CHILDRENS BROADCASTING CORP, PREM14A, 1997-10-15

CHILDRENS BROADCASTING CORP
PREM14A, 1997-10-15
RADIO BROADCASTING STATIONS

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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/X/ Preliminary Proxy Statement / / Confidential, For Use of
the Commission Only (as
permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

COMMISSION FILE NO. 0-21534

CHILDREN'S BROADCASTING CORPORATION
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/ / No fee required.

/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

<TABLE>
<CAPTION>
<S> <C>
1) Title of each class of securities to which transaction applies: Not applicable.
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2) Aggregate number of securities to which transaction applies: Not applicable.
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3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was determined): Not applicable.
-----------------------------------------
4) Proposed maximum aggregate value of transaction: $72,500,000
----------------------------------------------------------------
5) Total fee paid: $14,500
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</TABLE>

/ / Fee paid previously with preliminary materials:
--------------------------

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

1) Amount Previously Paid:
---------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------
3) Filing Party:
-------------------------------------------------------
4) Date Filed:
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CHILDREN'S BROADCASTING CORPORATION
724 FIRST STREET NORTH
Minneapolis, MN 55401
(612) 338-3300

November 14, 1997

Dear Shareholder:

I am pleased to invite you to attend the Special Meeting of Shareholders
(the "Special Meeting") of Children's Broadcasting Corporation (the "Company"),
to be held at the Minneapolis Hilton and Towers, 1001 Marquette Avenue,
Minneapolis, Minnesota, on December 17, 1997, at 3:30 p.m. Minneapolis time.

At the Special Meeting you will be asked to approve an agreement between
the Company and Global Broadcasting Company, Inc. ("Global") providing for the
sale by the Company to Global of all of the Company's owned and operated radio
stations for $72.5 million cash. The sale of assets is part of management's
strategy to reposition the Company by selling substantially all of its
broadcasting assets and, using the net cash realized, to make one or more
acquisitions in the media, entertainment or advertising-related areas. THE
BOARD OF DIRECTORS HAS DETERMINED THAT THE SALE AND THE RELATED AGREEMENT ARE IN
THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND HAS UNANIMOUSLY
APPROVED, AND ACCORDINGLY RECOMMENDS, THAT YOU VOTE FOR THE PROPOSED SALE.

The Company's financial adviser, Piper Jaffray, Inc., has rendered its
opinion that the consideration to be received by the Company for its
broadcasting assets is fair to the Company from a financial point of view.

The accompanying material contains the Notice of Special Meeting, the Proxy
Statement which includes information about the matters to be acted upon at the
Special Meeting, and the related Proxy Card. A copy of the Asset Purchase
Agreement is set forth as Appendix I to the Proxy Statement.

I sincerely hope you will be able to attend the Company's Special Meeting.
Whether or not you are able to attend the Special Meeting in person, I urge you
to sign and date the enclosed proxy and return it promptly in the enclosed
envelope. If you do attend the Special Meeting in person, you may withdraw your
proxy and vote personally on any matters brought properly before the Special
Meeting.

Very truly yours,

CHILDREN'S BROADCASTING CORPORATION

Christopher T. Dahl
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

<PAGE>

CHILDREN'S BROADCASTING CORPORATION
724 FIRST STREET NORTH
Minneapolis, MN 55401
(612) 338-3300

---------------------

NOTICE OF 1997 SPECIAL MEETING OF SHAREHOLDERS

To be Held December 17, 1997

---------------------

NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders (the
"Special Meeting") of Children's Broadcasting Corporation (the "Company") will
be held at the Minneapolis Hilton and Towers, 1001 Marquette Avenue,
Minneapolis, Minnesota, on December 17, 1997, at 3:30 p.m. Minneapolis time, for
the following purposes, as more fully described in the accompanying Proxy
Statement:

1. To consider and vote upon a proposal to approve the Asset Purchase
Agreement, between the Company and Global Broadcasting Company, Inc.,
pursuant to which the radio broadcast licenses, and certain related
assets, of all of the Company's owned and operated radio stations,
representing substantially all of the assets of the Company, would be
sold to Global Broadcasting Company, Inc. A copy of the Asset
Purchase Agreement is attached as Appendix I to, and is described in,
the Proxy Statement.

2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment thereof.

Only shareholders of record at the close of business on October 17, 1997
are entitled to notice of and to vote at the Special Meeting. Whether or not
you expect to attend the Special Meeting in person, please complete, date and
sign the enclosed proxy exactly as your name appears thereon and promptly return
it in the envelope provided, which requires no postage if mailed in the United
States. Proxies may be revoked at any time before they are exercised and, if
you attend the Special Meeting in person, you may withdraw your proxy and vote
personally on any matter brought properly before the Special Meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Lance W. Riley
SECRETARY AND GENERAL COUNSEL

Minneapolis, Minnesota
November 14, 1997

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TABLE OF CONTENTS
PAGE
----

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Time, Date, Place and Purpose . . . . . . . . . . . . . . . . . . . 1
Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Record Date and Voting Securities . . . . . . . . . . . . . . . . . 2
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . . 2

PROPOSAL TO SELL SUBSTANTIALLY ALL OF THE COMPANY'S ASSETS . . . . . . . . 2
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Background and Reasons for the Proposed Transaction . . . . . . . . 2
Board Recommendation. . . . . . . . . . . . . . . . . . . . . . . . 5
Description of the Asset Purchase Agreement . . . . . . . . . . . . 5
Ongoing Corporate Operations. . . . . . . . . . . . . . . . . . . . 8
Interests of Certain Persons in the Transaction . . . . . . . . . . 8
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . 9
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . 9
Opinion of Financial Adviser. . . . . . . . . . . . . . . . . . . . 10
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . . 13

SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS. . . . . . . . . . . . . . . . 15

SELECTED CONSOLIDATED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . 17

PRO FORMA FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . 18
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

APPENDIX I -- ASSET PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . I-1

APPENDIX II -- OPINION OF FINANCIAL ADVISER. . . . . . . . . . . . . . . .II-1

APPENDIX III -- DISSENTERS' RIGHTS . . . . . . . . . . . . . . . . . . . III-1

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CHILDREN'S BROADCASTING CORPORATION
724 FIRST STREET NORTH
Minneapolis, MN 55401
(612) 338-3300

---------------------

PROXY STATEMENT FOR 1997 SPECIAL MEETING OF SHAREHOLDERS

To be Held December 17, 1997

---------------------

INTRODUCTION

TIME, DATE, PLACE AND PURPOSE

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Children's Broadcasting Corporation (the
"Company") for use at the Special Meeting of Shareholders (the "Special
Meeting") to be held at the Minneapolis Hilton and Towers, 1001 Marquette
Avenue, Minneapolis, Minnesota, on December 17, 1997, at 3:30 p.m. Minneapolis
time, and at any adjournment thereof.

The purpose of the Special Meeting is to consider and vote upon a proposal
to approve the Asset Purchase Agreement (the "Asset Purchase Agreement" or
"Agreement"), between the Company and Global Broadcasting Company, Inc., a
Delaware corporation ("Global"), pursuant to which the radio broadcast licenses,
and certain related assets, of all of the Company's owned and operated radio
stations would be sold to Global for a total consideration of $72.5 million
(subject to adjustment). See "Proposal to Sell Substantially all of the
Company's Assets."

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE SALE OF
THE COMPANY'S RADIO BROADCAST LICENSES AND CERTAIN RELATED ASSETS AND RECOMMENDS
THAT THE SHAREHOLDERS APPROVE THE ASSET PURCHASE AGREEMENT.

PROXIES

Proxies in the accompanying form are solicited on behalf, and at the
direction, of the Board of Directors of the Company (hereinafter sometimes
referred to as the "Board"). All shares of Common Stock represented by properly
executed proxies, unless such proxies have previously been revoked, will be
voted at the meeting and, where the manner of voting is specified on the proxy,
will be voted in accordance with such specifications. Shares represented by
properly executed proxies on which no specification has been made will be voted
FOR the proposal to approve and adopt the Asset Purchase Agreement. If any
other matters are properly presented at the meeting for action, including a
question of adjourning the meeting from time to time, the persons named in the
proxies and acting thereunder will have discretion to vote on such matters in
accordance with their best judgment. If a properly executed proxy is returned
and the shareholder has abstained from voting on any matter, the shares
represented by the proxy will be considered present at the meeting for purposes
of determining a quorum and for purposes of calculating the vote, but will not
be considered to have been voted in favor of such matter.

When stock is held in the name of more than one person, each such person
should sign the proxy. If the shareholder is a corporation, the proxy should be
signed in the name of such corporation by an executive or other authorized
officer. If signed as attorney, executor, administrator, trustee, guardian or
in any other representative capacity, the signer's full title should be given
and, if not previously furnished, a certificate or other evidence of appointment
should be furnished. If an executed proxy is returned by a broker holding
shares in street name which indicates that the broker does not have
discretionary authority as to certain shares to vote on one or more matters,
such shares will be considered present at the meeting for purposes of
determining a quorum, but will not be considered to be represented at the
meeting for purposes of calculating the vote with respect to such matter.

<PAGE>

Any shareholder who executes and returns a proxy may revoke it at any time
before it is voted. Any shareholder who wishes to revoke a proxy can do so
by executing a later-dated proxy relating to the same shares and delivering
it to Lance W. Riley, Esq., Secretary and General Counsel, Children's
Broadcasting Corporation, 724 First Street North, Minneapolis, Minnesota
55401, prior to the vote at the Special Meeting, by written notice of
revocation received by Mr. Riley, prior to the vote at the Special Meeting,
or by appearing in person at the Special Meeting, filing a written notice of
revocation and voting in person the shares to which the proxy relates.

RECORD DATE AND VOTING SECURITIES

The Board has fixed the close of business on October 17, 1997, as the
Record Date for determining the holders of outstanding shares of Common Stock
entitled to notice of, and to vote at, the Special Meeting. On October 1, 1997,
there were 6,275,074 shares of Common Stock issued, outstanding and entitled to
vote. Each holder of Common Stock is entitled to one vote, exercisable in
person or by proxy, for each share of Common Stock held of record on the Record
Date. As of the date preceding public announcement of the proposed transaction,
the high and low sale prices of the Company's Common Stock were $3.625 and
$3.375, respectively. The Notice of Special Meeting, this Proxy Statement and
the related Proxy Card are first being mailed to shareholders of the Company on
or about November 14, 1997.

RIGHTS OF DISSENTING SHAREHOLDERS

Shareholders who object to the Asset Purchase Agreement may exercise their
dissenters' rights and obtain payment for the "fair value" of their shares. See
"Proposal to Sell Substantially All of the Company's Assets -- Rights of
Dissenting Shareholders."

PROPOSAL TO SELL SUBSTANTIALLY ALL
OF THE COMPANY'S ASSETS

GENERAL

At the Special Meeting, the shareholders of the Company will be asked to
consider and vote upon the approval of the Asset Purchase Agreement dated as of
July 16, 1997, between the Company and Global, which provides for the sale to
Global of the radio broadcast licenses, and certain related assets, of all of
the Company's owned and operated radio stations (the "Stations"). The
consideration to be received by the Company for the sale of the Stations
consists of a cash payment of $72.5 million (subject to adjustment). The terms
of the Agreement and the Stations to be sold are described below under the
caption "Description of the Asset Purchase Agreement."

BACKGROUND AND REASONS FOR THE PROPOSED TRANSACTION

HISTORICAL PERFORMANCE. Children's Broadcasting Corporation is a full-time
national broadcaster of children's radio programming in the United States. The
Company develops, produces and distributes programming that is entertaining and
informative, and directed to the interests and radio listening patterns of
pre-teenage children and their families. The Company's Aahs World
Radio(SM*) format provides 24-hour programming featuring music, stories,
call-in segments, quizzes and current events features. The programming varies
by time of day in order to attract that component of its prospective audience
most likely to be listening. The programming originates at the Company's
flagship station, WWTC(AM) in Minneapolis, Minnesota, and is distributed via
satellite to a network of radio stations around the country.

- - - --------------------------------------
(*) The Company has applied for service mark for Aahs World Radio.

<PAGE>

Since the inception of the Company, the primary sources of the Company's
revenue have been from the sale of local advertising and air time and network
revenue. The Company's growth strategy included the acquisition of AM radio
broadcast licenses ("RBLs") in the top 15 markets. Pursuant to that strategy,
the Company acquired RBLs which serve the New York City, Los Angeles, Chicago,
Philadelphia, Detroit and Dallas/Fort Worth markets. As a result of the
acquisition strategy, together with its affiliation strategy, the Company
distributed its programming to markets representing approximately 40% of the
U.S. population and had a presence in the top four markets and seven of the top
ten markets in the U.S. Notwithstanding the growth of the Company's network
and its presence in the top 15 markets, the Company's network operations and
revenue from owned and operated stations has not achieved expected levels and
is significantly below levels needed to offset operating expenses. The
Company has incurred substantial operating losses since its inception. For
the year ended December 31, 1996, 39% of the Company's local advertising
revenue was derived from Company-owned stations not broadcasting the Aahs
World Radio format, and approximately 28% of total revenue was derived from
network advertising sales. See "Selected Consolidated Financial Data."

THE ABC/DISNEY RELATIONSHIP. The Company's business strategy has been to
derive revenue from the sale of network advertising time to national advertisers
and from local advertising sales from Company-owned or operated stations. The
Company's strategy, in entering into the operations agreement with ABC Radio
Networks, Inc. ("ABC Radio"), was to use the resources and reputation of ABC to
market Aahs World Radio, attract national advertising and further build the
Company's network through affiliations. The Company sought out and developed
strategic relationships in order to enhance and reinforce its brand, and to
allow the Company to explore business opportunities at minimal cost to it and
without detracting from management's focus upon the Company's core business. In
1995, the Company developed such a relationship with ABC Radio, pursuant to
which ABC Radio agreed, through representations and agreements, that ABC Radio
would commit its affiliate development and national advertising sales staffs and
other resources to assist and augment the Company's efforts to market the Aahs
World Radio format to broadcasters and advertisers. Throughout the course of
its relationship with ABC Radio, the Company disclosed significant confidential
proprietary business information to ABC Radio and The Walt Disney Company. On
June 21, 1996, ABC Radio announced to the Company that ABC Radio was terminating
its relationship with the Company and that ABC Radio would join with Disney to
immediately commence competing directly with the Company in the field of
children's radio broadcasting. The Walt Disney Company and ABC Radio
("ABC/Disney") thereupon rolled out its Radio Disney programming at several
locations throughout the country, and is aggressively competing against the
Company today.

THE PENDING ABC/DISNEY SUIT. The Company filed a lawsuit in the fall of
1996 in the United States District Court for the District of Minnesota
against ABC/Disney. The suit seeks injunctive relief and to recover
substantial monetary damages based on alleged wrongful conduct by ABC/Disney,
including acts and omissions of fraud, business interference, breach of
contractual and fiduciary obligations and misappropriation of the Company's
confidential and proprietary business information, trade secrets and business
opportunities. In September 1997, ABC Radio asserted its own counterclaim
for breach of contractual obligations, seeking to recover an unspecified
amount of damages said only "to exceed $75,000.00" for an alleged failure by
the Company to pay certain commissions and fees allegedly earned during the
course of the parties' relationship. The Company denies ABC Radio's
counterclaim in all respects, and is moving to have the counterclaim
dismissed as untimely. Under the Court's current schedule, the ABC/Disney
suit is to be considered ready for trial effective December 1997, but the
case is more likely to proceed to trial in the first quarter of 1998.

FOOTHILL CAPITAL CORPORATION FINANCING. From its inception in 1995 until
its termination by ABC/Disney in July 1996, the ABC/Disney relationship did
not result in any significant national advertising sales or increase in the
Company's network affiliate base. As a result, the Company's financial
position deteriorated. To meet its working capital requirements and to
facilitate acquisitions pursuant to its growth strategy, the Company entered
into a credit agreement (the "Credit Agreement") with Foothill Capital
Corporation ("Foothill") in November 1996. The Credit Agreement, as amended,
provides the Company with working capital and provided funding for the
acquisition of shares of common stock of Harmony Holdings, Inc. ("Harmony"),
through loan facilities aggregating $23.0 million. Such facilities mature on
September 30, 2000. The Company's indebtedness to Foothill is secured by a
first priority lien on

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substantially all of the assets of the Company and its subsidiaries. The
facilities require principal payments of $500,000 on March 31, 1998; $5.0
million on June 30, 1998; and $2.0 million each quarter thereafter.

DECISION TO SELL STATIONS. The Board determined that the Company must
either (i) seek a strategic partner which would enable the Company to maintain
a competitive position in the children's radio market, but with the existing
shareholders potentially owning a smaller percentage of the business, (ii) seek
a purchaser for the Company and exit the children's radio market, (iii) seek a
purchaser of its Aahs World Radio intangible assets and explore other business
opportunities in radio broadcasting or (iv) seek a purchaser of its radio
stations and explore other business ventures aimed at the media, entertainment
or advertising-related markets. Such determination was based primarily upon the
Company's inability to pursue effectively its network business plan because of
ABC/Disney's method of entering the children's radio market, and the lack of
access to equity capital due in part to the Company's lack of positive financial
performance subsequent to the Company's entry into the operations agreement with
ABC Radio.

On June 17, 1996 and July 26, 1996, the Company engaged Richard Alan
Incorporated and Southcoast Capital Corporation, respectively, to explore
strategic alternatives for the Company to maximize shareholder value, including
possible joint venture opportunities, or a sale or merger of the Company. Such
investment banking firms had discussions with various potential strategic
partners with a view toward entering into a joint venture, sale or merger.
These discussions did not result in the development of any strategic
opportunities for the Company.

In June 1997, the Company received the unsolicited offer from Global to
purchase the Stations for an aggregate purchase price of $72.5 million. The
Board reviewed the offer, considering the lack of access to capital on terms
acceptable to the Company, and such factors as the amount of consideration to
be received by the Company, the form of payment, the timing of payment and
Global's apparent ability to pay. Based on this review, the Board
unanimously approved the sale of the Stations to Global. Pursuant to the
Agreement, subject to shareholder approval, Global will acquire all of the
Company's RBLs and related tangible and intangible assets. Global, however,
is not purchasing the Company's accounts receivable or the intangible assets
related to the Company's Aahs World Radio format. The Company plans to
continue its ongoing network programming operations with its network
affiliates. There can be no assurance that the Company will be able to
remain a viable business without its owned and operated radio stations. See
" -- Ongoing Corporate Operations." The proposed transaction is subject to a
number of conditions and there can be no assurance that the Company will be
successful in completing the proposed transaction. See " -- Description of
the Asset Purchase Agreement." If the proposed transaction is not
consummated, the Company intends to seek another buyer or buyers for its
assets. If such a buyer or buyers are not found, and additional financing is
not forthcoming, the Company may be forced to liquidate.

In approving the sale to Global, the Board recognizes that it is requesting
the Company's shareholders to give up the certainty of its known business for an
unknown business that may or may not be acquired. The Board has determined,
however, that the Company's ability to remain viable and competitive is in doubt
due to (i) the business momentum lost as the result of and ABC/Disney's failure
to perform its obligations under the parties' operations agreement; (ii) the
Company's lack of significant network advertising revenue; (iii) the inability
of the Company, without significant additional equity financing, to
significantly increase its network market coverage and affiliate base; (iv) the
Company's continued losses from operations; (v) ABC/Disney's entry into the
children's radio market as a direct competitor of the Company; and (vi) the
difficulty which the Company expects to encounter in obtaining additional
capital due to its lack of profitable operations and cash flow and
highly-leveraged debt position.

The Board also recognizes that a more favorable offer for its broadcasting
assets might be obtained if the Company or its assets were marketed to potential
buyers over a longer period of time; however, considering the length of time
during which the Company attempted to solicit a strategic partner or purchaser,
delaying further, assuming that it was financially feasible, was not deemed
likely to result in a more favorable offer. Having found an acceptable
purchaser, and absent alternative offers, the Board has further considered
whether to (i) liquidate the Company and distribute the remaining cash to the
shareholders after payment of liabilities or (ii) seek one or more new
investment opportunities and/or businesses. The Board determined that the
latter approach is in the best interests of the Company

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and its shareholders. While the Company believes significant acquisition
opportunities exist in the media, entertainment and advertising-related
industries, no specific acquisitions have been identified and there can be no
assurance that any new business can be acquired, or if acquired, that the same
will be profitable or enable shareholders to realize a greater return on their
investment.

On the other hand, if the sale is not consummated, the Company will be
unable to continue business operations without additional funding. The
Company's highly leveraged position and the requirements for payments under
the Foothill loan facilities may require the Company to liquidate. If the
Company were forced to liquidate, it is possible that it could do so over an
extended period of time and at a substantially greater cost than that
estimated to be incurred in connection with the sale of its assets to Global.
If the sale to Global is not consummated, no assurance can be given that the
aggregate price which could be realized for the broadcasting assets would
equal the price offered by Global.

In light of the foregoing, the Board firmly believes that the sale of the
RBLs and related assets to Global is in the best interests of the Company and
its shareholders. The Board anticipates that the potential return on investment
to the shareholders will be greater if the sale of assets to Global is
consummated, the Company continues to pursue opportunities as a children's
programming producer, and new media, entertainment or advertising-related
businesses are found or developed.

BOARD RECOMMENDATION

Approval of the proposed transaction requires the affirmative vote of
holders of a majority of the Company's Common Shares entitled to vote at the
Special Meeting. The Board of Directors of the Company has unanimously approved
the sale of the Stations to Global pursuant to the Agreement and recommends that
the shareholders vote FOR such proposal.

DESCRIPTION OF THE ASSET PURCHASE AGREEMENT

GENERAL. The following is a brief summary of certain provisions of the
Agreement. This description is qualified in its entirety by reference to the
Agreement, a copy of which is attached to this Proxy Statement as Appendix I.
References to the "Company" below are generally deemed to include the Company's
operating subsidiaries. Shareholders are urged to read the Agreement in its
entirety.

ASSETS. The assets to be purchased by Global from the Company generally
include all of the material assets used in connection with, or in the operation
of, the Stations, including without limitation: (i) the Federal Communications
Commission ("FCC") licenses; (ii) the real property; (iii) the personal
property; (iv) the leases and agreements; (v) the permits; (vi) the call letters
and general intangibles; (vii) the subsidiaries' magnetic media, electronic data
processing files, systems and computer programs, logs, public files, records
required by the FCC, vendor contracts, supplies, maintenance records or similar
business records relating to or used in connection with the operation of the
stations; and (viii) the KMUS purchase agreement.

The assets to be sold specifically exclude all other assets, including:
(i) the Company's intangible property rights held or used in connection with its
Radio AAHS-Registered Trademark-/Aahs World RadioSM children's radio format;
(ii) the Company's intangible property rights related to its claims made in its
pending action against ABC/Disney; (iii) the Company's accounts receivable; (iv)
the Company's cash on hand at closing and (v) the Company's investments,
including shares of common stock of Harmony, which the Company has made or will
make prior to closing.

THE PURCHASER. Global broadcasts and syndicates uniform daily programming
simultaneously through their stations on a national basis. Global has developed
a reputation in the broadcast industry as the Radio Broadcast rights holder to
the NFL World League, Rugby Super League, and the NHL and as the creator of the
Avis Travelers Network.

<PAGE>

PURCHASE PRICE. Upon the terms and subject to the conditions set forth in
the Agreement, Global will deliver to the Company on the closing date, a cash
payment in the amount of $72.5 million. The purchase price may be subject to
adjustments or allocations as follows: (i) in the event the KMUS purchase
agreement is excluded, the purchase price shall be reduced by $400,000; (ii)
certain expenses (i.e., power and utility charges, lease rents, property taxes,
frequency discounts, annual license fees, wages, commissions, payroll taxes, and
other fringe benefits of employees) shall be prorated with final settlement
within 90 days after closing; (iii) in the event any application of any of the
RBLs is designated for hearing and one of the parties excludes from the acquired
assets those assets associated with the operation of the station affected, the
purchase price shall be reduced by an amount equal to the aggregate value of the
affected station; or (iv) in the event the approvals of assignments of all the
other licenses occurs and become final orders prior to final approval of the
renewal of the FCC licenses of KPLS(AM), a portion of the purchase price payable
equal to the aggregate station value allocated to the acquired assets relating
to the operation of station KPLS(AM) shall be paid into escrow pending the final
approval of such renewal.

ESCROW. The Agreement calls for the sum of $3.5 million to be placed in
escrow by Global to secure performance of its obligations. The Agreement was
subsequently amended to allow Global to deliver a promissory note in that amount
rather than cash.

CLOSING; CONDITIONS TO CLOSING. It is anticipated that if the proposed
transaction is approved by the shareholders at the Special Meeting, the closing
of the proposed transaction will take place in January 1998. Pursuant to the
Agreement, the obligations of the Company to consummate the proposed transaction
are subject to and conditioned upon, among other things, (i) approval by the
Company's shareholders of the Agreement at the Special Meeting with no more than
20% of the Company's shareholders exercising statutory dissenter's rights,
unless waived by the Company; (ii) the final approval of the FCC to the renewals
of the RBLs and their assignment to Global; (iii) the satisfaction at or before
closing of all agreements, obligations and conditions of Global, as described in
the Agreement, required to be performed, or complied with by it, at or before
closing; (iv) the receipt by the Company from its investment banker of an
opinion confirming the fairness of the consideration payable to the Company by
Global; and (v) the material accuracy of the representations and warranties made
by Global as described in the Agreement.

REGULATORY MATTERS. The proposed transaction is contingent upon the FCC
giving its written approval to the proposed assignments of licenses to Global
and those grants maturing into final approvals forty days after the grants
appear on public notice. The Company and Global jointly filed 13 assignment
applications with the FCC on August 15, 1997, all of which were accepted for
filing by the FCC on August 15, 1997, and placed on public notice. The
application for the fourteenth station, KMUS(AM), Muskogee, Oklahoma, will be
filed after the Company's consummation of the acquisition of that station from
Oklahoma Sports Properties, Inc. It is estimated that the FCC will issue its
grants to the applications (except for the Tulsa application) on or about
October 16, 1997. If there are no petitions to deny filed with the FCC on or
before November 30, 1997 (depending on the actual grant date), the grants will
automatically mature into final approvals on or about December 1, 1997. The
transaction is further conditioned upon the FCC giving its written approval to
the Stations' license renewal applications and those grants maturing into final
approvals. The Company does not expect that any petitions will be filed in
opposition to the proposed assignments or applications for renewals.

CONDITIONS PRECEDENT TO GLOBAL'S OBLIGATIONS. Pursuant to the Agreement,
the obligations of Global to consummate the proposed transaction at closing are
subject to and conditioned upon, among other things (i) the FCC final approvals;
(ii) the satisfaction at or before closing in all material respects of all
agreements, obligations and conditions of the Company required to be performed,
or complied with, on or before closing; (iii) the material accuracy of the
representations and warranties made by the Company; (iv) written third party
consents to all material leases and agreements where required by the terms of
the lease or agreement or substitution by the Company of equivalent rights
without materially adverse impact upon Global's enjoyment of the acquired
assets; and (v) that there shall not be any material adverse change in the
acquired assets.

INDEMNIFICATION. The Agreement provides that the Company, upon written
notice by Global, shall indemnify and hold harmless Global and every affiliate
of Global and any of its directors, members, stockholders, officers,

<PAGE>

partners, employees, agents, consultants, representatives, transferees and
assignees from and against any loss, damage, liability, claim, demand,
judgment, or expense, including claims of third parties arising out of the
ownership of the acquired assets or the operations of the Stations by the
Company prior to closing. The Agreement provides that Global, upon written
notice by the Company, shall indemnify and hold harmless the Company and any
of its directors, members, stockholders, officers, partners, employees,
agents, consultants, representatives, transferees and assignees from and
against any loss, damage, liability, claim, demand, judgment, or expense,
including claims of third parties arising out of the ownership of the
acquired assets or the operations of the stations by Global after closing.

REPRESENTATIONS, WARRANTIES AND COVENANTS. In the Agreement, each of the
parties made certain representations and warranties to the other. The
Agreement, attached hereto as Appendix I, sets forth all of the representations
and covenants of the parties thereto.

ALTERNATIVE TRANSACTION. As described in the Agreement, the Company may
enter into discussions or negotiations with, any person or entity in connection
with any unsolicited acquisition proposal by such person or entity and the
Company may recommend such an unsolicited bona fide written acquisition proposal
to the shareholders of the Company, if and only to the extent that (i) the Board
determines in good faith that such acquisition proposal would, if consummated,
result in a transaction more favorable to the shareholders of the Company and
that the person or entity making such acquisition proposal has the financial
means, or the ability to obtain the necessary financing to conclude such
transaction; (ii) the Board determines in good faith that the failure to take
such action would be inconsistent with the fiduciary duties of such Board to its
shareholders; and (iii) prior to furnishing any non-public information to, or
entering into discussion or negotiations with, such person or entity, the Board
receives an executed confidentiality agreement from such person or entity. If
the Agreement is terminated after the occurrence of the above or another event
specified in the Agreement and within six months after such termination, the
Company enters into an alternative transaction then the Company must pay Global
a non-refundable fee of $3.5 million which shall be payable on the date such
alternative transaction is consummated.

TERMINATION. Pursuant to the Agreement, the proposed transaction may be
terminated prior to closing upon any of the following: (i) the Board withdraws
or modifies its recommendation of the Agreement or resolves or publicly
announces its intention to do so; (ii) an alternative transaction takes place or
the Board recommends such an alternative transaction to shareholders or resolves
or publicly announces its intention to recommend or engage in an alternative
transaction; (iii) a material breach by the Company of the Agreement occurs and
at the time of such breach or any termination based thereon an alternative
transaction shall have been publicly announced and not absolutely or
unconditionally withdrawn and abandoned; (iv) Company negotiates with, furnishes
information to, enters into any agreement with, consummates or recommends any
transaction with, any person other than Global or its affiliates based on a
determination regarding a "Superior Proposal;" or (v) Company materially
breaches or fails to perform its obligations regarding discussions or
negotiations with third parties under the Agreement. In addition to the above,
the Agreement sets forth customary events which may bring about termination of
the proposed transaction prior to closing.

ESTIMATED NET PROCEEDS FROM SALE OF ASSETS. The Company estimates that the
net proceeds from the transaction, after deducting expenses of the transaction
and taxes, and repayment of indebtedness, will be approximately $35,000,000.
Indebtedness to be repaid includes approximately $6,690,000 borrowed to finance
the Company's investment in Harmony. The net proceeds from the proposed
transaction will be used by the Company for the continued production and
delivery of the Aahs World Radio format, for further development of intangible
assets and ancillary distribution methods, for continued legal costs associated
with the Company's lawsuit against ABC/Disney, for repayment of indebtedness of
approximately $27.5 million, payment of federal and state income taxes resulting
from the proposed transaction (estimated at $9.5 million) and for general
corporate purposes including future acquisitions and joint ventures in the
media, entertainment and advertising industries.

<PAGE>

ONGOING CORPORATE OPERATIONS

The Company believes that opportunities exist to profitably utilize the
Aahs World Radio intellectual property and brand, as well as the expertise
gained in the development of children's radio programming. The Company intends
to preserve and enhance the value of such assets by continuing to produce and
distribute its Aahs World Radio format and reviewing and exploring other
distribution alternatives for such format and other programming products for
syndication. For example, in October 1997, the Company established a pointing
relationship between its interactive World Wide Web site and America Online's
NetFind. It is the Company's belief that relationships previously established
may facilitate the successful use of such assets in other areas of children's
entertainment.

In addition to utilizing network intangibles, the Company has begun to
diversify into other media, entertainment and advertising-related businesses.
Recently, the Company acquired a minority ownership interest in Harmony. The
Company may increase its ownership position in Harmony should an opportunity
exist at a price favorable to the Company. The Company intends to seek to
further diversify through acquisition of other entertainment related businesses,
children's entertainment businesses or other businesses.

The Company intends to pursue to its conclusion the ABC/Disney litigation.
Certain resources will be used to this end, including personnel costs and
litigation costs.

The Company and Global have entered into a syndication agreement which is
scheduled to commence after the closing of the proposed transaction. Under such
agreement, the Company will produce and distribute its children's radio
programming to Global in two hour blocks each Saturday and Sunday, which will
air between the hours of 9:00 a.m. and 12:00 p.m. Eastern. The parties are
currently negotiating an increase in the length of this initial block to provide
24-hour programming for every weekend.

INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION

The Company's 1994 Stock Option Plan (the "1994 Plan") contains a provision
which accelerates vesting of issued stock options in the event of a change of
control or sale of all or substantially all of the Company's assets. The
Company's 1991 Incentive Stock Option Plan (the "1991 Plan") was amended to
conform to the 1994 Plan at the time the 1994 Plan was adopted. Various
non-qualified stock options have also been issued with acceleration terms
conforming to the 1991 and 1994 Plans. Consequently, options to purchase
760,604 shares of Common Stock of the Company held by officers and directors
will vest upon consummation of the proposed transaction. As of September 30,
1997, options to purchase 304,794 of the above-listed options represent
in-the-money options. Assuming the exercise of such options, the Company would
receive $1,066,779 and the optionees would experience an aggregate gain of
$76,199, representing the product of the number of option shares multiplied by
the difference between the market value of the Company's Common Stock on
September 30, 1997 and the exercise price of each such option.

Further, in considering the recommendation of the Board with respect to the
proposed transaction, shareholders should be aware that, in connection with
the proposed transaction, Christopher T. Dahl, Chairman of the Board of
Directors, President and Chief Executive Officer of the Company, will enter
into a two-year Consulting and Non-Circumvention Agreement with Global,
pursuant to which Mr. Dahl will be paid the sum of $500,000 in consideration
of (i) his provision of certain consulting services to Global subsequent to
the proposed transaction and (ii) his agreement not to circumvent Global with
respect to any business opportunities of Global of which he becomes aware
through such relationship.

Finally, if the proposed transaction is completed, the efforts of certain
employees in connection with such transaction will be a factor considered by the
Board should it consider awarding bonuses for fiscal 1997 and fiscal 1998. If
approved by the Board, such bonuses could be cash or non-cash awards, or a
combination thereof.

<PAGE>

ACCOUNTING TREATMENT

Under generally accepted accounting principles, upon sale of the Stations,
the Company will remove the net assets sold from its consolidated balance sheet,
and record the gain on the sale net of transaction, severance and other related
costs including applicable state and federal income taxes, in its consolidated
statement of income. See "Pro Forma Financial Information."

FEDERAL INCOME TAX CONSEQUENCES

The following summary of the anticipated federal income tax consequences to
the Company of the proposed sale of assets is not intended as tax advice and is
not intended to be a complete description of the federal income tax consequences
of such transaction. This summary is based upon the Internal Revenue Code of
1986 (the "Code"), as presently in effect, the rules and regulations promulgated
thereunder, current administrative interpretations and court decisions. No
assurance can be given that future legislation, regulations, administrative
interpretations or court decisions will not significantly change these
authorities (possibly with retroactive effect).

No rulings have been requested or received from the Internal Revenue Service
("IRS") as to the matters discussed and there is no intent to seek any such
ruling. Accordingly, no assurance can be given that the IRS will not challenge
the tax treatment of certain matters discussed or, if it does challenge the tax
treatment, that it will not be successful.

The discussion of federal income tax consequences set forth below is
directed primarily toward individual taxpayers who are citizens of the United
States. However, because of the complexities of federal, state and local income
tax laws, it is recommended that the Company's shareholders consult their own
tax advisors concerning the federal, state and local tax consequences of the
proposed transaction to them. Further, persons who are trusts, tax-exempt
entities, corporations subject to specialized federal income tax rules (for
example, insurance companies) or non-U.S. citizens or residents are particularly
cautioned to consult their tax advisors in considering the tax consequences of
the proposed transaction.

The sale of the Stations pursuant to the Agreement will be a taxable sale
by the Company upon which gain or loss will be recognized by the Company. The
amount of gain or loss recognized by the Company with respect to the sale of a
particular asset will be measured by the difference between the amount realized
by the Company on the sale of that asset and the Company's tax basis in that
asset. The amount realized by the Company on the sale of the Stations will
include the amount of cash received and the fair market value of any other
property received. For purposes of determining the amount realized by the
Company with respect to specific assets, the total amount realized by the
Company will generally be allocated among the assets according to the rules
prescribed under Section 1060(a) of the Code. The Company's bases in its assets
are generally equal to their cost, as adjusted for certain items, such as
depreciation. However, the bases of assets of stations acquired in a stock
purchase are equal to the subsidiary's historical cost adjusted for certain
items, such as depreciation.

The determination of whether gain or loss is recognized by the Company will
be made with respect to each of the assets to be sold. Accordingly, the Company
may recognize gain on the sale of certain assets and loss on the sale of certain
others, depending on the amount of consideration allocated to an asset as
compared with the basis of that asset. The Company will recognize a net gain as
a result of the sale of its assets, but believes its net operating loss and tax
credit carryovers will offset a substantial portion of the projected gain on the
sale of the assets. The Company believes that the use of carryovers will not be
limited by Code Sections 382 and 383.

The proposed sale of substantially all of the assets of the Company by
itself will not produce any separate and independent federal income tax
consequences to the Company's shareholders.

<PAGE>

OPINION OF FINANCIAL ADVISER

Piper Jaffray, Inc. ("Piper Jaffray") was retained by the Company by letter
dated August 29, 1997 to render an opinion regarding the fairness to the Company
from a financial point of view of the consideration to be paid by Global to the
Company in a proposed acquisition of certain assets related to 13 Company-owned
and operated radio stations and rights to purchase one additional radio station
(the "Acquired Assets") pursuant to the Asset Purchase Agreement (the
"Transaction"). On October 10, 1997, Piper Jaffray rendered its written opinion
dated October 10, 1997 (the "Piper Jaffray Opinion") to the Company's Board of
Directors, to the effect that, as of the date thereof and based on and subject
to the assumptions, factors and limitations set forth in such opinion and
described below, the $72.5 million proposed to be paid by Global to the Company
for the Acquired Assets in the Transaction is fair, from a financial point of
view, to the Company.

Piper Jaffray, as a customary part of its investment banking business, is
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, underwritings and secondary distributions of
securities, private placements and valuations for estate, corporate and other
purposes. The Company selected Piper Jaffray because of its investment banking
expertise and reputation, its familiarity with the Company and its familiarity
with the media industry generally.

THE FULL TEXT OF THE PIPER JAFFRAY OPINION IS ATTACHED AS APPENDIX II TO
THIS PROXY STATEMENT. THE FOLLOWING SUMMARY OF THE PIPER JAFFRAY OPINION IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE PIPER JAFFRAY
OPINION. THE COMPANY'S SHAREHOLDERS ARE URGED TO READ THE PIPER JAFFRAY OPINION
IN ITS ENTIRETY FOR A COMPLETE DESCRIPTION OF THE ASSUMPTIONS MADE, MATTERS
CONSIDERED AND LIMITS OF THE REVIEW UNDERTAKEN.

In arriving at its opinion, Piper Jaffray reviewed, analyzed and relied
upon material bearing upon the financial and operating condition and prospects
of the Company and material prepared in connection with the Transaction, and
considered such financial and other factors as it deemed appropriate under the
circumstances, including, among other things, the following: (i) the Asset
Purchase Agreement dated July 16, 1997; (ii) the annual reports, Reports on Form
10-K, audited financial statements and Proxy Statements for the Company for the
three years ended December 31, 1996; (iii) the Reports on Form 10-Q for the
Company for the quarters ended March 31, 1997 and June 30, 1997; (iv) annual
unaudited financial results for each of the Company's radio stations prepared by
management for the three years ended December 31, 1996 and for the six-month
period ended June 30, 1997; and (v) an independently conducted appraisal of the
Acquired Assets dated October 8, 1996.

Piper Jaffray visited the headquarters of the Company and conducted
discussions with members of senior management of the Company, including the
Chief Executive Officer, Chief Operating and Financial Officer, Executive Vice
President of Programming and General Counsel. Topics discussed included, but
were not limited to, the background and rationale of the proposed Transaction,
the financial condition, operating performance and the balance sheet
characteristics of the Company and the Acquired Assets and the future prospects
for the Company. Piper Jaffray conducted a conference call with Force
Communications & Consultants to discuss the appraisal methodology used in the
appraisal of the Acquired Assets dated October 8, 1996. Piper Jaffray also
reviewed the historical prices and trading activity for the Company's Common
Stock, reviewed the publicly available financial terms of certain comparable
merger and acquisition transactions Piper Jaffray deemed relevant, compared
certain financial and securities data of the Company to financial and securities
data of companies Piper Jaffray deemed similar to the business represented by
the Acquired Assets, and reviewed such other financial data, performed such
other analyses and considered such other information as Piper Jaffray deemed
necessary and appropriate.

The Piper Jaffray Opinion, which was delivered for use and considered by
the Company's Board, is directed only to the fairness to the Company, from a
financial point of view, of the consideration to be received by the Company for
the Acquired Assets in the Transaction, does not in any manner address the
Company's underlying business decision to proceed with or effect the Transaction
or the structure thereof and does not constitute a recommendation to any Company
stockholder as to how such stockholder should vote with respect to the
Transaction. The total consideration was determined pursuant to negotiations
between the Company and Global and not pursuant to a recommendation

<PAGE>

of Piper Jaffray. Piper Jaffray does not admit that it is an expert within
the meaning of the term "expert" as used in the Securities Act and the rules
and regulations promulgated thereunder, or that its opinions constitute a
report or valuation within the meaning of Section 11 of the Securities Act
and the rules and regulations promulgated thereunder.

For purposes of the Piper Jaffray Opinion, Piper Jaffray relied upon and
assumed the accuracy, completeness and fairness of the financial and other
information made available to it and did not assume responsibility independently
to verify such information. Piper Jaffray relied upon the assurances of the
Company's management that the information provided by the Company had a
reasonable basis and, with respect to financial planning and other business
outlook information (including the inability to prepare meaningful forward
looking projections, as discussed below), reflected the best available
information and judgment of the Company's management as to the expected future
financial performance of the Company, and that they were not aware of any
information or fact that would make the information provided to Piper Jaffray
incomplete or misleading. Furthermore, Piper Jaffray, for purposes of the Piper
Jaffray Opinion, assumed that the Company was not a party to any pending
transaction, including external financing, recapitalizations, acquisitions or
merger discussions, other than the Transaction or in the ordinary course of
business.

In arriving at the Piper Jaffray Opinion, Piper Jaffray did not perform a
discounted cash flow analysis of the Company or the business represented by
the Acquired Assets since the Company did not have available and did not
prepare any forward looking projections. The Company's senior management
advised Piper Jaffray that they had determined that they could not make
reliable projections because the industry's competitive environment and its
economics, as well as the Company's current financial situation, had so
radically changed that senior management questioned the ability to accurately
project the Company's business going forward. Consequently, senior management
advised Piper Jaffray that they believed that any projections reflective of
historical operations would not be meaningful.

Piper Jaffray did not perform any appraisals or valuations of specific
assets or liabilities of the Company and expressed no opinion regarding the
liquidation value of the Company. The Piper Jaffray Opinion relates only to the
acquisition of the Acquired Assets by Global in the Transaction and is not an
assessment of the fairness of the Transaction relative to other potential
transactions. Piper Jaffray was not authorized by the Company to solicit, and
did not solicit, other purchasers for the Acquired Assets or alternative
transactions to the Transaction. No limitations were imposed by the Company on
the scope of Piper Jaffray's investigation or the procedures to be followed in
rendering its opinion, except with respect to Piper Jaffray's inability to
perform a discounted cash flow analysis as discussed above. The Piper Jaffray
Opinion was based upon the information available to Piper Jaffray and the facts
and circumstances as they existed and were subject to evaluation on the date of
the Piper Jaffray Opinion. Events occurring after such date could materially
affect the assumptions used in preparing the Piper Jaffray Opinion.

Based on this information, Piper Jaffray performed a variety of financial
and comparative analyses, including those summarized below.

ASSET APPRAISAL ANALYSIS. Piper Jaffray conducted an asset appraisal
analysis by comparing the purchase price of the Acquired Assets in the
Transaction with the results of an independently conducted appraisal of the
Acquired Assets dated October 8, 1996 of 12 of the total 14 radio stations
included in the Acquired Assets. Piper Jaffray determined that for the 12
radio stations included in the appraisal, the Company's aggregate purchase
price was $25,035,000; the low appraisal value was $57,550,000; and the
high appraisal value was $61,400,000. Two of the Company's radio stations
included in the Acquired Assets were not included in the appraisal. One
was purchased by the Company in January 1997 for $3,900,000; the other is
being purchased for $400,000. Piper Jaffray used the actual and pending
purchase prices of these two radio stations for the benefit of the asset
appraisal analysis, which resulted in an aggregate low appraisal value of
$61,850,000 and a high appraisal value of $65,700,000 for all 14 radio
stations included in the Acquired Assets.

Piper Jaffray also orally discussed the appraisal methodology with the
appraiser and was informed that the aggregate value of the 12 radio
stations may have increased approximately 10% during the last year. A 10%
appreciation in value for the 12 radio stations resulted in an aggregate
low appraisal value of $67,605,000 and a high appraisal value of
$71,840,000 for all 14 radio stations included in the Acquired Assets.

<PAGE>

COMPARABLE TRANSACTION ANALYSIS. Piper Jaffray conducted a comparable
transaction analysis through a review of selected radio industry
transactions deemed comparable to the Transaction. The analysis was based
upon information obtained from SEC filings, public company disclosures,
press releases, industry and popular press reports, databases and other
sources. Piper Jaffray identified all acquisitions of radio corporations
or assets that were pending or completed from January 1, 1996 through
September 29, 1997, where the primary business was the ownership and
operation of radio stations. This search yielded six transactions that
Piper Jaffray deemed comparable, including (in acquired/acquiror format)
American Radio Systems Corporation/Westinghouse Electric Corporation; SFX
Broadcasting Inc./Hicks, Muse, Tate & Furst; Heftel Broadcasting
Corporation/Clear Channel Communications, Inc.; Infinity Broadcasting
Corporation/Westinghouse Electric Corporation; Osborn Communications
Corporation/Capstar Broadcasting Partners, Inc.; and EZ Communications,
Inc./American Radio Systems Corporation.

Piper Jaffray then determined certain mean and median operating ratios
based upon information for the comparable transactions. Among other things,
Piper Jaffray determined that for the comparable transactions the mean
company value (market capitalization plus debt less cash) to latest twelve
month ("LTM") revenues ratio was 8.1x, the median such ratio was 8.8x and
the Acquired Assets' ratio (based on the consideration for the Acquired
Assets rather than on the Company's value as a whole) was 17.7x; and the
mean company value to LTM broadcast cash flow (earnings before interest,
taxes, depreciation and amortization plus corporate overhead) ratio was
22.3x, the median such ratio was 24.8x and the Acquired Assets' ratio
(based on the consideration for the Acquired Assets rather than on the
Company's value as a whole) was not meaningful.

COMPARABLE COMPANY ANALYSIS. Piper Jaffray conducted a comparable company
analysis by comparing certain financial information relating to the
Acquired Assets to corresponding data and rates for a group of six
comparable publicly traded companies. The group of comparable companies
consisted of: Cox Radio, Inc., Emmis Broadcasting Corporation, Jacor
Communications, Inc., Saga Communications, Inc., SFX Broadcasting, Inc. and
Triathlon Broadcasting Company. These comparable companies were selected
based on a search using the following criteria: companies with an SIC code
of 4832 (Radio Broadcasting Stations) and companies whose primary business
is the ownership and operation of radio stations in the United States.
Among other things, Piper Jaffray determined that for the comparable
companies the mean ratio of company value to LTM revenue for the comparable
companies was 5.4x, the median such ratio was 4.8x and the Acquired Assets'
ratio (based on the consideration for the Acquired Assets rather than on
the Company's value as a whole) was 17.7x; and the mean company value to
LTM broadcast cash flow ratio for the comparable companies was 16.3x, the
median such ratio was 14.8x, and the Acquired Assets' ratio (based on the
consideration for the Acquired Assets rather than on the Company's value as
a whole) was not meaningful.

The foregoing is a summary of the financial analyses used by Piper Jaffray
in connection with rendering its opinion. The preparation of a fairness opinion
is a complex process and not necessarily susceptible to partial analyses or
summary description. Piper Jaffray believes that its analyses must be
considered as a whole and that selecting portions of its analyses and of the
factors considered by it, without considering all factors and analyses, would
create a misleading view of the processes underlying the Piper Jaffray Opinion.
These analyses of Piper Jaffray are not necessarily indicative of actual values,
which may be significantly more or less favorable than the values used herein.
Analyses relating to the value of companies do not purport to be appraisals or
valuations or necessarily reflect the price at which companies may actually be
purchased or sold. No company or transaction used in any comparable analysis as
a comparison is identical to the Company or to the Transaction. Accordingly, an
analysis of the results is not mathematical and involves complex considerations
and judgments concerning differences in financial and operating characteristics
of the comparable companies and comparable transactions. In reaching its
conclusion as to the fairness of the consideration proposed to be paid for the
Acquired Assets and in its presentation to the Company's Board of Directors,
Piper Jaffray did not rely on any single analysis or factor described above,
assign relative weights to the analyses or factors considered by it, or make any
conclusions as to how the results of any given analysis, taken alone, supported
its fairness opinion.

<PAGE>

The Company has agreed to pay Piper Jaffray $90,000 in fees in connection
with its engagement and for rendering its fairness opinion. These fees are not
contingent upon consummation of the Transaction. The Company has agreed to
indemnify Piper Jaffray against certain liabilities incurred (including
liabilities under the federal securities laws) and reimburse reasonable
out-of-pocket expenses, including the fees and disbursements of its counsel, in
connection with the engagement of Piper Jaffray by the Company.

RIGHTS OF DISSENTING SHAREHOLDERS

Section 302A.471 of the Minnesota Business Corporation Act ("MBCA")
entitles any holder of the Common Stock of the Company who objects to the Asset
Purchase Agreement to dissent from the approval of the Asset Purchase Agreement
and obtain payment for the "fair value" (as defined in Section 302A.473, Subd. 1
of the MBCA) of his or her shares of the Common Stock of the Company
("Dissenters' Rights"). Any shareholder contemplating the exercise of these
Dissenters' Rights should review carefully the provisions of Sections 302A.471
and 302A.473 of the MBCA (copies of which are attached as Appendix III to this
Proxy Statement), particularly the procedural steps required to perfect such
rights. SUCH RIGHTS WILL BE LOST IF THE PROCEDURAL REQUIREMENTS OF SECTION
302A.473 ARE NOT FULLY AND PRECISELY SATISFIED.

The Company intends to proceed with the Transaction even if shareholders
exercise Dissenters' Rights. The exercise of such rights will potentially
reduce the amount of capital available to the Company for future acquisitions.

Set forth below (to be read in conjunction with the full text of Section
302A.473 appearing in Appendix II to this Proxy Statement) is a brief
description of the procedures relating to the exercise of Dissenters' Rights.
The following description does not purport to be a complete statement of the
provisions of Section 302A.473 and is qualified in its entirety by reference
thereto.

Under Section 302A.473, Subd. 3, a shareholder who wishes to exercise
Dissenters' Rights (a "dissenter") must file with the Company (at the Company's
address set forth in this Proxy Statement, Attention: Lance W. Riley, Secretary
and General Counsel) before the vote on the Agreement at the Special Meeting, a
written notice of intent to demand the fair value of the Common Stock of the
Company owned by the shareholder. IN ADDITION, THE SHAREHOLDER MUST NOT VOTE
HIS OR HER SHARES FOR THE APPROVAL AND ADOPTION OF THE AGREEMENT. A VOTE
AGAINST THE AGREEMENT WILL NOT IN ITSELF CONSTITUTE SUCH A WRITTEN NOTICE AND A
FAILURE TO VOTE WILL NOT AFFECT THE VALIDITY OF A TIMELY WRITTEN NOTICE.
HOWEVER, THE SUBMISSION OF A PROPERLY-EXECUTED BLANK PROXY, UNLESS WITHDRAWN,
WILL CONSTITUTE A VOTE FOR THE APPROVAL AND ADOPTION OF THE AGREEMENT AND A
WAIVER OF DISSENTERS' RIGHTS.

If the Agreement is approved by the holders of the Common Stock of the
Company, the Company will send to all dissenters who filed in a timely manner
the necessary notice of intent to demand the fair value of their shares and who
did not vote their shares in favor of the Agreement a notice containing the
information required by Section 302A.473, Subd. 4, including, without
limitation, the address to which a dissenter must send a demand for payment and
deposit certificates representing shares in order to obtain payment for such
shares and the date by which they must be received. In order to receive the
fair value of the shares under Section 302A.473, a dissenter must demand payment
and deposit certificates representing shares within 30 days after such notice
from the Company is given. Under Minnesota law, notice by mail is given by the
Company when deposited in the United States mail. A SHAREHOLDER WHO FAILS TO
MAKE DEMAND FOR PAYMENT AND TO DEPOSIT CERTIFICATES AS REQUIRED BY SECTION
302A.473, SUBD. 4, WILL LOSE THE RIGHT TO RECEIVE THE FAIR VALUE OF HIS OR HER
SHARES UNDER SUCH SECTION NOTWITHSTANDING THE TIMELY FILING OF NOTICE OF INTENT
TO DEMAND PAYMENT UNDER SECTION 302A.473, SUBD. 3.

After the date of final effectiveness, or after the Company receives a
valid demand for payment, whichever is later, the Company will remit, or, in the
case of certain dissenters who acquired their shares after the date the sale of
the Stations by the Company to Global was first announced to the public or who
are dissenting on behalf of persons

13
<PAGE>

who were not beneficial owners on that date, offer to remit if the dissenter
accepts the remittance in full satisfaction of his or her rights under
Section 302A.473, to each dissenter who has complied with the provisions of
Section 302A.473, Subds. 3 and 4, the amount the Company estimates to be the
fair value of the shares, with interest from five days after the date of
final effectiveness until the date of payment, calculated at the rate of
interest for verdicts and judgments in Minnesota. Such remittance will be
accompanied by certain financial statements, an estimate of fair value, a
description of the method used by the Company to reach such estimate, a copy
of Sections 302A.471 and 302A.473, a brief description of the procedure to be
followed in demanding supplemental payment and, in the case of dissenters
receiving an offer to remit, a statement of the reason for withholding
remittance.

If a dissenter believes that the amount remitted or offered by the Company
is less than the fair value of the shares, with interest, the dissenter may give
written notice to the Company of the dissenter's estimate of fair value, with
interest, within 30 days after the Company mails such remittance or offer, and
demand payment of the difference. UNLESS A DISSENTER MAKES SUCH A DEMAND WITHIN
SUCH 30-DAY PERIOD, THE DISSENTER WILL BE ENTITLED ONLY TO THE AMOUNT REMITTED
OR OFFERED BY THE COMPANY.

Within 60 days after the Company receives such a demand from a dissenter,
it will be required to either pay the dissenter the amount demanded or agreed to
after discussion between the dissenter and the Company or file in court a
petition requesting that the court determine the fair value of the shares, with
interest. All dissenters who have demanded payment for their shares, but have
not reached agreement with the Company, will be made parties to the proceeding.
The court will then determine whether the dissenters in question have fully
complied with the provisions of Section 302A.473, and will determine the fair
value of the shares, taking into account any and all factors the court finds
relevant (including, without limitation, the recommendation of any appraisers
which may have been appointed by the court), computed by any method or
combination of methods that the court, in its discretion, sees fit to use,
whether or not used by the Company or a dissenter. The fair value of the shares
as determined by the court is binding on all shareholders, but the dissenters
will not be liable to the Company for the amount, if any, by which the payment
remitted to the dissenters exceeds the fair value of the shares determined by
the court, with interest. The costs and expenses of the court proceeding will
be assessed against the Company, except that the court may assess part or all of
those costs and expenses against a dissenter whose action in demanding payment
is found to be arbitrary, vexatious or not in good faith.

Under Section 302A.471, Subd. 2, a shareholder of the Company may not
assert Dissenters' Rights with respect to less than all of the shares of the
Common Stock of the Company registered in the shareholder's name, unless the
shareholder dissents with respect to all shares beneficially owned by another
person and discloses the name and address of such other person. The beneficial
owner of shares of the Common Stock of the Company may assert Dissenters' Rights
with respect to such shares, by following the procedures described above, IF THE
BENEFICIAL OWNER SUBMITS TO THE COMPANY AT THE TIME OF OR BEFORE THE ASSERTION
OF DISSENTERS' RIGHTS A WRITTEN CONSENT OF THE SHAREHOLDER IN WHOSE NAME THE
SHARES ARE REGISTERED.

14
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS

The following table contains certain information as of September 30, 1997,
regarding the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each director, nominee for director and executive officer of
the Company and (iii) the directors and executive officers as a group, and as to
the percentage of the outstanding shares held by them on such date. Any shares
which are subject to an option or a warrant exercisable within 60 days are
reflected in the following table and are deemed to be outstanding for the
purpose of computing the percentage of Common Stock owned by the option or
warrant holder but are not deemed to be outstanding for the purpose of computing
the percentage of Common Stock owned by any other person. Unless otherwise
noted, each person identified below possesses sole voting and investment power
with respect to such shares. The business address of Messrs. Dahl, Gilbertson,
Riley, Landis, Paradis, Smith, Manrique and Ms. McMahon is 724 First Street
North, Minneapolis, Minnesota 55401.

NUBER OF PERCENT
SHARES OF OF
NAME AND ADDRESS COMMON STOCK CLASS
------------------------------------------- ----------------- ------------
Heartland Advisors, Inc.. . . . . . . . . 1,104,600(1) 17.3%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Perkins Capital Management, Inc.. . . . . 689,290(2) 10.6%
730 East Lake Street
Wayzata, Minnesota 55391
Christopher T. Dahl . . . . . . . . . . . 570,752(3) 8.7%
Richard W. Perkins. . . . . . . . . . . . 487,709(4) 7.3%
730 East Lake Street
Wayzata, Minnesota 55391
Russell Cowles II . . . . . . . . . . . . 283,139(5) 4.4%
c/o Sherburne and Coughlin, Ltd.
708 South 3rd Street, Suite 510
Minneapolis, Minnesota 55415
John Cowles Family Trust. . . . . . . . . 214,042(6) 3.3%
Sherburne and Coughlin, Ltd.
708 South 3rd Street, Suite 510
Minneapolis, Minnesota 55415
Rodney P. Burwell . . . . . . . . . . . . 72,500(7) 1.1%
7901 Xerxes Avenue South, Suite 201
Minneapolis, Minnesota 55431
James G. Gilbertson . . . . . . . . . . . 67,751(8) 1.1%
Gary W. Landis. . . . . . . . . . . . . . 45,837(9) *
Lance W. Riley. . . . . . . . . . . . . . 42,499(9) *
Mark A. Cohn. . . . . . . . . . . . . . . 31,250(10) *
7101 Winnetka Avenue North
Minneapolis, Minnesota 55428
Barbara A. McMahon. . . . . . . . . . . . 35,300(9) *
Melvin E. Paradis . . . . . . . . . . . . 51,668(11) *
Rick E. Smith . . . . . . . . . . . . . . 26,525(9) *

15
<PAGE>

NUBER OF PERCENT
SHARES OF OF
NAME AND ADDRESS COMMON STOCK CLASS
------------------------------------------- ----------------- ------------
Denny J. Manrique . . . . . . . . . . . . . . 22,067(9) *
All Directors and Executive Officers as
a Group (12 persons). . . . . . . . . 1,736,997(12) 24.1%

- - - ---------------
* Less than 1%

(1) As set forth in Schedule 13G filed with the Securities and Exchange
Commission (the "Commission") on February 10, 1997, includes 966,600
shares over which Heartland Advisors, Inc. claims sole voting power,
and 1,104,600 shares over which sole dispositive power is claimed.
(2) Based upon statements filed with the Commission, Perkins Capital
Management, Inc. ("PCM") is a registered investment adviser of which
Mr. Richard W. Perkins, a director of the Company, is President, Chief
Executive Officer, a director and the controlling shareholder. As set
forth in Schedule 13G filed with the Commission on February 14, 1997,
PCM has the sole right to sell such shares and has sole voting power
over 83,536 of such shares. Mr. Perkins and PCM disclaim any
beneficial interest in such shares. Excludes shares beneficially owned
by Mr. Perkins.
(3) Includes (i) 435,486 shares owned directly and (ii) 135,266 shares
purchasable upon exercise of options and warrants.
(4) Includes (i) 189,690 shares owned directly by Mr. Perkins, (ii) 6,769
shares beneficially owned by Mr. Perkins through Perkins Capital
Management, Inc. Profit Sharing Plan and Trust and Perkins Foundation,
(iii) 285,625 shares purchasable upon exercise of options and warrants
by Mr. Perkins and (iv) 5,625 shares purchasable upon exercise of
warrants by Perkins Capital Management, Inc. Profit Sharing Plan and
Trust and Perkins Foundation. Mr. Perkins' beneficial ownership
excludes shares held for the accounts of clients of PCM.
(5) Includes (i) 56,597 shares owned directly and (ii) 12,500 shares
purchasable upon exercise of warrants. Mr. Cowles beneficially owns
(i) 189,042 shares owned by the John Cowles Family Trust and (ii)
25,000 shares purchasable by the John Cowles Family Trust upon exercise
of warrants. The shares owned by the John Cowles Family Trust are
non-voting shares.
(6) The shares owned by the John Cowles Family Trust are non-voting shares.
(7) Includes (i) 36,250 shares owned directly by Mr. Burwell and (ii)
36,250 shares purchasable upon exercise of options and warrants.
(8) Includes (i) 4,500 shares owned directly by Mr. Gilbertson and (ii)
63,251 shares purchasable upon exercise of options.
(9) Includes options for the purchase of 42,499 shares, 45,837 shares,
26,525 shares, 22,067 shares, and 35,300 shares for Messrs. Riley,
Landis, Smith, Manrique and Ms. McMahon, respectively.
(10) Includes (i) 12,500 shares owned directly by Mr. Cohn and (ii) 18,750
shares purchasable upon exercise of options and warrants.
(11) Includes (i) 2,500 shares owned directly and (ii) 49,168 shares
purchasable upon exercise of warrants.
(12) Includes (i) 933,334 shares and owned directly by all officers,
directors and director nominees and (ii) 803,663 shares purchasable
upon exercise of options and warrants.

16
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth certain selected historical consolidated
financial information for the Company. The income statement and balance sheet
data for the Company included in the selected consolidated financial data for
each of the five years in the period ended December 31, 1996 are derived from
the audited consolidated financial statements of the Company for such five-year
period. The selected financial data for the six-month periods ended June 30,
1996 and 1997 are derived from the unaudited consolidated financial statements
of the Company for such periods. All financial data derived from unaudited
financial statements reflect, in the opinion of the Company's management, all
adjustments (consisting of only normal recurring adjustments) necessary for a
fair presentation of such data. Results for the six-month period ended June 30,
1997 are not necessarily indicative of the results that may be expected for any
other interim period or for the year as a whole. The data set forth in the
table should be read in conjunction with the consolidated financial statements
of the Company, and the related notes thereto, incorporated herein by reference.
See "Incorporation of Certain Documents by Reference."

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31 JUNE 30
-------------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:

Net Revenue:
Owned, operated and
LMA stations(1) $ 734 $ 2,263 $ 3,799 $ 4,047 $ 4,061 $ 1,940 $ 2,053
Network 7 253 589 1,059 1,594 607 515
--------- --------- --------- --------- --------- --------- ---------

Total net revenue 741 2,516 4,388 5,106 5,655 2,547 2,568

Operating Expenses:
Owned, operated and
LMA stations(1) 1,309 3,175 5,070 4,955 5,036 2,098 2,970
Network 369 1,413 1,541 2,490 3,525 1,677 1,822
Corporate 195 1,007 1,692 1,521 2,774 957 1,991
Depreciation and
amortization 77 192 516 937 1,501 1,091 1,003
Amortization and
write off of
deferred expense -- -- -- 103 2,288 1,662 --
Total operating
expenses 1,950 5,787 8,819 10,006 15,124 7,485 7,786
--------- --------- --------- --------- --------- --------- ---------

Loss from operations (1,209) (3,271) (4,431) (4,900) (9,469) (4,938) (5,218)
Interest expense, net
of interest income 47 (24) 88 1,208 399 307 717
--------- --------- --------- --------- --------- --------- ---------
Net loss $ (1,256) $ (3,247) $ (4,519) $ (6,108) $ (9,868) $ (5,245) $ (5,935)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net loss per share $ (1.27) $ (1.39) $ (1.69) $ (2.22) $ (1.99) $ (1.16) $ (0.99)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Weighted average
number of shares 991,000 2,330,500 2,703,500 2,815,500 5,149,000 4,583,000 6,019,500

BALANCE SHEET DATA:

Working capital (deficit) $ (1,128) $ 1,366 $ (3,472) $ (4,421) $ (5,489) $ 2,984 $ (12,572)
Total assets $ 1,110 $ 8,603 $ 10,485 $ 13,327 $ 28,607 $ 27,636 $ 32,307
Total debt and capital
leases (including
current portion) $ 1,001 $ 225 $ 3,835 $ 5,809 $ 9,669 $ 3,419 $ 17,219
Shareholders' equity
(deficit) $ (441) $ 7,540 $ 3,070 $ 3,487 $ 16,587 $ 20,684 $ 12,380

</TABLE>

- - - -----------------
(1) Includes stations owned and operated by the Company as well as stations
owned by third parties but operated under a LMA.

17
<PAGE>

PRO FORMA FINANCIAL INFORMATION

GENERAL

This pro forma financial information sets forth the impact of the proposed
sale by the Company of the Stations to Global. The unaudited pro forma balance
sheet does not purport to present the Company's consolidated results of
operations and financial position as they might have been, or as they may be in
the future, had the sale of the Stations actually occurred on the assumed dates.

The pro forma adjustments are based upon information currently available
and on certain assumptions that management of the Company believes are necessary
and reasonable for a fair presentation of the pro forma financial information.
The pro forma financial information and accompanying notes should be read in
conjunction with the historical consolidated financial statements of the Company
for the fiscal year ended December 31, 1996 and for the quarterly periods ended
March 31, 1997 and June 30, 1997.

The objective of the June 30, 1997 pro forma balance sheet is to show
what the significant effects on the historical balance sheet might have been
had the sale of the Stations occurred on January 1, 1997. However, the pro
forma balance sheet is not necessarily indicative of the effects of the
Company's financial position that would have been attained had the sale of
the Stations occurred earlier.

BALANCE SHEET

<TABLE>
<CAPTION>
Pro Forma Pro Forma
Children's Pro Forma Pro Forma Adjustments Including
Broadcasting Adjustments After Sale Harmony Sale and
Corporation Sale of Assets of Assets Investment Investment
--------------- ------------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
June 30, 1997:

Current Assets $ 4,616,399 $ 39,452,712(1) $ 44,069,111 $ (6,689,690)(5) $ 37,379,421
0 962,500(2) 962,500 0 962,500
Property and equipment 4,851,788 (4,513,795)(3) 337,993 0 337,993
Broadcast licenses 20,042,948 (20,042,948)(3) 0 0 0
Other assets 2,796,073 (2,719,106) 76,967 7,207,083(5) 7,284,050
------------- ------------- ------------- ------------ -------------
Total assets $ 32,307,208 $ 13,139,363 $ 45,446,571 $ 517,393 $ 45,963,964
------------- ------------- ------------- ------------ -------------
------------- ------------- ------------- ------------ -------------

Current liabilities $ 17,188,046 $ (17,188,046)(4) $ 0 $ 0 $ 0
Long-term debt 2,676,596 (2,676,596)(4) 0 0 0
Other liabilities 62,646 (62,646)(4) 0 0 0
Shareholders' equity (deficit) 12,379,920 33,066,651 45,446,571 517,393(5) 45,963,964
------------- ------------- ------------- ------------ -------------
Total liabilities and
shareholders' equity $ 32,307,208 $ 13,139,363 $ 45,446,571 $ 517,393 $ 45,963,964
------------- ------------- ------------- ------------ -------------
------------- ------------- ------------- ------------ -------------
</TABLE>

- - - -------------------
(1) Proceeds to Company net of taxes, transaction cost and debt payments.
(2) Interest income of 5.5% on $35.0 million cash in money market account.
(3) Elimination of the assets of owned and operated stations and capitalized
debt costs.
(4) Payment of debt and liabilities.
(5) Reflects purchase of a 40.7% beneficial ownership interest in Harmony
Holdings, Inc. with $6,689,690 cash and issuance of 60,000 shares of the
Company's Common Stock, valued at $247,500, and to record income in equity
basis investee of $269,893.

18
<PAGE>

OTHER MATTERS

The management of the Company is unaware of any other matters that are to
be presented for action at the Special Meeting. Should any other matter
properly come before the Special Meeting, however, the persons named in the
enclosed proxy will have discretionary authority to vote all proxies with
respect to such matter in accordance with their judgment.

All expenses incurred in connection with this solicitation, including the
cost of preparing, assembling, and mailing this proxy soliciting material and
Notice of Special Meeting, will be paid by the Company. In addition to the use
of the mails, proxies may be solicited by personal interview, telephone and
telegram by the directors, officers and regular employees of the Company. Such
persons will receive no additional compensation for such services. Further, the
Company has retained Georgeson & Company, Inc. to assist it in connection with
the solicitation of proxies, which may be by mail, telephone or personal
solicitation. In connection therewith, the Company will pay fees and expenses
estimated at $12,000. Arrangements will also be made with certain brokerage
firms and certain other custodians, nominees and fiduciaries for the forwarding
of solicitation materials to the beneficial owners of Common Stock held of
record by such persons, and such brokers, custodians, nominees and fiduciaries
will be reimbursed for their reasonable out-of-pocket expenses incurred by them
in connection therewith.

BY ORDER OF THE BOARD OF DIRECTORS

Christopher T. Dahl
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Minneapolis, Minnesota
November 14, 1997

19
<PAGE>

APPENDIX I

ASSET PURCHASE AGREEMENT

THIS AGREEMENT, dated as of July 16, 1997, is made between and among
CHILDREN'S BROADCASTING CORPORATION, a Minnesota corporation (referred to herein
as "CBC"); CHILDREN'S RADIO OF CHICAGO, INC., a Minnesota corporation ("CRC"),
CHILDREN'S RADIO OF DALLAS, INC., a Minnesota corporation ("CR Dallas"),
CHILDREN'S RADIO OF DETROIT, INC., a Minnesota corporation ("CR Detroit"),
CHILDREN'S RADIO OF GOLDEN VALLEY, INC., a Minnesota corporation ("CRGV"),
CHILDREN'S RADIO OF HOUSTON, INC., a Minnesota corporation ("CRH"), CHILDREN'S
RADIO OF KANSAS CITY, INC., a Minnesota corporation ("CRKC"), CHILDREN'S RADIO
OF LOS ANGELES, INC., a Minnesota corporation ("CRLA"), CHILDREN'S RADIO OF
MILWAUKEE, INC., a Minnesota corporation ("CR Milwaukee"), CHILDREN'S RADIO OF
MINNEAPOLIS, INC., a Minnesota corporation ("CR Minneapolis"), CHILDREN'S RADIO
OF NEW YORK, INC., a New Jersey corporation ("CRNY"), CHILDREN'S RADIO OF
PHILADELPHIA, INC., a Minnesota corporation ("CR Philadelphia"), and CHILDREN'S
RADIO OF PHOENIX, INC., a Minnesota corporation ("CR Phoenix"), CHILDREN'S RADIO
OF TULSA, INC., a Minnesota corporation ("CRT") (CRC, CR Dallas, CR Denver, CR
Detroit, CRGV, CRH, CRKC, CRLA, CR Milwaukee, CR Minneapolis, CRNY, CR
Philadelphia, CR Phoenix and CRT are sometimes collectively referred to herein
as the "Asset Subsidiaries"); KAHZ-AM, INC. ("KAHZ-AM"), KCNW-AM, INC.
("KCNW-AM"), KIDR-AM, INC. ("KIDR-AM"), KKYD-AM, INC. ("KKYD-AM"), KMUS-AM, INC.
("KMUS-AM"), KPLS-AM, INC. ("KPLS-AM"), KTEK-AM, INC. ("KTEK-AM"), KYCR-AM, INC.
("KYCR-AM"), WAUR-AM, INC. ("WAUR-AM"), WCAR-AM, INC. ("WCAR-AM"), WJDM-AM, INC.
("WJDM-AM"), WPWA-AM, INC. ("WPWA-AM"), WWTC-AM, INC. ("WWTC-AM"), and WZER-AM,
INC. ("WZER-AM"), all Minnesota corporations (KAHZ-AM, KCNW-AM, KIDR-AM,
KKYD-AM, KMUS-AM, KPLS-AM, KTEK-AM, KYCR-AM, WAUR-AM, WCAR-AM, WJDM-AM, WPWA-AM,
WWTC-AM and WZER-AM are sometimes collectively referred to herein as the
"License Subsidiaries"; the Asset Subsidiaries and the License Subsidiaries are
sometimes collectively referred to herein as the "Subsidiaries"; and CBC and the
Subsidiaries are sometimes collectively referred to herein as the "Sellers");
and GLOBAL BROADCASTING COMPANY, INC., a Delaware corporation (the "Buyer"); and

I-1
<PAGE>

W I T N E S S E T H :

THAT, WHEREAS, CBC is the owner and holder of 100% of the issued and
outstanding stock of the Asset Subsidiaries; and

WHEREAS, each of the Asset Subsidiaries is the owner of all the assets of
the radio station indicated below licensed to the community listed below
(collectively referred to herein as the "Stations"), except for the Federal
Communications Commission (the "FCC" or the "Commission") licenses, permits or
authorizations issued with respect to the Stations, and are the owners and
holders of 100% of the issued and outstanding stock of the License Subsidiary
designated by the respective Station's call letters:

KAHZ(AM) Fort Worth, Texas
KCNW(AM) Fairway, Kansas
KIDR(AM) Phoenix, Arizona
KKYD(AM) Denver, Colorado
KMUS(AM) Muskogee, Oklahoma
KPLS(AM) Orange, California
KTEK(AM) Alvin, Texas
KYCR(AM) Golden Valley, Minnesota
WAUR(AM) Sandwich, Illinois
WCAR(AM) Livonia, Michigan
WJDM(AM) Elizabeth, New Jersey
WPWA(AM) Chester, Pennsylvania
WWTC(AM) Minneapolis, Minnesota
WZER(AM) Jackson, Wisconsin; and

WHEREAS, the License Subsidiaries are the FCC licensees of the
Stations; and

WHEREAS, subject to and conditioned upon the consent of the FCC, the
Sellers desire to sell and transfer and Buyer desires to purchase and acquire
the Stations and certain of the tangible and intangible assets of the Sellers
used or held for use in connection with the operation of the Stations, all as is
more fully described below.

NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, the parties hereto hereby agree as follows:

I-2
<PAGE>

ARTICLE 1
SALE AND TRANSFER OF ASSETS

At closing of the transaction described herein ("Closing"), the Sellers
shall sell, convey, assign, transfer and deliver to Buyer, free and clear of any
lien, encumbrance, interest, reservation, restriction, mortgage or security
interest of any nature whatsoever, except as expressly provided herein, all the
material assets of the Sellers described below used or held for use in
connection with the operation of the Stations (collectively, the "Acquired
Assets"):

1.1. All licenses, permits and authorizations ("Licenses") issued by the
Commission for the operation of or used in connection with the operation
of the Stations, all of which are listed on SCHEDULE A attached hereto;

1.2. All of the Sellers' real property interests relating to the operation of
the Stations including that described in SCHEDULE B attached hereto
("Real Property");

1.3. All tangible personal property owned by the Sellers used or held for use
in the operation of the Stations listed on SCHEDULE C attached hereto,
and any replacements therefor or improvements thereof acquired or
constructed prior to Closing ("Personal Property");

1.4. All of the Sellers' rights and benefits under the business agreements,
leases and contracts listed on SCHEDULE D attached hereto, including any
renewals, extensions, amendments or modifications thereof, and any
additional agreements, leases and contracts made or entered into by the
Sellers in the ordinary course of business between the date of such
Schedule and the Closing approved in writing by Buyer or otherwise
permitted hereunder ("Leases and Agreements");

1.5. All other licenses, permits or authorizations issued by any government
or regulatory agency other than the FCC, which are used in connection
with the operation of the Stations, all of which are listed on Schedule
A ("Permits");

1.6. All right, title and interest of the Sellers in and to the use of the
call letters for the Stations (referred to herein as the "Call
Letters"), to the extent they can be conveyed; together with all common
law property rights, goodwill, copyrights, trademarks, service marks,
trade names and other similar rights used in connection with the
operation of the Stations, including all accretions thereto, listed on
SCHEDULE E attached hereto ("General Intangibles");

1.7. All of the Subsidiaries' magnetic media, electronic data processing
files, systems and computer programs, logs, public files, records
required by the FCC, vendor contracts, supplies, maintenance records or
similar business records relating to or used in connection with the
operation of the Stations, but not including records pertaining to
corporate affairs (including tax records) and original journals,
provided copies are supplied to Buyer. The Sellers shall have
reasonable access to all such records which might be in the possession
of Buyer for a period of two (2) years following the Closing, and shall,
at its own expense, have the right to make copies thereof; and

1.8. Subject to closing of the contemplated acquisition of the assets and
licenses of radio station KMUS(AM), Muskogee, Oklahoma pursuant to that
purchase agreement between CBC and Oklahoma Sports Properties, Inc.,
dated December 31, 1996 (the "KMUS Purchase Agreement"), which Purchase
Agreement was subsequently assigned to CRT, which is listed on Schedule
D attached hereto among the Agreements to be assigned to and assumed by
Buyer, the assets acquired by CRT shall be among the Acquired Assets,
and the Schedules hereto shall be revised accordingly.

I-3
<PAGE>

ARTICLE 2
PURCHASE PRICE AND PAYMENTS

2.1. PURCHASE PRICE. As the purchase price for the Assets, Buyer agrees to
pay to the Sellers the sum of Seventy-two Million Five Hundred Thousand
and no/100 Dollars ($72,500,000.00), subject for adjustment as provided
herein.

2.2. METHOD OF PAYMENT OF PURCHASE PRICE. The purchase price shall be paid
as follows:

2.2.1. EARNEST MONEY ESCROW. An aggregate amount of Three Million
Five Hundred Thousand and no/100 Dollars ($3,500,000.00) (the
"Escrowed Funds") shall be paid into escrow, Five Hundred
Thousand and no/100 Dollars ($500,000.00) on July 30, 1997,
and Three Million and no/100 Dollars ($3,000,000.00) on August
13, 1997, all pursuant to the terms of that Escrow Agreement
(the "Escrow Agreement") a copy of which is attached hereto as
EXHIBIT A.

2.2.2. CASH PAYMENT AT CLOSING. The entire purchase price payable
hereunder, including the Escrowed Funds, shall be payable in
cash at Closing, subject to adjustment or allocation as
provided herein.

2.3. ADJUSTMENTS AND PRORATIONS. The operations of the Stations and the
income and expenses attributable thereto up to 12:01 A.M. on the day of
the Closing (the "Adjustment Time"), shall, except as otherwise provided
in this Agreement, be for the account of the Sellers and thereafter
shall be for the account of Buyer. Expenses such as power and utility
charges, lease rents, property taxes according to year of payment,
frequency discounts, annual license fees (if any), wages, commissions,
payroll taxes, and other fringe benefits of employees of the Sellers who
enter the employment of the Buyer, and similar deferred items shall be
prorated between the Sellers and the Buyer. Prepaid deposits shall not
be prorated but shall remain the property of the Sellers. Employees'
employment with the Sellers shall be terminated as of the Closing Date,
and Buyer shall employ employees of its choice from and after said date
upon terms acceptable to Buyer and such employees. Any prorations shall
be made and paid insofar as feasible at the Closing, with a final
settlement within ninety (90) days after the Closing.

2.4. KMUS ADJUSTMENT. If for any reason the transactions contemplated under
the KMUS Purchase Agreement do not close prior to the Closing of the
transaction contemplated hereunder, Buyer shall have the option of
either:

a. accepting Sellers' rights under the KMUS Purchase Agreement
without any adjustment to the purchase price payable
hereunder, or

b. amending this Agreement to exclude the KMUS Purchase Agreement
and any rights of Sellers associated therewith from the
Acquired Assets and adjusting the purchase price payable
hereunder by the amount of Four Hundred Thousand and no/100
Dollars ($400,000.00).

Buyer must notify CBC as to which option it intends to elect no later
than ten (10) days after receipt of the FCC's first grant of an approval
to an assignment of any of the Licenses or it will be deemed to have
exercised the option described at subparagraph (a) above.

2.5. PARTIAL CLOSING ADJUSTMENTS. Further adjustments to the purchase price
payable hereunder may be made pursuant to the provisions of Sections 7.3
and 8.6 below.

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2.6. ASSUMED LIABILITIES. Except as expressly provided for in this Agreement
or the Leases and Agreements listed on the Schedules hereto, at the
Closing Buyer shall not assume, incur or be charged with, in connection
with the transactions herein contemplated, any liabilities or
obligations of any nature whatsoever, contingent or otherwise. Without
limitation of the foregoing, Buyer shall not assume any obligations to
the Stations' employees under any employee benefit plans or employment
contracts.

2.7. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Acquired Assets by Buyer and the Sellers as set forth in the
attached SCHEDULE F. The values of the Acquired Assets with respect to
each of the Stations are set forth with an aggregate allocation value as
to all Acquired Assets associated with the operation of each of the
Stations set out thereon as the station aggregate value (the "Station
Aggregate Value") for each of the Stations. Such allocation will be
used for all purposes, including preparation and filing of IRS Form 8594
with respect to the transactions contemplated by this Agreement.

2.8. DAHL NON-COMPETITION AGREEMENT. In addition to the purchase price
payable hereunder, Buyer agrees to enter into a Non-Competition
Agreement with Seller's Chief Executive Officer, Christopher T. Dahl
("Dahl"), at Closing in the form attached hereto as EXHIBIT B (the
"Non-Competition Agreement"), and CBC agrees to cause Dahl to enter into
the Non-Competition Agreement at Closing.

ARTICLE 3
THE SELLERS' REPRESENTATIONS,
WARRANTIES AND AGREEMENTS

The Sellers represent, warrant and agree as follows, which
representations, warranties and agreements shall be deemed to have been made
again at Closing:

3.1. CORPORATE EXISTENCE AND POWERS. The Sellers, except for CRNY, are
corporations organized and existing in good standing under the laws of
the State of Minnesota, with full power and authority to enter into this
Agreement and to enter into and complete the transactions contemplated
herein; CRNY is a corporation organized and existing in good standing
under the laws of the State of New Jersey, with full power and authority
to enter into this Agreement and to enter into and complete the
transactions contemplated herein; CRC is, and will be at the time of
Closing, qualified to do business in the State of Illinois; CR Dallas
is, and will be at the time of Closing, qualified to do business in the
State of Texas; CR Denver is, and will be at the time of Closing,
qualified to do business in the State of Colorado; CR Detroit is, and
will be at the time of Closing, qualified to do business in the State of
Michigan; CRH is, and will be at the time of Closing, qualified to do
business in the State of Texas; CRKC is, and will be at the time of
Closing, qualified to do business in the State of Kansas; CRLA is, and
will be at the time of Closing, qualified to do business in the State of
California; CR Milwaukee is, and will be at the time of Closing,
qualified to do business in the State of Wisconsin; CRNY is, and will be
at the time of Closing, qualified to do business in the State of New
York; CR Philadelphia is, and will be at the time of Closing, qualified
to do business in the State of Pennsylvania; and CR Phoenix is, and
will be at the time of Closing, qualified to do business in the State of
Arizona; CRT is, and will be at the time of Closing, qualified to do
business in the State of Oklahoma; all required corporate actions have
been taken by the Sellers to make and carry out this Agreement, which is
a valid and binding obligation of Sellers and which is enforceable in
accordance with its terms; the execution of this Agreement and the
completion of the transactions herein involved will not result in the
violation of any order, license, permit, rule, judgment or decree to
which any of the Sellers is subject or the breach of any contract,
agreement or other commitment to which any of the Sellers is a party or
by which they are bound; and, except for receipt of the Commission's
Final Approval (as defined herein) with respect to the assignment of the
Licenses to

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Buyer, no other consents of any kind are required that have not been
obtained for the Sellers to make or carry out the terms of this
Agreement, except with respect to those consents required of parties to
Leases and Agreements listed on Schedule B or D, with respect to
assignment and assumption of specific contract rights and obligations
and the consent of CBC's shareholders. The Sellers shall use their best
efforts to obtain third party consents with respect to any of the Leases
and Agreements designated by Buyer and the Sellers as "material", to the
extent required by such documents. Buyer shall cooperate with the
Sellers in obtaining all such required consents.

3.2. LICENSES AND PERMITS. Each of the License Subsidiaries is the holder of
the Licenses indicated on Schedule A, all of which are valid, in full
force and effect and which have been unconditionally issued for the full
license term, subject to such pending renewal applications as are
indicated on such Schedule A. The Licenses constitute all of the
licenses, grants, permits, waivers and authorizations issued by the FCC
and required for and/or used in the operation of the Stations as they
are currently being operated. Each License Subsidiary is fully
qualified to hold its Licenses. All ownership and employment reports,
renewal applications, and other reports and documents required to be
filed for the Stations have been properly and timely filed. The
Stations are operating in accordance with the Licenses, and in
compliance with the Communications Act of 1934, as amended, and the
rules and regulations of the Commission, including, without limitation,
those regulations governing the Stations' equal employment opportunity
practices and public files, and any other applicable laws, ordinances,
rules and regulations. The Licenses are unimpaired by any act or
omission of Sellers or their officers, directors, employees and agents
and Sellers will not, without Buyer's prior written consent, by an act
or omission, surrender, modify, forfeit or fail to seek renewals on
regular terms, of any License, or cause the Commission or other
regulatory authority to institute any proceeding for the cancellation or
modification of any such License, or fail to prosecute with due
diligence any pending application to the Commission or other regulatory
authority. There is not now pending, or to the best of Sellers'
knowledge threatened, any action by or before the Commission or other
regulatory authority to revoke, cancel, rescind, modify or refuse to
renew in the ordinary course any of the Licenses, or any investigation,
order to show cause, notice of violation, notice of inquiry, notice of
apparent liability or of forfeiture or complaint against the Stations or
Sellers, and Sellers have no knowledge of any basis for the commencement
of any such proceeding in the future. Should any such action or
investigation be commenced, order or notice be released, or complaint be
filed, Sellers will promptly notify Buyer and take all actions necessary
to protect the Stations and the Licenses from any material adverse
impact.

3.3. ACQUIRED ASSETS. The Acquired Assets to be transferred to Buyer at
Closing represent all the assets necessary for the Stations' current and
continuing operations; until Closing, none of the Acquired Assets will
be sold, leased or otherwise disposed of unless replaced by a similar
asset of equal or greater value, and, at Closing, all of the Acquired
Assets shall be owned by and transferred by the Sellers to Buyer free
and clear of all liens, encumbrances, interests or restrictions of any
kind whatsoever excepting only those obligations, liens or encumbrances
expressly provided to be assumed by Buyer herein or the Leases and
Agreements listed on Schedule B or D. The Acquired Assets have been
maintained in good condition, subject to normal wear and tear.

3.4. CONTRACTS, LEASES, AGREEMENTS, ETC. Each of the Leases and Agreements
are in full force and effect, and there are no outstanding notices of
cancellation, acceleration or termination in connection therewith except
as noted upon Schedule B or D. Sellers are not in breach or default in
connection with any of the Leases and Agreements and, to the best of
Sellers' knowledge, there is no basis for any claim, breach or default
with respect to Sellers or any other party under any of said Leases and
Agreements. Sellers have made available to Buyer true and correct
copies of all agreements and instruments listed on Schedule D. On the
Closing Date there will be no Leases or Agreements relating to the
Stations (not including this Agreement) which will be binding on the
Buyer other than those specifically identified herein, including the
Schedules attached hereto, as assumed by Buyer, or as otherwise approved
in writing by Buyer.

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3.5. LITIGATION. Except as set forth on SCHEDULE G, no strike, labor
dispute, investigation, litigation, court or administrative proceeding
is pending or, to the best of Sellers' knowledge, threatened against the
Sellers relating to the Stations, their employees or any of the Acquired
Assets which may result in any change in the business, operations,
assets or financial condition of the Stations or may materially affect
Buyer's use and enjoyment of the Acquired Assets, or which would hinder
or prevent the consummation of the transaction contemplated by this
Agreement, and the Sellers know of no basis for any such possible
action.

3.6. HAZARDOUS WASTE. As of now and as of the Closing Date, Sellers have not
participated in nor approved, nor has there occurred any production,
disposal or storage by Sellers on the Real Property of any hazardous
waste or toxic substance, nor, to the best of their knowledge, does such
waste or substance exist on the Real Property (above or beneath the
surface), nor is there any proceeding or inquiry, by any governmental
authority (federal or state) with respect to the presence of such waste
or substance on the Real Property to the best of the Sellers' knowledge,
nor are there any underground storage tanks on the Real Property, to the
best of Sellers' knowledge, all except as shown on SCHEDULE H attached
hereto. "Hazardous waste" shall consist of the substances defined as
"hazardous substances," "hazardous materials," or "toxic substances" in
the Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended, 42 USC Section 9601, et seq., or in the Hazardous
Materials Transportation Act, 49 USC Section 1801, et seq., or in the
Resources Conservation and Recovery Act, 42 USC Section 6901, et seq.

3.7. INSURANCE. Until Closing, the Sellers shall keep the Acquired Assets
insured against loss or damage by fire or from other causes customarily
insured against by other radio stations similarly situated consistent
with past practices, and has provided Buyer with an abstract of such
casualty insurance coverage.

3.8. ACCESS TO INFORMATION. The Sellers shall give Buyer and its
representatives reasonable access during normal business hours
throughout the period prior to Closing to the operations, properties,
books, accounting records, contracts, agreements, leases, commitments,
programming, technical and sales records and other records of and
pertaining to the Stations; provided, however, such access shall not
disrupt the Sellers' normal operation. The Sellers shall furnish to
Buyer all information concerning the Stations' affairs as Buyer may
reasonably request. Buyer will maintain the confidentiality of all the
information and materials delivered to it or made available for its
inspection by the Sellers hereunder in accordance with that
Confidentiality Agreement between CBC and Buyer, dated June 9, 1997 (the
"Confidentiality Agreement").

3.9. CONDUCT OF THE STATIONS' BUSINESS. Until Closing, without the written
consent of Buyer, the Sellers shall not enter into any transaction other
than those in the ordinary course of the business of the Stations; no
employment contract shall be entered into by the Sellers relating to the
Stations unless the same is terminable at will and without penalty; no
material increase in compensation payable or to become payable, to any
of the employees employed at the Stations shall be made; no material
change in personnel policies, insurance benefits or other compensation
arrangements shall be made; and the Sellers will cause the Stations to
be operated in compliance with the Licenses and Permits and all
applicable laws and regulations;

the Sellers further represent, warrant and covenant:

(a) Between the date hereof and Closing, the Sellers shall not
take any action which will prevent or impede Buyer from
obtaining at the Closing the actual and immediate occupancy
and possession of the Stations and all of the Acquired Assets.

(b) On the Closing date, the Sellers will be the owner of the
Acquired Assets except such of the same replaced by suitable
property of no less than equivalent value in the ordinary

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course of business, with good and marketable title thereto,
free and clear of all liens and encumbrances, except liens for
current taxes and assessments not yet due and payable or to
secure obligations to be assumed by Buyer hereunder pursuant
to the Leases and Agreements; and that between the date of
this Agreement and the Closing, there will be no more than the
ordinary normal wear and tear and expendability of the
Acquired Assets, and that the Acquired Assets will be in good
working condition.

(c) The Sellers do not know of any facts relating to them or the
Stations which would cause (i) the applications for assignment
of the Licenses to Buyer to be challenged, (ii) the Commission
to deny its consent to the assignments of the Stations'
Licenses to Buyer, or (iii) the Commission to grant such
applications for assignment subject to material adverse
conditions to Buyer.

(d) The Sellers will have paid and discharged all taxes,
assessments, excises, and levies known to the Sellers which
are due and payable and have not been paid and that would
interfere with the Sellers' enjoyment of the Acquired Assets.

(e) The Sellers do not know of any facts which would cause any
application for renewal of any of the Licenses to be
challenged at the Commission or that would cause such renewals
to be granted other than in the ordinary course for a full
license term without material adverse condition.

3.10. COPYRIGHTS, TRADEMARKS AND SIMILAR RIGHTS. The call letters listed on
Schedule E are the call letters used by Sellers during the radio
broadcast operations of the Stations to identify each of the respective
Stations to its local audience. Sellers have full right and authority
from the FCC to use such call letters except as may be provided in the
Agreements. Sellers have not licensed or consented to, and have no
knowledge of, any other entity's or individual's use of such call
letters. There is no other name, trademark, service mark, copyright, or
other trade, or service right or mark currently being used in the
business and operations of the Stations other than those listed in
Schedule E, except those of CBC in connection with its Radio
AAHS-Registered Trademark-/Aahs World Radio-SM- children's radio format.
To the best of Sellers' knowledge, the operations of the Stations do not
infringe on any trademark, service mark, copyright or other intellectual
property or similar right owned by others.

3.12. EMPLOYEE BENEFITS.

3.12.1. All of the Sellers' employee plans and compensation
arrangements providing benefits to employees of the Stations
as of the date hereof are listed and described in SCHEDULE I
and copies of any such written employee plans and compensation
arrangements (or related insurance policies) and any
amendments thereto have been made available to Buyer, along
with copies of any currently available employee handbooks or
similar documents describing such employee plans and
compensation arrangements. Except as disclosed in Schedule I,
there is not now in effect or scheduled to become effective
after the date hereof, any new employee plan or compensation
arrangement or any amendment to an existing employee plan or
compensation arrangement which will affect the benefits of
employees or former employees of the Stations.

3.12.2. Each of the Sellers' employee plans and compensation
arrangements has been administered, without material
exception, in compliance with its own terms and, where
applicable, with ERISA, the Internal Revenue Code of 1986, as
amended, the Age Discrimination in Employment Act and any
other applicable federal or state laws.

3.12.3. Sellers do not contribute to and are not required to
contribute to any multiemployer plan with respect to its
employees at the Stations except as disclosed on Schedule I.

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3.12.4. Sellers are not aware of the existence of any governmental
audit or examination of any of Sellers' employee plans or
compensation arrangements or of any facts that would lead them
to believe that any such audit or examination is pending or
threatened.

3.12.5. Sellers acknowledge that Buyer has no obligation hereunder to
offer employment to any employee of Sellers; however, Buyer
shall have the right to hire such of the employees of the
Stations as Buyer may select. With respect to any employee
that Buyer hires, Sellers further acknowledge that Buyer shall
have no obligation for, and shall not assume as part of the
transaction contemplated by this Agreement, any "accrued
vacation" or other accrued leave time of said employees as a
consequence of their being hired by Buyer. Sellers also
acknowledge that with respect to such employees as are hired
by Buyer, and where any such accrued leave time exists for
said employees, Sellers will retain the responsibility for any
liability arising therefrom.

3.13. LABOR RELATIONS. SCHEDULE J lists the names, dates of hire and current
annual salaries of all persons employed by the Sellers directly and
principally in connection with the operation of the Stations. None of
the Sellers is a party to or subject to any collective bargaining
agreements with respect to any of the Stations. Sellers have no written
or oral contracts of employment with any employee of the Stations, other
than (i) oral employment agreements terminable at will without penalty,
or (ii) those listed in Schedule D. The Sellers, in the operations of
the Stations, have substantially complied with all applicable laws,
rules and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational
safety, discrimination and the payment of social security and other
payroll related taxes. To the best of Sellers' knowledge, there is no
representation or organizing effort pending or threatened against or
involving or affecting the Sellers with respect to employees employed at
the Stations.

3.14 PRE-CLOSING COVENANTS. Between the date hereof and the Closing, the
Sellers covenant that:

3.14.1. FCC COMPLIANCE. The Sellers shall continue to operate the
Stations in conformity with the terms of the Stations'
Licenses and in conformity in all material respects with all
applicable laws, regulations, rules and ordinances, including
but not limited to the rules and regulations of the FCC. The
Sellers shall file all reports, applications and other filings
required by the FCC in a timely and accurate manner. Sellers
will maintain the Licenses in full force and effect and take
any action necessary before the FCC to preserve such Licenses
in full force and effect without material adverse change.
Sellers will not take any action that would jeopardize the
License Subsidiaries' rightful possession of the Licenses, the
potential for assignment of the Licenses to Buyer, or the
unconditional renewal of the Licenses for full license terms.

3.14.2. CONDUCT OF BUSINESS. The Sellers shall conduct the technical
operations of the Stations in the usual and ordinary course
and consistent with past practices, and shall continue all
practices, policies, procedures and technical operations
relating to the Stations in substantially the same manner as
heretofore.

3.14.3. MAINTENANCE OF ASSETS. The Sellers shall maintain all of the
Acquired Assets in a good condition and, with respect to the
Personal Property, shall maintain inventories of spare parts
at levels consistent with the past practices of the Sellers
and the Stations. The Sellers shall not sell, convey, assign,
transfer or encumber any of the Acquired Assets, except for
the retirement of tangible Acquired Assets consistent with the
normal and customary practices of the Sellers and the
Stations.

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3.14.4. NO SOLICITATION.

(a) CBC will immediately cease any existing discussions or
negotiations with any third parties conducted prior to
the date hereof with respect to any Acquisition
Proposal (as defined below). CBC shall not, directly
or indirectly, through any officer, director, employee,
representative or agent, or any of the Subsidiaries, or
otherwise (i) solicit, initiate, continue or encourage
any inquiries, proposals or offers that constitute, or
could reasonably be expected to lead to, a proposal or
offer for a merger, consolidation, business
combination, sale of substantial assets, sale of shares
of capital stock (including, without limitation, by way
of a tender offer), liquidation, reorganization or
transactions involving CBC or any of the Subsidiaries,
other than the transactions contemplated by this
Agreement (any of the foregoing inquiries or proposals
are being referred to in this Agreement as an
"Acquisition Proposal"), (ii) solicit, initiate,
continue or engage in negotiations or discussions
concerning, or provide any information or data to any
person or entity relating to, or otherwise cooperate in
any way with, or assist or participate in, or
facilitate or encourage any Acquisition Proposal, or
(iii) agree to, approve or recommend any Acquisition
Proposal; PROVIDED, that nothing contained in this
Section shall prevent CBC from, prior to the Closing,
furnishing non-public information to, or entering into
discussions or negotiations with, any person or entity
in connection with any unsolicited Acquisition Proposal
by such person or entity (including a new and
unsolicited Acquisition Proposal received by CBC after
the execution of this Agreement from a person or entity
whose initial contact with CBC may have been solicited
by CBC prior to the execution of this Agreement), and
CBC may recommend such an unsolicited bona fide written
Acquisition Proposal to the shareholders of CBC, if and
only to the extent that (i) the Board of Directors of
CBC determines in good faith (after consultation with
and based upon the advice of its financial advisor and
considering the effect of such Acquisition Proposal
upon the employees, customers and the community) that
such Acquisition Proposal would, if consummated, result
in a transaction more favorable to the shareholders of
CBC than this Agreement and that the person or entity
making such Acquisition Proposal has the financial
means, or the ability to obtain the necessary
financing, to conclude such transaction (any such more
favorable Acquisition Proposal is being referred to in
this Agreement as a "Superior Proposal"), (ii) the
Board of Directors of CBC determines in good faith
(after consultation with and based upon the advice of
its outside legal counsel) that the failure to take
such action would be inconsistent with the fiduciary
duties of such Board of Directors to its shareholders
under applicable law, and (iii) prior to furnishing
such non-public information to, or entering into
discussions or negotiations with, such person or
entity, the Board of Directors receives from such
person or entity an executed confidentiality agreement
with confidentiality provisions not materially less
favorable to the Company than those contained in the
Confidentiality Agreement. If (i) this Agreement is
terminated after the occurrence of a Triggering Event
(as defined below), and (ii) Sellers within six (6)
months after such termination either (A) consummates
any Alternative Transaction (as defined below) or (B)
become parties to any agreement relating to an
Alternative Transaction that is thereafter consummated,
then CBC shall pay Buyer a non-refundable fee of Three
Million Five Hundred Thousand and no/100 Dollars
($3,500,000.00) (the "Fee") which amount shall be
payable by wire transfer of same day funds on the date
such Alternative Transaction is consummated.

(b) CBC shall reimburse the Buyer in connection with any
legal or other fees incurred by the Buyer in connection
with the collection of the Fee from CBC.

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(i) the Board of Directors of CBC shall have
withdrawn or modified its recommendation of
this Agreement or shall have resolved or
publicly announced its intention to do so; or

(ii) an Alternative Transaction shall have taken
place or the Board of Directors of CBC shall
have recommended such an Alternative
Transaction to shareholders, or shall have
resolved or publicly announced its intention to
recommend or engage in an Alternative
Transaction; or

(iii) a material breach by CBC of this Agreement
shall have occurred, and at the time of such
breach or any termination based thereon an
Alternative Transaction shall have been
publicly announced and not absolutely and
unconditionally withdrawn and abandoned; or

(iv) CBC shall have negotiated with, furnished
information to, entered into any agreement
with, or consummated or recommended any
transaction with, any person other than Buyer
or its affiliates, based on a determination
regarding a "Superior Proposal" made as
described herein; or

(v) CBC shall materially breach or fail to perform
its obligations under this Section 3.14.4.

(d) As used herein, an "Alternative Transaction" shall mean
(a) any transaction or series of transactions by which
any person or group (other than Buyer) acquires or
would acquire shares (or securities exercisable or
convertible into shares) representing 20% or more of
the outstanding shares of CBC, pursuant to a tender
offer, exchange offer or otherwise, (b) a merger,
consolidation, share exchange, sale or substantial
assets or other business combination involving CBC, (c)
any other transaction or series of transactions whereby
any person acquires or would acquire control of the
board of directors, business or assets of CBC, or (d)
any agreement with respect to any of the foregoing,
which in the case of any transaction or agreement
described in clauses (a) through (d) above, involves a
greater value (considering the amounts payable to
shareholders and all payments under employment,
consulting and other arrangements in connection
therewith) than the value of this Agreement.

3.14.5. KMUS CLOSING. Sellers shall apply reasonable and diligent
efforts in good faith to conclude the transaction contemplated
under the KMUS Purchase Agreement prior to Closing.

3.15. NO MISLEADING STATEMENTS. To Sellers' knowledge, no statement,
representation or warranty made by Sellers herein and no information
provided or to be provided by Sellers to Buyer pursuant to this
Agreement or in connection with the negotiations covering the purchase
and sale contemplated herein contains or will contain any untrue
statement of a material fact, or omits or will omit a material fact.
There are no facts or circumstances known to Sellers and not disclosed
herein or in the Schedules hereto that, either individually or in the
aggregate, will materially adversely affect after Closing the Acquired
Assets or the condition of the Stations.

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ARTICLE 4
BUYER'S REPRESENTATIONS AND WARRANTIES

The Buyer represents and warrants as follows, which representations and
warranties shall be deemed to have been made again at Closing.

4.1. CORPORATE EXISTENCE AND POWERS. Buyer is a corporation organized and
existing in good standing under the laws of the State of Delaware with
full power and authority to enter into this Agreement and enter into and
complete the transactions contemplated herein; Buyer is, or will be at
the time of Closing, qualified to do business in the States of Arizona,
California, Colorado, Illinois, Kansas, Michigan, Minnesota, New Jersey,
Oklahoma, Pennsylvania, Texas and Wisconsin; all required corporate
action has been taken by Buyer to make and carry out this Agreement; the
execution of the Agreement and, once the consent referred to in the next
clause of this sentence is obtained, the completion of the transactions
herein involved will not result in the violation of any order, license,
permit, rule, judgment or decree to which Buyer is subject or the breach
of any contract, agreement or other commitment to which Buyer is a party
or by which it is bound; and except for the consent of the Commission to
the assignment of the Licenses to Buyer, no other consent of any kind is
required that has not been obtained for Buyer to make or carry out the
terms of this Agreement.

4.2. BUYER'S QUALIFICATIONS. At Closing, Buyer will be legally and
financially qualified to become the licensee of the Commission. Buyer
does not know of any facts relating to it which would cause the
Commission to deny its consents, or which would materially hinder or
delay receipt of such consents, to the assignments of the Licenses to
Buyer.

ARTICLE 5
BREACH OF AGREEMENTS,
REPRESENTATIONS AND WARRANTIES

5.1. BREACH OF THE SELLERS' AGREEMENTS, REPRESENTATIONS AND WARRANTIES. The
Sellers shall indemnify and hold harmless Buyer and every affiliate of
Buyer and any of its or their directors, members, stockholders, officers,
partners, employees, agents, consultants, representatives, transferees
and assignees from and against any loss, damage, liability, claim,
demand, judgment or expense, including claims of third parties arising
out of ownership of the Acquired Assets or the operations of the Stations
by the Sellers prior to Closing, and including without being limited to,
reasonable counsel fees and reasonable accounting fees, arising out of or
sustained by Buyer by reason of any material breach of any warranty,
representation, covenant or agreement of the Sellers contained herein or
in the Schedules attached hereto; provided, however, that such
indemnification shall be required only if written notice, with respect to
any matter for which indemnification is claimed, is given. Upon receipt
of such written notice, the Sellers shall have the right, if it involves
a liability to a third party, to defend or compromise such matter at the
Sellers' sole cost and expense, and Buyer shall cooperate fully in such
defense.

5.2. BREACH OF BUYER'S AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Buyer
shall indemnify and hold harmless the Sellers and every affiliate of
Sellers and any of their directors, members, stockholders, officers,
partners, employees, agents, consultants, representatives, transferees
and assignees from and against any loss, damage, liability, claim,
demand, judgment or expense, including claims of third parties arising
out of ownership of the Acquired Assets or operations of the Stations by
Buyer after Closing, and including without being limited to, reasonable
counsel fees and reasonable accounting fees, arising out of or sustained
by the Sellers by reason of any material breach of any warranty,
representation, covenant or agreement of Buyer contained herein;
provided, however, that such indemnification shall be required only if
written notice, with respect to any matter for which indemnification is
claimed, is given. Upon receipt of such written notice, Buyer shall have
the right,

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if it involves a liability to a third party, to defend or compromise such
matter at Buyer's sole cost and expense, and the Sellers shall cooperate
fully in such defense.

5.3. SPECIFIC PERFORMANCE. The Sellers acknowledge that the Acquired Assets
are unique and not readily bought or sold on the open market and, for
that reason, among others, Buyer would be irreparably harmed by any
breach or failure of the Sellers to consummate this Agreement, and
monetary damages therefor will be highly difficult, if not wholly
impossible, to ascertain. It is therefore agreed that this Agreement
shall be enforceable in a court of equity by a decree of specific
performance subject to the provisions of Section 3.14.4 above and Section
8.5 below, and an injunction may be issued restraining any transfer or
assignment of the Acquired Assets contrary to the provisions of this
Agreement pending the determination of such controversy. The Sellers,
for themselves and their successors and assigns, hereby waive the claim
or defense that an adequate remedy at law exists.

ARTICLE 6
RISK OF LOSS

6.1. BUYER'S OPTIONS. The risk of any loss, damage or destruction to any of
the Acquired Assets to be transferred to the Buyer hereunder from fire or
other casualty or loss shall be borne by the Sellers at all times prior
to the Closing. Upon the occurrence of any material loss or damage to
any of the Acquired Assets to be transferred hereunder as a result of
fire, casualty, or other causes prior to the Closing, the Sellers shall
notify the Buyer of same in writing immediately, stating with
particularity the reasonable estimates of the loss or damage incurred,
the cause of damage, if known, and the extent to which restoration,
replacement and repair of the Acquired Assets lost or destroyed is
believed reimbursable under any insurance policy with respect thereto.
Provided the Sellers, at their sole expense, have not repaired, restored
or replaced the damaged Acquired Assets to Buyer's reasonable
satisfaction by the Closing, Buyer shall have the option (but not the
obligation) exercisable at the Closing to:

(i) terminate this Agreement in which case none of the parties shall
have any further liability to the other parties and all Escrowed
Funds shall be returned to Buyer, except that the Sellers shall
have a reasonable period of time, not to exceed one hundred
twenty (120) days, to effect repairs of the damaged Acquired
Assets before Buyer may exercise its option under this
subparagraph 6.1 (i);

(ii) postpone the Closing for up to one hundred twenty (120) days to
allow the Acquired Assets to be completely repaired, replaced or
restored, at the Sellers' sole expense, in which event the
Sellers shall use their best efforts to complete such repairs; or

(iii) elect to consummate the Closing and accept the property in its
"then" condition, in which event the Sellers shall assign to
Buyer all rights under any insurance claim covering the loss and
pay over to the Buyer the proceeds under any such insurance
policy heretofore received by the Sellers with respect thereto.

ARTICLE 7
APPLICATION FOR COMMISSION APPROVAL

7.1. FILING AND PROSECUTION OF APPLICATION. Buyer and the Sellers shall, as
soon as practicable after the date of this Agreement and in any event not
later than August 15, 1997, join in applications to be filed with the
Commission requesting its written consents to the assignments of the
Licenses of the Stations from the License Subsidiaries to Buyer. The
parties shall prepare their own portions of the

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applications. Buyer and the Sellers shall take all steps necessary to
the expeditious prosecution of such applications to a favorable
conclusion, using their best efforts throughout.

7.2. EXPENSES. The parties shall bear their own legal, accounting and other
expenses in connection with the consummation of the contemplated
transaction. The parties shall cooperate with the preparation of the
Commission applications and in connection with the prosecution of such
applications. The filing fees shall be shared equally between the
Sellers on the one hand and the Buyer on the other.

7.3. DESIGNATION FOR HEARING. If, for any reason, any application for an
assignment of any of the Licenses is designated for hearing by the
Commission prior to grant thereof, either of the parties shall have the
right by written notice within thirty (30) days of such designation for
hearing, to exclude from the Acquired Assets those assets associated with
the operation of the Station affected if the allegations raised relate to
the other party, and the purchase price payable hereunder shall be
reduced by an amount equal to the Station Aggregate Value of the affected
Station.

7.4. TIME FOR COMMISSION CONSENT. Subject to the provisions of Section 7.3
above and Section 8.6 below, if the Commission has not given its written
consents to the assignments of the Licenses set forth herein within nine
(9) months from the date of acceptance for filing of the applications for
such assignments, any of the parties, if not then in default, may
terminate this Agreement by giving written notice to the other parties.
Upon such termination, none of the parties shall have any right or
liability hereunder and all Escrowed Funds shall be returned to Buyer
promptly.

7.5. CONTROL OF STATIONS. Until Closing, Buyer shall not directly or
indirectly, control, supervise, direct or attempt to control, supervise
or direct the operations of the Stations, but such operations shall be
the sole responsibility of the Sellers, subject to and consistent with
all rules, regulations and policies of the FCC.

ARTICLE 8
CLOSING

Subject to the terms and conditions herein stated, the parties agree as
follows:

8.1. CLOSING DATE. Except as provided in Section 7.3 above and Section 8.6
below, the Closing of this Agreement shall be held at such time and date
as shall be mutually agreed by the Sellers and Buyer; provided, however,
that in any event Buyer must close no later than five (5) days after
final Commission approval of the assignments of the Licenses and the
final FCC grant of renewal of the Stations' Licenses for full terms
without material adverse condition have become final, the finality of
each of the assignments and renewal applications subject to waiver by
Buyer ("Final Approval") and all other conditions to Closing shall have
been satisfied on or before the Closing Date. (The date scheduled, or
required to be scheduled for Closing hereunder is referred to herein as
the "Closing Date.") Final Approval shall be the approval of the FCC to
the renewal and assignment of the Licenses which are no longer subject to
rehearing, reconsideration or review by the Commission or to review by
any court under the Communications Act of 1934, as amended, and which
action is not reversed, stayed, enjoined or set aside, and with respect
to which no timely request or petition for stay, reconsideration, review
or rehearing or a notice of appeal is pending and the time for such
filing has expired. Closing shall take place at the offices of CBC in
Minnesota.

8.2. THE SELLERS' OBLIGATIONS AT CLOSING. At Closing, the Sellers shall
deliver to Buyer the following:

(a) An Assignment of the Licenses described in Schedule A, Warranty
Deeds as to the Real Property described on Schedule B and an
Assignment and Bill of Sale, or similar instruments, including
third party consents to all "material" Leases and Agreements,

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transferring to Buyer all other Acquired Assets to be transferred
hereunder, free and clear of all liens, encumbrances and
restrictions of any kind whatsoever, except as expressly provided
for in this Agreement or in the Leases and Agreements;

(b) The business records described in Section 1.7;

(d) An opinion of the Sellers' counsel, addressed to Buyer,
confirming the correctness of the Sellers' representations made
in Sections 3.1 and 3.2;

(e) A certificate of CBC's CEO verifying that the Sellers'
representations, warranties and covenants as provided herein
remain materially true and correct up to and through the Closing
Date;

(f) Certificates of Sellers' Secretary certifying as to Sellers'
Articles of Incorporation, By-Laws, and Board of Directors
approvals (all of which shall be attached thereto);

(g) Such other documents and instruments as might reasonably be
requested by Buyer to consummate the transaction contemplated
hereunder consistent with the intent expressed herein; and

(h) Escrow instructions releasing Escrowed Funds to Buyer.

8.3. BUYER'S OBLIGATIONS AT CLOSING. At Closing, Buyer shall deliver to CBC
the following:

(a) A cashier's or certified check in the amount of Seventy-two
Million Five Hundred Thousand and no/100 Dollars ($72,500,00.00)
(subject to adjustment as provided herein);

(b) An Agreement to assume the obligations of Sellers under the
Leases and Agreements with respect to periods of time from and
after Closing;

(d) An opinion of Buyer's counsel, addressed to the Sellers,
confirming the correctness of Buyer's representations made in
Section 4.1; and

(e) Such other documents and instruments as might reasonably be
requested by Sellers to consummate the transaction contemplated
hereunder consistent with the intent expressed herein.

8.4. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the transaction herein contemplated at Closing are subject to
and conditioned upon:

(a) The written consents of the Commission evidencing its Final
Approvals to the assignments of the Licenses to Buyer subject to
the provisions of Section 7.3 above and Section 8.6 below,
provided that any such approval is without any condition that is
materially adverse to Buyer;

(b) The satisfaction at or before Closing in all material respects of
all agreements, obligations and conditions of the Sellers
hereunder required to be performed or complied with by them on or
before Closing;

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(d) Written third party consents to all material Leases and
Agreements where required by the terms of the Lease or Agreement
or substitution by Sellers of equivalent rights without
materially adverse impact upon Buyer's enjoyment of the Acquired
Assets; and

(e) Between the date hereof and the Closing Date, there shall not
have been any material adverse change in the Acquired Assets.
Events relating to the Sellers' current effort to obtain permits
and approvals in Riverside County, California for construction of
towers on optioned property shall not be deemed to be material,
and Buyer's obligations hereunder are not subject to the success
or failure of such efforts.

8.5. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the Sellers
to consummate the transaction herein contemplated at Closing are subject
to and conditioned upon:

(a) The approval by CBC's shareholders of this Agreement and the
transaction contemplated hereunder at a meeting to be called by CBC
and held for that purpose with no more than 20% of CBC's
shareholders exercising statutory dissenter's rights;

(b) Subject to the provisions of Section 7.3 above and Section 8.6
below, the written consents of the Commission evidencing its
Final Approvals to the assignments of the Licenses to Buyer,
provided that any such approval is without any conditions that
are materially adverse to the Sellers;

(c) The satisfaction at or before Closing of all agreements,
obligations and conditions of Buyer hereunder required to be
performed or complied with by it at or before the Closing;

(d) The receipt by Sellers from their investment banker of an opinion
confirming the fairness of the consideration payable hereunder to
Sellers by Buyer; and

(e) The material accuracy of the representations and warranties made
by Buyer.

8.6. PARTIALLY DEFERRED CLOSING. The parties recognize that due to the FCC
license renewal schedule the application for renewal of Licenses held by
KPLS-AM will not be filed until August 1, 1997, and that FCC approvals of
the assignments of the other Licenses may occur and become Final Orders
prior to approval of the assignment of Station KPLS(AM)'s License or its
renewal. The parties agree that in such event, Closing shall occur with
respect to all of the Acquired Assets except those held by CRLA and
KPLS-AM within five (5) days of Final Approvals of assignments of the
other Licenses. A portion of the purchase price payable hereunder equal
to the Aggregate Station Value allocated to the Acquired Assets
associated with the operation of Station KPLS(AM) shall be paid into
escrow to be disbursed in accordance with an escrow agreement in the form
attached hereto as EXHIBIT C (the "Closing Escrow Agreement").

ARTICLE 9
MISCELLANEOUS PROVISIONS

9.1. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants of Sellers contained in this
Agreement shall survive for a period of twenty-four (24) months after the
Closing Date.

9.2. EXECUTION OF DOCUMENTS. The parties agree to execute all applications,
documents and instruments which may be necessary for the consummation of
the transaction contemplated hereunder, or which

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might be from time to time reasonably requested by any party hereto in
connection therewith, whether before or after the date of Closing.

9.3. NOTICES. All notices, requests, elections, demands and other
communications given pursuant to this Agreement shall be in writing and
shall be duly given when delivered personally or when deposited in the
mail, certified or registered mail, postage prepaid, return receipt
requested, and shall be addressed as follows:

If to the Sellers
(or any of them): Children's Broadcasting Corporation
724 First Street North, Fourth Floor
Minneapolis, Minnesota 55401
Attention: Mr. Christopher T. Dahl

with copy to: Children's Broadcasting Corporation
724 First Street North, Fourth Floor
Minneapolis, Minnesota 55401
Attention: Lance W. Riley, Esq.

If to Buyer: Global Broadcasting Company, Inc.
515 Madison Avenue
Suite 1111
New York, New York 10022
Attention: Mr. Gregory D. Deieso

with copy to: Harold K. McCombs, Jr., Esq.
Duncan, Weinberg, Miller & Pembroke, P.C.
1615 M Street, N.W.
Suite 800
Washington, D.C. 20036

9.4. EXHIBITS AND SCHEDULES. All Exhibits and Schedules referred to herein
are incorporated into this Agreement by reference for all purposes and
shall be deemed part of this Agreement.

9.5. ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement
together with all Exhibits and Schedules referred to herein contain all
of the terms and conditions agreed upon by the parties hereto with
respect to the transaction contemplated hereunder.

9.6. ASSIGNABILITY. None of the parties may assign their rights or
obligations under this Agreement without the prior written consent of the
other parties, except that any party may make an assignment to an entity
under essentially common control as the assigning entity.

9.7. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the representatives, heirs, estates, successors, and assigns
of the parties hereto.

9.8. HEADING. The headings contained in this Agreement are for reference only
and shall not effect in any way the meaning or interpretation of this
Agreement.

9.9. COUNTERPARTS. This Agreement and any other instrument to be signed by
the parties hereto may be executed by the parties, together or
separately, in two or more identical counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one
and the same instrument.

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9.10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota. The parties hereto
hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Minnesota and of
the United States of America located in the State of Minnesota for any
actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby (and they agree not
to commence any action, suit or proceeding relating thereto except in
such courts) and further agree that service of any process, summons,
notice or document by U.S. registered mail to the addresses set forth
above shall be effective service of process for any action, suit or
proceeding arising out of this Agreement, in the courts of the State
of Minnesota or the United States of America located in the State of
Minnesota, and hereby further irrevocably and unconditionally waive and
agree not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an
inconvenient forum.

9.11. BROKER COMMISSION. The Sellers and Buyer each represent to the other
that they have not engaged a broker in connection with the contemplated
transaction, except that CBC has engaged Star Media Group, Inc. with
respect to that portion of the transaction associated with the
operations of Stations WJDM(AM) and WAUR(AM), and Buyer has engaged
Star Media Group, Inc. with respect to the entire contemplated
transaction, and each party agrees to pay the respective commissions
owed under such agreements and agree to indemnify and hold the other
party or parties harmless against any claims made by a broker through
it or them in connection with the transactions contemplated hereunder.

9.12. SALES TAX. Any sales tax, including bulk sales taxes (if applicable),
due upon consummation of this transaction will be computed at Closing
and paid by the Sellers and any claims or proceedings arising therefrom
shall be the sole responsibility of Sellers. Sellers agree to
indemnify and hold Buyer harmless against any such claims in connection
with the transactions contemplated hereunder.

IN WITNESS WHEREOF, the parties hereto, by their properly authorized
representatives, have caused this Agreement to be executed as of the day and
date first above written.

CHILDREN'S BROADCASTING CORPORATION GLOBAL BROADCASTING COMPANY, INC.

BY: /s/Christopher T. Dahl BY: /s/Gregory Deieso
---------------------- -----------------

ITS: President and CEO ITS: CEO and Chairman
----------------- ----------------

CHILDREN'S RADIO OF CHICAGO, INC. WAUR-AM, INC.

BY: /s/Christopher T. Dahl BY: /s/Christopher T. Dahl
---------------------- ----------------------