exv10w1



 







Exhibit 10.1




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




 









 







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




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Seller as to the Adjustment Amount and (ii) has a midpoint equal to the average of such
written positions of Buyer and Seller.




          (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




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governmental filing hereunder. The FCC Consent and HSR Clearance are referred to herein
collectively as the “Governmental Consents.”




     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



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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.




     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



- 12 -









 




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



- 13 -









 




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



- 19 -









 




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.




ARTICLE 10: TERMINATION AND REMEDIES




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     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



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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.




     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






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	 	Facsimile: (317) 684-5583
	 
	 	 
	with copies (which shall not

constitute notice) to:

	 	Emmis Communications Corporation

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

constitute notice) to:

	 	Weil, Gotshal and Manges LLP

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: