Exhibit 10.3
ASSET PURCHASE AGREEMENT
     THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of August 19,
2005 among Emmis Television Broadcasting, L.P., an Indiana limited partnership,
Emmis Television License, LLC, an Indiana limited liability company, and Emmis
Indiana Broadcasting, L.P., an Indiana limited partnership (collectively,
“Seller”) and LIN Television Corporation, a Delaware corporation (“Buyer”).
Recitals
     A. Seller owns and operates the following television broadcast stations
(each a “Station” and collectively the “Stations”) pursuant to certain
authorizations issued by the Federal Communications Commission (the “FCC”):
WALA-TV, Mobile, Alabama
WBPG(TV), Gulf Shores, Alabama
WLUK-TV, Green Bay, Wisconsin
WTHI-TV, Terre Haute, Indiana
KRQE(TV), Albuquerque, New Mexico
KBIM-TV, Roswell, New Mexico
KREZ-TV, Durango, Colorado
     B. Pursuant to the terms and subject to the conditions set forth in this
Agreement, Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, the Station Assets (defined below).
Agreement
     NOW, THEREFORE, taking the foregoing into account, and in consideration of
the mutual covenants and agreements set forth herein, the parties, intending to
be legally bound, hereby agree as follows:
ARTICLE 1: PURCHASE OF ASSETS
     1.1. Station Assets. On the terms and subject to the conditions hereof, at
Closing (defined below), except as set forth in Sections 1.2 and 1.3, Seller
shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall
purchase and acquire from Seller, all right, title and interest of Seller in and
to all assets and properties of Seller, real and personal, tangible and
intangible, that are used or held for use in the operation of the Stations (the
“Station Assets”), free and clear of all Liens except Permitted Liens (defined
below) including without limitation the following:
          (a) all licenses, permits and other authorizations issued to Seller by
the FCC with respect to the Stations (the “FCC Licenses”), including those
described on Schedule 1.1(a), including any renewals or modifications thereof
between the date hereof and Closing;
          (b) all of Seller’s equipment, transmitters, antennas, cables, towers,
vehicles, furniture, fixtures, spare parts and other tangible personal property
of every kind and description that are used or held for use in the operation of
the Stations, including without limitation those

 

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listed on Schedule 1.1(b), except for any retirements or dispositions thereof
made between the date hereof and Closing in the ordinary course of business (the
“Tangible Personal Property”);
          (c) all of Seller’s real property used or held for use in the
operation of the Stations (including any appurtenant easements and improvements
located thereon), including without limitation those listed on Schedule 1.1(c)
(the “Real Property”);
          (d) all agreements for the sale of advertising time on the Stations,
and all other contracts, agreements and leases used in the Stations’ business,
including without limitation those listed on Schedule 1.1(d), together with all
contracts, agreements and leases made between the date hereof and Closing in
accordance with Article 4 (the “Station Contracts”);
          (e) all of Seller’s rights in and to the following (the “Intangible
Property”): the Stations’ call letters and Seller’s rights in and to the
trademarks, trade names, service marks, internet domain names, copyrights,
programs and programming material, jingles, slogans, logos, and other intangible
property which are used or held for use in the operation of the Stations,
including without limitation those listed on Schedule 1.1(e); and
          (f) Seller’s rights in and to all the files, documents, records, and
books of account (or copies thereof) relating to the operation of the Stations,
including the Stations’ local public files, programming information and studies,
engineering data, advertising studies, marketing and demographic data, sales
correspondence, lists of advertisers, credit and sales reports, and logs, but
excluding records relating to Excluded Assets (defined below).
     1.2. Excluded Assets. Notwithstanding anything to the contrary contained
herein, the Station Assets shall not include the following assets or any rights,
title and interest therein (the “Excluded Assets”):
          (a) all cash and cash equivalents of Seller, including without
limitation certificates of deposit, commercial paper, treasury bills, marketable
securities, money market accounts and all such similar accounts or investments;
          (b) all tangible and intangible personal property of Seller retired or
disposed of between the date of this Agreement and Closing in accordance with
Article 4;
          (c) all Station Contracts that are terminated or expire prior to
Closing in accordance with Article 4;
          (d) Seller’s corporate and trade names unrelated to the operation of
the Stations (including the name “Emmis”), charter documents, and books and
records relating to the organization, existence or ownership of Seller,
duplicate copies of the records of the Stations, and all records not relating to
the operation of the Stations;
          (e) all contracts of insurance, all coverages and proceeds thereunder
and all rights in connection therewith, including without limitation rights
arising from any refunds due with respect to insurance premium payments to the
extent related to such insurance policies;

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          (f) all pension, profit sharing plans and trusts and the assets
thereof and any other employee benefit plan or arrangement and the assets
thereof, if any, maintained by Seller and any affiliates of Seller;
          (g) the Stations’ accounts receivable and any other rights to payment
of cash consideration (including without limitation all rights to payments under
the Stations’ network affiliation agreements, whether or not offset) for goods
or services sold or provided prior to the Effective Time (defined below) or
otherwise arising during or attributable to any period prior to the Effective
Time (the “A/R”);
          (h) any computer software and programs used in the operation of the
Stations that are not transferable;
          (i) all rights and claims of Seller, whether mature, contingent or
otherwise, against third parties with respect to the Stations and the Station
Assets, to the extent arising during or attributable to any period prior to the
Effective Time;
          (j) all deposits and prepaid expenses (and rights arising therefrom or
related thereto), except to the extent Seller receives a credit therefor under
Section 1.7;
          (k) all claims of Seller with respect to any Tax (defined below)
refunds to the extent attributable to a taxable period ending on or prior to the
Effective Time;
          (l) computers and other assets located at the Emmis Communications
Corporation headquarters, and the centralized server facility, data links,
payroll system and other operating systems and related assets that are used in
the operation of multiple stations; and
          (m) the assets listed on Schedule 1.2, and the slogan “Great Media,
Great People, Great Service.”
     1.3. Shared Assets.
          (a) Some of the Station Contracts may be used in the operation of
multiple stations or other business units (the “Shared Contracts”) and are
identified on Schedule 1.1(d). The rights and obligations under the Shared
Contracts shall be equitably allocated among stations in a manner reasonably
determined by Seller in accordance with the following equitable allocation
principles:
                    (i) any allocation set forth in the Shared Contract shall
control;
                    (ii) if none, then any allocation previously made by Seller
in the ordinary course of Station operations shall control;
                    (iii) if none, then the quantifiable proportionate benefit
to be received by the parties after Closing shall control; and
                    (iv) if not quantifiable, then reasonable accommodation
shall control.

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          (b) Buyer shall cooperate with Seller (and any third party designated
by Seller) in such allocation, and the Station Contracts (and Assumed
Obligations (defined below)) will include only Buyer’s allocated portion of the
rights and obligations under the Shared Contracts (without need for further
action and whether such allocation occurs before or after Closing). If
designated by Seller, such allocation will occur by termination of the Shared
Contract and execution of new contracts. Buyer’s allocated portion of the Shared
Contracts will not include any group discounts or similar benefits specific to
Seller or its affiliates. Completion of documentation of any such allocation is
not a condition to Closing.
          (c) Seller operates a centralcasting facility serving WKCF (Orlando),
WVUE (New Orleans), WFTX (Ft. Myers) and WALA and WBPG (Mobile-Pensacola). If
the Stations include any of such stations, then the terms set forth on
Schedule 1.3 shall apply. Assets used in the operation of such facility are
Excluded Assets. If any Schedule attached hereto includes any such items, then
such items are nonetheless Excluded Assets. If applicable, at Closing, the
parties shall enter into the agreements set forth on Schedule 1.3, in the forms
attached hereto as Exhibit 1.3 (or, where appropriate, the parties shall execute
an assignment and assumption agreement with respect to such agreements).
          (d) Seller also operates WTHI (Terre Haute) on a combined basis with
certain radio stations. If the Stations include any such stations, then shared
assets shall be allocated as set forth on Schedule 1.3, and to the extent not
allocated to Buyer pursuant to such Schedule, such assets shall be Excluded
Assets. If any other Schedule attached hereto includes any items that are shared
but not allocated to Buyer pursuant to Schedule 1.3, then such items are
nonetheless Excluded Assets. If applicable, at Closing, the parties shall enter
into the agreements set forth on Schedule 1.3, which may include (if applicable)
shared services agreements and shared facilities agreements, in the forms
attached hereto as Exhibit 1.3 (or, where appropriate, the parties shall execute
an assignment and assumption agreement with respect to such agreements).
     1.4. Assumption of Obligations. On the Closing Date (defined below), Buyer
shall assume the obligations of Seller arising during, or attributable to, any
period of time on or after the Closing Date under the Station Contracts and the
FCC Licenses, the obligations described in Section 5.7 and any other liabilities
of Seller to the extent Buyer receives a credit therefor under Section 1.7
(collectively, the “Assumed Obligations”). Except for the Assumed Obligations,
Buyer does not assume, and will not be deemed by the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby to
have assumed, any other liabilities or obligations of Seller (the “Retained
Obligations”).
     1.5. Purchase Price. In consideration for the sale of the Station Assets to
Buyer, at Closing Buyer shall pay Seller, by wire transfer of immediately
available funds, the sum of Two Hundred Sixty Million Dollars ($260,000,000),
subject to adjustment pursuant to Sections 1.7 and 5.10 (the “Purchase Price”).
     1.6. Deposit. Within one (1) business day of the date of this Agreement,
Buyer shall make a cash deposit in immediately available funds in an amount
equal to 7.5% of the Purchase Price (the “Deposit”) with Bank of America (the
“Escrow Agent”) pursuant to the Escrow Agreement (the “Escrow Agreement”) of
even date herewith among Buyer, Seller and the Escrow Agent. At Closing, the
Deposit shall be disbursed to Seller and applied to the Purchase

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Price and any interest accrued thereon shall be disbursed to Buyer. If this
Agreement is terminated by Seller pursuant to Section 10.1(c), the Deposit and
any interest accrued thereon shall be disbursed to Seller and credited as
partial payment of liquidated damages under Section 10.5. If this Agreement is
terminated for any other reason, the Deposit and any interest accrued thereon
shall be disbursed to Buyer. The parties shall each instruct the Escrow Agent to
disburse the Deposit and all interest thereon to the party entitled thereto and
shall not, by any act or omission, delay or prevent any such disbursement. Any
failure by Buyer to make the Deposit within one (1) business day of the date
hereof constitutes a material default as to which the Cure Period under
Section 10.1 does not apply entitling Seller to immediately terminate this
Agreement.
     1.7. Prorations and Adjustments.
          (a) All prepaid and deferred income and expenses relating to the
Station Assets and arising from the operation of the Stations shall be prorated
between Buyer and Seller in accordance with accounting principles generally
accepted in the United States (“GAAP”) as of 12:01 a.m. on the day of Closing
(the “Effective Time”). Such prorations shall include without limitation all
music and other license fees, employee performance incentives set forth in
employment agreements or annual compensation plans, any vacation for Transferred
Employees (defined below) (except accruals for the fiscal year of Seller in
which Closing occurs for which there shall be no adjustment), utility expenses,
rent and other amounts under Station Contracts and similar prepaid and deferred
items. Seller shall receive a credit for all of the Stations’ deposits and
prepaid expenses. Sales commissions related to the sale of advertisements
broadcast on the Stations prior to Closing shall be the responsibility of
Seller, and sales commissions related to the sale of advertisements broadcast on
the Stations after Closing shall be the responsibility of Buyer. All Taxes,
other than transfer taxes, related to the Station Assets accrued or accruable
with respect to events occurring on or prior to the Effective Time shall be
borne by Seller. All Taxes related to the Station Assets accrued or accruable
with respect to events occurring after the Effective Time shall be borne by
Buyer. Ad valorem, real estate and other property Taxes (except transfer taxes
as provided by Section 11.1), if any, with respect to the Station Assets shall
be pro-rated on a per diem basis.
          (b) With respect to trade, barter or similar agreements for the sale
of time for goods or services assumed by Buyer pursuant to Section 1.1(d), if at
Closing the Stations have an aggregate negative or positive barter balance
(i.e., the amount by which the value of air time to be provided by the Stations
after the Effective Time exceeds, or conversely, is less than, the fair market
value of corresponding goods and services), there shall be no proration or
adjustment, unless the negative or positive barter balance of the Stations as an
aggregate exceeds $50,000 per Station, in which event such excess or deficiency,
as the case may be, shall be treated either as prepaid time sales or a
receivable of Seller, and adjusted for as a proration in Buyer’s or Seller’s
favor, as applicable. In determining barter balances, the value of air time
shall be based upon Seller’s rates as of Closing, and corresponding goods and
services shall include those to be received by the Stations after Closing plus
those received by the Stations before Closing to the extent conveyed by Seller
to Buyer as a part of the Station Assets.
          (c) No later than three (3) business days prior to the scheduled
Closing date, Seller shall provide Buyer with a statement setting forth a
reasonably detailed computation of Seller’s reasonable and good faith estimate
of the Adjustment Amount (defined below) as of

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Closing (the “Preliminary Adjustment Report”). As used herein, the “Adjustment
Amount” means the net amount by which the Purchase Price is to be increased or
decreased in accordance with this Section 1.7. If the Adjustment Amount
reflected on the Preliminary Adjustment Report is a credit to Buyer, then the
Purchase Price payable at Closing shall be reduced by the amount of the
preliminary Adjustment Amount, and if the Adjustment Amount reflected on the
Preliminary Adjustment Report is a charge to Buyer, then the Purchase Price
payable at Closing shall be increased by the amount of such preliminary
Adjustment Amount. For a period of ninety (90) days after Closing, Seller and
its auditors and Buyer and its auditors may review the Preliminary Adjustment
Report and the related books and records of Seller with respect to the Stations,
and Buyer and Seller will in good faith seek to reach agreement on the final
Adjustment Amount. If agreement is reached within such 90-day period, then
promptly thereafter Seller shall pay to Buyer or Buyer shall pay to Seller, as
the case may be, an amount equal to the difference between (i) the agreed
Adjustment Amount and (ii) the preliminary Adjustment Amount indicated in the
Preliminary Adjustment Report. If agreement is not reached within such 90-day
period, then the dispute resolutions of Section 1.7(d) shall apply.
          (d) If the parties do not reach an agreement on the Adjustment Amount
within the 90-day period specified in Section 1.7(c), then Seller and Buyer
shall select an independent accounting firm of recognized national standing (the
“Arbitrating Firm”) to resolve the disputed items. If Seller and Buyer do not
agree on the Arbitrating Firm within five (5) calendar days after the end of
such 90-day period, then the Arbitrating Firm shall be a nationally recognized
independent accounting firm selected by lot (after excluding one firm designated
by Seller and one firm designated by Buyer). Buyer and Seller shall each inform
the Arbitrating Firm in writing as to their respective positions with respect to
the Adjustment Amount, and each shall make available to the Arbitrating Firm any
books and records and work papers relevant to the preparation of the Arbitrating
Firm’s computation of the Adjustment Amount. The Arbitrating Firm shall be
instructed to complete its analysis within thirty (30) days from the date of its
engagement and upon completion to inform the parties in writing of its own
determination of the Adjustment Amount, the basis for its determination and
whether its determination is within the Mid-Range (defined below) or if not,
whether it is closer to Buyer’s or Seller’s written determination of the
Adjustment Amount. Any determination by the Arbitrating Firm in accordance with
this Section shall be final and binding on the parties. Within five (5) calendar
days after the Arbitrating Firm delivers to the parties its written
determination of the Adjustment Amount, Seller shall pay to Buyer, or Buyer
shall pay to Seller, as the case may be, an amount equal to the difference
between (i) the Adjustment Amount as determined by the Arbitrating Firm and
(ii) the preliminary Adjustment Amount indicated in the Preliminary Adjustment
Report.
          (e) If the Arbitrating Firm’s determination of the Adjustment Amount
is within the Mid-Range, then Seller and Buyer shall each pay one-half of the
fees and disbursements of the Arbitrating Firm in connection with its analysis.
If not, then (i) if the Arbitrating Firm determines that the written position of
Buyer concerning the Adjustment Amount is closer to its own determination, then
Seller shall pay the fees and disbursements of the Arbitrating Firm in
connection with its analysis, or (ii) if the Arbitrating Firm determines that
the written position of Seller concerning the Adjustment Amount is closer to its
own determination, then Buyer shall pay the fees and disbursements of the
Arbitrating Firm in connection with its analysis. As used herein, the term
“Mid-Range” means a range that (i) equals twenty percent (20%) of the absolute
difference between the written positions of Buyer and Seller as to the
Adjustment Amount and (ii) has a midpoint equal to the average of such written
positions of Buyer and Seller.

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          (f) Concurrently with the payment of any amount required to be paid
under Section 1.7(c) or (d), the payor shall pay the payee interest on such
amount for the period from the Closing Date until the date paid at a rate equal
to seven percent (7%) per annum. All payments to be made under Section 1.7 shall
be paid by wire transfer in immediately available funds to the account of the
payee at a financial institution in the United States and shall for all purposes
constitute an adjustment to the Purchase Price.
     1.8. Allocation. After Closing, Buyer and Seller will allocate the Purchase
Price in accordance with the respective fair market values of the Station Assets
and the goodwill being purchased and sold in accordance with the requirements of
Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”) based
upon an appraisal by a nationally recognized broadcast appraiser acceptable to
Buyer and Seller (whose fees shall be paid one-half by Seller and one-half by
Buyer). Buyer and Seller shall file its federal income tax returns and its other
tax returns reflecting the allocation made pursuant to this Section.
     1.9. Closing. The consummation of the sale and purchase of the Station
Assets provided for in this Agreement (the “Closing”) shall take place on the
fifth business day after the date of the FCC Consent pursuant to the FCC’s
initial order (or on such earlier day after such consent as Buyer and Seller may
mutually agree), subject to the satisfaction or waiver of the conditions set
forth in Articles 6 or 7 below. The date on which the Closing is to occur is
referred to herein as the “Closing Date.”
     1.10. Governmental Consents.
          (a) Within five (5) business days of the date of this Agreement, Buyer
and Seller shall file an application with the FCC (the “FCC Application”)
requesting FCC consent to the assignment of the FCC Licenses to Buyer. FCC
consent to the assignment of the main station FCC Licenses to Buyer is referred
to herein as the “FCC Consent.” Buyer and Seller shall diligently prosecute the
FCC Application and otherwise use their commercially reasonable efforts to
obtain the FCC Consent as soon as possible.
          (b) If applicable, within ten (10) business days after the date of
this Agreement, Buyer and Seller shall make any required filings with the
Federal Trade Commission and the United States Department of Justice pursuant to
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”) with respect to the transactions contemplated hereby (including a request
for early termination of the waiting period thereunder), and shall thereafter
promptly respond to all requests received from such agencies for additional
information or documentation. Expiration or termination of any applicable
waiting period under the HSR Act is referred to herein as “HSR Clearance.”
          (c) Buyer and Seller shall notify each other of all documents filed
with or received from any governmental agency with respect to this Agreement or
the transactions contemplated hereby. Buyer and Seller shall furnish each other
with such information and assistance as the other may reasonably request in
connection with their preparation of any governmental filing hereunder. The FCC
Consent and HSR Clearance are referred to herein collectively as the
“Governmental Consents.”

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     1.11. Renewal. The main station FCC Licenses expire on the dates set forth
on Schedule 1.1(a). If due prior to Closing and if not previously filed, then
Seller shall timely file FCC renewal applications with respect to the Stations
and thereafter prosecute such applications. The parties acknowledge that under
current FCC policy, either the FCC will not grant an assignment application
while a renewal application is pending, or the FCC will grant an assignment
application with a renewal condition. If the FCC Application is granted subject
to a renewal condition, then the term “FCC Consent” shall mean FCC consent to
the FCC Application and satisfaction of such renewal condition.
     1.12. Multiple Closings. Notwithstanding anything in this Agreement to the
contrary:
          (a) the parties have allocated the Stations into groups (each a
“Station Group”) and have allocated the Purchase Price (each an “Allocated
Price”) as follows:

              Station Group   Stations   Allocated Price
 
           
Albuquerque Group
  KRQE(TV), Albuquerque, New Mexico   $ 74,000,000  

  KBIM-TV, Roswell, New Mexico        
 
           
Durango Group
  KREZ-TV, Durango, Colorado   $ 1,000,000  
 
           
Mobile Group
  WALA-TV, Mobile, Alabama   $ 85,000,000  

  WBPG(TV), Gulf Shores, Alabama        
 
           
Green Bay Group
  WLUK-TV, Green Bay, Wisconsin   $ 60,000,000  
 
           
Terre Haute Group
  WTHI-TV, Terre Haute, Indiana   $ 40,000,000  

          (b) the FCC Application shall consist of separate applications (each a
“Partial Application”), one for each Station Group, and the transactions
contemplated by this Agreement shall be consummated as follows: (i) if such
applications are granted concurrently, then in a single Closing, or (ii) if not,
then in multiple Closings (each a “Partial Closing”), one for each Station
Group;
          (c) with respect to each Station Group, each Partial Closing shall
occur on the fifth business day after the date of the FCC Consent with respect
to the applicable Partial Application (subject to the satisfaction or waiver of
the applicable conditions set forth in Articles 6 or 7 below), except that if
the day the Durango Group Partial Closing is otherwise scheduled to occur is
before the Albuquerque Group Partial Closing, then the Durango Group Partial
Closing shall be scheduled for the date of the Albuquerque Group Partial
Closing;
          (d) at each Partial Closing Seller shall convey to Buyer the Station
Assets used or held for use in the operation of the Stations in the applicable
group and Buyer shall pay Seller the Allocated Price for such group; and

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          (e) taking into account such multiple closings:
                    (i) the terms “Closing,” “Closing Date,” “FCC Application”
and “FCC Consent” shall mean, and refer separately to, the applicable Partial
Closing, the date on which such Partial Closing occurs (or is to occur), the
applicable Partial Application, and the applicable FCC consent, each as the
context requires;
                    (ii) with respect to each Station Group and each Partial
Closing, the provisions of this Agreement that apply before, at or after a
Closing shall apply before, at or after the applicable Partial Closing;
                    (iii) the Deposit shall be allocated and disbursed pro rata
according to the Allocated Price to be paid at each Partial Closing, and the
term “Deposit” as used herein shall mean, and refer separately to the allocable
portion thereof as the context requires (but shall mean the full amount thereof
if this Agreement is terminated without any Closing);
                    (iv) for purposes of Section 9.2, with respect to each
Partial Closing, the maximum liability amount shall be determined based upon the
Allocated Price for such Partial Closing;
                    (v) for purposes of Section 10.5, after each Partial Closing
the liquidated damage amount shall be determined based upon the Allocated Price
for the Station Groups for which a Partial Closing has not occurred;
                    (vi) any termination of this Agreement prior to the first
Partial Closing shall constitute a termination of this Agreement in its
entirety, but after the first Partial Closing, any termination of this Agreement
shall constitute a termination only with respect to the Station Assets not
subject to any prior Partial Closing, each Partial Closing being final and
non-rescindable; and
                    (vii) with respect to the Albuquerque Group and the Durango
Group, the Outside Date (defined below) shall be May 31, 2006.
          (f) Without limiting the parties’ obligations under this Section 1.12
to do Partial Closings, the parties agree to consult with one-another in an
effort to minimize the number of Partial Closings to the extent circumstances
warrant, but no such consultation is a condition to Closing.
ARTICLE 2: SELLER REPRESENTATIONS AND WARRANTIES
     Seller makes the following representations and warranties to Buyer:
     2.1. Organization. Seller is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, and is
qualified to do business in each jurisdiction in which the Station Assets are
located. Seller has the requisite power and authority to execute, deliver and
perform this Agreement and all of the other agreements and instruments to be
made by Seller pursuant hereto (collectively, the “Seller Ancillary Agreements”)
and to consummate the transactions contemplated hereby.

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     2.2. Authorization. The execution, delivery and performance of this
Agreement and the Seller Ancillary Agreements by Seller have been duly
authorized and approved by all necessary action of Seller and do not require any
further authorization or consent of Seller. This Agreement is, and each Seller
Ancillary Agreement when made by Seller and the other parties thereto will be, a
legal, valid and binding agreement of Seller enforceable in accordance with its
terms, except in each case as such enforceability may be limited by bankruptcy,
moratorium, insolvency, reorganization or other similar laws affecting or
limiting the enforcement of creditors’ rights generally and except as such
enforceability is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
     2.3. No Conflicts. Except as set forth on Schedule 2.3 and except for the
Governmental Consents and consents to assign certain of the Station Contracts as
set forth on Schedule 1.1(c) or Schedule 1.1(d), the execution, delivery and
performance by Seller of this Agreement and the Seller Ancillary Agreements and
the consummation by Seller of any of the transactions contemplated hereby does
not (i) conflict with any organizational documents of Seller, (ii) conflict
with, result in a breach of or give rise to a right of termination or
acceleration or constitute a default under any Station Contracts, (iii) conflict
with any law, judgment, order, or decree to which Seller is subject, or
(iv) require the consent or approval of, or a filing by Seller with, any
governmental or regulatory authority or any third party.
     2.4. FCC Licenses. Except as set forth on Schedule 1.1(a):
          (a) Seller is the holder of the FCC Licenses described on
Schedule 1.1(a), which are all of the FCC licenses, permits and authorizations
required for the present operation of the Stations. The FCC Licenses are in full
force and effect and have not been revoked, suspended, canceled, rescinded or
terminated and have not expired. There is not pending any action by or before
the FCC to revoke, suspend, cancel, rescind or materially adversely modify any
of the FCC Licenses (other than proceedings to amend FCC rules of general
applicability). There is not issued or outstanding, by or before the FCC, any
order to show cause, notice of violation, notice of apparent liability, or order
of forfeiture against the Stations or against Seller with respect to the
Stations that could result in any such action. The Stations are operating in
compliance in all material respects with the FCC Licenses, the Communications
Act of 1934, as amended (the “Communications Act”), and the rules, regulations
and policies of the FCC.
          (b) Each Station has been assigned a channel by the FCC for the
provision of digital television (“DTV”) service, and the FCC Licenses include
such authorization. The Stations are broadcasting the DTV signal in accordance
with such authorization in all material respects.
     2.5. Taxes.
          (a) Seller has, in respect of the Stations’ business, filed all Tax
Returns (defined below) required to have been filed by it under applicable law,
and has paid all Taxes which have become due pursuant to such Tax Returns or
pursuant to any assessments which have become payable. Seller is not a foreign
person within the meaning of Section 1445 of the Code.

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          (b) As used herein, (i) “Tax” (and, in the plural, “Taxes”) shall mean
(A) any domestic or foreign federal, state or local taxes, charges, fees,
levies, imposts, duties and governmental fees or other like assessments or
charges of any kind whatsoever (including without limitation any income, net
income, gross income, receipts, windfall profit, severance, property,
production, sales, use, license, excise, registration, franchise, employment,
payroll, withholding, alternative or add-on minimum, intangibles, ad valorem,
transfer, gains, stamp, estimated, transaction, title, capital, paid-up capital,
profits, occupation, premium, value-added, recording, real property, personal
property, inventory and merchandise, business privilege, federal highway use,
commercial rent or environmental tax), and (B) all interest, penalties, fines,
additions to tax or additional amounts imposed by any taxing authority in
connection with any item described in clause (A), and (ii) “Tax Returns” shall
mean any return, report or statement required to be filed with respect to any
Tax (including any attachments thereto and any amendments thereof) including
without limitation any information return, claim for refund, amended return or
declaration of estimated Tax, and including, where permitted or required,
consolidated, combined or unitary returns for any group of entities that
includes any Seller.
     2.6. Personal Property. Schedule 1.1(b) contains a list of material items
of Tangible Personal Property included in the Station Assets, subject to
Section 1.3(c). Except as set forth on Schedule 1.1(b), Seller has good and
marketable title to the Tangible Personal Property free and clear of liens,
claims and encumbrances (“Liens”) other than Permitted Liens (defined below).
Except as set forth on Schedule 1.1(b) or Schedule 1.1(d), to Seller’s
knowledge, Seller has good and marketable title to the shares of stock in Sandia
Television Corporation referenced on Schedule 1.1(d) free and clear Liens other
than Permitted Liens. Except as set forth on Schedule 1.1(b), all material items
of Tangible Personal Property are in normal operating condition, ordinary wear
and tear excepted. As used herein, “Permitted Liens” means, collectively, the
Assumed Obligations, the shared use arrangements described in Section 1.3, liens
for taxes not yet due and payable, liens that will be released at or prior to
Closing, and such other easements, rights of way, building and use restrictions,
exceptions, reservations and limitations that do not in any material respect
detract from the value of the property subject thereto or impair the use thereof
in the ordinary course of the business of the Stations.
     2.7. Real Property. Schedule 1.1(c) contains a description of all Real
Property included in the Station Assets, subject to Section 1.3(c). Seller has
good and marketable fee simple title to the owned Real Property described on
Schedule 1.1(c) (the “Owned Real Property”) free and clear of Liens other than
Permitted Liens. Schedule 1.1(c) includes a description of each lease of Real
Property or similar agreement included in the Station Contracts (the “Real
Property Leases”). To Seller’s knowledge, the Real Property is not subject to
any suit for condemnation or other taking by any public authority. Except for
the Excluded Assets, the Owned Real Property and the Real Property Leases are
the only real property now used by Seller in the operation of the Stations. No
other person has an option to acquire any of the Real Property.
     2.8. Contracts. Except as set forth on Schedule 1.1(d), each of the Station
Contracts (including without limitation each of the Real Property Leases) is in
effect and is binding upon Seller and, to Seller’s knowledge, the other parties
thereto (subject to bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting the enforcement of creditors’ rights generally). Seller
has performed its obligations under each of the Station Contracts in all
material respects, and is not in material default thereunder, and to Seller’s
knowledge, no other party to any of the Station Contracts is in default
thereunder in any material respect.

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     2.9. Environmental. Seller has provided Buyer with copies of Phase I
environmental assessments of certain Real Property sites as shown on
Schedule 1.1(c) and any other Phase I environmental assessments of any of the
Real Property in its possession (each a “Phase I”). Except as set forth in any
Phase I, to Seller’s knowledge, no hazardous or toxic substance or waste
regulated under any applicable environmental, health or safety law has been
generated, stored, transported or released on, in, from or to the Real Property
included in the Station Assets. Except as set forth on Schedule 1.1(c) or in any
Phase I, to Seller’s knowledge, Seller has complied in all material respects
with all environmental, health and safety laws applicable to the Stations.
Except as set forth in any Phase I, there is no action, suit or proceeding
pending or, to Seller’s knowledge, threatened, against Seller that asserts that
Seller has violated any environmental, health or safety laws applicable to the
Real Property.
     2.10. Intangible Property. Schedule 1.1(e) contains a description of the
material Intangible Property included in the Station Assets. Except as set forth
on Schedule 1.1(e), (i) to Seller’s knowledge, Seller’s use of the Intangible
Property does not infringe upon any third party rights in any material respect;
(ii) the Intangible Property is not the subject of any pending or, to Seller’s
knowledge, threatened legal proceedings claiming infringement, unauthorized use
or violation by Seller or any Station; and (iii) Seller has not received any
written notice that its use of the Intangible Property at any Station is
unauthorized or violates or infringes upon the rights of any other person or
challenging the ownership, use, validity or enforceability of any Intangible
Property. Except as set forth on Schedule 1.1(e), to Seller’s knowledge, Seller
owns or has the right to use the Intangible Property free and clear of Liens
other than Permitted Liens.
     2.11. Employees. Except as set forth on Schedule 2.11, (i) Seller has
complied in all material respects with all labor and employment laws, rules and
regulations applicable to the Stations’ business, including without limitation
those which relate to prices, wages, hours, discrimination in employment and
collective bargaining, and (ii) there is no unfair labor practice charge or
complaint against Seller in respect of the Stations’ business pending or to
Seller’s knowledge threatened before the National Labor Relations Board, any
state labor relations board or any court or tribunal, and there is no strike,
dispute, request for representation, slowdown or stoppage pending or threatened
in respect of the Stations’ business. Except as set forth on Schedule 1.1(d) or
Schedule 2.11, Seller is not party to any collective bargaining, union or
similar agreement with respect to the employees of Seller at the Stations, and,
to Seller’s knowledge, no union represents or claims to represent or is
attempting to organize such employees.
     2.12. Insurance. Seller maintains insurance policies or other arrangements
with respect to the Stations and the Station Assets consistent with the
requirements of law and its practices for other stations in the industry, and
will maintain such policies or arrangements until the Effective Time.
     2.13. Compliance with Law. Except as set forth on Schedule 2.13, (i) Seller
has complied in all material respects with all laws, rules and regulations,
including without limitation all FCC and Federal Aviation Administration (“FAA”)
rules and regulations applicable to the operation of the Stations, and all
decrees and orders of any court or governmental authority

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which are applicable to the operation of the Stations, and (ii) to Seller’s
knowledge, there are no governmental claims or investigations pending or
threatened against Seller in respect of the Stations except those affecting the
industry generally. All towers used by the Stations that are owned by Seller are
in compliance with all painting, lighting and tower registration requirements of
the FAA and FCC.
     2.14. Litigation. Except as set forth on Schedule 2.14, there is no action,
suit or proceeding pending or, to Seller’s knowledge, threatened against Seller
in respect of the Stations that will subject Buyer or the Station Assets to any
lien or liability or which will affect Seller’s ability to perform its
obligations under this Agreement.
     2.15. Financial Statements. Seller has provided to Buyer copies of its
statements of operations for the Stations for: (i) the years ended February 29,
2004 and February 28, 2005 (the “Year End Statements”), and (ii) the quarter
ended May 31, 2005 (such statements, together with the Year End Statements, the
“Financial Statements”). The Year End Statements are the statements included in
the audited consolidated financial statements of Seller and its affiliates (but
the Year End Statements are not separately audited). The Financial Statements
have been prepared in accordance with GAAP consistently applied and in the
aggregate present fairly in all material respects the results of operations of
the Stations as operated by Seller for the respective periods covered thereby,
except that (i) shared operating expenses (if applicable) are allocated among
the Stations as determined by Seller, and (ii) such statements do not include
income tax expense or benefit, interest income and expense, disclosures required
by GAAP in notes accompanying the financial statements, retiree benefit expense
(pension, health insurance, etc.), non-cash compensation expenses associated
with the discount given to employees on stock purchases and associated with
restricted stock grants made March 1, 2005, certain revenues and expenses
associated with operating the Stations as a group and expenses attributable to
the adoption of accounting pronouncements. Between May 31, 2005 and the date of
this Agreement, the Stations have been operated in all material respects in the
manner set forth in Sections 4.1(a) through 4.1(d) and 4.1(g) and 4.1(h), as if
such Sections applied during such period.
     2.16. No Undisclosed Liabilities. There are no liabilities or obligations
of Seller that will be binding upon Buyer after the Effective Time other than
the Assumed Obligations.
     2.17. Station Assets. The Station Assets include all assets that are owned
or leased by Seller and used or held for use in the operation of the Stations in
all material respects as currently operated, except for the Excluded Assets.
     2.18 Related Party Transactions. With respect to any Station Contract
between Seller on one hand, and any affiliate of Seller or any officer, director
or employee of Seller on the other hand, that is not listed on Schedule 1.1(d)
or referenced in Schedule 1.3, such Station Contract is on commercially
reasonable terms.
ARTICLE 3: BUYER REPRESENTATIONS AND WARRANTIES
     Buyer hereby makes the following representations and warranties to Seller:
     3.1. Organization. Buyer is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, and is
qualified to do business in each jurisdiction in which the Station Assets are
located. Buyer has the requisite power and authority

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to execute, deliver and perform this Agreement and all of the other agreements
and instruments to be executed and delivered by Buyer pursuant hereto
(collectively, the “Buyer Ancillary Agreements”) and to consummate the
transactions contemplated hereby.
     3.2. Authorization. The execution, delivery and performance of this
Agreement and the Buyer Ancillary Agreements by Buyer have been duly authorized
and approved by all necessary action of Buyer and do not require any further
authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary
Agreement when made by Buyer and the other parties thereto will be, a legal,
valid and binding agreement of Buyer enforceable in accordance with its terms,
except in each case as such enforceability may be limited by bankruptcy,
moratorium, insolvency, reorganization or other similar laws affecting or
limiting the enforcement of creditors’ rights generally and except as such
enforceability is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
     3.3. No Conflicts. Except for the Governmental Consents, the execution,
delivery and performance by Buyer of this Agreement and the Buyer Ancillary
Agreements and the consummation by Buyer of any of the transactions contemplated
hereby does not (i) conflict with any organizational documents of Buyer,
(ii) conflict with, result in a breach of or give rise to a right of termination
or acceleration or constitute a material default under any material contract of
Buyer, (iii) conflict with any law, judgment, order or decree to which Buyer is
subject, or (iv) require the consent or approval of, or a filing by Buyer with,
any governmental or regulatory authority or any third party.
     3.4. Litigation. There is no action, suit or proceeding pending or, to
Buyer’s knowledge, threatened against Buyer which questions the legality or
propriety of the transactions contemplated by this Agreement or could materially
adversely affect the ability of Buyer to perform its obligations hereunder, nor
to the knowledge of Buyer, is there any reasonable basis for any such action,
suit or proceeding.
     3.5. Qualification. Buyer is legally, financially and otherwise qualified
to be the licensee of, acquire, own and operate the Stations under the
Communications Act and the rules, regulations and policies of the FCC. There are
no facts that would, under existing law and the existing rules, regulations,
policies and procedures of the FCC, disqualify Buyer as an assignee of the FCC
Licenses or as the owner and operator of the Stations. No waiver of or exemption
from any FCC rule or policy is necessary for the FCC Consent to be obtained.
There are no matters which might reasonably be expected to result in the FCC’s
denial or delay of approval of the FCC Application.
ARTICLE 4: SELLER COVENANTS
     4.1. Seller’s Covenants. Between the date hereof and Closing, except as
contemplated by Schedule 1.3 (if any), and except as permitted by this Agreement
or with the prior written consent of Buyer, which shall not be unreasonably
withheld, delayed or conditioned, Seller shall:
          (a) operate the Stations in the ordinary course of business and in all
material respects in accordance with FCC rules and regulations and with all
other applicable laws, regulations, rules and orders;

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          (b) not materially adversely modify any of the FCC Licenses;
          (c) not other than in the ordinary course of business, sell, lease,
license, convey or dispose of or agree to sell, lease, license, convey or
dispose of any of the Station Assets unless replaced with similar items of
substantially equal or greater value and utility, or create, assume or permit to
exist any Liens upon the Station Assets, except for Permitted Liens;
          (d) maintain the Tangible Personal Property in the ordinary course of
business and maintain insurance policies or other arrangements with respect to
the Station Assets;
          (e) upon reasonable notice, give Buyer and its representatives
reasonable access during normal business hours to the Station Assets, and
furnish Buyer with information relating to the Station Assets and the Station
employees that Buyer may reasonably request, provided that such access rights
shall not be exercised in a manner that interferes with the operation of the
Stations;
          (f) at Buyer’s sole cost and expense, provide, and authorize Seller’s
accountant’s to provide, Buyer any financial information regarding the Stations
that is maintained by Seller on an unconsolidated basis and requested by Buyer
that is reasonably necessary to satisfy any reporting obligations to the
Securities and Exchange Commission or reasonably necessary to obtain acquisition
financing for the Stations;
          (g) except in the ordinary course of business and as otherwise
required by law, (i) not enter into any employment, labor, or union agreement or
plan (or amendments of any such existing agreements or plan) that will be
binding upon Buyer after Closing or (ii) increase the compensation payable to
any employee of the Stations, except for bonuses and other compensation payable
by Seller in connection with the consummation of the transactions contemplated
by this Agreement;
          (h) use commercially reasonable efforts to maintain the Stations’
cable and DBS carriage existing as of the date of this Agreement, including
making timely elections of must-carry or retransmission consent and negotiating
new or extended retransmission consent agreements in the ordinary course of
business, but no new agreement is a condition to Closing;
          (i) timely make the DTV channel election for WBPG-TV, and consult with
Buyer in connection therewith, but no election or consultation is a condition to
Closing;
          (j) consult with Buyer in connection with any material amendment,
renewal or extension of any network affiliation agreement, but no consultation
is a condition to Closing; and
          (k) not, other than in the ordinary course of business, enter into new
Station Contracts or amend any existing Station Contracts.
ARTICLE 5: JOINT COVENANTS
     Buyer and Seller hereby covenant and agree as follows:

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     5.1. Confidentiality. Seller (or The Blackstone Group, LLC on behalf of
Seller) and Buyer (or an affiliate of Buyer on behalf of Buyer) are parties to a
non-disclosure agreement with respect to Seller and its television stations (the
“NDA”). To the extent not already a direct party thereto, Seller and Buyer
hereby assume the NDA and agree to be bound by the provisions thereof. Without
limiting the terms of the NDA, subject to the requirements of applicable law,
all non-public information regarding the parties and their business and
properties that is disclosed in connection with the negotiation, preparation or
performance of this Agreement (including without limitation all financial
information provided by Seller to Buyer) shall be confidential and shall not be
disclosed to any other person or entity, except in accordance with the terms of
the NDA.
     5.2. Announcements. Prior to Closing, no party shall, without the prior
written consent of the other, issue any press release or make any other public
announcement concerning the transactions contemplated by this Agreement, except
to the extent that such party is so obligated by law, in which case such party
shall give advance notice to the other.
     5.3. Control. Buyer shall not, directly or indirectly, control, supervise
or direct the operation of the Stations prior to Closing. Consistent with the
Communications Act and the FCC rules and regulations, control, supervision and
direction of the operation of the Stations prior to Closing shall remain the
responsibility of Seller as the holder of the FCC Licenses.
     5.4. Risk of Loss.
          (a) Seller shall bear the risk of any loss of or damage to any of the
Station Assets at all times until the Effective Time, and Buyer shall bear the
risk of any such loss or damage thereafter.
          (b) If prior to the Effective Time any item of Tangible Personal
Property is damaged or destroyed or otherwise not in the condition described in
Section 2.6 in any material respect, then:
                    (i) Seller shall use commercially reasonable efforts to
repair or replace such item in all material respects in the ordinary course of
business,
                    (ii) Seller’s representations and warranties, and Buyer’s
pre-Closing termination rights and post-Closing indemnification rights, are
hereby modified to take into account any such condition, and
                    (iii) if such repair or replacement is not completed prior
to Closing, then as Buyer’s sole remedy, the parties shall proceed to Closing
and Seller shall repair or replace such item in all material respects after
Closing (and Buyer will provide Seller access and any other reasonable
assistance requested by Seller with respect to such obligation).
          (c) If a Station is off the air prior to Closing, then Seller shall
use commercially reasonable efforts to return the Station to the air as promptly
as practicable in the ordinary course of business. Notwithstanding anything
herein to the contrary, if on the day otherwise scheduled for Closing a Station
is off the air, then Closing shall be postponed until the date five (5) business
days after the Station returns to the air, subject to Section 10.1.

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     5.5. Environmental. Certain Phase I’s identified the items set forth on
Schedule 1.1(c). With respect to such items:
                    (i) Seller shall have no duty to remediate such items, and
                    (ii) Seller’s representations and warranties, and Buyer’s
pre-Closing termination rights and post-Closing indemnification rights, are
hereby modified to take into account any such items.
     5.6. Consents.
          (a) The parties shall use commercially reasonable efforts to obtain
(i) any third party consents necessary for the assignment of any Station
Contract (which shall not require any payment to any such third party), and
(ii) execution of reasonable estoppel certificates by lessors under any Real
Property Leases requiring consent to assignment (if any), but no such consents
or estoppel certificates are conditions to Closing except for the Required
Consents (defined below). Receipt of consent to assign to Buyer the Stations’
unexpired (i) network affiliation agreements designated with a diamond on
Schedule 1.1(d) and (ii) main tower leases designated with a diamond on Schedule
1.1(c) (if any) is a condition precedent to Buyer’s obligation to close under
this Agreement (the “Required Consents”).
          (b) To the extent that any Station Contract may not be assigned
without the consent of any third party, and such consent is not obtained prior
to Closing, this Agreement and any assignment executed pursuant to this
Agreement shall not constitute an assignment of such Station Contract; provided,
however, with respect to each such Station Contract, Seller and Buyer shall
cooperate to the extent feasible in effecting a lawful and commercially
reasonable arrangement under which Buyer shall receive the benefits under the
Station Contract from and after Closing, and to the extent of the benefits
received, Buyer shall pay and perform Seller’s obligations arising under the
Station Contract from and after Closing in accordance with its terms.
     5.7. Employees.
          (a) For a period of two (2) years from the date of this Agreement,
Buyer shall not, without the prior written consent of Seller, solicit for
employment, induce or attempt to induce to leave Seller’s or an affiliate of
Seller’s employ, or hire, any employees of Seller or its affiliates staffed in
Seller’s Indianapolis headquarters or at any other television station owned by
Seller or its affiliates (other than (i) general solicitations not directed
solely to any such employees; and (ii) any employment or hiring of such
employees that results from such general solicitation).
          (b) If the Stations include any stations identified in Section 1.3(c)
or 1.3(d), then any shared employees shall be allocated as set forth on
Schedule 1.3. With respect to such shared employees, the terms of this
Section 5.7 shall apply only to those who are allocated to Buyer pursuant to
Schedule 1.3, and Buyer shall not solicit for hire those who are not allocated
to Buyer (other than general solicitations not directed solely to any such
employees).
          (c) Seller has provided Buyer a list showing employee positions and
annualized pay rates for employees of the Stations. Except as provided by
Section 5.7(b) and

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except for Excluded Employees (defined below), Buyer shall offer employment to
all persons employed by Seller immediately prior to Closing (including any hired
after the date hereof in the ordinary course of business or in connection with
any bifurcation of operations contemplated by Schedule 1.3) upon substantially
the same terms and conditions and with substantially the same duties as in
effect immediately preceding the Closing, including but not limited to wages,
salaries, commission rate (if applicable) and target bonuses (all determined on
a cash basis before taking into account Seller’s stock compensation program) and
with benefits which are substantially similar to the benefits Buyer provides to
its similarly situated employees. As used herein the term “Excluded Employees”
shall mean only those employees who are on inactive status (including employees
who are inactive due to leave or short-term or long-term disability, as of the
Closing Date. Buyer shall offer employment to Excluded Employees on the terms
set forth above in this Section 5.7(c) subject to the following conditions:
(i) if on medical or disability leave, when such individual is released by his
or her physician to return to active employment, and (ii) such individual
actually reports for active employment with Buyer immediately upon such medical
release, and (iii) Buyer shall not be required to offer employment under this
provision after six (6) months from the Closing Date or, if longer, after the
expiration of any period required by applicable law. With respect to each
employee who accepts such offer (collectively, the “Transferred Employees”), at
Closing employment with Seller shall terminate and employment with Buyer shall
commence. Without limiting the foregoing, if Buyer terminates the employment of
any Transferred Employee within one (1) year after Closing, Buyer shall be
responsible for any applicable severance in accordance with Seller’s severance
policy (a copy of which has been provided to Buyer), unless the Transferred
Employee is party to a written employment agreement that provides for a
different severance obligation.
          (d) With respect to Transferred Employees, Seller shall be responsible
for all compensation and benefits arising prior to the Effective Time, and Buyer
shall be responsible for all compensation and benefits arising after the
Effective Time. Notwithstanding anything herein to the contrary, Buyer shall
grant credit to each Transferred Employee for all unused vacation accrued as of
the Effective Time as an employee of Seller, and Buyer shall assume and
discharge Seller’s obligation to provide such leave to such employees (such
obligations being a part of the Assumed Obligations).
          (e) Buyer shall permit Transferred Employees (and their spouses and
dependents) to participate in its “employee welfare benefit plans” (including
without limitation health insurance plans) and “employee pension benefit plans”
(as defined in Section 3(1) and 3(2) of ERISA, respectively) which are
substantially similar to the employee benefits Buyer provides to its similarly
situated employees, with coverage effective immediately upon Closing (and
without exclusion from coverage on account of any pre-existing condition), with
service with Seller deemed service with the Buyer for purposes of any length of
service requirements, waiting periods, vesting periods and differential benefits
based on length of service (but not accruals under defined benefits pension
plans), and with credit under any welfare benefit plan for any deductibles or
co-payments paid for the current plan year under any plan maintained by Seller.
          (f) Buyer shall also permit each Transferred Employee who participates
in the Seller’s 401(k) plan to elect to make direct rollovers of their account
balances into the Buyer’s 401(k) plan as of Closing, including the direct
rollover of any outstanding loan balances such

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that they will continue to make payments under the terms of such loans under the
Buyer’s 401(k) plan, subject to compliance with applicable law and subject to
the reasonable requirements of Buyer’s 401(k) plan.
     5.8. Accounting Services.
          (a) For a period of one hundred twenty (120) days after Closing (the
“Collection Period”), Buyer shall, without charge to Seller, use commercially
reasonable efforts to collect the A/R in the ordinary course of business and
shall apply all amounts collected from the Stations’ account debtors to the
oldest account first. Any amounts relating to the A/R that are paid directly to
Seller shall be retained by Seller. Buyer shall not discount, adjust or
otherwise compromise any A/R and Buyer shall refer any disputed A/R to Seller.
Within ten calendar days after the end of each month, Buyer shall deliver to
Seller a report showing A/R collections for the prior month and Buyer shall make
a payment, without offset, to Seller equal to the amount of all such
collections. At the end of the Collection Period, any remaining A/R shall be
returned to Seller for collection.
          (b) During the first fifteen (15) business days after Closing, Buyer
shall provide to Seller at no additional cost the services of the Stations’
business offices, together with reasonable access to related systems and
records, for the purposes of closing the books of the Stations for the period
prior to Closing and of facilitating the distribution of any stock compensation
from Seller to the Stations’ employees, all in accordance with the procedures
and practices applied by the business offices for periods prior to Closing.
     5.9. 1031 Exchange.
          (a) By Seller. To facilitate a like-kind exchange under Section 1031
of the Code, Seller may assign its rights under this Agreement (in whole or in
part) to a “qualified intermediary” under section 1.1031(k)-1(g)(4) of the
treasury regulations (but such assignment shall not relieve Seller of its
obligations under this Agreement) and any such qualified intermediary may
re-assign to Seller. If Seller gives notice of such assignment, Buyer shall
provide Seller with a written acknowledgment of such notice prior to Closing and
pay the Purchase Price (or such portion thereof as is designated in writing by
the qualified intermediary) to or on behalf of the qualified intermediary at
Closing and otherwise reasonably cooperate therewith at no cost to Buyer.
          (b) By Buyer. To facilitate a like-kind exchange under Section 1031 of
the Code, Buyer may assign its rights under this Agreement (in whole or in part)
to a “qualified intermediary” under section 1.1031(k)-1(g)(4) of the treasury
regulations (but such assignment shall not relieve Buyer of its obligations
under this Agreement) and any such qualified intermediary may re-assign to
Buyer. If Buyer gives notice of such assignment, Seller shall provide Buyer with
a written acknowledgment of such notice prior to Closing and convey the Station
Assets (or such portion thereof as is designated in writing by the qualified
intermediary) to or on behalf of the qualified intermediary at Closing and
otherwise reasonably cooperate therewith at no cost to Seller.
     5.10. DTV Construction at WTHI (Terre Haute). Buyer acknowledges that the
DTV construction at WTHI (Terre Haute), as set forth on Schedule 5.10, must be
timely completed to

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meet replication/maximization requirements for interference protection or to
meet other applicable FCC requirements. Seller shall commence such work in the
ordinary course of business, but completion thereof is not a condition to
Closing. The adjustments under Section 1.7 shall include a credit in favor of
Seller for 50% of the cost of such work incurred by Seller.
ARTICLE 6: SELLER CLOSING CONDITIONS
     The obligation of Seller to consummate the Closing hereunder is subject to
satisfaction, at or prior to Closing, of each of the following conditions
(unless waived in writing by Seller):
     6.1. Representations and Covenants.
          (a) The representations and warranties of Buyer made in this
Agreement, shall be true and correct in all material respects as of the Closing
Date except for changes permitted or contemplated by the terms of this
Agreement.
          (b) The covenants and agreements to be complied with and performed by
Buyer at or prior to Closing shall have been complied with or performed in all
material respects.
          (c) Seller shall have received a certificate dated as of the Closing
Date from Buyer executed by an authorized officer of Buyer to the effect that
the conditions set forth in Sections 6.1(a) and (b) have been satisfied.
     6.2. Proceedings. Neither Seller nor Buyer shall be subject to any court or
governmental order or injunction restraining or prohibiting the consummation of
the transactions contemplated hereby.
     6.3. FCC Authorization. The FCC Consent shall have been obtained.
     6.4. Hart Scott Rodino. If applicable, the HSR Clearance shall have been
obtained.
     6.5. Deliveries. Buyer shall have complied with its obligations set forth
in Section 8.2.
ARTICLE 7: BUYER CLOSING CONDITIONS
     The obligation of Buyer to consummate the Closing hereunder is subject to
satisfaction, at or prior to Closing, of each of the following conditions
(unless waived in writing by Buyer):
     7.1. Representations and Covenants.
          (a) The representations and warranties of Seller made in this
Agreement shall be true and correct in all material respects as of the Closing
Date except for changes permitted or contemplated by the terms of this
Agreement.
          (b) The covenants and agreements to be complied with and performed by
Seller at or prior to Closing shall have been complied with or performed in all
material respects.

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          (c) Buyer shall have received a certificate dated as of the Closing
Date from Seller executed by an authorized officer of Seller to the effect that
the conditions set forth in Sections 7.1(a) and (b) have been satisfied.
     7.2. Proceedings. Neither Seller nor Buyer shall be subject to any court or
governmental order or injunction restraining or prohibiting the consummation of
the transactions contemplated hereby.
     7.3. FCC Authorization. The FCC Consent shall have been obtained.
     7.4. Hart Scott Rodino. If applicable, the HSR Clearance shall have been
obtained.
     7.5. Deliveries. Seller shall have complied with its obligations set forth
in Section 8.1.
     7.6. Consents. The Required Consents shall have been obtained.
ARTICLE 8: CLOSING DELIVERIES
     8.1. Seller Documents. At Closing, Seller shall deliver or cause to be
delivered to Buyer:
          (i) good standing certificates issued by the Secretary of State of
Seller’s jurisdiction of formation;
          (ii) certified copies of resolutions authorizing the execution,
delivery and performance of this Agreement, including the consummation of the
transactions contemplated hereby;
          (iii) the certificate described in Section 7.1(c);
          (iv) an assignment of FCC authorizations assigning the FCC Licenses
from Seller to Buyer;
          (v) an assignment and assumption of contracts assigning the Station
Contracts from Seller to Buyer;
          (vi) an assignment and assumption of leases assigning the Real
Property Leases (if any) from Seller to Buyer;
          (vii) special warranty deeds conveying the Owned Real Property (if
any) from Seller to Buyer;
          (viii) an assignment of marks assigning the Stations’ registered marks
listed on Schedule 1.1(e) (if any) from Seller to Buyer;
          (ix) domain name transfers assigning the Stations’ domain names listed
on Schedule 1.1(e) (if any) from Seller to Buyer;
          (x) endorsed vehicle titles conveying the vehicles included in the
Tangible Personal Property (if any) from Seller to Buyer;

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          (xi) a bill of sale conveying the other Station Assets from Seller to
Buyer;
          (xii) an affidavit of non-foreign status of Seller that complies with
section 1445 of the Code;
          (xiii) an assignment of shares in Sandia Television Corporation,
together with Seller’s stock certificates therein, if any; and
          (xiv) any other instruments of conveyance, assignment and transfer
that may be reasonably necessary to convey, transfer and assign the Station
Assets from Seller to Buyer, free and clear of Liens, except for Permitted
Liens.
     8.2. Buyer Documents. At Closing, Buyer shall deliver or cause to be
delivered to Seller:
          (i) the Purchase Price in accordance with Section 1.5 hereof;
          (ii) good standing certificates issued by the Secretary of State of
Buyer’s jurisdiction of formation;
          (iii) certified copies of resolutions authorizing the execution,
delivery and performance of this Agreement, including the consummation of the
transactions contemplated hereby;
          (iv) the certificate described in Section 6.1(c);
          (v) an assignment and assumption of contracts assuming the Station
Contracts;
          (vi) an assignment and assumption of leases assuming the Real Property
Leases (if any);
          (vii) domain name transfers assuming the Stations’ domain names listed
on Schedule 1.1(e) (if any);
          (viii) the agreements in the form of Exhibit 1.3 hereto, if
applicable, and any agreements required in connection therewith; and
          (ix) such other documents and instruments of assumption that may be
necessary to assume the Assumed Obligations.
ARTICLE 9: SURVIVAL; INDEMNIFICATION
     9.1. Survival. The representations and warranties in this Agreement shall
survive Closing for a period of eighteen (18) months from the Closing Date
whereupon they shall expire and be of no further force or effect, except
(a) those under Section 2.5 (Taxes), which shall survive until the expiration of
any applicable statute of limitations, and those under Section 2.9
(Environmental), which shall survive for a period of sixty (60) months from the
Closing Date, and (b) that if within such period the indemnified party gives the
indemnifying party written

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notice of a claim for breach thereof describing in reasonable detail the nature
and basis of such claim, then such claim shall survive until the earlier of
resolution of such claim or expiration of the applicable statue of limitations.
The covenants and agreements in this Agreement shall survive Closing until
performed.
     9.2. Indemnification.
          (a) Subject to Section 9.2(b), from and after Closing, Seller shall
defend, indemnify and hold harmless Buyer from and against any and all losses,
costs, damages, liabilities and expenses, including reasonable attorneys’ fees
and expenses (“Damages”) incurred by Buyer arising out of or resulting from:
                    (i) any breach by Seller of its representations and
warranties made under this Agreement; or
                    (ii) any default by Seller of any covenant or agreement made
under this Agreement; or
                    (iii) the Retained Obligations;
                    (iv) the business or operation of the Stations before the
Effective Time, except for the Assumed Obligations; or
                    (v) any Tax liability of Buyer caused by an assignment of
rights by Seller pursuant to Section 5.9(a).
          (b) Notwithstanding the foregoing or anything else herein to the
contrary, after Closing, (i) Seller shall have no liability to Buyer under
Section 9.2(a)(i) until, and only to the extent that, Buyer’s aggregate Damages
exceed $500,000 per Station and (ii) the maximum aggregate liability of Seller
under Section 9.2(a)(i) shall be an amount equal to 20% of the Purchase Price,
except with respect to a breach by Seller of its representations and warranties
contained in Section 2.5 (Taxes) and 2.9 (Environmental), in which case the
maximum liability of Seller in the aggregate with all other liability of Seller
under Section 9.2(a)(1) shall be an amount equal to 50% of the Purchase Price.
          (c) From and after Closing, Buyer shall defend, indemnify and hold
harmless Seller from and against any and all Damages incurred by Seller arising
out of or resulting from:
                    (i) any breach by Buyer of its representations and
warranties made under this Agreement; or
                    (ii) any default by Buyer of any covenant or agreement made
under this Agreement; or
                    (iii) the Assumed Obligations;
                    (iv) the business or operation of the Stations after the
Effective Time; or

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                    (v) any Tax liability of Seller caused by an assignment of
rights by Buyer pursuant to Section 5.9(b).
          (d) Notwithstanding the foregoing or anything else herein to the
contrary, after Closing, (i) Buyer shall have no liability to Seller under
Section 9.2(c)(i) until, and only to the extent that, Seller’s aggregate Damages
exceed $500,000 per Station and (ii) the maximum aggregate liability of Buyer
under Section 9.2(c)(i) shall be an amount equal to 20% of the Purchase Price.
     9.3. Procedures.
          (a) The indemnified party shall give prompt written notice to the
indemnifying party of any demand, suit, claim or assertion of liability by third
parties that is subject to indemnification hereunder (a “Claim”), but a failure
to give such notice or delaying such notice shall not affect the indemnified
party’s rights or the indemnifying party’s obligations except to the extent the
indemnifying party’s ability to remedy, contest, defend or settle with respect
to such Claim is thereby prejudiced and provided that such notice is given
within the time period described in Section 9.1.
          (b) The indemnifying party shall have the right to undertake the
defense or opposition to such Claim with counsel selected by it. In the event
that the indemnifying party does not undertake such defense or opposition in a
timely manner, the indemnified party may undertake the defense, opposition,
compromise or settlement of such Claim with counsel selected by it at the
indemnifying party’s cost (subject to the right of the indemnifying party to
assume defense of or opposition to such Claim at any time prior to settlement,
compromise or final determination thereof).
          (c) Anything herein to the contrary notwithstanding:
                    (i) the indemnified party shall have the right, at its own
cost and expense, to participate in the defense, opposition, compromise or
settlement of the Claim;
                    (ii) the indemnifying party shall not, without the
indemnified party’s written consent, settle or compromise any Claim or consent
to entry of any judgment which does not include the giving by the claimant to
the indemnified party of a release from all liability in respect of such Claim;
and
                    (iii) in the event that the indemnifying party undertakes
defense of or opposition to any Claim, the indemnified party, by counsel or
other representative of its own choosing and at its sole cost and expense, shall
have the right to consult with the indemnifying party and its counsel concerning
such Claim and the indemnifying party and the indemnified party and their
respective counsel shall cooperate in good faith with respect to such Claim.
     (d) Seller and Buyer agree to treat any indemnity payment made pursuant to
this Article 9 as an adjustment to the Purchase Price for all income Tax
purposes.

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ARTICLE 10: TERMINATION AND REMEDIES
     10.1. Termination. Subject to Section 10.3, this Agreement may be
terminated prior to Closing as follows:
          (a) by mutual written consent of Buyer and Seller;
          (b) by written notice of Buyer to Seller if Seller breaches its
representations or warranties or defaults in the performance of its covenants
contained in this Agreement and such breach or default is material in the
context of the transactions contemplated hereby and is not cured within the Cure
Period (defined below);
          (c) by written notice of Seller to Buyer if Buyer breaches its
representations or warranties or defaults in the performance of its covenants
contained in this Agreement and such breach or default is material in the
context of the transactions contemplated hereby and is not cured within the Cure
Period; provided, however, that the Cure Period shall not apply to Buyer’s
obligations to make the Deposit on the date hereof and to pay the Purchase Price
at Closing; or
          (d) by written notice of Seller to Buyer or Buyer to Seller if Closing
does not occur by the date twelve (12) months after the date of this Agreement
(the “Outside Date”), except as provided by Section 1.12.
     10.2. Cure Period. Each party shall give the other party prompt written
notice upon learning of any breach or default by the other party under this
Agreement. The term “Cure Period” as used herein means a period commencing on
the date Buyer or Seller receives from the other written notice of breach or
default hereunder and continuing until the earlier of (i) twenty (20) calendar
days thereafter or (ii) five (5) business days after the scheduled Closing date;
provided, however, that if the breach or default is non-monetary and cannot
reasonably be cured within such period but can be cured before the date five
(5) business days after the scheduled Closing date, and if diligent efforts to
cure promptly commence, then the Cure Period shall continue as long as such
diligent efforts to cure continue, but not beyond the date five (5) business
days after the scheduled Closing date.
     10.3. Survival. Neither party may terminate under Sections 10.1(b) or
(c) if it is then in material default under this Agreement. Except as provided
by Section 10.5, the termination of this Agreement shall not relieve any party
of any liability for breach or default under this Agreement prior to the date of
termination. Notwithstanding anything contained herein to the contrary,
Sections 1.6 (Deposit) (and Sections 10.4 and 10.5 with respect to the Deposit),
5.1 (Confidentiality) and 11.1 (Expenses) shall survive any termination of this
Agreement.
     10.4. Specific Performance. In the event of failure or threatened failure
by either party to comply with the terms of this Agreement, the other party
shall be entitled to an injunction restraining such failure or threatened
failure and, subject to obtaining any necessary FCC consent, to enforcement of
this Agreement by a decree of specific performance requiring compliance with
this Agreement. Notwithstanding the foregoing, if prior to Closing Seller has
the right to terminate this Agreement pursuant to Section 10.1(c), then Seller’s
sole remedy shall be termination of this Agreement and receipt of the liquidated
damages amount pursuant to Section 10.5, except for any failure by Buyer to
comply with its obligations related to the Deposit or Sections 1.10, 5.1, 5.2 or
5.3, as to which Seller shall be entitled to all available rights and remedies,
including without limitation specific performance.

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     10.5. Liquidated Damages. If Seller terminates this Agreement pursuant to
Section 10.1(c), then Buyer shall pay Seller on demand an amount equal to 15% of
the Purchase Price by wire transfer of immediately available funds, and such
payment shall constitute liquidated damages and the sole remedy of Seller under
this Agreement. Buyer acknowledges and agrees that Seller’s recovery of such
amount shall constitute payment of liquidated damages and not a penalty and that
Seller’s liquidated damages amount is reasonable in light of the substantial but
indeterminate harm anticipated to be caused by Buyer’s material breach or
default under this Agreement, the difficulty of proof of loss and damages, the
inconvenience and non-feasibility of otherwise obtaining an adequate remedy, and
the value of the transactions to be consummated hereunder.
ARTICLE 11: MISCELLANEOUS
     11.1. Expenses. Each party shall be solely responsible for all costs and
expenses incurred by it in connection with the negotiation, preparation and
performance of and compliance with the terms of this Agreement. All governmental
fees and charges applicable to any requests for Governmental Consents shall be
paid by the party upon whom the applicable governmental authority imposes the
fee or charge (or shall be shared equally if not imposed upon either party).
Buyer and Seller shall each pay one-half of all governmental taxes, fees and
charges applicable to the transfer of the Station Assets under this Agreement.
Each party is responsible for any commission, brokerage fee, advisory fee or
other similar payment that arises as a result of any agreement or action of it
or any party acting on its behalf in connection with this Agreement or the
transactions contemplated hereby.
     11.2. Further Assurances. After Closing, each party shall from time to
time, at the request of and without further cost or expense to the other,
execute and deliver such other instruments of conveyance and assumption and take
such other actions as may reasonably be requested in order to more effectively
consummate the transactions contemplated hereby.
     11.3. Assignment. Except as provided by Section 5.9 (1031 Exchange),
neither party may assign this Agreement without the prior written consent of the
other party hereto. The terms of this Agreement shall bind and inure to the
benefit of the parties’ respective successors and any permitted assigns, and no
assignment shall relieve any party of any obligation or liability under this
Agreement.
     11.4. Notices. Any notice pursuant to this Agreement shall be in writing
and shall be deemed delivered on the date of personal delivery or confirmed
facsimile transmission or confirmed delivery by a nationally recognized
overnight courier service, and shall be addressed as follows (or to such other
address as any party may request by written notice):

     
if to Seller:
  c/o Emmis Communications Corporation

  One Emmis Plaza

  40 Monument Circle, Suite 700

  Indianapolis, Indiana 46204

  Attention: President and CEO

  Facsimile: (317) 684-5583

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with copies (which shall not
  Emmis Communications Corporation
constitute notice) to:
  3500 W. Olive Avenue, Suite 1450

  Burbank, California 91505

  Attention: Gary Kaseff

  Facsimile: (818) 238-9158
 
   
 
   

  Wiley Rein & Fielding LLP

  1776 K Street, N.W.

  Washington, D.C. 20006

  Attention: Doc Bodensteiner

  Facsimile: (202) 719-7049
 
   
 
   

  Bose McKinney & Evans, LLP

  2700 First Indiana Plaza

  135 N. Pennsylvania Street

  Indianapolis, Indiana 46204

  Attention: David L. Wills

  Facsimile: (317) 223-0125
 
   
 
   
if to Buyer:
  LIN Television Corporation

  3940 Morrison Street NW

  Washington, DC 2001

  Attention: Greg Schmidt

  Facsimile: (202) 462-8285
 
   
 
   
with a copy (which shall not
  Weil, Gotshal and Manges LLP
constitute notice) to:
  200 Crescent Court, Suite 300

  Dallas, Texas 75201

  Attention: Glenn West

  Facsimile: (214) 746-7777

     11.5. Amendments. No amendment or waiver of compliance with any provision
hereof or consent pursuant to this Agreement shall be effective unless evidenced
by an instrument in writing signed by the party against whom enforcement of such
amendment, waiver, or consent is sought.
     11.6. Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) constitutes the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings with respect to the subject matter hereof,
except the NDA, which shall remain in full force and effect. No party makes any
representation or warranty with respect to the transactions contemplated by this
Agreement except as expressly set forth in this Agreement. Without limiting the
generality of the foregoing, Seller makes no representation or warranty to Buyer
with respect to any projections, budgets or other estimates of the Stations’
revenues, expenses or results of operations, or, except as expressly set forth
in Article 2, any other financial or other information made available to Buyer
with respect to the Stations.

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     11.7. Severability. If any court or governmental authority holds any
provision in this Agreement invalid, illegal or unenforceable under any
applicable law, then, so long as no party is deprived of the benefits of this
Agreement in any material respect, this Agreement shall be construed with the
invalid, illegal or unenforceable provision deleted and the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected or impaired thereby.
     11.8. No Beneficiaries. Nothing in this Agreement expressed or implied is
intended or shall be construed to give any rights to any person or entity other
than the parties hereto and their successors and permitted assigns.
     11.9. Governing Law. The construction and performance of this Agreement
shall be governed by the laws of the State of New York without giving effect to
the choice of law provisions thereof.
     11.10. Neutral Construction. Buyer and Seller agree that this Agreement was
negotiated at arms-length and that the final terms hereof are the product of the
parties’ negotiations. This Agreement shall be deemed to have been jointly and
equally drafted by Buyer and Seller, and the provisions hereof should not be
construed against a party on the grounds that the party drafted or was more
responsible for drafting the provision.
     11.11. Cooperation. After Closing, Buyer shall cooperate with Seller in the
investigation, defense or prosecution of any action which is pending or
threatened against Seller or its affiliates with respect to the Stations,
whether or not any party has notified the other of a claim for indemnity with
respect to such matter. Without limiting the generality of the foregoing, Buyer
shall make available its employees to give depositions or testimony and shall
furnish all documentary or other evidence that Seller may reasonably request.
Seller shall reimburse Buyer for all reasonable and necessary out-of-pocket
expenses incurred in connection with the performance of its obligations under
this Section 11.11.
     11.12. Counterparts. This Agreement may be executed in separate
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same agreement.
[SIGNATURE PAGE FOLLOWS]

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SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

         
BUYER:
  LIN TELEVISION CORPORATION  

  By:    

       

      Name:

      Title:
 
       
 
       
 
       
SELLER:
  EMMIS TELEVISION BROADCASTING, L.P.

  By:   Emmis Operating Company, its general partner  

  By:    

       

      Name:

      Title:
 
       
 
       
 
       

  EMMIS TELEVISION LICENSE, LLC  

  By:    

       

      Name:

      Title:      

  EMMIS INDIANA BROADCASTING, L.P.  

  By:    

       

      Name:

      Title: