10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

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 001-14691

WESTWOOD ONE, INC.

(Exact name of registrant as specified in its charter)

Delaware	95-3980449
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1166 Avenue of the Americas
New York, NY 10036
(212)-641-2000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common stock, par value $0.01 per share	NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No þ

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 (“Exchange Act”) 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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ

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

The aggregate market value of common stock held by non-affiliates of the registrant was approximately $1,270,000 based on the last reported sales price of the registrant’s common stock on June 30, 2009 and assuming solely for the purpose of this calculation that all directors and officers of the registrant are “affiliates.” The determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of February 28, 2010, 20,544,473 shares (excluding treasury shares) of common stock, par value $0.01 per share, were outstanding.

Documents Incorporated By Reference

Portions of the registrant’s definitive proxy statement for our 2010 annual meeting of stockholders (which will be filed with the Commission within 120 days of the registrant’s 2009 fiscal year end) are incorporated by reference in Part III of this Form 10-K.

TABLE OF CONTENTS

PART I
	Item 1. Business
	Item 1A. Risk Factors
	Item 1B. Unresolved Staff Comments
	Item 2. Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
PART II
	Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A. Quantitative and Qualitative Disclosures about Market Risk
	Item 8. Financial Statements and Supplementary Data
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
	Item 9A. Controls and Procedures
	Item 9B. Other Information
PART III
	Item 10. Directors and Executive Officers and Corporate Governance
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	Item 13. Certain Relationships and Related Transactions, and Director Independence
	Item 14. Principal Accountant Fees and Services
PART IV
	Item 15. Exhibits and Financial Statement Schedules
SIGNATURES
Exhibit 10.2
Exhibit 10.52
Exhibit 21
Exhibit 23
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

PART I

Item 1. Business

In this report, “Westwood One,” “Company,” “registrant,” “we,” “us” and “our” refer to Westwood One, Inc. All share and dollar amounts are in thousands, except where noted.

We produce and provide traffic, news, weather, sports, talk, music, special events and other programming content. Our content is distributed to radio and television stations and digital platforms and reaches over 190 million people. We are one of the largest domestic outsourced providers of traffic reporting services and one of the nation’s largest radio networks, delivering content to approximately 5,000 radio and 170 television stations in the U.S. We exchange our content with radio and television stations for commercial airtime, which we then sell to local, regional and national advertisers. By aggregating and packaging commercial airtime across radio and television stations nationwide, we are able to offer our advertising customers a cost effective way to reach a broad audience and target their audience on a demographic and geographic basis.

We derive substantially all of our revenue from the sale of 10 second, 15 second, 30 second and 60 second commercial airtime to advertisers. Our advertisers who target local/regional audiences generally find that an effective method is to purchase shorter duration advertisements, which are principally correlated to our traffic and information related programming and content. Our advertisers who target national audiences generally find that a cost effective method is to purchase longer 30 or 60 second advertisements, which are principally correlated to our news, talk, sports, music and entertainment related programming and content. A growing number of advertisers purchase both local/regional and national airtime. Our goal is to maximize the yield of our available commercial airtime to optimize revenue and profitability.

There are a variety of factors that influence our revenue on a periodic basis, including but not limited to: (1) economic conditions and the relative strength or weakness in the United States economy; (2) advertiser spending patterns and the timing of the broadcasting of our programming, principally the seasonal nature of sports programming; (3) advertiser demand on a local/regional or national basis for radio related advertising products; (4) increases or decreases in our portfolio of program offerings and the audiences of our programs, including changes in the demographic composition of our audience base; (5) increases or decreases in the size of our advertiser sales force; and (6) competitive and alternative programs and advertising mediums.

Our commercial airtime is perishable, and accordingly, our revenue is significantly impacted by the commercial airtime available at the time we enter into an arrangement with an advertiser. Our ability to specifically isolate the relative historical aggregate impact of price and volume is not practical as commercial airtime is sold and managed on an order-by-order basis. We closely monitor advertiser commitments for the current calendar year, with particular emphasis placed on the annual upfront process. We take the following factors, among others, into account when pricing commercial airtime: (1) the dollar value, length and breadth of the order; (2) the desired reach and audience demographic; (3) the quantity of commercial airtime available for the desired demographic requested by the advertiser for sale at the time their order is negotiated; and (4) the proximity of the date of the order placement to the desired broadcast date of the commercial airtime.

Business segments: Metro Traffic and Network.

We are organized into two business segments; Metro Traffic and Network.

Our Metro Traffic business produces and distributes traffic and other local information reports (such as news, sports and weather) to approximately 2,200 radio and 170 television stations, which include stations in over 80 of the top 100 Metropolitan Statistical Area (“MSA”) markets in the US. Our Metro Traffic business generates revenue from the sale of commercial advertising inventory to advertisers (typically 10 and 15 second radio spots embedded within our information reports and 30 second spots in television). We provide broadcasters a cost-effective alternative to gathering and delivering their own traffic and local information reports and offer advertisers a more efficient, broad reaching alternative to purchasing advertising directly from individual radio and television stations.

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Our Network business nationally syndicates proprietary and licensed content to radio stations, enabling them to meet their programming needs on a cost-effective basis. The programming includes national news and sports content, such as CBS Radio News, CNN Radio News and NBC Radio News and major sporting events, including the National Football League (including the Super Bowl), NCAA football and basketball games (including the Men’s College Basketball Tournament known as “March Madness”) and the 2010 Winter Olympic Games. Our Network business features popular shows that we produce with personalities including Dennis Miller, Charles Osgood, Fred Thompson and Billy Bush. We also feature special events such as live concert broadcasts, countdown shows (including MTV and Country Music Television branded programs), music and interview programs. Our Network business generates revenue from the sale of 30 and 60 second commercial airtime, often embedded in our programming that we bundle and sell to national advertisers who want to reach a large audience across numerous radio stations.

Our Strategy

In mid-2008, as the economy began to weaken (which weakness intensified in the latter part of 2008 and in 2009), we took certain proactive actions to better position the Company for future growth, including:  

• Metro Traffic Re-engineering. We consolidated 60 operating centers into 13 regional hubs. As part of this process, which spanned nearly 21 months, we implemented new traffic video and speed and flow technology and reduced our reliance on aircraft.

• Cost Reduction Programs. We reduced salary expense and headcount, reduced programming costs and eliminated unprofitable programming, and negotiated reductions in compensation we pay to our affiliated radio stations to more effectively match such compensation to the revenue and profitability of the commercial airtime the stations provide to us.

• Dedicated Sales Forces. We appointed new leadership to oversee the sales efforts of each of our Network and Metro Traffic businesses to improve focus, accountability and results.

• Revenue Initiatives. In our Network business, we delivered expanded product offerings such as copy-splitting and focused on adding new programming, which resulted in new programs such as The Fred Thompson Show and Peter Greenberg Worldwide, expanding distribution of The Billy Bush Show to CHR audiences nationwide, entering into a multi-year renewal agreement for continued syndication of the CNN Radio Network, and recently-announced deals with Harpo Radio for programs with Gayle King and Dr. Mehmet Oz. In Metro Traffic, we began to deliver an increased amount of 15 second spots and pre-recorded advertisements.

Going forward, we intend to grow our business by taking the following actions:

• Network. We plan to grow the Network business organically by: investing in new, targeted programming, expanding our affiliate and advertising salesforce, and investing in our systems and infrastructure to help increase sales productivity.

• Metro Traffic. We intend to drive revenue in our Metro Traffic business by deploying a SigAlert traffic product in major metropolitan areas throughout the U.S, adding to and top-grading our salesforce, completing new inventory optimization and pricing systems, further improving our sales mix, and expanding our local news product with short-form sports content and other high-demand content. As part of this strategy, we recently partnered with Litton News Source to help drive growth in the number of television affiliates and we plan to further upgrade our television traffic product with SigAlert graphics and online solutions. We also plan to selectively add television advertising salespersons in key markets to broaden our reach and scale.

• Business Development. We continue to seek opportunities to complement our organic growth strategy with strategic partnerships such as TrafficLand and Litton News Source and select business development activity, as we did with SigAlert, including acquisitions and dispositions.

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Competition

In the markets in which we operate, we compete for advertising revenue with other forms of communications media, including print, radio, television, cable, outdoor and out-of-home, direct response, yellow page directories, internet/new media and point-of-sale.

Metro Traffic

There are several multi-market operations providing local radio and television programming services in various markets. We believe we are larger than the next largest provider of traffic and local information services (Clear Channel Communications). In recent history, the radio industry has experienced a significant increase in the volume of shorter-duration commercial inventory. Also, the consolidation of the radio industry has created opportunities for large radio groups, such as Clear Channel Communications, CBS Radio, Citadel, and other station owners to gather traffic information on their own.

Network

In our Network business, in which we market and sell commercials in our programming to national advertisers, we compete with Clear Channel’s Premiere Radio Networks division, Citadel Media (formerly ABC Radio Networks) and Dial Global (a subsidiary of Triton Media), each of whom are examples of “radio networks”. As the radio industry has consolidated, companies owning large groups of stations have begun to create competing radio networks, which have resulted in increased competition for local, regional, national and network radio advertising expenditures. In addition, we compete for advertising revenue with network television, cable television, print and other forms of communications media. We believe that the quality of our programming and the strength of our affiliate relations and advertising sales forces enable us to compete effectively with other forms of communication media. We market our programs to radio stations, including affiliates of other radio networks that we believe will have the largest and most desirable listening audience for each of our programs. Given the breadth of our programming, we routinely have different programs airing on multiple stations in the same geographic market at the same time. Unlike our primary competitors, we are an independent radio network (i.e., we are not affiliated with or controlled by a major media company), which we believe facilitates our having a diversified group of radio stations (referred to as affiliates) that carry our programming (news, sports, talk, entertainment) from which national advertisers and radio stations may choose. Since we both produce and distribute many of the programs that we syndicate, we are able to respond more effectively to the preferences and needs of our advertisers and radio stations.

The increase in the number of radio program formats has led to increased competition among local radio stations for audience. As stations attempt to differentiate themselves in an increasingly competitive environment, their demand for quality programming available from outside programming sources increases. This demand has been intensified by high operating and production costs at local radio stations and increased competition for local advertising revenue. While we compete with radio stations for advertising revenue, we do not compete with such stations directly as our advertising inventory is sold on a network basis and is usually connected to our programming.

Significant Events

More information on the matters described below can be found in Item 7 —Management’s Discussion and Analysis of Results of Operations and Financial Condition of this report.

On April 23, 2009, we completed the refinancing of substantially all of our outstanding long-term indebtedness (approximately $241,000 in principal amount) and a recapitalization of our equity (“the Refinancing”). As part of the Refinancing we entered into a Purchase Agreement (the “Purchase Agreement”) with Gores Radio Holdings, LLC (our ultimate parent, together with certain related entities “Gores”). In exchange for the then outstanding shares of 7.50% Series A Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”) held by Gores, we issued 75 shares of 7.50% Series A-1 Convertible Preferred Stock, par value $0.01 per share (the “Series A-1 Preferred Stock”). In addition, Gores purchased 25 shares of 8.0% Series B Convertible Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock” and together with the Series A-1 Preferred Stock, the “Preferred Stock”), for an aggregate purchase price of $25,000. As a result of the Refinancing, a change in control occurred, which required us to account for the change with a revaluation of our balance sheet to a fair-value basis from a

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historical basis. We also entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with certain participating holders of our then outstanding Senior Notes and lenders under the Credit Agreement, dated as of March 3, 2004. Gores purchased at a discount approximately $22,600 in principal amount of our then existing debt (i.e., Old Notes and the Old Credit Agreement) held by debt holders who did not wish to participate in the new 15.00% Senior Secured Notes due July 15, 2012 (the “Senior Notes”) being offered by us. Gores also agreed to guarantee our senior credit facility which consists of a revolving credit facility of $15,000 (which includes a $2,000 letter of credit sub-facility) on a senior unsecured basis and a $20,000 unsecured non-amortizing term loan (collectively, the “Senior Credit Facility”) and payments due to the NFL for the license and broadcast rights to certain NFL games and NFL-related programming.

On July 9, 2009, Gores converted its Series A-1 Preferred Stock into shares of common stock, resulting in a decline in the voting power of the Class B common stock to below ten percent (10%) of the aggregate voting power of our issued and outstanding shares of common stock and Class B common stock. As a result of such decline in voting power, all then outstanding shares of the Class B common stock were converted automatically into shares of common stock pursuant to the terms of our Certificate of Incorporation.

On August 3, 2009, the stockholders approved amendments to our Certificate of Incorporation that resulted in the automatic conversion of all outstanding shares of preferred stock into common stock, the cancellation of previously issued warrants to purchase 50 shares of common stock issued to Gores and to effect a 200 for 1 reverse stock split of our outstanding common stock.

In September 2009, we believe a triggering event occurred as a result of our updated forecasted results for 2009 and 2010 and therefore we conducted a goodwill impairment analysis, which resulted in an impairment charge of $50,401 for our Metro Traffic goodwill and $100 for our Metro Traffic trademark.

On October 14, 2009, we entered into separate agreements with the holders of our Senior Notes and Wells Fargo Foothill to amend the terms of our Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility, respectively, to waive compliance with our debt leverage covenants which were to be measured on December 31, 2009 on a trailing four-quarter basis. As part of the Securities Purchase Agreement amendment, we agreed to pay down our Senior Notes by $3,500 on or prior to March 31, 2010.

On March 30, 2010, we entered into additional agreements with the holders of our Senior Notes and Wells Fargo Capital Finance, LLC to amend the terms of our Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility, respectively, to modify our debt leverage covenants for periods to be measured (on a trailing four-quarter basis) on March 31, 2010 and beyond. As part of the amendment to the Securities Purchase Agreement, the quarterly debt leverage covenants for 2010 have been eased to levels of 8.00, 7.50, 7.00 and 6.50, respectively and the original quarterly covenants for 2010 now apply to 2011. The original quarterly covenants for 2012 remain unchanged. The amendment to the Securities Purchase Agreement also contemplates that we will pay down our Senior Notes out of the proceeds of the tax refund we anticipate receiving in the second or third quarter of 2010 (see “Liquidity and Capital Resources” below). The first $12,000 of such refund and any refund amount in excess of $17,000 will be used to pay down our Senior Notes. Gores has agreed to guarantee up to a $10,000 pay down of the Senior Notes if such refund is not received on or prior to August 16, 2010. Copies of these amendments will be filed with the SEC in a subsequent 8-K filing. The quarterly debt leverage covenants that appear in the Senior Credit Facility have also been amended to maintain the 15% cushion that exists between the debt leverage covenant applicable to the Senior Credit Facility and the corresponding covenant in the Securities Purchase Agreement governing the Senior Notes. By way of example, the 8.00, 7.50, 7.00 and 6.50 covenants in the Securities Purchase Agreement (applicable to the Senior Notes) are 9.20, 8.65, 8.05 and 7.50, respectively, in the Senior Credit Facility.

Government Regulation

Radio broadcasting and station ownership are regulated by the Federal Communications Commission (the “FCC”). As a producer and distributor of radio programs and information services, we are generally not subject to regulation by the FCC. The Traffic and Information Division utilizes FCC regulated two-way radio frequencies pursuant to licenses issued by the FCC.

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Employees

On December 31, 2009, we had approximately 1,500 employees, including 500 part-time employees. In addition, we maintain continuing relationships with numerous independent writers, program hosts, technical personnel and producers. Approximately 500 of our employees are covered by collective bargaining agreements. We believe relations with our employees, unions and independent contractors are satisfactory.

Available Information

We are a Delaware corporation, having re-incorporated in Delaware on June 21, 1985. Our current and periodic reports filed with the Securities and Exchange Commission (“SEC”), including amendments to those reports, may be obtained through our internet website at www.westwoodone.com, from us in print upon request or from the SEC’s website at www.sec.gov free of charge as soon as reasonably practicable after we file these reports with the SEC. Additionally, any reports or information that we file with the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street, Washington, DC. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates.

Cautionary Statement regarding Forward-Looking Statements

This annual report on Form 10-K, including Item 1A—Risk Factors and Item 7—Management’s Discussion and Analysis of Results of Operations and Financial Condition, contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements we make or others make on our behalf. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements are not based on historical fact but rather are based on management’s views and assumptions concerning future events and results at the time the statements are made. No assurances can be given that management’s expectations will come to pass. There may be additional risks, uncertainties and factors that we do not currently view as material or that are not necessarily known. Any forward-looking statements included in this document are only made as of the date of this document and we do not have any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.

Item 1A. Risk Factors

An investment in our common stock is speculative and involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this Annual Report on Form 10-K. The risks described below could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Business and Industry

Deterioration in general economic conditions and constrained consumer spending has caused, and could cause, additional decreases or delays in advertising spending, could harm our ability to generate advertising revenue and negatively affect our results of operations

We derive the majority of our revenue from the sale of local, regional and national advertising. The global economic slowdown that began in 2008 and continued in 2009, resulted in a decline in advertising and marketing services among our customers and a decline in advertising revenue in 2009. Additionally, advertisers and the agencies that represent them, have put increased pressure on advertising rates, in some cases, requesting broad percentage discounts on ad buys, demanding increased levels of inventory and re-negotiating booked orders. The current state of economy could also adversely affect our ability to collect accounts receivable from our advertisers, particularly those entities which have filed for bankruptcy. Reductions in advertising expenditures and declines in ad rates have adversely affected our revenue and if the global economic slowdown continues or a double-dip recession occurs, it would likely continue to adversely impact our revenue, profit margins, cash flow and liquidity in future periods. In addition, once the current economic situation improves, we cannot predict whether or not advertisers’ demands and budgets for advertising will return to previous levels.

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Our operating income has declined since 2005 and may continue to decline. We may not be able to reverse this trend or reduce costs sufficiently to offset declines in revenue if such trends continue

Since 2005, our annual operating income has declined from operating income of $143,978 to an operating loss of $97,582, which included impairment charges of approximately $50,501, for the year ended December 31, 2009. Between 2005 and 2009, our operating income declined as a result of increased competition in our local and regional markets and an increase in the amount of 10 second inventory being sold by radio stations. The decline also occurred due to reductions in national audience levels, lower commercial clearance and audience levels of our affiliated stations, and reductions in our local and regional sales force, which began in mid-2006 and continued through 2009. More recently, our operating income has also been affected by the weakness in the United States economy and advertising market. Given the economic climate, it is possible our financial position will not improve.

Our present financial condition has caused us to obtain waivers to the agreements governing our indebtedness and to institute certain cost saving measures. If our financial condition does not improve, we may need to take additional actions designed to respond to or improve our financial condition and we cannot assure you that any such actions would be successful in improving our financial position

As a result of our current financial position, we have taken certain actions designed to respond to and improve our current financial position. On October 14, 2009 and March 30, 2010, respectively, we entered into separate agreements with the holders of our Senior Notes and Wells Fargo Capital Finance, LLC (formerly Well Fargo Foothill) to amend the terms of our Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility, respectively, to waive compliance with our debt leverage covenants which were to be measured on December 31, 2009 on a trailing four-quarter basis (October amendment) and to amend our future debt leverage covenant levels (March amendment). In addition, we have implemented and continue to implement cost saving measures which included compensation reduction and furlough actions (aggregating 10 days of pay per each participating full-time employee) that we announced on September 29, 2009. Certain of the cost saving initiatives were designed to improve our financial condition. If our financial condition does not improve as a result of these and other actions, we may need to take additional actions in the future in an attempt to improve our financial position. We can make no assurance that the actions we have taken and plan to take in the future will improve our financial position.

CBS Radio provides us with a significant portion of our commercial inventory and audience that we sell to advertisers. A material reduction in the audience delivered by CBS Radio stations or a material loss of commercial inventory from CBS Radio would have an adverse effect on our advertising sales and financial results

While we provide programming to all major radio station groups, we have affiliation agreements with most of CBS Radio’s owned and operated radio stations which, in the aggregate, provide us with a significant portion of the audience and commercial inventory that we sell to advertisers, much of which is in the more desirable top 10 radio markets. Although the compensation we pay to CBS Radio under our new 2008 arrangement is adjustable for audience levels and commercial clearance (i.e., the percentage of commercial inventory broadcast by CBS Radio stations), any significant loss of audience or inventory delivered by CBS Radio stations, including, by way of example only, as a result of a decline in station audience, commercial clearance levels or station sales that resulted in lower audience levels, would have a material adverse impact on our advertising sales and revenue. Since implementing the new arrangement in early 2008 and continuing through the end of 2009, CBS Radio has delivered improved audience levels and broadcast more advertising inventory than it had under our previous arrangement. However, there can be no assurance that CBS Radio will be able to maintain these higher levels in particular, with the introduction of The Portable People Meter^™, or PPM^™, which to date has reported substantially lower audience ratings for certain of our radio station affiliates, including our CBS Radio station affiliates, in those markets in which PPM^™ has been implemented as described below. As part of our recent cost reduction actions to eliminate less profitable programming, we and CBS Radio mutually agreed to enter into an arrangement, which became effective on February 25, 2010, to give back approximately 15% of the audience delivered by CBS Radio which resulted in a commensurate reduction in cash compensation payable to them. Since the time of our agreement, we have added incremental (more cost effective), non-CBS inventory to largely offset the impact of such give back on our audience. We have also approximately 23% of additional Metro Traffic inventory from CBS Radio through various stand-alone agreements. While our arrangement with CBS Radio is scheduled to terminate in 2017, there can be no assurance that such arrangement will not be breached by either party. If our agreement with CBS Radio were terminated as a result of such breach, our results of operations could be materially impacted.

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We may not realize expected benefits from our cost cutting initiatives

In order to improve the efficiency of our operations, we have implemented and continue to implement certain cost cutting initiatives, including headcount and salary reductions and more recently a furlough of participating full-time employees. We cannot assure you that we will realize the full benefit expected from these cost savings or improve our operating performance as a result of our past, current and future cost cutting activities. We also cannot assure you that our cost cutting activities will not adversely affect our ability to retain key employees, the significant loss of whom could adversely affect our operating results. Further, as a result of our cost cutting activities, we may not have an adequate level of resources and personnel to appropriately react to significant changes or fluctuations in the market and in the level of demand for our programming and services. If our operating losses continues to increase, our ability to further decrease costs may be more limited as a result of our previously enacted cost cutting initiatives.

Our ability to grow our Metro Traffic business revenue may be adversely affected by the increased proliferation of free of charge traffic content to consumers

Our Metro Traffic business produces and distributes traffic and other local information reports to approximately 2,200 radio and 170 television affiliates and we derive the substantial majority of the revenue attributed to this business from the sale of commercial advertising inventory embedded within these reports. Recently, the US Department of Transportation and other regional and local departments of transportation have significantly increased their direct provision of real-time traffic and traveler information to the public free of charge. The ability to obtain this information free of charge may result in our radio and television affiliates electing not to utilize the traffic and local information reports produced by our Metro Traffic business, which in turn could adversely affect our revenue from the sale of advertising inventory embedded in such reports.

If we are unable to achieve our financial forecast, we may require an amendment or additional waiver of our debt leverage covenant, which amendment or waiver, if not obtained, could have a material and adverse effect on our business continuity and financial condition

Management believes that after giving effect to certain cost containment measures including furloughs and salary reductions for employees, and the most recent amendments to our covenant levels, we will generate sufficient Adjusted EBITDA (as defined in our Senior Credit Facility) to meet our debt leverage covenants over the next twelve months (namely, on March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010, when the covenants are measured on a trailing four-quarter basis). However, as described elsewhere in this report, we are still operating in an uncertain economic environment, where the pace of an advertising recovery is unclear. As described above, we agreed to pay down (x) $3,500 of our Senior Notes on or prior to March 31, 2010 as part of our agreement with our lenders to waive our debt covenant for December 31, 2009 and (y) a minimum of $10,000 of our Senior Notes in the agreement with our lenders to amend our debt covenant levels for March 31, 2010 and beyond. Gores has agreed to guarantee up to a $10,000 pay down of the Senior Notes if such refund is not received on or prior to August 16, 2010. If we are unable to achieve our forecasted results, or sufficiently offset those results with certain cost reduction measures, and were to require a further waiver or amendment of our debt covenant requirements which could not then be obtained, it could have a material and adverse effect on our business continuity, results of operations, cash flows and financial condition.

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We may require additional financing to fund our working capital, debt service, capital expenditures or other capital requirements and the ongoing global credit market disruptions have reduced access to credit and created higher costs of obtaining financing

Our primary source of liquidity is cash flow from operations, which has been adversely impacted by the decline in our advertising revenue. Based on our current and anticipated levels of operations, we believe that cash flow from operations as well as cash on hand (including amounts drawn or available under our Senior Credit Facility) will enable us to meet our working capital, capital expenditure, debt service and other capital requirements for at least the next 12 months. However, our ability to fund our working capital needs, debt service and other obligations, and to comply with the financial covenants under our financing agreements depends on our future operating performance and cash flow, which are subject to prevailing economic conditions and other factors, many of which are beyond our control. As described above, we recently negotiated agreements with the holders of our Senior Notes and Wells Fargo Capital Finance, LLC in October 2009 and March 2010 regarding our debt leverage covenants under our Senior Notes and Senior Credit Facility, respectively (which level was to be measured on December 31, 2009) and in March 2010 to amend such debt leverage covenants, as a result of lower than anticipated revenue and the uncertain economic and advertising environments. Pursuant to the terms of the October amendment, we agreed to pay down $3,500 of our outstanding Senior Notes on or before March 31, 2010 and under the terms of the March amendment, we agreed to pay down a minimum of $10,000 of our outstanding Senior Notes, which amount could increase depending on the size of our anticipated tax refund. Gores has agreed to guarantee up to a $10,000 pay down of the Senior Notes if such refund is not received on or prior to August 16, 2010. On December 31, 2009, we also acquired the business assets of Jaytu Technologies LLC (d/b/a SigAlert) (“Jaytu”), which included a cash payment of $1,250, common stock with a fair value of $1,045 and up to $1,500 in potential cash earnouts based on future deliverables. The cash portion of these items will not be available to us to fund the ongoing operating needs of our business. If our future operating performance does not meet our expectations or our plans materially change in an adverse manner or prove to be materially inaccurate, we may need additional financing. There can be no assurance that such financing, if consented to by our lenders under the terms of our financing agreements, will be available on terms acceptable to us or at all. Additionally, disruptions in the credit markets make it harder and more expensive to obtain financing. If available financing is limited or we are forced to fund our operations at a higher cost, these conditions may require us to curtail our business activities and increase our cost of financing, both of which could reduce our profitability or increase our losses. The inability to obtain additional financing in such circumstances could have a material adverse effect on our financial condition and on our ability to meet our obligations.

We have a significant amount of indebtedness, which could adversely affect our liquidity and future business operations if our operating income declines more than we currently anticipate

As of December 31, 2009, we had $121,927 in aggregate principal amount of Senior Notes outstanding (of which approximately $4,400 is paid in kind interest), which bear interest at a rate of 15.0%, and a Senior Credit Facility consisting of: a $20,000 term loan and a $15,000 revolving credit facility (of which $5,000 was drawn down at December 31, 2009 and $1,219 is used under a letter of credit), which we will continue to borrow against in the future. Loans under our Senior Credit Facility bear interest at LIBOR plus 4.5% (with a LIBOR floor of 2.5%) or a base rate plus 4.5% (with a base rate floor equal to the greater of 3.75% or the one-month LIBOR rate). As described above, we recently obtained waivers of compliance with our debt leverage covenants for the fourth quarter of 2009 measurement period and amendments to our debt leverage covenants to be measured on March 31, 2010 and beyond. Our ability to service our debt in 2010 and beyond will depend on our financial performance in an uncertain and unpredictable economic environment as well as competitive pressures. Further, our Senior Notes and Senior Credit Facility restrict our ability to incur additional indebtedness. If our operating income declines more than we currently anticipate, resulting in limits to our ability to incur additional indebtedness under the terms of our outstanding indebtedness, and we are unable to obtain a waiver to increase our indebtedness or successfully raise funds through an issuance of equity, we could have insufficient liquidity which would have a material adverse effect on our business, financial condition and results of operations. If we are unable to meet our debt service and repayment obligations under the Senior Notes or the Senior Credit Facility, we would be in default under the terms of the agreements governing our debt, which if uncured, would allow our creditors at that time to declare all outstanding indebtedness to be due and payable and materially impair our financial condition and liquidity.

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Our Senior Credit Facility and Senior Notes contain various covenants which, if not complied with, could accelerate repayment under such indebtedness, thereby materially and adversely affecting our financial condition and results of operations

Our Senior Credit Facility and Senior Notes require us to comply with certain financial and operational covenants. These covenants (as amended on March 30, 2010) include, without limitation:
 

• a maximum senior leverage ratio (expressed as the principal amount of Senior Notes over our Adjusted EBITDA (as defined in our Senior Credit Facility) measured on a trailing, four-quarter basis) which is 8.0 to 1.0 on March  31, 2010 but begins to decline on a quarterly basis thereafter, including to a 6.5 to 1.0 ratio on December 31, 2010, a 4.50 to 1.0 ratio on December 31, 2011 and a 3.5 to 1.0 ratio on March 31, 2012; and

• restrictions on our ability to incur debt, incur liens, make investments, make capital expenditures, consummate acquisitions, pay dividends, sell assets and enter into mergers and similar transactions.

While our 2010 projections indicate we would attain sufficient Adjusted EBITDA (as defined in our Senior Credit Facility) to comply with our debt leverage covenant levels in 2010, we cannot be certain there will be sufficient Adjusted EBITDA to comply with our debt covenants, particularly if the advertising environment remains weak or our operating income continues to decline. As described above, in October 2009 we obtained waivers of compliance with our debt leverage covenants for December 31, 2009 and in March 2010, eased our debt leverage covenants for 2010 and 2011. Our debt leverage covenant will first be measured on March 31, 2010 and thereafter quarterly on a trailing four-quarter basis. Failure to comply with any of our covenants would result in a default under our Senior Credit Facility and Senior Notes that, if we were unable to obtain a waiver from the lenders or holders thereof, could accelerate repayment under the Senior Credit Facility and Senior Notes and thereby have a material adverse impact on our business.

Our ability to increase our revenue is significantly dependent on audience, which could be negatively impacted by The Portable People Meter

In late 2007, Arbitron Inc., the supplier of ratings data for United States radio markets, rolled out new electronic audience measurement technology to collect data for its ratings service known as The Portable People Meter^TM, or PPM^™. The PPM^™ measures the audience of radio stations remotely without requiring listeners to keep a manual diary of the stations they listen to. In 2007, 2008, 2009, two, nine and 19 markets converted to PPM^™, respectively, and in 2010, 15 markets will convert to PPM^™. As of the date of this report, the PPM^™ has been implemented in 30 markets (including all top 10 markets and three markets whose MSAs overlap). Unlike our Metro Traffic inventory, which is fully reflected in ratings books that are released semi-annually, our Network inventory is reflected in ratings books on an incremental basis over time (i.e., over a rolling four-quarter period), which means we and our advertisers cannot view audience levels that give full weight to PPM^™ for our Radio’s All Dimension Audience Research (“RADAR”) inventory (which comprises half of our Network inventory) for over a year after a market converts to PPM^™. In the RADAR ratings book released in March 2010, approximately half (measured by the revenue generated by such inventory) of the inventory published in such ratings books shows the effect of PPM^™ in those markets which have converted to PPM^™. In the two most recent periods published by RADAR, July 2009 to September 2009 and October 2009 to December 2009, the audience (measured by Persons 12+) for our 12 RADAR networks declined by 0.8% and 5.8%, respectively, which also reflects our decision to reduce the number of our RADAR networks from 14 to 12 in the fourth quarter of 2009. Because audience levels can decline for several reasons, including changes in the radio stations included in a RADAR network, clearance levels by those stations and general radio listening trends, it is difficult to isolate the effects PPM^™ is having on our audience with a high level of certainty. While ad revenue in our Network and Metro Traffic businesses has declined, we are unable to determine how much of the decline is a result of the general economic environment as opposed to our decline in audience. While most major markets have converted to PPM^™ (only 15 markets have yet to convert), it is unclear whether our audience levels will continue to decline in future ratings books. In 2009, we were able to offset the impact of audience declines by using excess inventory; however, in 2010 we anticipate that this option will be limited and that to offset declines in audience will generally require that we purchase additional inventory which must be obtained well in advance of our having definitive data on future audience levels. If we do not accurately predict how much additional inventory will be required to offset any declines in audience, or cannot purchase comparable inventory to our current inventory at efficient prices, our revenue or margins in 2010 could be materially and adversely affected.

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If we fail to maintain an effective system of internal controls, we may not be able to continue to accurately report our financial results.

Effective internal controls are necessary for us to provide reliable financial reporting. During the current year, we identified a material weakness related to accounting for income taxes which resulted in adjustments to the 2009 annual consolidated financial statements, as described in Item 9A — Controls and Procedures. We also identified certain immaterial errors in our financial statements, which we have corrected in subsequent interim periods. Such items have been reported and disclosed in the financial statements for the period ended December 31, 2009. We do not believe these adjustments are material to our current period consolidated financial statements or to any prior period’s consolidated financial statements and no prior periods have been restated. We intend to further enhance our internal control environment and we may be required to enhance our personnel or their level of experience, among other things, in order to continue to maintain effective internal controls. No assurances can be provided that we will be able to continue to maintain effective internal controls over financial reporting, enhance our personnel or their level of experience or prevent a material weakness from occurring. Our failure to maintain effective internal controls could have a material adverse effect on us, could cause us to fail to timely meet our reporting obligations or could result in material adjustments in our financial statements.

Our failure to obtain or retain the rights in popular programming could adversely affect our revenue

Our revenue from our radio programming and television business is dependent on our continued ability to anticipate and adapt to changes in consumer tastes and behavior on a timely basis. We obtain a significant portion of our popular programming from third parties. For example, some of our most widely heard broadcasts, including certain NFL games, are made available based upon programming rights of varying duration that we have negotiated with third parties. Competition for popular programming that is licensed from third parties is intense, and due to increased costs of such programming or potential capital constraints, we may be outbid by our competitors for the rights to new, popular programming or in connection with the renewal of popular programming currently licensed by us. Our failure to obtain or retain rights to popular content could adversely affect our revenue.

Our business is subject to increased competition resulting from new entrants into our business, consolidated companies and new technology/platforms, each of which has the potential to adversely affect our business

Our business segments operate in a highly competitive environment. Our radio and television programming competes for audiences and advertising revenue directly with radio and television stations and other syndicated programming, as well as with other media such as satellite radio, newspapers, magazines, cable television, outdoor advertising, direct mail and, more increasingly, digital media. We may experience increased audience fragmentation caused by the proliferation of new media platforms, including the Internet and video-on-demand and the deployment of portable digital devices and new technologies which allow consumers to time shift programming, make and store digital copies and skip or fast-forward through advertisements. New or existing competitors may have resources significantly greater than our own and, in particular, the consolidation of the radio industry has created opportunities for large radio groups, such as Clear Channel Communications, CBS Radio and Citadel Broadcasting Corporation to gather information and produce radio and television programming on their own. Increased competition, in part, has resulted in reduced market share, and could result in lower audience levels, advertising revenue and cash flow. There can be no assurance that we will be able to compete effectively, be successful in our efforts to regain market share and increase or maintain our current audience ratings and advertising revenue. To the extent we experience a further decline in audience for our programs, advertisers’ willingness to purchase our advertising could be further reduced. Additionally, audience ratings and performance-based revenue arrangements are subject to change based on the competitive environment and any adverse change in a particular geographic area could have a material and adverse effect on our ability to attract not only advertisers in that region, but national advertisers as well.

In recent years, digital media platforms and the offerings thereon have increased significantly and consumers are playing an increasingly large role in dictating the content received through such mediums. We face increasing pressure to adapt our existing programming as well as to expand the programming and services we offer to address these new and evolving digital distribution channels. Advertising buyers have the option to filter their messages through various digital platforms and as a result, many are adjusting their advertising budgets downward with respect to traditional advertising mediums such as radio and television or utilizing providers who offer “one-stop shopping” access to both traditional and alternative distribution channels. If we are unable to offer our broadcasters and advertisers an attractive full suite of traditional and new media platforms and address the industry shift to new digital mediums, our operating results may be negatively impacted.

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The cost of our indebtedness has increased substantially, which, when combined with our recent declining revenue, further affects our liquidity and could limit our ability to implement our business plan and respond competitively

As a result of our Refinancing, the interest payments on our debt (on an annualized basis — i.e., from April 23, 2009 to April 23, 2010 and subsequent annual periods thereafter) have increased from approximately $12,000 to $19,000, $6,000 of which will be paid in kind (“PIK”). If the economy does not continue to improve and advertisers continue to maintain reduced budgets which do not significantly recover in 2010, we may be required to delay the implementation or reduce the scope of our business plan and our ability to develop or enhance our services or programs could be curtailed. Without additional revenue and capital, we may be unable to take advantage of business opportunities, such as acquisition opportunities or securing rights to name-brand or popular programming, or respond to competitive pressures. If any of the foregoing should occur, this could have a material and adverse effect on our business.

If we are not able to integrate future acquisitions successfully, our operating results could be harmed

We evaluate acquisitions on an ongoing basis and intend to pursue acquisitions of businesses in our industry and related industries that can assist us in achieving our growth strategy. The success of our future acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions and, if necessary, to obtain satisfactory debt or equity financing to fund those acquisitions. Mergers and acquisitions are inherently risky, and any mergers and acquisitions we do complete may not be successful.

Any mergers and acquisitions we do may involve certain risks, including, but not limited to, the following:
 

• difficulties in integrating and managing the operations, technologies and products of the companies we acquire;

• diversion of our management’s attention from normal daily operations of our business;

• our inability to maintain the key business relationships and reputations of the businesses we acquire;

• uncertainty of entry into markets in which we have limited or no prior experience or in which competitors have stronger market positions;

• our dependence on unfamiliar affiliates and partners of the companies we acquire;

• insufficient revenue to offset our increased expenses associated with the acquisitions;

• our responsibility for the liabilities of the businesses we acquire; and

• potential loss of key employees of the companies we acquire.

Our success is dependent upon audience acceptance of our content, particularly our radio programs, which is difficult to predict

Revenue derived from the production and distribution of radio programs depend primarily upon their acceptance by the public, which is difficult to predict. The commercial success of a radio program also depends upon the quality and acceptance of other competing programs released into the marketplace at or near the same time, the availability of alternative forms of entertainment activities, general economic conditions and other tangible and intangible factors, all of which are difficult to predict. Rating points are also factors that are weighed when determining the advertising rates that we receive. Poor ratings can lead to a reduction in pricing and advertising revenue. Consequently, low public acceptance of our content, particularly our radio programs, could have an adverse effect on our results of operations.

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Continued consolidation in the radio broadcast industry could adversely affect our operating results

The radio broadcasting industry has continued to experience significant change, including a significant amount of consolidation in recent years and increased business transactions by key players in the radio industry (e.g., Clear Channel, Citadel and CBS Radio). Certain major station groups have: (1) modified overall amounts of commercial inventory broadcast on their radio stations; (2) experienced significant declines in audience; and (3) increased their supply of shorter duration advertisements, in particular the amount of 10 second inventory, which is directly competitive to us. To the extent similar initiatives are adopted by other major station groups, this could adversely impact the amount of commercial inventory made available to us or increase the cost of such commercial inventory at the time of renewal of existing affiliate agreements. Additionally, if the size and financial resources of certain station groups continue to increase, the station groups may be able to develop their own programming as a substitute to that offered by us or, alternatively, they could seek to obtain programming from our competitors. Any such occurrences, or merely the threat of such occurrences, could adversely affect our ability to negotiate favorable terms with our station affiliates, attract audiences and attract advertisers. If we do not succeed in these efforts, our operating results could be adversely affected.

We may be required to recognize further impairment charges

On an annual basis and upon the occurrence of certain events, we are required to perform impairment tests on our identified intangible assets with indefinite lives, including goodwill, which testing could impact the value of our business. We have a history of recognizing impairment charges related to our goodwill. In September 2009, we believe a triggering event occurred as a result of forecasted results for 2009 and 2010 and therefore we conducted a goodwill impairment analysis. Metro Traffic results indicated impairment in our Metro Traffic segment. As a result of our Metro Traffic analysis, we recorded an impairment charge of $50,501. At December 31, 2008, we determined that our goodwill was impaired and recorded an impairment charge of $224,073, which is in addition to the impairment charge of $206,053 taken on June 30, 2008. In connection with our Refinancing and our requisite adoption of the acquisition method of accounting, we recorded new values of certain assets such that as of April 24, 2009 our revalued goodwill was $86,414 (an increase of $52,426) and intangible assets were $116,910 (an increase of $114,481). The majority of the impairment charges related to our goodwill have not been deductible for income tax purposes.

Risks Related to Our Common Stock

Our common stock may not maintain an active trading market which could affect the liquidity and market price of our common stock.

On November 20, 2009, we listed our common stock on the NASDAQ Global Market. However, there can be no assurance that an active trading market on the NASDAQ Global Market will be maintained, that our common stock price will increase or that our common stock will continue to trade on the exchange for any specific period of time. If we are unable to maintain our listing on the NASDAQ Global Market, we may be subject to a loss of confidence by customers and investors and the market price of our shares may be affected.

Sales of additional shares of common stock by Gores or our other lenders could adversely affect the stock price.

Gores beneficially owns, in the aggregate, 15,258 shares of our common stock, or approximately 74.3% of our outstanding common stock. There can be no assurance that at some future time Gores, or our other lenders, will not, subject to the applicable volume, manner of sale, holding period and limitations of Rule 144 under the Securities Act, sell additional shares of our common stock, which could adversely affect our share price. The perception that these sales might occur could also cause the market price of our common stock to decline. Such sales could also make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.

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Gores will be able to exert significant influence over us and our significant corporate decisions and may act in a manner that advances its best interest and not necessarily those of other stockholders.

As a result of its beneficial ownership of 15,258 shares of our common stock, or approximately 74.3% of our voting power, Gores has voting control over our corporate actions. For so long as Gores continues to beneficially own shares of common stock representing more than 50% of the voting power of our common stock, it will be able to elect all of the members of our Board of Directors (our “Board”) and determine the outcome of all matters submitted to a vote of our stockholders, including matters involving mergers or other business combinations, the acquisition or disposition of assets, the incurrence of indebtedness, the issuance of any additional shares of common stock or other equity securities and the payment of dividends on common stock. Gores may act in a manner that advances its best interests and not necessarily those of other stockholders by, among other things:

• delaying, deferring or preventing a change in control;

• impeding a merger, consolidation, takeover or other business combination;

• discouraging a potential acquirer from making a tender offer or otherwise attempting obtain control; or

• causing us to enter into transactions or agreements that are not in the best interests of all stockholders.

Provisions in our restated certificate of incorporation and by-laws and Delaware law may discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Provisions of our restated certificate of incorporation and by-laws and Delaware law may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition. In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock. This provision of the Delaware General Corporation Law could delay or prevent a change of control of our company, which could adversely affect the price of our common stock.

We do not anticipate paying dividends on our common stock.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently anticipate that we will retain all of our available cash, if any, for use as working capital and for other general corporate purposes. Any payment of future cash dividends will be at the discretion of our Board and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that our Board deems relevant. In addition, our Senior Credit Facility and the New Senior Notes restrict the payment of dividends.

Any issuance of shares of preferred stock by us could delay or prevent a change of control of our company, dilute the voting power of the common stockholders and adversely affect the value of our common stock.

Our Board has the authority to cause us to issue, without any further vote or action by the stockholders, up to 10,000 shares of preferred stock, in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. To the extent we choose to issue preferred stock, any such issuance may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares.

The issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote even if the action were approved by the holders of our other classes of voting stock.

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The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive. For example, investors in the common stock may not wish to purchase common stock at a price above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase common stock at the lower conversion price causing economic dilution to the holders of common stock.

The foregoing list of factors that may affect future performance and the accuracy of forward-looking statements included in the factors above are illustrative, but by no means all-inclusive or exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The following table sets forth, as of December 31, 2009, the Company’s major facilities, all of which are leased.

		Approximate
Location	Use	Floor Space Sq. Ft.
New York, NY	Corporate Headquarters		39,000
New York, NY	Broadcasting Center		11,000
Silver Spring, MD	Broadcasting		21,000
Culver City, CA (1)	Broadcasting		32,000

(1) On December 18, 2009, we closed the building financing of real property located in Culver City (the “Culver City Properties”). We received $6,998 in proceeds from the transaction after taking into account necessary repair work, commissions, fees and closing costs. As part of the transaction, we entered into a 10-year lease (with two five-year renewal options) for the Culver City Properties with annual rental payments of approximately $875 (in year 1 and thereafter, subject to incremental increases), not including a 2% management fee and operating expenses. We also issued a 12-month letter of credit for $219 (the equivalent of three months rent) as a security deposit under the lease. This transaction is presented as a “building financing” in the table entitled “Contractual Obligations and Commitments” that appears below.

We believe that our facilities are adequate for our current level of operations.

Item 3. Legal Proceedings

On September 12, 2006, Mark Randall, derivatively on behalf of Westwood One, Inc., filed suit in the Supreme Court of the State of New York, County of New York, against us and certain of our current and former directors and certain former executive officers. The complaint alleges breach of fiduciary duties and unjust enrichment in connection with the granting of certain options to our former directors and executives. Plaintiff seeks judgment against the individual defendants in favor of us for an unstated amount of damages, disgorgement of the options which are the subject of the suit (and any proceeds from the exercise of those options and subsequent sale of the underlying stock) and equitable relief.  Subsequently, on December 15, 2006, Plaintiff filed an amended complaint which asserts claims against certain of our former directors and executives who were not named in the initial complaint filed in September 2006 and dismisses claims against other former directors and executives named in the initial complaint.  On March 2, 2007, we filed a motion to dismiss the suit. On April 23, 2007, Plaintiff filed its response to our motion to dismiss. On May 14, 2007, we filed our reply in furtherance of our motion to dismiss Plaintiff’s amended complaint.  On August 3, 2007, the Court granted such motion to dismiss and denied Plaintiff’s request for leave to replead and file a further amended complaint. On September 20, 2007, Plaintiff appealed the Court’s dismissal of its complaint and moved for “renewal” under CPLR 2221(e).  Oral argument on Plaintiff’s motion for renewal occurred on October 31, 2007.  On April 22, 2008, Plaintiff withdrew its motion for renewal, without prejudice to renew.

Item 4. Submission of Matters to a Vote of Security Holders

None.

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PART II

(In thousands, except per share amounts)

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

On March 10, 2010, there were approximately 291 holders of record of our common stock, several of which represent “street accounts” of securities brokers. We estimate that the total number of beneficial holders of our common stock exceeds 5,200.

From December 15, 1998 until our trading suspension on November 24, 2008 and subsequent delisting on March 16, 2009, our common stock was traded on the New York Stock Exchange (“NYSE”) under the symbol “WON”. On November 20, 2009, we listed our common stock on the NASDAQ Global Market under the symbol “WWON”. In the intervening period, our common stock was traded on the Over the Counter Bulletin Board under the ticker “WWOZ.” The following table sets forth the range of high and low closing prices for the common stock for the calendar quarters indicated.

2009	High		Low
First Quarter	$	0.12	$	0.03
Second Quarter		0.10		0.05
Third Quarter (through August 4, 2009)		0.06		0.04
Third Quarter (from August 5, 2009 through September 30, 2009)(1)		9.50		5.90
Fourth Quarter (1)		6.50		3.21

2008	High		Low
First Quarter	$	2.16	$	1.51
Second Quarter		2.28		1.05
Third Quarter		1.42		0.49
Fourth Quarter		0.41		0.02

(1) Reflects the 200 for 1 reverse stock split that occurred on August 3, 2009 and was reflected in stock prices on August 5, 2009.

The amounts in the table for the periods ending on or prior to August 4, 2009 do not reflect the 200 for 1 reverse stock split of our outstanding common stock and the conversion of all outstanding shares of Series A-1 Preferred Stock and Series B Preferred Stock into common stock that occurred on August 3, 2009. The closing price for our common stock on March 26, 2010 was $8.91.

The payment of dividends is prohibited by the terms of our Senior Notes and Senior Credit Facility, and accordingly, we do not plan on paying dividends for the foreseeable future.

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Equity Compensation Plan Information (1)

The following table contains information as of December 31, 2009 regarding our equity compensation plans.

					Number of securities
					remaining available for
					future issuance under
	Number of securities to		Weighted average		equity compensation
	be issued upon exercise		exercise price of		plus excluding
	of outstanding options,		outstanding options,		securities reflected in
Plan Category	warrants and rights		warrants and rights		Column (a)
	(a)		(b)
	(in thousands)
Equity compensation plans approved by security holders (1)
Options (2)		28.6	$	1,345.00		(3	)
Restricted Stock Units		0.1		N/A		(3	)
Restricted Stock		0.8		N/A		(3	)
Equity compensation plans not approved by security holders		—		—		—
Total		29.5

(1)	We have amended and restated the 2005 Equity Compensation Plan (the “2005 Plan) because we had a limited number of shares available for issuance thereunder (such plan, as amended and restated, the “2010 Plan”).  The 2010 Plan became effective upon its adoption by the Board on February 12, 2010 and accordingly the stock options issued under the 2010 Plan on such date are not reflected in the table above or the footnotes below.  Such stock option awards remain subject to stockholder approval.
(2)	Options included herein were granted or are available for grant as part of our 1989 and 1999 stock option plans and/or the 2005 Plan that were approved by our stockholders. The Compensation Committee of the Board oversees option grants to executive officers and other employees. Among other things, the 2005 Plan provides for the granting of restricted stock and restricted stock units (“RSUs”). Pursuant to Board resolution since May 19, 2005, the date of our 2005 annual meeting of stockholders, outside directors have automatically received a grant of RSUs equal to $100 in value on the date of each of our annual meeting of stockholders and any newly appointed outside director would receive an initial grant of RSUs equal to $150 in value on the date such director is appointed to our Board. On April 23, 2009, the Board passed a resolution that discontinued this practice. Recipients of RSUs are entitled to receive dividend equivalents on the RSUs (subject to vesting) when and if we pay a cash dividend on our common stock. RSUs awarded to outside directors vest over a three-year period in equal one-third increments on the first, second and third anniversary of the date of the grant, subject to the director’s continued service with us. Directors’ RSUs vest automatically, in full, upon a change in control or upon their retirement, as defined in the 2005 Plan. RSUs are payable to outside directors in shares of our common stock. For a more complete description of the provisions of the 2005 Plan, refer to our proxy statement in which the 2005 Plan and a summary thereof are included as exhibits, filed with the SEC on April 29, 2005. The 1989 Plan expired in March 1999 and the 1999 Plan expired in March of 2009.
(3)	As of December 31, 2009, a maximum of 9,200 shares of common stock was authorized for issuance of equity compensation awards under the 2005 Plan. Options, RSUs and restricted stock are deducted from this authorized total, with grants of RSUs, restricted stock and related dividend equivalents being deducted at the rate of three shares for every one share granted.

The performance graph below compares the performance of our common stock to the Dow Jones US Total Market Index and the Dow Jones US Media Index for the last five calendar years. The graph assumes that $100 was invested in our common stock and each index on December 31, 2004.

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The following tables set forth the closing price of our common stock at the end of each of the last five years.

CUMULATIVE TOTAL RETURN	2005		2006		2007		2008		2009
Westwood One, Inc.		61.48		27.60		7.81		0.22		0.09
Dow Jones US Total Market Index		106.32		122.88		130.26		81.85		105.42
Dow Jones US Media Industry Index		88.52		111.94		97.83		57.59		83.70
Westwood One Closing Stock Price(1)		16.30		7.06		1.99		0.06		4.50

(1) Stock prices prior to August 3, 2009 do not reflect the 200 for 1 reverse stock split that occurred on August 3, 2009 and was reflected in stock prices on and after August 5, 2009.

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Item 6. Selected Financial Data

	Successor Company			Predecessor Company
	For the Period			For the Period
	April 24, 2009 to			January 1, 2009			Year Ended December 31,
(In thousands except per share data)	December 31, 2009(1)			to April 23, 2009			2008			2007			2006			2005(2)
Consolidated Statements of Operations:
Revenue	$	228,860		$	111,474		$	404,416		$	451,384		$	512,085		$	557,830
Operating costs		213,521			111,580			360,492			350,440			395,196			378,998
Depreciation and amortization		21,473			2,585			11,052			19,840			20,756			20,826
Corporate general and administrative expenses		7,683			4,248			13,442			13,171			14,618			14,028
Goodwill and intangible impairment		50,501			—			430,126			—			515,916			—
Restructuring charges		3,976			3,976			14,100			—			—			—
Special charges		5,554			12,819			13,245			4,626			1,579			—
Operating (loss) income		(73,848	)		(23,734	)		(438,041	)		63,307			(435,980	)		143,978
Interest expense		14,782			3,222			16,651			23,626			25,590			18,315
Other (income) expense		(5	)		(359	)		(12,369	)		(411	)		(926	)		(1,440	)
Income tax (benefit) expense		(25,025	)		(7,635	)		(14,760	)		15,724			8,809			49,217
Net (loss) income	$	(63,600	)	$	(18,962	)	$	(427,563	)	$	24,368		$	(469,453	)	$	77,886
Net (loss) income attributable to common stockholders (3)	$	(145,148	)	$	(22,038	)	$	(430,644	)	$	24,363		$	(469,528	)	$	77,816
(Loss) Income Per Basic Share:
Common stock	$	(11.75	)	$	(43.64	)	$	(878.73	)	$	56.59		$	(1,091.76	)	$	171.56
Class B stock	$	—		$	—		$	—		$	3.20		$	51.20		$	48.00
(Loss) Income Per Diluted Share:
Common stock	$	(11.75	)	$	(43.64	)	$	(878.73	)	$	56.38		$	(1,091.76	)	$	170.05
Class B stock	$	—		$	—		$	—		$	3.20		$	51.20		$	48.00
Dividends Declared (4)
Common stock	$	—		$	—		$	—		$	3.85		$	64.10		$	59.44
Class B stock	$	—		$	—		$	—		$	3.20		$	51.20		$	48.00
	As of December 31,						As of December 31,
	2009(1)						2008			2007			2006			2005(1)
Consolidated Balance Sheet Data:
Current assets	$	123,871					$	119,468		$	138,154		$	149,222		$	172,245
Working capital (deficit) (5)		37,532						(208,034	)		47,294			29,313			72,094
Total assets		305,448						205,088			669,757			696,701			1,239,646
Long-term debt (5)		122,262						—			345,244			366,860			427,514
Due to Gores		11,165						—			—			—			—
Total stockholders’ equity (deficit)		17,984						(203,145	)		227,631			202,931			704,029

(1)	As a result of the Refinancing, we adopted the acquisition method of accounting effective April 23, 2009. Accordingly, we have revalued our assets and liabilities using our best estimate of current fair value. Our consolidated financial statements which present periods prior to the closing of the Refinancing reflect the historical accounting basis in our assets and liabilities and are labeled Predecessor Company, while the periods subsequent to the Refinancing are labeled Successor Company and reflect the push down basis of accounting for the fair values which were allocated to our segments based on the business enterprise value of each segment. Deferred tax liabilities have been recorded as a part of acquisition accounting to reflect the future taxable income to be recognized relating to the cancellation of indebtedness income as well as the deferred tax liability related to the acquisition accounting.
(2)	Effective January 1, 2006, we adopted Authoritative Guidance for Share Based Payment utilizing the modified retrospective transition alternative. Accordingly, results for years prior to 2006 have been restated to reflect stock-based compensation expense.
(3)	In connection with the Refinancing and the issuance of the Preferred Stock, we have determined that the Preferred Stock contained a beneficial conversion factor (“BCF”) that was partially contingent. BCF is measured as the spread between the effective conversion price and the market price of common stock on the commitment date and then multiplying this spread by the number of conversion shares. We recognized the portion of the BCF that was not related to the contingent shares at issuance (issuance BCF) while the majority of the BCF was contingent (contingent BCF) upon the authorization of additional common shares that occurred on August 3, 2009. Because such shares were authorized on August 3, 2009, the contingent BCF was recognized on such date in the third quarter and, due to the immediate conversion of the Preferred Stock into common stock on such date, resulted in a deemed dividend of $76,887 that is included in net loss attributable to common stockholders in the third quarter of 2009.

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(4)

No cash dividend was paid on our common stock or Class B stock in 2009 or 2008. In 2005, our Board declared cash dividends of $0.10 per share for every issued and outstanding share of common stock and $0.08 per share for every issued and outstanding share of Class B stock on each of April 29, 2005, August 3, 2005 and November 2, 2005. In 2006, our Board declared cash dividends of $0.10 per share for every issued and outstanding share of common stock and $0.08 per share for every issued and outstanding share of Class B stock on each of February 2, 2006, April 18, 2006 and August 7, 2006. Our Board declared a cash dividend of $0.02 per share for every issued and outstanding share of common stock and $0.016 per share for every issued and outstanding share of Class B stock on November 7, 2006. Our Board declared cash dividends of $0.02 per share for every issued and outstanding share of common stock and $0.016 per share for every issued and outstanding share of Class B stock on March 6, 2007. The payment of dividends is prohibited by the terms of our Senior Notes and our Senior Credit Facility, and accordingly, we do not plan on paying dividends for the foreseeable future.

(5)

On November 30, 2008, we failed to make the interest payment on our outstanding indebtedness which constituted an event of default under the Old Credit Agreement and the Old Notes (as such terms are defined below). Accordingly, $249,053 of debt previously considered long-term was then re-classified as short-term debt, which decreased our Old Debt, as described in Item 1 — Business — Significant Events, and decreased our working capital from $41,019 to ($208,034) in 2008.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except for per share amounts)

EXECUTIVE OVERVIEW

For Westwood One, 2009 was a year that included dramatic changes to its financial structure and ownership; challenging financial hurdles to overcome; and a continuing weakness in the U.S. economy that limited its ability to generate sales.

Refinancing

On April 23, 2009, we completed the Refinancing of substantially all of our outstanding long-term indebtedness (approximately $241,000 in principal amount) and a recapitalization of our equity, as described in Item 1 — Business — Significant Events. As part of the Refinancing, we entered into the Purchase Agreement with Gores. In exchange for the then outstanding shares of Series A Preferred Stock held by Gores, we issued 75 shares of 7.50% Series A-1 Preferred Stock. In addition, Gores purchased 25 shares of Series B Preferred Stock for an aggregate purchase price of $25,000.

Additionally and simultaneously, we entered into a Securities Purchase Agreement with certain participating: (1) holders of our then outstanding Senior Notes (“Old Notes”) consisting of two series of notes as described below, both issued under the Note Purchase Agreement, dated as of December 3, 2002 and (2) lenders under the Credit Agreement, dated as of March 3, 2004 (the “Old Credit Agreement”). The Old Notes, issued on December 3, 2002, consisted of: 5.26% Senior Notes due November 30, 2012 (in an aggregate principal amount of $150,000) and 4.64% Senior Notes due November 30, 2009 (in an aggregate principal amount of $50,000). Gores purchased at a discount approximately $22,600 in principal amount of our then existing debt held by debt holders who did not wish to participate in the new Senior Notes, which upon completion of the Refinancing, were exchanged for $10,797 in principal amount of Senior Notes. Gores also agreed to guarantee our Senior Credit Facility consisting of a $15,000 revolving credit facility (which includes a $1,500 letter of credit sub-facility) on a senior unsecured basis and a $20,000 unsecured non-amortizing term loan and payments due to the NFL in an amount of up to $10,000 for the license and broadcast rights to certain NFL games and NFL-related programming. Gores currently holds $11,165 (including PIK interest which accretes on a quarterly basis) of the Senior Notes shown in the line item “Due to Gores” on our balance sheet. Under the Securities Purchase Agreement, in consideration for releasing all of their respective claims under the Old Senior Notes and the Old Credit Agreement, the participating debt holders collectively received in exchange for their outstanding debt: (1) $117,500 of Senior Notes; (2) 34,962 shares of Series B Preferred Stock, and (3) a one-time cash payment of $25,000.

On July 9, 2009, Gores converted 3.5 shares of Series A-1 Convertible Preferred Stock into 103,513 shares of common stock (without taking into account the 200 for 1 reverse stock split described below). As a result of such conversion by Gores, the voting power of the Class B common stock, taken as a group, fell below ten percent (10%) of the aggregate voting power of our issued and outstanding shares of common stock and Class B common stock. Under the terms of our Restated Certificate of Incorporation, as a result of such decline in voting power, the 292 shares of then outstanding Class B common stock were converted automatically into 292 shares of common stock (without giving effect to the 200 for 1 reverse stock split).

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On August 3, 2009, we held a special meeting of our stockholders to consider and vote upon, among other proposals, an amendment of our Restated Certificate of Incorporation to: (1) increase the number of authorized shares of our common stock from 300,000 to 5,000,000 and (2) effect a 200 for 1 reverse stock split of our outstanding common stock (the “Charter Amendments”). On August 3, 2009, the stockholders approved the Charter Amendments, which resulted in the automatic conversion of all shares of Preferred Stock into common stock and the cancellation of warrants to purchase 50 shares of common stock previously issued to Gores in June 2008. There are no longer any issued and outstanding warrants to purchase our common stock or any shares of our capital stock that have any preference over the common stock with respect to voting, liquidation, dividends or otherwise and our common stock is the only equity presently issued and outstanding. Under the Charter Amendments, each of the newly authorized shares of common stock has the same rights and privileges as our previously authorized common stock. Adoption of the Charter Amendments did not affect the rights of the holders of our currently outstanding common stock nor did it change the par value of the common stock.

Liquidity and Capital Resources

We continually project anticipated cash requirements, which may include potential acquisitions, capital expenditures, principal and interest payments on our outstanding indebtedness, dividends and working capital requirements. To date, funding requirements have been financed through cash flows from operations, the issuance of equity and the issuance of long-term debt.

At December 31, 2009, our principal sources of liquidity were our cash and cash equivalents of $4,824 and borrowing availability of $8,781 under our revolving credit facility, which total $13,605. In addition, cash flow from operations is a principal source of funds. We have experienced significant operating losses since 2005 as a result of increased competition in our local and regional markets, reductions in national audience levels, and reductions in our local and regional sales force. Also, in 2009 our operating income has been affected by the economic downturn in the United States and reduction in the overall advertising market. Based on our 2010 projections, which we believe use reasonable assumptions regarding the current economic environment, we estimate that cash flows from operations will be sufficient to fund our cash requirements, including scheduled interest and required principal payments on our outstanding indebtedness and projected working capital needs, and provide us sufficient Adjusted EBITDA to comply with our debt covenants for at least the next 12 months.

While our 2010 projections indicated we would attain sufficient Adjusted EBITDA (as defined in our Senior Credit Facility) to comply with our debt leverage covenant levels in 2010 (prior to such covenants being amended in March 2010), management did not believe there was sufficient cushion in our projections to outweigh the current unpredictability in the economy and our business. Accordingly, we determined it was prudent to amend our debt leverage covenants on March 30, 2010 in order to provide our business with (1) greater operational flexibility and (2) a greater time period to recover from the effects of the weakened economy and to incorporate the full benefit of the revenue initiatives and re-engineering and cost reduction actions taken by us from mid-2008 and throughout 2009. Notwithstanding these amendments to our covenants, if our operating income continues to decline, we cannot provide assurances that there will be sufficient liquidity available to us to invest in our business or Adjusted EBITDA to comply with our debt covenants.

We will file a preliminary U.S. federal income tax return carrying back our current net operating losses and an application for tentative refund in the second quarter of 2010 and anticipate receiving a refund of approximately $12,000 at the end of the second quarter or early third quarter of 2010. As part of the amendments to the Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility described above, the first $12,000 of such refund and any refund amount in excess of $17,000, will be used to pay down our Senior Notes. Gores has agreed to guarantee up to a $10,000 pay down of the Senior Notes if such refund is not received on or prior to August 16, 2010. The effect of these new covenant levels and the pay down of Senior Notes on the amount of Adjusted EBITDA required by us to satisfy our covenants is demonstrated below in a table which appears under the section entitled “Existing Indebtedness”.

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Changes in Financial Statement Presentation for Accounting Purposes

We follow the authoritative guidance for our financial statement presentation as determined by the Financial Accounting Standards Board (“FASB”) and SEC. As a result of the Refinancing, Gores acquired approximately 75.1% of our then outstanding equity and our then existing lenders acquired approximately 22.7% of our then outstanding equity. We have considered the ownership held by Gores and our existing debt holders as a collaborative group in accordance with the authoritative guidance. As a result, we have followed the acquisition method of accounting and therefore have applied the rules and guidance regarding “push down” accounting treatment to our financial statements after the closing of the Refinancing. Accordingly, our consolidated financial statements and transactional records prior to the closing of the Refinancing reflect the historical accounting basis in our assets and liabilities and are labeled Predecessor Company, while such records subsequent to the Refinancing are labeled Successor Company and reflect the push down basis of accounting for the new fair values in our financial statements. In order to assist the reader, these changes are presented in our consolidated financial statements by a demarcation using either a vertical or horizontal black line, which appears between the information entitled Predecessor Company and Successor Company. The black line signifies that the amounts shown for the periods prior to and subsequent to the Refinancing are not comparable. All costs and professional fees incurred as part of the Refinancing totaling $13,895 have been expensed as special charges ($12,699 on and prior to April 23, 2009 for the Predecessor Company and $1,196 on and after April 24, 2009 for the Successor Company).

Goodwill and Intangible Impairment

During the third quarter of 2009, the Metro Traffic television upfronts (where advertisers purchase commercial airtime for the upcoming television season several months before the season begins), which in prior years concluded in the second quarter, were extended through August to complete the upfront advertising sales. During this period, advertisers were slow to commit to buying commercial airtime for the third quarter of 2009. We believed that the conclusion of the Metro Traffic television upfronts would help bring more clarity to both purchasers and sellers of advertising; however, once such upfronts concluded in August, it became increasingly evident from our quarterly bookings, backlog and pipeline data that the downturn in the economy was continuing and affecting advertising budgets and orders. The decrease in advertising budgets and orders is evidenced by our revenue decreasing to $78,474 in the third quarter of 2009 from $96,299 in the third quarter of 2008, which represents a decrease of approximately 18.5%. These conditions, namely the weak third quarter and the likely continuation of the current economic conditions into the fourth quarter and the immediate future, caused us at the time to reduce our forecasted results for the remainder of 2009 and 2010. We believe these updated forecasted results constituted a triggering event and therefore we conducted a goodwill impairment analysis. The new forecast would more likely than not reduce the fair value of one or more of our reporting units below its carrying value. Accordingly, we performed a Step 1 analysis in accordance with the authoritative guidance by comparing our recalculated fair value based on our new forecast to our current carrying value. The results indicated impairment in our Metro Traffic segment and we performed a Step 2 analysis to compare the implied fair values of goodwill and intangible assets for Metro Traffic with the carrying value of those assets. As a result of the Step 2 analysis we recorded a non-cash charge of $50,401 for impairment of goodwill and $100 for impairment of the Metro Traffic trademark. The majority of the impairment charge is not deductible for income tax purposes.

The estimates and assumptions used in our impairment analysis vary between our reporting units depending on the facts and circumstances specific to each unit. The discount rate for each reporting unit is influenced by general market conditions as well as factors specific to the reporting unit and the discount rates we used for our reporting units were between 15.0% and 16.0%. We believe that the estimates and assumptions we made are reasonable, but they are susceptible to change from period to period. Actual results of operations, cash flows and other factors will likely differ from the estimates used in our valuation, and it is possible that differences and changes could be material. A deterioration in profitability, adverse market conditions and a slower or weaker economic recovery than currently estimated by management could have a significant impact on the estimated fair value of our reporting units and could result in an impairment charge in the future.

As part of our 2009 annual impairment review, we performed a Step 1 analysis at December 31, 2009. The Step 1 analysis was performed using our most current management projections. The results of the analysis indicated no impairment in either segment as of December 31, 2009. None of our reporting unit’s carrying values were greater than their average fair value during the first step of our goodwill impairment test and we were not required to perform the second step of the impairment test. We did not record an impairment charge in the fourth quarter of 2009, as we determined that the fair value of goodwill was greater than the carrying value for our reporting units. Additionally, no carrying value adjustment was made to the intangible assets for our reporting units as the estimated cash flows were greater than the carrying value of these assets on an undiscounted basis.

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We have performed a sensitivity analysis to detail the impact that changes in assumptions may have on the outcome of the first step of the impairment test. Our sensitivity analysis provides a range of fair value for each reporting unit, where the low end of the range reduces growth rates by 0.5% and increases discount rates by 0.5% and the high end of the range increases growth rates by 0.5% and decreases discount rates by 0.5%. We use the average of our fair values for purposes of our comparison between carrying value and fair value for the first step of the impairment test.

The following table shows our reporting units tested in our 2009 year-end impairment reviews and the related goodwill value associated with the reporting units at the low end, average and high end of the valuation range for a) fair values exceeding carrying values by less than 10%, b) fair values exceeding carrying values between 10% and 20%, c) fair values exceeding carrying values by more than 20% and d) carrying values that exceed fair value.

Low End
	Metro Traffic		Network		Total
Fair value exceeds carrying value by:
Less than 10%	$	—	$	25,912	$	25,912
Greater than 20%		13,005		—		13,005
Carrying value exceeds fair value		—		—		—

Average
	Metro Traffic		Network		Total
Fair value exceeds carrying value by:
Less than 10%	$	—	$	25,912	$	25,912
Greater than 20%		13,005		—		13,005
Carrying value exceeds fair value		—		—		—

High End
	Metro Traffic		Network		Total
Fair value exceeds carrying value by:
Greater than 20%	$	13,005	$	25,912	$	38,917
Carrying value exceeds fair value		—		—		—

Overview of Results from Operations

Our national revenue has been trending downward for the last several years due principally to reductions in national audience levels and the audience levels of our affiliated stations. Our local/regional revenue has been trending downward due principally to increased competition, and an increase in the amount of 10 second inventory being sold by radio stations. For 2009, our operating performance has also been negatively affected by the ongoing economic downturn in the United States and, in particular, the general decline in advertiser demand for radio-related advertising products.

The principal components of our operating expenses are programming, production and distribution costs (including affiliate compensation and broadcast rights fees), selling expenses including commissions, promotional expenses and bad debt expenses, depreciation and amortization, and corporate general and administrative expenses. Corporate general and administrative expenses are primarily comprised of costs associated with the Management Agreement (which terminated on March 3, 2008), corporate accounting, legal and administrative personnel costs, and other administrative expenses, including those associated with corporate governance matters. Special charges include one-time expenses associated with the Refinancing, costs associated with the stock offering that we no longer have immediate plans to further pursue, the renegotiation of the CBS agreements, the 2009 and 2008 Gores investments, and write-down of certain costs associated with the TrafficLand arrangement and regionalization costs.

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We consider our operating cost structure to be largely fixed in nature, and as a result, we need several months lead time to make significant modifications to our cost structure to react to what we view are more than temporary increases or decreases in advertiser demand. This becomes important in predicting our performance in periods when advertiser revenue is increasing or decreasing. In periods where advertiser revenue is increasing, the fixed nature of a substantial portion of our costs means that operating income will grow faster than the related growth in revenue. Conversely, in a period of declining revenue, operating income will decrease by a greater percentage than the decline in revenue because of the lead time needed to reduce our operating cost structure. If we perceive a decline in revenue to be temporary, we may choose not to reduce our fixed costs, or may even increase our fixed costs, so as to not limit our future growth potential when the advertising marketplace rebounds. We carefully consider matters such as credit and commercial inventory risks, among others, in assessing arrangements with our programming and distribution partners. In those circumstances where we function as the principal in the transaction, the revenue and associated operating costs are presented on a gross basis in the Consolidated Statement of Operations. In those circumstances where we function as an agent or sales representative, our effective commission is presented within revenue with no corresponding operating expenses. Although no individual relationship is significant, the relative mix of such arrangements is significant when evaluating operating margin and/or increases and decreases in operating expenses.

Restructuring

In the third quarter of 2008, we announced a plan to restructure our Metro Traffic business (commonly referred to by us as the Metro Traffic re-engineering) and to implement other cost reductions. The re-engineering entailed reducing the number of our Metro Traffic operational hubs from 60 to 13 regional centers and produced meaningful reductions in labor expense, aviation expense, station compensation, program commissions and rent. Management also implemented additional cost reduction initiatives in the first half of 2009 including reductions in Network programming costs, labor expense, station compensation and other operating costs, to help improve our operating and financial performance and help establish a foundation for potential profitable long-term growth. We have recognized $59,800 of savings from both the Metro Traffic re-engineering and additional cost reduction initiatives undertaken by us through the end 2009, of which $5,500 was recognized during 2008. We anticipate that the total additional savings in 2010 will be approximately $3,000, as additional phases of the Metro Traffic re-engineering and cost-reduction programs are implemented.  These anticipated savings are comprised of labor savings, lower programming costs and reductions in aviation expense, station compensation and savings from consolidation of office leases.  Many of the initiatives were fully instituted as of June 30, 2009.

These savings will be offset somewhat by specific strategic investments, including: strengthening our sales force in both the Network and Metro Traffic segments, investments in new programming, digital, and systems infrastructure, television inventory outlays, incremental costs related to our TrafficLand License Agreement (as described in more detail below in “Investments”), and expenses under the Company’s distribution arrangement with CBS Radio, which partly resulted from increased clearance levels by CBS Radio.

CBS Agreements

Our Master Agreement with CBS Radio documents a long-term distribution arrangement in which CBS Radio will broadcast certain of our commercial inventory for our Network and Metro Traffic and information businesses through March 31, 2017 in exchange for certain programming and/or cash compensation. The new arrangement with CBS Radio is particularly important to us, as in recent years, the radio broadcasting industry has experienced a significant amount of consolidation. As a result, certain major radio station groups, including Clear Channel Communications and CBS Radio, have emerged as powerful forces in the industry. While we provide programming to all major radio station groups, our extended affiliation agreements with most of CBS Radio’s owned and operated radio stations provide us with a significant portion of audience that we sell to advertisers.

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Prior to the new CBS arrangement which closed on March 3, 2008, many of our affiliation agreements with CBS Radio did not tie station compensation to audience levels or clearance levels. Such factors contributed to a significant decline in our national audience delivery to advertisers when CBS Radio stations delivered lower audience levels and broadcast fewer commercials than in earlier years. Our new arrangement with CBS limits the impact of these circumstances in most instances by adjusting affiliate compensation for changes in audience levels. In addition, the arrangement provides CBS Radio with financial incentives to broadcast substantially all our commercial inventory (referred to as “clearance”) in accordance with the terms of the contracts and significant penalties for not complying with the contractual terms of our arrangement. At this point, we believe that over time we will be able to increase prices for this larger audience; however, if we cannot, the higher costs incurred by us, without offsetting revenue gains, may continue to be a contributing factor to our decline in operating income.

As a result of the Charter Amendments approved on August 3, 2009, CBS Radio which previously owned approximately 15.8% of our common stock, now owns less than 1% of our common stock. As a result of this change in ownership and the fact that CBS Radio ceased to manage us in March 2008, we no longer consider CBS Radio to be a related party effective as of August 3, 2009 and are no longer recording payments to CBS as related party expenses or amounts due to related parties effective August 3, 2009.

Presentation of Results

During this year, we have identified certain immaterial errors in our financial statements, which we corrected in subsequent interim periods. Such items have been reported and disclosed in the financial statements for the period ended December 31, 2009. We do not believe these adjustments are material to our current period consolidated financial statements or to any prior period’s consolidated financial statements and accordingly we have not restated any prior period financial statements. In an ongoing effort to improve our control environment, we have made further enhancements to our financial reporting personnel subsequent to December 31, 2009 and intend to continue to evaluate our internal controls during the fourth quarter and make further improvements as necessary.

Our consolidated financial statements and transactional records prior to the closing of the Refinancing reflect the historical accounting basis in our assets and liabilities and are labeled Predecessor Company, while such records subsequent to the Refinancing are labeled Successor Company and reflect the push down basis of accounting for the new fair values in our financial statements. This is presented in our consolidated financial statements by a vertical black line division which appears between the sections entitled Predecessor Company and Successor Company on the statements and relevant notes. The black line signifies that the amounts shown for the periods prior to and subsequent to the Refinancing are not comparable. For management purposes we continue to measure our performance against comparable prior periods.

For purposes of presenting a comparison of our 2009 results to prior periods, we have presented our 2009 results as the mathematical addition of the Predecessor Company and Successor Company periods. We believe that this presentation provides the most meaningful information about our results of operations. This approach is not consistent with generally accepted accounting principles in the United States (“GAAP”), may yield results that are not strictly comparable on a period-to-period basis, and may not reflect the actual results we would have achieved.

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Below is a reconciliation of our financial statements to this non-GAAP measure.

	Successor Company			Predecessor Company			Combined Total
	For the Period			For the Period
	April 24, 2009 to			January 1, 2009 to			For the year ended			For the year ended
	December 31, 2009			April 23, 2009			December 31, 2009			December 31, 2008
Revenue	$	228,860		$	111,474		$	340,334		$	404,416
Operating costs		213,521			111,580			325,101			360,492
Depreciation and amortization		21,473			2,585			24,058			11,052
Corporate general and administrative expenses		7,683			4,248			11,931			13,442
Goodwill and intangible impairment		50,501			—			50,501			430,126
Restructuring charges		3,976			3,976			7,952			14,100
Special charges		5,554			12,819			18,373			13,245
Total operating costs		302,708			135,208			437,916			842,457
Operating loss		(73,848	)		(23,734	)		(97,582	)		(438,041	)
Interest expense		14,782			3,222			18,004			16,651
Other income, net		(5	)		(359	)		(364	)		(12,369	)
Loss before income tax		(88,625	)		(26,597	)		(115,222	)		(442,323	)
Income tax benefit		(25,025	)		(7,635	)		(32,660	)		(14,760	)
Net loss	$	(63,600	)	$	(18,962	)	$	(82,562	)	$	(427,563	)

We established a new organizational structure in 2008 pursuant to which we manage and report our business in two operating segments: Metro Traffic and Network. Our Metro Traffic business produces and distributes traffic and other local information reports (such as news, sports and weather) to approximately 2,200 radio and 170 television stations. Our Network segment produces and distributes regularly scheduled and special syndicated programs, including exclusive live concerts, music and interview shows, national music countdowns, lifestyle short features, news broadcasts, talk programs, sporting events and sports features. We evaluate segment performance based on segment revenue and segment operating (loss) income. Administrative functions such as finance, human resources and information systems are centralized. However, where applicable, portions of the administrative function costs are allocated between the operating segments. The operating segments do not share programming or report distribution. Operating costs are captured discretely within each segment. Our accounts receivable and property, plant and equipment are captured and reported discretely within each operating segment.

Revenue

Revenue presented by operating segment for the years ended December 31 is as follows:

	2009					2008					2007
	$		% of Total			$		% of Total			$		% of Total
Metro Traffic	$	156,487		46	%	$	194,884		48	%	$	232,445		51	%
Network		183,847		54	%		209,532		52	%		218,939		49	%
Total (1)	$	340,334		100	%	$	404,416		100	%	$	451,384		100	%

(1) As described above, we currently aggregate revenue data based on the operating segment. A number of advertisers purchase both local/regional and national or Network commercial airtime in both segments. Our objective is to optimize total revenue from those advertisers.

For the year ended December 31, 2009, total revenue decreased $64,082, or 16%, from $404,416 to $340,334. For the year ended December 31, 2008 revenue decreased $46,968, or 10%, from $451,384 for the year ended December 31, 2007. The decrease in 2009 was principally attributable to the ongoing economic downturn and, in particular, the general decline in advertising spending, which started to contract in the second half of 2008 and continued in 2009. Revenue for all periods was adversely affected by increased competition and lower audience levels.

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For the year ended December 31, 2009, Metro Traffic revenue decreased to $156,487, a decline of 20%, from $194,884 in 2008. The 2009 decrease is principally related to a weak local advertising marketplace spanning various sectors and categories including automotive, retail and telecommunications, which placed an overall downward pressure on advertising sales and rates. In 2008, Metro Traffic revenue decreased to $194,884, a decline of 16% from $232,445 in 2007. The 2008 decrease is primarily due to the economic downturn that began in the last half of 2008, a weak local advertising marketplace, primarily in the automotive, financial services and retail categories, increased competition and an ongoing reduction in 10 second inventory units available to sell. The reduced demand was experienced in most markets and advertiser categories.

For the year ended December 31, 2009, Network revenue decreased to $183,847, compared to $209,532 for 2008, a 12% decline. In 2008, Network revenue decreased to $209,532 compared to $218,939 in 2007, a decrease of 4%. The declines in 2009 and 2008 are primarily the result of the cancellation of certain programs, declines in audience, lower revenue from our RADAR network inventory and the general decline in advertising spending which began to contract in 2008, accelerated toward the end of 2008 and continued throughout much of 2009,.

Expenses

Operating costs

Operating costs for the years ended December 31, were as follows:

	2009					2008					2007
	$		% of Total			$		% of Total			$		% of Total
Payroll and payroll related	$	82,191		25	%	$	100,651		28	%	$	97,497		28	%
Programming and production		78,385		24	%		98,620		27	%		101,839		29	%
Program and operating		25,138		8	%		15,781		4	%		14,181		4	%
Station compensation		75,216		23	%		79,874		22	%		75,509		22	%
Other operating expenses		64,169		20	%		65,566		18	%		61,413		18	%
	$	325,101		100	%	$	360,492		100	%	$	350,440		100	%

Operating costs decreased $35,391, or 10%, to $325,101 in 2009 from $360,492 in 2008. The decrease reflects the benefit of the Metro Traffic re-engineering and cost reduction programs, which began in the last half of 2008 and continued through 2009, and which were partially offset by increases in program and operating costs, primarily due to TV inventory purchases, and other investments in the business. Payroll and payroll related costs declined $18,460 or 18%, as a result of the salary and headcount reductions. Programming and production costs decreased by $20,234 from $98,620 to $78,385 due to lower talent fees as well as reduced revenue sharing expense as a result of our lower revenue. Program and operating costs increased to $25,138 from $15,781, reflecting increased purchases of television and other inventory, higher operating costs in the digital area and expenses related to our License Agreement with TrafficLand. Station compensation expense decreased by $4,658, primarily due to the renegotiation and cancellation of certain affiliate arrangements Other operating expenses declined from $65,566 to $64,171, reflecting the benefit of the Metro Traffic re-engineering program, primarily related to facilities, aviation, communication and other costs, partially offset by a 2009 asset write-off of $1,652.

Operating costs increased $10,052, or 3%, to $360,492 in 2008 from $350,440 in 2007 due to increased station compensation and salary costs, which were partially offset by the elimination of management fees as a result of the new CBS arrangement. Payroll and payroll related costs increased $3,154 or 3% as a result of management additions and staff additions in the digital area, partially offset by headcount reductions. Programming and production costs decreased by $3,022 from $101,839 to $98,620, primarily related to the CBS arrangement. Program and operating costs increased to $15,781 from $14,181 reflecting increased purchases of television and other inventory. Station compensation expense increased by $4,365, due to increased fees under the CBS agreement and other continuing contracts. Other operating expenses increased from $61,413 to $65,566.

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Depreciation and Amortization

Depreciation and amortization in 2009 increased $13,006, or 118%, to $24,058. The increase is primarily attributable to the increase in the fair value of amortizable intangibles that were recorded as a result of the Refinancing and our application of push down acquisition accounting and by increased depreciation and amortization from our additional investments in systems and infrastructure. This was partially offset by a decrease in warrant amortization expense as a result of the cancellation on March 3, 2008 of all outstanding warrants previously granted to CBS Radio and decreased depreciation for leasehold improvements from the closure and consolidation of facilities.

In 2008, depreciation and amortization decreased $8,788, or 44%, to $11,052 primarily as a result of the cancellation of the CBS warrants.

Corporate General and Administrative Expenses

Corporate, general and administrative expenses decreased $1,511 to $11,931 for 2009 as compared to $13,442 in 2008. The decrease is due to reduced legal fees for normal operations of $949 and reduced consulting fees of $767, partially offset by increases in accounting and auditing fees of $609.

Corporate general and administrative expenses in 2008 increased slightly to $13,442 from $13,171 in 2007, a $271, or 2%, increase. The increase reflects an increase in salary and wages and stock-based compensation for corporate management, partially offset by a reduction in legal fees and the CBS management fee.

Goodwill and Intangible Impairment

In September 2009, a triggering event occurred as a result of updated forecasted results for 2009 and 2010, and therefore, we conducted a goodwill impairment analysis. The results indicated impairment in our Metro Traffic segment. As a result of the analysis, we recorded an impairment charge of $50,401 to Metro Traffic goodwill and $100 to Metro Traffic’s trademark.

In 2008, we determined that our goodwill was impaired and recorded impairment charges totaling $430,126 ($206,053 in the second quarter and $224,073 in the fourth quarter).

Restructuring Charges

In connection with the Metro Traffic re-engineering and other cost reductions, which included the consolidation of leased offices, staff reductions and the elimination of underperforming programming, that commenced in the last half of 2008, we recorded $7,952 and $14,100 in restructuring charges for the twelve months ended December 31, 2009 and December 31, 2008, respectively. The Metro Traffic re-engineering and other cost savings programs were completed by the end of 2009.

Special Charges

We incurred costs aggregating $18,373, $13,245 and $4,626 in 2009, 2008 and 2007, respectively. Special charges for 2009 included: Refinancing costs of $13,895, including transaction fees and expenses related to negotiation of the definitive documentation, fees of various legal and financial advisors for the constituents involved in the Refinancing (e.g., Westwood One, Gores, Glendon Partners, the banks, noteholders and the lenders of the Senior Credit Facility); $1,852 for the asset write-down associated with the TrafficLand arrangement; $1,698 in professional fees and other costs related to the S-1 stock offering that we currently have no immediate plans to further pursue; and $928 in costs related to the regionalization program, Culver City financing costs and costs associated with the acquisition of Jaytu (d/b/a SigAlert). Special charges for 2008 consisted of $5,000 of contract termination costs, $6,624 of associated legal and professional fees incurred in connection with the new CBS arrangement and $1,621 for re-engineering expenses.

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Operating (Loss) Income

Operating (loss) income presented by operating segment is as follows for the years ending December 31:

	Year Ended December 31,
	2009			2008			2007
Metro Traffic	$	(11,935	)	$	24,577		$	64,033
Network		1,475			14,562			30,943
Total segment operating income	$	(10,460	)	$	39,139		$	94,976
Corporate expenses		(10,296	)		(19,709	)		(27,043	)
Goodwill and intangible impairment		(50,501	)		(430,126	)		—
Restructuring charges		(7,952	)		(14,100	)		—
Special charges		(18,373	)		(13,245	)		(4,626	)
Operating (loss) income	$	(97,582	)	$	(438,041	)	$	63,307

We incurred an operating loss of $97,582 in 2009 compared to an operating loss $438,041 in 2008. The operating loss for 2009 decreased from 2008 due primarily to the higher goodwill impairment charges in 2008 of $430,126 versus the goodwill impairment charge of $50,401 in 2009. The decline in operating income between 2009 and 2008, absent the goodwill impairment charge, is primarily related to a weak advertising marketplace spanning various sectors and categories including automotive, retail and telecommunications, which placed an overall downward pressure on advertising sales and rates. The decline in revenue was partially offset by the realignment of our cost base, net of restructuring charges, which actions were taken as part of our Metro re-engineering and other reduction initiatives.

Metro Traffic

Operating income in our Metro Traffic segment decreased by $36,512 to a loss of $11,935 in 2009 compared to income of $24,577 in 2008 primarily due to lower revenue of $38,397, increased amortization expense from an increase in the value of amortizable intangible assets of $11,550 and higher program and operating costs, primarily television inventory purchases, of $9,299. These increases were partially offset by reductions in the following areas: salaries and related expenses of $13,223, aviation expense of $5,818, station compensation of $1,913 and rent of $1,455, as well as, a general decrease in other operating expenses due to cost saving measures. We allocate certain operating costs to each segment. During 2009, we refined our allocation of accounting and auditing fees to the Metro Traffic segment, which resulted in an increase of expense for the Metro Traffic segment in 2009 of $1,394 compared to 2008. Total accounting and audit fees for the Company increased by $609 during 2009.

Metro Traffic’s operating income in 2008 decreased by $39,456, which was driven primarily by the $37,562 decline in revenue noted above.

Network

Operating income in our Network segment decreased by $13,087 to $1,475 in 2009 compared to income of $14,562 in 2008. The decrease was due to lower revenue of $25,685, increased amortization expense of $2,634 from an increase in the value of amortizable intangible assets, increased depreciation from investments in infrastructure of $1,433 and higher accounting and audit fees of $1,452. These expense increases were partially offset by decreases in salary and related costs of $3,926, program commissions of $6,245, talent costs of $4,037, broadcast rights of $2,939 and CBS fees of $2,583. We allocate certain operating costs to each segment. During 2009, we refined our allocation of accounting and auditing fees to the Network segment, which resulted in an increase of expense for the Network segment in 2009 of $1,452 compared to 2008. Total accounting and audit fees for the Company increased by $609 during 2009.

Network’s operating income in 2008 decreased by $16,381, which was comprised of a decline in revenue of $9,406 and increased station compensation and salary costs, which were partially offset by the elimination of management fees as a result of the new CBS arrangement.

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Interest Expense

Interest expense increased $1,353, or 8%, to $18,004 for the twelve months ended December 31, 2009 from $16,651 in the comparable period of 2008. The increase reflects higher average interest rates on the Senior Notes and Senior Credit Facility, partially offset by the lower average debt levels during 2009 as a result of our Refinancing that closed on April 23, 2009. As a result of our Refinancing, the interest payments on our debt on an annualized basis (i.e., from April 23, 2009 to April 23, 2010 and subsequent annual periods thereafter) increased from approximately $12,000 to $19,000, $6,000 of which will be PIK (such interest accrues on a quarterly basis and is added to the principal amount of our debt). The increase was partially offset by a one-time reversal of interest expense in 2009 from the settlement of an amount owed to a former employee of $754.

Interest expense in 2008 decreased $6,975 from $23,626 in 2007 to $16,651 in 2008, reflecting the decrease in the amount of outstanding debt. Our weighted average interest rate was 13.9% in 2009, 6.5% in 2008 and 6.3% in 2007.

Other (Income) Expense

Other income was $364, $12,369 and $411 in 2009, 2008, and 2007, respectively. Other income in 2008 was principally due to a gain on the sale of securities of $12,420.

Provision for Income Taxes

Income tax benefit in 2009 increased $17,900, or 121%, to $32,660 from $14,760 in 2008, primarily due to the operating loss and higher deductible expenses in 2009. Income tax expense in 2008 decreased $30,484, or 194%, to a benefit of $14,760 from a provision of $15,724 in 2007, which reflected a portion of the goodwill impairment charge recorded during the year, being deductible for tax purposes.

Our effective 2009 income tax rate was impacted by the 2009 goodwill impairment charge, which for the most part was substantially non-deductible for tax purposes. The effective 2008 income tax rate was impacted by the 2008 goodwill impairment charge, which was substantially non-deductible for tax purposes. The 2007 effective income tax rate benefited from a change in New York State tax law on our deferred tax balance (approximately $100).

The effective tax rate in 2009 was 28.3%, compared to 3.3% in 2008. The change in the effective tax rate is the result of large non-deductible expenses in 2008 for goodwill impairments, compared to a smaller impairment in 2009 and other items.

Existing Indebtedness

Our existing debt totaling $146,927 consists of: $121,927 under the Senior Notes maturing July 15, 2012 (which includes $13,500 classified as current maturities of long term-debt and $11,165 due to Gores) and the Senior Credit Facility, consisting of a $20,000 unsecured, non-amortizing term loan and $5,000 under our revolving credit facility. The term loan and revolving credit facility (i.e., the “Senior Credit Facility”) mature on July 15, 2012 and are guaranteed by subsidiaries of the Company and Gores. We borrowed the entire amount of the term loan on April 23, 2009 and did not make any borrowings under the revolving credit facility at that time. The amount drawn under the revolving credit facility on December 31, 2009 was $5,000. The Senior Notes bear interest at 15.0% per annum, payable 10% in cash and 5% PIK interest. The PIK interest accretes and is added to principal quarterly, but is not payable until maturity. As of December 31, 2009, the PIK interest was $4,427. The Senior Notes may be prepaid at any time, in whole or in part, without premium or penalty. Payment of the Senior Notes is mandatory upon, among other things, certain asset sales and the occurrence of a “change of control” (as such term is defined in the Securities Purchase Agreement governing the Senior Notes). The Senior Notes are guaranteed by the subsidiaries of the Company and are secured by a first priority lien on substantially all of the Company’s assets.

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Loans under our existing Credit Agreement (which govern the Senior Credit Facility) bear interest at our option at either LIBOR plus 4.5% per annum (with a LIBOR floor of 2.5%) or a base rate plus 4.5% per annum (with a base rate floor of the greater of 3.75% and the one-month LIBOR rate).

Both the Securities Purchase Agreement (governing the Senior Notes) and Credit Agreement (governing the Senior Credit Facility) contain restrictive covenants that, among other things, limit our ability to incur debt, incur liens, make investments, make capital expenditures, consummate acquisitions, pay dividends, sell assets and enter into mergers and similar transactions beyond specified baskets and identified carve-outs. Additionally, we may not exceed the maximum senior leverage ratio (the principal amount outstanding under the Senior Notes over our Adjusted EBITDA) referred to in this report as our debt leverage covenant. The Securities Purchase Agreement contains customary representations and warranties and affirmative covenants. The Credit Agreement contains substantially identical restrictive covenants (including a maximum senior leverage ratio calculated in the same manner as with the Securities Purchase Agreement), affirmative covenants and representations and warranties like those found in the Securities Purchase Agreement, modified, in the case of certain covenants, for a cushion on basket amounts and covenant levels from those contained in the Securities Purchase Agreement.

On October 14, 2009, we entered into separate agreements with the holders of our Senior Notes and Wells Fargo Foothill to amend the terms of our Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility, respectively, to waive compliance with our debt leverage covenants which were to be measured on December 31, 2009, on a trailing four-quarter basis. As part of the Securities Purchase Agreement amendment, we paid down our Senior Notes by $3,500 on March 31, 2010. The amendments also included consents by holders of the Senior Notes and Wells Fargo Foothill regarding the potential Culver City building financing and in the case of the amendment to the Senior Credit Facility, an increase in the letters of credit sub-limit from $1,500 to $2,000.

On March 30, 2010, we entered into additional agreements with the holders of our Senior Notes and Wells Fargo Capital Finance, LLC to amend the terms of our Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility, respectively, to modify our debt leverage covenants for periods to be measured (on a trailing four-quarter basis) on March 31, 2010 and beyond. As part of the amendment to the Securities Purchase Agreement, the quarterly debt leverage covenants for 2010 have been eased to levels of 8.00, 7.50, 7.00 and 6.50, respectively, and the original quarterly covenants for 2010 now apply to 2011. The original quarterly covenants for 2012 remain unchanged. The amendment to the Securities Purchase Agreement also contemplates that we will pay down our Senior Notes out of the proceeds of the tax refund we anticipate receiving in the second or third quarter of 2010. The first $12,000 of such refund and any refund amount in excess of $17,000 will be used to pay down our Senior Notes. Gores has guaranteed up to a $10,000 pay down of the Senior Notes if such refund is not received on or prior to August 16, 2010. The quarterly debt leverage covenants that appear in the Senior Credit Facility have also been amended to maintain the 15% cushion that exists between the debt leverage covenant applicable to the Senior Credit Facility and the corresponding covenant in the Securities Purchase Agreement governing the Senior Notes. By way of example, the 8.00, 7.50, 7.00 and 6.50 covenants in the Securities Purchase Agreement (applicable to the Senior Notes) are 9.20, 8.65, 8.05 and 7.50, respectively, in the Senior Credit Facility.

Adjusted EBITDA for the year ended December 31, 2009 was $10,374. Under the terms of our Senior Notes, in order to satisfy our 8.00 to 1.00 covenant for the twelve month period ended March 31, 2010, we must realize an Adjusted EBITDA (loss) for the three months ended March 31, 2010 of no more than $(2,320). As a point of reference, our Adjusted EBITDA for the three months ended March 31, 2009 was a loss of $(6,940). Our Adjusted EBITDA for the last three quarters of 2009 was $17,314.

In order to satisfy our 7.50 to 1.00 covenant for the twelve month period ending June 30, 2010, we must realize a minimum Adjusted EBITDA of $7,949 for the six months ended June 30, 2010. This compares to our Adjusted EBITDA for the six months ended June 30, 2009 of $2,130. Adjusted EBITDA for the last two quarters of 2009 was $8,244.

In order to satisfy our 7.00 to 1.00 covenant for the twelve month period ending September 30, 2010, we must realize a minimum Adjusted EBITDA of $11,847 for the nine months ended September 30, 2010. This compares to our Adjusted EBITDA for the nine months ended September 30, 2009 of $4,283. Adjusted EBITDA for the last quarter of 2009 was $6,091.

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Our maximum senior leverage ratio (also referred to herein as our “debt leverage covenant”), defined as the principal amount of Senior Notes over our Adjusted EBITDA (defined below), is measured on a trailing, four-quarter basis. The covenant is the same under our Securities Purchase Agreement, governing the Senior Notes and our Senior Credit Facility, governing the Senior Credit Facility, except that they have different maximum levels. We have presented the more restrictive of the two levels below.
 

	Maximum				Required Last Twelve
	Senior Leverage Ratio		Principal Amount of Senior Notes		Months (FE LTM) Minimum
Quarter Ending	Covenant		Estimated Outstanding (Includes PIK)*		Adjusted EBITDA*
3/31/2010		8.00 to 1.0	$	119,951	$	14,994
6/30/2010		7.50 to 1.0		121,450		16,193
9/30/2010		7.00 to 1.0		112,911		16,130
12/31/2010		6.50 to 1.0		114,322		17,588
3/31/2011		6.00 to 1.0		115,751		19,292
6/30/2011		5.50 to 1.0		117,198		21,309
9/30/2011		5.00 to 1.0		118,663		23,733
12/31/2011		4.50 to 1.0		120,146		26,699
3/31/2012		3.50 to 1.0		121,648		34,757
6/30/2012		3.50 to 1.0		123,169		35,191

The above chart reflects a payment of: (1) $3,500 on or before March 31, 2010 of the $121,927 principal amount of Senior Notes outstanding on December 31, 2009 (including the PIK interest that accrues to the principal on a quarterly basis) and (2) $10,000 (the minimum repayment required) on or before August 16, 2010 of the then outstanding principal amount of Senior Notes.

Adjusted EBITDA has the same definition in both of our borrowing agreements and means Consolidated Net Income adjusted for the following: (1) minus any net gain or plus any loss arising from the sale or other disposition of capital assets; (2) plus any provision for taxes based on income or profits; (3) plus consolidated net interest expense; (4) plus depreciation, amortization and other non-cash losses, charges or expenses (including impairment of intangibles and goodwill); (5) minus any “extraordinary,” “unusual,” “special” or “non-recurring” earnings or gains or plus any “extraordinary,” “unusual,” “special” or “non-recurring” losses, charges or expenses; (6) plus restructuring expenses or charges; (7) plus non-cash compensation recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights; (8) plus any Permitted Glendon/Affiliate Payments (as described below); (9) plus any Transaction Costs (as described below); (10) minus any deferred credit (or amortization of a deferred credit) arising from the acquisition of any Person; and (11) minus any other non-cash items increasing such Consolidated Net Income (including, without limitation, any write-up of assets); in each case to the extent taken into account in the determination of such Consolidated Net Income, and determined without duplication and on a consolidated basis in accordance with GAAP.

“Permitted Glendon/Affiliate Payments” means payments made at our discretion to Gores and its affiliates including Glendon Partners for consulting services provided to Westwood One and “Transaction Costs” refers to the fees, costs and expenses incurred by us in connection with the Restructuring.

Adjusted EBITDA, as we calculate it, may not be comparable to similarly titled measures employed by other companies. While Adjusted EBITDA does not necessarily represent funds available for discretionary use, and is not necessarily a measure of our ability to fund our cash needs, we use Adjusted EBITDA as defined in our lender agreements as a liquidity measure, which is different from operating cash flow, the most directly comparable financial measure calculated and presented in accordance with GAAP. We have provided below the requisite reconciliation of operating cash flow to Adjusted EBITDA.

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Adjusted EBITDA for the years ended December 31, 2009, 2008 and 2007 is as follows:

	For the Years ended December 31,
	2009			2008			2007
Net cash (used in) provided by operating activities	$	(24,919	)	$	2,038		$	27,901
Interest expense		18,004			16,651			23,626
Income taxes (benefit)		(32,660	)		(14,760	)		15,724
Restructuring		7,952			14,100			—
Special charges and other (1)		20,025			16,517			4,626
Investment income		(188	)		(207	)		—
Other non-operating income		(364	)		(998	)		(412	)
Deferred taxes		33,782			13,907			6,480
Amortization of deferred financing costs		(331	)		(1,674	)		(481	)
Change in assets and liabilities		(10,928	)		(6,376	)		19,914
Adjusted EBITDA	$	10,373		$	39,198		$	97,378

(1) Special charges and other includes expense of $1,652 and $3,272 classified as general and administrative expenses and operating costs, respectively, on the Statement of Operations for the years ended December 31, 2009 and 2008, respectively.

Net cash used in operating activities was $24,919 for the twelve-month period ended December 31, 2009 and cash provided by operating activities was $2,038 for the year ended December 31, 2008, an increase of $25,127 in net cash used by operating activities. The increase principally reflects the increased net loss, before impairment charges and other non-cash expenses. On February 26, 2010, we repaid in full all previously deferred payments due to CBS Radio under the Master Agreement.

Our business does not usually require significant cash outlays for capital expenditures. Capital expenditures for the twelve month period ended December 31, 2009 decreased $745 to $6,568 from $7,313 for the comparable period of 2008. The decrease in 2009 is principally attributable to the lower spending in the first half of 2009 on infrastructure purchases, which became more significant in the last half of 2009.

We did not pay dividends to our stockholders during 2009 or 2008. In 2007, we paid dividends to our stockholders in the amount of $1,663. In May 2007, our Board elected to discontinue the payment of a dividend on our common stock. The payment of dividends on our common stock is prohibited by the terms of our Senior Notes and Senior Credit Facility. There are no plans to declare dividends on our common stock for the foreseeable future. Additionally, our Senior Credit Facility and Senior Notes contain covenants that restrict our ability to repurchase shares of our common stock.

Investments

Jaytu (d/b/a SigAlert)

On December 31, 2009, we purchased Jaytu. At December 31, 2009, we issued 232,277 shares of its common stock with a fair value of $1,045 (based on a per share price of $4.50) and paid $1,250 in cash to the members of Jaytu. The members of Jaytu may earn up to an additional $1,500 in cash upon the delivery and acceptance of certain traffic products in accordance with certain specifications mutually agreed upon by the parties, including commercial acceptance and/or first usage of the products by our television affiliates. The assets purchased are software and technology assets included in intangible assets. The operations and assets of Jaytu (d/b/a SigAlert) are included in the Metro Traffic segment.

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TrafficLand

On December 22, 2008, Metro Traffic Networks Communications, Inc. and TrafficLand entered into a License and Services Agreement (the “TrafficLand License Agreement”) which provides us with a three-year license to market and distribute TrafficLand services and products. Concurrent with the execution of the License Agreement, Westwood One, Inc. (parent of Metro Traffic Networks Communications, Inc.), TLAC, Inc. (a wholly-owned subsidiary of Westwood One) and TrafficLand entered into an option agreement granting us the right to acquire 100% of the stock of TrafficLand pursuant to the terms of a Merger Agreement which the parties had previously negotiated and placed into escrow. We ultimately chose not to exercise the option to purchase TrafficLand, and accordingly the Option Agreement and Merger Agreement were terminated. As a result, the License Agreement will continue until December 31, 2011.

GTN

On March 29, 2006, our cost method investment in The Australia Traffic Network Pty Limited (“ATN”) was converted to 1,540 shares of common stock of Global Traffic Network, Inc. (“GTN”) in connection with the initial public offering of GTN on that date. The investment in GTN was sold during 2008 and we received proceeds of approximately $12,741 and realized a gain of $12,420. Such gain is included as a component of other (income) expense in the Consolidated Statement of Operations.

POP Radio

On October 28, 2005, we became a limited partner of POP Radio, LP (“POP Radio”) pursuant to the terms of a subscription agreement dated as of the same date. As part of the transaction, effective January 1, 2006, we became the exclusive sales representative of the majority of advertising on the POP Radio network for five years, until December 31, 2010, unless earlier terminated by the express terms of the sales representative agreement. We hold a 20% limited partnership interest in POP Radio. No additional capital contributions are required by any of the limited partners. This investment is being accounted for under the equity method. The initial investment balance was de minimis, and our equity in earnings of POP Radio through December 31, 2009 was de minimis. Pursuant to the terms of a 2006 recapitalization of POP Radio, if and when one of the other partners elects to exercise warrants it received in connection with the transaction, our limited partnership interest in POP Radio will decrease from 20% to 6%.

Contractual Obligations and Commitments

The following table lists our future contractual obligations and commitments as of December 31, 2009:

	Payments due by Period
Contractual obligations (1)	Total		<1 year		1 - 3 years		3 - 5 years		>5 years
Debt (2)	$	186,299	$	25,216	$	161,083	$	—	$	—
Capital lease obligations		1,600		960		640		—		—
Building financing (3)		10,271		875		1,844		1,976		5,576
Operating leases		43,682		4,900		11,435		10,357		16,990
Other long-term obligations		585,774		123,850		173,763		131,321		156,840
Total contractual obligations	$	827,626	$	155,801	$	348,765	$	143,654	$	179,406

(1)	The above table excludes our Fin 48 reserves and deferred tax liabilities as the future cash flows are uncertain as of December 31, 2009.
(2)	Includes the estimated net interest payments on fixed and variable rate debt. Estimated interest payments on floating rate instruments are computed using our interest rate as of December 31, 2009, and borrowings outstanding are assumed to remain at current levels.
(3)	Includes payments related to the financing of our Culver City Properties.

We have long-term noncancelable operating lease commitments for office space and equipment and capital leases for satellite transponders.

Included in other long-term obligations enumerated in the table above, are various contractual agreements to pay for talent, broadcast rights, research and various related party arrangements, including $462,531 of payments due under the new CBS arrangement and the previous Management Agreement. As discussed in more detail below, on October 2, 2007, we entered into a long term distribution arrangement with CBS Radio which closed on March 3, 2008. As a result of the new arrangement with CBS Radio, total contractual obligations included in the above table are $462,531 ($74,478 within 1 year; $116,476 1-3 years; $123,487 3-5 years; and, $148,090 beyond 5 years).

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Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with accounting principles that are 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, liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities. We continually evaluate our estimates and judgments including those related to allowances for doubtful accounts, useful lives of property, plant and equipment and intangible assets, and other contingencies. We base our estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that of our significant accounting policies, the following may involve a higher degree of judgment or complexity.

Revenue Recognition – Revenue is recognized when earned, which occurs at the time commercial advertisements are broadcast. Payments received in advance are deferred until earned and such amounts are included as a component of Deferred Revenue in the accompanying Balance Sheet.

We consider matters such as credit and inventory risks, among others, in assessing arrangements with our programming and distribution partners. In those circumstances where we function as the principal in the transaction, the revenue and associated operating costs are presented on a gross basis in the consolidated statement of operations. In those circumstances where we function as an agent or sales representative, our effective commission is presented within Revenue with no corresponding operating expenses.

Barter transactions represent the exchange of commercial announcements for programming rights, merchandise or services. These transactions are recorded at the fair market value of the commercial announcements relinquished, or the fair value of the merchandise and services received. A wide range of factors could materially affect the fair market value of commercial airtime sold in future periods (See the section entitled “Cautionary Statement regarding Forward-Looking Statements” in Item 1 — Business and Item 1A — Risk Factors), which would require us to increase or decrease the amount of assets and liabilities and related revenue and expenses recorded from prospective barter transactions. Revenue is recognized on barter transactions when the advertisements are broadcast. Expenses are recorded when the merchandise or service is utilized.

Program Rights – Program rights are stated at the lower of cost, less accumulated amortization, or net realizable value. Program rights and the related liabilities are recorded when the license period begins and the program is available for use, and are charged to expense when the event is broadcast.

Valuation of Goodwill and Intangible Assets – Goodwill represents the excess of cost over fair value of net assets of businesses acquired. In accordance with the authoritative guidance, the value assigned to goodwill and indefinite lived intangible assets is not amortized to expense, but rather the estimated fair value of the reporting unit is compared to its carrying amount on at least an annual basis to determine if there is a potential impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit goodwill and intangible assets is less than their carrying value. On an annual basis and upon the occurrence of certain events, we are required to perform impairment tests on our identified intangible assets with indefinite lives, including goodwill, which testing could impact the value of our business.

Prior to 2008, we operated as a single reportable operating segment: the sale of commercial time. As part of our re-engineering initiative commenced in the fourth quarter of 2008, we installed separate management for the Network and Metro Traffic divisions providing discrete financial information and management oversight. Accordingly, we have determined that each division is an operating segment. A reporting unit is the operating segment or a business which is one level below the operating segment. Our reporting units are consistent with our operating segments and impairment has been tested at this level.

On an annual basis and upon the occurrence of certain interim triggering events, we are required to perform impairment tests on our identified intangible assets with indefinite lives, including goodwill, which testing could impact the value of our business. In 2009, we determined that our goodwill was impaired and recorded impairment charges totaling $50,401. The carrying value of our goodwill at December 31, 2009 is $38,917.

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Intangible assets subject to amortization primarily consist of affiliation agreements that were acquired in prior years. Such affiliate contacts, when aggregated, create a nationwide audience that is sold to national advertisers. The intangible asset values assigned to the affiliate agreements for each acquisition were determined based upon the expected discounted aggregate cash flows to be derived over the life of the affiliate relationship. The method of amortizing the intangible asset values reflects, based upon our historical experience, an accelerated rate of attrition in the affiliate base over the expected life of the affiliate relationships. Accordingly, we amortize the value assigned to affiliate agreements on an accelerated basis (period ranging from 4 to 20 years with a weighted-average amortization period of approximately 8 years) consistent with the pattern of cash flows which are expected to be derived. We review the recoverability of our finite-lived intangible assets whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is assessed by comparison to associated undiscounted cash flows. During 2009 an impairment of intangible assets of $100 was recorded for the reduction in the value of the Metro Traffic trademark.

Allowance for doubtful accounts – We maintain an allowance for doubtful accounts for estimated losses which may result from the inability of our customers to make required payments. We base our allowance on the likelihood of recoverability of accounts receivable by aging category, based on past experience and taking into account current collection trends that are expected to continue. If economic or specific industry trends worsen beyond our estimates, it would be necessary to increase our allowance for doubtful accounts. Alternatively, if trends improve beyond our estimates, we would be required to decrease our allowance for doubtful accounts. Our estimates are reviewed periodically, and adjustments are reflected through bad debt expense in the period they become known. Changes in our bad debt experience can materially affect our results of operations. Our allowance for bad debts requires us to consider anticipated collection trends and requires a high degree of judgment. In addition, as fully described herein, our results in any reporting period could be impacted by relatively few but significant bad debts.

Estimated useful lives of property, plant and equipment – We estimate the useful lives of property, plant and equipment in order to determine the amount of depreciation expense to be recorded during any reporting period. The useful lives, which are disclosed in Note 1- Basis of Presentation of the consolidated financial statements, are estimated at the time the asset is acquired and are based on historical experience with similar assets as well as taking into account anticipated technological or other changes. If technological changes were to occur more rapidly than anticipated or in a different form than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition of increased depreciation and amortization expense in future periods. Alternately, these types of technological changes could result in the recognition of an impairment charge to reflect the write-down in value of the asset.

Income Taxes - We use the asset and liability method of financial accounting and reporting for income taxes required by the authoritative guidance. Under the authoritative guidance, deferred income taxes reflect the tax impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes.

We classified interest expense and penalties related to unrecognized tax benefits as income tax expense in accordance with the authoritative guidance which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The evaluation of a tax position in accordance with this interpretation is a two-step process. The first step is recognition, in which the enterprise determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements.

We determined, based upon the weight of available evidence, that it is more likely than not that our deferred tax asset will be realized. We have experienced a long history of taxable income, which would enable us to carryback any potential future net operating losses and taxable temporary differences that can be used as a source of income. As such, no valuation allowance was recorded during the year ended December 31, 2009. We will continue to assess the need for a valuation allowance at each future reporting period.

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Recent Accounting Pronouncements Affecting Future Results

In June 2009, the FASB issued a standard that established the FASB Accounting Standards Codification (the “ASC”), which effectively amended the hierarchy of GAAP and established only two levels of GAAP, authoritative and non-authoritative. All previously existing accounting standard documents were superseded, and the ASC became the single source of authoritative, nongovernmental GAAP, except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. All other non-grandfathered, non-SEC accounting literature not included in the ASC became non-authoritative. The ASC was intended to provide access to the authoritative guidance related to a particular topic in one place. New guidance issued subsequent to June 30, 2009 will be communicated by the FASB through Accounting Standards Updates. The ASC was effective for financial statements for interim or annual reporting periods ending after September 15, 2009.  We adopted and applied the provisions of the ASC for our third quarter ended September 30, 2009, and have eliminated references to pre-ASC accounting standards throughout our consolidated financial statements. Our adoption of the ASC did not have a material impact on our consolidated financial position or results of operations.

In May 2009, the FASB issued new guidance on the treatment of subsequent events which is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This new guidance was effective for fiscal years and interim periods ended after June 15, 2009, and must be applied prospectively. We adopted and applied the provisions of the new guidance for our second quarter ended June 30, 2009. Our adoption of the new guidance did not have an impact on our consolidated financial position or results of operations.

In April 2009, the FASB issued new guidance intended to provide additional application guidance and enhanced disclosures regarding fair value measurements and impairments of securities. New guidance related to determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly provides additional guidelines for estimating fair value in accordance with pre-existing guidance on fair value measurements. New guidance on recognition and presentation of other-than-temporary impairments provides additional guidance related to the disclosure of impairment losses on securities and the accounting for impairment losses on debt securities, but does not amend existing guidance related to other-than-temporary impairments of equity securities. Lastly, new guidance on interim disclosures about the fair value of financial instruments increases the frequency of fair value disclosures. The new guidance was effective for fiscal years and interim periods ended after June 15, 2009.  As such, we adopted the new guidance in the second quarter ended June 30, 2009, and have included the additional required disclosures about the fair value of financial instruments and valuation techniques within Note 9 — Fair Value Measurements of the Consolidated Financial Statements. Our adoption of the new guidance did not have a material impact on our consolidated financial position or results of operations or results of operations.

In March 2009, the FASB issued new guidance intended to provide additional application guidance for the initial recognition and measurement, subsequent measurement, and disclosures of assets and liabilities arising from contingencies in a business combination and for pre-existing contingent consideration assumed as part of the business combination. It establishes principles and requirements for how an acquirer recognizes and measures the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. The new guidance also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. We adopted the new guidance on January 1, 2009. The adoption of the new guidance impacted the accounting for our Refinancing and for the acquisition of the business assets of Jaytu (d/b/a SigAlert), in the fourth quarter of 2009. (See Note 1 – Basis of Presentation of the Consolidated Financial Statements).

In November 2008, the FASB issued new guidance intended to provide application guidance on the accounting for equity method investments, including how the initial carrying value of an equity method investment should be determined, how an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed and how to account for a change in an investment from the equity method to the cost method. Our adoption of the new guidance did not have a significant impact on our consolidated financial position or results of operations.

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In March 2008, the FASB issued new guidance on disclosures about derivative instruments and hedging activities. This new guidance is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand the effect these instruments and activities have on an entity’s financial position, financial performance and cash flows. Entities are required to provide enhanced disclosures about: how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for under existing GAAP; and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. This new guidance was effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Our adoption of the new guidance in the fourth quarter of 2009 had no impact on our consolidated financial position or results of operations.

In December 2007, the FASB issued new guidance on non-controlling interests in consolidated financial statements. This new guidance establishes requirements for ownership interests in subsidiaries held by parties other than the parent (sometimes called “minority interests”) to be clearly identified, presented, and disclosed in the consolidated statement of financial position within equity, but separate from the parent’s equity. All changes in the parent’s ownership interests are required to be accounted for consistently as equity transactions and any non-controlling equity investments in unconsolidated subsidiaries must be measured initially at fair value. The new guidance is effective for fiscal years beginning after December 15, 2008. However, presentation and disclosure requirements must be retrospectively applied to our Consolidated Financial Statements. The implementation of this standard, effective for our interim financial statements ending September 30, 2009, did not have a material impact on our consolidated financial position and results of operations.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We have exposure to changing interest rates under the Senior Credit Facility. We manage interest rate risk through the use of a combination of fixed and floating rate debt. From time to time, we make use of derivative financial instruments to adjust its fixed and floating rate ratio. We were not party to any derivative financial instruments during 2009.

We monitor our positions with, and the credit quality of, the financial institutions that are counterparties to our financial instruments, and do not anticipate non-performance by the counterparties.

Our receivables do not represent a significant concentration of credit risk due to the wide variety of customers and markets in which we operate.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements and the related notes and schedules were prepared by and are the responsibility of management. The financial statements and related notes were prepared in conformity with generally accepted accounting principles and include amounts based upon management’s best estimates and judgments. All financial information in this annual report is consistent with the consolidated financial statements.

We maintain internal accounting control systems and related policies and procedures designed to provide reasonable assurance that assets are safeguarded, that transactions are executed in accordance with management’s authorization and properly recorded, and that accounting records may be relied upon for the preparation of consolidated financial statements and other financial information. The design, monitoring, and revision of internal accounting control systems involve, among other things, management’s judgment with respect to the relative cost and expected benefits of specific control measures.

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Our consolidated financial statements have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, who have expressed their opinion with respect to the presentation of these statements.

The Audit Committee of the Board of Directors, which is comprised solely of directors who are independent under NASDAQ rules and regulations, meets periodically with the independent auditors, as well as with management, to review accounting, auditing, internal accounting controls and financial reporting matters. The Audit Committee, pursuant to its charter, is also responsible for retaining our independent accountants. The independent accountants have full and free access to the Audit Committee with and without management’s presence. Members of the Audit Committee meet the stringent independence standards and at least one member has financial expertise. From March 16, 2009, when we were delisted from the NYSE, to November 20, 2009, when our common stock was listed on the NASDAQ Global Market under the ticker symbol “WWON”, we were not subject to the listing requirements of any national securities exchange or national securities association. Effective November 20, 2009, the Company became subject to NASDAQ rules and regulations except where it relies on the “controlled company” exemption to the board of directors and committee composition. The “controlled company” exception does not modify the independence requirements for the Audit Committee, and we comply with the requirements of the Sarbanes-Oxley Act of 2002 and the NASDAQ rules which require that our audit committee be composed of at least three independent directors. The Board used the NASDAQ standard of “independence” in determining Messrs. Ming, Nunez and Wuensch independence.

The consolidated financial statements and the related notes and schedules are indexed on page F-1 of this report, and attached hereto as pages F-1 through F-42 and by this reference incorporated herein.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our President and Chief Financial Officer and our Senior Vice President, Finance and Principal Accounting Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2009 (the “Evaluation”). Based upon the Evaluation, our President and Chief Financial Officer and Senior Vice President, Finance and Principal Accounting Officer concluded that our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) are effective as of December 31, 2009 in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Our internal control over financial reporting is a process designed by, or under the supervision of, our President and Chief Financial Officer and our Senior Vice President, Finance and Principal Accounting Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Management evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Management, under the supervision and with the participation of our President and Chief Financial Officer and our Senior Vice President, Finance and Principal Accounting Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2009 and concluded that it is effective as of such date.

The effectiveness of our internal control over financial reporting as of December 31, 2009, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

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Changes in Internal Control over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. During the quarter ended December 31, 2009, we identified a material weakness related to accounting for income taxes that resulted in adjustments to the 2009 annual consolidated financial statements as discussed in Note 14 to the consolidated financial statements.

Specifically, we did not maintain effective controls over the completeness and accuracy of our quarterly and year-end tax provision calculations with respect to liabilities for uncertain tax positions in accordance with accounting principles generally accepted in the United States of America. More specifically, we did not have the appropriate technically competent resources in place to perform an adequate review of the calculation of the liability for uncertain tax positions. This material weakness resulted in adjustments identified by management relating to uncertain income tax exposures that we recorded in the fourth quarter of fiscal 2009 and could have resulted in a material misstatement of the income tax accounts and related disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

We have concluded that this material weakness was remediated during the quarter ended December 31, 2009 due to the implementation of the following enhancement of our internal controls over the calculation of the liability for uncertain tax positions, the related balance sheet accounts and related disclosures:

We enhanced the technical proficiency of our tax function to review our calculation of the liability for uncertain tax positions and the related balance sheet accounts on an annual and quarterly basis. Specifically:

• We created the position of Senior Vice President, Finance and Principal Accounting Officer, with the requisite experience to enhance our review of the calculation of the liability for uncertain tax positions.

• We engaged a reputable professional services firm to assist us in the calculation of the liability for uncertain tax positions. In prior periods, we used internal resources.

• In addition, tax experts from Glendon reviewed the Company’s calculation of the liability for uncertain tax positions.

These controls were tested and determined to be operating effectively during the quarter and annual period ended December 31, 2009.

In addition, these new controls also materially enhanced our controls over all areas related to accounting for income taxes.

During the quarter ended December 31, 2009, we adopted changes in our internal controls in order to implement a more robust review of our financial reporting process and improve communication between certain of our departments.

As discussed above, there were changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

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PART III

Item 10. Directors and Executive Officers and Corporate Governance

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2010 annual meeting of stockholders that is responsive to the information required with respect to this Item 10; provided, however, that such information shall not be incorporated herein:

• if the information that is responsive to the information required with respect to this Item 10 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or

• if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

Item 11. Executive Compensation

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2010 annual meeting of stockholders that is responsive to the information required with respect to this Item 11; provided, however, that such information shall not be incorporated herein:

• if the information that is responsive to the information required with respect to this Item 11 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or

• if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2010 annual meeting of stockholders that is responsive to the information required with respect to this Item 12; provided, however, that such information shall not be incorporated herein:

• if the information that is responsive to the information required with respect to this Item 12 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or

• if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

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Item 13. Certain Relationships and Related Transactions, and Director Independence

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2010 annual meeting of stockholders that is responsive to the information required with respect to this Item 13; provided, however, that such information shall not be incorporated herein:

• if the information that is responsive to the information required with respect to this Item 13 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or

• if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

Item 14. Principal Accountant Fees and Services

The registrant incorporates by reference herein information to be set forth in its definitive proxy statement for its 2010 annual meeting of stockholders that is responsive to the information required with respect to this Item 14; provided, however, that such information shall not be incorporated herein:

• if the information that is responsive to the information required with respect to this Item 14 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or

• if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Documents filed as part of this report on Form 10-K

1, 2. Financial statements and schedules to be filed hereunder are indexed on page F-1 hereof.

3. Exhibits

EXHIBIT
NUMBER (A)		DESCRIPTION
	3.1	Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware. (14)
	3.1.1	Certificate of Amendment to the Restated Certificate of Incorporation of Westwood One, Inc., as filed with the Secretary of the State of Delaware on August 3, 2009. (41)
	3.1.2	Certificate of Elimination, filed with the Secretary of State of the State of Delaware on November 18, 2009. (42)
	3.2	Amended and Restated Bylaws of Registrant adopted on April 23, 2009 and currently in effect. (40)
	4.1	Securities Purchase Agreement, dated as of April 23, 2009, by and among Westwood One, Inc. and the other parties thereto. (40)
	4.1.1	Waiver and First Amendment, dated as of October 14, 2009, to Securities Purchase Agreement, dated as of April 23, 2009, by and between Registrant and the noteholders parties thereto. (43)
	4.2	Note Purchase Agreement, dated as of December 3, 2002, between Registrant and the noteholders parties thereto. (15)
	4.2.1	First Amendment, dated as of February 28, 2008, to Note Purchase Agreement, dated as of December 3, 2002, by and between Registrant and the noteholders parties thereto. (34)
	4.3	Certificate of Designations for the 7.50% Series A-1 Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on April 23, 2009. (40)
	4.4	Certificate of Designations for the 8.0% Series B Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on April 23, 2009. (40)
	4.5	Shared Security Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Bank of New York, as Collateral Trustee (34)
	4.5.1	First Amendment to Security Agreement, dated as of April 23, 2009, by and among Westwood One, Inc., each of the subsidiaries of Westwood One, Inc. and The Bank of New York Mellon, as collateral trustee. (40)
	10.1	Credit Agreement, dated as of April 23, 2009, by and among Westwood One, Inc., Wells Fargo Foothill, LLC, and the lenders signatory thereto. (40)
	10.1.1	Waiver and First Amendment, dated as of October 14, 2009, to Credit Agreement, dated as of April 23, 2009, by and between Registrant, the lenders party thereto and Wells Fargo Foothill, LLC, as administrative agent for the lenders. (43)
	10.2	Agreement of Purchase and Sale, dated as of December 3, 2009, between the Company and NLC-Lindblade, LLC +
	10.3	Form of Indemnification Agreement between Registrant and its directors and executive officers. (1)
	10.4	Credit Agreement, dated March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank as Administrative Agent. (16)
	10.4.1	Amendment No. 1, dated as of October 31, 2006, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (23)
	10.4.2	Amendment No. 2, dated as of January 11, 2008, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (26)
	10.4.3	Amendment No. 3, dated as of February 25, 2008, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (13)

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EXHIBIT
NUMBER (A)		DESCRIPTION
	10.5	Purchase Agreement, dated as of August 24, 1987, between Registrant and National Broadcasting Company, Inc. (2)
	10.6	Agreement and Plan of Merger among Registrant, Copter Acquisition Corp. and Metro Networks, Inc. dated June 1, 1999 (9)
	10.7	Amendment No. 1 to the Agreement and Plan Merger, dated as of August 20, 1999, by and among Registrant, Copter Acquisition Corp. and Metro Networks, Inc. (10)
	10.8	Employment Agreement, effective May 1, 2003, between Registrant and Paul Gregrey, as amended by Amendment 1 to Employment Agreement, effective January 1, 2006. (35)*
	10.8.1	Amendment No. 2 to Employment Agreement, dated May 4, 2007, between Registrant and Paul Gregrey (27)*
	10.8.2	Separation Agreement, effective as of October 31, 2008, by and between Registrant and Paul Gregrey (47)*
	10.9	Employment Agreement, effective October 16, 2004, between Registrant and David Hillman, as amended by Amendment No. 1 to Employment Agreement, effective January 1, 2006. (28)*
	10.9.1	Amendment No. 2 to the Employment Agreement, effective July 10, 2007, between Registrant and David Hillman. (29)*
	10.10	Registrant Amended 1999 Stock Incentive Plan. (22)*
	10.11	Amendment to Registrant Amended 1999 Stock Incentive Plan, effective May 25, 2005 (19)*
	10.12	Registrant 1989 Stock Incentive Plan. (3)*
	10.13	Amendments to Registrant’s Amended 1989 Stock Incentive Plan. (4) (5)*
	10.14	Leases, dated August 9, 1999, between Lefrak SBN LP and Westwood One Radio Networks, Inc. and between Infinity and Westwood One Radio Networks, Inc. relating to New York, New York offices. (11)
	10.15	Form of Stock Option Agreement under Registrant’s Amended 1999 Stock Incentive Plan. (17)*
	10.16	Employment Agreement, effective January 1, 2004, between Registrant and Andrew Zaref. (18)*
	10.16.1	Amendment No. 1 to Employment Agreement, dated as of June 30, 2006, between Registrant and Andrew Zaref (24)*
	10.17	Registrant 2005 Equity Compensation Plan (19)*
	10.18	Form Amended and Restated Restricted Stock Unit Agreement under Registrant 2005 Equity Compensation Plan for outside directors (20)*
	10.19	Form Stock Option Agreement under Registrant 2005 Equity Compensation Plan for directors. (21)*
	10.20	Form Stock Option Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (21)*
	10.21	Form Restricted Stock Unit Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (20)*
	10.22	Form Restricted Stock Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (20)*
	10.23	Employment Agreement, effective as of July 16, 2007, by and between Registrant and Gary Yusko. (29)*
	10.24	Master Agreement, dated as of October 2, 2007, by and between Registrant and CBS Radio Inc. (31)
	10.25	Employment Agreement, effective as of January 8, 2008, by and between Registrant and Thomas F.X. Beusse. (30)*
	10.25.1	Separation Agreement, effective as of October 31, 2008, by and between Registrant and Thomas F.X. Beusse (38)*
	10.26	Consent Agreement, dated as of January 8, 2008, made by and among CBS Radio Inc., Registrant, and Thomas F.X. Beusse. (30)*
	10.27	Stand-Alone Stock Option Agreement, dated as of January 8, 2008, by and between Registrant and Thomas F.X. Beusse. (30)*
	10.28	Letter Agreement, dated February 25, 2008, by and between Registrant and Norman J. Pattiz (32)*
	10.29	Purchase Agreement, dated February 25, 2008, between Registrant and Gores Radio Holdings, LLC. (32)
	10.30	Registration Rights Agreement, dated March 3, 2008, between Registrant and Gores Radio Holdings, LLC. (33)
	10.31	Intercreditor and Collateral Trust Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, the financial institutions that hold the Notes and The Bank of New York, as Collateral Trustee (34)
	10.32	Shared Security Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Bank of New York, as Collateral Trustee (34)

- 43 -

EXHIBIT
NUMBER (A)		DESCRIPTION
	10.33	Shared Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of February 28, 2008, by Registrant, to First American Title Insurance Company, as Trustee, for the benefit of The Bank of New York, as Beneficiary (34)
	10.34	Mutual General Release and Covenant Not to Sue, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33)
	10.35	Amended and Restated News Programming Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33)
	10.36	Amended and Restated Technical Services Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33)
	10.37	Amended and Restated Trademark License Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33)
	10.38	Registration Rights Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33)
	10.39	Lease for 524 W. 57th Street, dated as of March 3, 2008, by and between Registrant and CBS Broadcasting Inc. (33)
	10.40	Form Westwood One Affiliation Agreement, dated February 29, 2008, between Westwood One, Inc. on its behalf and on behalf of its affiliate, Westwood One Radio Networks, Inc. and CBS Radio Inc., on its behalf and on behalf of certain CBS Radio stations (33)
	10.41	Form Metro Affiliation Agreement, dated as of February 29, 2008, by and between Metro Networks Communications, Limited Partnership, and CBS Radio Inc., on its behalf and on behalf of certain CBS Radio stations (33)
	10.42	Employment Agreement, dated as of July 7, 2008, between Registrant and Steven Kalin. (6)*
	10.42.1	Amendment No. 1 to Employment Agreement, dated as of December 22, 2008, by and between the Registrant and Steven Kalin, amending terms in a manner intended to address Section 409A of the Internal Revenue Code of 1986, as amended (47)*
	10.43	Employment Agreement, effective as of September 17, 2008, by and between Registrant and Roderick M. Sherwood, III. (36)*
	10.44	Employment Agreement, effective as of October 20, 2008, by and between Registrant and Gary Schonfeld (37)*
	10.45	Employment Agreement, effective as of April 14, 2008, by and between Registrant and Jonathan Marshall. (47)*
	10.46	License and Services Agreement, dated as of December 22, 2008, by and between Metro Networks Communications, Inc. and TrafficLand, Inc. (39)
	10.48	Employment Agreement, dated as of May 12, 2008, between Registrant and Andrew Hersam. (47)*
	10.48.1	Separation Agreement, effective as of March 31, 2009, by and between Registrant and Andrew Hersam. (45)*
	10.48.2	Consulting Agreement made as of April 27, 2009, by and between Registrant and Andrew Hersam. (45)*
	10.49	Agreement of Sublease made as of November 2, 2009, by and between Marsh & McLennan Companies, Inc. and Westwood One Radio Networks, Inc. (42)
	10.50	Form of Amendment to Employment Agreement for senior executives, amending terms in a manner intended to address Section 409A of the Internal Revenue Code of 1986, as amended (47)*
	10.51	Employment Agreement, dated April 29, 1998, between Registrant and Norman J. Pattiz. (8) *
	10.52	Single Tenant Triple Net Lease, dated as of December 17, 2009, between the Company and NLC-Lindblade, LLC +
	10.53	Amendment to Employment Agreement, dated October 27, 2003, between Registrant and Norman J. Pattiz. (16)*
	10.53.1	Amendment No. 2 to Employment Agreement, dated November 28, 2005, between Registrant and Norman J. Pattiz (7)*
	10.53.2	Amendment No. 3, effective January 8, 2008, to the employment agreement by and between Registrant and Norman Pattiz (30)*
	10.53.3	Amendment No. 4, effective December 31, 2008, to the employment agreement by and between Westwood One, Inc. and Norman Pattiz, dated as of April 29, 1998, as amended. (44)*
	10.53.4	Amendment No. 5, effective June 11, 2009, to the employment agreement by and between Westwood One, Inc. and Norman Pattiz, dated as of April 29, 1998, as amended. (44)*
	10.54	Master Mutual Release, dated as of April 23, 2009, by and among Westwood One, Inc. and the other parties party to the Securities Purchase Agreement. (40)

- 44 -

EXHIBIT
NUMBER (A)		DESCRIPTION
	10.55	Purchase Agreement, dated as of April 23, 2009, by and among Westwood One, Inc. and Gores Radio Holdings, LLC. (40)
	10.56	Amendment No. 1 to Registration Rights Agreement, dated as of April 23, 2009, between Westwood One, Inc. and Gores Radio Holdings, LLC. (40)
	10.57	Investor Rights Agreement, dated as of April 23, 2009, among Westwood One, Inc., Gores Radio Holdings, LLC and the other investors signatory thereto and the parties executing a Joinder Agreement in accordance with the terms thereto. (40)
	14.1	Westwood One, Inc. Code of Ethics. (46)
	21	List of Subsidiaries. +
	23	Consent of Independent Registered Public Accounting Firm. +
	31.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. +
	31.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. +
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. **
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **

*	Indicates a management contract or compensatory plan
+	Filed herewith.
**	Furnished herewith.
(A)	We agree to furnish supplementally a copy of any omitted schedule to the SEC upon request.
(1)	Filed as part of Registrant’s September 25, 1986 proxy statement and incorporated herein by reference.
(2)	Filed an exhibit to Registrant’s current report on Form 8-K dated September 4, 1987 and incorporated herein by reference.
(3)	Filed as part of Registrant’s March 27, 1992 proxy statement and incorporated herein by reference.
(4)	Filed as an exhibit to Registrant’s July 20, 1994 proxy statement and incorporated herein by reference.
(5)	Filed as an exhibit to Registrant’s April 29, 1996 proxy statement and incorporated herein by reference.
(6)	Filed as an exhibit to Registrant’s current report on Form 8-K dated July 7, 2008 and incorporated herein by reference.
(7)	Filed as an exhibit to Registrant’s current report on Form 8-K dated November 28, 2005 and incorporated herein by reference.
(8)	Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference.
(9)	Filed as an exhibit to Registrant’s current report on Form 8-K dated June 4, 1999 and incorporated herein by reference.
(10)	Filed as an exhibit to Registrant’s current report on Form 8-K dated October 1, 1999 and incorporated herein by reference.
(11)	Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.
(12)	Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference.
(13)	Filed as an exhibit to Registrant’s current report on Form 8-K dated February 25, 2008 (filed on February 29, 2008) and incorporated herein by reference.
(14)	Filed as an exhibit to Registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference.
(15)	Filed as an exhibit to Registrant’s current report on Form 8-K dated December 4, 2002 and incorporated herein by reference.
(16)	Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2003 and incorporated herein by reference.
(17)	Filed as an exhibit to Registrant’s current report on Form 8-K dated October 12, 2004 and incorporated herein by reference.
(18)	Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2004 and incorporated herein by reference.
(19)	Filed as an exhibit to Company’s current report on Form 8-K, dated May 25, 2005 and incorporated herein by reference.

- 45 -

(20)	Filed as an exhibit to Company’s current report of Form 8-K dated March 17, 2006 and incorporated herein by reference.
(21)	Filed as an exhibit to Registrant’s current report on Form 8-K dated December 5, 2005 and incorporated herein by reference.
(22)	Filed as an exhibit to Registrant’s April 30, 1999 proxy statement and incorporated herein by reference.
(23)	Filed as an exhibit to Registrant’s current report on Form 8-K dated November 6, 2006 and incorporated herein by reference.
(24)	Filed as an exhibit to Registrant’s current report on Form 8-K dated June 30, 2006 and incorporated herein by reference.
(25)	Filed as an exhibit to Registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2006 and incorporated herein by reference.
(26)	Filed as an exhibit to Registrant’s current report on Form 8-K dated January 11, 2008 and incorporated herein by reference.
(27)	Filed as an exhibit to Registrant’s current report on Form 10-Q for the quarter ended March 31, 2007 and incorporated herein by reference.
(28)	Filed as an exhibit to Registrant’s annual report on Form 10-K/A for the year ended December 31, 2006 and incorporated herein by reference.
(29)	Filed as an exhibit to Company’s current report on Form 8-K dated July 10, 2007 and incorporated herein by reference.
(30)	Filed as an exhibit to Company’s current report on Form 8-K dated January 8, 2008 and incorporated herein by reference.
(31)	Filed as an exhibit to Company’s current report on Form 8-K dated October 2, 2007 and incorporated herein by reference.
(32)	Filed as an exhibit to Registrant’s current report on Form 8-K dated February 25, 2008 (filed on February 27, 2008) and incorporated herein by reference.
(33)	Filed as an exhibit to Registrant’s current report on Form 8-K dated March 3, 2008 and incorporated herein by reference.
(34)	Filed as an exhibit to Registrant’s current report on Form 8-K dated February 28, 2008 (filed on March 5, 2008) and incorporated herein by reference.
(35)	Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2005 and incorporated herein by reference.
(36)	Filed as an exhibit to Registrant’s current report on Form 8-K dated September 18, 2008 and incorporated herein by reference.
(37)	Filed as an exhibit to Registrant’s current report on Form 8-K dated October 24, 2008 and incorporated herein by reference.
(38)	Filed as an exhibit to Registrant’s current report on Form 8-K dated October 30, 2008 and incorporated herein by reference.
(39)	Filed as an exhibit to Registrant’s current report on Form 8-K dated December 22, 2008 and incorporated herein by reference.
(40)	Filed as an exhibit to Company’s current report on Form 8-K dated April 27, 2009 and incorporated herein by reference.
(41)	Filed as an exhibit to Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2009 and incorporated herein by reference.
(42)	Filed as an exhibit to Company’s current report on Form 8-K dated November 20, 2009 and incorporated herein by reference.
(43)	Filed as an exhibit to Amendment No. 3 of the Company’s registration statement on Form S-1 and incorporated herein by reference.
(44)	Filed as an exhibit to Company’s current report on Form 8-K dated June 18, 2009 and incorporated herein by reference.
(45)	Filed as an exhibit to Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference.
(46)	Filed as an exhibit to Company’s current report on Form 8-K dated April 27, 2009 and incorporated herein by reference.
(47)	Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.

- 46 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	WESTWOOD ONE, INC.
Date: March 31, 2010	By:	/S/ RODERICK M. SHERWOOD III
		Roderick M. Sherwood III
		President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/S/ RODERICK M. SHERWOOD III Roderick M. Sherwood III	President and Chief Financial Officer (Principal Executive Officer)	March 31, 2010
/S/ NORMAN J. PATTIZ Norman J. Pattiz	Chairman of the Board of Directors	March 31, 2010
/S/ MARK STONE Mark Stone	Vice-Chairman of the Board of Directors	March 31, 2010
/S/ ANDREW P. BRONSTEIN	Director	March 31, 2010
Andrew P. Bronstein
/S/ JONATHAN I. GIMBEL	Director	March 31, 2010
Jonathan I. Gimbel
/S/ SCOTT M. HONOUR	Director	March 31, 2010
Scott M. Honour
/S/ H MELVIN MING	Director	March 31, 2010
H. Melvin Ming
/S/ MICHAEL F. NOLD	Director	March 31, 2010
Michael F. Nold
/S/ EMANUEL NUNEZ	Director	March 31, 2010
Emanuel Nunez
/S/ JOSEPH P. PAGE	Director	March 31, 2010
Joseph P. Page
/S/ RONALD W. WUENSCH	Director	March 31, 2010
Ronald W. Wuensch

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

No annual report or proxy material has been sent to security holders as of the date of this report.

- 47 -

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE

	Page
1. Consolidated Financial Statements
—Reports of Independent Registered Public Accounting Firm		F-2
—Consolidated Balance Sheets		F-4
—Consolidated Statements of Operations		F-5
—Consolidated Statements of Stockholders’ Equity		F-6
—Consolidated Statements of Cash Flows		F-7
—Notes to Consolidated Financial Statements		F-8
2. Financial Statement Schedule:
II. —Valuation and Qualifying Accounts		II-1

All other schedules have been omitted because they are not applicable, the required information is immaterial, or the required information is included in the consolidated financial statements or notes thereto.

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Westwood One, Inc.:

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of cash flows and of stockholders’ equity (deficit) present fairly, in all material respects, the financial position of Westwood One, Inc. and its subsidiaries at December 31, 2009 and the results of their operations and their cash flows for the period from April 24, 2009 through December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information for the period from April 24, 2009 through December 31, 2009 when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting, appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for business combinations in 2009.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/S/ PricewaterhouseCoopers LLP
New York, New York
March 31, 2010

F-2

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Westwood One, Inc.:

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of cash flows and of stockholders’ equity (deficit) present fairly, in all material respects, the financial position of Westwood One, Inc. (Predecessor Company) and its subsidiaries at December 31, 2008 and the results of operations and cash flows for the period from January 1, 2009 to April 23, 2009, and for the years ended December 31, 2008 and 2007 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information for the period from January 1, 2009 through April 23, 2009 and for the years ended December 31, 2008 and 2007 when read in conjunction with the related consolidated financial statements. The Company’s management is responsible for these financial statements and financial statement schedule. Our responsibility is to express an opinion on these financial statements and on the financial statement schedule based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinion.

/S/ PricewaterhouseCoopers LLP
New York, New York

March 31, 2010

F-3

WESTWOOD ONE, INC.

CONSOLIDATED BALANCE SHEET
(In thousands, except per share amounts)

	Successor Company			Predecessor Company
	December 31,			December 31,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	4,824		$	6,437
Accounts receivable, net of allowance for doubtful accounts of $2,723 (2009) and $3,632 (2008)		87,568			94,273
Federal income tax receivable		12,355			—
Prepaid and other assets		20,994			18,758
Total current assets		125,741			119,468
Property and equipment, net		36,265			30,417
Intangible assets, net		103,400			2,660
Goodwill		38,917			33,988
Deferred tax asset		—			14,220
Other assets		2,995			4,335
TOTAL ASSETS	$	307,318		$	205,088
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	40,164		$	27,807
Amounts payable to related parties		129			22,680
Deferred revenue		3,682			2,397
Accrued expenses and other liabilities		28,864			25,565
Current maturity of long-term debt		13,500			249,053
Total current liabilities		86,339			327,502
Long-term debt		122,262			—
Deferred tax liability		50,932			—
Due to Gores		11,165			—
Other liabilities		18,636			6,993
TOTAL LIABILITIES		289,334			334,495
Commitments and Contingencies
Redeemable preferred stock: $.01 par value, authorized: 10,000 shares; issued and outstanding: 75 shares of Series A Convertible Preferred Stock; liquidation preference $1,000 per share, plus accumulated dividends		—			73,738
TOTAL PREFERRED STOCK
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $.01 par value: authorized: 5,000,000 shares (2009) and 300,000 (2008) issued and outstanding: 20,544 (2009) and 101,253 (2008)		205			1,013
Class B stock, $.01 par value: authorized: 3,000 shares; issued and outstanding: 0 (2009) and 292 (2008)		—			3
Additional paid-in capital		81,268			293,120
Net unrealized gain		111			267
Accumulated deficit		(63,600	)		(497,548	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		17,984			(203,145	)
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	307,318		$	205,088

See accompanying notes to consolidated financial statements

F-4

WESTWOOD ONE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

	Successor Company			Predecessor Company
	For the Period			For the Period			For the Year Ended
	April 24, 2009 to			January 1, 2009			December 31,
	December 31, 2009			to April 23, 2009			2008			2007
Revenue	$	228,860		$	111,474		$	404,416		$	451,384
Operating costs		213,521			111,580			360,492			350,440
Depreciation and amortization		21,473			2,585			11,052			19,840
Corporate general and administrative expenses		7,683			4,248			13,442			13,171
Goodwill and intangible impairment		50,501			—			430,126			—
Restructuring charges		3,976			3,976			14,100			—
Special charges		5,554			12,819			13,245			4,626
Total operating costs		302,708			135,208			842,457			388,077
Operating (loss) income		(73,848	)		(23,734	)		(438,041	)		63,307
Interest expense		14,782			3,222			16,651			23,626
Other (income) expense		(5	)		(359	)		(12,369	)		(411	)
(Loss) income before income tax		(88,625	)		(26,597	)		(442,323	)		40,092
Income tax (benefit) expense		(25,025	)		(7,635	)		(14,760	)		15,724
Net (loss) income	$	(63,600	)	$	(18,962	)	$	(427,563	)	$	24,368
Net (loss) income attributable to common stockholders	$	(145,148	)	$	(22,038	)	$	(430,644	)	$	24,363
(Loss) earnings per share
Common Stock
Basic	$	(11.75	)	$	(43.64	)	$	(878.73	)	$	56.59
Diluted	$	(11.75	)	$	(43.64	)	$	(878.73	)	$	56.38
Class B stock
Basic	$	—		$	—		$	—		$	3.20
Diluted	$	—		$	—		$	—		$	3.20
Weighted average shares outstanding:
Common Stock
Basic		12,351			505			490			431
Diluted		12,351			505			490			432
Class B stock
Basic		—			1			1			1
Diluted		—			1			1			1

See accompanying notes to consolidated financial statements

F-5

WESTWOOD ONE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(In thousands)

Predecessor Company
															Unrealized			Total
									Additional						Gain (Loss) on			Stock-			Compre-
	Common Stock				Class B Stock				Paid-in			(Accumulated			Available for			holders’			hensive
	Shares		Amount		Shares		Amount		Capital			Deficit)			Sale Securities			Equity			Income (Loss)
Balance as of January 1, 2007		86,311	$	864		292	$	3	$	291,847		$	(94,353	)	$	4,570		$	202,931
Net income		—		—		—		—		—			24,368			—			24,368		$	24,368
Comprehensive income		—		—		—		—		—			—			1,385			1,385			1,385
Equity based compensation		—		—		—		—		9,606			—			—			9,606			—
Issuance common stock under equity based compensation plans		794		8		—		—		(344	)		—			—			(336	)		—
Cancellations of vested equity grants		—		—		—		—		(7,099	)		—			—			(7,099	)		—
Cancellation of warrants		—		—		—		—		(1,561	)		—			—			(1,561	)		—
Cash dividend paid		—		—		—		—		(1,663	)		—			—			(1,663	)		—
Balance as of December 31, 2007		87,105		872		292		3		290,786			(69,985	)		5,955			227,631		$	25,753
Net loss		—		—		—		—		—			(427,563	)		—			(427,563	)	$	(427,563	)
Comprehensive loss		—		—		—		—		—			—			(5,688	)		(5,688	)		(5,688	)
Equity based compensation		—		—		—		—		5,443			—			—			5,443			—
Issuance common stock under equity based compensation plans		110		1		—		—		(1,727	)		—			—			(1,726	)		—
Issuance of common stock		14,038		140		—		—		22,471			—			—			22,611			—
Issuance of warrants		—		—		—		—		440			—			—			440			—
Cancellations of vested equity grants		—		—		—		—		(4,722	)		—			—			(4,722	)		—
Cancellation of warrants		—		—		—		—		(19,571	)		—			—			(19,571	)		—
Balance as of December 31, 2008		101,253		1,013		292		3		293,120			(497,548	)		267			(203,145	)	$	(433,251	)
Net loss		—		—		—		—		—			(18,962	)		—			(18,962	)	$	(18,962	)
Comprehensive income		—		—		—		—		—			—			219			219			219
Equity based compensation		—		—		—		—		2,110			—			—			2,110			—
Issuance common stock under equity based compensation plans		777		7		—		—		(939	)		—			—			(932	)		—
Preferred stock accretion		—		—		—		—		(6,157	)		—			—			(6,157	)		—
Cancellations of vested equity grants		—		—		—		—		(890	)		—			—			(890	)		—
Balance as of April 23, 2009		102,030	$	1,020		292	$	3	$	287,244		$	(516,510	)	$	486		$	(227,757	)	$	(18,743	)

Successor Company
																	Unrealized		Total
											Additional						Gain (Loss) on		Stock-			Compre-
	Common Stock				Class B Stock						Paid-in			(Accumulated			Available for		holders’			hensive
	Shares		Amount		Shares			Amount			Capital			Deficit)			Sale Securities		Equity			Income (Loss)
Revalued Capital		510	$	5		292		$	3		$	2,256		$	—		$	—	$	2,264
Net loss		—		—		—			—			—			(63,600	)		—		(63,600	)	$	(63,600	)
Comprehensive income		—		—		—			—			—			—			111		111			111
Equity based compensation		—		—		—			—			3,310			—			—		3,310			—
Issuance common stock for acquisition		232		2		—			—			1,043			—			—		1,045			—
Issuance common stock under equity based compensation plans		2		—		—			—			(219	)		—			—		(219	)		—
Class B conversion		1		—		(292	)		(3	)					—			—		(3	)		—
Preferred stock conversion		19,799		198		—			—			81,353			—			—		81,551			—
Preferred stock accretion		—		—		—			—			(4,661	)		—			—		(4,661	)		—
Cancellations of vested equity grants		—		—		—			—			(1,814	)		—			—		(1,814	)		—
Beneficial conversion feature		—		—		—			—			76,887			—			—		76,887			—
Beneficial conversion feature accretion		—		—		—			—			(76,887	)		—			—		(76,887	)		—
Balance as of December 31, 2009		20,544	$	205		—		$	—		$	81,268		$	(63,600	)	$	111	$	17,984		$	(63,489	)

See accompanying notes to consolidated financial statements

F-6

WESTWOOD ONE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Successor Company			Predecessor Company
	For the			For the
	Period			Period
	April 24, 2009 to			January 1, 2009			Year Ended December 31,
	December 31, 2009			to April 23, 2009			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(63,600	)	$	(18,962	)	$	(427,563	)	$	24,368
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		21,473			2,585			11,052			19,840
Goodwill and intangible impairment		50,501			—			430,126			—
Loss on disposal of property and equipment		—			188			1,257			—
Deferred taxes		(25,038	)		(6,873	)		(13,907	)		(6,480	)
Non-cash stock compensation		3,310			2,110			5,443			9,606
Gain on sale of marketable securities		—			—			(12,420	)		—
Amortization of deferred financing costs		—			331			1,674			481
		(13,354	)		(20,621	)		(4,338	)		47,815
Changes in assets and liabilities, net of effect of business combination:
(Increase) decrease in accounts receivable		(3,608	)		10,313			13,998			7,234
(Increase) decrease in prepaid and other assets		(2,542	)		3,187			(2,515	)		(990	)
Increase (decrease) in deferred revenue		749			536			(3,418	)		(2,335	)
Increase (decrease) in income taxes payable		180			28			(7,246	)		1,097
Increase (decrease) in accounts payable, accrued expenses and other liabilities		285			2,861			13,736			(29,435	)
(Decrease) increase in amounts payable to related parties		(5,852	)		2,919			(8,179	)		4,515
Net cash (used in ) provided by operating activities		(24,142	)		(777	)		2,038			27,901
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(5,184	)		(1,384	)		(7,313	)		(5,849	)
Acquisition of business		(1,250	)		—			—			—
Proceeds from sale of marketable securities		—			—			12,741			—
Net cash (used in) provided by investing activities		(6,434	)		(1,384	)		5,428			(5,849	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from term loan		20,000			—			—			—
Proceeds from Senior Credit Facility		16,000			—			—			—
Repayment of Senior Credit Facility		(11,000	)		—			—			—
Issuance of Series B Convertible Preferred Stock		25,000			—			—			—
Debt repayments		(25,000	)		—			—			—
Proceeds from building financing		6,998			—			—			—
Payments of capital lease obligations		(603	)		(271	)		(104,737	)		(25,730	)
Deferred financing costs		—			—			(1,556	)		—
Issuance of Series A Convertible Preferred Stock and warrants		—			—			74,168			—
Issuance of common stock		—			—			22,760			—
Termination of interest swap agreements		—			—			2,150			—
Dividend payments		—			—			—			(1,663	)
Net cash provided by (used in) financing activities		31,395			(271	)		(7,216	)		(27,393	)
Net increase (decrease) in cash and cash equivalents		819			(2,432	)		250			(5,341	)
Cash and cash equivalents at beginning of period		4,005			6,437			6,187			11,528
Cash and cash equivalents at end of period	$	4,824		$	4,005		$	6,437		$	6,187
Supplemental Schedule of Cash Flow Information:
Cash paid during the period for :
Interest	$	12,960		$	—		$	10,146		$	24,239
Income taxes, net of refunds		—			—			10,179			21,814
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Cancellation of long-term debt (1)	$	—		$	(252,060	)	$	—		$	—
Issuance of new long-term debt		117,500			—			—			—
Preferred stock — conversion to common stock (2)		81,551			—			—			—
Issuance of shares for asset acquisition		1,045			—			—			—
Class B — conversion to common stock		(3	)		—			—			—

(1)	34,962 shares of the Series B Preferred Stock was issued to our lenders in exchange in part for the cancellation of our prior indebtedness.
(2)	All of the Series A Preferred Stock was exchanged for all of the Series A-1 Preferred Stock. See accompanying notes to consolidated financial statements

See accompanying notes to consolidated financial statements

F-7

WESTWOOD ONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)

NOTE 1 — Basis of Presentation

Nature of Business

In this report, “Westwood One,” “Company,” “registrant,” “we,” “us” and “our” refer to Westwood One, Inc. We are a provider of programming, information services and content to the radio, television and digital sectors. We are one of the largest domestic outsource providers of traffic reporting services and one of the nation’s largest radio networks, producing and distributing national news, sports, music, talk and entertainment programs, features and live events, in addition to local news, sports, weather, video news and other information programming. We deliver our content to approximately 5,000 radio and 170 television stations in the U.S. We exchange our content with radio and television stations for commercial airtime, which we then sell to local, regional and national advertisers.

From 1994 to 2008, Westwood One was managed by CBS Radio, Inc. (“CBS Radio”, previously known as Infinity Broadcasting Corporation (“Infinity”), a wholly-owned subsidiary of CBS Corporation, pursuant to a management agreement between us and CBS Radio (then Infinity) which was scheduled to expire on March 31, 2009 (the “Management Agreement”)). On October 2, 2007, we entered into a new arrangement with CBS Radio that was approved by stockholders on February 12, 2008 and closed on March 3, 2008. On such date, the Management Agreement terminated. See Note 3 — Related Party Transactions for additional information with respect to the new arrangement.

At December 31, 2009, our principal sources of liquidity were our cash and cash equivalents of $4,824 and $8,781 available to us under our revolving credit facility as described in Note 8 - Debt, which total $13,605 as of the date hereof.

In addition, cash flow from operations is a principal source of funds. We have experienced significant operating losses since 2005 as a result of increased competition in our local and regional markets, reductions in national audience levels, and reductions in our local and regional sales force. Also, in 2009 our operating income has been affected by the economic downturn in the United States and reduction in the overall advertising market. Based on our 2010 projections, which we believe use reasonable assumptions regarding the current economic environment, we estimate that cash flows from operations will be sufficient to fund our cash requirements, including scheduled interest and required principal payments on our outstanding indebtedness, projected working capital needs, and provide us sufficient Adjusted EBITDA (as defined in our Senior Credit Facility) to comply with our debt covenants for at least the next 12 months.

While our 2010 projections indicate we would attain sufficient Adjusted EBITDA (as defined in our Senior Credit Facility) to comply with our debt leverage covenant levels in 2010 (prior to those covenants being amended in March 2010), management did not believe there was not sufficient cushion in our projections to outweigh the current unpredictability in the economy and our business. Accordingly, we determined it was prudent to amend our debt leverage covenants on March 30, 2010 in order to provide our business with (1) greater operational flexibility and (2) a greater time period to recover from the effects of the weakened economy and to incorporate the full benefit of the revenue initiatives and re-engineering and cost reduction actions taken by the Company from mid-2008 and throughout 2009. Notwithstanding these amendments to our covenants, if our operating income continues to decline, we cannot provide assurances that there will be sufficient liquidity available to us to invest in our business or Adjusted EBITDA to comply with our debt covenants.

Refinancing

On April 23, 2009, we completed a refinancing of substantially all of our outstanding long-term indebtedness (approximately $241,000 in principal amount) and a recapitalization of our equity (the “Refinancing”). As part of the Refinancing we entered into a Purchase Agreement (the “Purchase Agreement”) with Gores Radio Holdings, LLC (currently our ultimate parent) (together with certain related entities “Gores”). In exchange for the then outstanding shares of Series A Preferred Stock held by Gores, we issued 75 shares of 7.50% Series A-1 Convertible Preferred Stock, par value $0.01 per share (the “Series A-1 Preferred Stock”). In addition Gores purchased 25 shares of 8.0% Series B Convertible Preferred Stock (the “Series B Preferred Stock” and together with the Series A-1 Preferred Stock, the “Preferred Stock”), for an aggregate purchase price of $25,000.

F-8

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Additionally and simultaneously, we entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with: (1) holders of our then outstanding senior notes (“Old Notes”) both series of which were issued under the Note Purchase Agreement, dated as of December 3, 2002 and (2) lenders under the Credit Agreement, dated as of March 3, 2004 (the “Old Credit Agreement”). Gores purchased at a discount approximately $22,600 in principal amount of our then existing debt held by debt holders who did not wish to participate in the Senior Notes, which upon completion of the Refinancing was exchanged for $10,797 of the Senior Notes. We also entered into a senior credit facility pursuant to which we have a $15,000 revolving credit facility on a senior unsecured basis and a $20,000 unsecured non-amortizing term loan (collectively, the “Senior Credit Facility”), which obligations are subordinated to the Senior Notes. Gores also agreed to guarantee our Senior Credit Facility and payments due to the NFL for the license and broadcast rights to certain NFL games and NFL-related programming. Gores currently holds $11,165 (including paid in kind interest (“PIK”)) of the Senior Notes shown in the line item Due to Gores on our balance sheet. Pursuant to the Securities Purchase Agreement, in consideration for releasing all of their respective claims under the Old Notes and the Old Credit Agreement, the participating debt holders collectively received in exchange for their outstanding debt: (1) $117,500 of new senior secured notes maturing July 15, 2012 (the “Senior Notes”); (2) 34,962 shares of Series B Preferred Stock, and (3) a one-time cash payment of $25,000.

As a result of the Refinancing, Gores acquired approximately 75.1% of our then outstanding equity (in preferred and common stock) and our then existing lenders acquired approximately 22.7% of our then outstanding equity (in preferred and common stock). We have considered the ownership held by Gores and our existing debt holders as a collaborative group in accordance with the authoritative guidance. As a result, we have followed the acquisition method of accounting, as required by the authoritative guidance, and have applied the Securities and Exchange Commission (“SEC”) rules and guidance regarding “push down” accounting treatment. Accordingly, our consolidated financial statements and transactional records prior to the closing of the Refinancing reflect the historical accounting basis in our assets and liabilities and are labeled Predecessor Company, while such records subsequent to the Refinancing are labeled Successor Company and reflect the push down basis of accounting for the new fair values in our financial statements. This is presented in our consolidated financial statements by a vertical black line division which appears between the columns entitled Predecessor Company and Successor Company on the statements and relevant notes. The black line signifies that the amounts shown for the periods prior to and subsequent to the Refinancing are not comparable.

Based on the complex structure of the Refinancing, a valuation was performed to determine the acquisition price using the Income Approach employing a Discounted Cash Flow (“DCF”) methodology. The DCF method explicitly recognizes that the value of a business enterprise is equal to the present value of the cash flows that are expected to be available for distribution to the equity and/or debt holders of a company. In the valuation of a business enterprise, indications of value are developed by discounting future net cash flows available for distribution to their present worth at a rate that reflects both the current return requirements of the market and the risk inherent in the specific investment.

We used a multi-year DCF model to derive a Total Invested Capital value which was adjusted for cash, non-operating assets and any negative net working capital to calculate a Business Enterprise Value which was then used to value our equity. In connection with the Income Approach portion of this exercise, we made the following assumptions: (1) the discount rate was based on an average of a range of scenarios with rates between 15% and 16%; (2) management’s estimates of future performance of our operations; and (3) a terminal growth rate of 2%. The discount rate and market growth rate reflect the risks associated with the general economic pressure impacting both the economy in general and more specifically and substantially the advertising industry. All costs and professional fees incurred as part of the Refinancing costs totaling $13,895 have been expensed as special charges in 2009 ($12,699 on and prior to April 23, 2009 for the Predecessor Company and $1,196 on and after April 24, 2009 for the Successor Company).

F-9

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

The allocation of the Business Enterprise Value at April 24, 2009 is as follows:

Current Assets	$	104,641
Goodwill		86,414
Intangibles		116,910
Property, plant and equipment, net		36,270
Other assets		21,913
Current liabilities		81,160
Deferred income taxes		77,879
Due to Gores		10,797
Other liabilities		10,458
Long-term debt		106,703
Total Business Enterprise Value	$	79,151

We finalized the valuation and completed the allocation of the Business Enterprise Value, except for income taxes, and expect to complete them no later than one year from the acquisition date of April 23, 2009.

We recorded an adjustment to goodwill in December 2009 related to a correction of our liabilities for uncertain tax provisions for $3,165 as of April 23, 2009. In the 23-day period ended April 23, 2009, we recorded a charge to special charges for insurance expense of $261 which should have been capitalized and expensed through April 30, 2010. The appropriate adjustments, including a reduction to our opening balance of goodwill of $261 at April 24, 2009, were recorded in the period from April 24, 2009 to December 31, 2009.

On July 9, 2009, Gores converted 3.5 shares of Series A-1 Convertible Preferred Stock into 103,513 shares of common stock (without taking into account the 200 for 1 reverse stock split that occurred on August 3, 2009 as described in more detail below). Pursuant to the terms of our Certificate of Incorporation, the 292 outstanding shares of our Class B common stock were automatically converted into 292 shares of common stock (without taking into account the 200 for 1 reverse stock split that occurred on August 3, 2009 as described in more detail below) because as a result of such conversion by Gores the voting power of the Class B common stock, as a group, fell below ten percent (10%) of the aggregate voting power of issued and outstanding shares of common stock and Class B common stock.

On August 3, 2009, we held a special meeting of our stockholders to consider and vote upon, among other proposals, amending our Restated Certificate of Incorporation to increase the number of authorized shares of our common stock from 300,000 to 5,000,000 and to amend the Certificate of Incorporation to effect a 200 for 1 reverse stock split of our outstanding common stock (the “Charter Amendments”). On August 3, 2009, the stockholders approved the Charter Amendments, which resulted in the automatic conversion of all shares of preferred stock into common stock and the cancellation of warrants to purchase 50 shares of common stock issued to Gores as part of their investment in our Series A Preferred Stock. There are no longer any issued and outstanding warrants to purchase our common stock or any shares of our capital stock that have any preference over the common stock with respect to voting, liquidation, dividends or otherwise. Under the Charter Amendments, each of the newly authorized shares of common stock has the same rights and privileges as previously authorized common stock. Adoption of the Charter Amendments did not affect the rights of the holders of our currently outstanding common stock nor did it change the par value of the common stock.

The following unaudited pro forma financial summary for the years ended December 31, 2009 and 2008 gives effect to the Refinancing and the resultant acquisition accounting. The pro forma information does not purport to be indicative of what the financial condition or results of operations would have been had the Refinancing been completed on the applicable dates of the pro forma financial information.

	Unaudited Pro Forma
	Year ended December 31,
	2009			2008
Revenue	$	340,334		$	404,416
Net loss		(78,177	)		(466,010	)

F-10

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Financial Statement Presentation

The preparation of our financial statements in conformity with the authoritative guidance of the Financial Accounting Standards Board (“FASB”) for generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities. Management continually evaluates its estimates and judgments including those related to allowances for doubtful accounts, useful lives of property, plant and equipment, goodwill and intangible assets and the valuation of such, barter inventory, fair value of stock options granted, forfeiture rate of equity based compensation grants, income taxes and valuation allowances on such and other contingencies. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable in the circumstances. Actual results may differ from those estimates under different assumptions or conditions.

In June 2009, the FASB issued a standard that established the FASB Accounting Standards Codification (the “ASC”), which effectively amended the hierarchy of U.S. GAAP and established only two levels of GAAP, authoritative and non-authoritative. All previously existing accounting standard documents were superseded, and the ASC became the single source of authoritative, nongovernmental GAAP, except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. All other non-grandfathered, non-SEC accounting literature not included in the ASC became non-authoritative. The ASC was intended to provide access to the authoritative guidance related to a particular topic in one place. New guidance issued subsequent to June 30, 2009 will be communicated by the FASB through Accounting Standards Updates. The ASC was effective for financial statements for interim or annual reporting periods ending after September 15, 2009. We adopted and applied the provisions of the ASC and have eliminated references to pre-ASC accounting standards throughout our consolidated financial statements. Our adoption of the ASC did not have a material impact on our consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of all majority and wholly-owned subsidiaries. All significant intercompany accounts, transactions and balances have been eliminated in consolidation.

Segment Information

We manage and report our business in two operating segments: Metro Traffic and Network. We evaluated performance based on segment revenue and operating (loss) income. Administrative functions such as finance, human resources and information systems are centralized. However, where applicable, portions of the administrative function costs are allocated between the operating segments. The operating segments do not share programming content.

Revenue Recognition

Revenue is recognized when earned, which occurs at the time commercial advertisements are broadcast. Payments received in advance are deferred until earned and such amounts are included as a component of deferred revenue in the accompanying Consolidated Balance Sheet.

We consider matters such as credit and inventory risks, among others, in assessing arrangements with our programming and distribution partners. In those circumstances where we function as the principal in the transaction, the revenue and associated operating costs are presented on a gross basis in the Consolidated Statement of Operations. In those circumstances where we function as an agent or sales representative, our effective commission is presented within revenue with no corresponding operating expenses.

Barter transactions represent the exchange of commercial announcements for programming rights, merchandise or services. These transactions are recorded at the fair market value of the commercial announcements relinquished, or the fair value of the merchandise and services received. A wide range of factors could materially affect the fair market value of commercial airtime sold in future periods (See the section entitled “Cautionary Statement regarding Forward-Looking Statements” in Item 1 and Item 1A Risk Factors), which would require us to increase or decrease the amount of assets and liabilities and related revenue and expenses recorded from prospective barter transactions.

F-11

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Revenue is recognized on barter transactions when the advertisements are broadcast. Expenses are recorded when the merchandise or service is utilized. Barter revenue of $9,357, $5,357, $13,152 and $15,854 has been recognized for the period from April 24, 2009 to December 31, 2009 and January 1, 2009 to April 23, 2009 and the years ended December 31, 2008 and 2007, respectively, and barter expenses of $8,750, $5,541, $12,740 and $16,116 have been recognized for the period from April 24, 2009 to December 31, 2009 and January 1, 2009 to April 23, 2009 and the years ended December 31, 2008 and 2007, respectively.

Equity-Based Compensation

We have equity-based compensation plans, which provide for the grant of stock options, restricted stock and restricted stock units. We recognize the cost of the equity-based awards following accepted authoritative quidance and use the estimated fair value of the awards on the date of grant over their requisite service period. We used the Black-Scholes-Merton option-pricing model to determine the fair value of stock options awards.

Depreciation

Depreciation is computed using the straight line method over the estimated useful lives of the assets, as follows:

Buildings	30 years
Leasehold improvements	Shorter of economic useful life or lease term
Recording, broadcasting and studio equipment	3 – 10 years
Furniture and equipment and other	3 – 10 years

Cash Equivalents

We consider all highly liquid instruments purchased with a maturity of less than three months to be cash equivalents. The carrying amount of cash equivalents approximates fair value because of the short maturity of these instruments.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses which may result from the inability of our customers to make required payments. We base our allowance on the likelihood of recoverability of accounts receivable by aging category, based on past experience and taking into account current collection trends that are expected to continue. If economic or specific industry trends worsen beyond our estimates, we would be required to increase our allowance for doubtful accounts. Alternatively, if trends improve beyond our estimates, we would be required to decrease our allowance for doubtful accounts. Our estimates are reviewed periodically, and adjustments are reflected through bad debt expense in the period they become known. Changes in our bad debt experience can materially affect our results of operations. Our allowance for bad debts requires us to consider anticipated collection trends and requires a high degree of judgment. In addition, our results in any reporting period could be impacted by relatively few but significant bad debts.

Program Rights

Program rights are stated at the lower of cost, less accumulated amortization, or net realizable value. Program rights and the related liabilities are recorded when the license period begins and the program is available for use, and are charged to expense when the event is broadcast.

F-12

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Goodwill and Intangible Assets

Goodwill represents the excess of cost over fair value of net assets of businesses acquired. In accordance with the authoritative guidance the value assigned to goodwill and indefinite lived intangible assets is not amortized to expense, but rather the estimated fair value of the reporting unit is compared to its carrying amount on at least an annual basis to determine if there is a potential impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit goodwill and intangible assets is less than their carrying value.

Prior to 2008, we operated as a single reportable operating segment. As part of our re-engineering initiative implemented in the second half of 2008, we installed separate management for the Network and Metro Traffic segments providing discrete financial information and management oversight. Accordingly, we have determined that each division is an operating segment. A reporting unit is the operating segment or a business which is one level below the operating segment. Our reporting units are consistent with our operating segments and impairment has been tested at this level.

In order to estimate the fair values of assets and liabilities a company may use various methods including discounted cash flows, excess earnings, profit split and income methods. Utilization of any of these methods requires that a company make important assumptions and judgments about future operating results, cash flows, discount rates, and the probability of various scenarios, as well as the proportional contribution of various assets to results and other judgmental allocations. In conjunction with the change to two reporting units, we determined that using the discounted cash flow model in its entirety to be the best evaluation of the fair value of our two reporting units. In prior periods, we evaluated the fair value of our one reporting unit based on a weighted average of seventy-five percent from a discounted cash flow approach and twenty-five percent from the quoted market price of our stock.

During 2009 and 2008, we determined our goodwill was impaired by $50,401 and $430,126, respectively. See Note 5 — Goodwill for additional information regarding the determination of goodwill impairment.

Intangible assets subject to amortization primarily consist of affiliation agreements that were acquired in prior years. Such affiliate contracts, when aggregated, create a nationwide audience that is sold to national advertisers. The intangible asset values assigned to the affiliate agreements for each acquisition were determined based upon the expected discounted aggregate cash flows to be derived over the life of the affiliate relationship. The method of amortizing the intangible asset values reflects, based upon our historical experience, an accelerated rate of attrition in the affiliate base over the expected life of the affiliate relationships. Accordingly, we amortized the value assigned to affiliate agreements on an accelerated basis (periods ranging from 4 to 20 years with a weighted-average amortization period of approximately 8 years) consistent with the pattern of cash flows which are expected to be derived. We review our finite-lived intangible assets for recoverability whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is assessed by comparison to associated undiscounted cash flows.

Income Taxes

We use the asset and liability method of financial accounting and reporting for income taxes. Deferred income taxes reflect the tax impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. We classified interest expense and penalties related to unrecognized tax benefits as income tax expense.

The authoritative guidance clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return. The evaluation of a tax position in accordance with this interpretation is a two-step process. The first step is recognition, in which the enterprise determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of the liability to recognize in the financial statements.

F-13

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Earnings per Share

Basic earnings, or loss, per share is based on the weighted average number of shares of common stock outstanding during each year. Diluted earnings per share is based on the weighted average number of shares of common stock and dilutive securities outstanding during each year. See Note 2 - - Earnings Per Share.

Financial Instruments

We may use derivative financial instruments (fixed-to-floating interest rate swap agreements) for the purpose of hedging specific exposures and hold all derivatives for purposes other than trading. All derivative financial instruments held reduce the risk of the underlying hedged item and are designated at inception as hedges with respect to the underlying hedged item. Hedges of fair value exposure are entered into in order to hedge the fair value of a recognized asset, liability or a firm commitment. Derivative contracts are entered into with major creditworthy institutions to minimize the risk of credit loss and are structured to be 100% effective. In 2007, we had designated the interest rate swap agreements as a fair value hedge. Accordingly, the fair value of the swaps were included in other current assets (liabilities) on the consolidated balance sheet with a corresponding adjustment to the carrying value of the underlying debt at December 31, 2007. In December 2008, we terminated the remaining interest rate swap agreements, resulting in cash proceeds of $2,150, which has been classified as a financing cash inflow in our Statement of Cash Flows. The resulting gain of $2,150 from the termination of the derivative contracts was amortized in the Predecessor Company through April 23, 2009. We did not hold derivative financial instruments at any time during the periods ending April 23, 2009 and December 31, 2009.

Recent Accounting Pronouncements

In May 2009, the FASB issued new guidance on the treatment of subsequent events which is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This new guidance was effective for fiscal years and interim periods ended after June 15, 2009, and must be applied prospectively. We adopted and applied the provisions of the new guidance for our second quarter ended June 30, 2009. Our adoption of the new guidance did not have an impact on our consolidated financial position or results of operations.

In April 2009, the FASB issued new guidance intended to provide additional application guidance and enhanced disclosures regarding fair value measurements and impairments of securities. New guidance related to determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly provides additional guidelines for estimating fair value in accordance with pre-existing guidance on fair value measurements. New guidance on recognition and presentation of other-than-temporary impairments provides additional guidance related to the disclosure of impairment losses on securities and the accounting for impairment losses on debt securities, but does not amend existing guidance related to other-than-temporary impairments of equity securities. Lastly, new guidance on interim disclosures about the fair value of financial instruments increases the frequency of fair value disclosures. The new guidance was effective for fiscal years and interim periods ended after June 15, 2009. As such, we adopted the new guidance in the second quarter ended June 30, 2009, and have included the additional required disclosures about the fair value of financial instruments and valuation techniques within Note 5 — Goodwill, Note 6 — Intangible Assets and Note 9 — Fair Value Measurements. Our adoption of the new guidance did not have a material impact on our consolidated financial position or results of operations.

In March 2009, the FASB issued new guidance intended to provide additional application guidance for the initial recognition and measurement, subsequent measurement, and disclosures of assets and liabilities arising from contingencies in a business combination and for pre-existing contingent consideration assumed as part of the business combination. It establishes principles and requirements for how an acquirer recognizes and measures the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. The new guidance also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. We adopted the new guidance on January 1, 2009. The adoption of the new guidance impacted the accounting for our Refinancing, as described above, and for the acquisition of Jaytu Technologies, LLC (“Jaytu”) (doing business as (“d/b/a”) SigAlert in the fourth quarter of 2009, as described in Note 7 — Acquisitions and Investments.

F-14

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

In November 2008, the FASB issued new guidance intended to provide application guidance on the accounting for equity method investments, including how the initial carrying value of an equity method investment should be determined, how an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed and how to account for a change in an investment from the equity method to the cost method. The adoption of this guidance did not have a significant impact on our consolidated financial position or results of operations.

In March 2008, the FASB issued new guidance on disclosures about derivative instruments and hedging activities. This new guidance is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand the effect these instruments and activities have on an entity’s financial position, financial performance and cash flows. Entities are required to provide enhanced disclosures about: how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for under existing GAAP; and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. This new guidance was effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Our adoption of the guidance in the first quarter of 2009 had no impact on our consolidated financial statements or results of operations.

In December 2007, the FASB issued revised authoritative guidance related to business combinations, which provides for recognition and measurement of identifiable assets and goodwill acquired, liabilities assumed, and any non-controlling interest in the acquiree at fair value. The guidance also established disclosure requirements to enable the evaluation of the nature and financial effects of a business combination. This guidance, which was incorporated into ASC Topic 805, “Business Combinations”, was adopted by the Company as of January 1, 2009.

In December 2007, the FASB issued new guidance on non-controlling interests in consolidated financial statements. This new guidance establishes requirements for ownership interests in subsidiaries held by parties other than the parent (sometimes called “minority interests”) to be clearly identified, presented, and disclosed in the Consolidated Balance Sheet within equity, but separate from the parent’s equity. All changes in the parent’s ownership interests are required to be accounted for consistently as equity transactions and any non-controlling equity investments in unconsolidated subsidiaries must be measured initially at fair value. The new guidance is effective for fiscal years beginning after December 15, 2008. However, presentation and disclosure requirements must be retrospectively applied to our Consolidated Financial Statements. The implementation of this standard did not have a material impact on our consolidated financial position or results of operations.

Reclassifications and Revisions

For the nine months ended September 30, 2009 and the years ended December 31, 2008, and 2007, we understated liabilities in error related to uncertain income tax exposures, arising in the respective periods. These additional income tax exposures related primarily to deductions taken in state filings for which it is more likely than not that those deductions would not be sustained on their technical merits. The amounts of additional tax expense that should have been recorded related to this error was $82 in the 2009 successor period, $68 in the 2009 predecessor period, $1,442 in 2008 and $410 in 2007. In addition, $1,245 should have been recorded to retained deficit in 2007 upon adoption of the authoritative guidance on uncertain tax positions. Such charges totaling $3,247 were corrected in the fourth quarter of 2009 as an increase to income tax expense of $82, and an adjustment to the opening goodwill of $3,165 in the Successor Company at April 24, 2009. We have determined that the impact of these adjustments recorded in the fourth quarter of fiscal 2009 were immaterial to our results of operations in all applicable prior interim and annual periods. As a result, we have not restated any prior period amounts.

On August 3, 2009 at a special meeting of stockholders, we affected a 200 for 1 reverse stock split of our common stock. This reverse stock split has been reflected in share data and earnings per share data contained herein for all periods presented, unless otherwise indicated. The par value of the common stock was not affected by the reverse stock split and remains at $0.01 per share.

F-15

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 2 — Earnings Per Share

Prior to the Refinancing, we had outstanding two classes of common stock (common stock and Class B stock) and a class of preferred stock (7.5% Series A Convertible Preferred Stock, referred to herein as the “Series A Preferred Stock”). Both the Class B stock and the Series A Preferred Stock were convertible into common stock. To the extent declared by our Board of Directors (the “Board”), the common stock was entitled to cash dividends of at least ten percent higher than those declared and paid on our Class B stock, and the Series A Preferred Stock was also entitled to receive such dividends on an as-converted basis if and when declared by the Board.

As part of the Refinancing, we issued Series A-1 Preferred Stock and Series B Preferred Stock. To the extent declared by our Board, the Series A-1 Preferred Stock and Series B Preferred Stock were also entitled to receive such dividends on an as-converted basis. The Series A Preferred Stock, Series A-1 Preferred Stock and Series B Preferred Stock are considered “participating securities” requiring use of the “two-class” method for the computation of basic net income (loss) per share. Losses were not allocated to the Series A Preferred Stock, Series A-1 Preferred Stock or Series B Preferred Stock in the computation of basic earnings per share (“EPS”) as the Series A Preferred Stock, Series A-1 Preferred Stock and the Series B Preferred Stock were not obligated to share in losses. Diluted earnings per share is computed using the “if-converted” method.

Basic EPS excludes the effect of common stock equivalents and is computed using the “two-class” computation method, which divides the sum of distributed earnings to common and Class B stockholders and undistributed earnings allocated to common stockholders and preferred stockholders on a pro rata basis, after Series A Preferred Stock dividends, by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflects the potential dilution that could result if securities or other contracts to issue common stock were exercised or converted into common stock. Diluted earnings per share assumes the exercise of stock options using the treasury stock method and the conversion of Class B stock, Series A Preferred Stock, Series A-1 Preferred Stock and Series B Preferred Stock using the “if-converted” method.

Common equivalent shares are excluded in periods in which they are anti-dilutive. Options, restricted stock, restricted stock units (“RSUs”), warrants (see Note 11 — Equity-Based Compensation) and Series A Preferred Stock were excluded from the Predecessor Company calculations of diluted earnings per share because the conversion price, combined exercise price, unamortized fair value and excess tax benefits were greater than the average market price of our common stock for the periods presented. Options, restricted stock, RSUs, warrants, Series A-1 Preferred Stock and Series B Preferred Stock were excluded from the Successor Company calculations of diluted earnings per share because the conversion price, combined exercise price, unamortized fair value and excess tax benefits were greater than the average market price of our common stock for the periods presented. EPS calculations for all periods reflect the effects of the 200 for 1 reverse stock split.

The conversion of preferred stock that occurred on August 3, 2009 increased the number of shares of common stock issued and outstanding from 206,263 to 4,062,466 on a pre-split basis, which was reduced to 20,312 shares after the 200 for 1 reverse stock split. While such technically resulted in substantial dilution to our common stockholders, the ownership interest of each of our common stockholders did not change substantially after the conversion of the Preferred Stock into common stock as the Preferred Stock that was issued on April 23, 2009 when our Refinancing closed from the time of its issuance participated on an as-converted basis with respect to voting, dividends and other economic rights as the common stock. Effective August 3, 2009, when the Charter Amendments were approved, the warrants issued to Gores on June 19, 2008 were cancelled.

In connection with the Refinancing and the issuance of the preferred shares, we had determined that the preferred shares contained a beneficial conversion feature (“BCF”) that was partially contingent. The BCF is measured as the spread between the effective conversion price and the market price of common stock on the commitment date and then multiplying this spread by the number of conversion shares, as adjusted for the contingent shares. A portion of the BCF had been recognized at issuance and was being amortized using the effective yield method over the period until conversion. The total BCF, which was limited to the carrying value of the preferred stock, was $76,887, prior to conversion and upon conversion resulted in, among other effects, a deemed dividend that is included in the earnings per share calculation.

F-16

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

	Successor Company			Predecessor Company
	For the Period			For the Period
	April 24, 2009 to			January 1, 2009			Year Ended December 31,
	December 31, 2009			to April 23, 2009			2008			2007
Net Loss	$	(63,600	)	$	(18,962	)	$	(427,563	)	$	24,368
Less: Accumulated Preferred Stock dividends and accretion		(4,661	)		(3,076	)		(3,081	)		—
Less: Deemed dividends from beneficial conversion feature		(76,887	)		—			—			—
Less: distributed earnings to common stockholders		—			—			—			1,658
Less: distributed earnings to Class B stockholders		—			—			—			5
Undistributed earnings	$	(145,148	)	$	(22,038	)	$	(430,644	)	$	22,705
Earnings — Common stock
Basic
Distributed earnings to Common shareholders	$	—		$	—		$	—		$	1,658
Undistributed earnings allocated to Common shareholders		(145,148	)		(22,038	)		(430,644	)		22,705
Total Earnings — Common stock, basic	$	(145,148	)	$	(22,038	)	$	(430,644	)	$	24,363
Diluted
Distributed earnings to Common stockholders	$	—		$	—		$	—		$	1,658
Distributed earnings to Class B stockholders		—			—			—			5
Undistributed earnings allocated to Common stockholders		(145,148	)		(22,038	)		(430,644	)		22,705
Total Earnings — Common stock, diluted	$	(145,148	)	$	(22,038	)	$	(430,644	)	$	24,368
Weighted average Common shares outstanding, basic		12,351			505			490			431
Weighted average Class B shares		—			0			0			1
Weighted average Common shares outstanding, diluted		12,351			505			490			432
(Loss) Earnings per Common share, basic
Distributed earnings, basic	$	—		$	—		$	—		$	3.85
Undistributed earnings — basic		(11.75	)		(43.64	)		(878.73	)		52.73
Total	$	(11.75	)	$	(43.64	)	$	(878.73	)	$	56.59
(Loss) Earnings per Common share, diluted
Distributed earnings, diluted	$	—		$	—		$	—		$	3.84
Undistributed earnings — diluted		(11.75	)		(43.64	)		(878.73	)		52.54
Total	$	(11.75	)	$	(43.64	)	$	(878.73	)	$	56.38
Earnings per share — Class B Stock
Basic
Distributed earnings to Class B stockholders	$	—		$	—		$	—		$	5.00
Undistributed earnings allocated to Class B stockholders		—			—			—			—
Total Earnings — Class B Stock, basic	$	—		$	—		$	—		$	5.00
Diluted
Distributed earnings to Class B stockholders	$	—		$	—		$	—		$	5.00
Undistributed earnings allocated to Class B stockholders		—			—			—			—
Total Earnings — Class B Stock, diluted	$	—		$	—		$	—		$	5.00
Weighted average Class B shares outstanding, basic		—			1			1			1
Share-based compensation		—			—			—			—
Warrants		—			—			—			—
Weighted average Class B shares outstanding, diluted		—			1			1			1
Earnings per Class B share, basic
Distributed earnings, basic	$	—		$	—		$	—		$	3.20
Undistributed earnings — basic		—			—			—			—
Total	$	—		$	—		$	—		$	3.20
Earnings per Class B share, diluted
Distributed earnings, diluted	$	—		$	—		$	—		$	3.20
Undistributed earnings — diluted		—			—			—			—
Total	$	—		$	—		$	—		$	3.20

F-17

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 3 — Related Party Transactions

On March 3, 2008, we closed the new Master Agreement with CBS Radio, which documents a long-term distribution arrangement through March 31, 2017. As part of the new arrangement, CBS Radio agreed to broadcast certain of our local/regional and national commercial inventory through March 31, 2017 in exchange for certain programming and/or cash compensation. Additionally, the News Programming Agreement, the Technical Services Agreement and the Trademark License Agreement were amended and restated and extended through March 31, 2017. The previous Management Agreement and Representation Agreement were cancelled on March 3, 2008 and $16,300 of compensation previously paid to CBS Radio under those agreements was added to the maximum potential compensation CBS Radio affiliate stations could earn pursuant to their affiliations with us. In addition, all warrants previously granted to CBS Radio were cancelled on March 3, 2008.

Expenses incurred for the Representation Agreement and programming and affiliate arrangements are included as a component of operating costs in the accompanying Consolidated Statement of Operations. Expenses incurred for the Management Agreement (excluding warrant amortization) and amortization of the warrants granted to CBS Radio under the Management Agreement are included as a component of corporate general and administrative expenses and depreciation and amortization, respectively, in the accompanying Consolidated Statement of Operations. The expense incurred upon closing of the Master Agreement is included as a component of special charges in the accompanying Consolidated Statement of Operations. The description and amounts regarding related party transactions set forth in these consolidated financial statements and related notes, also reflect transactions between us and Viacom. Viacom is an affiliate of CBS Radio, as National Amusements, Inc. beneficially owns a majority of the voting power of all classes of common stock of each of CBS Corporation and Viacom. As a result of the Charter Amendments approved on August 3, 2009, CBS Radio, which previously owned approximately 15.8% of our common stock, now owns less than 1% of our common stock. As a result of this change in ownership and the fact that CBS Radio ceased to manage us in March 2008, we no longer consider CBS Radio to be a related party effective as of August 3, 2009 and are no longer recording payments to CBS as related party expenses or amounts due to related parties effective August 3, 2009.

We incurred the following expenses as a result of transactions with CBS Radio or its affiliates in the following years:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Programming and affiliate arrangements	$	13,877	$	20,884	$	57,609	$	39,314
News agreement		3,623		4,107		—		—
Representation agreement		—		—		15,440		27,319
Management agreement (excluding warrant amortization)		—		—		610		3,394
Warrant amortization		—		—		1,618		9,706
Payment upon closing of Master Agreement		—		—		5,000		—
	$	17,500	$	24,991	$	80,277	$	79,733

F-18

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Gores Radio Holdings

We have a related party relationship with Gores. As a result of our Refinancing, Gores created a holding company which owns approximately 74.3% of our equity and is our ultimate parent company. Gores currently also holds $11,165 (including PIK interest) of our Senior Notes as a result of purchasing debt from certain of our former debt holders who did not wish to participate in the issuance of the Senior Notes on April 23, 2009 in connection with our Refinancing. Such debt is classified as Due to Gores on our balance sheet.

We recorded fees related to consultancy and advisory services rendered by, and incurred on behalf of, Gores and Glendon Partners, an operating group affiliated with Gores as follows:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Consultancy and advisory fees	$	386	$	1,533	$	—	$	—
Gores Radio Holdings, LLC		—		230		250		—
Glendon Partners fees		810		754		—		—
	$	1,196	$	2,517	$	250	$	—

POP Radio

We also have a related party relationship, including a sales representation agreement, with our investee, POP Radio, L.P. We recorded fees as follows:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Program commission expense	$	913	$	416	$	2,050	$	2,558

Summary of related party expense by expense category:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Operating costs	$	18,413	$	25,407	$	75,099	$	69,191
Depreciation and amortization		—		—		1,618		9,706
Corporate, general and administrative		—		—		610		3,394
Consulting fees		—		2,517		250		—
Special charges		1,196		—		5,000		—
	$	19,609	$	27,924	$	82,577	$	82,291

F-19

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 4 — Property and Equipment

Property and equipment is recorded at cost and is summarized as follows:

	Successor Company		Predecessor Company
	December 31, 2009		December 31, 2008
Land, buildings and improvements	$	10,830	$	11,999
Recording, broadcasting and studio equipment		20,581		75,907
Furniture, equipment and other		11,592		18,445
		43,003		106,351
Less: Accumulated depreciation and amortization		6,738		75,934
Property and equipment, net	$	36,265	$	30,417

Depreciation expense is summarized as follows:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Depreciation expense	$	6,738	$	2,354	$	8,652	$	9,134

On December 17, 2009, we entered into an agreement to sell our Culver City properties and leaseback over a ten-year term (with two five-year renewal options). Upon closing at December 31, 2009, we received proceeds of $6,998, and incurred costs for commissions, fees and closing costs of $1,252 and we placed $673 in escrow for a portion of the repairs to be conducted on the properties. We used $3,500 of these proceeds to pay down our Senior Notes on March 31, 2009, in accordance with the terms of the Waiver and First Amendment to the Securities Purchase Agreement entered into on October 14, 2009 by us and the noteholders party thereto. This transaction did not qualify as a sale for accounting purposes as certain third party guarantees included in the agreement are considered continuing involvement under accounting guidance. As a result, the Company classified this transaction as financing under the financing method: (1) the assets and accumulated depreciation remain on the Consolidated Balance Sheet and continue to be depreciated; (2) no gain recognized; (3) proceeds of $8,250 received by us as of December 31, 2009 from this transactions are recorded as a financing liability; and (4) transactions costs of $459 as of December 31, 2009 are recorded as deferred financing expense, which will be amortized over 20 years. We currently expect the existence of our continuing involvement to remain for the entirety of the lease period. Under the terms of the building financing, the Company will make rental payments in the first year of approximately $875, plus operating expense reimbursement, including a 2% management fee. Thereafter, base rental payments are subject to an annual increase equal to 3.5% in years 2 through 5 and the greater of 3.5% or the increase in the consumer price index in years 6 through 10. As part of the closing, we issued a letter of credit for $219 (the equivalent of three months base rent) in lieu of a security deposit under the lease. Pursuant to the terms of the lease, with limited exceptions, we will remain responsible for required repairs, replacements and improvements to the Culver City properties.

In 2001, we entered into a capital lease for satellite transponders totaling $6,723. The allocation of the Business Enterprise Value for the capital lease at April 24, 2009 was $7,355. Accumulated amortization related to the capital lease was $5,787 and $4,949 as of December 31, 2009 and 2008, respectively.

NOTE 5 — Goodwill:

Goodwill represents the excess of cost over fair value of net assets of businesses acquired. In accordance with authoritative guidance, the value assigned to goodwill and indefinite lived intangible assets is not amortized to expense, but rather the estimated fair value of the reporting unit is compared to its carrying amount on at least an annual basis to determine if there is a potential impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit goodwill and intangible assets is less than their carrying value. On an annual basis and upon the occurrence of certain events, we are required to perform impairment tests on our identified intangible assets with indefinite lives, including goodwill, which testing could impact the value of our business.

F-20

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Prior to the fourth quarter 2008, we operated as a single reportable operating segment: the sale of commercial time. As part of our re-engineering initiative implemented in the fourth quarter of 2008, we installed separate management for the Network and Metro Traffic segments providing discrete financial information and management oversight. Accordingly, we have determined that each division is an operating segment. A reporting unit is the operating segment or a business which is one level below the operating segment. Our reporting units are consistent with our operating segments and impairment has been tested at this level.

As a result of the Refinancing, we have followed the acquisition method of accounting, as described by the authoritative guidance. Accordingly, we have revalued our assets and liabilities using our best estimate of current fair value which was calculated using the income approach and were based on our then most current forecast. The assumptions underlying our forecasted values were derived from our then best estimates including the industry’s general forecast of the advertising market which assumed an improvement in the economy and in advertising market conditions in the later half of 2009. The majority of goodwill is not expected to be tax deductible. The increase in the value of goodwill was primarily attributable to deferred taxes associated with the fair value of our intangible assets (see Note 6 — Intangible Assets) and deferred taxes arising from the cancellation of our prior indebtedness. The value assigned to goodwill is not amortized but rather the estimated fair value of the reporting unit is compared to its carrying amount on at least an annual basis to determine if there is a potential impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit’s goodwill and intangible assets is less than its carrying value. Our consolidated financial statements prior to the closing of the Refinancing reflect the historical accounting basis in our assets and liabilities and are labeled Predecessor Company, while the periods subsequent to the Refinancing are labeled Successor Company and reflect the push down basis of accounting for the fair values which were allocated to our segments based on the Business Enterprise Value of each.

Based on the complex structure of the Refinancing, a valuation was performed to determine the acquisition price using the Income Approach employing a Discounted Cash Flow (DCF) methodology. The DCF method explicitly recognizes that the value of a business enterprise is equal to the present value of the cash flows that are expected to be available for distribution to the equity and/or debt holders of a company. In the valuation of a business enterprise, indications of value are developed by discounting future net cash flows available for distribution to their present worth at a rate that reflects both the current return requirements of the market and the risk inherent in the specific investment.

We used a multi-year DCF model to derive a Total Invested Capital value which was adjusted for cash, non-operating assets and any negative net working capital to calculate a Business Enterprise Value which was then used to value our equity. In connection with the Income Approach portion of this exercise, we made the following assumptions: (1) the discount rate was based on an average of a range of scenarios with rates between 15% and 16%; (2) management’s estimates of future performance of our operations; and (3) a terminal growth rate of 2%. The discount rate and market growth rate reflect the risks associated with the general economic pressure impacting both the economy in general and more specifically and substantially the advertising industry.

In 2009, the Metro Traffic television upfronts (where advertisers purchase commercial airtime for the upcoming television season several months before the season begins), which in prior years concluded in the second quarter, were extended through August to complete the upfront advertising sales. During this period, advertisers were slow to commit to buying commercial airtime for the third quarter of 2009. We believed that the conclusion of the Metro Traffic television upfronts would help bring more clarity to both purchasers and sellers of advertising; however, once such upfronts concluded in August, it became increasingly evident from our quarterly bookings, backlog and pipeline data that the downturn in the economy was continuing and affecting advertising budgets and orders. The decrease in advertising budgets and orders is evidenced by our revenue decreasing to $78,474 in the third quarter of 2009 from $96,299 in the third quarter of 2008, which represents a decrease of approximately 18.5%. These conditions, namely the weak third quarter of 2009 and the likely continuation of the current economic conditions into the fourth quarter of 2009 and the immediate future, caused us to reduce our forecasted results for the remainder of 2009 and 2010. We believe these new forecasted results constituted a triggering event and therefore we conducted a goodwill impairment analysis. The new forecast would more likely than not reduce the fair value of one or more of our reporting units below its carrying value. Accordingly, we performed a Step 1 analysis in accordance with the authoritative guidance by comparing our recalculated fair value based on our new forecast to our current carrying value. The results indicated impairment in our Metro Traffic segment and we performed a Step 2 analysis to compare the implied fair value of goodwill for Metro Traffic with the carrying value of its goodwill. As a result of the Step 2 analysis we recorded a non-cash charge of $50,401. The majority of the goodwill impairment charge is not deductible for income tax purposes.

F-21

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

In the fourth quarter 2008, in conjunction with the change to two reporting units, we determined that solely using the income approach was the best evaluation of the fair value of our two reporting units. In prior periods, we evaluated the fair value of our reporting unit based on a weighted average of the income approach (75% weight) and the quoted market price of our stock (25% weight). The remaining value of our goodwill at December 31, 2009 is $38,917.

In 2008, we determined that our goodwill was impaired and recorded impairment charges totaling $430,126 ($206,053 in the second quarter and $224,073 in the fourth quarter). The remaining value of our goodwill at December 31, 2008 was $33,988.

In using the income approach to test goodwill for impairment as of December 31, 2008, we made the following assumptions: (1) the discount rate was 14%; (2) market growth rates were based upon management’s estimates of future performance and (3) terminal growth rates were in the 2% to 3% range. The discount rate reflects the volatility of our operating performance and our common stock. The market growth rates and operating performance estimates reflect the current general economic pressures impacting both the national and a number of local economies, and specifically, national and local advertising revenues in the markets in which our affiliates operate.

Earlier in 2008, as a result of a continued decline in our operating performance and stock price, caused in part by reduced valuation multiples in the radio industry, we determined a triggering event had occurred and as a result performed an interim test to determine if our goodwill was impaired at June 30, 2008. The interim test resulted in an impairment of goodwill and accordingly, we recorded a non-cash charge of $206,053. The goodwill impairment charge is substantially non-deductible for tax purposes.

In connection with the income approach portion of the goodwill impairment test as of June 30, 2008, we used the following assumptions: (1) the discount rate was 12%; (2) market growth rates that were based upon management’s estimates of future performance of our operations and (3) terminal growth rates were in the 2% to 3% range. The discount rate reflects the volatility of our operating performance and our common stock. The market growth rates and operating performance estimates used reflected the general economic pressures impacting both the national and a number of local economies, and specifically, national and local advertising revenues in the markets in which our affiliates operate as of June 30, 2008.

Determining the fair value of our reporting units requires our management to make a number of judgments about assumptions and estimates that are highly subjective and that are based on unobservable inputs. The actual results may differ from these assumptions and estimates; and it is possible that such differences could have a material impact on our financial statements.

As noted above, we are required to test our goodwill on an annual basis or whenever events or changes in circumstances indicate that these assets might be impaired. As a result, if the current economic trends continue and the credit and capital markets continue to be disrupted, it is possible that we may record further impairments in the future.

In connection with our annual goodwill impairment testing for 2007, we determined goodwill was not impaired at December 31, 2007.

F-22

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

The changes in the carrying amount of goodwill for the years ended December 31, 2009 and 2008 are as follows:

	Total			Metro Traffic			Network
Predecessor Company
Balance at January 1, 2008	$	464,114		$	327,495		$	136,619
Goodwill impairment		(430,126	)		(303,703	)		(126,423	)
Balance at December 31, 2008		33,988			23,792			10,196
Goodwill impairment		—			—			—
Balance at April 23, 2009	$	33,988		$	23,792		$	10,196
Successor Company
Balance at April 24, 2009	$	86,414		$	61,354		$	25,060
Accumulated impairment losses		—			—			—
Balance at April 24, 2009		86,414			61,354			25,060
Adjustments to opening balance (1)		2,904			2,052			852
Goodwill impairment		(50,401	)		(50,401	)		—
Balance at December 31, 2009		89,318			63,406			25,912
Accumulated impairment losses		(50,401	)		(50,401	)		—
Balance at December 31, 2009	$	38,917		$	13,005		$	25,912

(1) We recorded an adjustment to goodwill in December 2009 related to our liability for uncertain tax positions $3,165 as of April 23, 2009. In the 23-day period ended April 23, 2009, we recorded a charge to special charges for insurance expense of $261 which should have been capitalized and expensed through April 30, 2010. The appropriate adjustments, including an adjustment to our opening balance of goodwill at April 24, 2009, were recorded in the period from April 24, 2009 to December 31, 2009.

NOTE 6 — Intangible Assets

In accordance with the authoritative guidance which is applicable to the Refinancing, we have revalued our intangibles using our best estimate of current fair value. The value assigned to our only indefinite lived intangible assets, our trademarks, are not amortized to expense but tested at least annually for impairment or upon a triggering event. Our identified definite lived intangible assets are: our relationship with radio and television affiliates, or other distribution partners from which we obtain commercial airtime we sell to advertisers; internally developed software for systems unique to our business; contracts which provide information and talent for our programming; real estate leases; and insertion order commitments from advertisers. The values assigned to definite lived assets are amortized over their estimated useful life using, where applicable, contract completion dates, lease expiration dates, historical data on affiliate relationships and software usage. On an annual basis and upon the occurrence of certain events, we are required to perform impairment tests on our identified intangible assets with indefinite lives, including goodwill, which testing could impact the value of our business.

As a result of the conditions described in Note 5 — Goodwill above, namely the weak third quarter and the likely continuation of the current economic conditions into the fourth quarter and the immediate future, we reduced our forecasted results for the remainder of 2009 and 2010. We believe these new forecasted results constituted a triggering event and therefore we conducted an impairment analysis of our indefinite and definite lived intangible assets. A fair value appraisal, using the discounted cash flow method, was conducted on our trademarks, our only indefinite lived intangible assets, and an impairment of $100 was recorded for the reduction in the value of the Metro Traffic trademark.

F-23

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

We purchased Jaytu (d/b/a SigAlert), whose assets are primarily included in software and technology, in the fourth quarter of 2009. The fair value of the additional intangible asset was $2,295 (see Note 7 — Acquisitions and Investments) and is included in software and technology.

In the fourth quarter of 2009, we failed to attain our forecast which constituted a trigger event under authoritative guidance. Based on a comparison of carrying values to undiscounted cash flows for our definite lived assets, we have concluded there was no impairment on our definitive lived assets.

Intangible assets by asset type and estimated life as of December 31, 2009 and 2008 are as follows:

		Successor Company							Predecessor Company
		As of December 31, 2009							As of December 31, 2008
		Gross					Net		Gross					Net
	Estimated	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Life	Value		Amortization			Value		Value		Amortization			Value
Trademarks (1)	Indefinite	$	20,800	$	—		$	20,800	$	—	$	—		$	—
Affiliate relationships	10 years		72,100		(4,953	)		67,147		28,380		(25,720	)		2,660
Software and technology	5 years		7,896		(890	)		7,006		—		—			—
Client contracts	5 years		8,930		(1,363	)		7,567		—		—			—
Leases	7 years		980		(100	)		880		—		—			—
Insertion orders	9 months		8,400		(8,400	)		—		—		—			—
		$	119,106	$	(15,706	)	$	103,400	$	28,380	$	(25,720	)	$	2,660

(1) A fair value appraisal, using the discounted cash flow method, was conducted on our trademarks, our only indefinite lived intangible assets, and an impairment of $100 was recorded for the reduction in the gross carrying value of the Metro Traffic trademark.

F-24

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

The changes in the carrying amount of intangible assets for the years ended December 31, 2009 and 2008 are as follows:

	Total			Metro Traffic			Network
Predecessor Company
Balance at January 1, 2008	$	3,443		$	46		$	3,397
Amortization		(783	)		(46	)		(737	)
Balance at December 31, 2008		2,660			—			2,660
Amortization		(231	)		—			(231	)
Balance at April 23, 2009	$	2,429		$	—		$	2,429
Successor Company
Balance at April 24, 2009	$	116,910		$	83,280		$	33,630
Additions		2,295			2,295			—
Amortization		(15,705	)		(11,661	)		(4,044	)
Trademark impairment		(100	)		(100	)		—
Balance at December 31, 2009	$	103,400		$	73,814		$	29,586
Gross carrying value	$	119,205		$	85,575		$	33,630
Accumulated amortization		(15,705	)		(11,661	)		(4,044	)
Accumulated impairment losses		(100	)		(100	)		—
Balance at December 31, 2009	$	103,400		$	73,814		$	29,586

Amortization expense of intangible assets was $231 for the period from January 1, 2009 to April 23, 2009, $15,705 for the period from April 24, 2009 to December 31, 2009 and $783 for each of the years ended December 31, 2008 and 2007. We estimate aggregate amortization expense for intangibles for fiscal year 2010, 2011, 2012, 2013 and 2014 will be approximately $10,900, $10,900, $10,900, $10,500 and $8,000, respectively.

NOTE 7 — Acquisitions and Investments

In December 2007, the FASB issued revised authoritative guidance related to business combinations, which provides for recognition and measurement of identifiable assets and goodwill acquired, liabilities assumed, and any non-controlling interest in the acquiree at fair value. The guidance also established disclosure requirements to enable the evaluation of the nature and financial effects of a business combination. This guidance, which was incorporated into ASC Topic 805, “Business Combinations”, was adopted by the Company as of January 1, 2009.

On December 31, 2009, we closed the acquisition of Jaytu (d/b/a SigAlert), for which the purchase price allocation was primarily to software and technology assets. At December 31, 2009, we issued 232,277 shares of its common stock with a fair value of $1,045, based upon a per share price of $4.50, and paid $1,250 in cash to the members of Jaytu. The members of Jaytu may earn up to an additional $1,500 upon the delivery and acceptance of certain traffic products in accordance with certain specifications mutually agreed upon by the parties, including commercial acceptance and/or first usage of the products by our Metro Traffic television affiliates. The operations and assets of Jaytu (d/b/a SigAlert) are included in the Metro Traffic segment.

On December 22, 2008, we entered into a License and Services Agreement with TrafficLand which provides us with a three-year license to market and distribute TrafficLand services and products. Concurrent with the execution of the License Agreement, we entered into an option agreement with TrafficLand granting us the right to acquire 100% of the stock of TrafficLand pursuant to the terms of a merger agreement which the parties negotiated and placed in escrow. We did not exercise our right under the option agreement and therefore the License Agreement will continue until December 31, 2011.

On March 29, 2006, our cost method investment in The Australia Traffic Network Pty Limited (“ATN”) was converted to 1,540 shares of common stock of Global Traffic Network, Inc. (“GTN”) in connection with the initial public offering of GTN on that date. The investment in GTN was sold during the quarter ended September 30, 2008 and we received proceeds of approximately $12,741 and realized a gain of $12,420. Such gain is included as a component of other expense (income) in the Consolidated Statement of Operations.

F-25

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

On October 28, 2005, we became a limited partner of POP Radio, LP (“POP Radio”) pursuant to the terms of a subscription agreement dated as of the same date. As part of the transaction, effective January 1, 2006, we became the exclusive sales representative of the majority of advertising on the POP Radio network for five years, until December 31, 2010, unless earlier terminated by the express terms of the sales representative agreement. We hold a 20% limited partnership interest in POP Radio. No additional capital contributions are required by any of the limited partners. This investment is being accounted for under the equity method. The initial investment balance was de minimis, and our equity in earnings of POP Radio through December 31, 2008 was de minimis. Pursuant to the terms of a 2006 recapitalization, if and when one of the other partners elects to exercise warrants it received in connection with the transaction, our limited partnership interest in POP Radio will decrease from 20% to 6%.

NOTE 8 — Debt:

On April 23, 2009, we completed the refinancing of our outstanding long-term indebtedness and the recapitalization of our equity with our existing lenders, and entered into our Senior Credit Facility and a Securities Purchase Agreement. The Senior Credit Facility includes a $2,000 letter of credit sub-facility, on a senior unsecured basis and a $20,000 unsecured non-amortizing term loan. As of December 31, 2009, we had borrowed the entire amount under the term loan and $5,000 under the revolving credit facility.

Our present financial condition has caused us to obtain waivers to the agreements governing our indebtedness and to institute certain cost saving measures. If our financial condition does not improve, we may need to take additional actions designed to respond to or improve our financial condition and we cannot assure you that any such actions would be successful in improving our financial position. As a result of our current financial position we have taken certain actions designed to respond to and improve our current financial position. On October 14, 2009, we entered into separate agreements with the holders of our Senior Notes and Wells Fargo Foothill to amend the terms of our Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility, respectively, to waive compliance with our debt leverage covenants which were to be measured on December 31, 2009 on a trailing four-quarter basis. As part of the Securities Purchase Agreement amendment, we paid down our Senior Notes by $3,500 on March 31, 2010. The amendments also included consents by holders of the Senior Notes and Wells Fargo Foothill regarding the potential Culver City financing lease and in the case of the amendment to the Senior Credit Facility, an increase in the letters of credit sub-limit from $1,500 to $2,000.

On March 30, 2010, we entered into additional agreements with the holders of our Senior Notes and Wells Fargo Capital Finance, LLC to amend the terms of our Securities Purchase Agreement (governing the Senior Notes) and Senior Credit Facility, respectively, to modify our debt leverage covenants for periods to be measured (on a trailing four-quarter basis) on March 31, 2010 and beyond. As part of the amendment to the Securities Purchase Agreement, the quarterly debt leverage covenants for 2010 have been eased to levels of 8.00, 7.50, 7.00 and 6.50, respectively and the original quarterly covenants for 2010 now apply to 2011. The original quarterly covenants for 2012 remain unchanged. The amendment to the Securities Purchase Agreement also contemplates that we will pay down our Senior Notes out of the proceeds of the tax refund we anticipate receiving in the second or third quarter of 2010. The first $12,000 of such refund and any refund amount in excess of $17,000 will be used to pay down our Senior Notes. Gores has agreed to guarantee up to a $10,000 pay down of the Senior Notes if such refund is not received on or prior to August 16, 2010. The quarterly debt leverage covenants that appear in the Senior Credit Facility have also been amended to maintain the additional 15% cushion that exists between the debt leverage covenants applicable to the Senior Credit Facility and the corresponding covenants in the Securities Purchase Agreement. By way of example, the 8.00, 7.50, 7.00 and 6.50 covenants in the Securities Purchase Agreement (applicable to the Senior Notes) are 9.20, 8.65, 8.05 and 7.50, respectively, in the Senior Credit Facility.

As of December 31, 2008, prior to the closing of the Refinancing, our debt consisted of an unsecured, five-year $120,000 term loan and a five-year $75,000 revolving credit facility (collectively, the “Old Facility”). Interest on the facility was variable and payable at a maximum of the prime rate plus an applicable margin of up to 0.75% or LIBOR plus an applicable margin of up to 1.75%, at our option. The Old Facility contained covenants relating to dividends, liens, indebtedness, capital expenditures and restricted payments, as defined, interest coverage and leverage ratios. As a result of an amendment to our Old Facility in the first quarter of 2008, we provided security to our lenders (including holders of our Old Notes) on substantially all of our assets and amended our allowable total debt covenant to 4.0 times Annualized Consolidated Operating Cash Flow through the remaining term of the Old Facility.

F-26

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Prior to April 23, 2009, we also had $200,000 in Old Notes which we issued on December 3, 2002, which consisted of: 5.26% Senior Notes due November 30, 2012 (in an aggregate principal amount of $150,000) and 4.64% Senior Notes due November 30, 2009 (in an aggregate principal amount of $50,000). Interest on the Old Notes was payable semi-annually in May and November. The Old Notes contained covenants relating to leverage and interest coverage ratios that were identical to those contained in our Old Facility.

At December 31, 2008, we had outstanding under the Old Facility $9,000 under a revolving credit facility and $32,000 under the term loan. In the fourth quarter of 2008, we did not make a semi-annual interest payment on our Old Notes and the amount of the unpaid interest is included in the debt balance at December 31, 2008.

Long-term debt, including current maturities of long-term debt and due to Gores, for the years ended December 31, 2009 and 2008 are as follows:

	Successor Company		Predecessor Company
	December 31, 2009		December 31, 2008
Term loans (1)	$	20,000	$	32,000
Revolving credit facilities (1)		5,000		9,000
Senior Secured Notes due on July 15, 2012 (2)		110,762		—
Due to Gores (2)		11,165		—
5.26% Senior Notes due on November 30, 2012		—		154,503
4.64% Senior Notes due on November 30, 2009		—		51,475
Deferred derivative gain		—		2,075
	$	146,927	$	249,053

(1)	Interest rate of 7.0% on term loan and revolving credit facilities as of December 31, 2009. Interest rate was variable and is payable at a maximum of the prime rate plus an applicable margin of up to .25% or LIBOR plus an applicable margin of up to 1.25%, at our option as of December 31, 2008.
(2)	Interest rate of 15%, which includes 5.0% PIK interest which accrues and is added to principal on a quarterly basis.

The aggregate maturities of long-term debt for the next five years and thereafter, pursuant to our debt agreements including PIK interest as in effect at December 31, 2009, are as follows (excludes market value adjustments):

	Long-Term Debt
Years ended December 31,	Maturities
2010	$	13,500
2011		—
2012		133,427
2013		—
2014		—
Thereafter		—
	$	146,927

Both the Securities Purchase Agreement (governing the Senior Notes) and Credit Agreement (governing the new term loan and revolving credit facility which collectively comprise the Senior Credit Facility) contain restrictive covenants that, among other things, limit our ability to incur debt, incur liens, make investments, make capital expenditures, consummate acquisitions, pay dividends, sell assets and enter into mergers and similar transactions beyond specified baskets and identified carve-outs. Additionally, we may not exceed the maximum senior leverage ratio (the principal amount outstanding under the Senior Notes divided by our Adjusted EBITDA (as defined below)). The Securities Purchase Agreement contains customary representations and warranties and affirmative covenants. The Credit Agreement contains substantially identical restrictive covenants (including a maximum senior leverage ratio calculated in the same manner as with the Securities Purchase Agreement), affirmative covenants and representations and warranties like those found in the Securities Purchase Agreement, modified, in the case of certain covenants, for a cushion on basket amounts and covenant levels from those contained in the Securities Purchase Agreement. We currently believe, based on our 2010 projections that we will be in compliance with our amended debt covenants for the next 12 months. A wide range of factors could materially affect future developments and performance and would cause us to be unable to meet our debt covenants. Such factors and others are discussed in greater detail in Item 1A of the 10-K, which lists the risks factors associated with our business.

F-27

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 9 — Fair Value Measurements

Fair Value of Financial Instruments

Our financial instruments include cash, cash equivalents, receivables, accounts payable and borrowings. At December 31, 2009 and 2008, the fair values of cash and cash equivalents, receivables and accounts payable approximated carrying values because of the short-term nature of these instruments. At December 31, 2009, the estimated fair value of the borrowings was based on estimated rates for long-term debt with similar debt ratings held by comparable companies. In 2008, the estimated fair values of the borrowings were valued based on the agreement related to the Refinancing. The carrying amount and estimated fair value for borrowings are as follows:

	Successor Company				Predecessor Company
	December 31, 2009				December 31, 2008
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Borrowings (short and long term)	$	141,927	$	148,425	$	249,053	$	158,100
Series A Convertible Preferred Stock		—		—		75,000		50,000

The authoritative guidance establishes a common definition of fair value to be applied under GAAP, which requires the use of fair value, establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

There was no change recorded in our opening balance of retained earnings (deficit) as of January 1, 2009 as we did not have any financial instruments requiring retroactive application per the provisions of the authoritative guidance.

We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Fair Value Hierarchy

The authoritative guidance specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs) or reflect our own assumptions of market participant valuation (unobservable inputs). In accordance with the authoritative guidance, these two types of inputs have created the following fair value hierarchy:

• Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2 — Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;

• Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The authoritative guidance requires the use of observable market data if such data is available without undue cost and effort.

F-28

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Items Measured at Fair Value on a Recurring Basis

The following table sets forth our financial assets and liabilities that were accounted for, at fair value on a recurring basis:

	Level 1				Level 2				Level 3
	Quoted Prices in Active				Significant Other				Significant
	Markets for Identical Assets				Observable Inputs				Unobservable Inputs
	2009		2008		2009		2008		2009		2008
Assets:
Investments (included in other assets)	$	968	$	433	$	—	$	—	$	—	$	—
	$	968	$	433	$	—	$	—	$	—	$	—

Items Measured at Fair Value on a Non-Recurring Basis

In addition to assets and liabilities recorded at fair value on a recurring basis, we are also required to record assets and liabilities at fair value on a nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or similar adjustments made to the carrying value of the applicable assets. Assets measured at fair value on a nonrecurring basis are as follows:

	Level 1		Level 2		Level 3
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs
Other long-term assets:
Intangible assets	$	—	$	—	$	103,400
Goodwill		—		—		38,917
	$	—	$	—	$	142,317

We recorded charges of $50,401 for Metro Traffic goodwill and $100 for Metro Traffic trademark, upon concluding a triggering event had occurred and performed a DCF analysis and valuation at September 30, 2009, as described in Note 5 — Goodwill and Note 6 — Intangible Assets.

NOTE 10 — Stockholders’ Equity — Common and Preferred Stock

On December 31, 2008, our authorized capital stock consisted of common stock, Class B stock and Series A Preferred Stock. At such time, our common stock is entitled to one vote per share while Class B stock was entitled to 50 votes per share. Class B stock was convertible to common stock on a share-for-share basis. As of December 31, 2009, we have only common stock outstanding.

On March 3, 2008 and March 24, 2008, we announced the closing of the sale and issuance of 7,143 shares (14,286 shares in the aggregate) of our common stock to Gores Radio Holdings, LLC (together with certain related entities, “Gores”), an entity managed by The Gores Group, LLC at a price of $1.75 per share for an aggregate purchase amount of $25,000.

On June 19, 2008, we completed a $75,000 private placement of the Series A Preferred Stock with an initial conversion price of $3.00 per share and four-year warrants to purchase an aggregate of 10,000 shares of our common stock in three approximately equal tranches with exercise prices of $5.00, $6.00 and $7.00 per share, respectively, to Gores Radio Holdings, LLC.

F-29

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

On April 23, 2009, as part of the Refinancing, we entered into a Purchase Agreement with Gores pursuant to which Gores purchased 25 shares of Series B Preferred Stock for an aggregate purchase price of $25,000. In exchange for the then outstanding shares of Series A Preferred Stock held by Gores, we issued 75 shares of Series A-1 Preferred Stock. On such date, our participating debt holders exchanged their outstanding debt for: (1) $117,500 of Senior Notes, (2) 34,962 shares of Series B Preferred Stock and (3) a one-time cash payment of $25,000.

On July 9, 2009, Gores converted 3.5 shares of Series A-1 Preferred Stock into 103,513 shares of common stock (such number does not take into account the 200 for 1 reverse stock split). Also on July 9, 2009, pursuant to the terms of our Certificate of Incorporation, the 292 outstanding shares of our Class B stock were automatically converted into 292 shares of common stock (such number does not take into account the 200 for 1 reverse stock split) because as a result of the aforementioned conversion by Gores, the voting power of the Class B stock, as a group, fell below ten percent of the aggregate voting power of issued and outstanding shares of common stock and Class B stock.

On August 3, 2009 at a special meeting of stockholders, certain amendments to our Charter were approved by our stockholders. Such amendments consist of an increase in the number of authorized shares of our common stock from 300,000 to 5,000,000 and a two hundred to one (200 for 1) reverse stock split which was approved and effective on August 3, 2009. Accordingly, the reverse stock split is reflected retrospectively in EPS for all periods presented herein. As contemplated by the terms of our Refinancing, the 71.5 then outstanding shares of Series A-1 Preferred Stock and the 60.0 outstanding shares of Series B Preferred Stock converted into 3,856,184 shares of our common stock, in the aggregate, pursuant to the terms of the Certifications of Designation for the Series A-1 Preferred Stock and Series B Preferred Stock.

In accordance with the authoritative guidance, the Series A Preferred Stock is required to be classified as mezzanine equity because a change on control of the Company could occur without our approval. Accordingly, the redemption of the Series A Preferred Stock was not solely under our control. When the Series A Preferred Stock was outstanding, we determined that such redemption was probable and, accordingly, accreted up to the redemption value of the Series A Preferred Stock.

In accordance with the authoritative guidance, the Series A-1 Preferred Stock and Series B Preferred Stock was also required to be classified as mezzanine equity because the redemption of these instruments was outside of our control.

We have recorded the preferred stock at fair value as of the date of issuance and have subsequently accreted changes in the redemption value from the date of issuance to the earliest redemption date using the interest method.

In connection with the Refinancing and the issuance of the Preferred Stock, we had determined that the Preferred Stock contained a BCF that was partially contingent. The BCF is measured as the spread between the effective conversion price and the market price of common stock on the commitment date and then multiplying this spread by the number of conversion shares, as adjusted for the contingent shares. A portion of the BCF had been recognized at issuance and was being amortized using the effective yield method over the period until conversion. The total BCF, which was limited to the carrying value of the Preferred Stock, was $76,887, prior to conversion and upon conversion resulted in, among other effects, a deemed dividend that is included in the earnings per share calculation.

F-30

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

The changes in the carrying amount of Preferred Stock for the years ended December 31, 2009 and 2008 are as follows:

Predecessor Company
	Series A				Series A-1				Series B
	Shares		Book Value		Shares		Book Value		Shares		Book Value
Balance at January 1, 2008		—	$	—		—	$	—		—	$	—
Issuance of Series A Preferred Stock		75.0		70,657		—		—		—		—
Preferred Stock accretion		—		3,081		—		—		—		—
Balance at December 31, 2008		75.0		73,738		—		—		—		—
Preferred Stock accretion		—		6,157		—		—		—		—
Balance at April 23, 2009		75.0	$	79,895		—	$	—		—	$	—

Successor Company
Balance at April 24, 2009	75.0		$	79,895		—		$	—		—		$	—
April 24, 2009 transactions:
Exchange Series A-1 for Series A	(75.0	)		(79,895	)	75.0			43,070		—			—
Gores purchase of Series B	—			—		—			—		25.0			14,099
Refinancing issuance of Series B	—			—		—			—		35.0			19,718
Preferred Stock accretion	—			—		—			2,658		—			2,003
July 9, 2009 conversion to common shares	—			—		(3.5	)		(2,101	)	—			—
August 3, 2009 conversion to common shares	—			—		(71.5	)		(43,627	)	(60.0	)		(35,820	)
Beneficial Conversion Feature	—			—		—			43,070		—			33,817
Beneficial Conversion Feature accretion	—			—		—			(43,070	)	—			(33,817	)
Balance at December 31, 2009	—		$	—		—		$	—		—		$	—

In May 2007, the Board elected to discontinue the payment of a dividend and no dividends have been declared since then. Our Senior Credit Facility and Senior Notes contain covenants that restrict our ability to declare dividends on our common stock. On March 6, 2007, our Board declared cash dividends of $0.02 for each issued and outstanding share of common stock and $0.016 for each issued and outstanding share of Class B stock.

In 2005, our Board authorized us to repurchase shares of common stock. We did not purchase any shares in 2009, 2008 or 2007. Our Senior Credit Facility and Senior Notes contain covenants that restrict our ability to repurchase shares of our common stock.

From December 15, 1998 until our trading suspension on November 24, 2008 and subsequent delisting on March 16, 2009, our common stock was traded on the New York Stock Exchange under the symbol “WON”. On November 20, 2009, we listed our common stock on the NASDAQ Global Market under the symbol “WWON”. In the intervening period, our common stock was traded on the Over the Counter Bulletin Board under the ticker “WWOZ.”

F-31

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 11 — Equity-Based Compensation

Equity Compensation Plans

We established stock option plans in 1989 (the “1989 Plan”) and 1999 (the “1999 Plan”) which allowed us to grant options to directors, officers and key employees to purchase our common stock at its market value on the date the options are granted. Under the 1989 Plan, 12,600 shares were reserved for grant through March 1999. The 1989 Plan expired in March 1999. On September 22, 1999, the stockholders ratified the 1999 Plan, which authorized us to grant up to 8,000 shares of common stock. Options granted under the 1999 Plan generally become exercisable after one year in 20 to 33% increments per year and expire within ten years from the date of grant. The 1999 Plan expired in March 2009.

On May 19, 2005, the Board modified the 1999 Plan by deleting the provisions of the 1999 Plan that provided for a mandatory annual grant of 10 stock options to outside directors. Also, on May 19, 2005, our stockholders approved the 2005 Equity Compensation Plan (the “2005 Plan”). Among other things, the 2005 Plan allows us to grant restricted stock and RSUs. When it was adopted, a maximum of 9,200 shares of common stock was authorized for the issuance of awards under the 2005 Plan.

On February 12, 2010, the Board amended and restated the 2005 Plan (such plan, as amended and restated, the “2010 Plan”). We have amended and restated the 2005 Plan because we had a limited number of shares available for issuance thereunder. The 2010 Plan became effective upon its adoption by the Board on February 12, 2010 and accordingly the stock options issued under the 2010 Plan on such date are not reflected in the tables below. Such stock option awards remain subject to stockholder approval.

Pursuant to Board resolution, since May 19, 2005, the date of our 2005 annual meeting of stockholders, outside directors have automatically received a grant of RSUs equal to $100 in value on the date of each of our annual meeting of stockholders and any newly appointed outside director would receive an initial grant of RSUs equal to $150 in value on the date such director is appointed to our Board. On April 23, 2009, the Board passed a resolution that discontinued this practice.

Options and restricted stock granted under the 2005 Plan vest in 25%, 33% or 50% increments per year, commencing on the anniversary date of each grant, and options expire within ten years from the date of grant. RSUs awarded to directors generally vest over a three-year period in equal 33% increments per year. Directors’ RSUs vest automatically, in full, upon a change in control or upon their retirement, as defined in the 2005 Plan. RSUs are payable in newly issued shares of our common stock. Recipients of restricted stock and RSUs are entitled to receive dividend equivalents (subject to vesting) when and if we pay a cash dividend on our common stock. Such dividend equivalents are payable, in newly issued shares of common stock, only upon the vesting of the related restricted shares.

Restricted stock has the same cash dividend and voting rights as other common stock and, once issued, is considered to be currently issued and outstanding (even when unvested). Restricted stock and RSUs have dividend equivalent rights equal to the cash dividend paid on common stock. RSUs do not have the voting rights of common stock, and the shares underlying the RSUs are not considered to be issued and outstanding until they vest.

All equity-based compensation expense is included in corporate expense for segment reporting purposes.

F-32

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Stock Options

Stock option activity for the periods from April 24, 2009 to December 31, 2009 and January 1, 2009 to April 23, 2009 and for the years ended December 31, 2008 and 2007 are as follows:

	Successor Company					Predecessor Company
	December 31, 2009					April 23, 2009					December 31, 2008					December 31, 2007
				Weighted					Weighted					Weighted					Weighted
				Average					Average					Average					Average
				Exercise					Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price		Shares			Price
Outstanding beginning of period		32.1		$	1,463		35.0		$	1,504		19.4		$	4,372		30.4		$	4,768
Granted		—		$	—		0.4		$	12		32.9		$	272		1.8		$	1,164
Exercised		—		$	—		—		$	—		—		$	—		—		$	—
Cancelled, forfeited or expired		(3.5	)	$	3,726		(3.3	)	$	1,860		(17.3	)	$	2,352		(12.8	)	$	4,862
Outstanding end of period		28.6		$	1,345		32.1		$	1,463		35.0		$	1,504		19.4		$	4,372
Options exercisable at end of period		13.6		$	2,485		11.4		$	3,810		8.7		$	4,856		13.7		$	4,800
Aggregate estimated fair value of options vesting during the period	$	826				$	788				$	2,360				$	5,976

At December 31, 2009, vested and exercisable options had an aggregate intrinsic value of $0 and a weighted average remaining contractual term of 6.14 years. Additionally, at December 31, 2009, 27.1 options were expected to vest with a weighted average exercise price of $1,404, and weighted average remaining term of 6.14 years. The aggregate intrinsic value of these options was $0. No options were exercised during the years ended December 31, 2009, 2008 and 2007. The aggregate intrinsic value of options represents the total pre-tax intrinsic value (the difference between our closing stock price at the end of the period and the option’s exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options at that time.

As of December 31, 2009, there was $1,193 of unearned compensation cost related to stock options granted under all of our equity compensation plans. That cost is expected to be recognized over a weighted-average period of 1.19 years.

The estimated fair value of options granted during each period was measured on the date of grant using the Black-Scholes option pricing model using the weighted average assumptions as follows:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009			Year Ended December 31,
	December 31, 2009		to April 23, 2009			2008			2007
Risk-free interest rate		—		2.98	%		2.64	%		4.52	%
Expected term (years)		—		5.0			4.8			5.7
Expected volatility		—		92.17	%		55.99	%		40.12	%
Expected dividend yield		—		0.00	%		0.00	%		0.79	%
Weighted average fair value of options granted	$	—	$	8.40		$	104.00		$	478.00

No options were granted in the period ended December 31, 2009, therefore no determination was made for fair value assumptions.

The risk-free interest rate for periods within the life of the option is based on a blend of U.S. Treasury bond rates. Beginning with options granted after January 1, 2006, the expected term assumption has been calculated based on historical data. Prior to January 1, 2006, we set the expected term equal to the applicable vesting period. The expected volatility assumption used by us is based on the historical volatility of our stock. The dividend yield represents the expected dividends on our common stock for the expected term of the option.

F-33

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Additional information related to options outstanding at December 31, 2009, segregated by grant price range is summarized below:

					Remaining
			Weighted		Weighted
			Average		Average
	Number of		Exercise		Contractual
Options outstanding at exercise price of:	Options		Price		Life (in years)
$10 – $36		6.2	$	34		8.84
$76 – $150		3.3		99		8.72
$248 – $250		2.9		250		8.52
$326 – $374		3.9		352		8.22
$398 – $1,448		5.4		454		8.14
$2,790 – $7,038		6.9		4,826		3.75
		28.6		1,345		7.34

Compensation expense in the Statement of Operations related to stock options is as follows:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Operating costs	$	1,294	$	624	$	2,502	$	3,933
General and administrative expense		303		192		160		2,902
	$	1,597	$	816	$	2,662	$	6,835

Restricted Stock

We have awarded shares of restricted stock to certain key employees. The awards vest over periods ranging from 2 to 4 years. The cost of these restricted stock awards, calculated as the fair market value of the shares on the date of grant, net of estimated forfeitures, is expensed ratably over the vesting period.

Restricted stock activity for the periods of January 1, 2009 to April 23, 2009 and April 24, 2009 to December 31, 2009 and the years ended December 31, 2008 and 2007 is as follows:

	Successor Company					Predecessor Company
	December 31, 2009					April 23, 2009					December 31, 2008					December 31, 2007
				Weighted					Weighted					Weighted					Weighted
				Average					Average					Average					Average
				Grant Date					Grant Date					Grant Date					Grant Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Outstanding beginning of period		0.9		$	1,498		1.8		$	1,510		4.8		$	1,724		1.7		$	2,612
Granted		—			—		—			—		0.2			126		4.4			1,232
Converted to common shares		(0.1	)		1,360		(0.9	)		1,522		(1.8	)		1,330		(0.4	)		2,656
Cancelled, forfeited or expired		—			—		—			—		(1.4	)		1,534		(0.9	)		1,654
Outstanding end of period		0.8		$	1,504		0.9		$	1,498		1.8		$	1,510		4.8		$	1,724

As of December 31, 2009, there was $406 of unearned compensation cost related to restricted stock awards. The unearned compensation is expected to be recognized over a weighted-average period of 0.17 years.

F-34

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Compensation expense in the Statement of Operations related to restricted stock awards is as follows:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Operating costs	$	1,221	$	536	$	1,772	$	1,453
General and administrative expense		165		74		390		468
	$	1,386	$	610	$	2,162	$	1,921

Restricted Stock Units

We have awarded RSUs to Board members and certain key executives, which vest over three and four years, respectively. On April 23, 2009, the Board passed a resolution that discontinued this practice. The cost of the RSUs, which is determined to be the fair market value of the shares at the date of grant, net of estimated forfeitures, is expensed ratably over the vesting period, or period to retirement eligibility (in the case of directors) if shorter. As of December 31, 2009, there was no unearned compensation cost and the remaining RSUs convert to common shares in the first quarter of 2010.

RSUs activity for the periods of January 1, 2009 to April 23, 2009 and April 24, 2009 to December 31, 2009 and the years ended December 31, 2008 and 2007 is as follows:

	Successor Company					Predecessor Company
	December 31, 2009					April 23, 2009					December 31, 2008					December 31, 2007
				Weighted					Weighted					Weighted					Weighted
				Average					Average					Average					Average
				Grant Date					Grant Date					Grant Date					Grant Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Outstanding beginning of period		2.4		$	306		6.1		$	320		1.2		$	1,830		1.2		$	2,612
Granted		—			—		—			—		5.5			138		0.6			1,126
Converted to common shares		(2.3	)		186		(3.7	)		325		(0.6	)		1,330		(0.4	)		2,480
Forfeited		—			—		—			—		—			—		(0.2	)		3,024
Outstanding end of period		0.1		$	1,314		2.4		$	306		6.1		$	320		1.2		$	1,830

Compensation expense in the Statement of Operations related to RSUs is as follows:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Operating costs	$	—	$	—	$	—	$	—
General and administrative expense		327		684		618		850
	$	327	$	684	$	618	$	850

NOTE 12 — Other Expense (Income)

During the year ended December 31, 2008, we sold marketable securities for total proceeds of approximately $12,741 and realized a gain of $12,420, which was included as a component of other expense (income) in the Consolidated Statement of Operations.

F-35

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 13 — Comprehensive (Loss) Income

Comprehensive (loss) income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive (loss) income represents net income or loss adjusted for net unrealized gains or losses on available for sale securities. Comprehensive (loss) income is as follows:

	Successor Company			Predecessor Company
	For the Period			For the Period
	April 24, 2009 to			January 1, 2009			Year Ended December 31,
	December 31, 2009			to April 23, 2009			2008			2007
Net (loss) income	$	(63,600	)	$	(18,962	)	$	(427,563	)	$	24,368
Unrealized gain on marketable securities net effect of income taxes		111			219			6,732			1,385
Adjustment for gains included in net income (1)		—			—			(12,420	)		—
Comprehensive (loss) income	$	(63,489	)	$	(18,743	)	$	(433,251	)	$	25,753

(1) During the year ended December 31, 2008, we sold marketable securities for total proceeds of approximately $12,741 and realized a gain of $12,420 included as a component of other expense (income) in the Consolidated Statement of Operations.

NOTE 14 — Income Taxes

The components of the provision for income taxes are as follows:

	Successor Company			Predecessor Company
	For the Period			For the Period
	April 24, 2009 to			January 1, 2009			Year Ended December 31,
	December 31, 2009			to April 23, 2009			2008			2007
Current:
Federal	$	(8,828	)	$	(2,693	)	$	(1,220	)	$	18,466
State		(2,529	)		(772	)		367			3,738
		(11,357	)		(3,465	)		(853	)		22,204
Deferred:
Federal		(9,567	)		(2,919	)		(11,790	)		(5,542	)
State		(4,101	)		(1,251	)		(2,117	)		(938	)
		(13,668	)		(4,170	)		(13,907	)		(6,480	)
Income tax (benefit) expense	$	(25,025	)	$	(7,635	)	$	(14,760	)	$	15,724

For the nine months ended September 30, 2009 and the years ended December 31, 2008, and 2007, we understated liabilities in error related to uncertain income tax exposures, arising in the respective periods. These additional income tax exposures related primarily to deductions taken in state filings for which it is more likely than not that those deductions would not be sustained on their technical merits. The amounts of additional tax expense that should have been recorded related to this error was $82 in the 2009 successor period, $68 in the 2009 predecessor period, $1,442 in 2008 and $410 in 2007. In addition, $1,245 should have been recorded to retained deficit in 2007 upon adoption of the authoritative guidance on uncertain tax positions. Such charges totaling $3,247 were corrected in the fourth quarter of 2009 as an increase to income tax expense of $82, and an adjustment to the opening goodwill of $3,165 in the Successor Company at April 24, 2009. We have determined that the impact of these adjustments recorded in the fourth quarter of fiscal 2009 were immaterial to our results of operations in all applicable prior interim and annual periods. As a result, we have not restated any prior period amounts.

F-36

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities on our balance sheet and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:

	Successor Company			Predecessor Company
	December 31, 2009			December 31, 2008
Deferred tax liabilities:
Goodwill, intangibles and other	$	26,198		$	—
Deferred cancellation of debt income		32,726			—
Property and equipment		7,038			5,076
Investment		387			166
Other		299			295
Total deferred tax liabilities		66,648			5,537
Deferred tax assets:
Goodwill, intangibles and other		—			6,487
Allowance for doubtful accounts		1,653			1,379
Deferred compensation		695			1,444
Equity based compensation		8,260			8,460
Accrued expenses and other		9,069			4,016
Total deferred tax assets		19,677			21,786
Net deferred tax (liabilities) assets		(46,971	)		16,249
Net deferred tax asset — current	$	3,961		$	2,029
Net deferred tax (liability) asset — long-term	$	(50,932	)	$	14,220

We determined, based upon the weight of available evidence, that it is more likely than not that our deferred tax asset will be realized. We have experienced a long history of taxable income which would enable us to carryback any potential future net operating losses and taxable temporary differences that can be used as a source of income. As such, no valuation allowance was recorded during the year ended December 31, 2009 or 2008. We will continue to assess the need for a valuation allowance at each future reporting period.

The reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:

	Successor Company			Predecessor Company
	For the Period			For the Period
	April 24, 2009 to			January 1, 2009			Year Ended December 31,
	December 31, 2009			to April 23, 2009			2008			2007
Federal statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
State taxes net of federal benefit		3.2			3.2			0.3			3.3
Non-deductible portion of goodwill impairment		(14.4	)		0.0			(31.8	)		0.0
Other		4.4			(9.5	)		(0.2	)		0.9
Effective tax rate		28.2	%		28.7	%		3.3	%		39.2	%

The 2009 and 2008 effective income tax rates were impacted by the goodwill impairment charges taken in each period being substantially non-deductible for tax purposes. The 2007 effective income tax rate benefited from a change in New York State tax law on our deferred tax balance (approximately $100).

F-37

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

We adopted FIN No. 48, “Accounting for Uncertainty in Income Taxes” effective January 1, 2007 that resulted in no material adjustment in the liability for unrecognized tax benefits. We classified interest expense and penalties related to unrecognized tax benefits as income tax expense. The accrued interest and penalties were $3,017 and $2,510 at December 31, 2009 and 2008, respectively. For the year-ended December 31, 2009 and 2008, we recognized $(493) and $405 of interest and penalties, respectively. Unrecognized tax benefits as of December 31, 2009 and 2008 are as follows:

	Unrecognized
	Tax Benefit
Predecessor Company
Balance at January 1, 2008	$	6,470
Additions for current year tax positions		439
Additions for prior year tax positions		94
Settlements		(444	)
Reductions related to expiration of statue of limitations		(157	)
Balance at December 31, 2008		6,402
Additions for current period tax positions		—
Additions for prior years tax positions		—
Settlements		—
Reductions related to expiration of statue of limitations		—
Balance at April 23, 2009	$	6,402
Successor Company
Balance at April 24, 2009	$	6,402
Additions for current period tax positions		1,751
Additions for prior years tax positions		3,165
Settlements		(2,614	)
Reductions related to expiration of statue of limitations		(2,067	)
Balance at December 31, 2009	$	6,637

The amount of unrecognized tax benefits that will reverse within the next twelve months cannot be estimated. Substantially all of our unrecognized tax benefits, if recognized, would affect the effective tax rate.

We are no longer subject to U.S. federal income examinations for years before 2005. During 2009, we settled our audit with the State of New York related primarily to filing positions through 2006. With few exceptions, we are no longer subject to state and local income tax examinations in other jurisdictions by tax authorities for years before 2002.

During 2008, we reported a federal net operating loss of approximately $2,700, for which we intend to prepare a Federal carryback claim. Accordingly, we have recorded an income tax receivable of $900. The states in which we operate generally do not permit the carryback of net operating losses. As a result, we must carry any related 2008 state net operating losses forward to be applied against future taxable income. We have recorded a deferred tax benefit of approximately $100 to reflect the expected utilization of these states and local net operating losses in future periods.

We determined, based upon the weight of available evidence, that it is more likely than not that our deferred tax asset will be realized. We have experienced a long history of taxable income, which would enable us to carryback any potential future net operating losses and taxable temporary differences that can be used as a source of income. As such, no valuation allowance was recorded during the year ended December 31, 2009. We will continue to assess the need for a valuation allowance at each future reporting period.

F-38

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 15 — Commitments and Contingencies

We have various non-cancelable, long-term operating leases for office space and equipment. In addition, we are committed under various contractual agreements to pay for talent, broadcast rights, research, news and other services. The approximate aggregate future minimum obligations under such operating leases and contractual agreements for the five years after December 31, 2009 and thereafter, are set forth below:

	Leases
Year	Capital		Operating		Other		Total
2010		960		5,775		123,850		130,585
2011		640		6,689		91,652		98,981
2012		—		6,590		82,111		88,701
2013		—		6,529		67,061		73,590
2014		—		5,804		64,260		70,064
Thereafter		—		22,566		156,840		179,406
	$	1,600	$	53,953	$	585,774	$	641,327

Rent expense charged to operations for the period from April 24, 2009 to December 31, 2009 and January 1, 2009 to April 23, 2009 and the years ended December 31, 2008 and 2007 was $6,288, $3,271, $10,686 and $8,523, respectively.

Included in “Other” in the table above is $476,531 of commitments due to CBS Radio and its affiliates pursuant to the agreements described in Note 2 — Related Party Transactions and $1,500 for payments related to the acquisition Jaytu (d/b/a SigAlert.)

NOTE 16 — Restructuring Charges

In the third quarter of 2008, we announced a plan to restructure our Metro Traffic segment (the “Metro Traffic re-engineering”) and to implement other cost reductions. The Metro Traffic re-engineering entailed reducing the number of our Metro Traffic operational hubs from 60 to 13 regional centers and produced meaningful reductions in labor expense, aviation expense, station compensation, program commissions and rent.

The Metro Traffic re-engineering initiative began in the second half of 2008 and continued in 2009. In the first half of 2009, we undertook additional reductions in our workforce and terminated certain contracts. In connection with the Metro Traffic re-engineering and other cost reduction initiatives, we recorded $14,100, 3,976 and $3,976 of restructuring charges in the second half of 2008, the period ended April 23, 2009 and the period ended December 31, 2009, respectively. We estimate upon completion of the program, aggregate restructuring charges will be approximately $22,600, consisting of: (1) $10,850 of severance, relocation and other employee related costs; (2) $5,050 of facility consolidation and related costs; and (3) $6,700 of contract termination costs.

F-39

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

The restructuring charges identified in the Consolidated Statement of Operations are comprised of the following:

	Severance			Facilities			Contract
	Termination			Consolidation			Termination
	Costs			Related Costs			Costs			Total
Activity thru December 31, 2008
Charges	$	6,765		$	831		$	6,504		$	14,100
Payments		(3,487	)		(41	)		(1,108	)		(4,636	)
Non-cash utilization		(80	)		—			(1,600	)		(1,680	)
Balance at December 31, 2008		3,198			790			3,796			7,784
Charges from January 1, to April 23, 2009		1,658			2,318			—			3,976
Charges from April 24, to December 31, 2009		1,941			1,885			150			3,976
Non-cash utilization		—			(360	)		—			(360	)
Payments		(5,260	)		(956	)		(2,196	)		(8,412	)
Balance at December 31, 2009	$	1,537		$	3,677		$	1,750		$	6,964
Accumulated charges	$	10,364		$	5,034		$	6,654		$	22,052
Accumulated payments		(8,747	)		(997	)		(3,304	)		(13,048	)
Accumulated non-cash utilization		(80	)		(360	)		(1,600	)		(2,040	)
Balance at December 31, 2009	$	1,537		$	3,677		$	1,750		$	6,964

NOTE 17 — Special Charges

The special charges identified on the Consolidated Statement of Operations are comprised of the following:

	Successor Company		Predecessor Company
	For the Period		For the Period
	April 24, 2009 to		January 1, 2009		Year Ended December 31,
	December 31, 2009		to April 23, 2009		2008		2007
Fees related to the Refinancing	$	1,196	$	12,699	$	—	$	—
TrafficLand write-down		1,852		—		—		—
Professional fees related to the offering		1,698		—		—		—
Regionalization costs		519		120		—		—
Financing and acquisition costs		289		—		—		—
Professional and other fees related to the new CBS agreements, Gores investment and debt refinancing		—		—		6,624		3,626
Closing payment to CBS for new agreement		—		—		5,000		—
Severance obligations related to executive officer changes		—		—		—		1,000
Re-engineering expenses		—		—		1,621		—
	$	5,554	$	12,819	$	13,245	$	4,626

Fees related to the Refinancing include transaction fees and expenses related to negotiation of the definitive documentation, including the fees of various legal and financial advisors for the constituents involved in the Refinancing (e.g. Westwood One, Gores, Glendon Partners, the banks, noteholders and the lenders of the new Senior Credit Facility) and other professional fees. The TrafficLand write-down reflects costs associated with the TrafficLand arrangement. Professional fees for the offering include fees for various legal and financial advisors related to the offering that the Company currently has no immediate plans to further pursue. Regionalization costs are expenses related to reducing the number of our Metro Traffic operational hubs from 60 to 13 regional centers. The financing and acquisition costs are costs related to the Culver city Properties financing lease and acquisition of Jaytu (d/b/a SigAlert). During 2008, we incurred costs relating to the negotiation of a new long-term arrangement with CBS Radio, legal and professional expenses attributable to negotiations relating to refinancing our debt, and consultancy expenses associated with developing a cost savings and Metro Traffic reengineering.

F-40

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

NOTE 18 — Segment Information

We manage and report our business in two operating segments: Metro Traffic and Network. We evaluated segment performance based on segment revenue and segment operating (loss) income. Administrative functions such as finance, human resources and information systems are centralized. However, where applicable, portions of the administrative function costs are allocated between the operating segments. The operating segments do not share programming or report distribution. In the event any materials and/or services are provided to one operating segment by the other, the transaction is valued at fair market value. Operating costs and total assets are captured discretely within each segment.

We report certain administrative activities under corporate. We are domiciled in the United States with limited international operations comprising less than one percent of our revenue. No one customer represented more than 10% of our consolidated revenue.

Revenue, segment operating (loss) income, depreciation, unusual items and capital expenditures for the periods ended at December 31, 2009 and April 23, 2009 and the years ended December 31, 2008 and 2007 are summarized below by segment:

	Successor Company			Predecessor Company
	For the Period			For the Period
	April 24, 2009 to			January 1, 2009			Year Ended December 31,
	December 31, 2009			to April 23, 2009			2008			2007
Revenue
Metro Traffic	$	109,008		$	47,479		$	194,884		$	232,445
Network		119,852			63,995			209,532			218,939
	$	228,860		$	111,474		$	404,416		$	451,384
Segment operating (loss) income
Metro Traffic	$	(9,842	)	$	(2,093	)	$	24,577		$	64,033
Network		3,144			(1,669	)		14,562			30,943
Total segment operating (loss) income		(6,698	)		(3,762	)		39,139			94,976
Corporate expenses		(7,119	)		(3,177	)		(19,709	)		(27,043	)
Restructuring and special charges		(9,530	)		(16,795	)		(27,345	)		(4,626	)
Goodwill and intangible impairment		(50,501	)		—			(430,126	)		—
Operating (loss) income		(73,848	)		(23,734	)		(438,041	)		63,307
Interest expense		14,782			3,222			16,651			23,626
Other (income) expense		(5	)		(359	)		(12,369	)		(411	)
(Loss) income before income taxes	$	(88,625	)	$	(26,597	)	$	(442,323	)	$	40,092
Depreciation and amortization
Metro Traffic	$	15,345		$	1,480		$	6,120		$	6,955
Network		6,110			1,096			3,139			3,152
Corporate		18			9			1,793			9,733
	$	21,473		$	2,585		$	11,052		$	19,840
Capital expenditures
Metro Traffic	$	3,509		$	878		$	1,538		$	4,042
Network		1,675			506			5,634			1,800
Corporate					—			141			7
	$	5,184		$	1,384		$	7,313		$	5,849

F-41

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Identifiable assets by segment at December 31, 2009 and 2008 are summarized below:

	Successor Company		Predecessor Company
	December 31, 2009		December 31, 2008
Total assets
Metro Traffic	$	152,057	$	80,079
Network		134,084		92,109
Corporate		19,307		32,900
	$	305,448	$	205,088

NOTE 19 — Quarterly Results of Operations (unaudited)

The unaudited quarterly results of operations for the years ended December 31, 2009 and 2008 are as follows:

Successor Company
	For the period			2009			2009			For the period
	April 24, 2009 to			Third			Fourth			April 24, 2009 to
	June 30, 2009			Quarter			Quarter			December 31, 2009
Net revenue	$	58,044		$	78,474		$	92,342		$	228,860
Operating loss	$	(4,146	)	$	(60,135	)	$	(9,567	)	$	(73,848	)
Net loss	$	(6,184	)	$	(53,549	)	$	(3,867	)	$	(63,600	)
Net loss per share:
Basic
Common Stock	$	(18.85	)	$	(10.03	)	$	(0.19	)	$	(11.75	)
Class B Stock	$	—		$	—		$	—		$	—
Diluted
Common Stock	$	(18.85	)	$	(10.03	)	$	(0.19	)	$	(11.75	)
Class B Stock	$	—		$	—		$	—		$	—

Predecessor Company
	2009			For the period			For the period
	First			April 1, 2009 to			January 1, 2009 to
	Quarter			April 23, 2009			April 23, 2009
Net revenue	$	85,867		$	25,607		$	111,474
Operating loss	$	(19,604	)	$	(4,130	)	$	(23,734	)
Net loss	$	(15,186	)	$	(3,776	)	$	(18,962	)
Net loss per share:
Basic
Common Stock	$	(33.95	)	$	(10.67	)	$	(43.64	)
Class B Stock	$	—		$	—		$	—
Diluted
Common Stock	$	(33.95	)	$	(10.67	)	$	(43.64	)
Class B Stock	$	—		$	—		$	—

F-42

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Predecessor Company
	2008
	First			Second			Third			Fourth			For the
	Quarter			Quarter			Quarter			Quarter			Year
Net revenue	$	106,627		$	100,372		$	96,299		$	101,118		$	404,416
Operating loss		(3,000	)		(195,609	)		(7,555	)		(231,877	)		(438,041	)
Net loss		(5,338	)		(199,744	)		(10	)		(222,471	)		(427,563	)
Net loss per share:
Basic
Common Stock	$	(11.94	)	$	(396.88	)	$	(2.88	)	$	(443.88	)	$	(878.73	)
Class B Stock	$	—		$	—		$	—		$	—		$	—
Diluted
Common Stock	$	(11.94	)	$	(396.88	)	$	(2.88	)	$	(443.88	)	$	(878.73	)
Class B Stock	$	—		$	—		$	—		$	—		$	—

For the nine months ended September 30, 2009 and the years ended December 31, 2008, and 2007, we understated liabilities in error related to uncertain income tax exposures, arising in the respective periods. These additional income tax exposures related primarily to deductions taken in state filings for which it is more likely than not that those deductions would not be sustained on their technical merits. The amounts of additional tax expense that should have been recorded related to this error was $82 in the 2009 successor period, $68 in the 2009 predecessor period, $1,442 in 2008 and $410 in 2007. In addition, $1,245 should have been recorded to retained deficit in 2007 upon adoption of the authoritative guidance on uncertain tax positions. Such charges totaling $3,247 were corrected in the fourth quarter of 2009 as an increase to income tax expense of $82, and an adjustment to the opening goodwill of $3,165 in the Successor Company at April 24, 2009. We have determined that the impact of these adjustments recorded in the fourth quarter of fiscal 2009 were immaterial to our results of operations in all applicable prior interim and annual periods. As a result, we have not restated any prior period amounts.

In the 23-day period ended April 23, 2009, we determined that we had incorrectly recorded a credit to interest expense, which should have been recorded in the three month period ended March 31, 2009, for the settlement of an amount owed to a former employee. We determined that this error was not significant to any prior period results and accordingly reduced the 23-day period’s interest expense by $754. Also in the period ended April 23, 2009, we determined that we incorrectly calculated the accretion of our preferred shares to redemption value which should have been recorded in the three-month period ended March 31, 2009. We determined that this error was not significant to any prior results and does not affect our net (loss) income. However, it does reduce the 23-day period’s net loss attributable to common stockholders by $1,262. Also In the 23-day period ended April 23, 2009, we recorded a charge to special charges for insurance expense of $261, see Note 5 — Goodwill for additional information.

For the period April 24, 2009 to June 30, 2009, we failed to record the added depreciation expense for the increase in fixed assets values associated with our purchase accounting. The amount of depreciation expense that should have been recorded in the period ended June 30, 2009 was $401. This amount was recorded in the three months ended September 30, 2009. Additionally, for the period ended June 30, 2009, we failed to accrue severance costs of $145 for employees terminated in June 2009. Such charge was recorded in the three months ended September 30, 2009.

In the fourth quarter of 2008, we recorded net adjustments of approximately $2,391 of expense for unused vacation time, a write-off of fixed assets and other miscellaneous items related to other periods. Additionally, in the second quarter of 2008, we recorded a decrease to our operating loss of approximately $1,496 for an adjustment to stock-based compensation.

We do not believe these adjustments are material to our Consolidated Financial Statements in any quarter or year of any prior period’s Consolidated Financial Statements. As a result, we have not restated any prior period amounts.

F-43

WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)

Schedule II — Valuation and Qualifying Accounts
Allowance for Doubtful Accounts

	Balance at		Additions		Deductions			Balance at
	Beginning of		Charged to Costs		Write-offs and			End of
	Period		and Expenses		Other Adjustments			Period
Successor Company
4/24/2009 to 12/31/2009	$	0	$	2,425	$	298		$	2,723
Predecessor Company
1/1/2009 to 4/23/2009	$	3,632	$	574	$	(6	)	$	4,200
2008	$	3,602	$	439	$	(409	)	$	3,632
2007	$	4,387	$	139	$	(924	)	$	3,602

II-1

EX-10.2

Exhibit 10.2

AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is made this 3rd day of December, 2009 (the “Effective Date”), between WESTWOOD ONE, INC., a Delaware corporation, having an address at 1114 Avenue of the Americas, 28th Floor, New York, NY 10036 (“Seller”) and NLC-LINDBLADE, LLC, a limited liability company, organized under the laws of Delaware, having an address at 11111 Santa Monica Blvd., Suite 750, Los Angeles, California 90025 (“Purchaser”).

WITNESSETH:

WHEREAS, Seller is the owner of separate parcels of real property commonly known as 8944 Lindblade Street, 8965 Lindblade Street and 8935 Lindblade Street, each in the City of Culver City, County of Los Angeles, State of California (a/k/a Assessor Parcel Numbers 4206-015-039, 4206-015-040, 4206-016-008, 4206-016-009, 4206-016-010 and 4206-016-011), more particularly described on Exhibit A attached hereto and made a part hereof (collectively, the “Land”);

WHEREAS, the Land has been improved with buildings containing approximately 32,428 square feet in the aggregate and certain ancillary improvements on the Land and certain other property subject to the Parking Rights Agreements (as defined below), including, without limitation, approximately one hundred one (101) parking spaces, driveways, access ways and landscaping (together with any and all other buildings, structures and fixtures now or hereinafter located on the Land, collectively, the “Improvements”);

WHEREAS, Purchaser is willing to purchase and acquire all of Seller’s right, title and interest in and to the Land, the Improvements and the other Property (as defined below), and Seller is willing to sell, assign and convey all such right, title and interest in and to the Land, the Improvements and the other Property, each upon and subject to the terms and conditions specified herein.

NOW THEREFORE, in consideration of the foregoing premises, the mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

PURCHASE AND SALE

Section 1.1 Property. Seller agrees to sell, assign and convey to Purchaser, and Purchaser agrees to purchase and acquire from Seller, the Property defined below, upon and subject to the terms and conditions of this Agreement. The “Property” shall be comprised of the following:

(a) Land. The Land;

(b) Improvements. The Improvements;

(c) Appurtenances. All open or proposed highways, streets, roads, avenues, alleys, easements, strips, gores and rights-of-way in, on, across, in front of, contiguous to, abutting or adjoining the Land and all other rights, privileges, burdens and rights-of-way appurtenant to the Land and/or the Improvements, including, without limitation, all rights, privileges and burdens of Seller under that certain Covenant and Agreement Regarding Parking made as of August 17, 1990 between GTO Entertainment and Westwood One, Inc., as recorded on September 10, 1990 as Instrument No. 90-1556576 in the Official Records of Los Angeles County, California (the “Parking Rights Agreement”);

(d) Tangible Property. Any and all tangible personal property of Seller located on the Land and/or the Improvements and used in connection with the use, enjoyment or operation thereof; excluding the personal property of Seller listed on Schedule 1.1(d) attached hereto and made a part hereof, title to which shall be retained by Seller (the “Excluded Property”);

(e) Intangible Property. Any and all assignable warranties and guaranties (express or implied) relating to the Land and/or the Improvements, all assignable permits, licenses, approvals and authorizations issued by any governmental authority with respect to the Land and/or the Improvements (except permits, licenses, approvals and authorizations required to be maintained by Seller for Seller’s operation of the Land and/or the Improvements as lessee under the Lease (as hereinafter defined in Section 3.2(b)), and any and all surveys of the Land and plans and specifications of the Improvements that are in Seller’s possession as of the Effective Date (as defined in Section 1.4(a) below); and

(f) Service Contracts. Seller’s right title and interest in any and all assignable service contracts and/or agreements to which Seller is a party relating exclusively to the management, upkeep, repair, maintenance and/or operation of the Land and/or the Improvements (“Service Contracts”) which Purchaser elects, in writing to Seller prior to the expiration of the Feasibility Period (as defined in Section 2.2), to assume in connection with the Closing (except Service Contracts to be maintained by Seller for Seller’s operation of the Land and/or the Improvements as lessee under the Lease).

Section 1.2 Purchase Price. In consideration of the sale, assignment and conveyance by Seller to Purchaser of the Property pursuant to the terms of this Agreement, Purchaser agrees to pay Seller an amount equal to Eight Million Two Hundred Fifty Thousand and 00/100 Dollars ($8,250,000.00) (the “Purchase Price”) at the Closing by wire transfer of immediately available federal funds. Notwithstanding the foregoing, Seller and Purchaser acknowledge and agree that the Purchase Price may be adjusted as a result of prorations, credits and adjustments as and to the extent herein provided.

Section 1.3 Payment of Purchase Price. The Purchase Price, as it may be increased or decreased by prorations, credits and adjustments as herein provided, shall be payable in full at Closing in cash by wire transfer of immediately available federal funds to a bank account designated by Seller in writing to Purchaser prior to the Closing.

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Section 1.4 Earnest Money.

(a) One (1) Business Day (as defined in Section 2.1(c) below) after the date this Agreement is executed by Seller and Purchaser (the “Effective Date”), Purchaser shall deposit with First American Title Insurance Company, Los Angeles, California, Attention: Greg Schultz (“Escrow Agent”), the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Earnest Money”). All interest accruing on the Earnest Money shall become a part of the Earnest Money and shall be distributed as the Earnest Money is distributed in accordance with the terms of this Agreement. The wire instructions of Escrow Agent are as follows:

Wire to:	First American Trust FSB
	5 First American Way
	Santa Ana, CA 92707
ABA Number:	122241255
For Credit To:	First American Title Insurance Company
Account Number:	3021820000
Reference:	Attn:      Barbara Laffer/Greg Schultz
	Phone:   213-271-1702

(b) Escrow Agent shall hold the Earnest Money in two separate banks approved by Seller and Purchaser, each in an interest bearing high-yield insured savings escrow account in accordance with the terms and conditions of this Agreement, to be disbursed and/or delivered as follows:

(i) Upon the consummation of the Closing, the Earnest Money shall be applied towards the payment of the Purchase Price and Escrow Agent will disburse the Earnest Money to Seller;

(ii) If the Closing is not consummated due to a breach or default of Purchaser that is not cured in accordance with this Agreement, and Seller terminates this Agreement pursuant to the terms and conditions hereof, Escrow Agent will disburse the Earnest Money to Seller;

(iii) If Seller defaults under the terms of this Agreement and Purchaser terminates this Agreement pursuant to the terms and conditions hereof, Escrow Agent will disburse the Earnest Money to Purchaser;

(iv) If Purchaser terminates this Agreement in accordance with the provisions of any of Sections 2.2(e), 3.7, 7.2 or 7.4, then Escrow Agent will disburse the Earnest Money to Purchaser;

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(v) Notwithstanding the foregoing, if either Seller or Purchaser claims that it is entitled to receive all or any portion of the Earnest Money, then that party (the claiming party) shall through its legal counsel notify Escrow Agent in writing and shall simultaneously deliver written notice of its claim to the other party (the non-claiming party). Escrow Agent shall promptly confirm with the non-claiming party that it received a copy of the claiming party’s notice. If Escrow Agent does not receive a written objection from or on behalf of the non-claiming party within five (5) Business Days after receipt of the claiming party’s notice, then Escrow Agent shall deliver to the claiming party all or that portion of the Earnest Money claimed by the claiming party; and

(vi) If Escrow Agent receives conflicting instructions or claims from Seller and Purchaser, Escrow Agent shall continue to hold the Earnest Money until jointly directed by Seller and Purchaser or until otherwise directed by a court of competent jurisdiction.

Section 1.5 Balance of Purchase Price. On or before the Closing, Purchaser shall deposit into the escrow an amount in immediately available funds which, when added to the Earnest Money, shall equal the Purchase Price plus any other sums payable by Purchaser hereunder.

Section 1.6 Escrow Agent.

(a) The parties acknowledge that Escrow Agent is holding the Earnest Money solely as a stakeholder at their request and for their convenience, that Escrow Agent shall not be deemed to be the agent of either party in carrying out its role as escrow agent hereunder, and that Escrow Agent shall not be liable to either party for any act or omission on its part unless taken in willful disregard of this Agreement or involving its gross negligence. Seller and Purchaser hereby jointly and severally indemnify and hold Escrow Agent harmless from and against any and all claims, liabilities and expenses (including reasonable attorneys’ fees and disbursements and court costs) which Escrow Agent may incur in connection with the performance of its duties hereunder, except with respect to actions or omissions taken by Escrow Agent in willful disregard of this Agreement or involving Escrow Agent’s gross negligence.

(b) Escrow Agent may act or not act in its role as escrow agent hereunder in full reliance upon and with the advice of counsel which it may select and shall be fully exculpated from all liability in so acting or not acting.

(c) Escrow Agent has acknowledged its agreement to act as escrow agent in accordance with this Agreement by signing in the place indicated on the signature page of this Agreement.

(d) Escrow Agent may at any time discharge its duties hereunder by depositing the Earnest Money with a court of competent jurisdiction and notifying Seller and Purchaser.

(e) Seller and Purchaser each agree to deliver to Escrow Agent an IRS Form W9 upon the execution and delivery of this Agreement. The parties acknowledge that until

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Escrow Agent receives a completed W9 from each of Seller and Purchaser the Earnest Money will be held in a non-interest bearing account.

ARTICLE II

TITLE, SURVEY AND DUE DILIGENCE

Section 2.1 Condition of Title.

(a) Purchaser has obtained a survey of the Property by a licensed surveyor or registered professional engineer selected by Purchaser (“Survey”) and a commitment for a policy of title insurance with respect to the Property issued by a nationally recognized title insurance company dated or redated as of the date of this Agreement (“Title Commitment”). Copies of the Title Commitment and Survey were provided to Seller prior to the Effective Date.

(b) Seller agrees to satisfy or remove at the Closing, from the proceeds of the Purchase Price it receives at Closing, the lien of any mortgage (including any fixture filings, assignment of leases and rents, or related documents) it created on the Property and to cause any liens (including mechanic’s liens) against Seller which have been filed against the Property and reduced to a liquidated sum to be released and/or discharged of record so that Purchaser’s title company is able to remove such liens as an exception to title in any title insurance which Purchaser may elect to purchase. Subject to the proceeding sentence, all other matters set forth in the Title Commitment and Survey shall be deemed accepted by Purchaser in their “AS IS” condition.

(c) As used in this Agreement, the term “Business Day” shall mean any day other than (i) a Saturday or a Sunday or (ii) a day observed as a holiday by the State of California or the federal government.

Section 2.2 Feasibility Contingency. As used herein, the term “Feasibility Period” shall mean the period which commences on the Effective Date and will expire at 2:00 pm Culver City Time (5:00 pm New York City Time), Thursday, December 10, 2009 (the “Feasibility Period Expiration Date”).

(a) During the Feasibility Period, Purchaser may, at its sole cost and expense, perform such studies, tests or inspections of the Property as it deems appropriate in connection with its due diligence review of the Property (the “Feasibility Studies”). If Purchaser shall intend to carry out any inspections which will involve the physical disturbance of any portion of the Property, Purchaser shall give Seller at least one (1) Business Day prior written notice of such intention and the conduct of such inspections shall be subject to Seller’s reasonable regulations (including, without limitation, regulations against disturbing the on-going activities of Seller or other occupants of the Property).

(b) Seller agrees to provide Purchaser with reasonable access to the Property, including, without limitation, any recording studios (except when in use), for the purpose of conducting the Feasibility Studies. Purchaser agrees to conduct all Feasibility Studies during normal business hours on Business Days (unless otherwise agreed to by Seller or unless studio use would be disturbed) with a representative of Seller present (at Seller’s option) and in

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such a manner so as to not disturb or interfere the ongoing activities and businesses of Seller or other occupants of the Property.

(c) Unless specifically authorized by Seller in writing or otherwise expressly permitted in Section 9.1, Purchaser shall maintain absolute confidentiality of the findings of its Feasibility Studies and shall not disclose the same to any third-party. To the extent not prohibited by any binding obligation on Purchaser with Purchaser’s third-party contractors or consultants, Purchaser shall forward copies of the Feasibility Studies to Seller promptly after request therefor by Seller. If Purchaser terminates this Agreement for any reason other than a default by Seller hereunder, Purchaser agrees that it shall not object (and hereby waives any right that it may have to object) to Seller’s contacting any of Purchaser’s third-party contractors and agents to obtain, at Seller’s sole cost and expense (and without any liability to Purchaser), updated Feasibility Studies certified to Seller or its nominee.

(d) Any portions of the Property which are disturbed or otherwise damaged by Purchaser or Purchaser’s agents, consultants or employees during the conduct of the Feasibility Studies shall be restored by Purchaser, at its sole cost and expense, to their prior existing condition. Purchaser hereby agrees to protect, defend, indemnify and hold Seller, Seller’s members, employees, officers and their respective affiliates (the “Seller Parties”) harmless from and against any and all liabilities, claims, damages, demands, judgments, costs, expenses or losses (including reasonable attorneys’ fees and expenses) incurred directly or indirectly by any of the Seller Parties for property damage claims or personal injury claims as a result of the conduct of the Feasibility Studies (but which shall not include pre-existing conditions or the results discovered by Purchaser during such inspection or Feasibility Study) or any other entry onto the Property by Purchaser, its agents, employees, contractors, subcontractors, invitees, consultants or other representatives (except to the extent that such claims arise from the gross negligence or willful misconduct of Seller, its affiliates, agents, officers or employees, directors or servants) and this obligation shall survive the Closing or the termination of this Agreement. In addition to the foregoing, Purchaser acknowledges and agrees that Seller shall have no liability to Purchaser or Purchaser’s agents, consultants or employees resulting from their entry upon the Property and the conduct of any Feasibility Studies, except to the extent that such claims arise from the gross negligence or willful misconduct of Seller, its affiliates, agents, officers or employees, directors or servants.

(e) Prior to the Feasibility Period Expiration Date, Purchaser shall deliver notice to Seller and Escrow Agent indicating that it has either accepted the Feasibility Studies or has rejected them and has elected to terminate this Agreement, whereupon this Agreement shall terminate without further notice, and all property, documents and amounts held in escrow shall be returned to the party that furnished them, other than the Earnest Money which shall be transferred as set forth herein, and no further time shall be available for performance of the Feasibility Studies. Non-delivery of the notice by Purchaser, or delivery of an acceptance or rejection of the accepted the Feasibility Studies that is conditional, shall be deemed a notice that Purchaser has elected to terminate this Agreement. Upon such termination, Purchaser shall be entitled to the return of the Earnest Money less one-half (1/2) the cost of all escrow and title cancellation charges and, upon the return of said sum, this Agreement shall terminate and be of no further force and effect and Seller and Purchaser shall be discharged of all liability, each to the other hereunder, except those liabilities which explicitly survive the Closing or sooner

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termination of this Agreement. If this Agreement does not so terminate, the Feasibility Period shall be deemed to have conclusively expired, and Purchaser shall be deemed to have conclusively waived its right to terminate this Agreement in accordance with this Section 2.2(e). From and after the Feasibility Period Expiration Date, the Earnest Money shall be non-refundable to Purchaser except as expressly provided in Sections 3.7, 6.2, 7.2 and 7.4.

(f) Prior to the exercise of its right of entry on the Property to conduct Feasibility Studies pursuant to this Section 2.2, if requested by Seller, Purchaser shall furnish to Seller evidence of liability insurance for each of Purchaser and any agent, representative or contractor of Purchaser entering the Property in amounts reasonably acceptable to Seller, but in no event less than $2,000,000.00 per occurrence and a deductible not to exceed $25,000. All insurers shall be authorized to do business in California, rated A:IX or higher in the AM Best’s Insurance Guide (or equivalent) and all required policies must name Seller as additional insureds and provide that thirty (30) days prior written notice of suspension, cancellation, termination, modification, non-renewal or lapse or material change in coverage shall be delivered to Seller.

(g) Under the terms of the Lease (as hereinafter defined), Seller is obligated to make certain repairs, improvements and replacements to the Property (collectively, the “Tenant’s Repairs”) set forth on Schedule 2.2(g) on or before the applicable dates set forth therein. The total cost (as such amount may be amended as set forth herein, the “Deferred Maintenance Funds”) of the Tenant Repairs is currently estimated not to exceed Nine Hundred One Thousand Dollars ($901,000). Prior to the Feasibility Period Expiration Date, Seller and Purchaser shall use commercially reasonable efforts to work with architects and contractors to obtain revised estimates (the “Repair Estimates”) from such architects and contractors for the performance of the Tenant’s Repairs which are reasonably satisfactory to each of Seller and Purchaser. If, prior to the expiration of the Feasibility Period, the parties hereto do not agree on any updates to Schedule 2.2(g) and if this Agreement has not been otherwise terminated, Schedule 2.2(g) (and the related provisions of the Lease) set forth herein as of the Effective Date shall not be deemed amended. Purchaser shall hold back from the Purchase Price the sum of Six Hundred Seventy-Three Thousand Dollars ($673,000), to be applied to the Deferred Maintenance Funds as required by the Lease. The Tenant Repairs shall be performed when and as required pursuant to the Lease. If the Repair Estimates are not reasonably satisfactory to each of Purchaser and Seller prior to the Feasibility Period Expiration Date, either party shall have the right to terminate this Agreement by delivery of a notice of termination of this Agreement to such other party on or before the Feasibility Period Expiration Date, and upon delivery of such notice, all property, documents and amounts held in escrow shall be returned to the party that furnished them. The failure to deliver such termination notice by either party shall be deemed to be that such party has elected to not terminate this Agreement. Notwithstanding the foregoing, but subject to Section 5.4(d), by agreeing to the amount of the Repair Estimates, neither Purchaser nor Seller shall be deemed to have represented, warranted or covenanted that the cost to complete the Tenant’s Repairs shall not exceed the amount of Repair Estimates, and Seller shall be obligated to perform the Tenant’s Repairs in accordance with the terms of the Lease even if the cost to complete the Tenant’s Repairs exceeds the Repair Estimates.

(h) Notwithstanding anything to the contrary contained herein, as of the Effective Date, Purchaser approves of all due diligence matters with respect to the Property, including, without limitation, the Feasibility Studies undertaken by Purchaser, other than (i) the

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scope of the Tenant’s Repairs, as set forth in Section 2.2(g), and (ii) the information set forth in the reports listed on Schedule 2.2(h) attached hereto (collectively, the “Outstanding Due Diligence Items”). Purchaser agrees to limit its remaining Feasibility Studies to determining whether to approve or disapprove the Outstanding Due Diligence Items. Prior to the Feasibility Period Expiration Date, Purchaser and Seller agree to obtain a commitment from one or more insurance companies to issue the Lease Environmental Policy upon the Closing. The provisions of Section 2.2(e) shall apply to Purchaser’s acceptance or rejection (or its deemed rejection) of the Outstanding Due Diligence Items and the termination of this Agreement. If the aggregate premiums for the Lease Environmental Policy and the insurance policy with respect to the storage tank located on the Property approved by Purchaser exceeds Seventy Thousand Dollars ($70,000) or (ii) no commitment for such Lease Environmental Policy has been obtained on or prior to the Feasibility Period Expiration Date, Seller shall have the right to terminate this Agreement by delivery of a notice of termination of this Agreement to Purchaser on or before the Feasibility Period Expiration Date, unless, in the case of clause (i) only, Purchaser agrees in writing before the Feasibility Period Expiration Date to pay the excess of the amounts set forth above for the Lease Environmental Policy. Upon delivery of such notice, all property, documents and amounts held in escrow shall be returned to the party that furnished them. The failure of Seller to deliver such notice shall be deemed to be an election by Seller to not terminate this Agreement.

ARTICLE III

CLOSING

Section 3.1 Closing of Title. Subject to the satisfaction (or waiver by Purchaser or Seller as provided therein) of the conditions precedent in Sections 3.7 and 3.8 hereof, the consummation of the transactions contemplated hereby (the “Closing”) shall be held via mail in escrow or in person at a location in Los Angeles to be mutually designated by Seller and Purchaser at 12:30 pm Culver City time on or Thursday, December 17, 2009 (the “Closing Date”). If any of the conditions set forth in Sections 3.7 or 3.8 hereof have not satisfied satisfaction (or waiver by Purchaser or Seller as provided therein) by the Closing Date, then either party may in writing, immediately subsequent to such date, demand and receive from Escrow Agent return of all amounts (other than the Earnest Money which shall be transferred as set forth herein), documents and property, whereupon this Agreement shall terminate and be of no further force and effect and Seller and Purchaser shall be discharged of all liability, each to the other hereunder, except those liabilities which are stated explicitly to survive the termination of this Agreement.

Section 3.2 Seller’s Obligations at Closing. At Closing, Seller shall deliver to Purchaser:

(a) a grant deed in the form attached hereto as Exhibit 3.2(a) (the “Deed”), duly executed and acknowledged, conveying the Property to Purchaser, subject only to (1) matters created with the consent of Purchaser, (2) non-delinquent liens for real estate taxes and assessments, and (3) subject to the removal of the items set forth in Section 2.1, exceptions disclosed in the Title Commitment;

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(b) the office building lease for the Property in the form attached hereto as Exhibit 3.2(b), duly executed by Seller, as the lessee therein (the “Lease”), including any amendment the parties may have agreed to under the provisions of Section 2.2(g); provided, however, nothing herein shall imply any obligation on either party to agree to amend the form of Lease, and provided further that if the parties cannot agree on any changes to the attached Lease on or prior to the expiration of the Feasibility Period, there shall be no changes to the form attached to this Agreement;

(c) an omnibus bill of sale, assignment and assumption agreement in the form attached hereto as Exhibit 3.2(c), duly executed by Seller, effecting the assignment of all of Seller’s right, title and interest in and to the Parking Rights Agreement, the conveyance of all tangible personal property of Seller (other than the Excluded Property) located on the Land and/or the Improvements and used in connection with the use, enjoyment or operation thereof, all assignable warranties and guaranties, assignable permits, licenses, approvals and authorizations issued by any governmental authority with respect to the Property (unless used by Seller in connection with its occupancy under the Lease) and all surveys and plans and specifications relating to the Property (the “Omnibus Assignment”);

(d) the memorandum of lease for the Property in the form attached hereto as Exhibit 3.2(d), duly executed by Seller (the “Memo of Lease”);

(e) the Letter of Credit (as defined in the Lease) and evidence of such insurance as required pursuant to the Lease and in the form previously approved by the parties;

(f) originals or copies of all permits, approvals, warranties and licenses and as-built plans and specifications (to the extent in existence and in the possession or control of Seller) relating to the ownership, use, development or operation of the Property;

(g) Intentionally Omitted;

(h) evidence of the existence, good standing, organization and authority of Seller and the authority of the person(s) executing documents on behalf of Seller reasonably satisfactory to Purchaser’s title insurer;

(i) a certification, in the form attached hereto as Exhibit 3.2(i), that Seller’s sole member is not a “foreign person” for purposes of Section 1445 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder;

(j) a duly executed California Real Estate Withholding Certificate in compliance with California law (Form 593-C), certifying, if applicable, that Seller is not subject to tax withholding under California law in connection with the transaction contemplated under this Agreement;

(k) a certificate from Seller which confirms that Seller’s representations and warranties set forth in Section 5.1 herein are true and correct as of the Closing Date, except as otherwise provided in such certificate (“Seller’s Closing Certificate”);

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(l) an estoppel certificate substantially in the form of Schedule 3.2(l) attached hereto, executed by Seller and SY Culver City Portfolio, L.P., as successor-in-interest to GTG Entertainment, with respect to the Parking Rights Agreement (the “Parking Rights Estoppel”);

(m) a subordination, non-disturbance and attornment agreement, in the form of Exhibit 3.4(e), duly executed by Seller, as tenant under the Lease, and Seller’s mortgagee(s), as mortgagee with respect to Seller’s interest in, under and to the Lease, with such changes thereto which may be requested during the Feasibility Period by Seller’s mortgagee(s), Purchaser’s mortagee(s) or any holder of any ground lease that may be granted by Purchaser at Closing and which are approved by Seller and Purchaser, which approvals shall not be unreasonably withheld, conditioned or delayed so long as the changes are reasonably consistent with industry custom for mortgagees or holders of ground leases, as applicable (the “SNDA”);

(n) keys to all locks located in or about any portion of the Property (excluding any recording studios) and all personal property described in the Omnnibus Agreement to the extent in Seller’s possession or control;.

(o) an owner’s affidavit sufficient to support the issuance of an ALTA Owner’s Policy of Title Insurance (Form B, rev. 10/17/70); and

(p) such other and further documents as may be reasonably required by Purchaser or its title insurer to effectuate the Closing that do not increase the liability of Seller under this Agreement.

Section 3.3 Purchaser’s Obligations at Closing. At Closing, Purchaser shall deliver to Seller:

(a) the Purchase Price described in Sections 1.2 and 1.3 above, as it may be increased or decreased by apportionments, prorations, credits and adjustments provided herein;

(b) duly executed counterparts of the Lease, the Memo of Lease, the Omnibus Assignment (pursuant to which Purchaser shall assume the rights, obligations and agreements therein assigned), the Parking Rights Estoppel and the Closing Statement;

(c) evidence to be delivered to Seller and the Title Company of the existence, organization and authority of Purchaser and the authority of the person(s) executing documents on behalf of Purchaser;

(d) a certificate from Purchaser which confirms that Purchaser’s representations and warranties set forth in Sections 5.4 herein are true and correct as of the Closing Date, except as provided in such certificate (“Purchaser’s Closing Certificate”);

(e) the SNDA, duly executed by Purchaser and Purchaser’s mortgagee and any holder of any ground lease that may be granted by Purchaser at Closing; and

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(f) such other and further documents as may be reasonably required by Seller, Escrow Agent and purchaser’s title company to effectuate the Closing.

Section 3.4 Escrow Agent’s Obligations at Closing. At Closing, Escrow Agent shall deliver the Earnest Money to Seller in accordance with the provisions of Section 1.4(b)(i) and the balance of the Purchase Price, as set forth in Section 1.5.

Section 3.5 Credits and Prorations.

(a) All items of income and expense relative to the Property, such as rent, utilities, real estate taxes and assessments levied against the Property, sewer charges, water rents, assessments and other charges payable or collectible under the Parking Rights Agreement and all other items typically adjusted upon the sale of commercial real estate in Los Angeles County, California, shall be apportioned with respect to the Property as of 12:01 a.m. on the Closing Date, on the basis of a 365 day year, based on a proration statement jointly prepared by Purchaser and Seller in accordance with this Section 3.5 and delivered to Escrow Agent prior to Closing, as if Purchaser were vested with title to the Property during the entire day upon which Closing occurs; provided, however, that with respect to real estate taxes (i) if there are any tax appeals pending as of the date of the Closing, all amounts credited to the Property or otherwise received as a result thereof, together with interest thereon, shall be payable to Seller, except as to the year in which the Closing shall occur, any amounts credited to the Property or otherwise received as a result thereof shall be apportioned between Seller and Purchaser as of the Closing Date on a pro-rata basis after the deduction of all costs of recovery (including reasonable attorney’s fees and costs) and Seller’s portion thereof (together with all costs of recovery, including reasonable attorney’s fees and costs) shall be payable to Seller, and (ii) all assessments for public improvements which have been physically completed as of the date of Closing are to be paid by Seller in full at Closing from the proceeds of the Purchase Price. If such prorations result in a net credit to Seller, Purchaser shall deposit the amount of such credit with Escrow Agent together with the balance of the Purchase Price pursuant to Section 1.5; provided, however, (1) if Seller is obligated to pay for such amounts pursuant to the Lease, Purchaser shall have no obligation to pay for such amounts, and no adjustment shall be made at Closing, and such sums shall be paid exclusively by Seller as tenant pursuant to the Lease, or (2) if Purchaser is obligated to pay such amount under the Lease, Purchaser shall retain such amount and apply it towards the payment of property operating expenses pursuant to the terms of the Lease (for example, if Seller receives a credit for prepaid Utilities, Purchaser would retain such amount and apply the credit towards Seller’s monthly utility obligations as tenant under the Lease). If the computation of the apportionments and adjustments described in this Section 3.5 shows that a net amount is owed by Seller to Purchaser, such amount shall be credited against the Purchase Price as provided for in Section 1.5.

(b) Seller shall be entitled to continue or decline, at its option, to prosecute any tax appeals which may be pending as of the Closing Date, however, Seller shall take no further action after the date of this Agreement and prior to Closing to appeal, forego appeal, settle or compromise taxes for the tax year in which the Closing shall occur without the prior written approval of Purchaser; nothing contained herein shall limit Seller’s rights or obligations as tenant under the Lease.

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(c) If the Closing shall occur before a new real estate tax rate is fixed, the apportionment of taxes shall be upon the basis of the old tax rate for the preceding tax year applied to the latest assessed valuation. Promptly after the new tax rate is fixed, the apportionment of taxes shall be recomputed by Seller and Purchaser and any discrepancy resulting from such recomputation and any errors or omissions in computing apportionments shall be promptly corrected.

(d) Seller and Purchaser agree to cooperate with one another in good faith following the Closing to correct any errors in credits or prorations in connection with the Closing and to “true-up” any prorations which were estimated as of the Closing within one hundred twenty (120) days of Closing. In connection with the foregoing, Seller and Purchaser agree to promptly pay to the party entitled thereto any refund, credit or other payment necessary to correct such errors or effect such “true-up”.

(e) Seller shall pay for the cost of issuance of the Parking Rights Estoppel.

(f) The terms and provisions of this Section 3.5 shall survive the Closing.

Section 3.6 Closing Costs.

(a) Seller shall pay (i) the fees of any counsel representing Seller in connection with this Agreement and the transactions contemplated hereby, (ii) all recording charges for the removal of any mortgages, liens, exceptions or encumbrances in accordance with Section 2.1, (iii) all fees, costs and expenses, if any, of any title examinations, the Title Commitment and any updated thereto prepared by the Title Company and the premium for a CLTA standard coverage owner’s title policy for the Property, (iv) all documentary stamp taxes or city or county conveyance or transfer taxes imposed by the State of California, County of Los Angeles or City of Culver City in connection with the transactions consummated at the Closing and (v) one-half (1/2) of escrow fees and expenses.

(b) Purchaser shall pay (i) the fees of any counsel representing Purchaser in connection with this Agreement and the transactions contemplated hereby, (ii) the cost of all premiums and endorsements for Purchaser’s title policy which are in excess of the amounts for which Seller is responsible for pursuant to Section 3.6(a) above, (iii) the fees and costs, if any, related to any surveys, inspections and other reports commissioned by Purchaser in connection with the Feasibility Studies and the transactions contemplated by this Agreement, (iv) all recording fees and charges (except to the extent payable by Seller as provided in Section 3.6(a)(ii)), and (v) one-half (1/2) of all escrow fees and expenses.

(c) All other costs and expenses incident to the transactions contemplated hereby and the Closing shall be paid by the party incurring same.

Section 3.7 Conditions Precedent to Obligation of Purchaser to Consummate the Closing. The obligation of Purchaser to consummate the Closing shall be subject to the fulfillment or satisfaction of the following on or prior to the Closing Date:

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(a) Seller shall have delivered all documents required pursuant to Section 3.2, including the Parking Rights Estoppel;

(b) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller;

(c) all representations and warranties of Seller set forth in Section 5.1 shall be true and correct in all material respects as of the Closing Date;

(d) Seller shall deliver Seller’s Closing Certificate, dated as of the Closing Date, stating that the representations and warranties of Seller contained in this Agreement are true and correct in all material respects as of the Closing Date (with any specific modifications of those representations and warranties to reflect changes in factual circumstances occurring from and after the Effective Date, or identifying any representation or warranty which is not, or no longer is, true and correct and explaining the state of facts giving rise to the change. In no event shall Seller be liable to Purchaser for any Out-of-Pocket Expenses, or be deemed to be in default hereunder by reason of, any breach of a representation or warranty which results from any change that (i) occurs between the Effective Date and the Closing Date and (ii) either (A) was actually known to Purchaser before expiration of the Feasibility Period (in which event Seller’s representations and warranties set forth in this Agreement shall be deemed to have been modified by all such knowledge) or (B) is permitted under the terms of this Agreement or is beyond the reasonable control of Seller to prevent; provided, however, that in the case of clause (B), the occurrence of a change which is not permitted hereunder, if materially adverse to the operation and use of the Property, shall constitute the non-fulfillment of the relevant condition(s) set forth in this Section 3.7(d) entitling Purchaser to cancel the subject transaction based upon the failure of an express condition precedent and receive a return of the Earnest Money and Purchaser’s Out-of-Pocket Expenses. References to “actually known to Purchaser” shall refer only to the actual knowledge of Michael Hackman, Jonathan Epstein, Theresa Jones, Fong Ly and Jason Gruenbaum, and shall not be construed, by imputation or otherwise, to refer to the knowledge of any affiliate of Purchaser or any other agent, manager, representative or employee of Purchaser or any affiliate thereof or to impose upon Purchaser any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains. If, despite changes or other matters described in such certificate, Purchaser elects to close Escrow, Seller’s representations and warranties set forth in this Agreement shall be deemed to have been modified by all statements made in Seller’s Closing Certificate;

(e) On or prior to Closing, Seller shall have paid the premium for issuance of the Lease Environmental Policy in the form approved by Purchaser under the terms and conditions of Section 2.2(h), and the applicable insurance companies are committed to issue such Lease Environmental Policy upon the Closing; and

(f) Title Company shall be irrevocably and unconditionally committed to issue the Title Commitment.

Section 3.8 Conditions Precedent to Obligation of Seller to Consummate the Closing. The obligation of Seller to consummate the Closing shall be subject to the fulfillment or satisfaction of the following on or prior to the Closing Date:

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(a) Purchaser shall have delivered all documents required pursuant to Section 3.3;

(b) Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser; and

(c) all representations and warranties of Purchaser set forth in Section 5.4 shall be true and correct in all material respects as of the Closing Date.

ARTICLE IV

ADDITIONAL COVENANTS AND AGREEMENTS

Section 4.1 Parking Rights Agreement. Pursuant to Section 15.2 of the Parking Rights Agreement, Purchaser shall agree at Closing to be bound by all terms and conditions of the Parking Rights Agreement binding on Seller.

Section 4.2 Exclusivity. Seller covenants and agrees that as long as Purchaser timely pays the Earnest Money, this Agreement has not terminated during the Feasibility Period or has not terminated pursuant to Section 3.1, and Purchaser is otherwise not in default of any of its obligations hereunder, and for as long as this Agreement shall remain in full force and effect, Seller shall not (i) enter into another contract to sell the Property, (ii) engage another broker (i.e., aside from Broker (as defined in Section 7.6)), to list the Property for sale, (iii) directly or indirectly market the property to any other parties and shall cease and not initiate or entertain any discussions, negotiations or other efforts with any other parties concerning any type of sale or disposition of the Property; (iv) execute and deliver a letter of intent to sell the Property to any other party, and (v) record a mortgage secured by the Property which will not be discharged of record in connection with the Closing or before.

Section 4.3 Continued Operation of the Property. Between the date hereof and the Closing Date, Seller shall continue to operate and maintain the Property and enforce its service contracts in a manner consistent with the manner in which Seller has heretofore operated and maintained the Property, reasonable wear and tear and casualty excepted. From and after the date of this Agreement, Seller may enter into renewals, amendments, modifications or cancellations of existing Service Contracts (each, a “Contract Change”) or new Service Contracts (each, a “New Contract”) in the ordinary course of business consistent with past practices at the Property without Purchaser’s written approval. Seller shall promptly provide Purchaser with a copy of any Contract Change or New Contract. Each New Contract will contain a right to terminate such New Contract upon thirty (30) days written notice to the other party, without penalty. Seller shall not enter into a Contract Change or New Contract that is not terminable upon thirty (30) days written notice to the other party without Purchaser’s consent, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Seller shall not enter into any lease for any portion of the Property without the prior written consent of Purchaser.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties of Seller. Seller hereby makes the following representations and warranties to Purchaser:

(a) Organization and Authority. Seller has been duly organized and is validly existing and in good standing as a corporation under the laws of the State of Delaware and is qualified to do business in California. Seller has the full right and authority to enter into this Agreement and to transfer the Property pursuant hereto and to consummate or cause to be consummated the transaction contemplated herein. The person signing this Agreement on behalf of Seller is authorized to do so. Assuming the due authorization, execution and delivery of this Agreement by and on behalf of Purchaser, this Agreement constitutes a valid and binding obligation of Seller enforceable against Seller in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, receivership and other similar laws affecting the rights and remedies of creditors and principles of equity. Neither the execution and delivery hereof, nor the taking of any of the actions contemplated hereby, will conflict with or result in a breach of any of the provisions of, or constitute a default, event of default or event creating a right of acceleration, termination or cancellation under the organizational documents of Seller or under any instrument, note, mortgage, contract, judgment, order, award, decree or other agreement to which Seller is a party, or by which Seller is otherwise bound.

(b) Pending Actions. There are no actions, suits, arbitrations, unsatisfied orders or judgments, governmental investigations or other proceedings pending against Seller or the Property or the transactions contemplated by this Agreement, which, if adversely determined, could individually or in the aggregate have a material adverse effect on title to the Property or any portion thereof or which could in any material way interfere with the consummation by Seller of the transactions contemplated by this Agreement.

(c) Violation of Law. Except as set forth on Schedule 5.1(c), to Seller’s knowledge, (i) the Property (including all Improvements thereon) is in compliance, and all Improvements have been constructed in accordance with, all applicable statutes, rules, regulations and ordinances (including applicable zoning, building and seismic codes and the Americans with Disabilities Act), and (ii) Seller has not received a written notice from any federal, state, county or municipal authority that alleges that the Property is not in compliance with any applicable statute, rule, regulation or ordinance (including applicable zoning, building and seismic codes and the Americans with Disabilities Act) which non-compliance has not been cured.

(d) Bankruptcy. Seller has not filed any voluntary petition in bankruptcy, has not been the subject of an involuntary proceeding in bankruptcy which has not been vacated or stayed within thirty (30) days of the filing of such proceeding, and has not filed any petition or answer seeking any reorganization, liquidation, dissolution or similar relief under any federal bankruptcy or insolvency laws, or other relief for debtors, and has not sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator or liquidator of all or any substantial part of its assets or its interest in any property. No court of competent

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jurisdiction has entered an order, judgment, or decree approving a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any federal bankruptcy act, and no liquidator of Seller or of all or any substantial part of its assets or its interest in any property has been appointed.

(e) Condemnation. No condemnation or eminent domain proceeding is currently pending regarding the Property (or any portion thereof) and to Seller’s knowledge no such proceeding is contemplated.

(f) Leases. Except for the Lease, the Permitted Exceptions and the Parking Rights Agreement, no leases, licenses or other occupancy agreements are in effect with respect to the Property, or any portion thereof, which shall survive the Closing.

(g) Section 1445. Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code, as amended, and the regulations promulgated thereunder.

(h) Parking Rights Agreement. The Parking Rights Agreement is in full force and effect and has not been modified or amended except as may appear of record. Seller has not received any written notice advising that it is in default under the Parking Rights Agreement and to Seller’s knowledge, no facts or circumstances exist that, with notice and the passage of time, could constitute a default by Seller under the Parking Rights Agreement.

(i) Property Condition. Except as set forth on Schedule 5.1(c), Seller has not failed to obtain any material governmental permit necessary for the construction or occupancy of the Improvements in the manner in which they are presently being occupied.

(j) Service Contracts. The only Service Contracts in effect for the Property are set forth in a list of Service Contracts attached hereto as Schedule 5.1(j) and made a part hereof.

(k) Taxes. Seller has not received any written notice of any re-assessments for general real estate tax purposes, or special assessments.

(l) No Toxic Wastes. Except as set forth on Schedule 5.1(l), the Property has not been used during the period of Seller’s ownership of the Property for the storage or disposal of any Hazardous Substance in violation of Environmental Laws, and, to Seller’s actual knowledge, there are not present on or about the Property any Hazardous Substances in quantities in violation of Environmental Laws. Seller has not received any written notice from any governmental authority concerning the removal of any Hazardous Substance from the Property, or concerning any restrictions on the use or development of the Property on account of the presence of any Hazardous Substance on the Property.

“Hazardous Substance” means (i) any chemical, compound, material, mixture or substance that is now defined or listed in, or otherwise classified pursuant to, any Environmental Law as a “hazardous substance,” “hazardous material,” “hazardous waste,” “extremely hazardous waste,” “infectious waste,” “toxic substance,” “toxic pollutant” or any other formulation intended to define, list, or classify substances by reason of deleterious

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properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, or “EP toxicity” and (ii) petroleum, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas), ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources.

“Environmental Laws” means any and all present federal, state and local laws (whether under common law, statute, rule, regulation or otherwise), permits, and other requirements of governmental authorities relating to the environment or to any Hazardous Substance (including, without limitation, (i) the Toxic Substances Control Act, 15 U.S.C., Section 2601 et seq., (ii) the Clean Water Act, 33 U.S.C., Section 1251 et seq., (iii) the Resource and Conservation and Recovery Act, 42 U.S.C., Section 6901 et seq., (iv) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C., Section 9601 et seq., and (v) the Hazardous Materials Transportation Act, 49 U.S.C., Section 1801 et seq.

(m) Material Information. To Seller’s knowledge, all documents, architectural and engineering plans and specifications, Service Contracts and other contracts, agreements, reports and other items and materials related to the Property which have been or will be delivered to Purchaser constitute all of the documents in Seller’s possession or control which Seller reasonably believes are material to the ownership and operation of the Property during Seller’s period of ownership of the Property in accordance with the current use of the Property. Upon Seller’s consent, not to be unreasonably withheld or delayed, Seller agrees that Purchaser may update any third-party reports delivered to Purchaser and shall consent to such third-parties certifying the reports to Purchaser.

Section 5.2 Knowledge Defined. References to the “knowledge” of Seller shall refer only to the actual knowledge of Joseph Wachs, who is knowledgeable about the Property, and shall not be construed, by imputation or otherwise, to refer to the knowledge of any affiliate of Seller or to any other agent, manager, representative or employee of Seller or any affiliate thereof or to impose upon Seller any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains. Seller represents and warrants that the “knowledge” individual listed above is the individual under the control of Seller who most possesses substantial and material knowledge of the Property and its operations as compared to any other individuals under the control of the Seller. Notwithstanding the first sentence of this Section 5.3, the reference to the “knowledge” of Seller in Section 5.1(c)(ii) shall also mean David Hillman and Melissa Garza.

Section 5.3 Survival of Seller’s Representations and Warranties. The representations and warranties of Seller set forth in this Agreement and the documents to be delivered by Seller at the Closing shall survive the Closing for a period of twelve (12) months and no action or claim based on a breach of any of such representations and warranties shall be commenced after the expiration of such period. Further, to the extent any such breach was either disclosed to Purchaser in writing prior to the Closing or was otherwise known by Purchaser to have existed as of the Closing Date and Purchaser nevertheless decides to proceed with the Closing, then such breach shall be deemed to have been waived, it being agreed that Purchaser shall not be entitled to accept the Deed at Closing and maintain an action thereafter for a breach of a representation or

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warranty of Seller which was known by Purchaser at the time of Closing. In addition, during the period of the survivability of Seller’s representations and warranties provided above, Seller’s liability for a breach of its representations and warranties shall be limited to the actual, out-of-pocket damages (but not any consequential, special or other damages) suffered by Purchaser as a result of the fact that a breach of any of Seller’s representations or warranties provided in Section 5.1 existed as of the Closing and such breach was not disclosed in writing to Purchaser prior to the Closing and was otherwise unknown to Purchaser as of the Closing Date; provided, however, that Seller’s liability for Purchaser’s actual, out-of-pocket damages shall be limited to $250,000.00 in the aggregate and Purchaser shall not be entitled to make a claim for a breach of Seller’s representations and warranties if the alleged actual, out-of-pocket damages are less than $25,000.00 (but if the alleged damages are greater than $25,000.00, Purchaser may make a claim for the entire amount of its actual, out-of-pocket damages, up to a maximum of $250,000.00). Notwithstanding anything to the contrary contained herein, the foregoing limitations shall not apply to the fraud or intentional misrepresentation of Seller, and nothing in this Section 5.3 shall limit Seller’s obligations and liabilities as tenant under the Lease.

Section 5.4 Representations and Warranties of Purchaser. Purchaser hereby makes the following representations and warranties to Seller:

(a) Organization and Authority. Purchaser has been duly organized and is validly existing and in good standing as a limited liability company organized under the laws of Delaware. Purchaser has the full right and authority to enter into this Agreement and to acquire the Property pursuant hereto and to consummate or cause to be consummated the transactions contemplated herein. The person signing this Agreement on behalf of Purchaser is authorized to do so. Assuming the due authorization, execution and delivery of this Agreement by and on behalf of Seller, this Agreement constitutes a valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, receivership and other similar laws affecting the rights and remedies of creditors and principles of equity. Neither the execution and delivery hereof, nor the taking of any of the actions contemplated hereby, will conflict with or result in a breach of any of the provisions of, or constitute a default, event of default or event creating a right of acceleration, termination or cancellation under the organizational documents of Purchaser or under any instrument, note, mortgage, contract, judgment, order, award, decree or other agreement to which Purchaser is a party, or by which Purchaser is otherwise bound.

(b) Pending Actions. There is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Purchaser which, if adversely determined, could individually or in the aggregate materially interfere with the consummation by Purchaser of the transaction contemplated by this Agreement.

(c) Bankruptcy and Insolvency. Purchaser is solvent, has the financial capacity to fulfill its obligations hereunder, has not filed any voluntary petition in bankruptcy or been adjudicated as bankrupt or insolvent, has not been the subject of an involuntary proceeding in bankruptcy which has not been vacated or stayed within thirty (30) days of the filing of such proceeding, and has not filed any petition or answer seeking any reorganization, liquidation, dissolution or similar relief under any federal bankruptcy or insolvency laws, or other relief for debtors, and has not sought or consented to or acquiesced in the appointment of any trustee,

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receiver, conservator or liquidator of all or any substantial part of its assets or its interest in any property. No court of competent jurisdiction has entered an order, judgment, or decree approving a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any federal bankruptcy act, and no liquidator of Purchaser or of all or any substantial part of its assets or its interest in any property has been appointed. Purchaser has not admitted in writing or otherwise alleged to any person or entity that it is insolvent or is suspending or under the pending suspension of its operations.

(d) Repair Estimates. The Repair Estimates were delivered by an architect whom Purchaser has engaged on prior occasions for similar work. Purchaser had instructed the architect to deliver Repair Estimates that included in all material respects all elements of the work (hard and soft costs).

Section 5.5 Survival of Purchaser’s Representations and Warranties. The representations and warranties of Purchaser set forth in this Agreement shall not survive the Closing.

ARTICLE VI

DEFAULT AND REMEDIES

Section 6.1 Seller’s Remedies for Purchaser’s Default at or prior to Closing. If the Closing is not consummated on or prior to the Closing Date due to a breach or default of Purchaser that is not cured in accordance with this Agreement prior to the Closing Date, and Seller terminates this Agreement pursuant to the terms and conditions hereof, Seller shall be entitled, AS ITS SOLE AND EXCLUSIVE REMEDY TO TERMINATE THIS AGREEMENT UPON WRITTEN NOTICE TO PURCHASER AND ESCROW AGENT, WHICH SHALL RELEASE SELLER FROM ANY OBLIGATION TO SELL THE PROPERTY TO PURCHASER, AND RECEIVE AND RETAIN THE EARNEST MONEY AS LIQUIDATED DAMAGES FOR THE DEFAULT BY PURCHASER UNDER THIS AGREEMENT; IT BEING EXPRESSLY AGREED BETWEEN THE PARTIES HERETO THAT THE ACTUAL DAMAGES TO SELLER IN THE EVENT OF SUCH BREACH WOULD BE DIFFICULT AND IMPRACTICAL, IF NOT IMPOSSIBLE, TO ASCERTAIN AND THE AMOUNT OF THE EARNEST MONEY (INCLUDING ALL INTEREST THEREON) IS A FAIR AND REASONABLE ESTIMATE THEREOF AS OF THE DATE OF THIS AGREEMENT. THE PAYMENT AND RETENTION OF THE EARNEST MONEY AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO

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CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. IT IS UNDERSTOOD AND AGREED THAT THIS LIQUIDATED DAMAGES PROVISION APPLIES ONLY TO PURCHASER’S DEFAULT IN ITS OBLIGATION TO PURCHASE THE PROPERTY ON THE CLOSING DATE AND SHALL NOT BE CONSTRUED TO RESTRICT IN ANY WAY THE REMEDIES AVAILABLE TO SELLER UPON PURCHASER’S BREACH OF ITS OBLIGATIONS HEREUNDER TO INDEMNIFY AND HOLD SELLER HARMLESS AND OTHER PROVISIONS OF THIS AGREEMENT WHICH DO NOT PERTAIN TO THE CLOSING (E.G., CONFIDENTIALITY) OR A BREACH OF PURCHASER’S POST CLOSING OBLIGATIONS. FURTHER THIS LIQUIDATED DAMAGES PROVISION SHALL NOT BE EFFECTIVE OR OPERATE TO RESTRICT SELLER’S REMEDIES UNLESS PURCHASER HAS DEPOSITED THE EARNEST MONEY AS AND WHEN REQUIRED BY SECTION 1.4. Upon such termination and receipt of the Earnest Money, this Agreement shall be terminated and neither party shall have any further liability to the other except to the extent of any obligations which expressly survive a termination.

Seller’s Initials                      Purchaser’s Initials                     

Section 6.2 Purchaser’s Remedies for Seller’s Default. If Seller fails to perform its obligations under this Agreement for any reason except the failure of an express condition precedent to Seller’s obligation to consummate the Closing as set forth in Section 3.8 (and thereafter fails to remedy such default by the later of five (5) Business Days after written notice of such default by Purchaser or the Closing Date, as the same may be adjourned as provided herein), Purchaser shall be entitled, as its sole and exclusive remedy in such event (except as expressly provided below) to either (i) terminate this Agreement upon written notice to Seller and Escrow Agent and receive the Earnest Money and to collect Purchaser’s actual, documented, out-of-pocket expenses (“Out-of-Pocket Expenses”) incurred in connection with the negotiation and preparation of this Agreement (including attorneys’ fees) and the performance of the Feasibility Studies (not to exceed $125,000.00) which obligation shall survive termination of this Agreement, or (ii) maintain an action seeking specific performance of Purchaser’s obligations to transfer the Property to Purchaser for the Purchase Price as provided herein, it being expressly agreed between Purchaser and Seller that monetary damages or any other remedy at law or in equity shall not be available to Purchaser (except to the extent expressly provided below). Upon such termination and receipt of the Earnest Money, this Agreement shall be terminated and neither party shall have any further liability to the other except to the extent of any obligations which expressly survive a termination. Notwithstanding anything to the contrary provided herein, the foregoing shall not be construed to restrict in any way the remedies available to Purchaser upon Seller’s breach of its obligations hereunder to indemnify and hold Purchaser harmless or upon a post-Closing breach by Seller of any of its obligations hereunder which survives the Closing.

Section 6.3 Attorney’s Fees. In the event either party hereto employs an attorney in connection with claims by one party against the other arising from this Agreement, the non-

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prevailing party shall pay the prevailing party all reasonable fees and expenses incurred in connection with the prosecution of such claim, or the defense thereof, as applicable. In the event the parties agree to resolve any dispute hereunder prior to an adjudication by a court of competent jurisdiction, each party shall be responsible for its respective attorneys’ fees and expenses.

ARTICLE VII

RISK OF LOSS AND BROKERS

Section 7.1 Minor Taking. In the event of a taking of a portion of the Land and/or the Improvements by the power of eminent domain which is not “Major” (as defined in Section 7.3), this Agreement shall remain in full force and effect, Purchaser shall pay Seller the Purchase Price at the Closing and Seller shall pay over and assign to Purchaser at Closing all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any condemnation awards relating to the Property.

Section 7.2 Major Taking. In the event of a “Major” taking of the Land and/or the Improvements by the power of eminent domain, Purchaser may terminate this Agreement by written notice to Seller and Escrow Agent, in which event the Earnest Money shall be returned to Purchaser, and Purchaser and Seller shall each pay one-half (1/2) of all escrow and title cancellation charges. If Purchaser does not elect to terminate this Agreement within ten (10) days after Seller sends Purchaser written notice of the occurrence of such Major taking, then Purchaser shall be deemed to have elected to proceed with Closing, in which event Seller shall pay over and assign to Purchaser at Closing all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any condemnation awards relating to the Land and/or the Improvements and Purchaser shall pay Seller the Purchase Price at the Closing without abatement or reduction.

Section 7.3 Definition of “Major” Taking. For purposes of Sections 7.1 and 7.2 hereinabove, a “Major” taking shall mean (i) a taking of at least five percent (5%) of the area of the Land or (ii) a taking that (a) materially and adversely affects access to the Land and/or the Improvements or materially reduces available parking areas or (b) substantially restricts access to each parcel of Land or the parcel subject to the Parking Rights Agreement as currently accessed and, in the case of either clause (a) or (b), as a result Purchaser would be prevented from using the Land and Improvements in any manner substantially similar to which the Land and Improvements are used and operated on the Effective Date.

Section 7.4 Casualty. If prior to the Closing Date the Improvements are damaged by fire or other casualty, Seller shall reasonably estimate the cost to repair the damage and the time required to complete repairs and will provide Purchaser written notice of Seller^‘s reasonable estimation (the “Casualty Notice”) as soon as reasonably possible after the occurrence of the casualty. If the damage does not constitute “Material Damage” (as defined below) to the Improvements, Seller shall repair the damage. In the event of any Material Damage to or destruction of the Improvements prior to Closing, Purchaser may, at its option, terminate this Agreement by delivering written notice to Seller and Escrow Agent on or before the expiration of ten (10) days after the date Seller delivers the Casualty Notice to Purchaser. Upon any such

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termination, the Earnest Money shall promptly be returned to Purchaser and the parties hereto shall have no further rights or obligations hereunder, other than those that by their terms survive the termination of this Agreement Purchaser and Seller shall each pay one-half (1/2) of all escrow and title cancellation charges. For purposes of this Agreement, “Material Damage” means damage which will (i) cost more than Seller’s available insurance proceeds (plus deductible) to repair, or (ii) cost more than Five Hundred Thousand Dollars ($500,000.00) to repair. If Purchaser does not elect to terminate this Agreement within the said ten (10) day period, Purchaser shall holdback from the Purchase Price the amount required to complete the repairs as set forth in the Casualty Notice. Purchaser shall release such funds to Seller upon Purchaser’s receipt of (A) insurance proceeds in connection with such casualty in an amount sufficient to complete the repairs set forth in the Casualty Notice or (B) evidence satisfactory to Purchaser of payment of such repairs, whichever first occurs.

Section 7.5 Post Closing Risk of Loss. Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.

Section 7.6 Brokerage Commissions. Seller represents to Purchaser that Seller has dealt with no other broker in connection with the transactions contemplated by this Agreement besides CBRE (“Broker”). Purchaser represents to Seller that Purchaser has dealt with no other broker in connection with the transactions contemplated by this Agreement besides Broker. Pursuant to separate agreements between Seller and Broker, Seller shall be responsible for paying the fees and brokerage commissions payable to Broker in the event of the consummation of the transactions contemplated by this Agreement. Seller agrees that it will indemnify and hold Purchaser free and harmless from and against any and all loss, liability, cost, damage and expense incurred by Purchaser as a result of and in the event that its representation to Purchaser in this Section 7.6 shall prove to be untrue, incorrect or materially misleading. Purchaser agrees that it will indemnify and hold Seller free and harmless from and against any and all loss, liability, cost, damage and expense incurred by Seller as a result of and in the event that its representation to Seller in this Section 7.6 shall prove to be untrue, incorrect or materially misleading. Seller and Purchaser agree that the provisions of this Section 7.6 shall survive the Closing.

ARTICLE VIII

DISCLAIMERS AND RELEASES

Section 8.1 “AS IS” “WHERE IS” SALE; DISCLAIMERS; RELEASES. (a) EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN SELLER’S CLOSING CERTIFICATE OR ANY OTHER DOCUMENTS DELIVERED BY SELLER IN CONJUNCTION WITH THE CLOSING, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO THE PHYSICAL OR OTHER CONDITION OF THE PROPERTY, HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITIONS, SEISMIC CONDITIONS,

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UTILITIES, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY “AS IS”, “WHERE IS”, WITH “ALL FAULTS”. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN SELLER’S CLOSING CERTIFICATE OR ANY OTHER DOCUMENTS DELIVERED BY SELLER IN CONJUNCTION WITH THE CLOSING, PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, ANY INFORMATION DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER OR ITS AGENTS OR EMPLOYEES, THE MANAGERS OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING. PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL, ENVIRONMENTAL AND SEISMIC CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN SELLER’S CLOSING CERTIFICATE OR ANY OTHER DOCUMENTS DELIVERED BY SELLER IN CONJUNCTION WITH THE CLOSING , UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL, ENVIRONMENTAL, SEISMIC OR LEGAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS, AND UPON CLOSING, PURCHASER SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MAY HAVE OTHERWISE BEEN ENTITLED TO ASSERT OR ALLEGE AGAINST SELLER (AND

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SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY OR THE CONDITION THEREOF. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN SELLER’S CLOSING CERTIFICATE OR ANY OTHER DOCUMENTS DELIVERED BY SELLER IN CONJUNCTION WITH THE CLOSING, PURCHASER AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS ON THE PROPERTY BE REQUIRED AFTER THE DATE OF CLOSING, SUCH CLEANUP, REMOVAL OR REMEDIATION SHALL BE THE SOLE RESPONSIBILITY OF, AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSE OF, PURCHASER. AS USED IN THIS SECTION 8.1, THE TERM PURCHASER SHALL MEAN AND INCLUDE THE NAMED PURCHASER IN THIS AGREEMENT, ITS SUCCESSORS AND ASSIGNS, WHETHER BY OPERATION OF LAW, TRANSFER OR OTHERWISE (INCLUDING ITS SUCCESSORS-IN-INTEREST IN AND TO THIS AGREEMENT AND/OR TO THE PROPERTY (OR PORTIONS THEREOF)), AND THEIR RESPECTIVE AFFILIATES. NOTWITHSTANDING ANYTHING TO THE CONTRARY PROVIDED IN THIS SECTION 8.1(A), THE TERMS AND PROVISIONS OF THIS SECTION 8.1(A) SHALL BE SUBJECT TO THE PROVISIONS OF SECTION 5.3 HEREOF WITH RESPECT TO THE SURVIVAL OF SELLER’S REPRESENTATIONS AND WARRANTIES AND THE TERMS OF ANY DOCUMENTS DELIVERED BY SELLER IN CONJUNCTION WITH THE CLOSING.

(b) IN CONNECTION WITH SUBSECTION (a) ABOVE, PURCHASER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

Purchaser hereby specifically acknowledges that Purchaser has carefully reviewed this Section 8.1 and discussed its import with legal counsel, is fully aware of its consequences and that the provisions of this Section 8.1 are a material part of this Agreement.

Purchaser’s Initials                     

Section 8.2 Effect and Survival of Disclaimers. Seller and Purchaser acknowledge that the compensation to be paid to Seller for the Property has been fixed at a level which takes into account that the Property is being sold subject to the provisions of this Article VIII. Seller and Purchaser agree that the provisions of this Article VIII shall survive termination of this Agreement or Closing indefinitely.

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ARTICLE IX

MISCELLANEOUS

Section 9.1 Confidentiality.

(a) Without the prior written consent of Seller in its sole discretion, Purchaser shall not, and shall not allow any of its prospective investors, prospective lenders, and their respective employees, agents, representatives, accountants, attorneys and consultants (hereinafter “Purchaser’s Representatives”), to disclose, disseminate or divulge any of the Confidential Information (as defined below) (whether obtained before or after the date of this Agreement) to any person or entity, other than as specifically provided for below. Purchaser shall limit access to the Confidential Information to those of Purchaser’s Representatives which have a need to know the information contained in the Confidential Information for the purpose of evaluating the Property in connection with Purchaser’s due diligence review and feasibility testing of the Property and any financing thereof.

(b) Purchaser shall ensure that all persons to whom it or any of Purchaser’s Representatives discloses, disseminates or divulges the Confidential Information shall keep all Confidential Information confidential and shall not disclose, disseminate or divulge any of the Confidential Information to any person or entity, other than as specifically provided for below, and Purchaser assumes liability for any disclosure by any such person in violation of the terms of this Section 9.1.

(c) In the event this Agreement is terminated in accordance with its terms, Purchaser shall, and shall cause each of Purchaser’s Representatives, to promptly return or destroy all Confidential Information, including all copies or reproductions thereof, to Seller (other than any Confidential Information which contains any of Purchaser’s proprietary analyses or reports, or materials prepared by Purchaser’s lawyers or advisors which Purchaser may destroy rather than return to Seller). Notwithstanding anything to the contrary provided herein, any components of the Confidential Information which are not returned to Seller in accordance with the terms and provisions of this Agreement shall remain, notwithstanding the termination of this Agreement, subject to the non-disclosure and confidentiality provisions contained herein.

(d) To the extent that Purchaser is required to disclose the Confidential Information pursuant to a legally enforceable subpoena, court order or other legal process, Purchaser shall (i) give written notice thereof to Seller within two (2) Business Days of its receipt of such subpoena, court order or other legal process, (ii) consult with Seller on the advisability of taking, at Seller’s expense, legally advisable steps to resist or narrow such request, and (iii) if disclosure of Confidential Information is required, furnish only that portion of the Confidential Information which, in the opinion of Purchaser’s counsel, Purchaser is legally compelled to disclose.

(e) In the event of a breach or threatened breach by Purchaser or any of Purchaser’s Representatives of any of the provisions of this Section 9.1, Seller shall be entitled to an order or injunction restraining Purchaser, Purchaser’s Representatives and any other person to whom Purchaser or any of Purchaser’s Representatives has disclosed,

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disseminated or divulged Confidential Information from disclosing, disseminating or divulging, in whole or in part, any Confidential Information. However, nothing in this Agreement shall be construed as prohibiting Seller from pursuing any other available remedy at law or in equity for such breach or threatened breach.

(f) Purchaser shall defend, indemnify and hold Seller harmless from and against any and all claims, demands, causes of action, losses, damages, liabilities, judgments, costs and expenses (including attorneys’ fees) asserted against, or incurred by, Seller or its affiliates as a result of any violation of, or failure to comply with, the provisions of this Section 9.1 by Purchaser, any of Purchaser’s Representatives or any person to whom Purchaser or any of Purchaser’s Representatives has disclosed, disseminated or divulged any Confidential Information in breach of the provisions of this Agreement.

(g) Purchaser acknowledges and understands that certain components of the Confidential Information may have been prepared by parties other than Seller and further acknowledges and understands that, except as otherwise set forth in this Agreement or the documents to be delivered at Closing, Seller makes no representations or warranties whatsoever, expressed or implied, with respect to the content, completeness or accuracy of the Confidential Information or any portion thereof. Purchaser hereby releases Seller from any and all claims, demands, causes of action, losses, damages, liabilities, costs or expenses (including attorneys’ fees) asserted against, or incurred by, Purchaser by reason of Purchaser’s reliance on or knowledge of the Confidential Information.

(h) As used herein, “Confidential Information” shall collectively mean (i) all documents and information relating to the Property, including the ownership and operation thereof, and to Seller and its affiliates, which are made available to Purchaser or Purchaser’s Representatives by Seller, its employees or agents or brokers for review by Purchaser and Purchaser’s Representatives in connection with the Feasibility Studies (but excluding any such information or documents which are legally and readily accessible by the general public, but not as a result of any act of Purchaser or any of Purchaser’s Representatives in violation of this Agreement), and (ii) all information, documents, reports and analyses arising from, or generated by Purchaser or Purchaser’s Representatives in connection with Purchaser’s due diligence review and feasibility testing of the Property.

(i) The provisions of this Section 9.1 shall survive the termination of this Agreement for a period of one (1) year after such termination; provided, however, the provisions of this Section 9.1 shall terminate upon the Closing; provided, further, that Confidential Information made available to Purchaser with respect to the recapitalization of Seller shall still be subject to that certain Confidentiality Letter dated as of February 21, 2009 executed by Hackman Capital Partners, LLC, for the benefit of Seller.

Section 9.2 Public Disclosure. Subject to the provisions of Section 4.2, except for (i) disclosures as may be required by law; (ii) information which is demonstrated to have been in the possession of Purchaser or any of its affiliates or demonstrated to have been independently acquired or developed by the Purchaser without violating any of its obligations under this Agreement; (iii) information which is or becomes publicly available other than as a result of breach of this Agreement; (iv) information which is received by Purchaser from a third party that

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Purchaser reasonably believes, after inquiry, has the legal right to disclose such information; (v) information which is released for disclosure with Seller’s written consent; or (vi) information which is released for disclosure by order of a court, prior to Closing or thereafter, any release to the general public of information with respect to the sale contemplated herein or any matters set forth in this Agreement shall be made only in the form reasonably approved by Purchaser and Seller. Seller agrees that it will not unreasonably withhold its approval of any release by Purchaser after the Closing which announces the purchase price, the location of the Property and the names of the parties conducting the purchase and sale. The parties acknowledge that any disclosure by Purchaser or its affiliates in connection with any disposition, fundraising, financing, or other similar efforts by Purchaser or its affiliates involving the Property or with the usual and customary operation of the Property shall not require the approval by Seller contemplated by this Section 9.2 so long as the nature of the information released is pertinent to such efforts.

Section 9.3 Discharge of Obligations. The acceptance of the Deed for the Property by Purchaser shall be deemed to be a full performance and discharge of every representation and warranty made by Seller herein and every agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement, except those which are herein specifically stated to survive Closing. Likewise, the acceptance of Purchase Price by Seller shall be deemed to be a full performance and discharge of every representation and warranty made by Purchaser herein and every agreement and obligation on the part of Purchaser to be performed pursuant to the provisions of this Agreement, except those which are herein specifically stated to survive Closing.

Section 9.4 Assignment. Purchaser may not assign its rights under this Agreement without first obtaining Seller’s written approval, which approval may be given or withheld in Seller’s sole and absolute discretion, provided, however, that without the prior approval of Seller (but only after written notice to Seller at least five (5) Business Days prior to the Closing Date), Purchaser may assign this Agreement to an entity controlled by, controlling or under common control with Purchaser, but no such assignment or delegation shall otherwise affect or limit the liability of Purchaser to Seller hereunder or otherwise impair Seller’s recourse to Purchaser for the full performance of Purchaser’s obligations hereunder. No assignment by Purchaser shall relieve Purchaser from any of its obligations hereunder without an express novation from Seller.

Section 9.5 Notices. Any notice pursuant to this Agreement shall be given in writing by (a) personal delivery, or (b) reputable overnight delivery service with proof of delivery, or (c) legible facsimile transmission sent to the intended addressee at the address set forth below (with prompt follow-up notice sent by one of the other means of delivery set forth in (a) or (b) above), or to such other address or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith, and shall be deemed to have been given upon receipt or refusal to accept delivery, or, in the case of facsimile transmission, as of the date of the facsimile transmission provided that an original of such facsimile is also sent to the intended addressee by means described in clauses (a) or (b) above. Unless changed in accordance with the preceding sentence, the addresses for notices given pursuant to this Agreement shall be as follows:

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Purchaser’s Addresses for Notices:	Seller’s Addresses for Notices:
c/o Hackman Capital Partners	Westwood One, Inc .
11111 Santa Monica Blvd., Suite 750	1114 Avenue of the Americas, 28th Floor
Los Angeles, California 90025	New York, NY 10036
Attention: Chief Operating Officer,	Attention: General Counsel
Ms. Theresa Jones	212.641.2075 (Telephone)
310.473.8900 (Telephone)	212.641.2198 (facsimile)
310.473.1677 (facsimile)
and
c/o Hackman Capital Partners
11111 Santa Monica Blvd., Suite 750
Los Angeles, California 90025
Attention: Chief Financial Officer,
Scott Poland
310.473.8900 (Telephone)
310.473.1677 (facsimile)
With a copy to:	With a copy to:
Orrick, Herrington & Sutcliffe LLP	Lowenstein Sandler PC
777 S. Figueroa Street, Suite 3200	65 Livingston Avenue
Los Angeles, California 90017	Roseland, New Jersey 07068
Attention: Dennis P. Martin, Esq.	Attention: Stuart Yusem, Esq.
213.612.2224 (Telephone)	973.597.2566 (Telephone)
213.612.2499 (facsimile)	973.597.2567 (facsimile)
and
John A. Rosenfeld, Esq.
Post Office Box 1308
Topanga, California 90290
310.455.9718 (Telephone)
310.455.9768 (facsimile)

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Escrow Agent’s Address for Notices:

First American Title Insurance Company

515 S. Figueroa Street, Suite 700

Los Angeles, CA 90017

Attention: Barbara Laffer/ Greg Schultz

213.623.1552 (Telephone)

213.623.2868 (facsimile)

Section 9.6 Modifications. This Agreement cannot be changed orally, and no agreement shall be effective to waive, change, modify or discharge it in whole or in part unless such agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought.

Section 9.7 Time of the Essence and Force Majeure. Time is hereby made strictly of the essence of this Agreement and the consummation of the transactions contemplated hereby.

Section 9.8 Successors and Assigns. The terms and provisions of this Agreement shall apply to and bind the permitted successors and assigns of the parties hereto.

Section 9.9 Entire Agreement. This Agreement, including the exhibits and schedules hereto, contains the entire agreement between the parties hereto pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter.

Section 9.10 Further Assurances. Each party hereto agrees that it will execute and deliver such other documents and take such other action, whether prior or subsequent to Closing, as may be reasonably requested by the other party to implement or give effect to this Agreement. Without limiting the generality of the foregoing, Purchaser shall, if requested by Seller, execute acknowledgments of receipt with respect to any materials delivered by Seller to Purchaser with respect to the Property. The provisions of this Section 9.10 shall survive the Closing.

Section 9.11 Counterparts. This Agreement may be executed in counterparts, including counterparts delivered by facsimile or similar electronic transmission, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart in proving this Agreement.

Section 9.12 Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect.

Section 9.13 Governing Law; Submission to Jurisdiction; Service of Process.

(a) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California, without giving effect to the principles of conflicts of law.

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(b) ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED IN STATE OR FEDERAL COURTS LOCATED IN LOS ANGELES COUNTY, CALIFORNIA AND EACH PARTY TO THIS AGREEMENT HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING. PURCHASER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM OR LACKS JURISDICTION OVER PURCHASER.

Section 9.14 No Third-Party Beneficiary. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Purchaser and their respective successors and permitted assigns only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing.

Section 9.15 Exhibits and Schedules. The schedules and/or exhibits attached hereto shall each be deemed to be an integral part of this Agreement.

Section 9.16 Captions. The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof.

Section 9.17 Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

Section 9.18 Termination of Agreement. It is understood and agreed that if either Purchaser or Seller terminates this Agreement pursuant to a right of termination granted hereunder, such termination shall operate to relieve Seller and Purchaser from all obligations under this Agreement, except for such obligations as are specifically stated herein to survive the termination of this Agreement.

Section 9.19 Recordation. Neither this Agreement nor any memorandum hereof shall be recorded without the prior written consent of the Seller.

[Remainder of page intentionally left blank. Signature pages to follow.]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.

SELLER: WESTWOOD ONE, INC., a Delaware corporation
By:	/s/ Roderick M. Sherwood, III
	Name:	Roderick M. Sherwood, III
	Title:	President & CFO
PURCHASER: NLC-LINDBLADE, LLC, a Delaware limited liability company
By:	/s/ Jonathan Epstein
	Name:	Jonathan Epstein
	Title:	Authorized Representative

Signature Page to Agreement of Purchase and Sale

ACKNOWLEDGEMENT BY ESCROW AGENT

Escrow Agent agrees to act as Escrow Agent hereunder and to hold and disburse the Earnest Money in the manner provided herein.

ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMPANY
By:	/s/ Barbara Laffer
	Name:	Barbara Laffer
	Title:	Escrow Officer

EXHIBIT A

Legal Description

All that certain tract. parcel and lot of land lying and being situate in the City of Culver City, State of California, being more particularly described as follows:

PARCEL 1:

LOTS 41, 42 AND 45 OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46 PAGE 32, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 2:

LOTS 43 AND 44, OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46 PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 3:

LOTS 8, 9, 22 THE NORTHEASTERLY 4.61 FEET OF LOT 21 AND THE SOUTHWESTERLY 20.39 FEET OF LOT 23, OF TRACT NO. 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46 PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 4:

LOTS 10, 11, 12, 19,20 AND 21 ALLIN TRACT 4161, IN THE CITY OF CULVER CITY AS PER MAP RECORDED IN BOOK 46, PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE NORTHEASTERLY 4.61 FEET OF LOT 21.

APN: 4206-015-039 and 4206-015-040 and 4206-016-008 and 4206-016-009 and 4206-016-010 and 4206-016-011

Together with rights for parking vehicles on the site described below on the terms and conditions set forth in that certain Covenant and Agreement Regarding Parking made as of August 17, 1990 between GTO Entertainment and Westwood One, Inc., as recorded on September 10, 1990 as Instrument No. 90-1556576 in the Official Records of Los Angeles County, California:

Schedule 5.1(l) 

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EX-10.52

Exhibit 10.52

Commercial Space Lease

Single Tenant Triple Net

between

NLC-Lindblade, LLC,
a Delaware limited liability company
(“Landlord”)

and

Westwood One, Inc.
a Delaware corporation
(“Tenant”)

TABLE OF CONTENTS

		Page
ARTICLE 1	REFERENCES		1
ARTICLE 2	LEASED PREMISES, TERM AND POSSESSION		3
ARTICLE 3	RENT, LATE CHARGES AND SECURITY DEPOSITS		6
ARTICLE 4	USE OF LEASED PREMISES AND OUTSIDE AREA		10
ARTICLE 5	REPAIRS, MAINTENANCE, SERVICES AND UTILITIES		15
ARTICLE 6	ALTERATIONS AND IMPROVEMENTS		18
ARTICLE 7	ASSIGNMENT AND SUBLETTING BY TENANT		19
ARTICLE 8	LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY		22
ARTICLE 9	INSURANCE		23
ARTICLE 10	DAMAGE TO LEASED PREMISES		26
ARTICLE 11	CONDEMNATION		27
ARTICLE 12	DEFAULT AND REMEDIES		28
ARTICLE 13	GENERAL PROVISIONS		30
ARTICLE 14	CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT		40
EXHIBIT “A”	LEGAL DESCRIPTION OF THE PROPERTY		A-1
EXHIBIT “B”	SITE PLAN OF THE PROJECT		B-1
EXHIBIT “C”	SCHEDULE OF BASE MONTHLY RENT & PARKING FEES		C-1
EXHIBIT “D”	FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT		D-1
EXHIBIT “E”	SCHEDULE OF TENANT’S REPAIRS		E-1
EXHIBIT “F”	ROFO PURCHASE AGREEMENT		F-1
EXHIBIT “G”	MEMORANDUM OF LEASE		G-1

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COMMERCIAL SPACE LEASE
(SINGLE TENANT TRIPLE NET)

THIS COMMERCIAL SPACE LEASE (Single Tenant Triple Net) (this “Lease”) dated as of December 17, 2009 (the “Effective Date”), and is entered into between NLC-Lindblade, LLC, a Delaware limited liability company (“Landlord”), and Westwood One, Inc., a Delaware corporation (“Tenant”).

ARTICLE 1
REFERENCES

1.1 REFERENCES: All references in this Lease to the following terms shall have the following meaning or refer to the respective address, person, date, time period, amount, percentage, calendar year or fiscal year as below set forth:

A. Tenant’s Address for Notices:	Westwood One, Inc.
	1114 Avenue of the Americas, 28th Floor
	New York, New York 10036
	Attention: General Counsel
	Telephone: 212.641.2075
	Facsimile: 212.641.2198
	with a copy to:
	Lowenstein Sandler PC
	1251 Avenue of the Americas
	New York, New York 10020
	Attention: Peter D. Greene, Esq.
	Telephone: 646.414.6908
	Facsimile: 973.422.6861
B. Landlord’s Address for Notices:	NLC-Lindblade, LLC
	c/o Hackman Capital Partners, LLC
	11111 Santa Monica, Suite 750
	Los Angeles, California 90025-3343
	Attention: Chief Operating Officer — Theresa Jones
	Telephone: 310.473.8900
	Facsimile: 310.473.8827
	with a copy to:
	c/o Hackman Capital Partners, LLC
	11111 Santa Monica, Suite 750
	Los Angeles, California 90025-3343
	Attention: Chief Financial Officer — Scott Poland
	Telephone: 310.473.8900
	Facsimile: 310.473.8827
	and with a copy to:
	John A. Rosenfeld, Esq.
	Post Office Box 1308
	Topanga, California 90290
	Telephone: 310.455.9718
	Facsimile: 310.455.9768

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C. Commencement Date:	December 17, 2009
D. Initial Lease Term:	Ten (10) years
E. Initial Term Expiration Date:	December 16, 2019
F. Second Month’s Prepaid Rent
and Parking Fees:	$72,963.00
Tenant’s Security Deposit:	$218,889.00

G. Broker: CB Richard Ellis, Inc., for Tenant

H. Property or Project: That certain real property, situated in Culver City, County of Los Angeles, State of California, more particularly described on Exhibit “A” attached hereto.

I. Buildings: Those certain structures and improvements situated on, or affixed or appurtenant to the Property, including, without limitation, the parking facilities including (when aggregated with the spaces available under the Parking Agreement (defined below in Article 1.1L below)) approximately one hundred one (101) parking spaces (the “Parking Areas”) and the buildings (each, a “Building” and collectively, the “Buildings”), having a common address of 8944 Lindblade Street, 8966 Washington Boulevard (also commonly known as 8965 Lindblade Street) and 8960 Washington Boulevard (also commonly known as 8935 Lindblade Street), which Buildings and Parking Areas are depicted on Exhibit “B” attached hereto.

J. Outside Areas: The term “Outside Areas” shall mean all areas of the Property on the exterior of the Buildings, including, without limitation, the Parking Areas and structures (including striping and sealing of the Parking Areas and lighting systems in the Outside Areas), driveways, sidewalks, landscaped, planted areas (including sprinkler systems and drains) and enclosed trash disposal areas.

K. Private Restrictions: All tenements, hereditaments, easements, rights-of-way, rights and privileges in and to the Property, including (i) easements over other lands granted by any easement agreement, (ii) any streets, ways, alleys, vaults, gores or strips of land adjoining the Property, and (iii) the rights under that certain Covenant and Agreement Regarding Parking made as of August 17, 1990, between GTO Entertainment and Westwood One, Inc., a Delaware corporation, recorded on September 10, 1990, in the Official Records of Los Angeles County, California, as Instrument No. 90-1556576 (the “Parking Agreement”).

L. Fixtures: All fixtures, machinery, equipment and other property located on or affixed to the Property or the Buildings.

M. Leased Premises: All the space within the Property, consisting of approximately 32,428 square feet of Buildings situated on approximately 53,522 gross square feet of land, for purposes of this Lease, agreed between Landlord and Tenant to contain said number of square feet.

N. Base Monthly Rent: The term “Base Monthly Rent” shall mean the amounts, as adjusted, set forth on Exhibit “C” attached hereto.

O. Permitted Use: The term “Permitted Use” shall mean the use of the Leased Premises for production and broadcast of media content and general office use and all uses ancillary to any such uses; provided, however, that if Tenant desires to use the Leased Premises for any principal purpose other than studio, production and general office use, then (i) such other purpose shall be subject to applicable zoning restrictions, and (ii) Tenant shall obtain Landlord’s prior written consent, which consent may be withheld in Landlord’s reasonable discretion.

P. Exhibits: The term “Exhibits” shall mean the Exhibits to this Lease which are described as follows:

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Exhibit “A”-	Legal Description of the Property
Exhibit “B”-	Site Plan depicting the Property, the Buildings and Parking Areas
Exhibit “C” -	Schedule of Base Monthly Rent
Exhibit “D” -	Irrevocable Standby Letter of Credit
Exhibit “E” -	Schedule of Tenant’s Repairs
Exhibit “F” -	ROFO Purchase Agreement
Exhibit “G” -	Memorandum of Lease

ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION

2.1 DEMISE OF LEASED PREMISES: Landlord hereby leases to Tenant and Tenant hereby leases from Landlord for Tenant’s own use in the conduct of Tenant’s business, for the Lease Term and upon the terms and subject to the conditions of this Lease, the Leased Premises, reserving and excepting to Landlord the right to share in all profits to be derived from any permitted assignments or sublettings by Tenant during the Lease Term to the extent provided by Article 7. Tenant’s lease of the Leased Premises, together with the appurtenant right to use the Outside Areas as described in Article 2.2 below, shall be conditioned upon and be subject to the continuing compliance by Tenant with (i) all the terms and conditions of this Lease, (ii) all Laws (as defined in Article 13.11(D)) governing the use of the Leased Premises and the Property, (iii) all Private Restrictions, including, without limitation, all of the terms and conditions of the Parking Agreement, any others easements and other matters now of public record respecting the Leased Premises and the Property, and (iv) all reasonable rules and regulations from time to time established by Landlord. Subject to Tenant’s compliance with the terms and conditions of this Lease, Landlord covenants and agrees that Tenant shall have the right to quiet possession of the Leased Premises during the Lease Term.

2.2 RIGHT TO USE OUTSIDE AREAS: As an appurtenant right to Tenant’s right to the use and occupancy of the Leased Premises, Tenant shall have the right to exclusively use the Outside Areas in conjunction with the Permitted Use of the Leased Premises solely for the purposes for which they were designed and intended and for no other purposes whatsoever. Tenant’s right to use the Outside Areas shall be subject to the limitations on such use as set forth in Article 4 and shall terminate concurrently with any termination of this Lease. Unless approved in writing by Landlord, Tenant shall not use the Outside Areas to store any property, temporarily or permanently, except for the one (1) emergency generator approved by Landlord (the “Generator”) serving the Buildings and located in the area depicted on Exhibit “B”, benches and tables for employee use and the refuse and recycling storage areas located in the areas depicted on Exhibit “B”. Any other storage or other items within the Outside Areas shall be permitted only by the prior written consent of Landlord. If any unauthorized storage shall occur or if Tenant shall violate any covenants applicable to the Leased Premises, Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Tenant, which cost shall be immediately payable upon demand by Landlord.

2.3 LEASE TERM: Landlord hereby leases the Leased Premises to Tenant, and Tenant hereby rents and hires the Leased Premises from Landlord, for the Lease Term set forth in Article 1 above, subject to the terms and conditions of this Lease.

2.4 DELIVERY OF POSSESSION: Landlord shall deliver to Tenant possession of the Leased Premises on or before the Commencement Date in their presently existing condition.

2.5 ACCEPTANCE OF POSSESSION: Tenant acknowledges that (i) it has inspected the Leased Premises, (ii) is willing to accept the Leased Premises in their existing condition, and (iii) neither Landlord nor any representative of Landlord has made any representation or warranty with respect to the Leased Premises, the Buildings or the Property or their respective suitability or fitness for any purpose, including, without limitation, any representations or warranties regarding zoning or other land use matters. Tenant acknowledges and agrees that, as the fee owner of the Property prior to the execution of this Lease, and except for Tenant’s Repairs (as defined in Article 5.1(E) below, all existing plumbing, lighting, heating, ventilating and air conditioning systems within the Leased Premises and all doors serving the Leased Premises are in good operating condition as of the Commencement Date. As of the Commencement Date, Tenant hereby agrees to accept the Leased Premises in its

3

existing condition and acknowledges that Tenant does not rely on, and Landlord does not make, any express or implied representations or warranties as to any matters, including, without limitation, the suitability of the soil or subsoil, any characteristics of the Leased Premises or improvements thereon, the suitability of the Leased Premises for the intended use, the economic feasibility of the business Tenant intends to conduct on the Leased Premises, title to the Leased Premises, Hazardous Materials (as defined in Article 4.13(F) below) on or in the vicinity of the Leased Premises, or any other matter. Tenant further acknowledges that neither Landlord nor any representative of Landlord has agreed to undertake any alterations or additions or construct any improvements to the Leased Premises. Tenant hereby agrees that if any remedial or restoration work is required by any governmental authority in order to conform the Leased Premises to the requirements of any applicable Laws, Tenant shall assume responsibility for any such work.

2.6 SURRENDER OF POSSESSION: Immediately prior to the expiration or upon the sooner termination of this Lease, Tenant shall remove all of Tenant’s signs from the exterior of the Buildings and shall remove all of Tenant’s personal property from the Leased Premises, and shall vacate and surrender the Leased Premises to Landlord in good condition and repair in accordance with this Article, reasonable wear and tear excepted, and shall deliver to Landlord all keys to the Leased Premises. Tenant shall, to Landlord’s reasonable satisfaction, (i) repair all damage to the Leased Premises caused by Tenant’s removal of Tenant’s personal property and all damage to the exterior of the Buildings caused by Tenant’s removal of all signs, (ii) patch and refinish all penetrations made by Tenant or its agents and employees to the floor, walls or ceiling of the Leased Premises, whether such penetrations were made with Landlord’s approval or not; (iii) clean, repair or replace all stained or damaged ceiling tiles, wall coverings and clean or replace as may be required all stained or damaged floor coverings; (iv) replace all burned out light bulbs and damaged light lenses; (v) pay the cost to restore (or replace as required) all heating, ventilating, and air-conditioning equipment to good working order to the extent the need for the restoration or replacement results from Tenant’s failure to maintain the equipment in the condition required by this Lease; (vi) pay the cost of restoring or replacing all trees, shrubs, plants, lawn and ground cover and repair (or replace as required) to the extent the need for the restoration or replacement results from Tenant’s failure to maintain such landscaping in the condition required by this Lease; (vii) pay the cost to restore (or replace as required) all paved surfaces of the Leased Premises to the extent the need for the restoration or replacement results from Tenant’s failure to maintain the paving in the condition required by this Lease; and (viii) remove all Alterations required to be removed under Article 6 below. Tenant shall otherwise satisfy all requirements to repair any damage or excessive wear to the Leased Premises, the Buildings, Outside Areas and/or Property. Tenant shall not be required to comply with the preceding two (2) sentences of this Article for any portion of the Leased Premises that Landlord notifies Tenant in writing that such portion of the Leased Premises are to be demolished by on or behalf of the next occupant of the Leased Premises. If the Leased Premises are not surrendered to Landlord in the condition required by this Article at the expiration or sooner termination of this Lease, Landlord may, after three (3) business days notice and opportunity of Tenant to cure, to cure, at Tenant’s sole expense, remove Tenant’s signs, Tenant’s personal property and/or improvements not so removed and make such repairs and replacements not so made or hire, at Tenant’s sole expense, independent contractors to perform such work. Tenant shall be liable to Landlord for all costs incurred by Landlord in returning the Leased Premises to the required condition, plus interest on all costs incurred from the date paid by Landlord at the rate of ten percent (10%) per annum (the “Lease Interest Rate”), payable by Tenant to Landlord within ten (10) days after receipt of a statement therefore from Landlord, and Tenant shall be deemed to have impermissibly held over until such time as such required work is completed, and Tenant shall pay Base Monthly Rent and Additional Rent in accordance with the terms of Article 13.2 until such work is completed.

2.7 OPTIONS TO EXTEND: Tenant shall have two (2) options (each an “Extension Option” and collectively, the “Extension Options”) to extend the Lease Term for the entire Leased Premises only for additional periods of five (5) years each (each an “Extended Term”). To exercise an Extension Option with respect to each Extended Term, Tenant shall deliver written notice to Landlord (each an “Election Notice”) not more than fifteen (15) months and not less than twelve (12) months prior to the expiration of the initial Lease Term or the first Extended Term, as applicable. Notwithstanding the foregoing, Tenant shall have no right to exercise an Extension Option (i) during the period commencing with the giving of any valid notice of default and continuing until said default is cured, (ii) during the period of time any Base Monthly Rent or Additional Rent is unpaid (without regard to whether notice thereof is given to Tenant), or (iii) in the event that Tenant has been given three (3) or more valid notices of separate default, whether or not the defaults are cured, during any twelve (12) month period during the Lease Term preceding the exercise of the Extension Option. The period of time within which an Extension Option may be exercised shall not be extended or enlarged by reason of Tenant’s inability to exercise an Extension Option

4

because of the provisions of this Article 2.7. In addition, an Extension Option shall terminate and be of no further force or effect, notwithstanding Tenant’s due and timely exercise of the Extension Option, if, after such exercise and prior to the commencement of the Extended Term, (y) Tenant fails to pay Base Monthly Rent or Additional Rent for a period of thirty (30) days after such Base Monthly Rent or Additional Rent becomes due (without any necessity of Landlord to give notice thereof), or (z) if Tenant commits a default of the Lease beyond the applicable cure period, if any.

A. If Tenant properly and timely exercises an Extension Option pursuant to this Article 2.7, then each Extended Term shall be upon all of the same terms, covenants and conditions of this Lease; provided, however, that (i) the Base Monthly Rent applicable to the Leased Premises for the Extended Term shall be ninety-five percent (95%) of the Fair Market Rent (as defined below) for creative office space comparable to the Leased Premises as of the commencement of the applicable Extended Term; (ii) the Base Monthly Rent for each year during the Extended Term shall be subject to annual increases, and (iii) in no event shall the Base Monthly Rent for an Extended Term be less than the applicable Base Monthly Rent for the month immediately preceding the first month of the applicable Extended Term. The term “Fair Market Rent” shall mean the annual rental being charged for creative office space of a class comparable to that of the Leased Premises, as of the commencement of the applicable Extended Term, within Culver City and Santa Monica, County of Los Angeles, California (“Comparable Class”), taking into account location, condition, existing improvements to the space and any improvements to be made to the Leased Premises in connection with the Extended Term or otherwise. Tenant shall pay all leasing commissions and consulting fees payable in connection with the Extension Options, unless such leasing commissions or consulting fees arise solely out of a contractual relationship between Landlord and a broker or consultant.

B. Within one hundred twenty (120) days prior to the commencement of the applicable Extended Term, Landlord and Tenant shall negotiate in good faith in an attempt to determine Fair Market Rent for the applicable Extended Term. If within thirty (30) days after the commencement of such one hundred twenty (120) day period Landlord and Tenant are unable to agree on the Fair Market Rent for any Extended Term, then the Fair Market Rent shall be determined as provided in Article 2.7(C) below.

C. If it becomes necessary to determine the Fair Market Rent for the Leased Premises by appraisal, the real estate appraiser(s) indicated in this Article shall be members of the American Institute of Real Estate Appraisers (or its successor organization, or if such organization ceases to exist, by the American Arbitration Association), shall have at least five (5) years experience appraising office space located in Culver City and Santa Monica, California, and shall be appointed and shall act in accordance with the following procedures:

(1) If the parties are unable to agree on the Fair Market Rent within the above-referenced thirty (30) day period, then either party may demand an appraisal by giving written notice to the other party, which demand to be effective must state the name, address and qualifications of an appraiser selected by the party demanding the appraisal (“Notifying Party”). Within fifteen (15) days following the Notifying Party’s appraisal demand, the other party (“Non-Notifying Party”) shall either approve the appraiser selected by the Notifying Party or select a second properly qualified appraiser by giving written notice of the name, address and qualification of said appraiser to the Notifying Party. If the Non-Notifying Party fails to select an appraiser within the fifteen (15) day period, the appraiser selected by the Notifying Party shall be deemed selected by both parties and no other appraiser shall be selected. If two (2) appraisers are selected, they shall select a third appropriately qualified appraiser within ten (10) days of selection of the second appraiser. If the two (2) appraisers fail to select a third qualified appraiser, the third appraiser shall be appointed by the American Institute of Real Estate Appraisers (or its successor organization, or if such organization ceases to exist, by the American Arbitration Association) upon application by either party.

(2) If only one (1) appraiser is selected, such appraiser shall notify the parties in simple letter form of its determination of the Fair Market Rent for the Leased Premises within fifteen (15) days following his or her selection, which appraisal shall be conclusively determinative and binding on the parties as the appraised Fair Market Rent.

(3) If multiple appraisers are selected, the appraisers shall meet not later than ten (10) days following the selection of the last appraiser. At such meeting, the appraisers shall attempt to determine the Fair

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Market Rent for the Premises as of the commencement date of the Extended Term by the agreement of at least two (2) of the appraisers.

(4) If two (2) or more of the appraisers agree on the Fair Market Rent for the Leased Premises at the initial meeting, such agreement shall be determinative and binding upon the parties hereto and the agreeing appraisers shall forthwith notify both Landlord and Tenant of the amount set by such agreement. If multiple appraisers are selected and two (2) appraisers are unable to agree on the Fair Market Rent for the Leased Premises, each appraiser shall submit to Landlord and Tenant his or her respective independent appraisal of the Fair Market Rent for the Leased Premises, in simple letter form, within fifteen (15) days following appointment of the final appraiser. The parties shall then determine the Fair Market Rent for the Leased Premises by averaging the appraisals; provided that any high or low appraisal, differing from the middle appraisal by more than ten percent (10%) of the middle appraisal, shall be disregarded in calculating the average.

(5) If only one (1) appraiser is selected, then each party shall pay one-half (¹/2) of the fees and expenses of that appraiser. If three (3) appraisers are selected, each party shall bear the fees and expenses of the appraiser it selects and one-half (¹/2) of the fees and expenses of the third appraiser.

D. The Extension Option is personal to Westwood One, Inc., a Delaware corporation (and to any Affiliate or Successor who has assumed the Lease or succeeded to Tenant’s rights under Article 7.10), and cannot be assigned or exercised by any person or entity other than Westwood One, Inc., a Delaware corporation (or such Affiliate or Successor), and may be exercised only while Westwood One, Inc., a Delaware corporation (or such Affiliate or Successor), is in full possession of the Leased Premises and without the intention of thereafter assigning or subleasing the Leased Premises.

E. Immediately after the Fair Market Rent has been determined, the parties shall enter into an amendment to this Lease setting forth the Base Monthly Rent for the applicable Extended Term and the new expiration date of the Lease Term. All other terms and conditions of the Lease shall remain in full force and effect and shall apply during the Extended Term, except that: (i) there shall be no further option to extend the Lease Term beyond the expiration of the second Extended Term (if and as applicable), (ii) there shall be no rent concessions, and (iii) there shall be no construction allowance, tenant improvement allowance or similar provisions or any obligation on the part of Landlord to construct any improvements within the Leased Premises.

ARTICLE 3
RENT, LATE CHARGES AND SECURITY DEPOSITS

3.1 BASE MONTHLY RENT: Commencing on the Commencement Date and continuing throughout the Lease Term, Tenant shall pay to Landlord, without prior demand therefore or offset, in advance on the first day of each calendar month, as base monthly rent, the applicable Base Monthly Rent set forth on Exhibit “C” attached hereto.

3.2 ADDITIONAL RENT: Commencing on the Commencement Date and continuing throughout the Lease Term, in addition to the Base Monthly Rent, Tenant shall pay to Landlord without offset as additional rent (the “Additional Rent”) the following amounts:

A. An amount equal to all Property Operating Expenses (as defined in Article 13) incurred by Landlord. Payment shall be made by whichever of the following methods (or combination of methods) is (are) from time to time designated by Landlord:

(1) Landlord may bill to Tenant, on a periodic basis not more frequently than monthly, the amount of such expenses (or group of expenses) as paid or incurred by Landlord, and Tenant shall pay to Landlord the amount of such expenses within thirty (30) days after receipt of a written bill therefore from Landlord; and/or

(2) Landlord may deliver to Tenant Landlord’s reasonable estimate of any given expense (such as Landlord’s Insurance Costs or Real Property Taxes), or group of expenses, which it anticipates will be paid or incurred for the ensuing calendar or fiscal year, as Landlord may determine, and Tenant shall pay to Landlord an

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amount equal to the estimated amount of such expenses for such year in equal monthly, installments during such year with the installments of Base Monthly Rent.

(3) Landlord reserves the right to change from time to time the methods of billing Tenant for any given expense or group of expenses or the periodic basis on which such expenses are billed; provided, however, in no event shall Landlord bill any such expenses more frequently than monthly.

B. The fees imposed from time to time for the right to use the Parking Areas in accordance with the Parking Agreement (“Parking Fees”), without prior demand therefore or offset, in advance on the first day of each calendar month, together with the Base Monthly Rent in accordance with the schedule set forth on Exhibit “C” attached hereto. In the event Parking Fees are imposed for any period of time prior to the Commencement Date, Tenant shall pay all such Parking Fees upon demand.

C. Landlord’s share of the consideration received by Tenant upon certain assignments and sublettings as required by Article 7;

D. Any legal fees and costs that Tenant is obligated to pay or reimburse to Landlord pursuant to Article 13; and

E. Any other charges or reimbursements due Landlord from Tenant pursuant to the terms of this Lease other than late charges and interest on defaulted rent.

This Lease is a “net lease,” and Tenant’s obligations arising or accruing during the Lease Term to pay Base Monthly Rent, Additional Rent and all other payments under this Lease required to be made by Tenant shall be absolute and unconditional. Tenant shall pay all Base Rent, Additional Rent and all other payments required to be made by Tenant under this Lease without notice, demand, counterclaim, set-off, deduction, or defense and free from any charges, assessments, impositions, expenses or deductions of any and every kind of and nature whatsoever. Subject to exceptions and limitations expressly set forth in this Lease, (i) all costs, expenses and obligations of every kind and nature whatsoever relating to the Leased Premises that may arise or become due during the Lease Term (whether or not the same shall become payable during the Lease Term or thereafter) shall be paid by Tenant, and (ii) Landlord shall have no obligation or responsibility to perform any improvements or to provide any services or to perform any repairs, maintenance or replacements in, to, at, on or under the Leased Premises or the Property.

3.3 YEAR-END ADJUSTMENTS: If Landlord shall have elected to bill Tenant for the Property Operating Expenses (or any group of such expenses) on an estimated basis in accordance with the provisions of Article 3.2A(2) above, Landlord shall furnish to Tenant within three (3) months following the end of the applicable calendar or fiscal year, as the case may be, a statement setting forth (i) the amount of such expenses paid or incurred during the just ended calendar or fiscal year, as appropriate, and (ii) the amount that Tenant has paid to Landlord for credit against such expenses for such period. If Tenant shall have paid more than its obligation for such expenses for the stated period, Landlord shall, at its election, either (a) credit the amount of such overpayment toward the next ensuing payment or payments of Additional Rent that would otherwise be due, or (b) refund in cash to Tenant the amount of such overpayment. If such year-end statement shall show that Tenant did not pay its obligation for such expenses in full, then Tenant shall pay to Landlord the amount of such underpayment within thirty (30) days from Landlord’s billing of same to Tenant. The provisions of this Article shall survive the expiration or sooner termination of this Lease.

Landlord agrees to maintain accurate books and records of the Property Operating Expenses for each calendar or fiscal year or partial year throughout the Term and for a period of two (2) years thereafter. Tenant shall have ninety (90) days after receipt of any statement for Property Operating Expenses within which to raise any questions or objections to the items or calculations contained in such statement, which questions or objections must be delivered to Landlord in writing and, as to any objections, must set out with particularity the nature of such objections. If Tenant requests, within such ninety (90) days following receipt of a statement, to review Landlord’s records (limited to such records relevant to the information in the statement), Landlord shall permit Tenant (through a reputable and duly licensed certified public accounting firm reasonably approved by Landlord) to review such records in the offices of Landlord or Landlord’s property manager, during normal business hours, within thirty (30) days after such request. Tenant shall provide Landlord with a written report of the findings of Tenant’s review

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within thirty (30) days after such review. If, following Tenant’s review, Tenant continues to dispute any items or any calculations contained in any statement, Tenant shall continue to pay all amounts due hereunder, without any deduction or offset whatsoever, but nothing in this Lease shall prohibit or impair Tenant’s right to bring suit against Landlord to resolve any of Tenant’s claims against Landlord arising out of such a dispute.

3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges that the late payment by Tenant of any monthly installment of Base Monthly Rent or any Additional Rent will cause Landlord to incur certain costs and expense not contemplated under this Lease, the exact amounts of which are extremely difficult or impractical to fix. Such costs and expenses will include, without limitation, administration and collection costs and processing and accounting expenses. Therefore, if any installment of Base Monthly Rent or Additional Rent is not received by Landlord from Tenant within six (6) calendar days after the same becomes due, Tenant shall immediately pay to Landlord a late charge in an amount equal to the greater of five percent (5%) of the amount overdue or $500.00 for each delinquent payment (the “Late Charge Amount”); provided, however, (i) Tenant shall not be obligated to pay the Late Charge Amount solely with respect to the first late payment of Base Monthly Rent and/or Additional Rent during the Lease Term as long as such Base Monthly Rent and/or Additional Rent is paid within ten (10) calendar days of when first due, and (ii) the Late Charge Amount shall be $500.00 solely with respect to the second late payment of Base Monthly Rent and/or Additional Rent during the Lease Term so long as such Base Monthly Rent and/or Additional Rent is paid within ten (10) calendar days of when first due, and (iii) except as otherwise provided in the foregoing clauses (i) and (ii), so long as Tenant has not made late payment of Base Monthly Rent and/or Additional Rent more than two times during the preceding twelve (12) months, the Late Charge Amount shall be reduced to the greater of three percent (3%) of the amount overdue or $500. Landlord and Tenant agree that the Late Charge Amount represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord for the anticipated loss Landlord would suffer by reason of Tenant’s failure to make timely payment. In no event shall this provision for a late charge be deemed to grant to Tenant a grace period or extension of time within to pay any rental installment or prevent Landlord from exercising any right or remedy available to Landlord upon Tenant’s failure to pay each rental installment due under this Lease when due, including the right to terminate this Lease. If any rent remains delinquent for a period in excess of six (6) calendar days, then, in addition to the Late Charge Amount, Tenant shall pay to Landlord interest on any rent that is not so paid from said sixth (6th) day at the Lease Interest Rate until paid in full.

3.5 PAYMENT OF RENT: All rent shall be paid in lawful money of the United States, without any abatement, reduction or offset for any reason whatsoever, to Landlord at such address as Landlord may designate from time to time. Tenant’s obligation to pay Base Monthly Rent and all Additional Rent shall be appropriately prorated at the commencement and expiration of the Lease Term. The failure by Tenant to pay any Additional Rent as required pursuant to this Lease when due shall be treated the same as a failure by Tenant to pay Base Monthly Rent when due, and Landlord shall have the same rights and remedies against Tenant as Landlord would have if Tenant failed to pay the Base Monthly Rent when due.

3.6 PREPAID RENT: Concurrent with the execution of this Lease, Tenant shall pay to Landlord the amount set forth in Article 1 as the first month’s Base Monthly Rent and Parking Fees.

3.7 SECURITY DEPOSIT: Tenant shall deposit with Landlord upon the execution of this Lease by Landlord and Tenant, an irrevocable standby letter of credit (the “Letter of Credit”) in the amount set forth in the Basic Lease Information as the “Security Deposit” under this Lease and in the form of Exhibit “D” attached hereto. The Security Deposit shall be held by Landlord as security for the performance by Tenant of all its obligations under this Lease. If Tenant fails to pay any Rent due hereunder, or otherwise commits a default with respect to any provision of this Lease, Landlord may use, apply or retain all or any portion of the Security Deposit for the payment of any such Rent or for the payment of any other amounts expended or incurred by Landlord by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may incur thereby (and in this regard Tenant hereby waives the provisions of California Civil Code Section 1950.7 and any similar or successor statute providing that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant, or to clean the Leased Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant). Exercise by Landlord of its rights hereunder shall not constitute a waiver of, or relieve Tenant from any liability for, any default. If any portion of the Letter of Credit posted as the Security Deposit is drawn

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upon by Landlord for such purposes, Tenant shall within ten (10) days after written demand therefore, deposit a replacement Letter of Credit with Landlord in the amount of the original Letter of Credit. If Tenant performs all of Tenant’s obligations hereunder, the Letter of Credit shall be returned to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest under this Lease) within thirty (30) days after the later of (i) the date of expiration or earlier termination of this Lease, or (ii) vacation of the Leased Premises by Tenant if the Leased Premises has been left in the condition specified by this Lease. Upon termination of the original Landlord’s (or any successor owner’s) interest in the Leased Premises, the original Landlord (or such successor) shall be released from further liability with respect to the Security Deposit upon the original Landlord’s (or such successor’s) delivery of the Letter of Credit to the successor landlord and compliance with California Civil Code Section 1950.7(d), or successor statute.

A. The Letter of Credit deposited as a Security Deposit shall be issued by a U.S. based money-center bank (a bank which accepts deposits, which maintains accounts, which has a local office in the City of Los Angeles that will negotiate a letter of credit and whose deposits are insured by the FDIC) whose financial strength shall be sufficient to meet liquidity demands with respect to issued letters of credit and which is otherwise acceptable to Landlord. The Letter of Credit shall be issued for a term of at least twelve (12) months and shall be in a form and with such content reasonably acceptable to Landlord. The Letter of Credit shall specify that the issuer thereof shall notify the beneficiary of the Letter of Credit in writing at least sixty (60) days in advance of the expiry date of such Letter of Credit if the Letter of Credit shall not be renewed as of such expiry date. Tenant shall either replace the expiring Letter of Credit with another Letter of Credit in an amount equal to the original Letter of Credit or renew the expiring Letter of Credit, in any event no later than thirty (30) days prior to the expiration of the term of the Letter of Credit then in effect. If Tenant fails to deposit a replacement Letter of Credit or renew the expiring Letter of Credit, Landlord shall have the right immediately to draw upon the expiring Letter of Credit for the full amount thereof and hold the funds drawn as the Security Deposit. Any Letter of Credit deposited with Landlord during the final lease year of the Term must have an expiry date no earlier than the date which is thirty (30) days after the expiration of the Lease Term, as extended (if and as applicable). If Landlord notifies Tenant in writing that the bank which issued the Letter of Credit has become financially unacceptable (e.g., the bank is under investigation by governmental authorities, the bank no longer has the financial strength equivalent to the current financial strength of Wells Fargo Bank, N.A., the FDIC or other applicable governmental agency has threatened to place the bank in conservatorship or receivership, or the bank has filed bankruptcy or reorganization proceedings), then Tenant shall have thirty (30) days after notice from Landlord to provide Landlord with a substitute Letter of Credit complying with all of the requirements hereof. If Tenant does not so provide Landlord with a substitute Letter of Credit within such time period, then Landlord shall have the right to draw upon the current Letter of Credit and hold the funds drawn as the Security Deposit. The premium or purchase price of, or any other bank fees (including transfer or assignment fees) associated with, such Letter of Credit shall be paid by Tenant. The Letter of Credit shall be transferable (and must permit multiple transfers), irrevocable and unconditional, so that Landlord, or its successors-in-interest, may at any time draw on the Letter of Credit against sight drafts presented by Landlord, accompanied by Landlord’s statement, made under penalty of perjury, that said drawing is in accordance with the terms and conditions of this Lease; no other document or certification from Landlord shall be required to negotiate the Letter of Credit and the Landlord may draw on any portion of the then uncalled upon amount thereof without regard to and without the issuing bank inquiring as to the right or lack of right of the holder of said Letter of Credit to effect such draws or the existence or lack of existence of any defenses by Tenant with respect thereto. The Letter of Credit shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord (which consent may be withheld by Landlord in its sole discretion). The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by Law, it being intended that Landlord shall not first be required to proceed against the Letter of Credit, and such use, application or retention shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled.

B. Tenant acknowledges and agrees that the Letter of Credit constitutes a separate and independent contract between Landlord and the issuing bank, that Tenant is not a third-party beneficiary of such contract, and that Landlord’s claim under the Letter of Credit for the full amount due and owing thereunder shall not be, in any way, restricted, limited, altered or impaired by virtue of any provision of the Bankruptcy Code, including, but not limited to, Section 502(b)(6) of the Bankruptcy Code.

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C. The Letter of Credit shall be transferable to any of the following parties: (i) any secured or unsecured lender of Landlord, or (ii) any assignee, successor, transferee or other purchaser of all or any portion of the Buildings, or any interest in any Building. Further, in the event of any sale, assignment or transfer by the Landlord of its interest in the Leased Premises or the Lease, Landlord shall have the right to assign or transfer the Letter of Credit to its grantee, assignee or transferee; and in the event of any sale, assignment or transfer, the landlord so assigning or transferring the Letter of Credit shall have no liability to Tenant for the return of the Letter of Credit, and Tenant shall look solely to such grantee, assignee or transferee for such return, so long as such grantee, assignee or transferee assumes in writing all of Landlord’s obligations with respect to the Letter of Credit. The terms of the Letter of Credit shall permit multiple transfers of the Letter of Credit. Tenant shall use its best efforts to cooperate with Landlord and the bank to effect the transfer(s) of the Letter of Credit and Tenant shall be responsible for all costs of the bank associated therewith.

ARTICLE 4
USE OF LEASED PREMISES AND OUTSIDE AREA

4.1 PERMITTED USE: Tenant shall be entitled to use the Leased Premises solely for the Permitted Use as set forth in Article 1 and for no other purpose. Tenant shall have the exclusive right to use the Outside Areas in conjunction with its Permitted Use of the Leased Premises solely for the purposes for which they were designed and intended and for no other purpose.

4.2 GENERAL LIMITATIONS ON USE: Tenant shall not do or permit anything to be done in or about the Leased Premises, the Buildings, the Outside Areas or the Property which does or could (i) jeopardize the structural integrity of the Building, or (ii) cause damage to any part of the Leased Premises, the Buildings, the Outside Areas or the Property. Tenant shall not operate any equipment within the Leased Premises which does or could (a) injure, vibrate or shake the Leased Premises or any Building, (b) damage, overload, corrode or impair the efficient operation of any electrical, plumbing, sewer, heating, ventilating or air conditioning systems within or servicing the Leased Premises or any Building, or (c) damage or impair the efficient operation of the sprinkler system (if any) within or servicing the Leased Premises or any Building. Except as permitted in Article 5, Tenant shall not affix any equipment to or make any penetrations or cuts in the floor, ceiling or walls of the Leased Premises without Landlord’s prior written consent. Tenant shall not place any loads upon the floors, walls, ceiling or roof systems which could endanger the structural integrity of any Building or damage its floors, foundations or supporting structural components. Tenant shall not place any explosive, flammable or harmful fluids or other waste materials including Hazardous Materials in the drainage systems of the Leased Premises, the Buildings, the Outside Areas or the Property. Tenant shall not commit nor permit to be committed any waste in or about the Leased Premises, any Building, the Outside Areas or the Property.

4.3 NOISE AND EMISSIONS: All noise generated by Tenant in its use of the Leased Premises shall be confined or muffled so that it does not interfere with the businesses of or annoy the occupants and/or users of adjacent properties. All dust, fumes, odors and other emissions generated by Tenant’s use of the Leased Premises shall be sufficiently dissipated in accordance with sound environmental practices and exhausted from the Leased Premises in such a manner so as not to interfere with the businesses of or annoy the occupants and/or users of adjacent properties, or cause any damage to the Leased Premises, any Building, the Outside Areas or the Property or any component part thereof or the property of adjacent property owners.

4.4 TRASH DISPOSAL: Tenant shall provide trash bins (or other adequate garbage disposal facilities) within the trash enclosure areas currently in use or otherwise as provided or permitted by Landlord in the Outside Areas sufficient for the interim disposal of all of its trash, garbage and waste. All such trash, garbage and waste temporarily stored in such areas shall be stored in such a manner so that it is not visible from outside of such areas, and Tenant shall cause such trash, garbage and waste to be removed once each week from the Property at Tenant’s sole cost. Tenant shall at all times keep the Leased Premises, the Buildings, the Outside Areas and the Property in a clean, safe and neat condition free and clear of all trash, garbage, waste and/or boxes, pallets and containers containing same at all times.

4.5 PARKING: In consideration for the Parking Fees, Tenant shall be entitled to use of the vehicle parking spaces in the Parking Areas depicted on Exhibit “B”, which use, as between Landlord and Tenant, is

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exclusive. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be loaded, unloaded or parked in areas other than those used for such purposes on the Commencement Date or as otherwise designated by Landlord for such activities. Nothing contained in this Lease shall be deemed to create liability upon Landlord for any damage to motor vehicles of visitors or employees, for any loss of property from within those motor vehicles, or for any injury to Tenant, its visitors or employees, unless the same is caused by Landlord’s gross negligence or intentional misconduct. Tenant shall be liable for any damage to the Parking Areas caused by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees, including, without limitation, damage from excess oil leakage. Tenant shall have no right to install any fixtures or equipment or store any personal property in the Parking Areas, except that Tenant may park its mobile broadcasting equipment within the Parking Areas in the areas designated by Landlord for same. Tenant shall not, at any time, park or permit to be parked any recreational vehicles or inoperative vehicles in the Parking Areas or on any portion of the Property. Tenant agrees to assume responsibility for compliance by its employees and invitees with the Parking Agreement and the parking provisions contained in this Lease. If Tenant or its employees park any vehicle within the Property in violation of these provisions, then Landlord may, in addition to any other remedies Landlord may have under this Lease, charge Tenant, as Additional Rent, and Tenant agrees to pay, as Additional Rent, $75.00 per day for each day or partial day that each such vehicle is so parked within the Property. Landlord reserves the right, after the Initial Lease Term, to construct a parking garage to serve the parking needs of the Property and neighboring properties. If Landlord desires to construct a parking garage during an Extension Term, Landlord shall so notify Tenant in writing not less than thirty (30) days prior to the earliest date Tenant is permitted to deliver an Election Notice to exercise the Extension Option with respect to such Extension Term pursuant to Article 2.7 above. If Landlord fails to provide timely written notice of the exercise of its right to construct the parking garage and thereafter Tenant exercises the Extension Option, Landlord shall have no right to construct a parking garage during such Extension Term. If Landlord provides timely notice of the exercise of its right to construct the parking garage and Tenant nonetheless exercises an Extension Option pursuant to Article 2.7, Landlord may provide the Parking Areas within a parking garage constructed thereon, and may temporarily relocate the Parking Areas during construction thereof (the “Temporary Relocated Parking Areas”). The Temporary Relocated Parking Areas Parking Areas shall be located with one (1) mile of the Leased Premises, provided that if the Temporary Relocated Parking Areas Parking Areas are not within 750 feet of the Leased Premises, Landlord shall provide shuttle service from and to such Temporary Relocated Parking Areas and the Leased Premises during any such construction; provided, however, Landlord shall at all times provide Tenant with the number of parking spaces set forth in Article 1.1(J) above. The hours of operation and frequency of trips of the shuttle service shall not unreasonably inconvenience Tenant’s employees or hinder operation of Tenant’s business. The Temporary Relocated Parking Areas shall have security substantially equivalent to the level of security Tenant is then providing to Parking Area at the Leased Premises. Landlord covenants to use reasonable commercial efforts to ensure that noise and vibration resulting from the construction does not adversely affect the utility of the Tenant’s recording studios.

4.6 SIGNS: Other than the business identification signs which are located on the Property as of the Commencement Date, Tenant shall not place or install on or within any portion of the Leased Premises, the exterior of the Building, the Outside Areas or the Property any other sign, advertisement, banner, placard or picture which is visible from the exterior of the Leased Premises, until Landlord shall have first approved in writing the location, size, content, design, method of attachment and material to be used in the making of such sign. Any sign, once approved by Landlord, shall be installed only in strict compliance with Landlord’s approval, at Tenant’s expense, using a contractor first approved by Landlord to install same. Landlord may remove any permitted signs, advertisements, banners, placards or pictures so placed by Tenant on or within the Leased Premises, the exterior of any Building, the Outside Areas or the Property and charge to Tenant the cost of such removal, together with any costs incurred by Landlord to repair any damage caused thereby, including any cost incurred to restore the surface upon which such sign was so affixed to its original condition. Tenant shall remove all of Tenant’s signs, repair any damage caused thereby, and restore the surface upon which the sign was affixed to its original condition, all to Landlord’s reasonable satisfaction, upon the earlier of the expiration of the Lease Term or the termination of this Lease.

4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall abide by and shall promptly observe and comply with, at its sole cost and expense, all Laws and Private Restrictions respecting the use and occupancy of the Leased Premises, the Buildings, the Outside Areas or the Property including, without limitation, the terms of the Parking Agreement and all Laws governing the use and/or, subject to Article 4.13,

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disposal of Hazardous Materials, and shall defend with competent counsel, indemnify and hold Landlord harmless from any claims, damages or liability resulting from Tenant’s failure to do so. Notwithstanding anything in the first sentence of this Article 4.7 to the contrary, if Laws (including compliance with the ADA, Title 24 of the California Administrative Code, and other similar federal, state and local Laws and regulations) or Private Restrictions respecting the use and occupancy of the Leased Premises, the Buildings, the Outside Areas or the Property are changed after the Commencement Date so as to require during the Lease Term the construction of an addition to or an alteration of any portion of the Property, or the reinforcement or other physical modification of any portion of the Property (“Capital Expenditure”), Landlord and Tenant shall allocate the cost of such work as follows:

A. Subject to Article 4.7(C) below, if such Capital Expenditures are required as a result of the specific and unique use of the Leased Premises by Tenant as compared with uses by tenants in general, Tenant shall be fully responsible for the cost thereof.

B. If such Capital Expenditure is not the result of the specific and unique use of the Leased Premises by Tenant (such as, governmentally mandated seismic modifications), then Landlord shall pay for such Capital Expenditure and Tenant shall only be obligated to pay, each month during the remainder of the Lease Term, on the date on which Base Monthly Rent is due, an amount equal to 1/144^th of the portion of such costs. Tenant shall pay interest monthly at the Lease Interest Rate on a sum equal to the number of months then remaining in the Lease Term times 1/144^th of the portion of such costs (the “Unamortized Balance”) but may prepay its obligation at any time.

C. Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary and new Applicable Requirements. If the Capital Expenditures are instead triggered by Tenant as a result of an actual or proposed change in the use, change in intensity of use, or Tenant’s voluntary modification to the Property or any portion thereof then, and in that event, Tenant shall either (i) immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Tenant shall not, however, have any right to terminate this Lease.

4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS: With respect to any insurance policies required or permitted to be carried by Landlord in accordance with the provisions of this Lease, Tenant shall not conduct (or permit any other person to conduct) any activities nor keep, store or use (or allow any other person to keep, store or use) any item or thing within the Leased Premises, the Buildings, the Outside Areas or the Property which (i) is prohibited under the terms of any of such policies, (ii) could result in the termination of the coverage afforded under any of such policies, (iii) could give to the insurance carrier the right to cancel any of such policies, or (iv) could cause an increase in the rates (over standard rates) charged for the coverage afforded under any of such policies. Tenant shall comply with all requirements of any insurance company, insurance underwriter, or Board of Fire Underwriters which are necessary to maintain, at standard rates, the insurance coverages carried by either Landlord or Tenant pursuant to this Lease.

4.9 LANDLORD’S RIGHT TO ENTER: Landlord and its agents shall have the right to enter the Leased Premises during normal business hours after giving Tenant reasonable prior notice and subject to Tenant’s reasonable security measures for the purpose of (i) inspecting the same, (ii) showing the Leased Premises to prospective purchasers, mortgagees or tenants, (iii) making necessary alterations, additions or repairs, and/or (iv) performing any of Tenant’s obligations when Tenant has failed to do so. Landlord shall have the right to enter the Leased Premises during normal business hours (or as otherwise agreed), subject to Tenant’s reasonable security measures, for purposes of exercising its rights under this Lease. Landlord shall have the right to enter the Outside Areas during normal business hours for purposes of (a) inspecting the exterior of the Buildings and the Outside Areas, and (b) posting notices of non-responsibility, or, during the final year of the Lease Term, “For Lease” of “For Sale” signs. Any entry into the Leased Premises or the Outside Areas by Landlord in accordance with this Article shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Leased Premises, or an eviction, actual or constructive of Tenant from the Leased Premises or any portion thereof.

4.10 USE OF OUTSIDE AREAS: Tenant, in its use of the Outside Areas, shall at all times keep the Outside Areas in a safe, Comparable Class condition, free and clear of all materials, equipment, debris, trash (except

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within existing enclosed trash areas), inoperable vehicles, and other items which are not specifically permitted by Landlord to be stored or located thereon by Tenant. If, in the opinion of Landlord, unauthorized persons are using any of the Outside Areas by reason of, or under claim of, the express or implied authority or consent of Tenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest extent then allowed by Law, such unauthorized use, and shall initiate such appropriate proceedings as may be required to so restrain such use.

4.11 RULES AND REGULATIONS: Landlord shall have the right from time to time to establish reasonable rules and regulations and/or amendments or additions thereto relating to the use of the Leased Premises and the Outside Areas and for the care and orderly management of the Property. Upon delivery to Tenant of a copy of such rules and regulations or any amendments or additions thereto, Tenant shall comply with such rules and regulations. A violation by Tenant of any of such rules and regulations shall constitute a default by Tenant under this Lease. If there is a conflict between the rules and regulations and any of the provisions of this Lease, the provisions of this Lease shall prevail. Landlord shall not be responsible or liable to Tenant for the violation of such rules and regulations by any other tenant of the Property.

4.12 ENVIRONMENTAL PROTECTION: Landlord may voluntarily cooperate in a reasonable manner with the efforts of all governmental agencies in reducing actual or potential environmental damage. Tenant shall not be entitled to terminate this Lease or to any reduction in or abatement of rent by reason of such compliance or cooperation. Tenant agrees at all times to cooperate fully with Landlord and to abide by all rules and regulations and requirements which Landlord may reasonably prescribe in order to comply with the requirements and recommendations of governmental agencies regulating, or otherwise involved in, the protection of the environment.

4.13 HAZARDOUS SUBSTANCES:

A. Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Leased Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Landlord to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Tenant shall not engage in any activity in or on the Leased Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Landlord and timely compliance (at Tenant’s expense) with all Applicable Requirements. “Reportable Use” shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Leased Premises of a Hazardous Substance with respect to which any Law requires that a notice be given to persons entering or occupying the Leased Premises or neighboring properties. Notwithstanding the foregoing, without Landlord’s consent Tenant may use any ordinary and customary materials reasonably required to be used in the normal course of the Permitted Use such as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with all Laws and does not expose Landlord to any liability therefor. In addition, Landlord may condition its consent to any Reportable Use upon receiving such additional assurances as Landlord reasonably deems necessary to protect itself, the public, the Leased Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit. Landlord hereby consents to the operation and maintenance by Tenant, in accordance with the terms of this Lease, of the existing underground storage tank which contains fuel for Tenant’s emergency generator located on the Leased Premises.

B. Duty to Inform Landlord. If Tenant knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Leased Premises, other than as previously consented to by Landlord (and Hazardous Substances to which Landlord has consented for purposes of this Article 4.13(B) shall be deemed to include any state of fact discovered by Landlord in connection with its Feasibility Studies under the Purchase and Sale Agreement between Landlord (as purchaser) and Tenant (as seller) dated December  _____  , 2009 (the “PSA”) or which is described in the exhibits or schedules to the PSA), as soon as is possible Tenant shall give

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written notice of such fact to Landlord, and provide Landlord with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance.

C. Tenant Remediation. Tenant shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Leased Premises (including through the plumbing or sanitary sewer system) in violation of Laws and shall promptly, at Tenant’s expense, comply with all Laws and Private Restrictions and take all investigatory and/or remedial action ordered or required under any applicable Laws for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Leased Premises or neighboring properties, that was caused or materially contributed to by Tenant, or pertaining to or involving any Hazardous Substance brought onto the Leased Premises during the term of this Lease, by or for Tenant or any third party.

D. Tenant Indemnification. Tenant shall indemnify, defend and hold Landlord, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims; expenses, penalties, and attorneys’ and consultants’ fees resulting from any Hazardous Substance brought onto the Leased Premises by or for Tenant, or any third party (provided, however, that Tenant shall have no liability under this Lease with respect to (i) Hazardous Substances brought onto the Leased Premises by Landlord, or Landlord’s employees, agents, contractors or subcontractors, and (ii) underground migration of any Hazardous Substance under the Leased Premises from areas outside of the Leased Premises not caused or contributed to by Tenant). Tenant’s obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Tenant, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Landlord and Tenant shall release Tenant from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Landlord in writing at the time of such agreement.

E. Landlord Indemnification. Landlord and its successors and assigns shall indemnify, defend, reimburse and hold Tenant, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances which are caused by the negligent acts or omissions of Landlord, its agents or employees, contractors or subcontractors. Landlord’s obligations, as and when required by Laws, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.

F. Investigations and Remediation. Landlord shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Leased Premises which are caused by the negligent acts or omissions of Landlord, its agents or employees, contractors or subcontractors. Tenant shall cooperate fully in any such activities at the request of Landlord, including allowing Landlord and Landlord’s agents to have reasonable access to the Leased Premises at reasonable times in order to carry out Landlord’s investigative and remedial responsibilities.

G. Landlord Termination Option. If a condition involving the presence of, or a contamination by Hazardous Substances, which requires repair, remediation or restoration (a “Hazardous Substance Condition”), occurs during the term of this Lease, unless Tenant is legally responsible therefor (in which case Tenant shall make the investigation and remediation thereof required by all Laws and this Lease shall continue in full force and effect, but subject to Landlord’s rights under Article 4.13(D) and Article 12), Landlord may, at Landlord’s option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Landlord’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the Hazardous Substance Condition cannot be remediated at a commercially reasonable cost without dispossessing Tenant from a material portion of the Premises for more than an immaterial amount of time, give written notice to Tenant within 60 days after receipt by Landlord of knowledge of the occurrence of such Hazardous Substance Condition, of Landlord’s desire to terminate this Lease as of a date not less than nine (9) months following the date of such notice. In the event Landlord elects to give a termination notice, this Lease shall terminate as of the date specified in Landlord’s notice of termination.

H. Inspection; Compliance. Landlord and Landlord’s lenders and consultants shall have the right to enter into the Leased Premises at any time, in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Leased Premises and for verifying compliance by Tenant with this Lease.

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The cost of any such inspections shall be paid by Landlord, unless, under circumstances where Tenant would be responsible under this Lease for compliance, a violation of Laws or Private Restrictions or a Hazardous Substance Condition is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Tenant shall upon request reimburse Landlord for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination.

I. Environmental Insurance. Prior to the Commencement Date and as a condition to the closing under the PSA, Landlord shall have obtained, at Tenant’s expense, a policy of environmental liability insurance covering pre-existing conditions from Great American Insurance Group (or one of its subsidiaries) (the “EP Insurer”), for a term of ten (10) years and with limits of liability in the amount of $5,000,000, and with a deductible or self-insured retention amount not to exceed $100,000 per claim (the “Lease Environmental Policy”, which shall include replacements or extensions of same at Tenant’s expense if Tenant continues to occupy the Leased Premises after the Initial Lease Term). Landlord shall be designated as the first named insured on the Lease Environmental Policy, and Tenant shall be an additional named insured on the Lease Environmental Policy and on any replacements or extensions of same if Tenant continues to occupy the Leased Premises after the Initial Lease Term. The Lease Environmental Policy shall list this Lease and the PSA as “insured contracts” thereunder, and otherwise shall be in form approved by Landlord. During the Lease Term, Tenant shall be responsible to pay the deductible amount for any claim under the Lease Environmental Policy, whether the claim is made by Landlord or Tenant, unless the claim arises from a matter where Landlord is responsible to indemnify Tenant under Article 4.13(E) above. Tenant acknowledges that Landlord may maintain one or more additional environmental liability insurance policies with respect to the Leased Premises at Landlord’s sole cost, and shall have no obligation to designate Tenant as an additional insured or additional named insured thereon. Landlord shall copy Tenant on all of its written communications concerning the Lease Environmental Policy to the EP Insurer or to the insurance broker which placed the Lease Environmental Policy, and during the Lease Term shall not cancel the Lease Environmental Policy or remove Tenant as an additional named insured without the written authorization of Tenant. In the event the Lease Environmental Policy is replaced with an environmental liability policy from an insurer other than Great American Insurance Group (or one of its subsidiaries), such subsequent insurer shall be deemed the EP Insurer for purposes of this Article 4.13(I).

ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

5.1 REPAIR AND MAINTENANCE: Tenant shall, during the Lease Term, at its sole cost and expense and without any cost or expense to Landlord (except as otherwise expressly set forth below), provide for the repair and maintenance of the Leased Premises in accordance with the following terms and conditions.

A. Tenant shall continuously keep and maintain all Buildings and other improvements now or hereafter located on the Leased Premises, the Outside Areas and the Property and all appurtenances thereto, and replace as and when required to the Buildings and all such improvements, in a Comparable Class condition, including, without limiting, the generality of the foregoing, (i) all interior walls, floors and ceilings, (ii) all windows, doors and skylights, (iii) all electrical wiring, conduits, connectors and fixtures, (iv) all plumbing, pipes, sinks, toilets, faucets, drains and wet and dry utility systems, including, without limitation, sprinkler systems, (v) all lighting fixtures, bulbs and lamps, (vi) all heating, ventilating and air conditioning equipment, (vii) all entranceways to the Leased Premises, (viii) the exterior and structural parts of each Building (including the foundation, subflooring, load-bearing and exterior walls and roof), and (ix) all Outside Areas, including, without limitation, the Generator and paying and performing all obligations of Landlord under and in accordance with the Parking Areas. Except where expressly required by this Lease, Landlord shall not be obligated to make any repairs, replacements or renewals of any kind, nature or description whatsoever to the Leased Premises or any Buildings or other improvements now or hereafter located thereon, and Tenant hereby expressly waives all right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code, as amended from time to time. Tenant shall, at Tenant’s sole cost and expense, procure and maintain contracts, with copies to Landlord, in customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if any, if and when installed on the Leased Premises (collectively, the “Systems”): (i) heating, ventilating and air conditioning equipment and systems (“HVAC”), (ii) fire extinguishing systems, including fire alarm and/or smoke detection, (iii) landscaping and irrigation systems, (iv) roof covering and drains, (v) clarifiers, and (vi) the

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underground storage tank on the Leased Premises which contains fuel for Tenant’s backup generator, including leak detection, monitoring and maintenance.

B. Tenant shall comply with and abide by all Laws and Private Restrictions, including, without limitation, the Parking Agreement, affecting the Leased Premises, the Outside Areas and all Buildings and other improvements now or hereafter located on the Property.

C. If Tenant shall fail to perform the required maintenance or fail to make repairs required of it pursuant to this Article within a reasonable period of time following notice from Landlord to do so, then Landlord may, at its election and without waiving any other remedy it may otherwise have under this Lease or at Law, perform such maintenance or make such repairs and charge to Tenant, as Additional Rent, the costs so incurred by, Landlord for same.

D. Tenant, at its sole cost and expense, shall cause all alterations, additions, improvements and repairs made by Tenant to the Leased Premises to comply with the provisions of the ADA, Title 24 of the California Administrative Code, and other similar federal, state and local laws and regulations required by Tenant’s use or occupation of the Leased Premises.

E. Tenant, at Tenant’s sole cost and expense (but subject to the reimbursement by Landlord set forth herein), shall cause the repairs, replacements and improvements identified on Exhibit “E” attached hereto (as same may be amended from time to time upon the request of either party with the consent of the other party, such consent not to be unreasonably withheld, collectively, the “Tenant’s Repairs”) to be made and/or installed, as applicable, on or before the applicable date set forth on Exhibit “E,” but in no event later than twelve (12) months after the Effective Date. The Tenant’s Repairs shall be made and performed in a safe and workmanlike manner, using only first-class materials, in accordance with Article 6. Subject to the requirements of Article 6, Landlord agrees to allow Tenant to make such repairs and replacements, all at the sole cost of Tenant (except as otherwise provided herein). No delay in the completion of construction of the Tenant’s Repairs shall be considered in the determination of the Commencement Date of the Lease. Landlord shall be entitled to supervise Tenant’s completion of the Tenant’s Repairs; provided, however, Tenant acknowledges and agrees that Landlord’s sole interest in any review and supervision of the installation of the Tenant’s Repairs is to protect the Building and Landlord’s interest in the Building. Accordingly, Tenant shall not rely upon Landlord’s supervision of the design and/or installation of the Tenant’s Repairs for any purpose, and Landlord shall incur no liability of any kind by reason of such supervision. The failure of Tenant, absent force majeure, to substantially complete or cause the completion of the Tenant’s Repairs in accordance with the terms of this Section and the schedule set forth on Exhibit “E”, shall be a default under this Lease and Landlord shall have the right, but not the obligation, in addition to such other rights and remedies that Landlord may have, to complete the Tenant’s Repairs and charge the cost of the same to Tenant, which cost shall be immediately payable upon demand by Landlord. In connection with its acquisition of the Property, Landlord has held back from the purchase price the sum of $673,000 (the “Deferred Maintenance Funds Deposit”), which shall be disbursed to Tenant upon satisfaction of the following conditions:

(1) Tenant shall submit to Landlord, from time to time but not more than once per calendar month, for reasonable approval by Landlord, a description of the portion of Tenant’s Repairs which have been completed along with a written request for payment executed by Tenant;

(2) Tenant shall provide Landlord with copies of invoices, lien waivers, applications for payments, and, unless payment is made directly by Landlord pursuant to clause (7) of this Article 5.1(E), cancelled checks or other evidence of payment of amounts paid by Tenant in connection with Tenant’s Repairs; and

(3) Tenant shall have delivered evidence satisfactory to Landlord, in its reasonable discretion, that the undisbursed Deferred Maintenance Funds Deposit is sufficient to complete the uncompleted Tenant’s Repairs or, if insufficient (the amount of such shortfall, the “Deferred Maintenance Shortfall”), Tenant shall provide evidence of payment of Tenant’s Repairs in an amount equal to such Deferred Maintenance Shortfall, which payment shall not be eligible for reimbursement hereunder;

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(4) Tenant shall submit disbursement requests to Landlord promptly upon receipt of any invoice for payment from any architect, contractor, supplier or other third party for work or services completed for Tenant’s Repairs;

(5) Intentionally omitted;

(6) Such disbursements shall be utilized to pay the actual costs of Tenant’s Repairs; and

(7) Upon receipt of a disbursement request from Tenant in compliance with the foregoing, at Landlord’s option, Landlord shall either (a) pay the disbursement requested from the Deferred Maintenance Funds Deposit directly to an architect, contractor, supplier or other third party for work or services completed, or (b) deliver the Deferred Maintenance Funds Deposit to Tenant for payment to such third party.

If Tenant’s Repairs are substantially completed pursuant to the terms of this Lease, Landlord shall disburse to Tenant the undisbursed portion, if any, of the Deferred Maintenance Funds Deposit, within ten (10) days after request therefor. If Tenant’s Repairs are not completed pursuant to the terms of this Lease, Landlord shall retain any undisbursed portion of the Deferred Maintenance Funds Deposit not required to be paid to Tenant under this Lease. In light of the possibility that the final scope of work for Tenant’s Repairs, based on final plans and specifications and permits for same to be prepared and obtained after execution of this Lease, may vary in immaterial ways from the scope of work set forth in Exhibit “E”, Landlord agrees that its approval of the scope of work set forth in the plans and specifications for Tenant’s Repairs will not be withheld, so long as such scope of work is consistent in all material respects with that set forth on Exhibit “E”.

F. Without relieving Tenant of liability resulting from damage caused by Tenant or by Tenant’s failure to exercise and perform good maintenance practices, if the roof, structural elements or foundation of any of the Buildings on the Leased Premises cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such item, then such items shall be replaced by Landlord, and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall only be obligated to pay, each month during the remainder of the Lease Term, on the date on which Base Monthly Rent is due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e., 1/144^th of the cost per month). Tenant shall pay interest at the Lease Interest Rate on the Unamortized Balance but may prepay its obligation at any time.

5.2 UTILITIES: Tenant shall arrange, at its sole cost and expense and in its own name, for the supply of water, gas, electricity, telephone, cable and all other utilities provided to or serving the Leased Premises. In the event that such services are not separately metered, Tenant shall, at its sole expense, cause such meters to be installed. Landlord shall maintain the water meter(s) in its own name; provided, however, that if at any time during the Lease Term Landlord shall require Tenant to put the water service in Tenant’s name, Tenant shall do so at Tenant’s sole cost. Tenant shall be responsible for determining if the local supplier of water, gas, electricity, telephone, cable and other utilities can supply the needs of Tenant and whether or not the existing water, gas, telephone, cable and electrical distribution systems within the Buildings and the Leased Premises are adequate for Tenant’s needs. Tenant shall be responsible for determining if the existing sanitary and storm sewer systems now servicing the Leased Premises and the Property are adequate for Tenant’s needs. Tenant shall pay all charges for water, gas, electricity, telephone, cable, storm and sanitary sewer and other utility and other services as so supplied to the Leased Premises, irrespective of whether or not the services are maintained in Landlord’s or Tenant’s name.

5.3 SECURITY: Tenant acknowledges that Landlord has not undertaken any duty whatsoever to provide security for the Leased Premises, the Buildings, the Outside Areas or the Property and, accordingly, Landlord is not responsible for the security of same or the protection of Tenant’s property or Tenant’s employees, invitees or contractors. To the extent Tenant determines that such security or protection services are advisable or necessary, Tenant shall arrange for and pay the costs of providing same.

5.4 ENERGY AND RESOURCE CONSUMPTION: Landlord may voluntarily cooperate in a reasonable manner with the efforts of governmental agencies and/or utility suppliers in reducing energy or other resource consumption within the Property. Tenant shall not be entitled to terminate this Lease or to any reduction in or abatement of rent by reason of such compliance or cooperation as long as Tenant continues to be able to

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beneficially enjoy the Leased Premises for the uses permitted hereunder, including, without limitation, provision of comfortable cooling and heating to the Leased Premises. In no event shall Tenant have any obligation to pay Landlord the cost of implementing such compliance or cooperation, including through incorporation of the cost in the Property Operating Expenses, except to the extent of any savings to Tenant resulting from the implementation, as and when the savings are realized. Tenant agrees at all times to reasonably cooperate with Landlord and to abide by all reasonable rules established by Landlord (i) to maximize the efficient operation of the electrical, heating, ventilating and air conditioning systems and all other energy or other resource consumption systems within the Property, and/or (ii) in order to comply with the requirements and recommendations of utility suppliers and governmental agencies regulating the consumption of energy and/or other resources.

5.5 LIMITATION OF LANDLORD’S LIABILITY: Landlord shall not be liable to Tenant for injury to Tenant, its employees, agents, invitees or contractors, damage to Tenant’s property or loss of Tenant’s business or profits, nor shall Tenant be entitled to terminate this Lease or to any reduction in or abatement of rent by reason of any matter relating to this Lease or the Leased Premises unless the same is caused by Landlord’s gross negligence or intentional misconduct. Without limiting the foregoing, Landlord shall not be liable to Tenant as a result of (i) Landlord’s failure to provide security services or systems within the Property for the protection of the Leased Premises, the Buildings or the Outside Areas, or the protection of Tenant’s property or Tenant’s employees, invitees, agents or contractors, or (ii) any failure, interruption, rationing or other curtailment in the supply of water, electric current, gas or other utility service to the Leased Premises, the Buildings, the Outside Areas or the Property from whatever cause (other than Landlord’s gross negligence or willful misconduct), or (iii) the unauthorized intrusion or entry into the Leased Premises by third-parties (other than Landlord or third parties acting on behalf of Landlord).

ARTICLE 6
ALTERATIONS AND IMPROVEMENTS

6.1 PERMITTED ALTERATIONS: Tenant may, from time to time at its sole expense make alterations, modifications and improvements (collectively, “Alterations”), to the interior of any of the Buildings on the Leased Premises without Landlord’s prior consent but upon notice to Landlord (“Permitted Alterations”) provided that: (i) such Permitted Alterations are non-structural, (ii) do not involve puncturing, removing or relocating the roof, ceilings, floors or any existing walls, (iii) will not affect the electrical, plumbing, HVAC and/or life safety systems, (iv) are designed to enhance either or both of the economic value and the utility of the Property, (v) the cost of such Permitted Alterations do not exceed $20,000 for any single alteration or $50,000 cumulatively during any lease year of the Lease Term (excluding the Tenant Repairs), and (vi) Tenant, in every instance, complies with the terms and conditions of this Article (other than the first sentence of Article 6.2). Landlord also consents hereby to the Tenant Repairs referenced in Article 5.1(E) provided that Tenant complies with the terms and conditions of this Article other than (x) the first sentence of Article 6.2 and (y) the provisions of Article 6.3 which grant Landlord the right to require Tenant to remove such repairs upon the expiration or earlier termination of the Term of this Lease.

6.2 OTHER ALTERATIONS: Except as provided in Article 6.1, all Alterations that are not Permitted Alterations (“Major Alterations”) shall require Landlord’s prior written consent. Regardless of whether or not Landlord’s consent to Alterations is required, all of the following shall apply with respect to all Alterations: (i) the structural integrity of the Buildings shall not be adversely affected; (ii) the proper functioning of the mechanical, electrical, heating, ventilating, air-conditioning (“HVAC”), sanitary and other service systems of the Leased Premises shall not be adversely affected and the usage of such systems by Tenant shall not be increased beyond the level of usage for which each such system was designed, and (iii) Tenant shall have appropriate insurance coverage, reasonably satisfactory to Landlord, regarding the performance and installation of the Alterations. Additionally, but subject to clauses (i) through (iii) above, Landlord shall not unreasonably withhold its consent to Major Alterations that are: (a) reasonably required in order to accommodate a sublease or an assignment of this Lease (provided such assignment or sublease is permitted hereunder), or (b) reasonably required to accommodate Tenant’s business operations at the Leased Premises. Tenant shall submit complete copies of plans and specifications to Landlord (y) for Major Alterations, concurrent with its request for consent, and (z) for Permitted Alterations, prior to obtaining permits for same.

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6.3 OTHER REQUIREMENTS: All Alterations, regardless of whether or not Landlord’s consent to Alterations is required, shall be made, constructed or installed by Tenant at Tenant’s expense, shall be done in accordance with all Laws and in a good and workmanlike manner using new materials of good quality that match or complement the original improvements existing as of the Commencement Date. Tenant shall not commence the making of any Alterations until (i) all required governmental approvals and permits shall have been obtained, (ii) all requirements regarding insurance imposed by this Lease have been satisfied, and (iii) Tenant shall have obtained contingent liability and broad form builder’s risk insurance in an amount reasonably satisfactory to Landlord to cover any perils relating to the proposed work not covered by insurance carried by Tenant pursuant to Article 9. As a part of granting Landlord’s approval for Tenant to make Major Alterations, Landlord may require Tenant to increase the amount of its Security Deposit to cover the cost of removing the Major Alterations and to restore the condition of the Leased Premises. Tenant shall pay Landlord’s reasonable costs to inspect the construction of Major Alterations and to have Landlord’s architect revise Landlord’s drawings to show the work performed by Tenant. At the time Landlord approves of any Major Alterations, Landlord shall notify Tenant whether Landlord shall require Tenant to remove the Major Alterations at Tenant’s sole expense before the expiration or earlier termination of this Lease or whether the Major Alterations shall remain upon the Leased Premises and be surrendered therewith at the expiration or earlier termination of this Lease as the property of Landlord. Landlord shall retain the right to notify Tenant whether Landlord shall require Tenant to remove any of the Permitted Alterations at Tenant’s sole expense prior to the expiration or earlier termination of the Lease Term or whether the Permitted Alterations (or any of them) shall remain on the Leased Premises and be surrendered therewith at the expiration or earlier termination of this Lease as the property of Landlord. If Landlord notifies Tenant that Landlord requires the removal of all or part of any Alterations in accordance with this Article, then Tenant, at its expense, shall remove such Alterations before the expiration or earlier termination of this Lease and repair any damage to the Leased Premises caused by such removal. If Tenant fails to remove the Alterations required to be removed pursuant to this Article, then Landlord may (but shall not be obligated to) remove such Alterations and the cost of removal and repair of any damage to the Leased Premises, together with all other damages which Landlord may suffer by reason of the failure of Tenant to remove same, shall be paid by Tenant to Landlord upon demand. Tenant shall not be entitled to any compensation from Landlord for any Alterations removed by Landlord or at Landlord’s direction pursuant to the immediately preceding sentence.

6.4 OWNERSHIP OF IMPROVEMENTS: All Alterations made or added to the Leased Premises by Tenant (other than Tenant’s inventory, equipment, movable furniture, wall decorations and trade fixtures) shall be deemed real property and a part of the Leased Premises, but shall remain the property of Tenant during the Lease Term. At the expiration or sooner termination of this Lease, all Alterations (excluding Tenant’s inventory, equipment, movable furniture, wall decorations and trade fixtures) shall automatically become the property of Landlord and shall be surrendered to Landlord as a part of the Leased Premises as required pursuant to Article 2, unless Landlord shall require Tenant to remove any of such Alterations in accordance with the provisions of Article 6.3, in which case Tenant shall so remove same. Landlord shall have no obligation to reimburse to Tenant all or any portion of the cost or value of any such Alterations so surrendered to Landlord. All lighting, plumbing, electrical, heating, ventilating and air conditioning fixtures, partitioning, window coverings, wall coverings and floor coverings installed by Tenant shall be deemed improvements to the Leased Premises and not trade fixtures of Tenant.

6.5 LIENS: Tenant shall keep the Property and every part thereof free from any liens and shall pay when due all bills arising out of any work performed, materials furnished, or obligations incurred by Tenant, its agents, employees or contractors relating to the Property. If any such claim of lien is recorded against Tenant’s interest in this Lease, the Property or any part thereof, Tenant shall bond against, discharge or otherwise cause such lien to be entirely released within fifteen (15) days after the same has been so recorded. Tenant’s failure to do so shall be a default under this Lease.

ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT

7.1 BY TENANT: Except as set forth in Article 7.10, Tenant shall not sublet the Leased Premises (or any portion thereof) or assign or encumber its interest in this Lease, whether voluntarily or by operation of Law, without Landlord’s prior written consent first obtained in accordance with the provisions of this Article 7. Any

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attempted subletting, assignment or encumbrance without Landlord’s prior written consent, at Landlord’s election, shall constitute a default by Tenant under the terms of this Lease. The acceptance of rent by Landlord from any person or entity other than Tenant, or the acceptance of rent by Landlord from Tenant with knowledge of a violation of the provisions of this Article, shall not be deemed to be a waiver by Landlord of any provision of this Article or this Lease or to be a consent to any subletting by Tenant or any assignment or encumbrance of Tenant’s interest in this Lease.

7.2 Intentionally omitted.

7.3 LANDLORD’S ELECTION: If Tenant or Tenant’s successors shall desire to assign its interest under this Lease or to sublet the Leased Premises, Tenant and Tenant’s successors must first notify Landlord, in writing, of its intent to so assign or sublet, at least thirty (30) days in advance of the date it intends to so assign its interest in this Lease or sublet the Leased Premises but not sooner than sixty (60) days in advance of such date, specifying in detail the terms of such proposed assignment or subletting, including the name of the proposed assignee or sublessee, the proposed assignee’s or sublessee’s intended use of the Leased Premises, a current financial statement of such proposed assignee or sublessee and the form of documents to be used in effectuating such assignment or subletting. Landlord shall have a period of fifteen (15) days following receipt of such notice and receipt of all information requested by Landlord regarding the proposed assignee or sublessee within which to do one of the following: (i) terminate this Lease or, in the case of a sublease of less than all of the Leased Premises, terminate this Lease as to that part of the Leased Premises proposed to be so sublet, either on the condition that the proposed Transferee immediately enter into a direct lease of the Leased Premises with Landlord (or, in the case of a partial sublease, a lease for the portion proposed to be so sublet) on the same terms and conditions contained in Tenant’s (or Tenant’s successors’) notice, or so that Landlord is thereafter free to lease the Leased Premises (or, in the case of a partial sublease, the portion proposed to be so sublet) to whomever it pleases on whatever terms are acceptable to Landlord, (ii) consent to the proposed assignment or sublease subject to the terms of this Article, or (iii) refuse to consent to the proposed assignment or sublease. In the event Landlord elects to so terminate this Lease, then (a) if such termination is conditioned upon the execution of a lease between Landlord and the proposed Transferee, Tenant’s and Tenant’s successors’ obligations under this Lease shall not be terminated until such Transferee executes a new lease with Landlord, enters into possession, and commences the payment of rent, and (b) if Landlord elects simply to terminate this Lease (or, in the case of a partial sublease, terminate this Lease as to the portion to be so sublet), the Lease shall so terminate in its entirety (or as to the space to be so sublet) fifteen (15) days after Landlord has notified Tenant and Tenant’s successors in writing of such election. In the case of a partial termination of the Lease, the Base Monthly Rent and Tenant’s or Tenant’s successors’ proportionate share shall be reduced to an amount which bears the same relationship to the original amount thereof as the area of that part of the Leased Premises which remains subject to the Lease bears to the original area of the Leased Premises. Landlord and Tenant or Tenant’s successors shall execute a cancellation agreement with respect to the Lease to effect such termination or partial termination, or if Landlord shall not have elected to cancel and terminate this Lease, to either (x) consent to such requested assignment or subletting subject to Tenant’s and Tenant’s successors’ compliance with the conditions set forth in Article 7.4 below, or (y) refuse to so consent to such requested assignment or subletting, provided that such consent shall not be unreasonably refused. It shall not be unreasonable for Landlord to withhold its consent to any proposed assignment or subletting if (A) the proposed assignee’s or subtenant’s anticipated use of the Leased Premises involves the storage, use or disposal of a Hazardous Material; (B) if the proposed assignee or subtenant has been required by any prior landlord, lender or governmental authority to clean up Hazardous Materials unlawfully discharged by the proposed assignee or subtenant; (C) if the proposed assignee or subtenant is subject to investigation or enforcement order or proceeding by any governmental authority in connection with the use, disposal or storage of a Hazardous Material, (D) the proposed assignee or subtenant is a subsidiary of another entity and the parent entity does not guarantee the obligations under this Lease, (E) all of the assets of Tenant shall not be held by the proposed assignee or subtenant following the transfer, or (F) Landlord disapproves of the proposed assignee’s or subtenant’s net worth and/or ability to satisfy the financial obligations of Tenant under this Lease. Tenant and Tenant’s successors covenant and agree to supply to Landlord, upon request, with all necessary or relevant information which Landlord may reasonably request respecting such proposed assignment or subletting and/or the proposed assignee or sublessee. Landlord’s review period shall not commence until Landlord has received all information requested by Landlord.

7.4 CONDITIONS TO LANDLORD’S CONSENT: If Landlord elects to consent, or shall have been ordered to so consent by a court of competent jurisdiction, to such requested assignment, subletting or

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encumbrance, such consent shall be expressly conditioned upon the occurrence of each of the conditions below set forth, and any purported assignment, subletting or encumbrance made or ordered prior to the full and complete satisfaction of each of the following conditions shall be void and, at the election of Landlord, which election may be exercised at any time following such a purported assignment, subletting or encumbrance shall constitute a default by Tenant under this Lease giving Landlord the absolute right to terminate this Lease. The conditions are as follows:

A. Landlord having approved in form and substance the assignment or sublease agreement (or the encumbrance agreement), which approval shall not be unreasonably withheld by Landlord if the requirements of this Article 7 are otherwise complied with. Without limiting the foregoing, such agreement shall contain a provision that it may not be amended or modified without the Landlord’s prior written consent, the absence of which will cause any such amendment or modification to be null and void.

B. Each such sublessee or assignee having agreed, in writing satisfactory to Landlord and its counsel and for the benefit of Landlord, to assume, to be bound by, and to perform the obligations of this Lease to be performed by Tenant (or, in the case of an encumbrance, each such encumbrancer having similarly agreed to assume, be bound by and to perform Tenant’s obligations upon a foreclosure or transfer in lieu thereof).

C. Tenant having fully and completely performed all of its obligations under the terms of this Lease through and including the date of the requested consent, as well as through and including the date such assignment or subletting is to become effective.

D. Tenant having reimbursed to Landlord all reasonable costs and attorneys’ fees incurred by Landlord in conjunction with the processing and documentation of any such requested subletting, assignment or encumbrance.

E. Tenant having delivered to Landlord a complete and fully-executed duplicate original of such sublease agreement, assignment agreement or encumbrance (as applicable) and all related agreements.

F. Tenant having paid, or having agreed in writing to pay as to future payments, to Landlord fifty percent (50%) of all Assignment Consideration (as defined below) or Excess Rentals (as defined below) to be paid to Tenant or to any other on Tenant’s behalf or for Tenant’s benefit for such assignment or subletting as follows:

(1) If Tenant assigns its interest under the Lease and if all or a portion of the consideration for such assignment is to be paid by the assignee at the time of the assignment, that Tenant shall have paid to Landlord and Landlord shall have received an amount equal to fifty percent (50%) of the Assignment Consideration so paid or to be paid whichever is the greater) at the time of the assignment by the assignee; or

(2) If Tenant assigns its interest under this Lease and if Tenant is to receive all or a portion of the consideration for such assignment in future installments, that Tenant and Tenant’s assignee shall have entered into a written agreement with and for the benefit of Landlord satisfactory to Landlord and its counsel whereby Tenant and Tenant’s assignee jointly agree to pay to Landlord an amount equal to fifty percent (50%) of all such future Assignment Consideration installments to be paid by such assignee as and when such Assignment Consideration is so paid.

(3) If Tenant subleases the Leased Premises, that Tenant and Tenant’s sublessee shall have entered into a written agreement with and for the benefit of Landlord satisfactory to Landlord and its counsel whereby Tenant and Tenant’s sublessee jointly agree to pay to Landlord fifty percent (50%) of all Excess Rentals to be paid by such sublessee as and when such Excess Rentals are so paid and fifty percent (50%) of any payment upon termination or modification of a sublease.

7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED: For purposes of this Article, the term “Assignment Consideration” shall mean all consideration to be paid by the assignee as consideration for such assignment, and the term “Excess Rentals” shall mean all consideration to be paid by the sublessee in excess of the rent to be paid by said sublessee/sublessor for the premises subleased for the same period. Assignment Consideration and/or Excess Rentals shall include all payments made or to be made by any assignee or sublessee relating in any way to any transfer of an interest in the Lease or the Leased Premises including, but not

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limited to, any payment made with respect to property which would or shall become Landlord’s property upon the expiration or earlier termination of the Lease, whether such property was installed or paid for by Landlord or by Tenant or Tenant’s successors. In the event Tenant or Tenant’s successors sublease a portion of the Leased Premises, Excess Rentals shall be calculated by subtracting the rent payable by the sublessor for the portion of the Leased Premises so sublet from all consideration to be paid by such sublessee. Rent payable by the sublessor for the portion of the Leased Premises so sublet shall be calculated by multiplying the Base Monthly Rent payable by the sublessor for the Leased Premises leased by such sublessor by a fraction, the numerator of which is the area in square feet subleased and the denominator of which is the total floor area of the Leased Premises leased by such sublessor also in square feet. Tenant and Tenant’s successors agree that any Assignment Consideration and/or Excess Rentals hereunder shall be the property of Landlord and not the property of Tenant.

7.6 PAYMENTS: All payments required by this Article to be made to Landlord shall be made in cash in full as and when they become due. At the time Tenant, Tenant’s assignee or sublessee makes each such payment to Landlord, Tenant or Tenant’s assignee or sublessee, as the case may be, shall deliver to Landlord an itemized statement in reasonable detail showing the method by which the amount due Landlord was calculated and certified by the party making such payment as true and correct. Landlord may require that all payments of Excess Rentals and/or Assignment Consideration to be made hereunder be made directly to Landlord by the applicable transferee.

7.7 GOOD FAITH: The rights granted to Tenant by this Article are granted in consideration of Tenant’s express covenant that all pertinent allocations which are made by Tenant between the rental value of the Leased Premises and the value of any of Tenant’s personal property which may be conveyed or leased concurrently with and which may reasonably be considered a part of the same transaction as the permitted assignment or subletting shall be made fairly, honestly and in good faith. If Tenant shall breach this covenant of good faith, Landlord may immediately declare Tenant to be in default under this Lease and terminate this Lease and/or exercise any other rights and remedies Landlord would have under the terms of this Lease in the case of a default by Tenant.

7.8 EFFECT OF LANDLORD’S CONSENT: No subletting, assignment or encumbrance, even with the consent of Landlord, shall relieve Tenant of its personal and primary obligation to pay rent and to perform all of the obligations to be performed by Tenant hereunder. Consent by Landlord to one (1) or more assignments or encumbrances of Tenant’s interest in this Lease or to one (1) or more sublettings of the Leased Premises shall not be deemed to be a consent to any subsequent assignment, encumbrance or subletting. If Landlord shall have been ordered by a court of competent jurisdiction to consent to a requested assignment, subletting or encumbrance, or such an assignment, subletting or encumbrance shall have been ordered over the objection of Landlord, such assignment, subletting or encumbrance shall not be binding between the assignee (or sublessee) and Landlord until such time as all conditions set forth in Article 7.4 above have been fully satisfied (to the extent not then satisfied) by the assignee or sublessee, including, without limitation, the payment to Landlord of all Assignment Consideration and/or Excess Rentals then due Landlord.

7.9 Intentionally omitted.

7.10 ASSIGNMENT OR SUBLEASE TO AFFILIATE OR SUCCESSOR. Notwithstanding anything to the contrary in Article 7.1, Tenant may, without Landlord’s consent (1) assign this Lease or sublease the Leased Premises or any portion thereof to any entity that controls, is controlled by or under common control with Tenant (each, an “Affiliate”), or (2) merge, consolidate, or transfer stock of Tenant or sell all or substantially all assets of Tenant (Tenant’s successor or purchaser in such a transaction, a “Successor”) provided that in each case the Affiliate or Successor, as applicable, delivers to Landlord a written assumption of the Lease. In addition, Tenant may, without Landlord’s consent (3) engage in a public offering of Tenant and (4) transfer shares of Tenant effected through any recognized exchange or through the “over the counter” market. In connection with any transaction described in this Article 7.10, Tenant shall be obligated to deliver to Landlord promptly any written information relating to same as is reasonably requested by Landlord. Subject to securities laws and regulations, Tenant shall provide not less than ten (10) business days prior written notice to Landlord of a transaction that is described in this Article 7.10. Articles 7.3 through 7.6 shall not apply to any transaction governed by this Article 7.10.

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ARTICLE 8
LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY

8.1 LIMITATION ON LANDLORD’S LIABILITY AND RELEASE: Landlord shall not be liable to Tenant for, and Tenant hereby releases Landlord and its partners, principals, officers, agents and employees from, any and all liability, whether in contract, tort or on any other basis, for any injury to or any damage sustained by Tenant, Tenant’s agents, employees, contractors or invitees; any damage to Tenant’s property; or any loss to Tenant’s business, loss of Tenant’s profits or other financial loss of Tenant resulting from or attributable to the condition of, the management of, the repair or maintenance of, the protection of, the supply of services or utilities to, the damage to or destruction of the Leased Premises, the Buildings, the Project or the Outside Areas, including without limitation, (i) the failure, interruption, rationing or other curtailment or cessation in the supply of electricity, water, gas or other utility service to the Project, the Buildings or the Leased Premises; (ii) the vandalism or forcible entry into the Buildings or the Leased Premises; (iii) the penetration of water into or onto any portion of the Leased Premises through roof leaks or otherwise; (iv) the failure to provide security and/or adequate lighting in or about the Project, the Buildings or the Leased Premises; (v) the existence of any design or construction defects within the Project, the Buildings or the Leased Premises; (vi) the failure of any mechanical systems to function properly (such as the HVAC systems); (vii) the existence of any Hazardous Materials, or (viii) the blockage of access to any portion of the Project, the Buildings, the Parking Areas or the Leased Premises, except that Tenant does not so release Landlord from such liability to the extent such damage was proximately caused by Landlord’s gross negligence or willful misconduct. In this regard, Tenant acknowledges that it is fully apprised of the provisions of Law relating to releases, and particularly to those provisions contained in Section 1542 of the California Civil Code which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

Notwithstanding such statutory provision, and for the purpose of implementing a full and complete release and discharge, Tenant hereby (a) waives the benefit of such statutory provision, and (b) acknowledges that, subject to the exceptions specifically set forth herein, the release and discharge set forth in this Article is a full and complete settlement and release and discharge of all claims and is intended to include in its effect, without limitation, all claims which Tenant, as of the date hereof, does not know of or suspect to exist in its favor.

8.2 TENANT’S INDEMNIFICATION OF LANDLORD: Tenant shall defend with competent counsel satisfactory to Landlord any claims made or legal actions filed or threatened against Landlord with respect to the violation of any Law, or the death, bodily injury, personal injury, property damage, or interference with contractual or property rights suffered by any third-party occurring within the Leased Premises or Property or resulting from Tenant’s use or occupancy of the Leased Premises or the Buildings or the use of the Outside Areas, or resulting from Tenant’s activities in or about the Leased Premises, the Buildings, the Outside Areas or the Property, and Tenant shall indemnify and hold Landlord, Landlord’s principals, employees and agents (the “Landlord Indemnified Parties”) harmless from any loss, liability, penalties, or expense whatsoever (including any loss or liability resulting from delay by Tenant in surrendering the Leased Premises in accordance with the terms of this Lease) resulting therefrom, except to the extent caused by the gross negligence or willful misconduct of Landlord. This indemnity agreement shall survive the expiration or sooner termination of this Lease. In no event shall Tenant be liable to Landlord and the Landlord Indemnified Parties for any punitive, special or consequential damages the Landlord Indemnified Parties incur.

ARTICLE 9
INSURANCE

9.1 TENANT’S INSURANCE: Tenant shall maintain insurance complying with all of the following:

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A. Tenant shall procure, pay for and keep in full force and effect, at all times during the Lease Term, the following:

(1) Comprehensive general liability insurance covering the Leased Premises and the Property in the amount of not less than $3,000,000 per occurrence, and $5,000,000 annual general aggregate for bodily injury and property damage liability (umbrella/ excess liability coverage may be used to achieve required dollar limits);

(2) Commercial “all-risk” property insurance covering Tenant’s personal property (at its full replacement cost) and damage to other property resulting from any acts or operations of Tenant or any third parties and business income;

(3) Loss of income and extra expense insurance in amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Tenant, or attributable to prevention of access to the Leased Premises on account of such perils;

(4) Workers’ compensation insurance and any other employee benefit insurance sufficient to comply with all Laws which policy shall be endorsed to provide thirty (30) days written notice of cancellation to Landlord;

(5) With respect to making of Alterations by Tenant, contingent liability and builder’s risk insurance, in an amount and with coverage satisfactory to Landlord;

(6) Comprehensive Auto Liability insurance with a combined single limit coverage of not less than the amount of $2,000,000 (umbrella or excess liability coverage may be used to achieve the required dollar limits) for bodily injury and/or property damage liability for: (i) owned autos (ii) hired or borrowed autos, (iii) non-owned autos, and (iv) auto blanket contractual form CA0001; if reasonably available from the insurer, the policy shall be endorsed to provide thirty (30) days written notice of cancellation to Landlord;

(7) During any period of construction on the Property by or on behalf of Tenant, builder’s risk coverage in an amount sufficient for such Alterations performed on the Leased Premises; provided, however, that in the event that such builder’s risk coverage is required, such coverage may be provided through so-called “course of construction” coverage endorsement, and Tenant shall cause such “course of construction” coverage to provide coverage in an amount equal to 100% of the completed value of the work; and

(8) The Lease Environmental Policy; and

(9) If not covered under the Lease Environmental Policy, coverage for environmental damages (including remediation and restoration of the Leased Premises) arising from a leak in the existing underground storage tank at the Leased Premises.

B. Each policy of liability insurance required to be carried by Tenant pursuant to this Article or actually carried by Tenant with respect to the Leased Premises or the Property shall (i) be in a form satisfactory to Landlord, (ii) be provided by carriers admitted to do business in the state of California, with a Best rating of “A/VI” or better and/or acceptable to Landlord, (iii) except for the Lease Environmental Policy, not contain deductibles in excess of $25,000, and (iv) name as insured parties Tenant, Landlord and, upon request, any mortgagee of Landlord. Property insurance shall contain a waiver and/or a permission to waive by the insurer any right of subrogation against Landlord, its principal, employees, agents and contractors which might arise by reason of any payment under such policy or by reason of any act or omission of Landlord, its principals, employees, agents or contractors.

C. Prior to the time Tenant or any of its contractors enters the Leased Premises, Tenant shall deliver to the Landlord with respect to each policy of insurance required to be carried by Tenant pursuant to this Article, a certificate of the insurer certifying, in a form satisfactory to the Landlord, that the policy has been issued and premium paid providing the coverage required by this Article and containing the provisions herein. Attached to such a certificate shall be endorsements naming Landlord as additional insured, and including the wording under primary insurance above. With respect to each renewal or replacement of any such insurance, the requirements of

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this Article must be complied with not less than thirty (30) days prior to the expiration or cancellation of the policy being renewed or replaced. Landlord may at any time and from time-to-time inspect and/or copy any and all insurance policies required to be carried by Tenant pursuant to this Article. If Landlord’s lender, insurance broker or advisor or counsel reasonably determines at any time that the form or amount of coverage set forth in Article 9.1(A) for any policy of insurance Tenant is required to carry pursuant to this Article is not adequate, then Tenant shall increase the amount of coverage for such insurance to such greater amount or change the form as Landlord’s lender, insurance broker or advisor or counsel reasonably deems adequate (provided however such increase level of coverage may not exceed the level of coverage for such insurance commonly carried by owners of comparable buildings in Culver City and Santa Monica, California).

D. Nothing contained in this Article 9 shall be construed to limit the liability of Tenant under the indemnification provisions set forth in this Lease.

9.2 LANDLORD’S INSURANCE: With respect to insurance maintained by Landlord:

A. Landlord may maintain, as the minimum coverage required of it by this Lease, property insurance in so-called “Special” form insuring Landlord (and such others as Landlord may designate) against loss from physical damage to the Buildings with coverage of not less than one hundred percent (100%) of the full actual replacement cost thereof and against loss of rents for a period of not less than twelve (12) months. Such property damage insurance, at Landlord’s election but without any requirement on Landlord’s behalf to do so, (i) may be written in so-called Special Form, excluding only those perils commonly excluded from such coverage by Landlord’s then property damage insurer; (ii) may provide coverage for physical damage to the improvements so insured for up to the entire full actual replacement cost thereof; (iii) may be endorsed to include (or separate policies may be carried to cover) loss or damage caused by any additional perils against which Landlord may elect to insure, including earthquake and/or flood if required by a Lender; (iv) may provide coverage for loss of rents for a period of up to twelve (12) months; and/or (v) may contain “deductibles” per occurrence in an amount reasonably acceptable to Landlord. Landlord shall not be required to cause such insurance to cover any of Tenant’s personal property, inventory and trade fixtures, or any modifications, alterations or improvements made or constructed by Tenant to or within the Leased Premises.

B. Landlord may maintain Commercial General Liability insurance insuring Landlord (and such others as are designated by Landlord) against liability for personal injury, bodily injury, death, and damage to property occurring in, on or about, or resulting from the use or occupancy of the Property, or any portion thereof, with combined single limit coverage of at least $2,000,000. Landlord may carry such greater coverage as Landlord or Landlord’s lender, insurance broker or advisor or counsel may from time to time determine is reasonably necessary for the adequate protection of Landlord and the Property.

C. Notwithstanding anything to the contrary in Article 9.2(A)(iii) above, provided that Tenant commences that portion of Tenant’s Repairs consisting of seismic retrofitting (the “Seismic Retrofit Work”) on or before April 15, 2009 (as such date may be postponed on account of inclement weather which make the performance such work impractical) and completes the Seismic Retrofit Work within twelve (12) weeks thereafter (as such time period may be extended on account of inclement weather which makes the performance of such work impractical), any insurance which provides coverage for damage caused by an earthquake and which is required by a Lender to be maintained prior to the completion of the portion of the Seismic Retrofit Work, shall be paid for by Landlord. Thereafter, if insurance which provides coverage for damage caused by an earthquake is required by a Lender to be maintained, Landlord shall provide Tenant with written notice of such requirement and a period of five (5) business days within which to provide to Landlord a policy quote for such coverage from an insurer meeting the requirements of the Lender. Provided the coverage and the insurer proposed by Tenant meet the requirements of the Lender and the insurer agrees to provide such coverage on such terms, and the cost of such policy is less than the cost of a policy for such coverage that Landlord otherwise would obtain, Landlord agrees to procure any such insurance from the carrier proposed by Tenant.

D. Landlord may maintain any other insurance which in the reasonable opinion of Landlord, its lender or legal counsel, is prudent to carry under the given circumstances.

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9.3 MUTUAL WAIVER OF SUBROGATION: Landlord hereby releases Tenant and its respective principals, officers, agents, employees and servants, and Tenant hereby releases Landlord and its respective principals, officers, agents, employees and servants, from any and all liability for loss, damage or injury to the property of the other in or about the Leased Premises or the Property which is caused by or results from a peril or event or happening which would be covered by insurance required to be carried by the party sustaining such loss under the terms of this Lease, or is covered by insurance actually carried and in force at the time of the loss, by the party sustaining such loss; provided, however, that such waiver shall be effective only to the extent permitted by the insurance covering such loss and to the extent such insurance is not prejudiced thereby.

9.4 PAYMENT OF INSURANCE COSTS BY TENANT: Tenant shall pay for all insurance required under this Article 9, and all deductibles in connection with any claim. Premiums for policy periods commencing prior to or extending beyond the Lease Term shall be prorated to correspond to the Lease Term. Payment shall be made to Landlord within ten (10) days following receipt of an invoice.

ARTICLE 10
DAMAGE TO LEASED PREMISES

10.1 TENANT’S DUTY TO RESTORE: No loss or damage by fire or other cause required to be insured against under this Lease, resulting in either partial or total destruction of any Building or improvement on the Property, shall, except as otherwise provided herein, operate to terminate this Lease, or to relieve or discharge Tenant from the payment of rents or amounts payable as rent as they become due and payable, or from the performance and observance of any of the agreements, covenants and conditions herein contained on the part of Tenant to be performed and observed. Tenant hereby waives the provisions of Subsection 2 of Section 1932 and Subsection 4 of Section 1933 of the California Civil Code, as amended from time to time. If any Buildings or improvements located on the Leased Premises or the Property, or any fixtures, equipment or machinery used or intended to be used in connection with the Leased Premises, at any time during the Lease Term shall be damaged or destroyed by fire or other cause and Tenant does not terminate this Lease pursuant to Article 10.2 below, then Tenant, with all reasonable diligence, shall repair, reconstruct or replace such Buildings or improvements and such fixtures, equipment and machinery to a condition substantially similar to their condition immediately prior to such destruction. All such repair, reconstruction or replacements shall be at the sole cost and expense of Tenant and, upon completion thereof, shall be free and clear of all liens and encumbrances of any nature whatsoever, including mechanics’ liens. Subject to the requirements of its lenders, Landlord shall make the proceeds of the insurance required under Article 9.2(A) available to Tenant for the purposes described in the preceding sentence.

10.2 TENANT’S RIGHT TO TERMINATE: If (i) the Buildings now or hereafter located on the Leased Premises or the Property are totally or substantially destroyed by a cause not required to be insured against under this Lease, or (ii) the then existing Laws do not permit the repair, reconstruction or replacement of such Buildings, or (iii) the Buildings are totally or substantially destroyed during the last two (2) years of the Lease Term (irrespective of whether the cause of such destruction was required to be insured against hereunder), and provided that any such destruction referred to in the foregoing clauses (i) through (iii) has not been caused by Tenant’s gross negligence or willful misconduct, then, in any of such events, Tenant, may, at its option, either (a) repair, reconstruct or replace the Buildings, or (b) elect to terminate this Lease, by delivering to Landlord notice thereof within ninety (90) days after such total or substantial destruction. If Tenant elects to terminate this Lease, then this Lease shall terminate effective as of the date of such total or substantial destruction; provided, however, that upon Landlord’s written request made upon Tenant within ninety (90) days after Landlord’s receipt of Tenant’s notice of election to terminate, Tenant shall promptly remove such destroyed or damaged Buildings from the Property and immediately thereafter redeliver the Leased Premises to Landlord in a neat and clean condition. Subject to the requirements of its lenders, Landlord shall make the proceeds of the insurance required under Article 9.2(A) available to Tenant for the purposes described in the preceding sentence.

10.3 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of Article 10.2 above, captioned “Tenant’s Right to Terminate”, are intended to supersede and replace the provisions contained in California Civil Code, Section 1932, Subdivision 2, and California Civil Code, Section 1934, and accordingly, Tenant hereby waives the provisions of said Civil Code Sections and the provisions of any successor Code Sections or similar laws hereinafter enacted.

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ARTICLE 11
CONDEMNATION

11.1 TENANT’S RIGHT TO TERMINATE: Except as otherwise provided in Article 11.4 below regarding temporary takings, Tenant shall have the option to terminate this Lease if, as a result of any taking, (i) the entire Leased Premises is taken, or (ii) if less than the entire Leased Premises shall be taken, but Landlord reasonably determines that the Buildings cannot at a reasonable expense be repaired, restored, or replaced to an economically profitable unit, this Lease may at the option of Tenant be terminated on the date of such taking. Tenant must exercise such option within a reasonable period of time, to be effective on the later to occur of (a) ten (10) days after the date that possession of that portion of the Leased Premises is condemned is taken by the condemnor, or (b) the date Tenant vacated the Leased Premises.

11.2 RESTORATION: If any part of the Leased Premises, the Buildings or the Outside Areas is taken and this Lease is not terminated, then Tenant shall repair any damage occasioned thereby to the remainder thereof to a condition reasonably suitable for Tenant’s continued operations.

11.3 TEMPORARY TAKING: No temporary taking of the Property or Leased Premises shall terminate this Lease or give Tenant any right to abatement of rent, and any award specifically attributable to a temporary taking of the Leased Premises shall belong entirely to Tenant. A temporary taking shall be deemed to be a taking of the use or occupancy of a material portion of the Leased Premises for a period of not to exceed one hundred twenty (120) days.

11.4 DIVISION OF CONDEMNATION AWARD: Any award made for any taking of the Property, the Buildings, the Outside Areas or the Leased Premises, or any portion thereof, shall belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of its right, title and interest in any such award; provided, however, that Tenant shall be entitled to receive any portion of the award that is made specifically (i) for the taking of personal property, inventory or trade fixtures belong to Tenant, (ii) for the interruption of Tenant’s business or its moving costs, (iii) for loss of Tenant’s goodwill, or (iv) for any temporary taking where this Lease is not terminated as a result of such taking. The rights of Landlord and Tenant regarding any condemnation shall be determined as provided in this Article, and each party hereby waives the provisions of Section 1265.130 of the California Code of Civil Procedure, and the provisions of any similar law hereinafter enacted, allowing either party to petition the Superior Court to terminate this Lease and/or otherwise allocate condemnation awards between Landlord and Tenant in the event of a taking of the Leased Premises.

11.5 TAKING DEFINED: The term “taking” or “taken” as used in this Article 11 shall mean any transfer or conveyance of all or any portion of the Property to a public or quasi-public agency or other entity having the power of eminent domain pursuant to or as a result of the exercise of such power by such an agency, including any inverse condemnation and/or any sale or transfer by Landlord of all or any portion of the Property to such an agency under threat of condemnation or the exercise of such power.

ARTICLE 12
DEFAULT AND REMEDIES

12.1 EVENTS OF TENANT’S DEFAULT: Tenant shall be in default of its obligations under this Lease if any of the following events occur:

A. Tenant shall have failed to pay Base Monthly Rent or any Additional Rent when due; or

B. Tenant shall have failed to renew any letter of credit Security Deposit within thirty (30) days before the expiration thereof; or

C. Tenant shall have failed to perform any term, covenant or condition of this Lease, except those requiring the payment of Base Monthly Rent or Additional Rent, within thirty (30) days after written notice from Landlord to Tenant specifying the nature of such failure and requesting Tenant to perform same;

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D. Tenant shall have sublet the Leased Premises or assigned or encumbered its interest in this Lease in violation of the provisions contained in Article 7, whether voluntarily or by operation of Law; or

E. Tenant shall have permitted or suffered the sequestration or attachment of, or execution on, or the appointment of a custodian or receiver with respect to, all or any substantial part of the property or assets of Tenant or any property or asset essential to the conduct of Tenant’s business, and Tenant shall have failed to obtain a return or release of the same within thirty (30) days thereafter, or prior to sale pursuant to such sequestration, attachment or levy, whichever is earlier; or

F. Tenant shall have made a general assignment of all or a substantial part of its assets for the benefit of its creditors; or

G. Tenant shall have allowed (or sought) to have entered against it a decree or order which: (i) grants or constitutes an order for relief, appointment of a trustee, or confirmation or a reorganization plan under the bankruptcy laws of the United States; (ii) approves as properly filed a petition seeking liquidation or reorganization under said bankruptcy laws or any other debtor’s relief Law or similar statute of the United States or any state thereof; or (iii) otherwise directs the winding up or liquidation of Tenant; provided, however, if any decree or order was entered without Tenant’s consent or over Tenant’s objection, Landlord may not terminate this Lease pursuant to this Article if such decree or order is rescinded or reversed within thirty (30) days after its original entry; or

H. Tenant shall have abandoned the Leased Premises without the payment of rent and without providing reasonable security for the Buildings; or

I. Tenant shall have availed itself of the protection of any debtor’s relief Law, moratorium law or other similar Law which does not require the prior entry of a decree or order.

Tenant agrees that any notice given by Landlord pursuant to Article 12.1 of the Lease shall satisfy the requirements for notice under California Code of Civil Procedure Section 1161, and Landlord shall not be required to give any additional notice in order to be entitled to commence an unlawful detainer proceeding.

12.2 LANDLORD’S REMEDIES: In the event of any default by Tenant, and without limiting Landlord’s right to indemnification as provided in Article 8.2 or otherwise, Landlord shall have the following remedies, in addition to all other rights and remedies provided by Law or otherwise provided in this Lease, to which Landlord may resort cumulatively, or in the alternative:

A. Landlord may, at Landlord’s election, keep this Lease in effect and enforce, by an action at law or in equity, all of its rights and remedies under this Lease including, without limitation, (i) the right to recover the rent and other sums as they become due by appropriate legal action, (ii) the right to make payments required by Tenant, or perform Tenant’s obligations and be reimbursed by Tenant for the cost thereof with interest at the then maximum rate of interest not prohibited by Law from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive relief and specific performance to prevent Tenant from violating the terms of this Lease and/or to compel Tenant to perform its obligations under this Lease, as the case may be.

B. Landlord may, at Landlord’s election, terminate this Lease by giving Tenant written notice of termination, in which event this Lease shall terminate on the date set forth for termination in such notice. Any termination under this Article shall not relieve Tenant from its obligation to pay to Landlord all Base Monthly Rent and Additional Rent then or thereafter due, or any other sums due or thereafter accruing to Landlord, or from any claim against Tenant for damages previously accrued or then or thereafter accruing. In no event shall any one or more of the following actions by Landlord, in the absence of a written election by Landlord to terminate the Lease, constitute a termination of the Lease:

(1) Appointment of a receiver or keeper in order to protect Landlord’s interest hereunder;

(2) Consent to any subletting of the Leased Premises or assignment of this Lease by Tenant, whether pursuant to the provisions hereof or otherwise; or

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(3) Any other action by Landlord or Landlord’s agents intended to mitigate the adverse effects of any breach of this Lease by Tenant, including, without limitation, any action taken to maintain and preserve the Leased Premises or any action taken to relet the Leased Premises, or any portion thereof, for the account of Tenant and in the name of Tenant.

C. In the event Tenant breaches this Lease and abandons the Leased Premises, Landlord may terminate this Lease, but this Lease shall not terminate unless Landlord gives Tenant written notice of termination. If Landlord does not terminate this Lease by giving written notice of termination, Landlord may enforce all its rights and remedies under this Lease, including the right to recover rent as it becomes due under this Lease as provided in California Civil Code Section 1951.4, as in effect on the Effective Date of this Lease.

D. In the event Landlord terminates this Lease, Landlord shall be entitled, at Landlord’s election, to damages in an amount as set forth in California Civil Code Section 1951.2, as in effect on the Effective Date of this Lease. For purposes of computing damages pursuant to Section 1951.2, an interest rate equal to the Lease Interest Rate shall be used where permitted. Such damages shall include, without limitation:

(1) The worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided, computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco, at the time of award plus one percent (1%); and

(2) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease, or which in the ordinary course of things would be likely to result therefrom, including without limitation, the following: (i) expenses for cleaning, repairing or restoring the Leased Premises; (ii) expenses for altering, remodeling or otherwise improving the Leased Premises for the purpose of reletting, including removal of existing leasehold improvements and/or installation of additional leasehold improvements (regardless of how the same is funded, including reduction of rent, a direct payment or allowance to a new tenant, or otherwise); (iii) broker’s fees, advertising costs and other expenses of reletting the Leased Premises; (iv) costs of carrying and maintaining the Leased Premises which costs would have been billed to Tenant as Additional Rent had Tenant not defaulted and which include but are not limited to taxes, insurance premiums, utility charges, landscape maintenance costs, costs of maintaining electrical, plumbing and HVAC equipment and costs for providing security; (v) expenses incurred in removing, disposing of and/or storing any of Tenant’s personal property, inventory or trade fixtures remaining therein; (vi) attorneys’ fees, expert witness fees, court costs and other reasonable expenses incurred by Landlord but not limited to taxable costs) in retaking possession of the Leased Premises, establishing damages hereunder, and re-leasing the Leased Premises; and (vii) any other expenses, costs or damages otherwise incurred or suffered as a result of Tenant’s default.

12.3 LANDLORD’S DEFAULT AND TENANT’S REMEDIES: Landlord shall not be deemed to be in default in the performance of any obligation under this Lease, and Tenant shall have no rights to take any action against Landlord, unless and until Landlord has failed to perform the obligation within thirty (30) days after written notice by Tenant to Landlord specifying in reasonable detail the nature and extent of the failure; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be deemed to be in default if it commences performance within the thirty (30) day period and thereafter diligently pursues the cure to completion. In the event of Landlord’s default as set forth above, then, and only then, Tenant shall have the following remedies only:

A. Tenant may then proceed in equity or at law to compel Landlord to perform its obligations and/or to recover damages proximately caused by such failure to perform (except as and to the extent Tenant has waived its right to damages as provided in this Lease).

B. Tenant, at its option, may then cure any default of Landlord at Landlord’s cost. If, pursuant to this Article, Tenant reasonably pays any sum to any third-party or does any act that requires the payment of any sum to any third-party at any time by reason of Landlord’s default, the sum paid by, Tenant shall be immediately due from Landlord to Tenant at the time Tenant supplies Landlord with an invoice therefor (provided such invoice sets forth and is accompanied by a written statement of Tenant setting forth in reasonable detail the amount paid, the party to whom it was paid, the date it was paid, and the reasons giving rise to such payment), together with interest at the

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Lease Interest Rate from the date of such invoice until Tenant is reimbursed by Landlord. Tenant may not offset such sums against any installment of rent due Landlord under the terms of this Lease.

12.4 LIMITATION ON TENANT’S RECOURSE: If Landlord is a corporation, trust, partnership, joint venture, unincorporated association, or other form of business entity, Tenant agrees that (i) the obligations of Landlord under this Lease shall not constitute personal obligations of the officers, directors, trustees, partners, joint venturers, members, owners, stockholders, or other principals of such business entity, and (ii) Tenant shall have recourse only to Landlord’s then equity interest, if any, in the Property for the satisfaction of such obligations and not against the assets of such officers, directors, trustees, partners, joint venturers, members, owners, stockholders or principals (other than to the extent of their interest in the Property). Tenant shall look exclusively to such equity interest of Landlord, if any, in the Property for payment and discharge of any obligations imposed upon Landlord hereunder, and Landlord is hereby released and relieved of any other obligations hereunder. Additionally, if Landlord is a partnership, then Tenant covenants and agrees:

A. No partner of Landlord shall be sued or named as a party in any suit or action brought by Tenant with respect to any alleged breach of this Lease (except to the extent necessary to secure jurisdiction over the partnership and then only for that sole purpose);

B. No service of process shall be made against any partner of Landlord except for the sole purpose of securing jurisdiction over the partnership; and

C. No writ of execution shall be levied against the assets of any partner of Landlord other than to the extent of his interest in Property.

Tenant further agrees that each of the foregoing covenants and agreements shall be enforceable by Landlord and by any partner of Landlord and shall be applicable to any actual or alleged misrepresentation or non-disclosure made respecting this Lease or the Leased Premises or any actual or alleged failure, default or breach of any covenant or agreement either expressly or implicitly contained in this Lease or imposed by statute or at common law.

12.5 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of Article 12.3 above are intended to supersede and replace the provisions of California Civil Code Sections 1932(l), 1941 and 1942, and accordingly, Tenant hereby waives the provisions of California Civil Code Sections 1932(l), 1941 and 1942 and/or any similar or successor Law regarding Tenant’s right to terminate this Lease or to make repairs and deduct the expenses of such repairs from the rent due under this Lease. Tenant hereby waives any right of redemption or relief from forfeiture under the Laws of the State of California, or under any other present or future Law, in the event Tenant is evicted or Landlord takes possession of the Leased Premises by reason of any default by Tenant.

ARTICLE 13
GENERAL PROVISIONS

13.1 TAXES ON TENANT’S PROPERTY: Tenant shall pay before delinquency any and all taxes, assessments, license fees, use fees, permit fees and public charges of whatever nature or description levied, assessed or imposed against Tenant or Landlord by a governmental agency arising out of, caused by reason of or based upon Tenant’s estate in this Lease, Tenant’s ownership of property, improvements made by Tenant to the Leased Premises or the Outside Areas, improvements made by Landlord for Tenant’s use within the Leased Premises or the Outside Areas, Tenant’s use (or estimated use) of public facilities or services or Tenant’s consumption (or estimated consumption) of public utilities, energy, water or other resources. Upon demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments. If any such taxes, assessments, fees or public charges are levied against Landlord, Landlord’s property, the Buildings or the Property, or if the assessed value of the Buildings or the Property is increased by the inclusion therein of a value placed upon same, then Landlord, after giving written notice to Tenant, shall have the right, regardless of the validity thereof, to pay such taxes, assessment, fee or public charge and bill Tenant, as Additional Rent, the amount of such taxes, assessment, fee or public charge so paid on Tenant’s behalf. Tenant shall, within ten (10) days from the date it receives an invoice from Landlord setting forth the amount of such taxes, assessment, fee or public charge so levied, pay to Landlord, as Additional Rent, the amount set forth in said invoice. Failure by Tenant to pay the amount so invoiced within said ten day period shall be

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conclusively deemed a default by Tenant under this Lease. Tenant shall have the right, and the Landlord’s full cooperation if Tenant is not then in default under the terms of this Lease, to bring suit in any court of competent jurisdiction to recover from the taxing authority the amount of any such taxes, assessment, fee or public charge so paid.

13.2 HOLDING OVER: This Lease shall terminate without further notice on the expiration of the Lease Term or earlier termination of this Lease. Any holding over by Tenant after expiration of the Lease Term or earlier termination of this Lease shall neither constitute a renewal nor extension of this Lease nor give Tenant any rights in or to the Leased Premises except as expressly provided in this Article. Any such holding over shall be deemed an unlawful detainer of the Leased Premises unless Landlord has consented in writing to same. Any such holding over to which Landlord has consented to in writing shall be construed to be a tenancy from month-to-month, on the same terms and conditions herein specified insofar as applicable, except that the Base Monthly Rent shall be increased to an amount equal to one hundred fifty percent (150%) of the Base Monthly Rent payable during the last full month immediately preceding such holding over. The provisions of this Article shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided in this Lease or at Law.

13.3 SUBORDINATION TO MORTGAGES: This Lease is subject to and subordinate to all underlying ground leases, mortgages and deeds of trust which affect the Buildings or the Property and which are of public record as of the Effective Date of this Lease, and to all renewals, modifications, consolidations, replacements and extensions thereof. However, if the lessor under any such ground lease or any lender holding any such mortgage or deed of trust shall advise Landlord that it desires or requires this Lease to be made prior and superior thereto, then, upon written request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and deliver any and all documents or instruments which Landlord and such lessor or lender deem necessary or desirable to make this Lease prior thereto. Tenant hereby consents to Landlord’s ground leasing the land underlying the Buildings or the Property and/or encumbering the Buildings or the Property as security for future loans on such terms as Landlord shall desire, all of which future ground leases, mortgages or deeds of trust shall be subject to and subordinate to this Lease. However, if any lessor under any such future ground lease or any lender holding such future mortgage or deed of trust shall desire or require that this Lease be made subject to and subordinate to such future ground lease, mortgage or deed of trust, then Tenant agrees, within ten (10) days after Landlord’s written request therefor, to execute, acknowledge and deliver to Landlord any and all documents or instruments requested by Landlord or by such lessor or lender as may be necessary or proper to assure the subordination of this Lease to such future ground lease, mortgage or deed of trust, but only if such lessor or lender agrees to recognize Tenant’s rights under this Lease and agrees not to disturb Tenant’s quiet possession of the Leased Premises so long as Tenant is not in default under this Lease.

13.4 TENANT’S ATTORNMENT UPON FORECLOSURE: Tenant shall, upon request, attorn (i) to any purchaser of the Buildings or the Property at any foreclosure sale or private sale conducted pursuant to any security instrument encumbering the Buildings or the Property, (ii) to any grantee or transferee designated in any deed given in lieu of foreclosure of any security interest encumbering the Buildings or the Property, or (iii) to the lessor under any underlying ground lease of the land underlying the Buildings or the Property, should such ground lease be terminated; provided that such purchaser, grantee or lessor recognizes Tenant’s rights under this Lease.

13.5 MORTGAGEE PROTECTION: In the event of any default on the part of Landlord, Tenant will give notice by registered mail to any lender or lessor under any underlying ground lease who shall have requested, in writing, to Tenant that it be provided with such notice, and Tenant shall offer such lender or lessor a reasonable opportunity to cure the default, including time to obtain possession of the Leased Premises by power of sale or judicial foreclosure or other appropriate legal proceedings if reasonably necessary to effect a cure.

13.6 ESTOPPEL CERTIFICATES: Tenant and Landlord shall, within twenty (20) days after the request of the other party, promptly execute and deliver to the requesting party an estoppel certificate (i) certifying that this Lease is unmodified and in full force and effect, or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect, (ii) stating the date to which the rent and other charges are paid in advance, if any, (iii) acknowledging that there are not, to such party’s knowledge, any uncured defaults under this Lease, or specifying such defaults if any are claimed, and (iv) certifying such other information about this Lease as may be reasonably requested by the requesting party. Tenant’s failure to execute and deliver such estoppel certificate within such twenty (20) day period shall be a default by Tenant under this Lease, and

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Landlord shall have all of the rights and remedies available to Landlord as Landlord would otherwise have in the case of any other default by Tenant. Landlord and Tenant intend that any statement delivered pursuant to this Article may be relied upon by any lender or purchaser or prospective lender or purchaser of the Buildings, the Property, or any interest herein.

13.7 TENANT’S FINANCIAL INFORMATION: If at any time after Tenant’s financial statements shall no longer be publicly available, Tenant shall, within ten (10) business days after Landlord’s request therefor deliver to Landlord a copy of a financial statement for the most recently concluded fiscal year (or if the request is made sooner than one hundred twenty (120) days from a fiscal year end, then the financial statement for the preceding fiscal year) including an income statement and a balance sheet and any such other information reasonably requested by Landlord regarding Tenant’s financial condition. Tenant acknowledges that Landlord is relying upon the financial information provided to Landlord by Tenant prior to entering into this Lease and the information to be provided to Landlord by Tenant during the Lease Term. Landlord shall be entitled to disclose such financial statements or other information to its lender, to any present or prospective principal of or investor in Landlord, or to any prospective lender or purchaser of the Buildings, the Property or any portion thereof or interest therein. Any such financial statement or other information which is not publicly available shall be confidential and shall not be disclosed by Landlord to any third party except as specifically provided in this Article, unless the same becomes a part of the public domain without the fault of Landlord.

13.8 TRANSFER BY LANDLORD: Landlord and its successors in interest shall have the right to transfer their interest in the Buildings, the Property, or any portion thereof at any time and to any person or entity. In the event of any such transfer, the Landlord originally named herein (and in the case of any subsequent transfer, the transferor), from the date of such transfer, (i) shall be automatically relieved, without any further act by any person or entity, of all liability for the performance of the obligations of the Landlord hereunder which may accrue after the date of such transfer, and (ii) shall be relieved of all liability for the performance of the obligations of the Landlord hereunder which have accrued before the date of transfer if its transferee agrees to assume and perform all such prior obligations of the Landlord hereunder. Tenant shall attorn to any such transferee. After the date of any such transfer, the term “Landlord” as used herein shall mean the transferee of such interest in the Buildings or the Property.

13.9 NOTICES: Any notice required or desired to be given by a party regarding this Lease shall be in writing and shall be personally served, or in lieu of personal service may be given by (i) delivery by Federal Express, United Parcel Service or similar commercial carrier, (ii) electronic fax transmission, or (iii) depositing such notice in the United States mail, postage prepaid, addressed to the other party as follows:

A. If addressed to Landlord, to Landlord at its Address for Notices (as set forth in Article 1).

B. If addressed to Tenant, to Tenant at its Address for Notices (as set forth in Article 1). Any notice given by registered mail shall be deemed to have been given on the third business day after its deposit in the United States mail.

Any notice given by registered mail shall be deemed given on the date receipt was acknowledged to the postal authorities. Any notice given by mail other than registered or certified mail shall be deemed given only if received by the other party, and then on the date of receipt. Any notice delivered by commercial carrier or by fax shall be deemed given on the date of confirmation of delivery by the carrier or by electronic confirmation. Each party may, by written notice to the other in the manner aforesaid, change the address to which notices addressed to it shall thereafter be mailed.

13.10 ATTORNEYS’ FEES: In the event any party shall bring any action, arbitration proceeding or legal proceeding alleging a breach of any provision of this Lease, to recover rent, to terminate this Lease, or to enforce, protect, determine or establish any term or covenant of this Lease or rights or duties hereunder of either party, the prevailing party shall be entitled to recover from the non-prevailing party as a part of such action or proceeding, or in a separate action for that purpose brought within one year from the determination of such proceeding, reasonable attorneys’ fees of up to two laws firms, expert witness fees, court costs and other reasonable expenses incurred by the prevailing party (collectively, “Costs”). In the event that Landlord shall be required to retain counsel to enforce any provision of this Lease, and if Tenant shall thereafter cure (or desire to cure) such

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default, Landlord shall be conclusively deemed the prevailing party and Tenant shall pay to Landlord all Costs incurred by Landlord promptly upon demand. Landlord may enforce this provision by either (i) requiring Tenant to pay such fees and costs as a condition to curing its default, or (ii) bringing a separate action to enforce such payment, it being agreed by and between Landlord and Tenant that Tenant’s failure to pay such fees and costs upon demand shall constitute a breach of this Lease in the same manner as a failure by Tenant to pay the Base Monthly Rent, giving Landlord the same rights and remedies as if Tenant failed to pay the Base Monthly Rent.

13.11 DEFINITIONS: Any term that is given a special meaning by any provision in this Lease shall, unless otherwise specifically stated, have such meaning whenever used in this Lease or in any Addenda or amendment hereto. In addition to the terms defined in Article 1, the following terms shall have the following meanings:

A. REAL PROPERTY TAXES: The term “Real Property Tax” or “Real Property Taxes” shall each mean (i) all taxes, assessments, levies and other charges of any kind or nature whatsoever, general and special, foreseen and unforeseen (including all installments of principal and interest required to pay any general or special assessments for public improvements and any increases resulting from reassessments caused by any change in ownership or new construction), now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power or tax or levy assessments, which are levied or assessed for whatever reason against the Project or any portion thereof, or Landlord’s interest herein, or the fixtures, equipment and other property of Landlord that is an integral part of the Project and located thereon, or Landlord’s business of owning, leasing or managing the Project or the gross receipts, income or rentals from the Project; (ii) all charges, levies or fees imposed by any governmental authority against Landlord by reason of or based upon the use of or number of parking spaces within the Project, the amount of public services or public utilities used or consumed (e.g. water, gas, electricity, sewage or surface water disposal) at the Project, the number of persons employed by tenants of the Project, the size (whether measured in area, volume, number of tenants or whatever) or the value of the Project, or the type of use or uses conducted within the Project; and (iii) all costs and fees (including attorneys’ fees) incurred by Landlord in contesting any Real Property Tax and in negotiating with public authorities as to any Real Property Tax, but only to the extent of a Real Property Tax reduction. If, at any time during the Lease Term, the taxation or assessment of the Project prevailing as of the Effective Date of this Lease shall be altered so that in lieu of or in addition to any Real Property Tax described above there shall be levied, or imposed (whether by reason of a change in the method of taxation or assessment, creation of a new tax or charge, or any other cause) an alternate, substitute, or additional tax or charge (a) on the value, size, use or occupancy of the Project or Landlord’s interest therein, or (b) on or measured by the gross receipts, income or rentals from the Project, or on Landlord’s business of owning, leasing or managing the Project or (c) computed in any manner with respect to the operation of the Project, then any such tax or charge, however designated, shall be included within the meaning of the terms “Real Property Tax” or “Real Property Taxes” for purposes of this Lease. If any Real Property Tax is partly based upon property or rents unrelated to the Project, then only that part of such Real Property Tax that is fairly allocable to the Project shall be included within the meaning of the terms “Real Property Tax” or “Real Property Taxes.” Notwithstanding the foregoing, the terms “Real Property Tax” or “Real Property Taxes” shall not include estate, inheritance, transfer, gift or franchise taxes of Landlord or the federal or state income tax imposed on Landlord’s income from all sources. Notwithstanding the foregoing or anything to the contrary in this Lease, Tenant shall be entitled to the benefit of all existing and future reductions and/or abatements of Real Property Taxes, to the extent such reductions and/or abatements are granted by the applicable taxing authorities and are applicable to periods during the Lease Term.

B. LANDLORD’S INSURANCE COSTS: The term “Landlord’s Insurance Costs” shall mean the costs to Landlord to carry and maintain the policies of insurance required, or permitted, to be carried by Landlord pursuant to Article 9, together with any deductible amounts paid by Landlord upon the occurrence of any insured casualty or loss.

C. PROPERTY OPERATING EXPENSES: The term “Property Operating Expenses” shall mean and include all Real Property Taxes, plus all Landlord’s Insurance Costs, plus all Property Costs. The term “Property Costs” shall mean and include all expenses of operation, repair and maintenance of the Buildings and the Property in accordance with the terms of this Lease, including, without limitation, (i) the costs associated with the maintenance of an HVAC service agreement (if Tenant fails to procure and maintain the same), (ii) the cost of any environmental, insurance, tax or other consultant utilized by Landlord in connection with the Buildings and/or Property,

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(iii) reasonably allocated wages and salaries, fringe benefits and payroll taxes for Landlord’s administrative and other personnel directly applicable to the Buildings or the Property, including both Landlord’s personnel and outside personnel, and (iv) an overhead/management fee for the professional operation of the Buildings or the Property in an amount equal to two percent (2%) of the sum of the annual Base Monthly Rent plus the Property Operating Expenses (payable monthly). Under no circumstances, however, shall Property Operating Expenses include any of the following: (a) depreciation on the Building or any improvements on the Property, (b) federal, state, or local income, franchise, gift, transfer, excise, capital stock, estate, succession or inheritance taxes (except to the extent any Real Property Tax is recharacterized as one of the foregoing, up to the amount of the resulting reductions in the real property tax from the prior year), (c) interest on debt or amortization payments on mortgages or deeds of trust secured by the Property, (d) costs incurred because Landlord violated any Law; provided such violation is not caused by Tenant’s failure to comply with the terms of this Lease; (e) costs or expenses of a partnership, or other entity, which constitutes Landlord, which costs or expenses are not directly related to the Leased Premises (such as entity-level accounting fees, tax returns, and income taxes of such entity), (f) expenses incurred by Landlord that are not directly related to and expended for the Leased Premises or its operations; (g) costs of any political, charitable, civic or other contribution or donation; (h) any interest or penalty incurred due to the late payment of any cost assessed as a result of Landlord’s failure to make payments when due in those instances where Landlord is specifically responsible for the payment in question; provided such late payment is not caused by Tenant’s failure to make when due any payment required pursuant to this Lease; (i) any fee or expenditure paid to a related party by Landlord in excess of the amount which would be paid in an arm’s length transaction for materials or services of comparable quality (but only to the extent of such excess); (j) any personal property taxes of the Landlord for equipment or items not used directly in the operation or maintenance of the Leased Premises; (k) any costs or expenses for sculpture, paintings or other works of art purchased for the Leased Premises by Landlord, including costs incurred with respect to the purchase, ownership, leasing, repair and/or maintenance of such works of art; (l) costs for which Landlord is actually compensated by insurance proceeds related to Property Operating Expense items, exclusive of deductibles and costs of collection; and (m) costs incurred by Landlord in connection with obtaining financing.

D. LAW: The term “Law” or “Laws” shall mean any judicial decision and any statute, constitution, ordinance, resolution, regulation, rule, administrative order, or other requirement of any municipal, county, state, federal, or other governmental agency or authority having jurisdiction over the parties to this Lease, the Leased Premises, the Buildings or the Property, or any of them in effect either at the Effective Date of this Lease or at any time during the Lease Term, including, without limitation, any regulation, order, or policy of any quasi-official entity or body (e.g. a board of fire examiners or a public utility or special district).

E. LENDER: The term “lender” shall mean the holder of any note or other evidence of indebtedness secured by the Property or any portion thereof.

F. PRIVATE RESTRICTIONS: The term “Private Restrictions” shall mean the Parking Agreement, all recorded covenants, conditions and restrictions, private agreements, easements, and any other recorded instruments affecting the use of the Property, as they may exist from time to time.

G. RENT: The term “rent” shall mean collectively Base Monthly Rent and all Additional Rent.

13.12 GENERAL WAIVERS: One party’s consent to or approval of any act by the other party requiring the first party’s consent or approval shall not be deemed to waive or render unnecessary the first party’s consent to or approval of any subsequent similar act by the other party. No waiver of any provision hereof or any breach of any provision hereof shall be effective unless in writing and signed by the waiving party. The receipt by Landlord of any rent or payment with or without knowledge of the breach of any other provision hereof shall not be deemed a waiver of any such breach. No waiver of any provision of this Lease shall be deemed a continuing waiver unless such waiver specifically states so in writing and is signed by both Landlord and Tenant. No delay or omission in the exercise of any right or remedy accruing to either party upon any breach by the other party under this Lease shall impair such right or remedy or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by either party of any breach of any provision of this Lease shall not be deemed to be a waiver of any subsequent breach of the same or any other provisions herein contained.

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13.13 MISCELLANEOUS: Should any provision of this Lease prove to be invalid or illegal, such invalidity or illegality shall in no way affect, impair or invalidate any other provision hereof, and such remaining provisions shall remain in full force and effect. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor. Any copy of this Lease which is executed by the parties shall be deemed an original for all purposes. This Lease shall, subject to the provisions regarding assignment, apply to and bind the respective heirs, successors, executors, administrators and assigns of Landlord and Tenant. The term “party” shall mean Landlord or Tenant as the context implies. If Tenant consists of more than one person or entity, then all members of Tenant shall be jointly and severally liable hereunder. This Lease shall be construed and enforced in accordance with the Laws of the California. The language in all parts of this Lease shall in all cases be construed as a whole according to its fair meaning, and not strictly for or against either Landlord or Tenant. The captions used in this Lease are for convenience only and shall not be considered in the construction or interpretation of any provision hereof. When the context of this Lease requires, the neuter gender includes the masculine, the feminine, a partnership or corporation or joint venture, and the singular includes the plural. The terms “must”, “shall”, “will”, and “agree” are mandatory. The term “may” is permissive. When a party is required to do something by this Lease, it shall do so at its sole cost and expense without right of reimbursement from the other party unless specific provision is made therefor. Where Tenant is obligated not to perform any act or is not permitted to perform any act, Tenant is also obligated to restrain any others reasonably within its control, including agents, invitees, contractors, subcontractors and employees, from performing said act. Landlord shall not become or be deemed a partner or a joint venture with Tenant by reason of any of the provisions of this Lease.

13.14 RIGHT OF FIRST OFFER.

A. Prior to offering to sell the Property during the Term to a third party, Landlord shall first deliver to Tenant a written notice of the purchase price and, if the purchase price is other than all cash, the terms of any seller financing, pursuant to which Landlord intends to negotiate the sale of the Property to a third party (the “ROFO Notice”). In addition, if Landlord receives an unsolicited offer to purchase the Property and Landlord wishes to negotiate or accept such unsolicited offer, Landlord shall first deliver to Tenant a written notice of the purchase price and, if the purchase price offered is other than all cash, the terms of any seller financing set forth in such unsolicited offer (the “Unsolicited Offer ROFO Notice”). For a period of twenty (20) days from receipt of the ROFO Notice, or ten (10) days from receipt of the Unsolicited Offer ROFO Notice, Tenant shall have the right to negotiate the purchase of the Property for the price and, if applicable, the terms of any seller financing specified in the ROFO Notice, or in the Unsolicited Offer ROFO Notice, as appropriate (the “ROFO”).

B. With respect to a ROFO Notice, in the event Landlord and Tenant are unable to reach agreement on the purchase price and, if applicable, the terms of any seller financing for the Property within the foregoing twenty (20) day period, then Tenant shall be deemed to have rejected the ROFO and Landlord shall be free to sell the Property to any third party at any time, subject to the following:

1. If Landlord fails, for any reason, to fully execute a purchase and sale agreement for the sale of the Property within one hundred eighty (180) days after Tenant rejects (or is deemed to have rejected) the ROFO, then Landlord shall be obligated, prior to selling the Property, to again offer the Property to Tenant for sale pursuant to a ROFO Notice or an Unsolicited Offer ROFO Notice, as applicable, in which event the preceding terms of this Article 13.14 shall again apply.

2. If by the end of the twenty (20) day period after receipt of the ROFO Notice, Tenant has specified in writing a price and, if applicable, the terms of any seller financing upon which it agrees, but for Landlord’s lack of concurrence, to purchase the Property (the “Tenant Offered Price and Terms”) and before the end of one hundred eighty (180) days after Tenant rejects or is deemed to have rejected the ROFO, Landlord proposes to sell the Property at a price which is less (and, if applicable, with seller financing more favorable to the buyer) than the Tenant Offered Price and Terms, then Landlord shall be obligated to deliver a written notice to Tenant specifying such price and, if applicable, the terms of the seller financing (the “Second Bite ROFO Notice”) and Tenant shall have the right, until the date which is three (3) business days after receipt of the Second Bite ROFO Notice, to deliver written notice to Landlord exercising the ROFO (and in the event Tenant fails to provide an unqualified written notice of acceptance and exercise of the ROFO to Landlord within the foregoing three (3) business day period following receipt of the Second Bite ROFO Notice, then Tenant shall be deemed to have rejected the ROFO).

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C. With respect to an Unsolicited Offer ROFO Notice, in the event Landlord and Tenant are unable to reach agreement on the purchase price (and, if applicable, the terms of any seller financing) for the Property within the foregoing ten (10) day period, then Tenant shall be deemed to have rejected the ROFO and Landlord shall be free to sell the Property to any third party at any time; provided, however, that if Landlord fails, for any reason, to fully execute a purchase and sale agreement for the sale of the Property within one hundred eighty (180) days after Tenant rejects (or is deemed to have rejected) the ROFO, then Landlord shall be obligated, prior to selling the Property, to again offer the Property to Tenant for sale pursuant to a ROFO Notice or an Unsolicited Offer ROFO Notice, as applicable, in which event the preceding terms of this Article 13.14 shall again apply.

D. Upon exercise of the ROFO, Tenant’s obligations to purchase the Property in accordance with the terms and conditions set forth in this Article 13.14 shall be irrevocable, and any breach by Tenant of its obligation to purchase the Property thereunder shall cause its rights under this Article 13.14 shall immediately terminate and be of no further force or effect. Any purchase of the Property by Tenant under the ROFO shall be upon the terms and conditions set forth in the American Industrial Real Estate Association Standard Offer, Agreement and Escrow Instructions for the Purchase of Real Property attached hereto as Exhibit “F”, except that in light of Tenant’s possession and occupancy of the Property, and notwithstanding any contrary terms in the ROFO Notice, there shall be no due diligence period provided to Tenant under the terms of its purchase of the Property, any representations and warranties thereunder by Landlord (as seller), other than as to the valid organization of Landlord and the due authorization by Landlord of the sale transaction thereunder, shall be deemed null and void, and the closing thereunder shall occur, on an all-cash basis (unless seller financing exists), not more than sixty (60) days following Tenant’s exercise of the ROFO. The period during which the ROFO shall apply (the “ROFO Period”) shall commence on the date of this Lease, and shall expire upon the earlier of (i) the closing of the sale of the Property following Tenant’s rejection of the ROFO as provided in Articles 13.14(B) and 13.14(C), or (ii) the expiration or earlier termination of this Lease.

E. In the event that Landlord desires to transfer and convey all or any portion of its interest in the Property (i) to an affiliate of Landlord, (ii) to any entity controlled by, controlling or under common control with Landlord, (iii) to any joint venture or co-investment program (whether in the form of a limited liability company, a limited partnership or otherwise), in which any of Landlord or its affiliates has an interest, or (iv) as part of a Portfolio Transaction (as hereinafter defined), such a transfer shall not trigger Tenant’s ROFO. A “Portfolio Transaction” shall mean a contemplated sale to a third party of the Property, together with one or more additional properties that are owned by Landlord or one of its affiliates or by a joint venture or co-investment program in which Landlord or one of its affiliates has an interest. Landlord may not rely on a transaction under this Article 13.14 to avoid, as a substantial purpose, the Tenant’s ROFO.

F. If Landlord finances and encumbers its interest in the Property (as evidenced by a mortgage or comparable encumbrance), and such secured party exercises any or all of its rights and remedies against either or both of Landlord and the Property, and as a result thereof, the Property is transferred to that lender, an affiliate of that lender, or a third party, whether at a foreclosure sale, or through a deed in lieu of foreclosure, or some comparable procedure or proceeding (a “Default Transfer”), then such Default Transfer shall not trigger Tenant’s ROFO (and, therefore, neither Landlord nor its lender shall be obligated to deliver a ROFO Notice); provided that any resulting successor shall continue to be bound by the terms of Tenant’s ROFO, it being intended to be a continuing right.

13.15 LEASEHOLD MORTGAGE

A. Landlord shall not be required to subject its fee estate and interest in the Premises to the lien of any leasehold financing or mortgage sought or obtained by Tenant.

B. Tenant, and to the extent this Lease is assigned to same, an Affiliate or Successor (each as defined in Article 7.10 above) are hereby given the right (exercisable at any time and from time to time) by Landlord, in addition to any other rights herein granted, without Landlord’s prior written consent, approval or authorization, to hypothecate, pledge, encumber or mortgage its interest in this Lease and the leasehold estate in the Leased Premises created hereby under one or more leasehold mortgage(s) from a third-party lender or lenders unrelated to Borrower or its owners, and experienced in financial transactions comparable to that represented by the agreements and instruments of which the Leasehold Mortgage in place as of the Commencement Date is a part (“Leasehold

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Mortgage”) and to assign such interest in this Lease and the leasehold estate in the Premises created hereby as collateral security for such Leasehold Mortgage(s), upon the condition that all rights acquired under such Leasehold Mortgage(s) shall, except as expressly provided in this Article 13.15, be subject to each and all of the covenants, conditions and restrictions set forth in this Lease, and to all rights and interests of Landlord herein. None of such covenants, conditions or restrictions is or shall be waived by Landlord by reason of the right given to mortgage such interest in this Lease, except as expressly provided in this Article 13.15. The holder of any Leasehold Mortgage, and its successors and/or assigns in such capacity, encumbering the leasehold estate created by this Lease, shall be referred to herein as the “Leasehold Mortgagee” and shall be entitled to the rights and benefits as provided herein. A subtenant may not hypothecate, pledge, encumber or mortgage its interest in this Lease without the prior written consent of Landlord, which may be withheld in Landlord’s sole and absolute discretion. Notwithstanding anything to the contrary herein, no Leasehold Mortgage or subleasehold mortgage shall affect Landlord’s fee title to the Leased Premises in any way.

C. Provided that Leasehold Mortgagee shall have notified Landlord in writing of its status as a Leasehold Mortgagee and its name and address for notices, and provided to Landlord a copy and the pertinent recording information of such Leasehold Mortgagee, Landlord thereafter shall give to such Leasehold Mortgagee a copy of each notice of default and each notice of termination of the Lease at the same time as the same shall be delivered by Landlord to Tenant, such copy to be addressed to Leasehold Mortgagee at the address last furnished to Landlord as hereinabove provided. No such communication shall be binding upon or affect said Leasehold Mortgagee unless a copy of said communication shall be given to said Leasehold Mortgagee pursuant to this Section 13.15(C). In furtherance of the foregoing, Landlord shall not serve a notice of cancellation or termination upon Tenant unless a copy of any prior notice of default shall have been delivered to Leasehold Mortgagee as hereinabove provided and the time as hereinafter specified for the curing of such default shall have expired without the same having been cured. Landlord shall notify Leasehold Mortgagee in writing of the failure of Tenant to cure a default within any applicable grace period and of the curing of any default by Tenant. Leasehold Mortgagee shall have the right, but not the obligation, to perform any term, covenant, condition or agreement of Tenant, and to remedy any default hereunder and, upon acquiring Tenant’s interest in this Lease, to exercise any rights of Tenant under the Lease (specifically including, without limitation, the Extension Options as described in Section 2.7). Landlord shall accept such performance by said Leasehold Mortgagee with the same force and effect as if performed, exercised and/or remedied by Tenant.

D. In furtherance of the provisions of Section 13.15(C) hereof, in the case of a default by Tenant in the performance of any term, covenant, condition or agreement on Tenant’s part to be performed under this Lease, Landlord will accept performance by Leasehold Mortgagee within the following periods of any obligation to be performed by Tenant hereunder, with the same force and effect as though timely performed by Tenant:

(i) as to any default in the payment of Rent and other sums payable hereunder, within ten (10) days after notice from Landlord thereof;

(ii) as to all other defaults, within thirty (30) days more time than is given Tenant to remedy or cause to be remedied the defaults complained of, or, if within such period such default cannot be cured, to commence to so cure within such period and diligently and continuously proceed therewith to completion; and

(iii) as to any default with respect to which Leasehold Mortgagee is without the legal power to cure by payment or performance, at any time so long as Leasehold Mortgagee shall diligently proceed to obtain possession of the Leased Premises as mortgagee (including possession by receiver), and upon obtaining such possession, Leasehold Mortgagee shall diligently proceed to cure such default; and

(iv) as to any default which is not susceptible to cure by Leasehold Mortgagee, at any time so long as Leasehold Mortgagee shall diligently institute foreclosure proceedings and diligently prosecute the same to completion (unless in the meantime Leasehold Mortgagee shall acquire Tenant’s estate hereunder, either in its own name or through a nominee, by assignment in lieu of foreclosure).

E. Landlord shall not exercise its right to terminate this Lease during the time that Leasehold Mortgagee shall require to complete its remedies under its Leasehold Mortgage; provided, however:

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(i) that Leasehold Mortgagee proceeds, promptly and with due diligence, to exercise the remedies under its Leasehold Mortgage and thereafter prosecutes and completes the same with all due diligence; and

(ii) that Leasehold Mortgagee shall pay to Landlord the Rent and all other charges required to be paid by Tenant hereunder which have accrued and those which shall become due and payable during said period.

(iii) Upon the completion of any foreclosure proceedings or acquisition of Tenant’s interest in this Lease by Leasehold Mortgagee, any default not susceptible of being cured by Leasehold Mortgagee shall be deemed waived by Landlord as to Leasehold Mortgagee, any purchaser at a foreclosure sale, and their respective successors and assigns.

F. No notice of termination to Tenant shall be effective with respect to termination of this Lease unless Leasehold Mortgagee shall also have been so notified. Leasehold Mortgagee shall then have the right to notify Landlord in writing, within ten (10) days after receipt by Leasehold Mortgagee of such notice of cancellation and termination, that (a) Leasehold Mortgagee, or a reasonably qualified operator of a radio programming and distribution business comparable to that operated by Tenant designated by Leasehold Mortgagee, or otherwise a nominee approved by Landlord for a use approved Landlord, such approval not to be unreasonably withheld (each hereinafter called an “approved nominee”), elects to lease the Premises from the date of termination of this Lease for the remainder of the term of this Lease, at the Rent and other charges herein reserved and upon the same terms, covenants and conditions as are herein set forth, with the same relative priority in time and in right as this Lease (to the extent possible) and having the benefit of and vesting in Leasehold Mortgagee, or the approved nominee, of all the rights, title, interest, powers and privileges of the Tenant hereunder (the “New Lease”), and (b) Leasehold Mortgagee or the approved nominee further obligates itself to (and in fact does) cure all defaults pursuant to, and within the time frames described in, Section 13.15(D). Each subtenant of all or any portion of the Leased Premises, if any, whose sublease was in force and effect immediately prior to the delivery of said New Lease shall attorn to the lessee under the New Lease, unless said lessee shall, at its option, elect to dispossess said subtenant or otherwise terminate the sublease held by said subtenant. Each subtenant who hereafter subleases all or any portion of the Leased Premises shall be deemed to have agreed to the provisions of this Section 13.15(G). The foregoing shall not be deemed to obligate Landlord to keep any sublease in force and effect after the termination of this Lease, nor shall Landlord have any obligation to terminate any sublease simultaneously with the termination of this Lease. Upon consummation of the New Lease, Landlord shall pay or credit to Leasehold Mortgagee or the approved nominee, as applicable, any rentals, less costs and expenses of collection, received by Landlord between the date of termination of this Lease and the date of execution of said New Lease, from subtenants or other occupants of the Leased Premises, if any, which shall not theretofore have been applied by Landlord towards the payment of rent or any other sum of money payable by Tenant hereunder or towards the cost of operating the Leased Premises and all buildings and improvements thereon or performing the obligations of Tenant hereunder.

G. After such termination of this Lease and upon compliance with the provisions of Article 13.15(G) by Leasehold Mortgagee, or the approved nominee, within such time, Landlord shall thereupon execute and deliver such New Lease to Leasehold Mortgagee or the approved nominee, having the same relative priority in time and right as this Lease (to the extent possible) and having the benefit of all of the right, title, interest, powers and privileges of Tenant hereunder in and to the Premises.

H. Anything herein contained to the contrary notwithstanding, Landlord and Tenant mutually agree that so long as there exists an unpaid Leasehold Mortgage on the leasehold estate of Tenant, this Lease or any renewal thereof shall not be modified, amended or altered and Landlord shall not accept a surrender of the Premises or a cancellation of this Lease (provided Leasehold Mortgagee remedies any default and keeps this Lease current, all as provided above) prior to the expiration or sooner termination thereof, without the prior written consent of Leasehold Mortgagee.

I. So long as any debt secured by a Leasehold Mortgage upon the leasehold created by this Lease shall remain unpaid, unless Leasehold Mortgagee shall otherwise consent in writing, the fee title to the Premises and the leasehold estate in the Premises shall not merge but shall always be kept separate estates, notwithstanding what otherwise would be the merger of such estates either in Landlord or in Tenant or in a third party by purchase or otherwise.

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J. In connection with any Leasehold Mortgage, if requested by the Leasehold Mortgagee, Landlord and Tenant agree to execute and deliver a memorandum of lease in the form attached hereto as Exhibit G (the “Memorandum of Lease”) for recordation in the Official Records of Los Angeles County. Upon the expiration or earlier termination of the Lease Term, and promptly following Landlord’s request, Tenant agrees to execute and deliver, in recordable form reasonably acceptable to Landlord, a termination of the Memorandum of Lease (the “Memorandum Termination”). Tenant hereby appoints Landlord as its attorney-in-fact for the purpose of executing and recording the Memorandum Termination following the expiration or earlier termination of the Lease Term, should Tenant not execute and deliver the Memorandum Termination to Landlord.

K. Notwithstanding the provisions of Section 13.3 to the contrary, Landlord shall not grant any ground leases, mortgages and/or deeds of trust after the date hereof unless and until such ground lessee, mortgagee or beneficiary, as applicable, shall recognize the rights and protections afforded Leasehold Mortgagee pursuant to this Article 13.15, including, without limitation, Leasehold Mortgagee’s right to receive notice and opportunity to cure any default under this Lease as required by this Article 13.15 prior to the commencement of any action to terminate this Lease. Leasehold Mortgagee agrees to evidence its consent to any subordination, non-disturbance and attornment (or similar) agreement required by a ground lessee, mortgagee or beneficiary, as applicable, provided such agreement shall not modify Leasehold Mortgagee’s rights and protections afforded by this Lease.

L. All notices, copies of notices and other communications between Landlord and Leasehold Mortgagee shall be given in the same manner and subject to the same terms and conditions as set forth in Section 13.9 hereof.

M. If Tenant shall reject or disaffirm this Lease pursuant to any bankruptcy law, Landlord shall give to Leasehold Mortgagee notice of such rejection or disaffirmance, together with a statement of all Rent then due and payable by Tenant under this Lease (without giving effect to any acceleration of the due date of any such payment of Rent), and of all other defaults under this Lease. Leasehold Mortgagee shall have the right (but not the obligation), to give to Landlord within thirty (30) days after receipt by Leasehold Mortgagee of such notice from Landlord, a notice that Leasehold Mortgagee elects to assume this Lease and cures all then-existing outstanding balance of Rent concurrently with such assumption of all non-monetary defaults (except for defaults of the type specified in Section 365(b)(2) of the Bankruptcy Code or which are impossible for Leasehold Mortgagee to cure) with reasonable diligence (the “Assumption Election”); provided however, that Leasehold Mortgagee’s failure to make the Assumption Election within said thirty (30) day period shall constitute Leasehold Mortgagee’s election not to assume this Lease. In the event of an Assumption Election, (i) Tenant’s rejection or disaffirmance of this Lease shall not constitute a termination of this Lease, (ii) Tenant and Leasehold Mortgagee’s interest in the Lease shall remain in effect (except to the extent Tenant’s interest therein shall have terminated or been transferred in connection with any enforcement of any Leasehold Mortgage) and shall not be terminated or subjected to any divestiture or defeasance as a result of such rejection or disaffirmance, (iii) Leasehold Mortgagee may assume the obligations of Tenant without any instrument of assignment or transfer from Tenant, (iv) Leasehold Mortgagee’s rights under this Lease shall be free and clear of all rights, claims and encumbrances of or in respect of Tenant, (v) Leasehold Mortgagee shall consummate the assumption of this Lease and the payment of the amounts payable by it to Landlord as provided above at a closing to be held at the office of Landlord on the tenth (10th) business day after Leasehold Mortgagee shall have given to Landlord the notice hereinabove provided for (or such other location as may be mutually acceptable to Leasehold Mortgagee and Landlord), and (vi) upon an assignment of this Lease (following an Assumption Election) by Leasehold Mortgagee to an approved nominee, Leasehold Mortgagee shall be relieved of all obligations and liabilities arising from and after the date of such assignment.

N. If Landlord (whether as debtor in possession or otherwise) or any trustee of Landlord shall reject or disaffirm this Lease pursuant to any bankruptcy law, (i) Landlord, without further act or deed, shall be deemed to have elected to remain in possession of the Leased Premises for the balance of the term hereof (including any extension or renewal terms) (unless Leasehold Mortgagee shall otherwise consent in writing), and (ii) this Lease shall not be terminated, or be deemed to have terminated, unless Tenant (with the written consent of Leasehold Mortgagee) shall elect to treat this Lease as terminated under Section 365 of the Bankruptcy Code. Any exercise or attempted exercise by Tenant of any right to treat this Lease as terminated after any rejection or disaffirmance of this Lease by Landlord (whether as debtor in possession or otherwise) or any trustee of Landlord shall be void unless consented to in writing by Leasehold Mortgagee. In the absence of such election with such consent, this Lease shall not be treated as terminated under any provision of any bankruptcy law, and this Lease shall continue in full force and effect in accordance with its terms (except that Tenant shall have the rights conferred under Section 365 of the

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Bankruptcy Code), and the rights of Leasehold Mortgagee shall not be affected or impaired by such rejection or disaffirmance.

O. Landlord agrees to subordinate to the lien of the Leasehold Mortgage any landlord’s lien, all rights of levy, distress or distraint and all claims and demands of every kind against any of Tenant’s personal property now or hereafter located within the Leases Premises, including, without limitation, Tenant’s present and future inventory, equipment and all tangible property now owned or hereafter acquired by Tenant (collectively, the “Goods”, which term, as used herein, shall not include any property owned by Landlord or required to support the structure of, or to heat or cool as a whole, any of the buildings located on the Property, or which would cause material damage or constitute a material adverse Alteration to the structure of the Property if removed, but which term shall expressly include, without limitation, all “Excluded Property” set forth on Exhibit B to the Bill of Sale delivered by Tenant to Landlord in connection with Landlord’s acquisition of the Leased Premises pursuant to the PSA). Without limiting the foregoing provisions of this Article 13.15(O), Leasehold Mortgagee or its receiver or any officer or other representative of Leasehold Mortgagee, may, at its option, from time to time enter the Leased Premises for the purpose of inspecting, possessing, removing, selling (by way of public or private auction, but subject to Landlord’s reasonable terms and conditions concerning same), advertising for sale or otherwise dealing with the Goods, and such license shall be irrevocable and shall continue from the date Leasehold Mortgagee enters the Leased Premises for as long as it deems necessary (but not to exceed a period of sixty (60) days after termination of the Lease); provided, however, that Leasehold Mortgagee shall pay the Rent and provide general liability insurance with limits of at least $2,000,000, naming Landlord as an additional insured thereon, for the period beginning with termination of the Lease until the conclusion of the removal of the Goods and return of the Leased Premises to Landlord as required in this Article 13.15(O). At the conclusion of such period, Leasehold Mortgagee shall remove all of the Goods not sold or otherwise removed, and leave the Leased Premises in broom clean condition and otherwise in the condition required by this Article 13.15(O). With respect to any Goods not removed from the Leased Premises within said period, all interest, if any, of Leasehold Mortgagee in such Goods shall terminate and be of no force or effect; provided, however, that nothing in the preceding sentence shall entitle Leasehold Mortgagee to abandon any Goods within the Leased Premises.

P. Notwithstanding anything to the contrary in Article 7.8, Leasehold Mortgagee shall be released from all obligations and liabilities under this Lease or any New Lease upon its assignment of its full interest therein made in conformance with the provisions of this Article 13.15.

ARTICLE 14
CORPORATE AUTHORITY,
BROKERS AND ENTIRE AGREEMENT

14.1 CORPORATE AUTHORITY: Tenant represents and warrants that Tenant is validly formed and duly authorized and existing, that Tenant is qualified to do business in the State in which the Leased Premises are located, that Tenant has the full right and legal authority to enter into this Lease, that the officers signing this Lease are duly authorized to execute and deliver this Lease on behalf of Tenant in accordance with the bylaws and/or a board of directors’ resolution of Tenant, and that this Lease is binding upon Tenant in accordance with its terms. Tenant shall, concurrently with the execution of this Lease, deliver to Landlord a certified copy of the resolution of its board of directors authorizing or ratifying the execution of this Lease, and if Tenant fails to do so, Landlord at its sole election may elect to (i) extend the Commencement Date by such number of days that Tenant shall have delayed in so delivering such corporate resolution to Landlord, or (ii) terminate this Lease.

14.2 BROKERAGE COMMISSIONS: Tenant covenants, warrants and represents that, other than the Broker, no broker, agent, salesperson or advisor represented Tenant in the negotiation of this Lease. Tenant, at Tenant’s sole cost, shall pay any and all fees, commissions or amounts payable to Broker in connection with this Lease and/or the occupancy of the Leased Premises by Tenant. Landlord covenants, warrants and represents that no brokers or advisors represented Landlord in the negotiation of this Lease. Each party agrees to and hereby does defend, indemnify and hold the other harmless against and from any brokerage commissions or finder’s fees or claims therefor by a party claiming to have dealt with the indemnifying party and all costs, expenses and liabilities in connection therewith, including, without limitation, reasonable attorneys’ fees and expenses, for any breach of the foregoing. The foregoing indemnification shall survive the termination or expiration of this Lease.

40

14.3 ENTIRE AGREEMENT: This Lease and the Exhibits, which Exhibits are by this reference incorporated herein, constitute the entire agreement between the parties, and there are no other agreements, understandings or representations between the parties relating to the lease by Landlord of the Leased Premises to Tenant, except as expressed herein. No subsequent changes, modifications or additions to this Lease shall be binding upon the parties unless in writing and signed by both Landlord and Tenant.

14.4 WAIVER OF JURY TRIAL: LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS MEMBERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE. FURTHERMORE, THIS WAIVER AND RELEASE OF ALL RIGHTS TO A JURY TRIAL IS DEEMED TO BE INDEPENDENT OF EACH AND EVERY OTHER PROVISION, COVENANT, AND/OR CONDITION SET FORTH IN THIS LEASE.

14.5 LANDLORD’S REPRESENTATIONS: Tenant acknowledges that neither Landlord nor any of its agents made any representation or warranties respecting the Project, the Buildings or the Leased Premises, upon which Tenant relied in entering into this Lease, which are not expressly set forth in this Lease. Tenant further acknowledges that neither Landlord nor any of its agents made any representations as to (i) whether the Leased Premises may be used for the Permitted Use under existing Law, or (ii) the suitability of the Leased Premises for the conduct of Tenant’s business, or (iii) the exact square footage of the Leased Premises, and that Tenant relied solely upon its own investigations respecting said matters. Tenant expressly waives any and all claims for damage by reason of any state-management, representation, warranty, promise or other agreement of Landlord or Landlord’s agent(s), if any, not contained in this Lease.

[Signature Page Follows Immediately]

41

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the Effective Date.

“LANDLORD”:			“TENANT”:
NLC-Lindblade, LLC,			Westwood One, Inc.,
a Delaware limited liability company			a Delaware corporation
By:	/s/ Jonathan Epstein		By:	/s/ Roderick M. Sherwood, III
	Name:	Jonathan Epstein		Name:	Roderick M. Sherwood, III
	Its:	Authorized Representative		Its:	President & CFO
			By:	/s/ David Hillman
				Name:	David Hillman
				Its:	GC, CAO & Secretary

If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and indicate the capacity in which they are signing. This Lease must be executed by the chairman of the board, president or vice-president, and the secretary, assistant secretary, the chief financial officer or assistant treasurer, unless the bylaws or a resolution of the board of directors shall otherwise provide, in which event a certified copy, of the bylaws or a certified copy of the resolution, as the case may be, must be attached to this Lease.

D-1

EXHIBIT “A”

(Legal Description of the Property)

All that certain tract. parcel and lot of land lying and being situate in the City of Culver City, State of California, being more particularly described as follows:

PARCEL 1:

LOTS 41, 42 AND 45 OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46 PAGE 32, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 2:

LOTS 43 AND 44, OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46 PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 3:

LOTS 8, 9, 22 THE NORTHEASTERLY 4.61 FEET OF LOT 21 AND THE SOUTHWESTERLY 20.39 FEET OF LOT 23, OF TRACT NO. 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46 PAGES 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 4:

LOTS 10, 11, 12, 19,20 AND 21 ALL IN TRACT 4161, IN THE CITY OF CULVER CITY AS PER MAP RECORDED IN BOOK 46, PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE NORTHEASTERLY 4.61 FEET OF LOT 21.

APN NOS.: 4206-015-039, 4206-015-040, 4206-016-008, 4206-016-009, 4206-016-010 and 4206-016-011

A-1

EXHIBIT “B”

(Site Plan of the Project)

B-1

EXHIBIT “C”

(Schedule of Base Monthly Rent)

	Monthly Installment of
Months	Base Monthly Rent			Annual Amount
1-12	$	72,963.00		$	875,556.00
13-24	$	75,516.71		$	906,200.46
25-36	$	78,159.79		$	937,917.48
37-48	$	80,895.38		$	970,744.59
49-60	$	86,726.72		$	1,004,720.65
61-72	$	86,657.16	**	$	1,039,885.87	**
73-84	$	89,690.16	**	$	1,076,281.88	**
85-96	$	92,829.31	**	$	1,113,951.74	**
97-108	$	96,078.34	**	$	1,152,940.05	**
109-120	$	99,441.08	**	$	1,193,292.96	**

** these amounts are based on a year-over-year increase of three and one-half percent (3.5%); provided, however, the Base Monthly Rent and Parking Fees for each year after the fifth anniversary of the Effective Date shall be subject to additional increases as provided in this Exhibit “C”

Commencing on the fifth anniversary of the Effective Date and continuing on each anniversary of the Effective Date thereafter during the Lease Term (each as “Adjustment Date”), the amount of Base Monthly Rent and Parking Fees (and the corresponding monthly installments of the Base Monthly Rent plus Parking Fees) payable under this Lease shall be increased in accordance with this Exhibit. On the first Adjustment Date, the Base Monthly Rent and the Parking Fees shall be increased by the greater of (i) three and one-half percent (3.5%), or (ii) a percentage equal to the cumulative percentage increase, if any, in the Index (as defined below) published one (1) month before the Effective Date over the Base Index (as defined below). On the second Adjustment Date and on each Adjustment Date thereafter during the Lease Term, the Base Monthly Rent and the Parking Fees shall be increased by the greater of (a) three and one-half percent (3.5%), or (b) a percentage equal to the percentage increase, if any, in the Index published one (1) month before the applicable Adjustment Date over the Base Index.

After each Adjustment Date, Landlord shall deliver to Tenant a written statement of the applicable Base Monthly Rent and Parking Fees and the manner in which such items were computed. If Tenant shall have paid any installment of Base Monthly Rent and Parking Fees prior to Landlord’s delivery of such written statement identifying the increased Base Monthly Rent and Parking Fees, then Tenant shall pay to Landlord the amount of the underpayment of Base Monthly Rent and Parking Fees within ten (10) days from Landlord’s delivery of such statement to Tenant. The term “Index” shall mean the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (Los Angeles-Riverside-Orange County Area), Subgroup “All Items” (1982/1984 = 100). In the event the foregoing Index is discontinued prior to the expiration of this Lease, Landlord may substitute any substantially equivalent official index published by the Bureau of Labor Statistics or its successor. Landlord shall use any appropriate conversion factors to accomplish such substitution. The substitute index shall then become the Index hereunder. The Index for the calendar month which is thirteen (13) months before each Adjustment Date shall be the “Base Index”.

Parking Fees shall be determined from time to time based upon the Parking Agreement, and shall be added to the Base Rent set forth above.

Notwithstanding anything to the contrary in this Lease, Landlord agrees to abate Tenant’s obligation to pay Base Rent for the first month of the Initial Lease Term.

C-1

EXHIBIT “D”

D-1

EX-21

Exhibit 21

SUBSIDIARIES OF WESTWOOD ONE, INC.

Name of Subsidiary	State of Incorporation/Organization
Westwood One Radio, Inc.	California
Westwood One Radio Networks, Inc.	Delaware
Westwood National Radio Corporation	Delaware
Westwood One Stations — NYC, Inc.	Delaware
Westwood One Properties, Inc.	Delaware
SmartRoute Systems, Inc.	Delaware
Metro Networks, Inc.	Delaware
Metro Networks Communications, Inc.	Maryland
Metro Networks Services, Inc.	Delaware
Metro Networks Communications, Limited Partnership	Delaware
TLAC, Inc.	Delaware

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-149725, No. 333-128362, No. 333-68785, No. 333-89595 and No. 333-85609) of Westwood One, Inc. of our report dated March 31, 2010 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appear in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
New York, New York
March 31, 2010

EX-31.1

EXHIBIT 31.1

PRESIDENT & CHIEF FINANCIAL OFFICER CERTIFICATION

I, Roderick M. Sherwood III, President and Chief Financial Officer of the Company, certify that:

1) I have reviewed this annual report on Form 10-K of Westwood One, Inc.;

2) Based on my knowledge, this annual 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 annual 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 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 controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-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 me 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 my 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 my 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) I have disclosed, based on my 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.

/S/ RODERICK M. SHERWOOD III

Roderick M. Sherwood III

President and Chief Financial Officer

March 31, 2010

EX-31.2

EXHIBIT 31.2

SENIOR VICE PRESIDENT, FINANCE AND PRINCIPAL ACCOUNTING OFFICER CERTIFICATION

I, Edward A. Mammone, Senior Vice President, Finance and Principal Accounting Officer of the Company, certify that:

1) I have reviewed this annual report on Form 10-K of Westwood One, Inc.;

2) Based on my knowledge, this annual 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 annual 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 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 controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-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 me 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 my 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 my 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) I have disclosed, based on my 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.

/S/ EDWARD A. MAMMONE

Edward A. Mammone

Senior Vice President, Finance and Principal Accounting Officer

March 31, 2010

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 0F THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Westwood One, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission (the “Report”), I, Roderick M. Sherwood III, President and Chief Financial Officer of the Company, certify that to my knowledge:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/ RODERICK M. SHERWOOD III

Roderick M. Sherwood III

March 31, 2010

This statement is being furnished to the Securities and Exchange Commission as an exhibit to this Annual Report on Form 10-K.

A signed original of this written statement required by Section 906 has been provided to Westwood One, Inc. and will be retained by Westwood One, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 0F THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Westwood One, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission (the “Report”), I, Edward A. Mammone, Senior Vice President, Finance and Principal Accounting Officer of the Company, certify that to my knowledge:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/ EDWARD A. MAMMONE

Edward A. Mammone

March 31, 2010

This statement is being furnished to the Securities and Exchange Commission as an exhibit to this Annual Report on Form 10-K.

A signed original of this written statement required by Section 906 has been provided to Westwood One, Inc. and will be retained by Westwood One, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.