Executive Vice President
ENTERCOM INCORPORATED
By:
	Name:	John C. Donlevie
	Title:	President

Signature Pages for Entercom Radio, LLC
First Amendment to First Amended and Restated Credit Agreement

EX-31.01

EXHIBIT 31.01

CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER

I, David J. Field, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Entercom Communications Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2006

By:	/s/ David J. Field
Name:	David J. Field
Title:	President and Chief Executive Officer
	(principal executive officer)

EX-31.02

EXHIBIT 31.02

CERTIFICATION OF EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

I, Stephen F. Fisher, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Entercom Communications Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2006

By:	/s/ Stephen F. Fisher
Name:	Stephen F. Fisher
Title:	Executive Vice President and Chief Financial Officer
	(principal financial and accounting officer)

EX-32.01

EXHIBIT 32.01

CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Entercom Communications Corp. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i)the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2006 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2006

By:	/s/ David J. Field
Name:	David J. Field
Title:	President and Chief Executive Officer
	(principal executive officer)

A signed original of this written statement required by Section 906 has been provided to Entercom Communications Corp. and will be retained by Entercom Communications Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.02

EXHIBIT 32.02

CERTIFICATION OF EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Entercom Communications Corp. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i)the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2006 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2006

By:	/s/ Stephen F. Fisher
Name:	Stephen F. Fisher
Title:	Executive Vice President and Chief Financial Officer
	(principal financial and accounting officer)

A signed original of this written statement required by Section 906 has been provided to Entercom Communications Corp. and will be retained by Entercom Communications Corp. and furnished to the Securities and Exchange Commission or its staff upon request.