Document:

exv10w1

 

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

     THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made this 1st day of July
2005, by and among GLOBAL ENERGY GROUP, INC., a Delaware corporation (“GEG”); GLOBAL ENERGY
DISTRIBUTION GROUP, L.L.C., a Texas limited liability company (“GEDG”); CND, L.L.C., an Oklahoma
limited liability company (“CND”), RECAP GROUP, L.L.C., a Texas limited liability company
(“Recap”), CAZATUR GROUP, L.L.C., a Texas limited liability company, (“Cazatur”), ALLEN WHEELER, an
individual (“Wheeler”), ROBERT J. SMITH, an individual (“Smith”), and QUEST CAPITAL ALLIANCE,
L.L.C., a Missouri limited liability company (“Quest”) (CND, Recap, Cazatur, Wheeler, Smith, and
Quest are individually, a “GEDG Member” and collectively, the “GEDG Members”).

     WHEREAS, GEG is a publicly held company with its common stock, par value .001 per share (the
“common stock”), registered pursuant to Section 12(g) of the Securities Act of 1933, as amended,
quoted on the OTC “Bulletin Board” under the symbol “GENG;”

     WHEREAS, GEG is presently engaged in the business of manufacturing and sales of patented
technologies that improve the energy efficiency of air conditioning and refrigeration appliances;

     WHEREAS, GEDG is the exclusive, world-wide distributor of all products manufactured by GEG,
including without limitation, the EER(+)Plus and Inventor Series 1400 units, pursuant to a certain
Distribution Agreement, dated January 30, 2004 (the “Distribution Agreement”), between GEDG and
GEG;

     WHEREAS, Cherokee Nation Industries, Inc., an Oklahoma corporation (“CNI”), currently
manufactures certain GEG products pursuant to the terms of a Manufacturing Agreement, dated October
28, 2004, between CNI and GEG, and CND is a distributor of certain GEG products pursuant to a
License Agreement between GEDG and CND;

     WHEREAS, all of the issued and outstanding membership interests in CND and CNI are wholly
owned by the Cherokee Nation;

     WHEREAS, the GEDG Members are the owners of all the issued and outstanding membership
interests in GEDG;

     WHEREAS, as of June 30, 2005, the issued and outstanding capital stock of GEG consists of
approximately 13,910,708 GEG Common Shares and 5,293,897 GEG Preferred Shares;

     WHEREAS, the GEG Preferred Shares are each entitled to 10 votes per share;

     WHEREAS, in connection with the acquisition of GEDG, GEG will issue 81,746,409 GEG Common
Shares, representing approximately 86% of the GEG Common Shares expected to be outstanding
following the Acquisition;

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     WHEREAS, the total combined voting power of the GEG Shares and the GEG Preferred Shares,
following the issuance of the Acquisition Shares pursuant to the terms of this Agreement, is
expected to be approximately 148,771,087 votes;

     WHEREAS, the voting power of the Acquisition Shares, plus the GEG Common Shares and GEG
Preferred Shares owned by the GEDG Members immediately following the Acquisition and the issuance
of the Acquisition Shares is expected to be 120,550,169, representing approximately 81% of the
expected total combined voting power of all classes of stock entitled to vote in GEG, as required
under Sections 351 and 368 of the Code for a non-taxable contribution to the capital of a
corporation;

     WHEREAS, immediately following the Acquisition, the parties expect CND to be the beneficial
and record owner of approximately 52% of the issued and GEG Common Shares, and approximately 51% of
the GEG Common Shares, on a fully diluted basis;

     WHEREAS, the Board of Directors of GEG has fully considered the terms and conditions of this
Agreement and the transactions contemplated by this Agreement, including without limitation, the
Acquisition, and GEG deems the Acquisition, pursuant to the terms and conditions of this Agreement,
to be advisable, fair to, and in the best interests of GEG and the stockholders of GEG;

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

	1.	 	Definitions and Interpretation.

	 	1.1	 	Definitions. In this Agreement, the following terms will have the
following meanings:

“1933 ACT” means the Securities Act of 1933, as amended;

“1934 ACT” means the Securities Exchange Act of 1934, as amended;

“ACQUISITION” means the transfer by the GEDG Members of all of the GEDG Units to GEG
in exchange for the Acquisition Shares in accordance with the terms and conditions
of this Agreement;

“ACQUISITION SHARES” means the Eighty-One Million Seven Hundred Forty-Six Thousand
Four Hundred Nine (81,746,409) shares of GEG Common to be issued to the GEDG Members
at Closing pursuant to the terms of the Acquisition;

“CLOSING” means the completion, on the Closing Date, of the transactions
contemplated hereby in accordance with paragraph 2 of this Agreement;

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“CLOSING DATE” means the day on which all conditions precedent to the completion of
the transaction as contemplated hereby have been satisfied or waived;

“CODE” means the Internal Revenue Code of 1986, as amended;

“GEDG ACCOUNTS PAYABLE AND LIABILITIES” means all accounts payable and liabilities
of GEDG, due and owing or otherwise constituting a binding obligation of GEDG (other
than a GEDG Material Contract) as of March 31, 2005 as set forth in Schedule “5.10”
hereto;

“GEDG ACCOUNTS RECEIVABLE” means all accounts receivable and other debts owing to
GEDG, as of March 31, 2005, as set forth in Schedule “5.11” hereto;

“GEDG ASSETS” means the undertaking and all the property and assets of the GEDG
Business of every kind and description wheresoever situated including, without
limitation, GEDG Equipment, GEDG Inventory, GEDG Cash, GEDG Intangible Assets and
GEDG Goodwill, and all credit cards, charge cards and banking cards issued to GEDG;

“GEDG BANK ACCOUNTS” means all of the bank accounts, lock boxes and safety deposit
boxes of GEDG or relating to the GEDG Business as set forth in Schedule “5.12”
hereto;

“GEDG BUSINESS” means all aspects of the business conducted by GEDG;

“GEDG CASH” means all cash on hand or on deposit to the credit of GEDG on the
Closing Date;

“GEDG DEBT TO RELATED PARTIES” means the debts owed by GEDG to any of the GEDG
Members or to any family member thereof, or to any affiliate, director or officer of
GEDG or any of the GEDG Members as described in Schedule “5.13;”

“GEDG EQUIPMENT” means all machinery, equipment, furniture, and furnishings used in
the GEDG Business, including, without limitation, the items more particularly
described in Schedule “5.36” hereto;

“GEDG FINANCIAL STATEMENTS” means collectively, the unaudited financial statements
of GEDG for the 12 months ended December 31, 2004, and the unaudited financial
statements of GEDG three-month period ended March 31, 2005, true copies of which are
attached as Schedule “5.9” hereto;

“GEDG GOODWILL” means the goodwill of the GEDG Business together with the exclusive
right of GEG to represent itself as carrying on the GEDG Business in succession of
GEDG subject to the terms hereof, and the right to use any words indicating that the
GEDG Business is so carried on including the right to use the

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name “Global Energy Distribution Group” or any variation thereof as part of the name
of or in connection with the GEDG Business or any part thereof carried on or to be
carried on by GEDG, the right to all corporate, operating and trade names associated
with the GEDG Business, or any variations of such names as part of or in connection
with the GEDG Business, all telephone listings and telephone advertising contracts,
all lists of customers, books and records and other information relating to the GEDG
Business, all necessary licenses and authorizations and any other rights used in
connection with the GEDG Business;

“GEDG INTANGIBLE ASSETS” means all of the intangible assets of GEDG, including,
without limitation, GEDG Goodwill, all trademarks, logos, copyrights, designs, and
other intellectual and industrial property of GEDG;

“GEDG INVENTORY” means all inventory and supplies of the GEDG Business as of March
31, 2005 as set forth in Schedule “1.1” hereto;

“GEDG MATERIAL CONTRACTS” means the burden and benefit of and the right, title and
interest of GEDG in, to and under all trade and non-trade contracts, engagements or
commitments, whether written or oral, to which GEDG is entitled in connection with
the GEDG Business whereunder GEDG is obligated to pay or entitled to receive the sum
of $10,000 or more including, without limitation, any pension plans, profit sharing
plans, bonus plans, loan agreements, security agreements, indemnities and
guarantees, any agreements with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers, directors, attorneys or
others which cannot be terminated without liability on not more than one month’s
notice, and those contracts listed in Schedule “5.32” hereto;

“GEDG MEMBERS” means the holders of all of the issued and outstanding GEDG Units as
of the date of this Agreement, whose names and respective Unit ownership as of the
date hereof are listed in Schedule 1 hereto;

“GEDG UNITS” means all of the issued and outstanding Units of the membership
interests in GEDG;

“GEG BUSINESS” means all aspects of any business conducted by GEG and its
subsidiaries;

“GEG COMMON SHARES” means the shares of common stock, par value $.001 per share, in
the capital of GEG;

“GEG MATERIAL CONTRACTS” means contracts to which GEG is a party that are attached
as Exhibits to or referenced in GEG’s 2004 Form 10-KSB, as amended, and GEG’s Form
10-QSB for the quarter ended March 31, 2005;

“GEG FINANCIAL STATEMENTS” means, collectively, the audited financial statements of
GEG for the fiscal year ended December 31, 2004, together with the auditors’ report
thereon, and the unaudited consolidated financial statements of

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GEG for the three month period ended March 31, 2005, as set forth in the SEC
Reports;

“GEG PREFERRED SHARES” means the issued and outstanding shares preferred stock in
the capital of GEG as of the date of this Agreement, consisting of 2,453,615 shares
of 6% Redeemable Preferred Stock, Series A, par value $.001 per share (the “SERIES A
PREFERRED”), and 2,840,282 shares of 6% Redeemable Preferred Stock, Series B, par
value $.001 per share (the “SERIES B PREFERRED”);

“PLACE OF CLOSING” means the offices of Conner & Winters, LLP, in Tulsa, Oklahoma,
or such other place as GEG and GEDG may mutually agree upon;

“SEC” means the U.S. Securities and Exchange Commission;

“SERIES A AMENDMENTS” means the Amendment to the Certificate of Designations of the
Series A Preferred substantially in the form of Exhibit A to this Agreement;

“SERIES B AMENDMENTS” means the Amendment to the Certificate of Designations of the
Series B Preferred substantially in the form of Exhibit B to this Agreement;

“SEC Reports” means all reports filed by GEG under the 1933 Act and the 1934 Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding
the date of this Agreement, including all exhibits thereto; and

“Unit Purchase Agreement” means the Unit Purchase Agreement, dated May 18, 2005,
between GEDG, the GEDG Members, CNI (whose interest was subsequently assigned to
CND), and, as to paragraphs 13 and 15 of the Unit Purchase Agreement only, Global
Energy Acquisition Group, L.L.C., an Oklahoma limited liability company (“GEAG”).

Any other terms defined within the text of this Agreement will have the meanings so
ascribed to them.

	 	1.2	 	Captions and Paragraph Numbers. The headings and paragraph references
in this Agreement are for convenience of reference only and do not form a part of this
Agreement and are not intended to interpret, define or limit the scope, extent or
intent of this Agreement or any provision thereof.
	 
	 	1.3	 	Paragraph References. Any reference to a particular “paragraph”,
“subparagraph”, “clause” or other subdivision is to the particular paragraph,
subparagraph, clause or other subdivision of this Agreement; any reference to a
particular “paragraph” includes all subparagraph thereunder; and any reference to a
Schedule by number will mean the appropriate Schedule attached to this Agreement and by
such reference the appropriate Schedule is incorporated into and made part of this
Agreement.

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	 	1.4	 	Schedules and Exhibits. The Schedules to this Agreement are as follows:

	 	 	 	 	 
	 

	 	Schedule “1”
	 	GEDG Members
	 

	 	Schedule “1.1”
	 	GEDG Inventory
	 

	 	Schedule “2”
	 	Issuance of Acquisition Shares
	 

	 	Schedule “3.3”
	 	Patents
	 

	 	Schedule “5.9”
	 	GEDG Financial Statements
	 

	 	Schedule “5.10”
	 	GEDG Accounts Payable and Liabilities
	 

	 	Schedule “5.11”
	 	GEDG Accounts Receivable
	 

	 	Schedule “5.12”
	 	GEDG Bank Accounts
	 

	 	Schedule “5.13”
	 	GEDG Debt to Related Parties
	 

	 	Schedule “5.18”
	 	Adverse Events
	 

	 	Schedule “5.32”
	 	GEDG Material Contracts
	 

	 	Schedule “5.36”
	 	GEDG Equipment
	 

	 	Schedule “9.1.13”
	 	GEG Warrants to be Cancelled
	 
	 	 	 	 
	 

	 	Exhibit “A”
	 	Form of Series A Amendments
	 

	 	Exhibit “B”
	 	Form of Series B Amendments
	 

	 	Exhibit “C”
	 	Form of Registration Rights Agreement

	 	1.5	 	Severability of Clauses. If any part of this Agreement is declared or
held to be invalid for any reason, such invalidity will not affect the validity of the
remainder which will continue in full force and effect and be construed as if this
Agreement had been executed without the invalid portion, and it is hereby declared the
intention of the parties that this Agreement would have been executed without reference
to any portion which may, for any reason, be hereafter declared or held to be invalid.

2. Contributions of the GEDG Members. At the Closing, upon the terms and subject to the
conditions set forth in this Agreement, each of the GEDG Members shall assign, convey, transfer and
deliver to GEG all of their right, title and interest in and to the GEDG Units free and clear of
any lien, charge, claim, pledge, security interest or other encumbrance of any type or kind
whatsoever against receipt of the respective numbers of newly-issued GEG Common Shares set forth
opposite their respective names on Schedule 2 hereto.

	 	2.1	 	Conveyance of Units. The conveyance, transfer, assignment and delivery
of the GEDG Units as herein provided shall be effected by delivery by the GEDG Members
at Closing of the certificates representing the GEDG Units, a separate assignment of
Units, and such other instruments of transfer and conveyance, duly executed as GEG
shall reasonably deem necessary to vest in GEG on the Closing Date good and marketable
title to the GEDG Units free and clear of any lien, charge, claim, pledge, security
interest or other encumbrance of any type or kind whatsoever.
	 
	 	2.2	 	Issuance of Acquisition Shares. At the Closing, GEG shall cause to be
issued to the GEDG Members in exchange for the GEDG Units a certificate or certificates
registered in the name of each of the GEDG Members representing that number of

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whole GEG Common Shares that each of the GEDG Members shall be entitled to receive
on the basis set forth in paragraph 2 above.

	 	2.3	 	Securities Legends and Notices. Each GEDG Member represents and
warrants that the GEDG Member has read, considered and understood the following legend,
and agrees that such legend, substantially in the form and substance set forth below,
shall be placed on all of the certificates representing the Acquisition Shares:

THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS. THIS COMMON STOCK MAY NOT BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT THERETO UNDER THE
SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE PRIOR
WRITTEN CONSENT OF GLOBAL ENERGY GROUP, INC. AND AN OPINION OF GLOBAL ENERGY GROUP,
INC.’S COUNSEL, OR AN OPINION FROM COUNSEL FOR THE HOLDER HEREOF, ACCEPTABLE TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.

3. Representations and Warranties of GEG. Except as otherwise disclosed in the SEC
Reports, GEG represents and warrants in all material respects to GEDG as follows:

	 	3.1	 	Incorporation. GEG is a corporation duly incorporated and validly
subsisting under the laws of the State of Delaware, and is in good standing with the
office of the Secretary of State for the States of Delaware, Oklahoma and Texas. The
nature of the GEG Business does not require GEG to register or otherwise be qualified
to carry on business in any jurisdictions other than Delaware, Oklahoma, and Texas.
	 
	 	3.2	 	Capacity. GEG has the corporate power, capacity and authority to enter
into and complete this Agreement in accordance with its terms.
	 
	 	3.3	 	Reporting Status; Listing. GEG is required to file current reports
with the SEC pursuant to paragraph 12(g) of the 1934 Act, the GEG Common Shares are
quoted on the OTC “Bulletin Board”, and all reports required to be filed by GEG with
the SEC or the OTC Bulletin Board have been filed and no SEC Report contains any untrue
statement of a material fact or omits a material fact necessary to make GEG’s
statements contained therein misleading. GEG has no outstanding comment letters from
the SEC or the OTC Bulletin Board.

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	 	3.4	 	Authorized Capital. The authorized capital of GEG consists of
100,000,000 GEG Common Shares and 10,000,000 GEG Preferred Shares. As of the date of
this Agreement, (a) 13,910,708 GEG Common Shares are issued and outstanding, and (b)
the issued and outstanding authorized Preferred Stock consists of 2,453,615 shares of
Series A Preferred Shares and 2,840,282 shares of Series B Preferred.
	 
	 	3.5	 	No Option. No person, firm or corporation has any agreement or option
or any right capable of becoming an agreement or option for the acquisition of GEG
Common Shares or for the purchase, subscription or issuance of any of the unissued shares in the capital of GEG.
	 
	 	3.6	 	Charter Documents. GEG is not in violation or breach of, or in default
with respect to, any term of its Certificate of Incorporation (or other charter
documents) or by-laws.
	 
	 	3.7	 	GEG Financial Statements. The GEG Financial Statements present fairly,
in all material respects, the financial position of GEG as of the dates thereof and
results of operations, cash flows and changes in stockholder’s equity of GEG, as of the
respective dates thereof, and have been prepared in substantial accordance with
generally accepted accounting principles consistently applied.
	 
	 	3.8	 	GEG Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of GEG which are not reflected in the GEG
Financial Statements, except those incurred in the ordinary course of business since
March 31, 2005, and GEG has not guaranteed or agreed to guarantee any material debt,
liability or other obligation of any person, firm or corporation.
	 
	 	3.9	 	No Debt to Related Parties. GEG, as of Closing, will not be materially
indebted to any affiliate, director or officer of GEG, except amounts payable under the
Series A Preferred and Series B Preferred and except accounts payable on account of
bona fide business transactions of GEG incurred in normal course of the GEG Business,
including employment agreements, none of which are more than 30 days in arrears.
	 
	 	3.10	 	No Related Party Debt to GEG. No director or officer or affiliate of
GEG is now indebted to or under any financial obligation to GEG on any account
whatsoever.
	 
	 	3.11	 	No Dividends. No dividends or other distributions on any shares in the
capital of GEG have been made, declared or authorized since the date of GEG Financial
Statements.
	 
	 	3.12	 	No Payments. No payments of any kind have been made or authorized by
GEG since the date of the GEG Financial Statements to or on behalf of officers,
directors, shareholders or employees of GEG or under any management agreements with
GEG, except payments made in the ordinary course of business and at the regular rates
of salary or other remuneration payable to them.

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	 	3.13	 	No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans affecting GEG.
	 
	 	3.14	 	No Adverse Events. Since March 31, 2005:

	 	3.14.1	 	There has not been any material adverse change in the financial position or
condition of GEG, its liabilities or the GEG Assets or any damage, loss or
other change in circumstances materially affecting GEG, the GEG Business or
GEG’s right to carry on the GEG Business, other than changes in the ordinary
course of business,
	 
	 	3.14.2	 	There has not been any damage, destruction, loss or other event (whether or
not covered by insurance) materially and adversely affecting GEG, its
Subsidiaries, or the GEG Business,
	 
	 	3.14.3	 	There has not been any material increase in the compensation payable or to
become payable by GEG to any of GEG’s officers, employees or agents or any
bonus, payment or arrangement made to or with any of them,
	 
	 	3.14.4	 	The GEG Business has been and continues to be carried on in the ordinary
course,
	 
	 	3.14.5	 	GEG has not waived or surrendered any right of material value,
	 
	 	3.14.6	 	No capital expenditures in excess of $25,000 individually or $50,000 in total
have been authorized or made,
	 
	 	3.14.7	 	There has not been any cancellation and/or material default by GEG, or to
GEG’s knowledge, by any other party, under any of GEG’s Material Contracts, and
	 
	 	3.14.8	 	There has not been (a) any transfer or (b) any encumbrance imposed, on any
asset or license of GEG.

	 	3.15	 	Tax Returns. All tax returns and reports of GEG required by law to be
filed have been filed and are true, complete and correct in all material respects, and
any taxes payable in accordance with any return filed by GEG or in accordance with any
notice of assessment or reassessment issued by any taxing authority have been so paid.
	 
	 	3.16	 	Current Taxes. Except as set forth on the Financial Statements, GEG
has no liability for any taxes, and adequate provisions have been made for taxes
payable for the current period for which tax returns are not yet required to be filed
and there are no agreements, waivers, or other arrangements providing for an extension
of time with respect to the filing of any tax return by, or payment of, any tax,
governmental charge or deficiency by GEG. GEG is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment

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including aggressive treatment of income and expenses in filing earlier tax returns.

	 	3.17	 	Licenses. GEG holds all licenses and permits as may be requisite for
carrying on the GEG Business in the manner in which it has heretofore been carried on,
which licenses and permits have been maintained and continue to be in good standing
except where the failure to obtain or maintain such licenses or permits would not have
a material adverse effect on the GEG Business.
	 
	 	3.18	 	Applicable Laws. GEG has not been charged with or received notice of
breach of any laws, ordinances, statutes, regulations, by-laws, orders or decrees to
which it is subject or which applies to it the violation of which would have a material
adverse effect on the GEG Business, and, to GEG’s knowledge, GEG is not in breach of
any laws, ordinances, statutes, regulations, bylaws, orders or decrees the
contravention of which would result in a material adverse impact on the GEG Business.
	 
	 	3.19	 	Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened against or relating to
GEG, the GEG Business, or any of the material assets of GEG, nor does GEG have any
knowledge of any deliberate act or omission of GEG that would form any material basis
for any such action or proceeding.
	 
	 	3.20	 	Labor Matters. GEG is not party to any collective agreement relating
to the GEG Business with any labor union or other association of employees and no part
of the GEG Business has been certified as a unit appropriate for collective bargaining
or, to the knowledge of GEG, has made any attempt in that regard.
	 
	 	3.21	 	Finder’s Fees. GEG is not party to any agreement which provides for
the payment of finder’s fees, brokerage fees, commissions or other fees or amounts
which are or may become payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein.
	 
	 	3.22	 	Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby, have been duly
and validly authorized by all necessary corporate action on the part of GEG.
	 
	 	3.23	 	No Violation or Breach. Except as contemplated by this Agreement, the
execution and performance of this Agreement will not:

	 	3.23.1	 	Violate the charter documents of GEG or result in any breach of, or default
under, any loan agreement, mortgage, deed of trust, or any other agreement to
which GEG or its Subsidiaries are party,
	 
	 	3.23.2	 	Except as expressly contemplated in this Agreement, give any person (other
than GEDG) any right to terminate or cancel any agreement including, without
limitation, GEG Material Contracts, or any right or rights enjoyed by GEG,

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	 	3.23.3	 	Except as expressly contemplated in this Agreement, result in any alteration
of GEG’s obligations under any agreement to which GEG is a party including,
without limitation, the GEG Material Contracts,
	 
	 	3.23.4	 	Result in the creation or imposition of any lien, encumbrance or restriction
of any nature whatsoever in favor of a third party upon or against the material
assets of GEG, and
	 
	 	3.23.5	 	Violate any court order or decree to which GEG is subject.

	 	3.24	 	Maintenance of Business. Since March 31, 2005, GEG has not entered
into any material agreement or commitment except in the ordinary course of business.
	 
	 	3.25	 	Acquisition Shares. The Acquisition Shares when delivered to the GEDG
Members pursuant to the acquisition shall be validly issued and outstanding as fully
paid and non-assessable shares, and shall be transferable upon the books of GEG, in all
cases subject to the provisions and restrictions of all applicable securities laws.
	 
	 	3.26	 	Non-Merger and Survival. The representations and warranties of GEG
contained herein will be true at and as of Closing in all material respects as though
such representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by GEDG, the representations and
warranties of GEG shall not survive the Closing.
	 
	 	3.27	 	 Disclosures. Neither this Agreement, nor any of the schedules,
attachments or exhibits hereto, contains any untrue statement by GEG of a material
fact or omit a material fact necessary to make GEG’s statements contained herein or
therein, in light of the circumstances in which they were made, not misleading. There
is no fact which has not been disclosed to GEDG or GEDG’s Members which GEG is aware
and which has or could have a material adverse effect on GEG.
	 
	 	3.28	 	Minute Books. The company minute books of GEG are complete and each of
the minutes contained therein accurately reflect the actions that were taken at a duly
called and held meeting or by consent without a meeting. All actions by GEG which
required approval are reflected on the company minute books of GEG. GEG is not in
violation or breach of, or in default with respect to, any term of its bylaws.
	 
	 	3.29	 	Title. GEG is the legal and beneficial owner of all GEG assets, free
and clear of all mortgages, liens, charges, pledges, security interests, encumbrances
or other claims whatsoever, save and except as disclosed in SEC Reports.
	 
	 	3.30	 	No Default. There has not been any default in any material obligation
of GEG or any other party to be performed under any of GEG Material Contracts, each of

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which is in full force and effect and unamended, and GEG is not aware of any default
in the obligations of any other party to any of the GEG Material Contracts.

	 	3.31	 	No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances on termination of
employment of any employee of GEG. GEG is not obliged to pay benefits or share profits
with any employee after termination of employment except as required by law.
	 
	 	3.32	 	GEG Goodwill. GEG carries on the GEG Business only under the name
“Global Energy Group, Inc.” and variations thereof and under no other business or trade
names.
	 
	 	3.33	 	Intangible Property. Schedule “3.3” sets forth an accurate list of all
patents and patent applications owned or used by GEG in connection with the GEG
Business. To GEG’s knowledge, GEG owns or possesses sufficient legal rights to use all
of such items without conflict with or infringement of the rights of others.

4. Covenants of GEG. GEG covenants and agrees with GEDG that it will:

	 	4.1	 	Conduct of Business. Until the Closing, conduct its business
diligently and in the ordinary course consistent with the manner in which it generally
has been operated up to the date of execution of this Agreement.
	 
	 	4.2	 	Preservation of Business. Until the Closing, use its best efforts to
preserve the GEG Business and, without limitation, preserve for GEDG, GEG’s
relationships with any third party having business relations with them.
	 
	 	4.3	 	Access. Until the Closing, give GEDG, the GEDG Members, and their
representatives full access to all of the properties, books, contracts, commitments and
records of GEG, and furnish to GEDG and its representatives all such information as
they may reasonably request.
	 
	 	4.4	 	Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents required to
permit the Acquisition and to preserve and maintain all GEG assets, including the GEG
Material Contracts, notwithstanding the change in control of GEG arising from the
Acquisition.
	 
	 	4.5	 	Filings and Applications. Cooperate fully with GEDG in furnishing any
necessary information required in connection with the preparation, distribution and
filing of any filings, applications and notices which may be required by federal, state
and local governmental or regulatory agencies, including the SEC.
	 
	 	4.6	 	Authorization. GEG hereby agrees to authorize and direct any and all
federal, state, municipal, foreign and international governments and regulatory
authorities having jurisdiction respecting GEG to release any and all information in
their possession respecting GEG to GEDG. GEG shall promptly execute and deliver to

12

 

GEDG any and all consents to the release of information and specific authorizations
which GEDG reasonably requires to gain access to any and all such information.

	 	4.7	 	Survival. The covenants set forth in this Article shall survive the
Closing for the benefit of GEDG.

5. Representations and Warranties of GEDG and the GEDG Members (other than CND). GEDG and
each of the GEDG Members (other than CND), jointly and severally, represents and warrants in all
material respects to GEG, as follows:

	 	5.1	 	Organization. GEDG is a limited liability company duly organized and
validly existing under the laws of the State of Texas, and is in good standing with the
office of the Secretary of State for the State of Texas.
	 
	 	5.2	 	Carrying on Business. GEDG carries on business primarily in the States
of Oklahoma and Texas and does not carry on any material business activity in any other
jurisdiction. GEDG has an office in Plano, Texas and in no other locations. GEDG is
duly authorized to carry on such business in Oklahoma and Texas and is in good standing
with the office of the respective Secretaries of State for the States of Oklahoma and
Texas. The nature of the GEDG Business does not require GEDG to register or otherwise
be qualified to carry on business in any other jurisdiction.
	 
	 	5.3	 	Company Capacity. GEDG has the limited liability company power,
capacity and authority to own GEDG Assets, to carry on the Business of GEDG and to
enter into and complete this Agreement.
	 
	 	5.4	 	Authorized Capital. The authorized capital of GEDG consists of 200,000
Units of the membership interests in GEDG. All of the authorized Units of GEDG are
issued and outstanding on the date of this Agreement. Immediately following the
completion of the Second Closing (as defined in the Unit Purchase Agreement) and
immediately prior to the Closing, such Units will be owned beneficially and of record
by the GEDG Members in the amounts set forth in Schedule 2, free and clear of any
liens, claims, or encumbrances.
	 
	 	5.5	 	No Option. No person, firm or corporation has any agreement, option,
warrant, convertible note, preemptive right or any other right capable of becoming an
agreement or option for the acquisition of GEDG Units held by the GEDG Members or for
the purchase, subscription or issuance of any of the unissued Units of GEDG, except as
set forth in the Unit Purchase Agreement.
	 
	 	5.6	 	No Restrictions. There are no restrictions on the transfer, sale or
other disposition of GEDG Units contained in the organizational documents of GEDG or
under any agreement, which have not been complied with in connection with this
Agreement and the Acquisition.

13

 

	 	5.7	 	Charter Documents. The organizational documents of GEDG have not been
altered since its organization date.
	 
	 	5.8	 	Minute Books. The company minute books of GEDG are complete and each
of the minutes contained therein accurately reflect the actions that were taken at a
duly called and held meeting or by consent without a meeting. All actions by GEDG
which required manager or member approval are reflected on the company minute books of
GEDG. GEDG is not in violation or breach of, or in default with respect to, any term
of its Articles of Organization or Operating Agreement.
	 
	 	5.9	 	GEDG Financial Statements. The GEDG Financial Statements present
fairly, in all material respects, the assets and liabilities (whether accrued,
absolute, contingent or otherwise) of GEDG, as of the respective dates thereof, and the
sales and earnings of the GEDG Business during the periods covered thereby, in all
material respects, and have been prepared in substantial accordance with generally
accepted accounting principles consistently applied.
	 
	 	5.10	 	GEDG Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of GEDG which are not disclosed in Schedule
“5.10” hereto or reflected in the GEDG Financial Statements except those incurred in
the ordinary course of business since the date of the said schedule and the GEDG
Financial Statements, and GEDG has not guaranteed or agreed to guarantee any debt,
liability or other obligation of any person, firm or corporation. Without limiting the
generality of the foregoing, all accounts payable and liabilities of GEDG as of March
31, 2005, are described in Schedule “5.10” hereto.
	 
	 	5.11	 	GEDG Accounts Receivable. All GEDG Accounts Receivable, described in
Schedule 5.11, result from bona fide business transactions and services actually
rendered without, to the knowledge and belief of GEDG and the GEDG Members, any claim
by the obligor for set-off or counterclaim.
	 
	 	5.12	 	GEDG Bank Accounts. All of the GEDG Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in Schedule “5.12”
hereto.
	 
	 	5.13	 	No Debt to Related Parties. Except as disclosed in Schedule 5.13
hereto, GEDG is not, and on Closing will not be, materially indebted to any GEDG Member
nor to any family member thereof, nor to any affiliate, director or officer of GEDG
except accounts payable on account of bona fide business transactions of GEDG incurred
in normal course of GEDG Business, none of which are more than 30 days in arrears.
	 
	 	5.14	 	No Related Party Debt to GEDG. No director, officer or affiliate of
GEDG are now indebted to or under any financial obligation to GEDG on any account
whatsoever.
	 
	 	5.15	 	No Distributions. No distributions in respect of the GEDG Units have
been made, declared or authorized since the date of the GEDG Financial Statements.

14

 

	 	5.16	 	No Payments. Except in connection with the transactions contemplated
by the Unit Purchase Agreement, no payments of any kind are contemplated at the Closing
of the Acquisition other than the Acquisition consideration as described in Schedule 2
and no payments of any kind have been made or authorized since March 31, 2005 to or on
behalf of officers, managers, members or employees of GEDG or under any management
agreements with GEDG, except (a) payments made in the ordinary course of business and
at the regular rates of salary or other remuneration payable to them and (b) issuance
of shares of Series B Preferred to GEAG in connection with GEAG contributions of
capital to GEG.
	 
	 	5.17	 	No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans affecting GEDG.
	 
	 	5.18	 	No Adverse Events. Since the date of the GEDG Financial Statements:

	 	5.18.1	 	There has not been any material adverse change in the financial position or
condition of GEDG, its liabilities or the GEDG Assets or any damage, loss or
other change in circumstances materially affecting GEDG, the GEDG Business or
the GEDG Assets or GEDG’s right to carry on the GEDG Business, other than
changes in the ordinary course of business,
	 
	 	5.18.2	 	There has not been any damage, destruction, loss or other event (whether or
not covered by insurance) materially and adversely affecting GEDG, the GEDG
Business or the GEDG Assets,
	 
	 	5.18.3	 	Except as disclosed in Schedule “5.18,” there has not been any material
increase in the compensation payable or to become payable by GEDG to any of
GEDG’s members, managers, employees or agents or any bonus, payment or
arrangement made to or with any of them,
	 
	 	5.18.4	 	The GEDG Business has been and continues to be carried on in the ordinary
course,
	 
	 	5.18.5	 	GEDG has not waived or surrendered any right of material value, and
	 
	 	5.18.6	 	GEDG has not discharged or satisfied or paid any lien or encumbrance or
obligation or liability other than current liabilities in the ordinary course
of business.

	 	5.19	 	Tax Returns. All tax returns and reports of GEDG required by law to be
filed have been filed and are true, complete and correct in all material respects, and
any taxes payable in accordance with any return filed by GEDG or in accordance with any
notice of assessment or reassessment issued by any taxing authority have been so paid.
	 
	 	5.20	 	Current Taxes. There are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any tax return by,

15

 

or payment of, any tax, governmental charge or deficiency by GEDG. GEDG is not
aware of any contingent tax liabilities or any grounds which would prompt a
reassessment including aggressive treatment of income and expenses in filing earlier
tax returns.

	 	5.21	 	Licenses. GEDG holds all licenses and permits as may be requisite for
carrying on the GEDG Business in the manner in which it has heretofore been carried on,
which licenses and permits have been maintained and continue to be in good standing
except where the failure to obtain or maintain such licenses or permits would not have
a material adverse effect on the GEDG Business.
	 
	 	5.22	 	Applicable Laws. GEDG has not been charged with or received notice of
breach of any laws, ordinances, statutes, regulations, orders or decrees to which it is
subject or which applies to it the violation of which would have a material adverse
effect on the GEDG Business, and, to GEDG’s knowledge, GEDG is not in breach of any
laws, ordinances, statutes, regulations, by-laws, orders or decrees the contravention
of which would result in a material adverse impact on the GEDG Business.
	 
	 	5.23	 	Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened against or relating to
GEDG, the GEDG Business, or any of the GEDG Assets, nor does GEDG have any knowledge of
any deliberate act or omission of GEDG that would form any material basis for any such
action or proceeding.
	 
	 	5.24	 	No Bankruptcy. GEDG has not made any voluntary assignment or proposal
under applicable laws relating to insolvency and bankruptcy and no bankruptcy petition
has been filed or presented against GEDG and no order has been made or a resolution
passed for the winding-up, dissolution or liquidation of GEDG.
	 
	 	5.25	 	Labor Matters. GEDG is not a party to any collective agreement
relating to the GEDG Business with any labor union or other association of employees
and no part of the GEDG Business has been certified as a unit appropriate for
collective bargaining or, to the knowledge of GEDG, has made any attempt in that regard
and GEDG has no reason to believe that any current employees will leave GEDG’s employ
as a result of this Acquisition.
	 
	 	5.26	 	Finder’s Fees. GEDG is not a party to any agreement which provides for
the payment of finder’s fees, brokerage fees, commissions or other fees or amounts
which are or may become payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein.
	 
	 	5.27	 	Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby, have been duly
and validly authorized by all necessary company action on the part of GEDG.

16

 

	 	5.28	 	No Violation or Breach. The execution and performance of this
Agreement will not:

	 	5.28.1	 	Violate the charter documents of GEDG or result in any breach of, or default
under, any loan agreement, mortgage, deed of trust, or any other agreement to
which GEDG is a party,
	 
	 	5.28.2	 	Give any person (other than GEG) any right to terminate or cancel any
agreement including, without limitation, GEDG Material Contracts, or any right
or rights enjoyed by GEDG,
	 
	 	5.28.3	 	Result in any alteration of GEDG’s obligations under any agreement to which
GEDG is a party including, without limitation, the GEDG Material Contracts,
	 
	 	5.28.4	 	Result in the creation or imposition of any lien, encumbrance or restriction
of any nature whatsoever in favor of a third party upon or against the GEDG
Assets, or
	 
	 	5.28.5	 	Violate any court order or decree to which either GEDG is subject.

	 	5.29	 	Business Assets. The GEDG Assets comprise all of the property and
assets of the GEDG Business, and no other person, firm or corporation owns any assets
used by GEDG in operating the GEDG Business, whether under a lease, rental agreement or
other arrangement, other than as disclosed in Schedule “5.32” hereto.
	 
	 	5.30	 	Title. GEDG is the legal and beneficial owner of the GEDG Assets, free
and clear of all mortgages, liens, charges, pledges, security interests, encumbrances
or other claims whatsoever, save and except as disclosed in Schedule “5.32” hereto.
	 
	 	5.31	 	No Option. No person, firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any of the GEDG Assets.
	 
	 	5.32	 	GEDG Material Contracts. The GEDG Material Contracts listed in
Schedule “5.32” constitute all of the material contracts of GEDG.
	 
	 	5.33	 	No Default. There has not been any default in any material obligation
of GEDG or any other party to be performed under any of GEDG Material Contracts, each
of which is in good standing and in full force and effect and unamended (except as
disclosed in Schedule “5.32”), and GEDG is not aware of any default in the obligations
of any other party to any of the GEDG Material Contracts.
	 
	 	5.34	 	No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances on termination of
employment of any employee of GEDG. GEDG is not obliged to pay benefits or share
profits with any employee after termination of employment except as required by law.

17

 

	 	5.35	 	GEDG Equipment. The GEDG Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment is in good
working condition.
	 
	 	5.36	 	GEDG Goodwill. GEDG carries on the GEDG Business only under the name
“Global Energy Distribution Group, L.L.C.” and variations thereof and under no other
business or trade names. GEDG does not have any knowledge of any infringement by GEDG
of any patent, trademark, copyright or trade secret.
	 
	 	5.37	 	Maintenance of Business. Since the date of the GEDG Financial
Statements, the GEDG Business has been carried on in the ordinary course and GEDG has
not entered into any material agreement or commitment except in the ordinary course.
	 
	 	5.38	 	Subsidiaries. GEDG does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any other corporation,
limited liability company, partnership, joint venture or firm.
	 
	 	5.39	 	SEC Reports and Other Information. GEDG and each GEDG Member has
received all the information GEDG and each GEDG Member considers necessary or
appropriate for deciding whether to enter into this Agreement and consummate the
Acquisition and other transactions contemplated by this Agreement. GEDG and each GEDG
Member further represents that GEDG and each GEDG Member has had an opportunity to ask
questions and receive answers from GEG regarding the business, properties, prospects
and financial condition of GEG. GEDG and each GEDG Member has reviewed all SEC Reports
filed during the two year period prior to the date of this Agreement, including,
without limitation, GEG’s 2004 Form 10-KSB, as amended by GEG’s 2004 Form 10-KSB/A, and
GEG’s Form 10-QSB for the quarter ended March 31, 2005. GEDG and each GEDG Member
understands and accepts all of the risk factors set forth in the SEC Reports in
connection with GEDG and each GEDG Member’s investment in the Acquisition Shares. GEDG
and each GEDG Member confirms that, GEDG, each GEDG Member, and each other person or
entity acting on GEDG’s or any GEDG Member’s behalf has not received from GEG or its
agents or counsel any information that constitutes or might constitute material,
non-public information. GEDG and each GEDG Member acknowledges and agrees that GEG has
not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Agreement.
	 
	 	5.40	 	Agreements to Elect Directors. The GEDG Members (other than CND) have
no arrangements or understandings to elect or designate any persons as directors of
GEG, otherwise than at a meeting of stockholders of GEG, that would result in the
persons so elected or designated constituting a majority of the directors of GEG.
	 
	 	5.41	 	Non-Merger and Survival. The representations and warranties of GEDG
contained herein will be true at and as of Closing in all material respects as though
such representations and warranties were made as of such time.

18

 

Notwithstanding the completion of the transactions contemplated hereby, the waiver
of any condition contained herein (unless such waiver expressly releases a party
from any such representation or warranty) or any investigation made by GEG, the
representations and warranties of GEDG and GEDG Members shall not survive the
Closing.

6. Representations and Warranties of CND. CND represents and warrants in all material
respects to GEG, with the intent that it will rely thereon in entering into this Agreement and in
approving and completing the transactions contemplated hereby, as follows:

	 	6.1	 	Organization. CND is a limited liability company duly organized and
validly existing under the laws of the State of Oklahoma, and is in good standing with
the office of the Secretary of State for the State of Oklahoma.
	 
	 	6.2	 	Carrying on Business. CND carries on business primarily in the State
of Oklahoma and does not carry on any material business activity in any other
jurisdiction. CND has an office in Stillwell, Oklahoma, and in no other locations.
The nature of the GEDG Business does not require CND to register or otherwise be
qualified to carry on business in any other jurisdiction.
	 
	 	6.3	 	GEDG Unit Ownership. The authorized capital of GEDG consists of
200,000 Units of the membership interests in GEDG. All of the authorized Units of GEDG
are issued and outstanding on the date of this Agreement. Immediately following the
completion of the Second Closing (as defined in the Unit Purchase Agreement) and
immediately prior to the Closing, such Units will be owned beneficially and of record
by the GEDG Members in the amounts set forth in Schedule 2, free and clear of any
liens, claims, or encumbrances.
	 
	 	6.4	 	Company Capacity. CND has the limited liability company power,
capacity and authority to own GEDG Assets, to enter into and complete this Agreement.
	 
	 	6.5	 	Tax Returns. All tax returns and reports of CND required by law to be
filed have been filed and are true, complete and correct in all material respects, and
any taxes payable in accordance with any return filed by CND or in accordance with any
notice of assessment or reassessment issued by any taxing authority have been so paid.
	 
	 	6.6	 	Current Taxes. There are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any tax return by, or
payment of, any tax, governmental charge or deficiency by CND. CND is not aware of any
contingent tax liabilities or any grounds which would prompt a reassessment including
aggressive treatment of income and expenses in filing earlier tax returns.
	 
	 	6.7	 	Licenses. CND holds all licenses and permits as may be requisite for
carrying on the its business in the manner in which it has heretofore been carried on,
which licenses and permits have been maintained and continue to be in good standing

19

 

except where the failure to obtain or maintain such licenses or permits would not
have a material adverse effect on such business.

	 	6.8	 	Agreements to Elect Directors. CND has no arrangements or
understandings to elect or designate any persons as directors of GEG, otherwise than at
a meeting of stockholders of GEG, that would result in the persons so elected or
designated constituting a majority of the directors of GEG.
	 
	 	6.9	 	Applicable Laws. CND has not been charged with or received notice of
breach of any laws, ordinances, statutes, regulations, orders or decrees to which it is
subject or which applies to it the violation of which would have a material adverse
effect on CND’s business, operations, or financial conditions, and, to CND’s knowledge,
CND is not in breach of any laws, ordinances, statutes, regulations, by-laws, orders or
decrees the contravention of which would result in a material adverse impact on CND’s
business, operations, or financial conditions.
	 
	 	6.10	 	Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened against or relating to
CND, its business, or any of its assets, nor does CND have any knowledge of any
deliberate act or omission of CND that would form any material basis for any such
action or proceeding.
	 
	 	6.11	 	No Bankruptcy. CND has not made any voluntary assignment or proposal
under applicable laws relating to insolvency and bankruptcy and no bankruptcy petition
has been filed or presented against CND and no order has been made or a resolution
passed for the winding-up, dissolution or liquidation of CND.
	 
	 	6.12	 	Finder’s Fees. CND is not a party to any agreement which provides for
the payment of finder’s fees, brokerage fees, commissions or other fees or amounts
which are or may become payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein.
	 
	 	6.13	 	Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby, have been duly
and validly authorized by all necessary company action on the part of CND.
	 
	 	6.14	 	No Violation or Breach. The execution and performance of this
Agreement will not:

	 	6.14.1	 	Violate the charter documents of CND or result in any breach of, or default
under, any loan agreement, mortgage, deed of trust, or any other agreement to
which CND is a party,
	 
	 	6.14.2	 	Give any person any right to terminate or cancel any material agreement,
including any right or rights enjoyed by CND,

20

 

	 	6.14.3	 	Result in any alteration of CND’s obligations under any agreement to which
CND is a party including,
	 
	 	6.14.4	 	Result in the creation or imposition of any lien, encumbrance or restriction
of any nature whatsoever in favor of a third party upon or against CND or any
of its assets, or
	 
	 	6.14.5	 	Violate any court order or decree to which either CND is subject.

	 	6.15	 	SEC Reports and Other Information. CND has received all the
information CND considers necessary or appropriate for deciding whether to enter into
this Agreement and consummate the Acquisition and other transactions contemplated by
this Agreement. CND further represents that CND has had an opportunity to ask
questions and receive answers from GEG regarding the business, properties, prospects
and financial condition of GEG. CND has reviewed all SEC Reports filed during the two
year period prior to the date of this Agreement, including, without limitation, GEG’s
2004 Form 10-KSB, as amended by GEG’s 2004 Form 10-KSB/A, and GEG’s Form 10-QSB for the
quarter ended March 31, 2005. CND understands and accepts all of the risk factors set
forth in the SEC Reports in connection with CND’s investment in the Acquisition Shares.
CND confirms that, CND, and each other person or entity acting on CND’s behalf has not
received from GEG or its agents or counsel any information that constitutes or might
constitute material, non-public information. CND acknowledges and agrees that GEG has
not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Agreement.
	 
	 	6.16	 	Non-Merger and Survival. The representations and warranties of CND
contained herein will be true at and as of Closing in all material respects as though
such representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by CND, the representations and
warranties of CND shall not survive the Closing.

7. Covenants of GEDG. GEDG covenants and agrees with GEG that it will:

	 	7.1	 	Conduct of Business. Until the Closing, conduct the GEDG Business
diligently and in the ordinary course consistent with the manner in which the GEDG
Business generally has been operated up to the date of execution of this Agreement.
	 
	 	7.2	 	Preservation of Business. Until the Closing, use their best efforts to
preserve the GEDG Business and the GEDG Assets and, without limitation, preserve for
GEG GEDG’s relationships with their suppliers, customers and others having business
relations with them.

21

 

	 	7.3	 	Access. Until the Closing, give GEG and its representatives full
access to all of the properties, books, contracts, commitments and records of GEDG
relating to GEDG, the GEDG Business and the GEDG Assets, and furnish to GEG and its
representatives all such information as they may reasonably request.
	 
	 	7.4	 	Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents required to
permit the Acquisition and to preserve and maintain the GEDG Assets, including the GEDG
Material Contracts, notwithstanding the change in control of GEDG arising from the
Acquisition.
	 
	 	7.5	 	Options. Prior to the Closing, GEDG will not issue any Shares or any
options, rights, warrants or other derivative securities for the purchase of the GEDG
Units.
	 
	 	7.6	 	Audited Financial Statements. Immediately upon execution of this
Agreement, cause to be prepared audited financial statements of GEDG in compliance with
the requirements of Regulation SB as promulgated by the SEC, such audited financial
statements to be provided no later than 30 days after the Closing Date.
	 
	 	7.7	 	Filings and Applications. Cooperate fully with GEG in furnishing any
necessary information required in connection with the preparation, distribution and
filing of any filings, applications and notices which may be required by federal, state
and local governmental or regulatory agencies.
	 
	 	7.8	 	Authorization. GEDG hereby agrees to authorize and direct any and all
federal, state, municipal, foreign and international governments and regulatory
authorities having jurisdiction respecting GEDG to release any and all information in
their possession respecting GEDG to GEG. GEDG shall promptly execute and deliver to
GEG any and all consents to the release of information and specific authorizations
which GEG reasonably require to gain access to any and all such information.
	 
	 	7.9	 	Survival. The covenants set forth in this paragraph 6 shall survive
the Closing for the benefit of GEG.

8. Investment Representations and Warranties of GEDG Members. Each of the GEDG Members
hereby represent, warrant and covenant to GEG as follows:

	 	8.1	 	Investment Intent. Each GEDG Member represents and warrants that the
Acquisition Shares are being purchased or acquired solely for the GEDG Member’s own
account, for investment purposes only and not with a view toward the distribution or
resale to others.
	 
	 	8.2	 	Certain Risk. Each GEDG Member recognizes that the purchase of the
Acquisition Shares involves a high degree of risk in that (a) GEG has, sustained losses
from its operations from its inception on February 19, 1988, and does not have an
established source of revenues sufficient to cover its operating costs, and
accordingly, there is substantial doubt about its ability to continue as a going

22

 

concern; (b) GEG has a substantial accumulated deficit; (c) an investment in the GEG
is highly speculative and only investors who can afford the loss of their entire
investment should consider investing in GEG and the Acquisition Shares; (d) an
investor may not be able to liquidate his investment; (e) in the event of a
disposition an investor could sustain the loss of his entire investment; (f) no
return on investment, whether through distributions, appreciation, transferability
or otherwise, and no performance by, through or of GEG, has been promised, assured,
represented or warranted, whether in writing or orally, by GEG, or by any director,
officer, employee, agent or representative thereof; and, (g) while the Common Stock
is presently quoted and traded on the OTC Bulletin Board, the Acquisition Shares are
not registered under applicable federal (U.S.) or state securities laws, and thus
may not be sold, conveyed, assigned or transferred unless registered under such laws
or unless an exemption from registration is available under such laws, as more fully
described herein, and (h) there is no assurance that the GEG Common Shares will
continue to be quoted or traded on the OTC Bulletin Board or on any other organized
market or quotation system.

	 	8.3	 	Prior Investment Experience. Each GEDG Member acknowledges that it has
prior investment experience, including investment in non-listed and non-registered
securities, or has employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by GEG to them and
to evaluate the merits and risks of such an investment on their behalf, and that they
recognizes the highly speculative nature of this investment.
	 
	 	8.4	 	Public Market. Each GEDG Member understands that although there is
presently a public market for the Common Stock, Rule 144 (“Rule 144”) promulgated under
the 1933 Act requires, among other conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale (in limited amounts) of
securities acquired in a nonpublic offering without having to satisfy the registration
requirements under the 1933 Act.
	 
	 	8.5	 	Sophisticated Investor. Each GEDG Member represents and warrants that
(a) the GEDG Member has adequate means of providing for the GEDG Member’s current
financial needs and possible contingencies and have no need for liquidity of the GEDG
Member’s investment in the Acquisition Shares; (b) the GEDG Member is able to bear the
economic risks inherent in an investment in the Acquisition Shares and that an
important consideration bearing on their ability to bear the economic risk of the
purchase of Acquisition Shares is whether the GEDG Member can afford a complete loss
of the GEDG Member’s investment in the Acquisition Shares, and the GEDG Member
represents and warrants that the GEDG Member can afford such a complete loss; and (c)
the GEDG Member has such knowledge and experience in business, financial, investment
and banking matters (including, but not limited to, investments in restricted,
non-listed and non-registered securities) that the GEDG Member is capable of evaluating
the merits, risks and advisability of an investment in the Acquisition Shares.

23

 

	 	8.6	 	Accredited Investor. Each GEDG Member represents, severally and not
jointly, that the GEDG Member is an “accredited investor” (as that term is defined in
Rule 501 of Regulation D under the 1933 Act) and by reason of the GEDG Member’s
business and financial experience, the GEDG Member has such knowledge, sophistication
and experience in business and financial matters as to be capable of evaluating the
merits and risks of the prospective investment, is able to bear the economic risk of
such investment and is able to afford a complete loss of such investment.
	 
	 	8.7	 	Tax Consequences. Each GEDG Member acknowledges that GEG has made no
representation regarding the potential or actual tax consequences for the GEDG Member
that will result from entering into the Agreement and from consummation of the purchase
of the Acquisition Shares. Each GEDG Member acknowledges each GEDG Member bears
complete responsibility for obtaining adequate tax advice regarding this Agreement and
the purchase of the Acquisition Shares.
	 
	 	8.8	 	SEC Filing. Each GEDG Member acknowledges that the GEDG Member has
been previously furnished with true and complete copies of the SEC Reports.
	 
	 	8.9	 	Documents, Information and Access. Each GEDG Member’s decision to
purchase the Acquisition Shares is not based on any promotional, marketing or sales
materials, and the GEDG Member and its representatives have been afforded, prior to
purchase thereof, the opportunity to ask questions of, and to receive answers from, GEG
and its management, and has had access to all documents and information known to the
GEDG Member that the GEDG Member deems material to an investment decision with respect
to the purchase of the Acquisition Shares hereunder.
	 
	 	8.10	 	No Registration, Review or Approval. The GEDG Member acknowledges and
understands that the offering and sale of securities pursuant to this Agreement has not
been reviewed or approved by the SEC or by any state securities commission, authority
or agency, and is not registered under the 1933 Act. Each GEDG Member acknowledges,
understands and agrees that the Acquisition Shares are being offered hereunder pursuant
to a private placement exemption to the registration provisions of the 1933 Act
pursuant to (a) Section 4(2) of the 1933 Act and/or Regulation D promulgated under the
1933 Act and (b) a similar exemption to the registration provisions of applicable state
securities laws.
	 
	 	8.11	 	Transfer Restrictions. Each GEDG Member will not transfer any
Acquisition Shares purchased under this Agreement unless such are registered under the
1933 Act or any applicable state securities or “blue sky” laws (collectively,
“Securities Laws”), or unless an exemption is available under such Securities Laws, and
GEG may, if it chooses, where an exemption from registration is claimed by such GEDG
Member, condition any transfer of Acquisition Shares out of the GEDG Member’s name on
receipt of an opinion of the GEG’s counsel, to the effect that the proposed transfer is
being effected in accordance with, and does not violate,

24

 

an applicable exemption from registration under the applicable securities laws, or
an opinion of counsel to the GEDG Member, acceptable to GEG, to the effect that
registration under the 1933 Act is not required in connection with such sale or
transfer and the reasons therefor.

	 	8.12	 	Reliance. Each GEDG Member understands and acknowledges that GEG is
relying upon all of the representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this Agreement in determining whether to
sell and issue the Acquisition Shares to the GEDG Member.

9. Conditions Precedent.

	 	9.1	 	Conditions Precedent in Favor of GEG. GEG’s obligations to carry out
the transactions contemplated hereby are subject to the fulfillment of each of the
following conditions precedent on or before the Closing:

	 	9.1.1	 	all documents or copies of documents required to be executed
and delivered to GEG hereunder will have been so executed and delivered.
	 
	 	9.1.2	 	all of the terms, covenants and conditions of this Agreement
to be complied with or performed by GEDG at or prior to the Closing will have
been complied with or performed.
	 
	 	9.1.3	 	GEG shall have completed its review and inspection of the
books and records of GEDG and shall be satisfied with same in all material
respects.
	 
	 	9.1.4	 	title to the GEDG Assets will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances or other
claims whatsoever.
	 
	 	9.1.5	 	subject to paragraph 8 hereof, there will not have occurred:

	 	(i)	 	any material adverse change in the
financial position or condition of GEDG, its liabilities or the GEDG
Assets or any damage, loss or other change in circumstances
materially and adversely affecting the GEDG Business or the GEDG
Assets or GEDG’s right to carry on the GEDG Business, other than
changes in the ordinary course of business, none of which has been
materially adverse, or
	 
	 	(ii)	 	any damage, destruction, loss or other
event, including changes to any laws or statutes applicable to GEDG
or the GEDG Business (whether or not covered by insurance)
materially and adversely affecting GEDG, the GEDG Business or the
GEDG Assets.

25

 

	 	9.1.6	 	the transactions contemplated hereby shall have been approved
by all other regulatory authorities having jurisdiction over the subject matter
hereof, if any;
	 
	 	9.1.7	 	all information provided by GEDG to GEG shall be true,
complete and correct in all material respects and without omission of any
material fact;
	 
	 	9.1.8	 	all consents and other approvals required or reasonably deemed
advisable by GEG’s legal counsel for the transaction will have been obtained;
	 
	 	9.1.9	 	the Certificate of Designations of GEG’s 6% Redeemable
Preferred Stock, Series A, shall have been amended substantially as set forth
in the Series A Amendment;
	 
	 	9.1.10	 	the Certificate of Designations of GEG’s 6% Redeemable Preferred Stock,
Series B, shall have been amended substantially as set forth in the Series B
Amendment;
	 
	 	9.1.11	 	CND shall have acquired 122,000 GEDG Units at the Second Closing, as defined
in and pursuant to the Unit Purchase Agreement;
	 
	 	9.1.12	 	the holders of the Series A Preferred and the Series B Preferred shall have
released and discharged GEG from all liability for the payment of unpaid
dividends on the outstanding Series A Preferred that have accrued to and
including June 30, 2005, to the satisfaction of GEG; and
	 
	 	9.1.13	 	each of the warrants listed in Schedule 9.1.13 providing for the purchase of
GEG Common Shares shall have been terminated without having been exercised.

The conditions precedent set out in the preceding paragraph are inserted for the
exclusive benefit of GEG and any such condition may be waived in whole or in part by
GEG at or prior to Closing by delivering to GEDG a written waiver to that effect
signed by GEG. In the event that the conditions precedent set out in the preceding
paragraph are not satisfied on or before the Closing, GEG shall be released from all
obligations under this Agreement.

	 	9.2	 	Conditions Precedent in Favor of GEDG. The obligation of GEDG to carry
out the transactions contemplated hereby is subject to the fulfillment of each of the
following conditions precedent on or before the Closing:

	 	9.2.1	 	all documents or copies of documents required to be executed
and delivered to GEDG hereunder will have been so executed and delivered;

26

 

	 	9.2.2	 	all of the terms, covenants and conditions of this Agreement
to be complied with or performed by GEG at or prior to the Closing will have
been complied with or performed;
	 
	 	9.2.3	 	GEDG shall have completed its review and inspection of the
books and records of GEG and its Subsidiaries and shall be satisfied with same
in all material respects;
	 
	 	9.2.4	 	GEG will have caused to be issued the Acquisition Shares
pursuant to the terms of the Acquisition to the GEDG Members at the Closing and
the Acquisition Shares will be registered on the books of GEG in the names of
the respective holders of GEDG Units as of the Closing Date as set forth in
Schedule 2;
	 
	 	9.2.5	 	title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances or other
claims whatsoever;
	 
	 	9.2.6	 	subject to paragraph 10 hereof, there will not have occurred:

	 	(i)	 	any material adverse change in the
financial position or condition of GEG, its Subsidiaries, their
liabilities or the GEG Assets or any damage, loss or other change in
circumstances materially and adversely affecting GEG, the GEG
Business or the GEG Assets or GEG’ right to carry on the GEG
Business, other than changes in the ordinary course of business,
none of which has been materially adverse, or
	 
	 	(ii)	 	any damage, destruction, loss or other
event, including changes to any laws or statutes applicable to GEG
or the GEG Business (whether or not covered by insurance) materially
and adversely affecting GEG, its Subsidiaries, the GEG Business or
the GEG Assets.

	 	9.2.7	 	the transactions contemplated hereby shall have been approved
by all other regulatory authorities having jurisdiction over the subject matter
hereof, if any;
	 
	 	9.2.8	 	all information provided by GEG to GEDG shall be true,
complete and correct in all material respects and without omission of any
material fact;
	 
	 	9.2.9	 	GEG and the GEDG Members shall have entered into a
Registration Rights Agreement pursuant to which the GEDG Members will possess
certain “piggyback” registration rights with respect to the Acquisition Shares,
substantially in the form of Exhibit “C” hereto; and

27

 

	 	9.2.10	 	all consents and other approvals required or reasonably deemed advisable by
legal counsel of GEDG for the transaction will have been obtained.
	 
	 	9.2.11	 	the Certificate of Designations of GEG’s 6% Redeemable Preferred Stock,
Series A, shall have been amended substantially as set forth in the Series A
Amendment;
	 
	 	9.2.12	 	the Certificate of Designations of GEG’s 6% Redeemable Preferred Stock,
Series B, shall have been amended substantially as set forth in the Series B
Amendment; and
	 
	 	9.2.13	 	each of the warrants listed in Schedule 9.1.13 providing for the purchase of
GEG Common Shares shall have been terminated without having been exercised.

The conditions precedent set out in the preceding paragraph are inserted for the
exclusive benefit of GEDG and the GEDG Members and any such condition may be waived
in whole or in part by GEDG or the GEDG Members at or prior to the Closing by
delivering to GEG a written waiver to that effect signed by GEDG and the GEDG
Members. In the event that the conditions precedent set out in the preceding
paragraph are not satisfied on or before the Closing GEDG and the GEDG Members shall
be released from all obligations under this Agreement.

	 	9.3	 	Nature of Conditions Precedent. The conditions precedent set forth in
this Article are conditions of completion of the transactions contemplated by this
Agreement and are not conditions precedent to the existence of a binding agreement.
	 
	 	9.4	 	Termination. Notwithstanding any provision in this Agreement to the
contrary, if the Closing does not occur on or before July 15, 2005, this Agreement will
be at an end and will have no further force or effect, unless otherwise agreed upon by
the parties in writing.
	 
	 	9.5	 	Confidentiality. Notwithstanding any provision herein to the contrary,
the parties hereto agree that the existence and terms of this Agreement are
confidential and that if this Agreement is terminated pursuant to the preceding
paragraph the parties agree to return to one another any and all financial, technical
and business documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this Agreement
and all information and documents received from GEDG and GEG and the contents thereof
confidential and not utilize nor reveal or release same; provided, however, that GEG
will be required to issue news releases regarding the execution and consummation of
this Agreement and file a Current Report on Form 8-K with the Securities and Exchange
Commission respecting the proposed Acquisition contemplated hereby together with such
other documents as are required to maintain the currency of GEG’s filings with the
Securities and Exchange Commission. Subject to applicable law, any public announcement

28

 

relating to the transactions contemplated by this Agreement will be mutually agreed
upon.

10. Material Change in the Business of GEDG. If any material loss or damage to the GEDG
Business occurs prior to Closing and such loss or damage, in GEG’s reasonable opinion, cannot be
substantially repaired or replaced within thirty (30) days, GEG shall, within two (2) days
following any such loss or damage, by notice in writing to GEDG, at its option, either (a)
terminate this Agreement, in which case no party will be under any further obligation to any other
party; or (b) elect to complete the Acquisition and the other transactions contemplated hereby, in
which case the proceeds and the rights to receive the proceeds of all insurance covering such loss
or damage will, as a condition precedent to GEG’s obligations to carry out the transactions
contemplated hereby, be vested in GEDG or otherwise adequately secured to the satisfaction of GEG
on or before the Closing Date.

11. Material Change in the GEG Business. If any material loss or damage to the GEG
Business occurs prior to Closing and such loss or damage, in GEDG’s reasonable opinion, cannot be
substantially repaired or replaced within thirty (30) days, GEDG shall, within two (2) days
following any such loss or damage, by notice in writing to GEG, at its option, either (a) terminate
this Agreement, in which case no party will be under any further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions contemplated hereby, in which case
the proceeds and the rights to receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to GEDG’s obligations to carry out the transactions contemplated
hereby, be vested in GEG or otherwise adequately secured to the satisfaction of GEDG on or before
the Effective Date.

12. Closing. The Acquisition and the other transactions contemplated by this Agreement
will be closed at the Place of Closing in accordance with the closing procedure set out in this
Article.

	 	12.1	 	Documents To Be Delivered By GEDG. On or before the Closing, GEDG will
deliver or cause to be delivered to GEG:

	 	12.1.1	 	copies of the organizational documents of GEDG certified by an authorized
officer of GEDG;
	 
	 	12.1.2	 	all reasonable consents or approvals required to be obtained by GEDG for the
purposes of completing the Acquisition and preserving and maintaining the
interests of GEDG under any and all GEDG Material Contracts and in relation to
GEDG Assets;
	 
	 	12.1.3	 	complete copies of such resolutions of the managers and members of GEDG as
are required to be passed to authorize the execution, delivery and
implementation of this Agreement certified by the manager of GEDG;
	 
	 	12.1.4	 	an acknowledgement from GEDG of the satisfaction of the conditions precedent
set forth in paragraph 9.2 hereof;

29

 

	 	12.1.5	 	the Registration Rights Agreement, duly executed by GEDG Members; and
	 
	 	12.1.6	 	such other documents as GEG may reasonably require to give effect to the
terms and intention of this Agreement.

	 	12.2	 	Documents To Be Delivered By GEG. On or before the Closing, GEG shall
deliver or cause to be delivered to GEDG:

	 	12.2.1	 	share certificates representing the Acquisition Shares duly registered in the
names of GEDG Members in accordance with Schedule 2;
	 
	 	12.2.2	 	certified copies of such resolutions of the directors of GEG as are required
to be passed to authorize the execution, delivery and implementation of this
Agreement;
	 
	 	12.2.3	 	an acknowledgement from GEG of the satisfaction of the conditions precedent
set forth in paragraph 9.1 hereof;
	 
	 	12.2.4	 	the Registration Rights Agreement, duly executed by GEG;
	 
	 	12.2.5	 	the Amended Certificates of Designation of Series A and Series B Preferred
Stock of GEG filed with the Secretary of State of Delaware; and
	 
	 	12.2.6	 	a certificate evidencing the cancellation of all warrants with accompanying
affidavits from all warrant-holders acknowledging the termination of the
warrants and the waiver of recourse for such termination.

	 	12.3	 	Documents to be delivered by CND. On or before the Closing, CND will
deliver or cause to be delivered to GEG:

	 	12.3.1	 	copies of the organizational documents of CND certified by an authorized
officer of CND;
	 
	 	12.3.2	 	all reasonable consents or approvals required to be obtained by CND for the
purposes of completing the Acquisition;
	 
	 	12.3.3	 	complete copies of such resolutions of the managers and members of CND as are
required to be passed to authorize the execution, delivery and implementation
of this Agreement, certified by the manager of CND;
	 
	 	12.3.4	 	an acknowledgement from CND of the satisfaction of the conditions precedent
set forth in paragraph 9.2 hereof;

30

 

	 	12.3.5	 	the Registration Rights Agreement, duly executed by CND Members; and
	 
	 	12.3.6	 	such other documents as GEG may reasonably require to give effect to the
terms and intention of this Agreement.

13. Post-Closing Matters. Forthwith after the Closing, GEG and the GEDG agree to use all
their best efforts to:

	 	13.1	 	Press Release. Issue a news release reporting the Closing;
	 
	 	13.2	 	8-K. File a Form 8-K with the Securities and Exchange Commission
disclosing the terms of this Agreement and, not more than 75 days following the Closing
Date, to file an amended Form 8-K which includes audited financial statements of GEDG
as well as pro forma financial information of GEDG and GEG as required by Regulation SB
as promulgated by the SEC;
	 
	 	13.3	 	13D. File reports on Schedules 13D and Forms 3 and 4 with the SEC
disclosing the acquisition of the Acquisition Shares as may be required; and
	 
	 	13.4	 	Form D. File Form D with SEC and the requisite blue sky notices for
the Acquisition Shares.

14. General Provisions.

	 	14.1	 	Arbitration. The parties hereto shall attempt to resolve any dispute,
controversy, difference or claim arising out of or relating to this Agreement by
negotiation in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party delivers to
any other party a notice of its intent to submit such matter to arbitration, then any
party to such dispute, controversy, difference or claim may submit such matter to
arbitration in the City of Oklahoma City, Oklahoma.
	 
	 	14.2	 	Notice. Any notice required or permitted to be given by any party will
be deemed to be given when in writing and delivered to the address for notice of the
intended recipient by personal delivery, prepaid single certified or registered mail,
or telecopier. Any notice delivered by mail shall be deemed to have been received on
the fourth business day after and excluding the date of mailing, except in the event of
a disruption in regular postal service in which event such notice shall be deemed to be
delivered on the actual date of receipt. Any notice delivered personally or by
telecopier shall be deemed to have been received on the actual date of delivery.
	 
	 	14.3	 	Addresses For Service. The address for service of notice of each of
the parties hereto is as follows:

31

 

	 	 	 	 	 
	 

	 	To GEG:
	 	Global Energy Group, Inc.
	 

	 	 	 	5000 Legacy Drive
	 

	 	 	 	Suite 470
	 

	 	 	 	Plano, Texas 75024
	 

	 	 	 	Attention: John R. Bailey
	 

	 	 	 	Fax: (972) 403-7659
	 
	 	 	 	 
	 

	 	          with copies to:
	 	Conner & Winters, LLP
	 

	 	 	 	211 North Robinson, Suite 1700
	 

	 	 	 	Oklahoma City, Oklahoma 73120
	 

	 	 	 	Attention: Kiran A. Phansalkar and Mark H.
	 

	 	 	 	Bennett
	 

	 	 	 	Fax: (405) 232-9621
	 
	 	 	 	 
	 

	 	If to CND:
	 	CND, L.L.C.
	 

	 	 	 	One Cherokee Circle
	 

	 	 	 	P.O. Box 860
	 

	 	 	 	Stilwell, Oklahoma 74960
	 

	 	 	 	Attention: Jim Majewski, President
	 

	 	 	 	Fax: (918) 696-6766
	 
	 	 	 	 
	 

	 	          with copies to:
	 	Jones, Gotcher & Bogan, P.C.
	 

	 	 	 	15 East Fifth Street, Suite 3800
	 

	 	 	 	First Place Tower
	 

	 	 	 	Tulsa, Oklahoma 74103
	 

	 	 	 	Attention: Robert R. Peters, II
	 

	 	 	 	Fax: (918) 583-1189
	 
	 	 	 	 
	 

	 	If to GEDG:
	 	Global Energy Distribution Group, L.L.C.
	 

	 	 	 	5000 Legacy Drive
	 

	 	 	 	Suite 470
	 

	 	 	 	Plano, Texas 75024
	 

	 	 	 	Attention: David E. Webb, Manager
	 

	 	 	 	Fax: (972) 403-7659
	 
	 	 	 	 
	 

	 	If to Recap:
	 	Recap Group, L.L.C.
	 

	 	 	 	5000 Legacy Drive
	 

	 	 	 	Suite 470
	 

	 	 	 	Plano, Texas 75024
	 

	 	 	 	Attention: David E. Webb
	 

	 	 	 	Fax: (972) 403-7659

32

 

	 	 	 	 	 
	 

	 	If to Cazatur:
	 	Cazatur Group, L.L.C.
	 

	 	 	 	5000 Legacy Drive
	 

	 	 	 	Suite 470
	 

	 	 	 	Plano, Texas 75024
	 

	 	 	 	Attention: Henry M. Burkhalter
	 

	 	 	 	Fax: (972) 403-7659
	 
	 	 	 	 
	 

	 	If to Wheeler:
	 	Allen Wheeler
	 

	 	 	 	401 West Evergreen
	 

	 	 	 	Durant, Oklahoma 74701
	 

	 	 	 	Fax: (580) 920-0547
	 
	 	 	 	 
	 

	 	If to Smith:
	 	Robert J. Smith
	 

	 	 	 	3865 Turtle Hatch Road
	 

	 	 	 	Springfield, Missouri 65809
	 

	 	 	 	Fax: (417) 863-9778
	 
	 	 	 	 
	 

	 	If to Quest:
	 	Quest Capital Alliance, L.L.C.
	 

	 	 	 	3140 E. Division Street
	 

	 	 	 	Springfield, Missouri 65902
	 

	 	 	 	Attention: Steven W. Fox
	 

	 	 	 	Fax: (417) 863-9778

Any party may, by notice to the other parties change its address for notice to some
other address in North America and will so change its address for notice whenever
the existing address or notice ceases to be adequate for delivery by hand. A post
office box may not be used as an address for service.

	 	14.4	 	Further Assurances. Each of the parties will execute and deliver such
further and other documents and do and perform such further and other acts as any other
party may reasonably require to carry out and give effect to the terms and intention of
this Agreement.
	 
	 	14.5	 	Time of the essence. Time is expressly declared to be the essence of
this Agreement.
	 
	 	14.6	 	Entire Agreement. The provisions contained herein constitute the
entire agreement among GEDG, the GEDG Members and GEG respecting the subject matter
hereof and supersede all previous communications, representations and agreements,
whether verbal or written, among GEDG, the GEDG Members and GEG with respect to the
subject matter hereof.
	 
	 	14.7	 	Inurement. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.

33

 

	 	14.8	 	Assignment. This Agreement is not assignable without the prior written
consent of the parties hereto.
	 
	 	14.9	 	Counterparts. This Agreement may be executed in counterparts, each of
which when executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of executed
copies of this Agreement by telecopier will constitute proper delivery, provided that
originally executed counterparts are delivered to the parties within a reasonable time
thereafter.
	 
	 	14.10	 	Applicable Law. This Agreement is subject to the laws of the State of
Delaware.
	 
	 	14.11	 	Expenses. GEDG and the GEDG Members will bear their own expenses and
costs of the transactions contemplated by this Agreement, including, but not limited
to, the fees of attorneys and financial advisors, and GEG will pay the expenses and
costs of GEG.

[SIGNATURES BEGIN ON THE NEXT PAGE]

34

 

     IN WITNESS WHEREOF the parties have executed this Securities Purchase Agreement effective as
of the day and year first above written.

	 	 	 	 	 
	 	 	GLOBAL ENERGY GROUP, INC., a Delaware
	 	 	corporation
	 
	 	 	 	 
	 

	 	By:	 	/s/ John R. Bailey 
	 

	 	 	 	 
	 

	 	 	 	John R. Bailey, President and CEO
	 
	 	 	 	 
	 	 	(“GEG”)
	 
	 	 	 	 
	 	 	GLOBAL ENERGY DISTRIBUTION GROUP,
	 	 	L.L.C., a Texas limited liability company
	 
	 	 	 	 
	 

	 	By:	 	/s/ David Webb 
	 

	 	 	 	 
	 

	 	 	 	David Webb, Manager
	 
	 	 	 	 
	 	 	(“GEDG”)
	 
	 	 	 	 
	 	 	CND, L.L.C., a Oklahoma limited liability company
	 
	 	 	 	 
	 

	 	By:	 	/s/ Jim Majewski 
	 

	 	 	 	 
	 

	 	 	 	Jim Majewski, Manager
	 
	 	 	 	 
	 	 	(“CND”)
	 
	 	 	 	 
	 	 	RECAP GROUP, L.L.C., a Texas limited liability
	 	 	company
	 
	 	 	 	 
	 

	 	By:	 	/s/ David Webb 
	 

	 	 	 	 
	 

	 	 	 	David Webb, Member
	 	 	(“Recap”)
	 
	 	 	 	 
	 	 	CAZATUR GROUP, L.L.C., a Texas limited liability
	 	 	company
	 
	 	 	 	 
	 

	 	By:	 	/s/ Henry Burkhalter 
	 

	 	 	 	 
	 

	 	 	 	Henry Burkhalter, Member
	 
	 	 	 	 
	 	 	(“Cazatur”)

35

 

[Signature Page of the Securities Purchase Agreement — continued]

	 	 	 	 	 
	 	 	/s/ ALLEN WHEELER 
	 	 	ALLEN WHEELER, Individually
	 
	 	 	 	 
	 	 	(“Wheeler”)
	 
	 	 	 	 
	 	 	/s/ ROBERT J. SMITH 
	 	 	ROBERT J. SMITH, Individually
	 
	 	 	 	 
	 	 	(“Smith”)
	 
	 	 	 	 
	 	 	QUEST CAPITAL ALLIANCE, L.L.C., a Missouri limited
	 	 	liability company
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	/s/ Steven Fox 
	 

	 	 	 	Steven Fox, Member
	 
	 	 	 	 
	 	 	(“Quest”)
	 
	 	 	 	 
	 	 	(CND, Recap, Cazatur, Wheeler, Smith, and Quest
	 	 	are individually, a “GEDG Member” and collectively,
	 	 	the “GEDG Members”)

36exv10w1

 

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

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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.

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

- 25 -

 

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

- 26 -

 

	 	 	 
	 

	 	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.

- 27 -

 

     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:

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