NOTE 16. SUBSEQUENT EVENTS

On April 10, 2012, we completed the acquisition of radio station WKDL-AM in Warrenton, Virginia for $30,000. We began programming the station upon the close of the transaction.

On April 27, 2012, we received a non-binding commitment letter from First California Bank (“FCB”) (the “Letter”). Pursuant to the Letter, FCB has committed to provide an unsecured term credit facility in a principal amount of $10 million (the “FCB Facility”). FCB’s commitment to make the FCB Facility available to Salem is subject to the execution of a definitive loan agreement and other documentation acceptable to the FCB and its counsel.

        The proceeds of the FCB Facility may be used to repurchase a portion of Salem’s outstanding senior secured notes. Outstanding amounts under the FCB Facility will bear interest at a floating rate equal to Wall Street Journal (“WSJ”) Prime Rate plus 1.0% (adjusted when WSJ’s Prime Rate changes) with a minimum interest rate of 4.25%. Interest is payable monthly. In addition, the term of the FCB Facility will be twenty four months. Amounts borrowed under the FCB Facility may be repaid at Salem’s discretion without penalty or premium.

The indebtedness under the FCB Facility will be subordinated to the indebtedness under the existing Revolver. A separate subordination agreement is anticipated to be entered into among Wells Fargo, FCB and Salem and the description of terms herein is subject to such subordination agreement. The parties intend to execute definitive credit agreements reflecting the terms set forth in the Letter on or before May 31, 2012.

Subsequent events reflect all applicable transactions through the date of the filing.