Document:

exv10w1

 

Exhibit 10.1

ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of September 28, 2005 among Emmis
Television Broadcasting, L.P., an Indiana limited partnership, and Emmis Television License, LLC,
an Indiana limited liability company (collectively, “Seller”) and SJL Acquisition, LLC, a Delaware
limited liability company (“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”):

KOIN(TV), Portland, Oregon

KHON-TV, Honolulu, Hawaii

KHAW-TV, Hilo, Hawaii

KAII-TV, Wailuku, Hawaii

     B. Simultaneously with the execution of this Agreement, Buyer and an affiliate of Seller are
entering into a Stock Purchase Agreement (the “SPA”) with respect to certain other television
stations.

     C. 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, properties and rights of Seller, real and personal,
tangible and intangible, that are used or held for use in the operation of the Stations (the
“Station Assets”), 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”), and all licenses, permits and authorizations issued by any
federal, state or local governmental authority other than the FCC, including without limitation,
those described on Schedule 1.1(a) and 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 in or held for use in the ownership or 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 the real property (i) owned in fee simple by, or (ii) leased, subleased or licensed
to any Seller, and 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, licenses and leases (including the Real Property Leases (defined below)) used or held
for use in the Stations’ business, including without limitation those listed on Schedule 1.1(d),
together with all contracts, agreements, licenses and leases made between the date hereof and
Closing in accordance with Article 4 (the “Station Contracts”);

          (e) all intellectual property and rights thereunder, including but not limited to all rights
in and to the call letters and trademarks, trade names, service marks, patents, inventions, trade
secrets, know-how, internet domain names, copyrights, programs and programming material, jingles,
slogans, logos, and other intangible property (the “Intellectual Property”) owned by or licensed to
Seller and used in or held for use in the operation of the Stations, including without limitation
those listed on Schedule 1.1(e) (the “Intangible Property”);

          (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); and

          (g) all assets included in Working Capital (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 and any Station Contract that is an employment agreement or similar contract with respect
to any employee not hired by Buyer pursuant to Section 5.7;

          (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

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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;

          (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;

          (g) receivables for the reimbursement of the cost of capital equipment and relocation related
expenses paid for by Seller and relating to the Sprint/Nextel relocation project;

          (h) any non-transferable shrinkwraped, computer software and any other non-transferable
computer licenses that are not material to the operation of the Stations;

          (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 (other than the assets included in Working
Capital);

          (j) all claims of Seller with respect to any Tax (defined below) refunds (except to the extent
Buyer is economically responsible for the underlying Tax or the underlying Tax is included in
Working Capital);

          (k) computers and other assets located at the Emmis Communications Corporation headquarters,
and the centralized server facility, data links, payroll system and other group-wide operating
systems; and

          (l) 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 as such on Schedule 1.1(d). The rights
and obligations under the Shared Contracts, except for those Shared Contracts already allocated on
Schedule 1.3, shall be equitably allocated among stations in a manner reasonably determined by
Seller, in good faith, 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 as reflected in Seller’s financial
statements 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

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               (iv) if not quantifiable, then reasonable accommodation shall control.

          (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 KHON (Honolulu) and KGMB (Honolulu) on a combined basis, and 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 (i) 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, (ii) the obligations
described in Section 5.7 as being the responsibility of Buyer, and (iii) all liabilities included
in Working Capital (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 or any of its affiliates (the “Retained Obligations”).

     1.5. Purchase Price. The aggregate purchase price to be paid for the Station Assets
under this Agreement and the Stock under the SPA shall be an amount equal to Two Hundred Fifty-Nine
Million Dollars ($259,000,000) plus the Contingent Payment (as defined on Schedule 1.5), if any
(the “Purchase Price”). The Purchase Price shall be paid at Closing as follows: (i) $253,000,000
(as allocated) in cash by wire transfer of immediately available funds and (ii) the balance by
execution and delivery of a secured limited recourse promissory note with the terms described on
Schedule 1.5 hereto (the “Loan”). Prior to Closing, Buyer and Seller shall agree upon an
allocation of the Purchase Price between this Agreement and the SPA.

     1.6. Working Capital. As used herein, the term “Working Capital” shall mean (i) all
current assets of the Stations, other than Excluded Assets, and (ii) all current liabilities of the
Stations that have been incurred in the ordinary course of business, other than intercompany
payables and Taxes on or measured by income, in each case to the extent that the same would appear
on a balance sheet prepared in accordance with accounting principles generally accepted in the
United States (“GAAP”), on a basis consistent with the manner in which the balance sheets of the
Stations have been prepared previously, as of 12:01 a.m. on the day of Closing (the “Effective
Time”).

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     1.7. Allocation. Buyer and Seller shall negotiate the allocation of the Purchase
Price (which for the purposes of this Section 1.7 only shall include all other costs that are
capitalized for United States federal income tax purposes) among the Station Assets (including
goodwill) for tax purposes within 90 days after the Closing. If Buyer and Seller do not reach an
agreement concerning the allocation of the Purchase Price within such time (or, if earlier, prior
to any applicable filing deadline), then Buyer and Seller each may file their respective tax
returns reflecting the allocation determined by it in accordance with requirements of Section 1060
of the Internal Revenue Code of 1986, as amended (the “Code”).

     1.8. 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, unless such consent is granted between
January 23, 2006 and January 30, 2006, in which event the Closing shall take place on January 31,
2006 (or on such other day after such consent as otherwise provided herein or as Buyer and Seller
may mutually agree), subject to the satisfaction or waiver of the conditions to Closing set forth
herein. The date on which the Closing is to occur is referred to herein as the “Closing Date.”

     1.9. 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 to Buyer of the main station FCC Licenses and
any other FCC Licenses necessary to operate the Stations in the ordinary course of business in all
material respects is referred to herein as the “FCC Consent.” Buyer and Seller shall diligently
prosecute the FCC Application and otherwise use their reasonable best efforts to obtain the FCC
Consent as soon as possible.

          (b) If applicable, within ten (10) business days after the date of this Agreement, Buyer and
Seller shall make any required filings with the Federal Trade Commission and the United States
Department of Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the “HSR Act”) with respect to the transactions contemplated hereby (including a request
for early termination of the waiting period thereunder), and shall thereafter promptly respond to
all requests received from such agencies for additional information or documentation. Expiration
or termination of any applicable waiting period under the HSR Act is referred to herein as “HSR
Clearance.”

          (c) Buyer and Seller shall notify each other of all documents filed with or received from any
governmental agency with respect to this Agreement or the transactions contemplated hereby. Buyer
and Seller shall furnish each other with such information and assistance as the other may
reasonably request in connection with their preparation of any governmental filing hereunder. The
FCC Consent and HSR Clearance are referred to herein collectively as the “Governmental Consents.”

     1.10. 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.

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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.

ARTICLE 2: SELLER REPRESENTATIONS AND WARRANTIES

     Seller makes the following representations and warranties to Buyer as of the date hereof and
as of the Closing:

     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. Emmis Operating Company is the sole general
partner of Emmis Television Broadcasting, L.P. and as such is liable for all of Seller’s
obligations under this Agreement.

     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 executed and delivered 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) and 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 or thereby does not and will not conflict with, violate, result in
a breach of the terms and conditions of, or, with or without notice or the passage of time, result
in any breach, event of default or the creation of any lien under, any lease, contract, license or
agreement (including the Station Contracts) to which Seller is a party or to which its assets are
subject, any organizational documents of Seller, or any law, judgment, order, or decree to which
Seller is subject, or 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 material licenses, permits and authorizations of any federal, state or local governmental
authority required for or otherwise material to the present operation of the

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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. Except
as set forth on Schedule 1.1(a), each Station’s election of a channel on which to provide DTV
service following the end of the DTV transition has been approved by the FCC, and each Station has
met the build-out requirements for its replication-maximization deadline pursuant to the FCC’s
Report and Order, “Second Periodic Review of the Commission’s Rules and Policies Affecting the
Conversion to Digital Television,” FCC 04-192 (released September 7, 2004) if such deadline has
passed.

          (c) As of the date of this Agreement, (i) the Stations are carried on cable and DBS systems
pursuant to the retransmission consent agreements set forth on Schedule 1.1(d), and (ii) each
retransmission consent agreement 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).

          (d) All material reports and filings required to be filed with the FCC by Seller with respect
to the Stations have been timely filed. All such reports and filings are accurate and complete in
all material respects. Seller maintains appropriate public inspection files at the Stations as
required by FCC rules.

     2.5. Taxes. Seller has, in respect of the Stations’ business and the Station Assets,
(a) filed all foreign, federal, state, county and local Tax Returns (defined below) which are
required to have been filed by it under applicable law, and (b) has paid all Taxes (defined below)
which have become due and payable by Seller. As used herein, “Taxes” shall mean any federal, state
or local net or gross income, gross receipts, sales, use, excise, property, ad valorem, transfer,
franchise, license, withholding, payroll, employment and social security, unemployment, and other
taxes, fees, assessments or charges of any kind imposed by any governmental authority, together
with any associated interest or penalties, and “Tax Returns” means any return, declaration, report,
claim for refund, or statement relating to Taxes, including any schedules or attachments thereto
and any amendments thereof.

     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), all material items of Tangible Personal Property are in
normal operating condition, ordinary wear and tear excepted. As used herein, “Permitted Liens”

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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 with respect to the Real Property, such other easements, rights of way, building and use
restrictions, exceptions, reservations and limitations that do not, individually or in the
aggregate, 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) and Schedule 1.3 contain a description of all
Real Property included in the Station Assets, which is all of the real property used, or held for
use, by Seller in connection with the operation of the Stations. Seller has good and marketable
fee simple title to the owned Real Property described on such schedules (the “Owned Real Property”)
free and clear of Liens other than Permitted Liens. Such schedules include a description of each
lease of Real Property or similar agreement included in the Station Contracts, which is all of the
leased real property used or held for use by such Seller in connection with the operation of the
Stations (the “Real Property Leases”). Seller has good and valid title to the leasehold estate
under each Real Property Lease free and clear of any Liens other than Permitted Liens. To Seller’s
knowledge, the Real Property is not subject to any suit for condemnation or other taking by any
public authority. The Owned Real Property includes, and the Real Property Leases provide, access
to the Stations’ facilities.

     2.8. Contracts. Seller has made available to Buyer copies of the material Station
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 full force and effect and is binding
upon Seller and, to Seller’s knowledge, the other parties thereto (subject to bankruptcy,
insolvency, reorganization or other similar laws relating to or affecting the enforcement of
creditors’ rights generally). Seller has performed its obligations under each of the Station
Contracts in all material respects, and is not in material default thereunder, and to Seller’s
knowledge, no other party to any of the Station Contracts is in default thereunder in any material
respect. The Station Contracts requiring the consent of a third party to assignment are identified
with an asterisk on Schedule 1.1(c) and Schedule 1.1(d).

     2.9. Environmental. Except as set forth on Schedule 1.1(c) or in any Phase I (defined
below), 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.

     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 conduct of the Stations’ business does not infringe upon or
misappropriate any third party rights in any material respect, (ii) to Seller’s knowledge, none of
the material Intangible Property is being infringed or misappropriated by any third party, (iii)
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 (iv) 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

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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. Seller has made the filings and
registrations listed on Schedule 1.1(e), if any, with respect to the Intangible Property listed
thereon.

     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) and 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.
To Seller’s knowledge, except as set forth on Schedule 2.11, no current liability may be imposed
upon a cessation of or reduction in contributions to, or upon any complete or partial withdrawal
from, any multiemployer plan covering employees of the Seller at the Stations.

     2.12. Insurance. Seller maintains insurance policies or other arrangements with
respect to the Stations and the Station Assets consistent with its practices for other stations,
and will maintain such policies or arrangements in full force and effect 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, ordinances, codes, rules and regulations, and all
decrees, judgments and orders of any court or governmental authority 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.

     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 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 six months ended August 31, 2004 and 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, (ii) employee health insurance expense
reflected in the statements is an estimate of the Stations’ share of consolidated health insurance
expense and not necessarily indicative of actual claims activity of any particular Station, (iii) a
portion of departmental operating expenses are paid in Seller’s

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stock but are reflected as cash expenses in the statements, and (iv) 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 August 31, 2005 and the date of this Agreement, the
Stations have been operated in all material respects in the ordinary course of business and
otherwise in the manner set forth in Section 4.1, as if such Section 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, leased or
licensed by Seller or any affiliate of Seller and used in 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 the 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.

     2.19. Citizenship. Seller is not a “foreign person” as defined in Section 1445(f)(3)
of the Code.

ARTICLE 3: BUYER REPRESENTATIONS AND WARRANTIES

     Buyer hereby makes the following representations and warranties to Seller as of the date
hereof and as of the Closing:

     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
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 executed and delivered 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).

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     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 or thereby does not and will not conflict
with, violate, result in a breach of the terms and conditions of, or, with or without notice or the
passage of time, result in any breach, event of default or the creation of any lien under, any
lease, contract or agreement to which Buyer is a party or to which its assets are subject, any
organizational documents of Buyer, or any law, judgment, order or decree to which Buyer is subject,
or 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.

     3.5. Qualification. Buyer knows of no reason why it should not be found to be
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, and knows
of 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 on the part of
Buyer is necessary for the FCC Consent to be obtained. There are no matters relating to Buyer that
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, and except as permitted by this Agreement or with the prior written consent of
Buyer, 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;

          (b) maintain the FCC Licenses in full force and effect in all material respects, and not
materially adversely modify any of the FCC Licenses, not give the FCC any grounds to institute
proceedings for the revocation or suspension of, or take any action or fail to take any action if
such action or failure to act would result in a materially adverse modification to any of the FCC
Licenses;

          (c) not other than in the ordinary course of business, sell, lease, license or dispose of or
agree to sell, lease, license or dispose of any of the Station Assets (other than the Real
Property, which Seller shall not sell or agree to sell) 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, and not dissolve, liquidate, merge or
consolidate with any other entity;

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          (d) maintain and replace the Tangible Personal Property and maintain the Real Property, in
each case in the ordinary course of business;

          (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 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) except as otherwise required by law, (i) not enter into any employment agreement (except
in the ordinary course of business consistent with past practice after consultation with Buyer) or
severance agreement or any labor, or union agreement or plan (or amendments of any such existing
agreements or plan) that will be binding upon Buyer after Closing, (ii) except in the ordinary
course of business, 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) or (iii) not modify any severance policy applicable to
any employee of the Station that would result in any increase in the amount of severance payable to
any such employee (or would expand the circumstances in which such severance is payable);

          (g) pay accounts payable and collect accounts receivable in the ordinary course of business
consistent with past practice, and not compromise or discount any accounts receivable except in the
ordinary course of business consistent with past practice;

          (h) use reasonable best 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; and

          (i) 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:

     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

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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 reasonable best efforts to repair or replace such item in all material
respects in the ordinary course of business, and

               (ii) if such repair or replacement is not completed prior to Closing, then the parties shall
proceed to Closing, Seller’s representations and warranties as of the Closing shall be modified to
take into account any such condition and Seller shall promptly 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 reasonable best
efforts to return the Station to the air as promptly as practicable in the ordinary course of
business. 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,
unless such Station returns to the air between January 23, 2006 and January 30, 2006, in which
event the Closing shall be postponed until January 31, 2006, subject to Section 10.1 and to the
satisfaction of the conditions to Closing set forth herein.

     5.5. Environmental.

          (a) Seller has provided Buyer with copies of Phase I environmental assessments of certain Real
Property sites as shown on Schedule 1.1(c), if any (each a “Phase I”).

          (b) Such assessments identified the items set forth on Schedule 1.1(c). With respect to such
items:

               (i) Seller shall use reasonable best efforts to remediate such items in all material respects
in the ordinary course of business,

               (ii) if such remediation is not completed prior to Closing, then the parties shall proceed to
Closing and Seller’s representations and warranties as of the Closing shall be modified to take
into account any such items, and Seller shall promptly remediate such items in

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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) Notwithstanding anything herein to the contrary, if at any time the reasonably estimated
cost to remedy such items (and any items under the SPA) in the aggregate exceeds the amount set
forth in Schedule 1.1(c), then Seller may terminate this Agreement upon written notice to Buyer.

     5.6 Consents.

          (a) The parties shall use reasonable best efforts to obtain (i) any third party consents
necessary for the assignment of any Station Contract or for the execution of the Tower Space
Licenses attached to Exhibit 1.3 for Mt. Haleakala and Mt. Mauna Loa (which shall not require any
payment to any such third party), and (ii) reasonable estoppel certificates from lessors under any
Real Property Leases requiring consent to assignment (if any), but no such third party consents or
estoppel certificates are conditions to Closing except for the Required Consents (defined below).
Receipt of consent to assign to Buyer the Stations’ network affiliation agreements designated with
a diamond on Schedule 1.1(d) without any material adverse conditions and the Stations’ 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 eighteen (18) months 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 general solicitations not directed solely to any such
employees).

          (b) If the Stations include any stations identified in Section 1.3(c), 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, including Buyer’s right to selectively offer employment pursuant to
Section 5.7(c), 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).

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          (c) Seller has provided Buyer a list showing employee positions and annualized pay rates and
target bonus opportunities, where applicable, for employees of the Stations. Seller shall update
that list no later than five (5) business days prior to Closing, and shall provide Buyer with such
other information in Seller’s possession as Buyer may reasonably request in order to decide to whom
it will offer employment, in each case subject to any restrictions under applicable laws. Prior to
the Closing, Buyer shall identify and provide to Seller a written list of the employees of the
Stations to whom Buyer plans to offer employment effective as of the Closing. Seller and Buyer
shall cooperate with one-another in connection with Buyer’s efforts to hire such employees. Each
such offer of employment shall be made 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 available to similarly situated employees in the markets
in which the Stations operate. Any person so hired by Buyer is referred to herein as a
“Transferred Employee.” If any Transferred Employee is subject to a written employment agreement,
Buyer shall assume Seller’s obligations under such agreement. Nothing in this Section 5.7 is
intended to or shall require Buyer to employ or continue to employ any Transferred Employee for any
period of time following the Closing or to continue to maintain any term or condition of employment
or otherwise to treat any such employee on any basis other than as an employee-at-will (subject to
the terms of any employment contract assumed by Buyer). With respect to the Transferred Employees,
at Closing employment with Seller shall terminate and employment with Buyer shall commence. Seller
and Buyer shall each pay one-half of all applicable severance and other liabilities under Seller’s
severance policy as in effect on the date hereof (a copy of which has been provided to Buyer) and
any other amounts (regardless of whether denominated as severance) owing in connection with the
termination of any written employment agreement owing to any employees of the Stations who do not
become Transferred Employees or who become Transferred Employees but who are terminated during the
first four (4) months following Closing (collectively, “Severance”), provided, however, that
Seller’s liability with respect to Severance shall not exceed $1 million in the aggregate
(including amounts paid by an affiliate of Seller under the SPA) and Buyer shall be liable for all
other Severance.

          (d) 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), with
coverage effective immediately upon Closing (and without exclusion from coverage on account of any
pre-existing condition unless Buyer determines in good faith that obtaining such coverage without
such exclusion is not practicable because of a material increase in cost), 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, 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.

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          (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 (or as soon as practicable thereafter when Buyer’s 401(k) plan is capable of accepting such
rollovers), including the direct rollover of any outstanding loan balances such 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. 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. 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 any 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.

     5.10. Asset Transfers. Between the date hereof and Closing, Seller shall and shall
use reasonable best efforts to cause its affiliates, officers, directors, employees and agents who
own any of the Station Assets or have rights thereto that should be terminated as of Closing to,
(i) transfer to Seller (if prior to Closing) or to Buyer (if at Closing) and (ii) to the extent
appropriate, terminate as of Closing, all of their respective rights, title and interest in, to and
under such Station Assets. Seller shall and shall cause its affiliates, officers, directors,
employees and agents to prepare, execute and file such documents in form and substance reasonably
satisfactory to Buyer and take such other actions as may be required to evidence or record any such
transfers or terminations.

     5.11. Intellectual Property License. If there is any shared Intellectual Property
that is allocated to KHON or KGMB pursuant to Section 1.3, and if requested by a party, then, to
the extent of the granting party’s rights in such Intellectual Property, the parties shall enter
into a customary license agreement to provide a non-exclusive, perpetual, irrevocable, royalty-free
license to use such Intellectual Property in the operation of KHON or KGMB, as appropriate, in the
ordinary course of business, transferable to any transferee of the Station. Other than any
trademarks, service marks, brand names, domain names or trade, corporate or business names of
Seller or its affiliates (other than the Stations), Seller for itself and its affiliates (other
than the Stations) hereby grants to Buyer a non-exclusive, perpetual, irrevocable, and royalty-free
license to use any Intellectual Property owned by Seller or an affiliate (other than the Stations)
and used by both the Stations and Seller’s other stations and business units prior to Closing in
the operation of the Stations in the ordinary course of business, provided that such license: (i)
may not be assigned by Buyer, except to any successor licensee of the relevant Station, (ii) is
limited to the extent of Seller’s rights therein, if any, (iii) may be used by Buyer only in the
market of the

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relevant Station and only in a manner that does not violate law or any third-party rights, and
(iv) shall terminate for noncompliance or non-use.

     5.12. Use of Business Names.

          (a) To the extent the trademarks, service marks, brand names, domain names or trade, corporate
or business names of Seller or its affiliates (other than the Stations) are used by the Stations on
stationery, signage, invoices, receipts, forms, packaging, advertising and promotional materials,
product, training and service literature and materials, computer programs or like materials
(“Marked Materials”), Buyer may continue such pre-existing use for a period of up to three months
after Closing, or until the supply of such Marked Materials is exhausted, if sooner. Buyer shall
be solely responsible for such use, which: (i) may not be assigned by Buyer, (ii) is limited to the
extent of Seller’s rights therein, if any, (iii) may be used by Buyer only in a manner that does
not violate law or any third-party rights, and (iv) shall terminate for noncompliance or non-use.

          (b) To the extent the trademarks, service marks, brand names, domain names or trade or
business names of KHON are used in the operation of television station KGMB on stationery, signage,
invoices, receipts, forms, packaging, advertising and promotional materials, product, training and
service literature and materials, computer programs or like materials (“KHON Marked Materials”),
Seller may continue such pre-existing use for a period of up to three months after Closing, or
until the supply of such KHON Marked Materials is exhausted, if sooner. Seller shall be solely
responsible for such use, which: (i) may not be assigned by Seller except to a subsequent purchaser
of KGMB, (ii) is limited to the extent of Buyer’s rights therein, if any, (iii) may be used by
Seller only in a manner that does not violate law or any third-party rights, and (iv) shall
terminate for noncompliance or non-use.

     5.13. Reasonable Efforts. Prior to Closing, Buyer and Seller shall use their
respective reasonable best efforts to take or cause to be taken all action necessary or desirable
in order to consummate the transactions contemplated by this Agreement by January 31, 2006.

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.

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     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 each of its obligations set forth in
Section 8.2.

     6.6. SPA. The Closing under the SPA shall have been consummated or shall be
consummated simultaneously with the Closing under this Agreement.

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.

          (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 each of its obligations set forth in
Section 8.1.

     7.6. Consents. The Required Consents shall have been obtained and delivered and such
Required Consents shall be without material adverse conditions.

     7.7. SPA. The Closing under the SPA shall have been consummated or shall be
consummated simultaneously with the Closing under this Agreement.

ARTICLE 8: CLOSING DELIVERIES

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     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 and copyrights assigning the Stations’ registered and applied
for marks and copyrights 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;

          (xi) a bill of sale conveying the other Station Assets from Seller to Buyer;

          (xii) the agreements in the form of Exhibit 1.3 hereto, if applicable, and any agreements
required in connection therewith;

          (xiii) an affidavit of non-foreign status of Seller that complies with Section 1445 of the
Code;

          (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; and

          (xv) any customary owner’s affidavits or gap indemnities reasonably requested from Seller by
any title company retained by Buyer.

     8.2. Buyer Documents. At Closing, Buyer shall deliver or cause to be delivered to
Seller:

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          (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 (i) those under Section 2.5 (Taxes) and Sections 2.6 and
2.7 (Personal Property and Real Property, but solely with respect to title), which shall survive
until the expiration of any applicable statute of limitations, and (ii) that if within such period
the indemnified party gives the indemnifying party written 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, whether or not
resulting from third party claims, arising out of or resulting from:

               (i) any breach by Seller of its representations and warranties made under this Agreement; or

- 20 -

 

               (ii) any default by Seller of any covenant or agreement made under this Agreement; or

               (iii) the Retained Obligations; or

               (iv) the business, ownership or operation of the Stations before the Effective Time, except
for the Assumed Obligations.

          (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 liability of Seller
under Section 9.2(a)(i) shall be an amount equal to 20% 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, whether or not resulting from third party claims,
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; or

               (iv) the business, ownership or operation of the Stations after the Effective Time.

     9.3. Procedures with Respect to Third Party Claims.

          (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 materially prejudiced and provided that, where applicable, 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:

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               (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.

ARTICLE 10: TERMINATION AND REMEDIES

     10.1. Termination. This Agreement shall terminate upon any termination of the SPA.
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
pay the Purchase Price at Closing in the circumstances where all of the conditions to Buyer’s
obligations to consummate the Closing (other than those under Article 7 to be performed at Closing)
have been satisfied;

          (d) by written notice of Seller to Buyer or Buyer to Seller if Closing does not occur on or
before September 29, 2006; or

          (e) as provided by Section 5.5(c).

     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 day otherwise scheduled for
Closing; 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; and provided, further, that, notwithstanding the

- 22 -

 

foregoing, if the date otherwise scheduled for Closing is between January 23, 2006 and January
30, 2006, Closing shall be January 31, 2006.

     10.3. Survival. Neither party may terminate under Sections 10.1(b) or (c) if it is
then in material default under this Agreement. 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 5.1
(Confidentiality), 10.5 (Liquidated Damages) 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.

     10.5. Liquidated Damages. If Seller terminates this Agreement or the SPA pursuant to
Section 10.1(c) hereof or thereof, then Buyer shall pay Seller on demand an amount equal to 10% of
the Purchase Price under this Agreement 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 one-half by Buyer and one-half by Seller, except that if more
than one HSR Act filing is necessary because a party has more than one ultimate parent entity, then
such party shall pay the HSR Act filing fees for any additional filings. Buyer and Seller shall
each be responsible for one-half of all governmental recording, sales, use and other similar
transfer taxes, fees and charges (not including any Taxes on or measured by income) 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. Before Closing, each party shall perform its obligations
and observe the conditions set forth in Schedule 11.2 to this Agreement. 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.

- 23 -

 

     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, provided,
however, that Buyer may assign its rights hereunder to an affiliate of Buyer upon written notice
to, but without consent of, Seller, provided that (i) any such assignment does not delay processing
of the FCC Application, grant of the FCC Consent or Closing, (ii) any such assignee delivers to
Seller a written assumption of this Agreement, and (iii) Buyer shall remain liable for all of its
obligations hereunder. The terms of this Agreement shall bind and inure to the benefit of the
parties’ respective successors and any permitted assigns, and no assignment shall relieve any party
of any obligation or liability under this Agreement.

     11.4. Notices. Any notice pursuant to this Agreement shall be in writing and shall be
deemed delivered on the date of personal delivery or confirmed facsimile transmission or confirmed
delivery by a nationally recognized overnight courier service, and shall be addressed as follows
(or to such other address as any party may request by written notice):

	 	 	 
	if to Seller:

	 	c/o Emmis Communications Corporation
	 

	 	One Emmis Plaza
	 

	 	40 Monument Circle, Suite 700
	 

	 	Indianapolis, Indiana 46204
	 

	 	Attention: President and CEO
	 

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

	 	Emmis Communications Corporation
	constitute notice) to:

	 	3500 W. Olive Avenue, Suite 1450
	 

	 	Burbank, California 91505
	 

	 	Attention: Gary Kaseff
	 

	 	Facsimile: (818) 238-9158
	 
	 	 
	 

	 	Wiley Rein & Fielding LLP
	 

	 	1776 K Street, N.W.
	 

	 	Washington, D.C. 20006
	 

	 	Attention: Doc Bodensteiner
	 

	 	Facsimile: (202) 719-7049
	 
	 	 
	 

	 	Bose McKinney & Evans, LLP
	 

	 	2700 First Indiana Plaza
	 

	 	135 N. Pennsylvania Street
	 

	 	Indianapolis, Indiana 46204
	 

	 	Attention: David L. Wills
	 

	 	Facsimile: (317) 223-0125
	 
	 	 
	if to Buyer:

	 	c/o The Blackstone Group
	 

	 	345 Park Avenue
	 

	 	New York, New York 10154
	 

	 	Attention: David Tolley
	 

	 	Facsimile: (212) 583-5717
	 
	 	 
	with a copy (which shall not

	 	Debevoise & Plimpton

- 24 -

 

	 	 	 
	constitute notice) to:

	 	919 Third Avenue
	 

	 	New York, New York 10022
	 

	 	Attention: Gregory V. Gooding

Facsimile: (212) 909-6836

     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. The Schedules and Exhibits hereto are hereby incorporated
into this Agreement. This Agreement, together with any other agreement executed on the date hereof
in connection herewith, 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 (or in any other
agreement executed on the date hereof in connection herewith). 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.

     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

- 25 -

 

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.

     11.13. Interpretation. Article titles and headings herein are for convenience of
reference only and are not intended to affect the meaning or interpretation of this Agreement. The
Schedules hereto shall be construed with and as an integral part of this Agreement to the same
extent as if set forth verbatim herein. When used in this Agreement, unless the context clearly
requires otherwise, (i) words such as “herein,” “hereto,” “hereunder,” and “hereafter” shall refer
to this Agreement as a whole, (ii) the term “including” shall not be limiting, and (iii) the term
“ordinary course” shall refer to the ordinary course of Seller’s business and the operation of the
Stations.

[SIGNATURE PAGE FOLLOWS]

- 26 -

 

SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth
above.

	 	 	 	 	 
	BUYER:	 	SJL ACQUISITION, LLC
	 
	 	 	 	 
	 

	 	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:exv10w2

 

Exhibit 10.2

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of September 28, 2005 between
Emmis Operating Company, an Indiana corporation (“Seller”) and SJL Acquisition, LLC, a Delaware
limited liability company (“Buyer”).

Recitals

     A. Seller owns 1,000 shares of common stock (the “Stock”) of SJL of Kansas Corp., a Kansas
corporation (“SJL”), being all of the issued and outstanding stock of SJL.

     B. SJL owns all of the issued and outstanding stock of Emmis Television License Corporation of
Wichita, a California corporation (“Wichita Licensee”).

     C. SJL and Wichita Licensee own and operate the following television broadcast and translator
stations (the “Wichita Stations”) pursuant to certain authorizations issued by the Federal
Communications Commission (the “FCC”):

KSNW(TV), Wichita, Kansas

KSNC(TV), Great Bend, Kansas

KSNG(TV), Garden City, Kansas

KSNK(TV), McCook, Nebraska

     D. SJL also owns all of the issued and outstanding stock of Topeka Television Corporation, a
Missouri corporation (“Topeka Television”).

     E. Topeka Television owns all of the issued and outstanding stock of Emmis Television License
Corporation of Topeka, a California corporation (“Topeka Licensee”).

     F. Topeka Television and Topeka Licensee own and operate the following television broadcast
station (the “Topeka Station”) pursuant to certain authorizations issued by the FCC:

KSNT(TV), Topeka, Kansas

     G. The Wichita Stations and the Topeka Station are referred to herein each as a “Station” and
collectively the “Stations.” SJL, Wichita Licensee, Topeka Television and Topeka Licensee are
referred to herein each as a “Company” and collectively as the “Companies.”

     H. Simultaneously with the execution of this Agreement, Buyer and certain affiliates of Seller
are entering into an Asset Purchase Agreement (the “APA”) with respect to certain other television
stations.

     I. 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 Stock.

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: SALE AND PURCHASE

     1.1. Stock. On the terms and subject to the conditions hereof, at Closing (defined
below), 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 the Stock.

     1.2. Station Assets. As used herein, “Station Assets” means all assets, properties
and rights of the Companies, real and personal, tangible and intangible, that are used or held for
use in the operation of the Stations, except as set forth in Sections 1.3 and 1.4. The Station
Assets include without limitation the following:

          (a) all licenses, permits and other authorizations issued to Wichita Licensee and Topeka
Licensee by the FCC with respect to the Stations (the “FCC Licenses”), and all licenses, permits
and authorizations issued by any federal, state or local governmental authority other than the FCC,
including without limitation, those described on Schedule 1.2(a), including any renewals or
modifications thereof between the date hereof and Closing;

          (b) all of the Companies’ equipment, transmitters, antennas, cables, towers, vehicles,
furniture, fixtures, spare parts and other tangible personal property of every kind and description
that are used in or held for use in the ownership or operation of the Stations, including without
limitation those listed on Schedule 1.2(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 the Companies’ real property (i) owned in fee simple by, or (ii) leased, subleased
or licensed to any Seller, and 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 1.2(c) (the “Real Property”);

          (d) all agreements for the sale of advertising time on the Stations, and all other contracts,
agreements, licenses and leases (including the Real Property Leases (defined below)) used or held
for use in the Stations’ business, including without limitation those listed on Schedule 1.2(d),
together with all contracts, agreements, licenses and leases made between the date hereof and
Closing in accordance with Article 4 (the “Station Contracts”);

          (e) all of the intellectual property and rights thereunder, including but not limited to all
rights in and to the call letters and the rights in and to trademarks, trade names, service marks,
patents, inventions, trade secrets, know-how, internet domain names, copyrights, programs and
programming material, jingles, slogans, logos, and other intangible property (the “Intellectual
Property”) owned by or licensed to any of the Companies and used in or held for use in the
operation of the Stations, including without limitation those listed on Schedule 1.2(e) (the
“Intangible Property”);

          (f) the Companies’ 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

- 2 -

 

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); and

          (g) all assets included in Working Capital (defined below).

     1.3. 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 the Companies, 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 the Companies 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 or Section 5.7 (including any Station Contract that is an employment agreement or similar
contract that is distributed or assigned to Seller);

          (d) all 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 the Companies, 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;

          (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 or its affiliates
for the benefit of the Companies;

          (g) receivables for the reimbursement of the cost of capital equipment and relocation related
expenses paid for by Seller and relating to the Sprint/Nextel relocation project;

          (h) any non-transferable shrinkwraped, computer software and any other non-transferable
computer licenses that are not material to the operation of the Stations;

          (i) all rights and claims of the Companies, 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 (other than the assets included in Working
Capital);

          (j) all claims of the Companies with respect to any Tax (defined below) refunds (except to the
extent Buyer is economically responsible for the underlying Tax or the underlying Tax is included
in Working Capital);

- 3 -

 

          (k) computers and other assets located at the Emmis Communications Corporation headquarters,
and the centralized server facility, data links, payroll system and other group-wide operating
systems; and

          (l) the assets listed on Schedule 1.3 (if any), and the slogan “Great Media, Great People,
Great Service.”

     1.4. 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 as such on Schedule 1.2(d). The rights
and obligations under the Shared Contracts shall be equitably allocated among stations in a manner
reasonably determined by Seller, in good faith, 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 the Companies or Seller as reflected in
Seller’s financial statements 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.

          (b) Buyer shall cooperate with Seller (and any third party designated by Seller) in such
allocation, and the Station Contracts (and Transferred 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.

     1.5. Assumption of Obligations. As used herein the term “Transferred Obligations”
means (i) the obligations of the Companies arising during, or attributable to, any period of time
on or after the Closing Date under the Station Contracts and the FCC Licenses, (ii) the obligations
described in Section 5.7 as being the responsibility of Buyer, and (iii) all liabilities included
in Working Capital. Pursuant to an assignment and assumption agreement in form and substance
reasonably satisfactory to Buyer and Seller (the “Assignment and Assumption Agreement”), Seller
will assume and be responsible for all liabilities and obligations of the Companies and their
affiliates, whether known or unknown, absolute, accrued, contingent or otherwise, and whether due
or to become due, as of the Effective Time other than the Transferred Obligations (the “Retained
Obligations”).

     1.6. Purchase Price. The aggregate purchase price to be paid for the Stock under this
Agreement and the Station Assets under the APA shall be an amount equal to Two Hundred Fifty-Nine
Million Dollars ($259,000,000) plus the Contingent Payment (as defined on Schedule

- 4 -

 

1.5 to the APA), if any (the “Purchase Price”). The Purchase Price shall be paid at Closing
as follows: (i) $253,000,000 (as allocated) in cash by wire transfer of immediately available funds
and (ii) the balance by execution and delivery of a secured limited recourse promissory note with
the terms described on Schedule 1.5 to the APA. Prior to Closing, Buyer and Seller shall agree
upon an allocation of the Purchase Price between this Agreement and the APA.

     1.7. Working Capital. As used herein, the term “Working Capital” shall mean (i) all
current assets of the Companies, other than Excluded Assets, and (ii) all current liabilities of
the Companies that have been incurred in the ordinary course of business, other than intercompany
payables and Taxes on or measured by the income of the Companies, in each case to the extent that
the same would appear on a balance sheet prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”), on a basis consistent with the manner in which
the balance sheets of the Stations have been prepared previously, as of 12:01 a.m. on the day of
Closing (the “Effective Time”).

     1.8. Transfer of Excluded Assets. At or prior to Closing, Seller may cause the
Companies to distribute or assign all or any portion of the Excluded Assets to Seller or an
affiliate of Seller. After Closing, Buyer shall cause the Companies from time to time, at the
request of and without further cost or expense to Seller (other than as provided in Section
9.2(d)), to take all actions as may be necessary to convey the Excluded Assets (other than those
referenced in Section 1.3(a)) to Seller, free and clear of Liens (defined below) other than
Permitted Liens (defined below), including without limitation providing Seller with the benefits of
the Excluded Assets described in Sections 1.3(e) and (i).

     1.9. Closing. The consummation of the sale and purchase of the Stock 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, unless such consent is granted between January 23,
2006 and January 30, 2006, in which event the Closing shall take place on January 31, 2006 (or on
such other day after such consent as otherwise provided herein or as Buyer and Seller may mutually
agree), subject to the satisfaction or waiver of the conditions to Closing set forth herein. 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 transfer of
control of the FCC Licenses to Buyer. FCC consent to the transfer of control of the main station
FCC Licenses and any other FCC Licenses necessary to operate the Stations in the ordinary course of
business in all material respects is referred to herein as the “FCC Consent.” Buyer and Seller
shall diligently prosecute the FCC Application and otherwise use their reasonable best 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

- 5 -

 

information or documentation. Expiration or termination of any applicable waiting period
under the HSR Act is referred to herein as “HSR Clearance.”

          (c) Buyer and Seller shall notify each other of all documents filed with or received from any
governmental agency with respect to this Agreement or the transactions contemplated hereby. Buyer
and Seller shall furnish each other with such information and assistance as the other may
reasonably request in connection with their preparation of any governmental filing hereunder. The
FCC Consent and HSR Clearance are referred to herein collectively as the “Governmental Consents.”

     1.11. Renewal. The main station FCC Licenses expire on the dates set forth on
Schedule 1.2(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
a transfer of control application while a renewal application is pending, or the FCC will grant a
transfer of control 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.

ARTICLE 2: SELLER REPRESENTATIONS AND WARRANTIES

     Seller makes the following representations and warranties to Buyer as of the date hereof and
as of the Closing:

     2.1. Organization. Seller and the Companies are duly organized, validly existing and
in good standing under the laws of the jurisdiction of their 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.

     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 executed and delivered 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 transfer of control under certain of the Station Contracts as
set forth on Schedule 1.2(c) and Schedule 1.2(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 or thereby does not and will not conflict with, violate, result in
a breach of the terms and conditions of, or, with or without notice or the passage

- 6 -

 

of time, result in any breach, event of default or the creation of any lien under, any lease,
contract, license or agreement (including the Station Contracts) to which Seller or any of the
Companies is a party or to which its assets are subject, any organizational documents of Seller or
any of the Companies, or any law, judgment, order, or decree to which Seller or any of the
Companies is subject, or require the consent or approval of, or a filing by Seller or any of the
Companies with, any governmental or regulatory authority or any third party.

     2.4. Capitalization; Title to Stock.

          (a) The authorized capital of SJL consists of 1,000 shares of common stock, par value $0 per
share, of which no shares are issued and outstanding other than the Stock. Seller owns the Stock,
SJL owns all of the issued and outstanding stock of Wichita Licensee and Topeka Television, and
Topeka Television owns all of the issued and outstanding stock of Topeka Licensee, in each case
free and clear of any liens, claims and encumbrances (“Liens”), other than Permitted Liens. The
Stock and all of the issued and outstanding stock of Wichita Licensee, Topeka Television and Topeka
Licensee (collectively, the “Shares”) are duly authorized, and validly issued and are fully paid
and non-assessable. At the Closing, upon payment of the Purchase Price, Buyer will acquire good
and valid title to all of the Stock, free and clear of any Liens.

          (b) Except for the Stock, the shares of Wichita Licensee and Topeka Television owned by SJL,
and the shares of Topeka Licensee owned by Topeka Television, there are no outstanding (i) shares
of capital stock or other equity interests of any of the Companies or (ii) securities of any of the
Companies convertible or exercisable for any such equity interests. There are no outstanding
subscriptions, options, warrants, rights, calls, commitments, conversion rights, rights of
exchange, plans or other agreements or commitment of any character providing for the purchase,
issuance or sale by Seller or any of the Companies of any shares of capital stock or other equity
interests in any of the Companies or any securities convertible or exercisable for any such equity
interests. There are no voting trusts, proxies or other similar agreements or understandings with
respect to the voting or transfer of any of the Shares. There are no outstanding obligations of
any of the Companies to repurchase, redeem or otherwise acquire any of the Shares or other equity
interests in any of the Companies.

     2.5. FCC Licenses. Except as set forth on Schedule 1.2(a):

          (a) Wichita Licensee and Topeka Licensee are the holders of the FCC Licenses described on
Schedule 1.2(a), which are all of the material licenses, permits and authorizations of any federal,
state or local governmental authority required for or otherwise material to 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 Wichita Licensee or
Topeka Licensee 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.

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          (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. Except
as set forth on Schedule 1.2(a), each Station’s election of a channel on which to provide DTV
service following the end of the DTV transition has been approved by the FCC, and each Station has
met the build-out requirements for its replication-maximization deadline pursuant to the FCC’s
Report and Order, “Second Periodic Review of the Commission’s Rules and Policies Affecting the
Conversion to Digital Television,” FCC 04-192 (released September 7, 2004) if such deadline has
passed.

          (c) As of the date of this Agreement, (i) the Stations are carried on cable and DBS systems
pursuant to the retransmission consent agreements set forth on Schedule 1.2(d) and (ii) each
retransmission consent agreement is in effect and is binding upon the Companies 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).

          (d) All material reports and filings required to be filed with the FCC by Wichita Licensee and
Topeka Licensee with respect to the Stations have been timely filed. All such reports and filings
are accurate and complete in all material respects. Wichita Licensee and Topeka Licensee maintain
appropriate public inspection files at the Stations as required by FCC rules.

     2.6. Taxes.

          (a) Except as set forth on Schedule 2.6, (i) the Companies have filed when due (taking into
account all valid extensions) all foreign, federal, state, county and local Tax Returns (defined
below) which are required to have been filed by or with respect to them under applicable law; (ii)
all such Tax Returns were correct and complete in all material respects when filed or subsequently
modified or amended prior to the date hereof; (iii) the Companies have paid all Taxes (defined
below) which have become due and payable by or with respect to them, except those included in
Working Capital; (iv) there is no action, suit, proceeding, investigation, audit, claim, notice of
deficiency or assessment threatened in writing or pending against or with respect to any Company
for Taxes of such Company; (v) there is no outstanding request for any extension of time within
which to file any Tax Return with respect to any Company; (vi) there has been no waiver or
extension of any applicable statute of limitation for the assessment or collection of any Taxes of
any Company; (vii) all Taxes required to be withheld or collected by any Company have been withheld
or collected, and all such Taxes have been paid when due (taking into account all valid extensions)
to the appropriate taxing authority; (viii) no Company has executed or filed any power of attorney
with respect to Taxes which is currently in force; (ix) no Company is a party to or bound by any
Tax allocation, sharing, indemnity or similar agreement; (x) since October 1, 2000, no Company has
been a member of any “affiliated group” within the meaning of Section 1504(a) of the Code filing a
consolidated federal income Tax Return, other than a group the common parent of which is Emmis
Communications Corporation; (xi) no Company has any liability for Taxes of any person (other than
another member of a group the common parent of which is Emmis Communications Corporation) under
Treas. Reg. Section 1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract, or otherwise; (xii) no Company has entered into any
transaction that is a “listed transaction” as defined in Treas. Reg. Section 1.6011-4(b); and
(xiii) no Company will be

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required to include any item of income in, or exclude any item of deduction from, taxable
income for any tax period or portion thereof beginning after the Closing Date as a result of any
(A) change in method of accounting for a tax period ending on or before the Effective Time, (B)
“closing agreement” as described in Section 7121 of the Code (or any similar provision of foreign,
state or local law) executed on or before the Effective Time, (C) intercompany transaction or
excess loss account described in Treasury Regulations promulgated under Section 1502 of the Code
(or any similar provision of foreign, state or local law), or (D) installment sale or open
transaction disposition transaction made on or before the Effective Time.

          (b) As used herein, “Taxes” shall mean any federal, state or local net or gross income, gross
receipts, sales, use, excise, property, ad valorem, transfer, franchise, license, withholding,
payroll, employment and social security, unemployment, and other taxes, fees, assessments or
charges of any kind imposed by any governmental authority, together with any associated interest or
penalties, and “Tax Returns” means any return, declaration, report, claim for refund or statement
relating to Taxes, including any schedules or attachments thereto and any amendments thereof.

     2.7. Personal Property. Schedule 1.2(b) contains a list of material items of Tangible
Personal Property included in the Station Assets. Except as set forth on Schedule 1.2(b), the
Companies have good and marketable title to the Tangible Personal Property free and clear of Liens
other than Permitted Liens. Except as set forth on Schedule 1.2(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 Transferred Obligations, liens for taxes not yet
due and payable, liens that will be released at or prior to Closing, and with respect to the Real
Property, such other easements, rights of way, building and use restrictions, exceptions,
reservations and limitations that do not, individually or in the aggregate, 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.

     2.8. Real Property. Schedule 1.2(c) contains a description of all Real Property
included in the Station Assets, which is all of the real property used, or held for use by the
Companies in connection with the operation of the Stations. The Companies have good and marketable
fee simple title to the owned Real Property described on Schedule 1.2(c) (the “Owned Real
Property”) free and clear of Liens other than Permitted Liens. Schedule 1.2(c) includes a
description of each lease of Real Property or similar agreement included in the Station Contracts,
which is all of the leased real property used or held for use by the Companies in connection with
the operation of the Stations (the “Real Property Leases”). The Companies have good and valid
title to the leasehold estate under each Real Property Lease free and clear of any Liens other than
Permitted Liens. To Seller’s knowledge, the Real Property is not subject to any suit for
condemnation or other taking by any public authority. The Owned Real Property includes, and the
Real Property Leases provide, access to the Stations’ facilities.

     2.9. Contracts. Seller has made available to Buyer copies of the material Station
Contracts. Except as set forth on Schedule 1.2(d), each of the Station Contracts (including
without limitation each of the Real Property Leases) is in full force and effect and is binding
upon the Companies 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). The Companies have performed their obligations under each of the

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Station Contracts in all material respects, and are 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. The Station Contracts requiring the consent of a third party to transfer of
control are identified with an asterisk on Schedules 1.2(c) and 1.2(d).

     2.10. Environmental. Except as set forth on Schedule 1.2(c) or in any Phase I
(defined below), 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 1.2(c) or in any Phase I, to Seller’s knowledge, the Companies have complied in all
material respects with all environmental, health and safety laws applicable to the Stations.

     2.11. Intangible Property. Schedule 1.2(e) contains a description of the material
Intangible Property included in the Station Assets. Except as set forth on Schedule 1.2(e), (i) to
Seller’s knowledge, the Companies’ conduct of the Stations’ business does not infringe upon or
misappropriate any third party rights in any material respect, (ii) to Seller’s knowledge, none of
the material Intangible Property is being infringed or misappropriated by any third party, (iii)
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 the Companies or any
Station, and (iii) the Companies have not received any written notice that their 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 1.2(e), to Seller’s knowledge, the Companies own or have
the right to use the Intangible Property free and clear of Liens other than Permitted Liens. The
Companies have made the filings and registrations listed on Schedule 1.2(e), if any, with respect
to the Intangible Property listed thereon.

     2.12. Employees. Except as set forth on Schedule 2.12, (i) Seller and the Companies
have complied in all material respects with all labor and employment laws, rules and regulations
applicable to the Companies’ 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 or the Companies in respect of the Companies’
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 Companies’ business.
Except as set forth on Schedule 1.2(d) and Schedule 2.12, the Companies are not party to any
collective bargaining, union or similar agreement with respect to the employees of the Companies,
and, to Seller’s knowledge, no union represents or claims to represent or is attempting to organize
such employees. To Seller’s knowledge, except as set forth on Schedule 2.12, no current liability
may be imposed upon a cessation of or reduction in contributions to, or upon any complete or
partial withdrawal from, any multiemployer plan covering employees of the Companies.

     2.13. Insurance. Seller maintains insurance policies or other arrangements with
respect to the Companies, the Stations and the Station Assets consistent with Seller’s or its
affiliates’ practices for other stations, and will maintain such policies or arrangements in full
force and effect until the Effective Time.

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     2.14. Compliance with Law. Except as set forth on Schedule 2.14, (i) the Companies
have complied in all material respects with all laws, ordinances, codes, rules and regulations, and
all decrees, judgments and orders of any court or governmental authority 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 the Companies in respect of the Stations except those
affecting the industry generally.

     2.15. Litigation. Except as set forth on Schedule 2.15, there is no action, suit or
proceeding pending or, to Seller’s knowledge, threatened against the Companies in respect of the
Stations that will subject Buyer or the Station Assets to liability or which will affect Seller’s
ability to perform its obligations under this Agreement.

     2.16. 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 six months ended August 31, 2004 and 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, (ii) employee health insurance expense
reflected in the statements is an estimate of the Stations’ share of consolidated health insurance
expense and not necessarily indicative of actual claims activity of any particular Station, (iii) a
portion of departmental operating expenses are paid in Seller’s stock but are reflected as cash
expenses in the statements, and (iv) 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 August 31, 2005 and the date of this Agreement, the Stations have been operated in all
material respects in the ordinary course of business and otherwise in the manner set forth in
Section 4.1, as if such Section applied during such period.

     2.17. Station Assets. The Station Assets include all assets that are owned, leased or
licensed by the Companies, or any affiliates of the Companies, and used in 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 any
Company on the one hand, and any affiliate of the Companies or any officer, director or employee of
the Companies on the other hand, that is not listed on Schedule 1.2(d), such Station Contract is on
commercially reasonable terms.

     2.19. Citizenship. Seller and the Companies are not “foreign persons” as defined in
Section 1445(f)(3) of the Code.

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ARTICLE 3: BUYER REPRESENTATIONS AND WARRANTIES

     Buyer hereby makes the following representations and warranties to Seller as of the date
hereof and as of the Closing:

     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
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 executed and delivered 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 or thereby does not and will not conflict
with, violate, result in a breach of the terms and conditions of, or, with or without notice or the
passage of time, result in any breach, event of default or the creation of any lien under, any
lease, contract or agreement to which Buyer is a party or to which its assets are subject, any
organizational documents of Buyer, or any law, judgment, order or decree to which Buyer is subject,
or 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.

     3.5. Qualification. Buyer knows of no reason why it should not be found to be
legally, financially and otherwise qualified to acquire the Stock and to own the Companies and
control and operate the Stations under the Communications Act and the rules, regulations and
policies of the FCC, and knows of no facts that would, under existing law and the existing rules,
regulations, policies and procedures of the FCC, disqualify Buyer as transferee of control of the
FCC Licenses. No waiver of or exemption from any FCC rule or policy on the part of Buyer is
necessary for the FCC Consent to be obtained. There are no matters relating to Buyer that might
reasonably be expected to result in the FCC’s denial or delay of approval of the FCC Application.

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     3.6. Investment. Buyer is acquiring the Stock for its own account and for investment
purposes and not with a view to the distribution thereof. Buyer acknowledges that none of the
Stock has been registered under the Securities Act of 1933, as amended, or any state securities
law. Buyer has conducted an examination of the information made available to it by Seller relating
to the Companies and their businesses, Buyer has such knowledge, sophistication and experience in
business and financial matters that it is capable of evaluating an investment in the Stock, and
Buyer can bear the economic risk of an investment in the Stock and can afford a complete loss of
such investment.

ARTICLE 4: SELLER COVENANTS 

     4.1. Seller’s Covenants. Between the date hereof and Closing, except as permitted by
this Agreement or with the prior written consent of Buyer, Seller shall or shall cause the
Companies to:

          (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;

          (b) maintain the FCC Licenses in full force and effect in all material respects, and not
materially adversely modify any of the FCC Licenses, not give the FCC any grounds to institute
proceedings for the revocation or suspension of, or take any action or fail to take any action if
such action or failure to act would result in a materially adverse modification to any of the FCC
Licenses;

          (c) not other than in the ordinary course of business, sell, lease, license or dispose of or
agree to sell, lease, license or dispose of any of the Station Assets (other than the Real
Property, which the Companies shall not sell or agree to sell) 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, and not dissolve, liquidate, merge or
consolidate with any other entity;

          (d) maintain and replace the Tangible Personal Property and maintain the Real Property, in
each case in the ordinary course of business;

          (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 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) except as otherwise required by law, (i) not enter into any employment agreement (except
in the ordinary course of business consistent with past practice after consultation with Buyer) or
severance agreement or any labor, or union agreement or plan (or amendments of any such existing
agreements or plan) that will be binding upon Buyer or the Companies after Closing, (ii) except in
the ordinary course of business, increase the compensation payable to any employee of the Companies
(except for bonuses and other compensation payable directly by Seller in connection with the
consummation of the transactions contemplated by this Agreement), or (iii) not modify any severance
policy applicable to any

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employee of the Companies that would result in any increase in the amount of severance payable
to any such employee (or would expand the circumstances in which such severance is payable);

          (g) pay accounts payable and collect accounts receivable in the ordinary course of business
consistent with past practice, and not compromise or discount any accounts receivable except in the
ordinary course of business consistent with past practice;

          (h) use reasonable best 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;

          (i) not, other than in the ordinary course of business, enter into new Station Contracts or
amend any existing Station Contracts;

          (j) not issue, sell, transfer, assign or grant options, warrants or rights to purchase or
subscribe to, enter into any arrangement or contract with respect to the issuance, sale, transfer
or assignment of, any of the Shares or any other shares of capital stock or other equity securities
of any of the Companies, or any rights or obligations convertible into or exchangeable for any
shares of capital stock or other equity securities of any of the Companies, not make any changes
(by combination, reorganization or otherwise) in the capital structure of any of the Companies, and
not incur or permit to exist any Lien upon the Shares, except for Permitted Liens; and

          (k) conduct all Tax affairs in the ordinary course consistent with past practice and, without
limiting the generality of the foregoing, not make or change any Tax election or file any amended
Tax Return if such election or amendment would have the effect of increasing the Tax liability of
any Company for any tax period or portion thereof beginning after the Closing Date.

ARTICLE 5: JOINT COVENANTS

     Buyer and Seller hereby covenant and agree as follows:

     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.

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     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 Wichita Licensee and Topeka Licensee 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 2.7 in any material respect, then:

               (i) Seller shall cause the Companies to use reasonable best efforts to repair or replace such
item in all material respects in the ordinary course of business, and

               (ii) if such repair or replacement is not completed prior to Closing, then the parties shall
proceed to Closing, Seller’s representations and warranties as of the Closing shall be modified to
take into account any such condition and Seller shall promptly 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 cause the Companies to use
reasonable best efforts to return the Station to the air as promptly as practicable in the ordinary
course of business. 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, unless such Station returns to the air between January 23, 2006 and January 30, 2006, in which
event the Closing shall be postponed until January 31, 2006, subject to Section 10.1 and to the
satisfaction of the conditions to Closing set forth herein.

     5.5. Environmental.

          (a) Seller has provided Buyer with copies of Phase I environmental assessments of certain Real
Property sites as shown on Schedule 1.2(c), if any (each a “Phase I”).

          (b) Such assessments identified the items set forth on Schedule 1.2(c). With respect to such
items:

               (i) Seller shall use reasonable best efforts to remediate such items in all material respects
in the ordinary course of business,

               (ii) if such remediation is not completed prior to Closing, then the parties shall proceed to
Closing and Seller’s representations and warranties as of the Closing shall be modified to take
into account any such items, and Seller shall promptly remediate such items 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).

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          (c) Notwithstanding anything herein to the contrary, if at any time the reasonably estimated
cost to remedy such items (and any items under the APA) in the aggregate exceeds the amount set
forth in Schedule 1.2(c), then Seller may terminate this Agreement upon written notice to Buyer.

     5.6. Consents. The parties shall use reasonable best efforts to obtain (i) any third
party consents necessary under any Station Contract (which shall not require any payment to any
such third party), and (ii) reasonable estoppel certificates from lessors under any Real Property
Leases for which consent to transfer is necessary, if any, but no such third party consents or
estoppel certificates are conditions to Closing except for the Required Consents (defined below).
Receipt of any consent necessary under the Stations’ network affiliation agreements designated with
a diamond on Schedule 1.2(d) without any material adverse conditions and the Stations’ leases
designated with a diamond on Schedule 1.2(c) (if any) is a condition precedent to Buyer’s
obligation to close under this Agreement (the “Required Consents”).

     5.7. Employees.

          (a) For a period of eighteen (18) months 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 general solicitations not directed solely to any such
employees).

          (b) Seller has provided Buyer a list showing employee positions and annualized pay rates and
target bonus opportunities, where applicable, for employees of the Companies. Seller shall update
that list no later than five (5) business days prior to Closing, and shall provide Buyer with such
other information in Seller’s possession as Buyer may reasonably request in order to decide which
employees it will retain following the Closing, in each case subject to any restrictions under
applicable laws. Prior to the Closing, Buyer shall identify and provide to Seller a written list
of the employees of the Companies whom Buyer plans to retain following the Closing. Seller and
Buyer shall cooperate with one-another in connection with Buyer’s efforts under this Section 5.7.
Employees retained by Buyer shall be employed 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 available to similarly situated employees in the
markets in which the Stations operate. Any person so retained is referred to herein as a
“Transferred Employee.” If any Transferred Employee is subject to a written employment agreement
with any entity other than the Companies, Buyer shall assume Seller’s obligations under such
agreement. Nothing in this Section 5.7 is intended to or shall require Buyer or the Companies to
employ or continue to employ any Transferred Employee for any period of time following the Closing
or to continue to maintain any term or condition of employment or otherwise to treat any such
employee on any basis other than as an employee-at-will (subject to the terms of any employment
contract covering such Transferred Employee). With respect to any employees of the Companies that
do not become Transferred Employees, Seller shall transfer such employees to one of its affiliates
other than the Companies (and, where applicable, the Seller shall assume the employee’s

- 16 -

 

employment agreement or cause it to be assumed by one of Seller’s affiliates other than the
Companies) or otherwise have their employment terminated immediately prior to the Closing. Seller
and Buyer shall each pay one-half of all applicable severance and other liabilities under Seller’s
severance policy as in effect on the date hereof (a copy of which has been provided to Buyer) and
any other amounts (regardless of whether denominated as severance) owing in connection with the
termination of any written employment agreement owing to any employees of the Companies who do not
become Transferred Employees or who become Transferred Employees but who are terminated during the
first four (4) months following Closing (collectively, “Severance”), provided, however, that
Seller’s liability with respect to Severance shall not exceed $1 million in the aggregate
(including amounts paid by Seller’s affiliates under the APA) and Buyer shall be liable for all
other Severance.

          (c) Buyer shall grant credit to each Transferred Employee for all unused vacation accrued as
of the Effective Time, and Buyer shall discharge the obligation to provide such leave to such
employees (such obligations being a part of the Transferred Obligations).

          (d) 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), with
coverage effective immediately upon Closing (and without exclusion from coverage on account of any
pre-existing condition unless Buyer determines in good faith that obtaining such coverage without
such exclusion is not practicable because of a material increase in cost), with service with the
Companies or 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, 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.

          (e) 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 (or as soon as practicable thereafter when Buyer’s 401(k) plan is capable of accepting such
rollovers), including the direct rollover of any outstanding loan balances such 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. DTV Construction for the Topeka Station. Buyer acknowledges that the DTV
construction for the Topeka Station set forth on Schedule 5.8 must be timely completed to meet
replication/maximization requirements for interference protection or to meet other applicable FCC
requirements. Seller shall cause the Companies to commence such work in the ordinary course of
business, and to proceed with such work diligently, but completion thereof is not a condition to
Closing. At Buyer’s reasonable request, Seller will cause the Companies to file with the FCC an
appropriate request for a waiver or extension of the replication/maximization deadline.

     5.9. Accounting Services. 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

- 17 -

 

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.

     5.10. Asset Transfers. Between the date hereof and Closing, Seller shall and shall
use reasonable best efforts to cause the Companies and their affiliates, officers, directors,
employees and agents who own any of the Station Assets or have rights thereto that should be
terminated as of Closing to, (i) transfer to Seller (if prior to Closing) or to Buyer (if at
Closing) and (ii) to the extent appropriate, terminate as of Closing, all of their respective
rights, title and interest in, to and under such Station Assets. Seller shall and shall cause the
Companies and their affiliates, officers, directors, employees and agents to prepare, execute and
file such documents in form and substance reasonably satisfactory to Buyer and take such other
actions as may be required to evidence or record any such transfers or terminations.

     5.11. Intellectual Property License. Other than any trademarks, service marks, brand
names, domain names or trade, corporate or business names of Seller or its affiliates (other than
the Stations), Seller for itself and its affiliates (other than the Stations) hereby grants to
Buyer a non-exclusive, perpetual, irrevocable, and royalty-free license to use any Intellectual
Property owned by Seller or an affiliate (other than the Stations) and used by both the Stations
and Seller’s other stations and business units prior to Closing in the operation of the Stations in
the ordinary course of business, provided that such license: (i) may not be assigned by Buyer,
except to any successor licensee of the relevant Station, (ii) is limited to the extent of Seller’s
rights therein, if any, (iii) may be used by Buyer only in the market of the relevant Station and
only in a manner that does not violate law or any third-party rights, and (iv) shall terminate for
noncompliance or non-use.

     5.12. Use of Business Names. To the extent the trademarks, service marks, brand
names, domain names or trade, corporate or business names of Seller or its affiliates (other than
the Stations) are used by the Stations on stationery, signage, invoices, receipts, forms,
packaging, advertising and promotional materials, product, training and service literature and
materials, computer programs or like materials (“Marked Materials”), Buyer may continue such
pre-existing use for a period of up to three months after Closing, or until the supply of such
Marked Materials is exhausted, if sooner. Buyer shall be solely responsible for such use, which:
(i) may not be assigned by Buyer, (ii) is limited to the extent of Seller’s rights therein, if any,
(iii) may be used by Buyer only in a manner that does not violate law or any third-party rights,
and (iv) shall terminate for noncompliance or non-use.

     5.13. Reasonable Efforts. Prior to Closing, Buyer and Seller shall use their
respective reasonable best efforts to take or cause to be taken all action necessary or desirable
in order to consummate the transactions contemplated by this Agreement by January 31, 2006.

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.

- 18 -

 

          (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 each of its obligations set forth in
Section 8.2.

     6.6. APA. The Closing under the APA shall have been consummated or shall be
consummated simultaneously with the Closing under this Agreement.

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.

          (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.

- 19 -

 

     7.4. Hart Scott Rodino. If applicable, the HSR Clearance shall have been obtained.

     7.5. Deliveries. Seller shall have complied with each of its obligations set forth in
Section 8.1.

     7.6. Consents. The Required Consents shall have been obtained and delivered and such
Required Consents shall be without material adverse conditions.

     7.7. APA. The Closing under the APA shall have been consummated or shall be
consummated simultaneously with the Closing under this Agreement.

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 and the Companies’
jurisdictions 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) the certificates representing the Stock accompanied by stock powers duly endorsed in
blank, sufficient to convey and transfer to Buyer title to the Stock;

          (v) certified copies of the Companies’ charters and bylaws, the Companies’ minute books and
resignations from all officers and directors of the Companies;

          (vi) any other instruments of conveyance, assignment and transfer that may be reasonably
necessary to convey, transfer and assign the Stock from Seller to Buyer, free and clear of Liens,
except for Permitted Liens;

          (vii) an affidavit of non-foreign status of Seller that complies with Section 1445 of the
Code; and

          (viii) the Assignment and Assumption Agreement.

     8.2. Buyer Documents. At Closing, Buyer shall deliver or cause to be delivered to
Seller:

          (i) the Purchase Price in accordance with Section 1.6 hereof;

          (ii) good standing certificates issued by the Secretary of State of Buyer’s jurisdiction of
formation;

- 20 -

 

          (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); and

          (v) the Assignment and Assumption Agreement.

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 (i) those under Section 2.6 (Taxes) and Sections 2.7 and
2.8 (Personal Property and Real Property, but solely with respect to title), which shall survive
until the expiration of any applicable statute of limitations, and (ii) that if within such period
the indemnified party gives the indemnifying party written 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 or, after the
Closing, the Companies, whether or not resulting from third party claims, 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; or

               (iv) the business, ownership, operation of the Companies before the Effective Time, including
without limitation any Taxes on or measured by income attributable to any tax period or portion
thereof ending on or before the Closing Date, except for the Transferred Obligations and as
otherwise provided in Section 11.2.

          (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) (excluding any breaches of the
representations and warranties made under Section 2.6) until, and only to the extent that, Buyer’s
aggregate Damages exceed $500,000 per Station and (ii) the maximum liability of Seller under
Section 9.2(a)(i) (excluding any breaches of the representations and warranties made under Section
2.6) shall be an amount equal to 20% of the Purchase Price.

- 21 -

 

          (c) From and after Closing, Buyer shall defend, indemnify and hold harmless Seller from and
against any and all Damages incurred by Seller, whether or not resulting from third party claims,
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 Transferred Obligations; or

               (iv) the business, ownership, operation of the Companies after the Effective Time, including
without limitation any Taxes on or measured by income attributable to any tax period or portion
thereof beginning after the Closing Date, except as otherwise provided in Section 11.2.

          (d) From and after Closing, Seller shall defend, indemnify and hold harmless Buyer from and
against any and all Taxes incurred by Buyer or, after the Closing, the Companies arising from or
attributable to any and all actions taken pursuant to the second sentence of Section 1.8.

     9.3. Procedures with Respect to Third Party Claims.

          (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 materially prejudiced and provided that, where applicable, 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

- 22 -

 

               (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.

ARTICLE 10: TERMINATION AND REMEDIES

     10.1. Termination. This Agreement shall terminate upon any termination of the APA.
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
pay the Purchase Price at Closing in the circumstances where all of the conditions to Buyer’s
obligations to consummate the Closing (other than those under Article 7 to be performed at Closing)
have been satisfied;

          (d) by written notice of Seller to Buyer or Buyer to Seller if Closing does not occur on or
before September 29, 2006; or

          (e) as provided by Section 5.5(c).

     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 day otherwise scheduled for
Closing; 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; and provided, further, that, notwithstanding the
foregoing, if the date otherwise scheduled for Closing is between January 23, 2006 and January 30,
2006, Closing shall be January 31, 2006.

     10.3. Survival. Neither party may terminate under Sections 10.1(b) or (c) if it is
then in material default under this Agreement. 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 5.1
(Confidentiality), 10.5 (Liquidated Damages) and 12.1 (Expenses) shall survive any termination of
this Agreement.

- 23 -

 

     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.

     10.5. Liquidated Damages. If Seller terminates this Agreement or the APA pursuant to
Section 10.1(c) hereof or thereof, then Buyer shall pay Seller on demand an amount equal to 10% of
the Purchase Price under this Agreement 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: TAX MATTERS

     11.1. Income Tax Returns. Seller shall prepare and file all Tax Returns in respect of
Taxes on or measured by income for or with respect to each Company for all tax periods ending on or
prior to the Closing Date, and pay all Taxes due in respect thereof. Buyer shall prepare and file
all Tax Returns in respect of Taxes on or measured by income for each Company for all tax periods
beginning after the Closing Date, and pay all Taxes due in respect thereof. The parties shall
jointly prepare, and Buyer shall file, all Tax Returns in respect of Taxes on or measured by income
for each Company for all tax periods beginning before or on and ending after the Closing Date
(each a “Straddle Period”), and Taxes due in respect thereof shall be paid by Seller to the extent
attributable to the tax period or portion thereof ending on the Closing Date, and by Buyer to the
extent attributable to the tax period or portion thereof beginning the day after the Closing Date.
With respect to each such Tax Return for or with respect to a Company for any Straddle Period,
Buyer shall provide Seller with the proposed return, a schedule apportioning the Tax, and its
related work papers, no later than thirty (30) days before the filing due date (taking into account
all valid extensions), and the parties shall cooperate in good faith to resolve any issues
concerning such return or apportionment consistent with this Agreement prior to filing.

     11.2. Apportionment. For purposes of this Agreement, all liabilities for Taxes on or
measured by income for any Straddle Period shall be apportioned between the portion of such tax
period that ends on the Closing Date and the portion beginning the day after the Closing Date as
determined on the basis of a closing of the books and records of each Company at the end of the
Closing Date, provided that if on the Closing Date there are any post-Closing transactions
involving a Company not in the ordinary course of business and other than a transaction
contemplated by Section 1.8, then Buyer shall be responsible for any resulting Tax and such
transactions shall be reported on such Company’s post-Closing Tax Return, each to the extent
permitted by Treas. Reg. §1.1502-76(b)(1)(ii)(B).

     11.3. Tax Matters. Any tax-sharing agreement to which a Company is a party shall be
terminated as to such Company as of the Effective Time and shall have no further effect for any
taxable year (whether the current year, a future year or a past year). At Seller’s request, Buyer

- 24 -

 

shall cause any Company to make or join with Seller in making any tax election after the
Closing Date that affects a tax period ending on or before the Closing Date (a “Pre-Closing
Period”) if such election does not have a material adverse effect on Buyer. Neither Buyer, a
Company, nor any of their affiliates shall make any election under section 338 of the Internal
Revenue Code of 1986, as amended, with respect to any transaction contemplated by this Agreement.

     11.4. Tax Records. After Closing, (i) Buyer shall retain the Companies’ tax records
that relate to all Pre-Closing Periods until the expiration of the applicable statute of
limitations (as may be extended), (ii) Buyer and the Companies will provide Seller access to and
copies of such records for the preparation of any Tax Returns, any audit or claim by any taxing
authority, the filing of any claim for a refund of Tax, the allowance of any Tax credit, or any
judicial or administrative proceedings relating to any Pre-Closing Period, and (iii) within five
(5) business days of receipt, Buyer shall pay Seller the amount of any Tax refund received by it or
a Company after Closing that is attributable to Taxes paid by Seller or a Company for any
Pre-Closing Period. If after Closing a taxing authority audits or makes any claim with respect to
a Tax Return of a Company that includes any Pre-Closing Period, then Buyer shall promptly notify
Seller thereof in writing. Seller shall control the portion of any such audit, examination or
proceeding that relates to any Taxes for which Seller is responsible, provided that without the
prior written consent of Buyer, which consent shall not be unreasonably withheld, Seller shall not
settle any such audit, examination or proceeding in a manner which would reasonably be expected to
have a material adverse effect on Buyer, any Company or any affiliates thereof. Buyer shall, at
its own expense, have the opportunity to participate in any such audit, examination or proceeding.
Buyer shall control any audit, examination or proceeding (or portion thereof) that does not relate
to Taxes for which Seller is responsible.

ARTICLE 12: MISCELLANEOUS

     12.1. 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 one-half by Buyer and one-half by Seller, except that if more
than one HSR Act filing is necessary because a party has more than one ultimate parent entity, then
such party shall pay the HSR Act filing fees for any additional filings. Buyer and Seller shall
each be responsible for one-half of all governmental recording, sales, use and other similar
transfer taxes, fees and charges (not including any Taxes on or measured by income) applicable to
the transfer of the Stock 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.

     12.2. Further Assurances. Before Closing, each party shall perform its obligations
and observe the conditions set forth in Schedule 12.2 to this Agreement. 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.

- 25 -

 

     12.3. Assignment. Neither party may assign this Agreement without the prior written
consent of the other party hereto, provided, however, that Buyer may assign its rights hereunder to
an affiliate of Buyer upon written notice to, but without consent of, Seller, provided that (i) any
such assignment does not delay processing of the FCC Application, grant of the FCC Consent or
Closing, (ii) any such assignee delivers to Seller a written assumption of this Agreement, and
(iii) Buyer shall remain liable for all of its obligations hereunder. 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.

     12.4. Notices. Any notice pursuant to this Agreement shall be in writing and shall be
deemed delivered on the date of personal delivery or confirmed facsimile transmission or confirmed
delivery by a nationally recognized overnight courier service, and shall be addressed as follows
(or to such other address as any party may request by written notice):

	 	 	 
	if to Seller:

	 	c/o Emmis Communications Corporation
	 

	 	One Emmis Plaza
	 

	 	40 Monument Circle, Suite 700
	 

	 	Indianapolis, Indiana 46204
	 

	 	Attention: President and CEO
	 

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

	 	Emmis Communications Corporation
	constitute notice) to:

	 	3500 W. Olive Avenue, Suite 1450
	 

	 	Burbank, California 91505
	 

	 	Attention: Gary Kaseff
	 

	 	Facsimile: (818) 238-9158
	 
	 	 
	 

	 	Wiley Rein & Fielding LLP
	 

	 	1776 K Street, N.W.
	 

	 	Washington, D.C. 20006
	 

	 	Attention: Doc Bodensteiner
	 

	 	Facsimile: (202) 719-7049
	 
	 	 
	 

	 	Bose McKinney & Evans, LLP
	 

	 	2700 First Indiana Plaza
	 

	 	135 N. Pennsylvania Street
	 

	 	Indianapolis, Indiana 46204
	 

	 	Attention: David L. Wills
	 

	 	Facsimile: (317) 223-0125
	 
	 	 
	if to Buyer:

	 	c/o The Blackstone Group
	 

	 	345 Park Avenue
	 

	 	New York, New York 10154
	 

	 	Attention: David Tolley
	 

	 	Facsimile: (212) 583-5717

- 26 -

 

	 	 	 
	with a copy (which shall not

	 	Debevoise & Plimpton
	constitute notice) to:

	 	919 Third Avenue
	 

	 	New York, New York 10022
	 

	 	Attention: Gregory V. Gooding

Facsimile: (212) 909-6836

     12.5. 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.

     12.6. Entire Agreement. The Schedules and Exhibits hereto are hereby incorporated
into this Agreement. This Agreement, together with any other agreement executed on the date hereof
in connection herewith, 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 (or in any other
agreement executed on the date hereof in connection herewith). 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.

     12.7. 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.

     12.8. 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.

     12.9. 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.

     12.10. 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.

     12.11. 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 Companies or the Stations, whether or not any party has

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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 12.11.

     12.12. 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.

     12.13. Interpretation. Article titles and headings herein are for convenience of
reference only and are not intended to affect the meaning or interpretation of this Agreement. The
Schedules hereto shall be construed with and as an integral part of this Agreement to the same
extent as if set forth verbatim herein. When used in this Agreement, unless the context clearly
requires otherwise, (i) words such as “herein,” “hereto,” “hereunder,” and “hereafter” shall refer
to this Agreement as a whole, (ii) the term “including” shall not be limiting, and (iii) the term
“ordinary course” shall refer to the ordinary course of Seller’s business and the operation of the
Stations.

[SIGNATURE PAGE FOLLOWS]

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SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth
above.

	 	 	 	 	 
	BUYER:	 	SJL ACQUISITION, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	SELLER:	 	EMMIS OPERATING COMPANY
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]