Document:

Table of Contents

Exhibit 10.2

ASPEN INSURANCE HOLDINGS LIMITED

2008 SHARESAVE SCHEME

DATED                2008

RULES OF THE ASPEN Insurance

Holdings Limited

     2008 Sharesave Scheme 

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	1.      INTERPRETATION					3	
	2.      INVITATIONS TO APPLY FOR OPTIONS					7	
	3.      SCALING DOWN					10	
	4.      GRANT OF OPTIONS					11	
	5.      OVERALL LIMITS ON GRANTS					13	
	6.      LAPSE OF OPTIONS					13	
	7.      EXERCISE OF OPTIONS					14	
	8.      MANNER OF EXERCISE OF OPTIONS					17	
	9.      TAX LIABILITIES					18	
	10.    RELATIONSHIP WITH EMPLOYMENT CONTRACT					19	
	11.    TAKEOVERS AND LIQUIDATIONS					20	
	12.    VARIATION OF SHARE CAPITAL					21	
	13.    NOTICES					22	
	14.    ADMINISTRATION AND AMENDMENT					23	

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Rules of the Aspen Insurance Holdings Limited

     2008 Sharesave Scheme 

Established by resolution of the shareholders of the Company on [DATE].

Approved by HM Revenue & Customs on [DATE] under number [NUMBER].

		
	1. 	INTERPRETATION

		
	1.1. 	The following definitions and rules of interpretation apply to these Rules:

Adoption Date: the date of the adoption of the Scheme by the Company;

Approval Date: the date of the approval of the Scheme by HMRC under Schedule 3;

Associate: has the meaning given to ‘‘associate’’ in paragraph 14 of Schedule 3;

Associated Company: has the meaning given in paragraph 47 of Schedule 3, which may be summarised, as at the Adoption Date, as providing that a company is an associated company of another at any time if:

			
		(a) 	at that time, one has control of the other, or both are under the control of the same person or persons; or

			
		(b) 	at any time in the previous year, one had control of the other, or both were under the control of the same person or persons.

In this definition, ‘‘control’’ has the meaning given in section 416(2) to (6) of the Income and Corporation Taxes Act 1988.

Auditors: the auditors of the Company, or, if the Company does not have auditors, the Company’s accountants at the relevant time (acting as experts and not as arbitrators).

Board: the board of directors of the Company or a committee of directors appointed by that board to carry out any of its functions under the Scheme.

Bonus Date: whichever of the following applies:

			
		(a) 	where the relevant Savings Arrangement provides for the payment of a maximum bonus, the earliest date on which the maximum bonus is payable; or

			
		(b) 	in any other case, the earliest date on which a bonus is payable under the relevant Savings Arrangement.

Company: Aspen Insurance Holdings Limited incorporated and registered in Bermuda;

Constituent Company: any of the following:

			
		(a) 	the Company; and

			
		(b) 	any Eligible Company nominated by the Board to be a Constituent Company at the relevant time.

Continuous Service: the period of continuous service of an employee or director with:

			
		(a) 	any Constituent Company (including service with that company before it became a Constituent Company); and

			
		(b) 	any other company which is or was an Eligible Company (including service with that company before it became an Eligible Company).

If an employee or director has been absent from service with a relevant company for any reason (while remaining an employee or director of that company), or by reason of maternity leave, and has since returned to service with a relevant company, that period of absence shall be deemed to form part of that person’s Continuous Service.

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Any period of service during which a person served as a director shall only count towards Continuous Service if the director was required during that period to devote at least 25 hours per week (excluding meal breaks) to his duties;

Control: has the meaning given in section 719 of ITEPA 2003. Controlled shall be interpreted accordingly. Note that ‘‘control’’ and ‘‘controlled’’ have a different meaning in the definition of ‘‘Associated Company’’ and in rule 7.7;

Date of Grant: the date on which an Option is, was, or is to be granted under the Scheme;

Dealing Day: a day on which the investment exchange on which Shares are listed and/or traded is open for the transaction of business;

Eligible Company: any company of which the Company has Control;

Eligible Employee: any employee or director of a Constituent Company who:

			
		(a) 	does not have a Material Interest (either on his own or together with one or more of his Associates), and has not had such an interest at any time in the 12 months up to the Date of Grant on which any relevant Options may be granted;

			
		(b) 	has no Associate or Associates which has or (taken together) have a Material Interest, or had such an interest at any time in the 12 months up to the Date of Grant on which any relevant Options may be granted;

			
		(c) 	if a director of a Constituent Company, is required to devote at least 25 hours per week (excluding meal breaks) to his duties;

			
		(d) 	on the relevant Date of Grant, will have Continuous Service equal to or greater than 3 months or any other minimum period which may be specified by the Board under rule 2.4(e) on or before the relevant Invitation Date;

			
		(e) 	whose earnings from employment (and/or office, if any) with the relevant Constituent Company are (or would be if there were any) general earnings subject to section 15 or 21 of ITEPA 2003 (earnings for year when employee resident and ordinarily resident in the UK); and

			
		(f) 	has not given or received notice to terminate his employment (and/or office, if any) which will have the effect that he will no longer be an employee or full-time director of any Constituent Company on the relevant Date of Grant;

Exercise Price: the price (which shall be in pounds sterling) at which each Share subject to an Option may be acquired on the exercise of that Option, which (subject to rule 12):

			
		(a) 	if Shares are to be newly issued to satisfy the exercise of the Option, may not be less than the nominal value of a Share;

			
		(b) 	may not be less than the 80 per cent. of the Market Value of a Share on the relevant Invitation Date;

Existing Option: an option or any other right to acquire or receive Shares granted under any Share Incentive Scheme (including the Scheme), which remains capable of exercise, or in the case of options or rights that do not require exercise, remains capable of satisfaction;

Grantor: the person granting an Option, which may be:

			
		(a) 	the Company; or

			
		(b) 	the trustees of an employee benefit trust authorised by the Board to grant Options at the relevant time, subject to rule 9.5; or

			
		(c) 	any other person so authorised, subject to rule 9.5;

HMRC: HM Revenue & Customs;

Invitation Date: a date on which invitations to apply for Options are, were, or are to be issued under the Scheme;

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ITEPA 2003: the Income Tax (Earnings and Pensions) Act 2003;

Key Feature: any provision of the Scheme which is necessary to meet the requirements of Schedule 3;

Market Value: whichever of the following applies:

			
		(a) 	on any day:

			
		(i) 	before any applicable regulations for the determination of market value are made under section 272(3) and 272(4) of the Taxation of Chargeable Gains Act 1992 (as amended by Schedule 26 of the Finance Act 2007); and

			
		(ii) 	on any day while the relevant shares are listed on the New York Stock Exchange, at the discretion of the Board, either:

			
		(iii) 	the middle market quotation for a share on the New York Stock Exchange on the last Dealing Day before that day; or

			
		(iv) 	the average of the middle market quotations on the New York Stock Exchange for a share for the three immediately preceding Dealing Days;

in either case converted into Pounds Sterling at the noon buying rate in New York City for cable transfers payable in Pounds Sterling as certified for customs purposes by the Federal Reserve Bank for that day; or

			
		(b) 	on any day:

			
		(i) 	while the relevant shares are listed on the New York Stock Exchange or listed on any recognised stock exchange (as defined in section 1005 of the Income Taxes Act 2007, as amended by Schedule 26 to the Finance Act 2007); and

			
		(ii) 	when regulations for the determination of market value made under section 272(3) and 272(4) of the Taxation of Chargeable Gains Act 1992 (as amended by Schedule 26 to the Finance Act 2007) (Valuation Regulations) apply in respect of the relevant shares,

the value determined using a method approved by the Board which is compatible with the Valuation Regulations; or

			
		(c) 	on any day when neither paragraph (a) nor paragraph (b) of this definition applies, the market value of a share, determined under the applicable provisions of Part VIII of the Taxation of Chargeable Gains Act 1992, as agreed with HMRC Shares and Assets Valuation (before the relevant Date of Grant, and, if possible, before the relevant Invitation Date, where Market Value on an Invitation Date is being determined for the purpose of setting the Exercise Price);

Material Interest: has the meaning given in paragraph 12 of Schedule 3;

Model Code: the model code set out in the Listing Rules issued by the Financial Services Authority acting as the United Kingdom Listing Authority (or any successor body carrying out the same functions), as it is in force at the relevant time;

Option: a right to acquire Shares granted under the Scheme which has neither lapsed nor been fully exercised;

Option Certificate: a certificate setting out the terms of an Option, issued under rule 4.6;

Option Holder: an individual who holds an Option or, where applicable, his personal representatives;

Redundancy: has the meaning given by the Employment Rights Act 1996 or the Employment Rights (Northern Ireland) Order 1996;

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Repaid Amount: The amount actually received by way of repayments of contributions and payments of bonus or interest (if any) under the Savings Arrangement linked to the relevant Option. The Repaid Amount shall be taken to exclude the amount of:

			
		(a) 	any bonus or interest, if, for the relevant Option, the Repayment is not to be taken to include a bonus under rule 4.3;

			
		(b) 	any contribution paid directly to the savings provider by the Option Holder, other than any contribution made:

			
		(i) 	under special arrangements relating to absence from the Option Holder’s office or employment; or

			
		(ii) 	after cessation of the Option Holder’s relevant office or employment, in the same monthly amount and at the same interval as contributions made previously by deduction from the Option Holder’s pay under the Scheme; and

			
		(c) 	any contribution made in advance, if the due date of payment for that contribution under the Savings Arrangement falls or would have fallen more than one month after the date on which the Repaid Amount was paid to the Option Holder;

Repayment: whichever of the following applies:

			
		(a) 	in relation to any Option for which repayment under the linked Savings Arrangement shall be taken as including a bonus, the aggregate of:

			
		(i) 	the maximum amount of the contributions repayable under the Savings Arrangement; and

			
		(ii) 	the amount of any bonus and/or interest payable under the Savings Arrangement at the Bonus Date; and

			
		(b)     	in relation to any Option for which repayment under the linked Savings Arrangement shall be taken as not including a bonus, the maximum amount of the contributions repayable under the Savings Arrangement;

Retirement: ceasing employment with the intention of retiring;

Rollover Period: any period during which Options may be exchanged for options over shares in another company (under paragraph 38 of Schedule 3, rule 11.4 and rule 11.5);

Savings Arrangement: a certified savings arrangement (as defined in section 703 of the Income Tax (Trading and Other Income) Act 2005) which has been approved by an officer of HMRC for the purposes of Schedule 3;

Schedule 3: Schedule 3 to ITEPA 2003, which provides for the approval of SAYE option schemes by HMRC;

Scheme: the employee share option Scheme constituted and governed by these rules, as amended from time to time;

Scheme-related Employment: the office or employment by virtue of which any person is or was eligible to become an Option Holder;

Share Incentive Scheme: any arrangement to provide employees and/or directors with shares;

Shares: ordinary shares in the Company (subject to rule 13) that meet the requirements of paragraphs 18 to 22 of Schedule 3;

Specified Age: 65, which shall be the specified age for the purposes of the Scheme, under paragraph 31 of Schedule 3;

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Taxable Event: any of the following events which may give rise to liabilities for income tax and national insurance contributions (or their equivalents in any other jurisdiction):

			
		(a) 	the exercise of an Option; or

			
		(b) 	any other taxable event in relation to an Option; or

			
		(c) 	the sale of Shares acquired on exercise of an Option; or

			
		(d) 	any other taxable event in relation to Shares acquired on exercise of an Option;

Tax Liability: the total of:

			
		(a) 	any PAYE income tax and primary class 1 (employee) national insurance contributions (or any similar liability to withhold amounts in respect of income tax or social security contribution in any jurisdiction) that the Company or any employer (or former employer) of an Option Holder is liable to account for as a result of any Taxable Event; and

			
		(b) 	if such amounts may be lawfully recovered from the relevant Option Holder, any secondary class 1 (employer) national insurance contributions (or any similar liability for social security contribution in any jurisdiction) that the Company or any employer (or former employer) of an Option Holder is liable to pay as a result of any Taxable Event.

		
	1.2. 	Headings shall not affect the interpretation of these rules.

		
	1.3. 	A reference to one gender in these rules shall include a reference to the other.

		
	1.4. 	Words in the singular in these rules shall include the plural and vice versa.

		
	1.5. 	A reference to a statute or a statutory provision in these rules is a reference to it as in force at the relevant time, taking account of any amendment, extension or re-enactment, and includes any subordinate legislation in force and made under it.

		
	2. 	INVITATIONS TO APPLY FOR OPTIONS AND APPLICATIONS FOR OPTIONS

		
	2.1 	Subject to the limitations and conditions of this Scheme, the Board may issue invitations to apply for Options at any time.

		
	2.2 	On each occasion that the Board decides to issue invitations to apply for Options, the Board shall determine (in its absolute discretion):

			
		(a) 	whether or not Repayments will be taken to include a bonus for Options granted as a result of the invitations. If the Board determines that Repayments will be taken to include a bonus, that determination may be subject to alteration if applications are scaled down under rule 3. The Board should note that (as at the Adoption Date) a seven year Option will be over the same number of Shares as a five year Option with the same monthly savings, if Repayments are not taken as including a bonus;

			
		(b) 	whether to invite applications for three year Options, five year Options or seven year Options (or Options of such other standard periods as may be available under the HM Treasury specifications for Savings Arrangement in force at the relevant time), or to offer those receiving invitations a choice between two or more of those Option periods;

			
		(c) 	the minimum monthly contribution to be made to a Savings Arrangement linked to any Option granted as a result of the invitations, being an amount which is neither:

			
		(i) 	less than £5 (or such other minimum as may be specified in the HM Treasury specifications for Savings Arrangements in force at the relevant time); nor

			
		(ii) 	more than £10 (or such other amount as may be specified in paragraph 25(3)(b) of Schedule 3 at the relevant time);

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		(d) 	whether to impose a limit on the number of Shares that may be made subject to Options granted as a result of the invitations and if so:

			
		(i) 	what that limit will be; and

			
		(ii) 	whether the threshold value for the purposes of scaling down under rule 3(d), will be £5 or some other value within the range of £40 to £200 specified by the Board under this rule 2.4(d).

In making their decisions under this rule 2.2(d), the Board shall consider the constraints imposed by rule 5 and any plans to make further invitations under the Scheme or to make future awards under any other Share Incentive Scheme that is subject to a limit similar to rule 5; and

			
		(e) 	whether to specify a minimum period of Continuous Service different from the default period of 6 months for the purposes of defining who will be an Eligible Employee. Any such period may not be longer than five years (or such other maximum period as may be specified in paragraph 6(2)(b) of Schedule 3 at the relevant time).

		
	2.3 	On each occasion that the Board decides to issue invitations to apply for Options, those invitations:

			
		(a) 	shall be in a form approved by the Board;

			
		(b) 	shall be sent to all Eligible Employees;

			
		(c) 	at the discretion of the Board, may also be sent to any other employee (including any employee who is also a director) of a Constituent Company who:

			
		(i) 	does not have a Material Interest (either on his own or together with one or more of his Associates), and has not had such an interest at any time in the 12 months up to the Date of Grant on which Options may be granted as a result of those invitations; and

			
		(ii) 	has no Associate or Associates which has or (taken together) have a Material Interest, or had such an interest at any time in the 12 months up to the Date of Grant on which Options may be granted as a result of those invitations;

			
		(d) 	shall comply with rule 2.4;

			
		(e) 	shall be accompanied by invitations to apply to enter into appropriate Savings Arrangements with a Savings Arrangement provider selected by the Board; and

			
		(f) 	shall include a statement that:

			
		(i) 	each invitation is subject to these rules, the relevant Savings Arrangement prospectus, Schedule 3 and any other legislation applying to SAYE option schemes approved under Schedule 3; and

			
		(ii) 	those provisions shall prevail over any conflicting statement.

		
	2.4 	Each invitation shall set out (without limitation):

			
		(a) 	the minimum monthly contribution determined by the Board under rule 2.2(c);

			
		(b) 	the Exercise Price for Options granted as a result of the invitations, or the method by which that Exercise Price will be notified to those receiving invitations;

			
		(c) 	whether Repayments will be taken to include a bonus (subject to rule 3);

			
		(d) 	any limit on the number of Shares that may be placed under Option as a result of the invitations specified under rule, and, if there is such a limit:

			
		(i) 	that applications will be scaled down in accordance with rule 3 if applications are received in excess of that limit; and

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		(ii) 	the amount of the threshold value for the purposes of scaling down under rule 3(d), if a value other than £5 is specified by the Board under rule 2.2(d);

			
		(e) 	whether applications may be made for three year Options, five year Options or seven year Options (or Options of such other standard periods as may be available under the HM Treasury Savings Arrangement specifications in force at the relevant time) or any specified combination of Option periods (subject torule 3);

			
		(f) 	that, to be considered for the grant of Options, completed applications should be received by the Board, or any person nominated to receive applications on behalf of the Board, by 5 pm on the day falling 14 days after the Invitation Date; and

			
		(g) 	any minimum period of Continuous Service which applies for the purpose of determining who is an Eligible Employee on the Invitation Date.

		
	2.5 	Any accidental failure or omission to deliver an invitation to any Eligible Employee shall not invalidate the grant of Options.

		
	2.6 	Each application for an Option:

			
		(a) 	shall be in a form approved by the Board;

			
		(b) 	shall state the period of the Option applied for (subject to possible amendment to a shorter Option period under rule 3);

			
		(c) 	shall incorporate or be accompanied by a duly completed application form to enter into a Savings Arrangement with a Savings Arrangement provider selected by the Board, in which the applicant agrees to make a monthly contribution of a specified amount (subject to possible amendment to a lesser amount under rule 3) which shall be:

			
		(i) 	a multiple of £1;

			
		(ii) 	not less than the minimum determined under rule 2.2(c) and

			
		(iii) 	when aggregated with contributions made by the applicant under any other Savings Arrangements linked to SAYE option schemes approved under Schedule 3, not more than £250 (or such other amount as may be specified by paragraph 25(3)(a) of Schedule 3 at the relevant time),

over the necessary savings period given the period of the Option applied for (subject to possible amendment to a shorter Option period under rule 3);

			
		(d) 	if a limit has been specified under rule 2.2(d), shall include a statement that, if applications are scaled down under rule 3, the applicant agrees that his application shall be amended or withdrawn in accordance with the operation of rule 3;

			
		(e) 	shall authorise and instruct the Board or any person authorised by the Board to:

			
		(i) 	deduct from the applicant’s pay the appropriate monthly contributions; and

			
		(ii) 	pay those deductions to the relevant Savings Arrangement provider to meet the applicant’s obligations,

under any Savings Arrangement entered into by the applicant as a result of the application;

			
		(f) 	shall include the applicant’s agreement to be bound by the terms of this Scheme, and in particular (without limitation), rule 9 in respect of any Option granted to him, or any shares acquired by him under the Scheme; and

			
		(g) 	shall state that:

			
		(i) 	the application is subject to these rules, the relevant Savings Arrangement prospectus, Schedule 3 and any other legislation applying to SAYE option schemes approved under Schedule 3; and

			
		(ii) 	those provisions shall prevail over any conflicting statement.

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	2.7 	The Repayment under a Savings Arrangement shall, as nearly as possible, equal the amount required to be paid to exercise the linked Option in full. Therefore, each application shall be treated as being for an Option over the largest whole number of Shares which can be acquired at the relevant Exercise Price with the Repayment under the linked Savings Arrangement (following adjustment of the application under rule 3, if relevant).

		
	3. 	SCALING DOWN

If:

			
		(a) 	the Board has specified a limit under rule 2.2(d) for a particular set of invitations; and

			
		(b) 	in response to those invitations the Board receives applications for Options over a total number of Shares which exceeds that limit,

the methods of scaling down set out below shall be considered in turn. Each method shall be applied independently, rather than cumulatively with the preceding methods in the list. Scaling down shall be undertaken by the first of the following methods which will ensure that the limit will not be exceeded:

if:

			
		(i) 	Repayments will be taken to include a bonus; and

			
		(ii) 	the relevant invitations offered a choice of Option periods including (but not restricted to) any period relating to Savings Arrangements under which a maximum bonus is payable,

any application for a Savings Arrangement under which a maximum bonus is payable shall be taken instead to be an application for the most similar type of Savings Arrangement under which the bonus is that payable on the first date on which a bonus may be paid. As at the Adoption Date, this would affect only applications for seven year Options, which would be scaled down to applications for five year Options as a result;

			
		(c) 	the amount by which the monthly savings contribution specified in each application exceeds either:

			
		(i) 	if no other threshold value has been specified by the Board under rule 2.2(d), £100; or

			
		(ii) 	if one has been specified, the threshold value specified by the Board under rule 2.2(d)

shall be reduced pro rata, in accordance with the method set out in Schedule 1;

			
		(d) 	if:

			
		(i) 	Repayments will be taken to include a bonus; and

			
		(ii) 	the relevant invitations offered a choice of Option periods including (but not restricted to) any period relating to Savings Arrangements under which a maximum bonus is payable,

a combination of the methods in rule 3(c) and rule 3(d);

			
		(e) 	if Repayments would otherwise have been taken to include a bonus for Options granted as a result of the relevant invitations, the method in rule 3(d) but with Repayments not taken to include a bonus;

			
		(f) 	the amount by which the monthly savings contribution specified in each application exceeds the minimum specified under rule 2.2(c) for the relevant invitations shall be reduced pro rata, in accordance with the method set out in Schedule 2;

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		(g) 	if:

			
		(i) 	Repayments will be taken to include a bonus; and

			
		(ii) 	the relevant invitations offered a choice of Option periods including (but not restricted to) any period relating to Savings Arrangements under which a maximum bonus is payable,

a combination of the methods in rule 3(c) and rule 3(g);

			
		(h) 	if Repayments would otherwise have been taken to include a bonus for Options granted as a result of the relevant invitations, the method in rule 3(g) but with Repayments not taken to include a bonus; and

			
		(i) 	if scaling down cannot be effected either by the method in rule 3(i), or, if Repayments are not to be taken to include a bonus, by the method in rule 3(g):

			
		(i) 	some applicants would not be granted Options following scaling down using the method in this rule 3.1(j);

			
		(ii) 	the Board, in its absolute discretion, may determine not to continue with the scaling down operation and that no Options shall be granted as a result of the relevant invitations; and

			
		(iii) 	if the Board decides to continue the scaling down operation, applicants shall be selected by lot, and each selected applicant shall be taken to apply for an Option of the shortest period offered in the relevant invitations, based on a monthly savings contribution of the minimum specified under rule 2.3(c) for the relevant invitations.

		
	4. 	GRANT OF OPTIONS

		
	4.1 	Subject to the other provisions of this Scheme, Options may be granted as a result of each set of invitations made under the Scheme. If Options are granted, an Option shall be granted to each person who made a valid application (or each person who is treated as making a valid application under rule 3) and who:

			
		(a) 	is an employee or director of a Constituent Company on the Date of Grant;

			
		(b) 	does not have a Material Interest (either on his own or together with one or more of his Associates), and has not had such an interest at any time in the 12 months up to the Date of Grant; and

			
		(c) 	has no Associate or Associates which has or (taken together) have a Material Interest, or had such an interest at any time in the 12 months up to the Date of Grant.

		
	4.2 	Each Option shall be granted over the number of Shares determined for the relevant application under rule 2.7.

		
	4.3 	Whether or not Repayments will be taken to include any bonus will be determined at the time of grant of each Option in accordance with:

			
		(a) 	the determination of the Board under rule 2.2(a); and

			
		(b) 	the effects of rule 3, if the relevant applications were scaled down.

		
	4.4 	Options shall be granted:

			
		(a) 	unless applications were scaled down under rule 3, not later than 30 days after the earliest date by reference to which Market Value was determined for the purpose of setting the Exercise Price; and

			
		(b) 	if applications were scaled down under rule 3, not later than 42 days after the earliest date by reference to which Market Value was determined for the purpose of setting the Exercise Price; and

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		(c) 	while the Company is bound by any undertaking or agreement that this should be the case, not later than 42 days after the Approval Date or any relevant Announcement Date (as applicable).

		
	4.5 	Options may not be granted:

			
		(a) 	at any time when that grant would be prohibited by, or in breach of, any:

			
		(i) 	law; or

			
		(ii) 	regulation with the force of law; or

			
		(iii) 	rule of an investment exchange on which Shares are listed or traded, or any other non-statutory rule with a purpose similar to any part of the Model Code that binds the Company or with which the Board wishes to comply; or

			
		(b) 	before the Approval Date; or

			
		(c) 	after the tenth anniversary of the Adoption Date.

		
	4.6 	Options shall be granted by the Grantor executing a deed in a form approved by the Board. A single deed of grant may be executed in favour of any number of Option Holders. Each Option Holder shall be issued with an Option Certificate (in a form approved by the Board) as soon as possible after the Date of Grant as evidence of the grant of the relevant Option. Each Option Certificate shall set out (without limitation):

			
		(a) 	the Date of Grant of the Option;

			
		(b) 	the number and class of the Shares over which the Option is granted;

			
		(c) 	the Exercise Price;

			
		(d) 	the date after which the Option may be exercised, unless an earlier event occurs to cause the Option to lapse or to become exercisable. This date shall be the Bonus Date of the Savings Arrangement linked to the Option;

			
		(e) 	the date when the Option will lapse, assuming that the Option is not exercised earlier, no event occurs to cause the Option to lapse earlier and rule 7.9 does not then apply to the Option. This date shall be the date falling six months after the Bonus Date of the Savings Arrangement linked to the Option;

			
		(f) 	a statement that:

			
		(i) 	the Option is subject to these rules, Schedule 3 and any other legislation applying to SAYE option schemes approved under Schedule 3; and

			
		(ii) 	those provisions shall prevail over any conflicting statement relating to the Option’s terms; and

			
		(g) 	a summary of the following:

			
		(i) 	rule 6.1 and rule 6.2(j);

			
		(ii) 	rule 7.11;

			
		(iii) 	rule 9; and

			
		(iv) 	rule 10.

		
	4.7 	No amount shall be paid for the grant of an Option.

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	5. 	OVERALL LIMITS ON GRANTS

		
	5.1 	The definition in this rule 5.1 applies in this rule 5:

Dilutive Shares: On any date, all shares of the Company which:

			
		(a) 	have been issued, or transferred out of treasury, on the exercise of options granted, and in satisfaction of any other awards made, under any Share Incentive Scheme (including the Scheme) in the shorter of:

			
		(i) 	the ten years ending on (and including) that date; and

			
		(ii) 	the period since such shares were first admitted to trading on New York Stock Exchange;

			
		(b) 	remain capable of issue, or transfer out of treasury, under any Existing Options.

		
	5.2 	While the Company is bound by any undertaking or agreement that this should be the case, no Option shall be granted under rule 4 if that grant would result in the total number of Dilutive Shares exceeding 10% of the issued share capital of the Company.

		
	6. 	LAPSE OF OPTIONS

		
	6.1 	Options may not be transferred or assigned or have any charge or other security interest created over them. An Option shall lapse if the relevant Option Holder (or his personal representatives) attempts to do any of those things. But, a transfer to an Option Holder’s personal representatives on the death of the Option Holder will not cause an Option to lapse.

		
	6.2 	An Option shall lapse on the earliest of the following:

			
		(a) 	any attempted action by the Option Holder (or his personal representatives) falling within rule 6.1;

			
		(b) 	the date on which the Option shall lapse, as specified in the Option Certificate, if the Option Holder is alive at that time;

			
		(c) 	when the Option Holder’s Scheme-related Employment ceases, if:

			
		(i) 	the Option may not be exercised after that cessation under any part of rule 7; and

			
		(ii) 	the Option Holder is alive immediately after that time.

This rule 6.2(c) is subject to rule 7.7;

			
		(d) 	either:

			
		(i) 	the seventh occasion on which the Option Holder omits to make a payment under the Savings Arrangement linked to the Option; or

			
		(ii) 	the giving of notice by the Option Holder to terminate the Savings Arrangement,

if that takes place before the Bonus Date of the Savings Arrangement, unless that non-payment or notice arises:

			
		(iii) 	when the Option may be exercised under rule 7.3 or rule 7.4, or rule 7.5 or rule 7.6; or

			
		(iv) 	on or after the Option Holder’s death; or

			
		(v) 	when the Option may be exercised or exchanged under any part of rule 11; or

			
		(vi) 	when the Option may be exercised under rule 7.8;

			
		(e) 	at the end of the period during which the Option may be exercised under rule 7.8, if the Option has not been exercised and during that period an event occurred which falls within rule 6.2(c)(i) or rule 6.2(c)(ii), unless that period ended on the Option Holder’s death;

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		(f) 	at the end of any period during which the Option may be exercised under any part of rule 7 other than rule 7.8 and rule 7.9, unless that period ended on the Option Holder’s death;

			
		(g) 	if the Option Holder has died:

			
		(i) 	if the Option Holder died before the Bonus Date of the Savings Arrangement linked to the relevant Option, the date falling 12 months after the date of death;

			
		(ii) 	if the Option Holder died on or within six months after the Bonus Date of the Savings Arrangement linked to the relevant Option, the date falling 12 months after that Bonus Date;

			
		(h) 	if any part of rule 11 applies, the time specified for the lapse of the Option under that part of rule 11;

			
		(i) 	if rule 7.1(h) applies, the time specified in rule 7.1(h); and

			
		(j) 	the bankruptcy of the Option Holder.

		
	7. 	EXERCISE OF OPTIONS

		
	7.1 	No Option may be exercised:

			
		(a) 	when the Option Holder has a Material Interest (either on his own or together with one or more of his Associates), or has had such an interest at any time in the preceding 12 months; or

			
		(b) 	when any Associate or Associates of the Option Holder has or (taken together) have a Material Interest, or had such an interest at any time in the preceding 12 months; or

			
		(c) 	when the Option Holder is not an employee or director of a Constituent Company, except as permitted by any provision of this Scheme other than any part of rule 11. If the Option Holder is not an employee or director of a Constituent Company, an Option may be exercised under any part of rule 11 only if exercise is also permitted at that time under any provision of this Scheme other than rule 11; or

			
		(d) 	earlier than the Bonus Date of the Savings Arrangement linked to that Option, except as permitted by any provision of this Scheme; or

			
		(e) 	later than six months after the Bonus Date of the Savings Arrangement linked to that Option, except as permitted under rule 7.9; or

			
		(f) 	when prohibited by or in breach of any law or regulation with the force of law; or

			
		(g) 	when prohibited by or in breach of any rule of an investment exchange on which Shares are listed or traded, or any provision of a personal dealing code adopted by the Company, or any other non-statutory rule with a similar purpose to any part of the Model Code that binds the Company; or

			
		(h) 	more than once. If an Option is exercised in part only, the unexercised part of the Option shall lapse immediately after the exercise.

		
	7.2 	An Option Holder who is a director or employee of:

			
		(a) 	a Constituent Company; or

			
		(b) 	any Associated Company of the Company which is not a Constituent Company;

			
		(c) 	may exercise an Option at any time during the period starting with the Bonus Date of the Savings Arrangement linked to that Option and ending on the earlier to occur of:

			
		(d) 	the date falling six months after the Bonus Date of the Savings Arrangement linked to that Option; and

			
		(e) 	the Option Holder’s death.

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	7.3 	This rule 7.3 is subject to rule 7.7 and applies to any Options held by an Option Holder who has ceased to hold his Scheme-related Employment:

			
		(a) 	because of injury; or

			
		(b) 	because of disability; or

			
		(c) 	because of Redundancy; or

			
		(d) 	because of Retirement on reaching the Specified Age; or

An Option to which this rule 7.3 applies may be exercised at any time in the period starting immediately after the date on which the Scheme-related Employment ceased and ending on the earliest to occur of:

			
		(e) 	the date falling six months after the date on which the Scheme-related Employment ceased;

			
		(f) 	the date falling six months after the Bonus Date of the Savings Arrangement linked to that Option; and

			
		(g) 	the Option Holder’s death.

		
	7.4 	This rule 7.4 is subject to rule 7.7 and applies to Options held by any Option Holder who has ceased to hold his Scheme-related Employment because of Retirement on reaching any age (other than the Specified Age) at which he is bound to retire in accordance with the terms of his contract of employment.

In this rule 7.4, ‘‘any age (other than the Specified Age) at which he is bound to retire in accordance with the terms of his contract of employment’’ means any age (other than the Specified Age) at which, if the relevant Option Holder were to be dismissed by his employer, it would be possible for retirement to be the reason (or a reason) for that dismissal under section 98 of the Employment Rights Act 1996.

An Option to which this rule 7.4 applies may be exercised at any time in the period starting immediately after the date of Retirement and ending on the earliest to occur of:

			
		(a) 	the date falling six months after the date of Retirement;

			
		(b) 	the date falling six months after the Bonus Date of the Savings Arrangement linked to that Option; and

			
		(c) 	the Option Holder’s death.

		
	7.5 	This rule 7.5 is subject to rule 7.7 and applies to Options:

			
		(a) 	held by any Option Holder who has ceased to hold his Scheme-related Employment because of any reason other than:

			
		(i) 	any reason listed in rule 7.3; or

			
		(ii) 	the reason set out in rule 7.4; or

			
		(iii) 	misconduct; and

			
		(b) 	which were granted more than three years before the date on which the Option Holder’s Scheme-related Employment ceased.

The Board shall interpret the meaning of ‘‘misconduct’’ in rule 7.5(a)(iii) in a manner which is fair and reasonable.

An Option to which this rule 7.5 applies may be exercised at any time in the period starting immediately after the date on which the Scheme-related Employment ceased and ending on the earliest to occur of:

			
		(c) 	the date falling six months after the date on which the Scheme-related Employment ceased;

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		(d) 	the date falling six months after the Bonus Date of the Savings Arrangement linked to that Option; and

			
		(e) 	the Option Holder’s death.

		
	7.6 	This rule 7.6 is subject to rule 7.7 and applies to any Options held by an Option Holder who has ceased to hold his Scheme-related Employment:

			
		(a) 	only because it was in a company which has ceased to be an Eligible Company; or

			
		(b) 	only because it related to a business or part of a business which was transferred to a person other than an Associated Company of the Company,

if the Option Holder has ceased to hold the office or employment which was (before the date of cessation of the Scheme-related employment) the Scheme-related employment (the post-transfer employment) for a reason falling within any of rule 7.3(a), rule 7.3(b), rule 7.3(c), rule 7.3(d) or rule 7.4.

An Option to which this rule 7.6 applies may be exercised at any time in the period starting immediately after the date on which the post-transfer employment ceased and ending on the earliest to occur of:

			
		(c) 	the date falling six months after the date on which the post-transfer employment ceased;

			
		(d) 	the date falling six months after the Bonus Date of the Savings Arrangement linked to that Option; and

			
		(e) 	the Option Holder’s death.

		
	7.7 	No Option Holder shall be treated as ceasing to hold Scheme-related Employment under any of rule 6.2(c), rule 7.3 or rule 7.4, or rule 7.5 or rule 7.6 until that Option Holder ceases to hold any office or employment with:

			
		(a) 	the Company; or

			
		(b) 	any Eligible Company or other company which is controlled by the Company; or

			
		(c) 	any company which:

			
		(i) 	controls the Company; or

			
		(ii) 	is controlled by a person or persons who also control the Company.

In this rule 7.7, ‘‘control’’ has the meaning given in section 416(2) to (6) of the Income and Corporation Taxes Act 1988.

		
	7.8 	This rule 7.8 applies to Options held by any Option Holder who:

			
		(a) 	has reached the Specified Age; and

			
		(b) 	continued to hold his Scheme-related Employment after the date on which he reached the Specified Age.

An Option to which this rule 7.8 applies may be exercised at any time in the period starting immediately after the date on which the Option Holder reached the Specified Age and ending on the earliest to occur of:

			
		(c) 	the date falling six months after the date on which the Option Holder reached the Specified Age;

			
		(d) 	the date falling six months after the Bonus Date of the Savings Arrangement linked to that Option; and

			
		(e) 	the Option Holder’s death.

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	7.9 	This rule 7.9 applies to Options which were held by any Option Holder at the time of his death if, at that time:

			
		(a) 	the Option Holder did not have a Material Interest (either on his own or together with one or more of his Associates), and had not had such an interest at any time in the preceding 12 months; and

			
		(b) 	no Associate or Associates of the Option Holder had (individually or taken together) a Material Interest, or had such an interest at any time in the preceding 12 months; and

whether or not those Options were capable of exercise under any other provision of the Scheme at the time of death.

An Option to which this rule 7.9 applies may be exercised by the Option Holder’s personal representatives at any time in the period starting immediately after the date of death and ending:

			
		(c) 	if the Option Holder died before the Bonus Date of the Savings Arrangement linked to that Option, the date falling 12 months after the date of death; or

			
		(d) 	if the Option Holder died on or within six months after the Bonus Date of the Savings Arrangement linked to that Option, the date falling 12 months after that Bonus Date.

		
	7.10 	If a Repaid Amount is insufficient to exercise the Option linked to the relevant Savings Arrangement in full:

			
		(a) 	the aggregate Exercise Price paid to exercise the Option may not exceed the Repaid Amount; and

			
		(b) 	the number of Shares acquired on exercise of the Option may not exceed the number obtained by dividing the Repaid Amount by the Exercise Price for the Option and, if the result of that division is not a whole number, rounding it down to the nearest whole number.

		
	7.11 	An Option may only be exercised if the Option Holder has made any arrangements, or entered into any agreements, that may be required under rule 9.

		
	8. 	MANNER OF EXERCISE OF OPTIONS

		
	8.1 	An Option shall be exercised by the Option Holder giving a written exercise notice to the Grantor, which shall:

			
		(a) 	set out the number of Shares over which the Option Holder wishes to exercise the Option. If that number exceeds the number over which the Option may be validly exercised at the time (in particular, without limitation, under rule 7.10):

			
		(i) 	the Option shall be treated as exercised only in respect of that lesser number; and

			
		(ii) 	any excess amount paid to exercise the Option or meet any Tax Liability shall be refunded;

			
		(b) 	be made using a form approved by the Board;

			
		(c) 	include a power of attorney appointing the Company as the Option Holder’s agent and attorney for the purposes of rule 9.4 and rule 9.7; and

			
		(d) 	be accompanied by the relevant Option Certificate. If an Option Certificate has been lost, the relevant Option may still be exercised, but the Grantor may make it a condition of exercise that the Option Holder shall enter into a formal acknowledgement that the Option Certificate is lost and a binding undertaking to return it for cancellation if recovered at a later date.

		
	8.2 	Any exercise notice shall be accompanied by:

			
		(a) 	payment of an amount equal to the Exercise Price multiplied by the number of Shares specified in the notice; and

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		(b) 	any payment required under rule 9; and/or

			
		(c) 	any documentation relating to arrangements or agreements required under rule 9.

If the Savings Arrangement provider permits, payment under rule 8.2(a) may take the form of a valid direction to the Savings Arrangement provider to repay to the Grantor the whole amount due to the Option Holder under the Savings Arrangement linked to the relevant Option. If payment is made in this way, the Grantor shall pay to the Option Holder any amount by which the payment received by the Grantor from the Savings Arrangement provider exceeds the aggregate Exercise Price payable on the exercise of the Option.

		
	8.3 	Any exercise notice shall be invalid:

			
		(a) 	to the extent that it is inconsistent with the Option Holder’s rights under these rules and the relevant Option; or

			
		(b) 	if any of the requirements of rule 8. or rule 8.2 are not met; or

			
		(c) 	if any payment referred to in rule 8.2 is made by a cheque that is not honoured on first presentation or in any other manner which fails to transfer the expected value to the Grantor.

The Grantor may permit the Option Holder to correct any defect referred to in rule 8.3(b) or rule 8.3(c) (but shall not be obliged to do so). The date of any corrected exercise notice shall be the date of the correction rather than the original notice date for all other purposes of the Scheme.

		
	8.4 	Shares shall be allotted and issued (or transferred, as appropriate) within 30 days after a valid Option exercise, subject to the other rules of this Scheme.

		
	8.5 	Except for any rights determined by reference to a date before the date of allotment, Shares allotted and issued in satisfaction of the exercise of an Option shall rank equally in all respects with the other shares of the same class in issue at the date of allotment.

		
	8.6 	Shares transferred in satisfaction of the exercise of an Option shall be transferred free of any lien, charge or other security interest, and with all rights attaching to them, other than any rights determined by reference to a date before the date of transfer.

		
	8.7 	If the Shares are listed or traded on any stock exchange, the Company shall apply to the appropriate body for any newly issued Shares allotted on exercise of an Option to be listed or admitted to trading on that exchange.

		
	9. 	TAX LIABILITIES

		
	9.1 	The definitions in this rule 9.1 apply in this rule 9.

Employer NICs: Secondary class 1 (employer) national insurance contributions (or any similar liability for social security contribution in any jurisdiction) which are included in any Tax Liability (or which would be included in any Tax Liability if an election of the type referred to in rule 9.2(c) had not been made) and which may be lawfully recovered from the Option Holder.

Sufficient Shares: the smallest number of Shares which, when sold, will produce an amount at least equal to the relevant Tax Liability (after deduction of brokerage and any other charges or taxes on the sale).

		
	9.2 	It shall be a term of each Option that the Option Holder shall:

			
		(a) 	pay to the Company, his employer or former employer (as appropriate) the amount of any Tax Liability;

			
		(b) 	enter into arrangements to the satisfaction of the Company, his employer or former employer (as appropriate) for payment of any Tax Liability; and

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		(c) 	if required to do so by the Company, his employer or former employer, join in making an election (using a form approved by HMRC) that the whole or any part of the liability for any Employer NICs shall be transferred to the Option Holder.

		
	9.3 	An Option Holder’s employer or former employer may decide to release the Option Holder from, or not to enforce, any part of the Option Holder’s obligations in respect of Employer NICs under rule 9.2(a) and rule 9.2(b).

		
	9.4 	If an Option Holder does not fulfil his obligations under either rule 9.2(a) or rule 9.2(b) in respect of any Tax Liability arising from the exercise of an Option within seven days after the date of exercise and Shares are readily saleable at that time, the Grantor shall withhold Sufficient Shares from the Shares which would otherwise be delivered to the Option Holder. From the net proceeds of sale of those withheld Shares, the Grantor shall pay to the Company, employer or former employer an amount equal to the Tax Liability and shall pay any balance to the Option Holder.

		
	9.5 	Any person other than the Company will only be authorised to grant Options after it has entered into an irrevocable undertaking to the Company (for the benefit of the Company and any employer or former employer of any relevant Option Holder) that such person will fulfil its obligations as a Grantor under the rules of the Scheme, in particular (without limitation) rule 9.4.

		
	9.6 	Option Holders shall have no rights to compensation or damages on account of any loss in respect of Options or the Scheme where such loss arises (or is claimed to arise), in whole or in part, from any loss of approval under Schedule 3 that affects the Scheme or any Option, however that loss of approval may be caused.

		
	9.7 	It shall be a term of each Option that the Option Holder shall join in making an election under section 431(1) or section 431(2) of ITEPA 2003, if required to do so by the Company, his employer or former employer, on or before the date of exercise of the Option.

		
	10. 	RELATIONSHIP WITH EMPLOYMENT CONTRACT

		
	10.1 	The rights and obligations of any Option Holder under the terms of his office or employment with any company shall not be affected by being an Option Holder.

		
	10.2 	The value of any benefit realised under the Scheme by Option Holders shall not be taken into account in determining any pension or similar entitlements.

		
	10.3 	Option Holders and the directors and employees of Constituent Companies and Associated Companies of the Company (past and present) shall have no rights to compensation or damages on account of any loss in respect of Options or the Scheme where such loss arises (or is claimed to arise), in whole or in part, from termination of office or employment with any company. This exclusion of liability shall apply however termination of office or employment, or the giving of notice, is caused and however compensation or damages may be claimed.

		
	10.4 	Option Holders and the directors and employees of Constituent Companies and Associated Companies of the Company (past and present) shall have no rights to compensation or damages on account of any loss in respect of Options or the Scheme where such loss arises (or is claimed to arise), in whole or in part, from:

			
		(a) 	any company ceasing to be a Constituent Company; or

			
		(b) 	any company ceasing to be an Associated Company of the Company; or

			
		(c) 	the transfer of any business from a Constituent Company to any person which is neither a Constituent Company nor an Associated Company of the Company; or

			
		(d) 	the transfer of any business from a Constituent Company to an Associated Company of the Company which is not a Constituent Company; or

			
		(e) 	any change to invitations made under the Scheme, including any variation of their terms or timing, or their complete suspension or termination; or

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		(f) 	the lapse of any Option; or

			
		(g) 	any failure by the Board to nominate an Eligible Company to be a Constituent Company; or

			
		(h) 	any failure by the Board to make an invitation to apply for an Option to any person who is not at the relevant time an Eligible Employee, where it is in the Board’s discretion to do so.

This exclusion of liability shall apply however the relevant circumstances are caused, and however compensation or damages may be claimed.

		
	10.5 	Each Eligible Employee and each employee of a Constituent Company shall have no right to receive Options, whether or not he has previously been granted any.

		
	11. 	TAKEOVERS AND LIQUIDATIONS

		
	11.1 	If any person (in this rule 11.1, the Controller) obtains Control of the Company as a result of:

			
		(a) 	making a general offer to acquire the whole of the issued share capital of the Company which is made on a condition such that, if it is satisfied, the person making the offer will have Control of the Company; or

			
		(b) 	making a general offer to acquire all the shares in the Company which are of the same class as the Shares,

then any Option may (subject to rule 7.1, rule 11.4 and rule 11.11) be exercised within six months after the time when the Controller has obtained Control of the Company and (if relevant) any condition subject to which the offer is made has been satisfied. Any Option to which this rule 11.1 applies shall lapse at the end of that period, unless before then it is exercised or released under rule 11.4.

		
	11.2 	Unless the relevant compromise or arrangement makes provision for the replacement of Options or the compensation of Option Holders which the Auditors have certified in writing to be fair and reasonable, any Option may be exercised within six months after any person (in this rule 11.2, the Controller) obtains Control of the Company as a result of the court sanctioning a compromise or arrangement for the reconstruction or amalgamation of the Company, under section 425 of the Companies Act 1985, Part 26 and (where applicable) Part 27 of the Companies Act 2006 (or in both cases, the local equivalent to such provisions), subject to rule 7.1, rule 11.4 and rule 11.11. Any Option to which this rule 11.2 applies shall lapse at the end of that period, unless before then it is exercised or released under rule 11.4.

		
	11.3 	Any Option may be exercised during the period commencing when any person becomes bound or entitled to acquire Shares under sections 979 to 982 of the Companies Act 2006 (or the local equivalent to such provisions) and continuing for as long as that person remains so bound or entitled, subject to rule 7.1, rule 11.4 and rule 11.11.

		
	11.4 	If, as a result of:

			
		(a) 	an event specified in rule 11.1(a); or

			
		(b) 	an event specified in rule 11.1(b); or

			
		(c) 	the court sanctioning a compromise or arrangement under section 425 of the Companies Act 1985, Part 26 and (where applicable) Part 27 of the Companies Act 2006 (including an event specified in rule 11.2), a company has obtained Control of the Company, or if a company has become bound or entitled as specified in rule 11.3, each Option Holder may, by agreement with that company (Acquiring Company) within the Rollover Period, release each Option (Old Option) for a replacement option (New Option). A New Option shall:

			
		(d) 	be over shares which satisfy the requirements of paragraphs 18 to 22 of Schedule 3 in the Acquiring Company (or some other company falling within paragraph 39(2)(b) of Schedule 3);

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		(e) 	be a right to acquire such number of those shares as have, immediately after grant of the New Option, a total Market Value equal to the total Market Value of the shares subject to the Old Option immediately before its release;

			
		(f) 	have an exercise price per share such that the total price payable on complete exercise of the New Option equals the total price which would have been payable on complete exercise of the Old Option; and

			
		(g) 	subject to rule 11.11, be on terms otherwise identical to the Old Option immediately before the Old Option’s release.

		
	11.5 	Any Rollover Period shall have the same duration as the applicable period defined in paragraph 38(3) of Schedule 3, which may be summarised (as at the Adoption Date) as:

			
		(a) 	for the purposes of rule 11.1, six months beginning with the time the Acquiring Company obtains Control and any condition of the relevant offer is met;

			
		(b) 	for the purposes of rule 11.2 and rule 11.4(c), six months beginning with the time when the court sanctions the relevant compromise or arrangement;

			
		(c) 	for the purposes of rule 11.3, while the Acquiring Company is bound or entitled as specified in that rule; and

			
		(d) 	for the purposes of rule 11.4, as determined by reference to whichever of rule 11.1, rule 11.4(c) or rule 11.3 applies.

		
	11.6 	Any New Option granted under rule 11.4 shall be treated as having been acquired at the same time as the relevant Old Option for all other purposes of the Scheme.

		
	11.7 	The Scheme shall be interpreted in relation to any New Options as if references to:

			
		(a) 	the Company (except for those in the definitions of Constituent Company and Eligible Company) were references to the Acquiring Company (or to any other company whose shares are subject to the New Options, as the context may require); and

			
		(b) 	the Shares were references to the shares subject to the New Options.

		
	11.8 	The Company will remain the scheme organiser of the Scheme (as defined in paragraph 2(2) of Schedule 3) following the release of Options and the grant of New Options under rule 11.4.

		
	11.9 	The Acquiring Company shall issue (or procure the issue of) an Option Certificate for each New Option.

		
	11.10 	In this rule 11 (other than rule 11.4), a person shall be deemed to have obtained Control of a company if he, and others acting with him, have obtained Control of it together.

		
	11.11 	An event causing the grant of New Options shall not trigger the exercise of those New Options under rule 11.1, rule 11.2 or rule 11.3.

		
	11.12 	If the Company passes a resolution for voluntary winding up, any Option may be exercised within six weeks after the resolution is passed, failing which it shall lapse at the end of that period.

		
	11.13 	The Board shall notify Option Holders (and Grantors other than the Company) of any event that is relevant to Options under this rule 11 within a reasonable period after the Board becomes aware of it.

		
	12. 	VARIATION OF SHARE CAPITAL

If there is any variation of the share capital of the Company (whether that variation is a capitalisation issue (other than a scrip dividend), rights issue, consolidation, subdivision or reduction of capital or otherwise), the number and description of Shares subject to each Option and/or the Exercise Price of each Option shall be adjusted in a manner the Board deems appropriate provided that, while the Scheme is approved under Schedule 3, no such adjustment shall be made without HMRC’s prior approval.

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	13. 	NOTICES

		
	13.1 	Any notice or other communication required or made in connection with any Option or otherwise under this Scheme shall be in writing and shall be:

			
		(a) 	delivered personally; or

			
		(b) 	sent by pre-paid first-class post; or

			
		(c) 	sent by recorded delivery post; or

			
		(d) 	sent by commercial courier; or

			
		(e) 	sent by fax (but fax communications shall only be treated as validly sent if an appropriate report of successful transmission has been recorded by the sender’s fax system); or

			
		(f) 	sent by e-mail (but e-mail communications shall only be treated as validly sent if an appropriate report of receipt has been returned to the sender by the e-mail system).

		
	13.2 	Communications made in accordance with rule 13.1 shall be addressed to the parties interested in the Scheme as specified below:

			
		(a) 	in the case of communications to any Eligible Employee or Option Holder, to:

			
		(i) 	his work address; or

			
		(ii) 	his home address, meaning that most recently notified to the sender; or

			
		(iii) 	his work fax number; or

			
		(iv) 	if one has been notified to the sender, his private fax number; or

			
		(v) 	his work e-mail address; or

			
		(vi) 	if one has been notified to the sender, his private e-mail address; and

			
		(b) 	in the case of communications to an Option Holder who has died (where the sender has notice of the death), to:

			
		(i) 	the Option Holder’s home address, meaning that most recently notified to the sender; or

			
		(ii) 	any address or fax number (marked for the attention of any specified person) or any e-mail address that the Option Holder’s personal representatives have notified to the Company (and any relevant Grantor other than the Company) for such communications; and

			
		(c) 	in the case of communications to the Company, to:

			
		(i) 	its registered office, marked for the attention of any specified person, and notified by the Company to the sender; or

			
		(ii) 	any other address (marked for the attention of any specified person) that may have been notified by the Company to the sender; or

			
		(iii) 	any fax number (marked for the attention of any specified person) that may have been notified by the Company to the sender; or

			
		(iv) 	any e-mail address that may have been notified by the Company to the sender; and

			
		(d) 	in the case of communications to any Grantor other than the Company, to:

			
		(i) 	any address (marked for the attention of any specified person) that may have been notified by the Grantor to the sender; or

			
		(ii) 	any fax number (marked for the attention of any specified person) that may have been notified by the Grantor to the sender; or

			
		(iii) 	any e-mail address that may have been notified by the Grantor to the sender.

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	13.3 	Communications made to any Eligible Employee, Option Holder or Option Holder’s personal representatives shall be deemed to have been duly received:

			
		(a) 	if delivered personally, when left at the relevant address; or

			
		(b) 	if sent by pre-paid first-class post or recorded delivery post, at 12 noon on the second business day after posting; or

			
		(c) 	if sent by commercial courier, at the time specified on the signed delivery receipt;

			
		(d) 	if sent by fax, at the time of transmission; or

			
		(e) 	if sent by e-mail, at the time specified in the relevant report of receipt returned to the sender.

		
	13.4 	Communications sent to the Company or any other Grantor shall:

			
		(a) 	be duly made only if actually received in accordance with this rule 13; and

			
		(b) 	shall be treated as made at the time they are received for all purposes of the Scheme.

		
	13.5 	This rule 13 shall not apply to the service of any proceedings or other documents in any legal action.

		
	14. 	ADMINISTRATION AND AMENDMENT

		
	14.1 	The Scheme shall be administered under the direction of the Board.

		
	14.2 	The Board may amend the Scheme from time to time, but:

			
		(a) 	while the Company is subject to any requirement, or bound by any agreement, that this should be the case, no amendment may be made without the prior approval of the Company in general meeting if it would:

			
		(i) 	make the terms on which Options may be granted materially more generous; or

			
		(ii) 	increase the limit specified in rule 5; or

			
		(iii) 	expand the class of potential Option Holders; or

			
		(iv) 	change rule 13 to the benefit of Option Holders,

unless it is a minor amendment to benefit the administration of the scheme, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for Option Holders or for the Company or any Eligible Company; and

			
		(b) 	while the Scheme is approved under Schedule 3, no amendment to a Key Feature shall have effect until approved by HMRC.

		
	14.3 	The Board may establish further savings-related share option plans to operate in overseas territories (overseas plans), provided that:

			
		(a) 	all overseas plans shall be subject to the limitation on awards set out in rule 5;

			
		(b) 	only employees of Eligible Companies who are resident in the relevant territory shall be entitled to benefit under any overseas plan; and

			
		(c) 	no employee shall have an entitlement to awards under any overseas plan greater than the maximum entitlement of an Eligible Employee under the Scheme.

Any such plan shall be governed by rules similar to the rules of the Scheme, but modified to take account of applicable tax, social security, employment, company, exchange control, trust or securities (or any other relevant) law, regulation or practice.

		
	14.4 	The cost of establishing and operating the Scheme shall be borne by the Constituent Companies in proportions determined by the Board.

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	14.5 	The Company shall ensure that at all times:

			
		(a) 	the Company has sufficient authorised and unissued or treasury Shares available, taking into account any other obligations of the Company to issue Shares and to transfer Shares from treasury; and/or

			
		(b) 	arrangements are in place for any third party to transfer issued Shares,

			
		(c) 	to satisfy the exercise of all Options of which the Company is the Grantor.

		
	14.6 	Each Grantor other than the Company shall at all times:

			
		(a) 	keep sufficient issued Shares available; and/or

			
		(b) 	hold sufficient enforceable rights to subscribe for Shares, or to acquire issued Shares,

			
		(c) 	to satisfy the exercise of all Options granted by that Grantor.

		
	14.7 	The Board shall determine any question of interpretation and settle any dispute arising under the Scheme (other than any requiring determination by the Auditors). In doing so, the Board shall exercise its discretion in a manner which is fair and reasonable. In such matters the Board’s decision shall be final.

		
	14.8 	The Company and any other Grantor shall not be obliged to notify any Option Holder if an Option is due to lapse.

		
	14.9 	The Company and any other Grantor shall not be obliged to provide Option Holders with copies of any materials sent to the holders of Shares.

		
	14.10 	The rules of the Scheme shall be governed by, and interpreted in accordance with, the laws of England. The courts of England and Wales shall have exclusive jurisdiction over:

			
		(a) 	the rules of the Scheme; and

			
		(b) 	all Options.

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SCHEDULE 1

SCALING DOWN APPLICATIONS

USING THE METHOD IN RULE 3.1(D)

		
	1. 	INTERPRETATION OF SCHEDULE 1

The definitions in this paragraph apply in this Schedule 1:

A: the maximum number of Shares that can be placed under Option. This is the limit determined under rule 2.2(d).

EP: the Exercise Price for Options granted as a result of the applications which are to be scaled down.

B: the maximum payable in total under Options granted as a result of the applications, which equals the total Repayments following scaling down, and is given by:

A x EP.

C: the total of the Repayments under all Savings Arrangements applied for, without scaling down.

D: the total of the Repayments under all Savings Arrangements applied for if those applications specifying monthly contributions greater than I were adjusted to specify monthly contributions of I.

E: the total of the Repayments under all Savings Arrangements applied for, where the applications specify monthly contributions of I or less.

F: the total of scaled down Repayments arising from monthly contributions in excess of I which is available to be shared pro rata among the applicants to be scaled down, and is given by:

B − D

G: the multiple of monthly contributions making up the Repayment for a particular applicant, which is given by:

in the case of a three year Option application, 36 plus the applicable three year bonus multiple (if Repayments are taken to include bonuses);

in the case of a five year Option application, 60 plus the applicable five year bonus multiple (if Repayments are taken to include bonuses);

in the case of a seven year Option application, 60 plus the applicable seven year bonus multiple (if Repayments are taken to include bonuses); and

in the case of an Option with any other standard period that might be available under a future HM Treasury specification for Savings Arrangements, the number of monthly contributions due under the relevant Savings Arrangement plus the applicable bonus multiple (if Repayments are taken to include bonuses).

H: the Repayment for a particular applicant if his application were not subject to scaling down.

I: £100 or The threshold value applicable under rule 3(d).

		
	2. 	WILL THE METHOD IN RULE 3.1(D) ACHIEVE SCALING DOWN?

First calculate B, C and D.

Note that, by definition, C must be greater than B if scaling down is required.

If D is greater than B, the method in rule 3(d) will not suffice to achieve scaling down.

If D is less than or equal to B, the method in rule 3(d) will suffice to achieve scaling down.

In the unlikely event that D is equal to B, there will be no need to calculate individual amended contributions for those who applied to contribute more than I per month. Their monthly contributions can simply be set at I.

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	3. 	HOW TO SCALE DOWN EACH RELEVANT APPLICATION

		
	3.1 	For each application which is to be scaled down, after scaling down, the Repayment will be given by:

(I x G) + X

where X = F x (H − (I x G))/(C − D).

X should be calculated for each application which is to be scaled down.

		
	3.2 	Each relevant applicant’s scaled down monthly contribution will then be given by:

I + (X/G).

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SCHEDULE 2

SCALING DOWN APPLICATIONS

USING THE METHOD IN RULE 3.1(G)

		
	1. 	INTERPRETATION OF SCHEDULE 2

The definitions in this paragraph apply in this Schedule 2:

A: the maximum number of Shares that can be placed under Option. This is the limit determined under rule 2.4(d).

EP: the Exercise Price for Options granted as a result of the applications which are to be scaled down.

B: the maximum payable in total under Options granted as a result of the applications, which equals the total Repayments following scaling down, and is given by:

A x EP.

C: the total of the Repayments under all Savings Arrangements applied for, without scaling down.

D: The minimum specified under rule 2.4(c).

E: the total of the Repayments under all Savings Arrangements applied for if those applications specifying monthly contributions greater than D were adjusted to specify monthly contributions of D.

F: the total of the Repayments under all Savings Arrangements applied for, where the applications specify monthly contributions of D.

G: the total of scaled down Repayments arising from monthly contributions in excess of D which is available to be shared pro rata among the applicants to be scaled down, and is given by:

B − E

H: the multiple of monthly contributions making up the Repayment for a particular applicant, which is given by:

in the case of a three year Option application, 36 plus the applicable three year bonus multiple (if Repayments are taken to include bonuses);

in the case of a five year Option application, 60 plus the applicable five year bonus multiple (if Repayments are taken to include bonuses);

in the case of a seven year Option application, 60 plus the applicable seven year bonus multiple (if Repayments are taken to include bonuses); and

in the case of an Option with any other period that might be available under a future HM Treasury specification for Savings Arrangements, the number of monthly contributions due under the relevant Savings Arrangement plus the applicable bonus multiple (if Repayments are taken to include bonuses).

I: the Repayment for a particular applicant if his application were not subject to scaling down.

		
	2. 	WILL THE METHOD IN RULE 3.1(G) ACHIEVE SCALING DOWN?

First calculate B, C and E.

Note that, by definition, C must be greater than B if scaling down is required.

If E is greater than B, the method in rule 3(g) will not suffice to achieve scaling down.

If E is less than or equal to B, the method in rule 3(g) will suffice to achieve scaling down.

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In the unlikely event that E is equal to B, there will be no need to calculate individual amended contributions for those who applied to contribute more than D per month. Their contributions can simply be set at D.

		
	3. 	HOW TO SCALE DOWN EACH RELEVANT APPLICATION

		
	3.1 	For each application which is to be scaled down, after scaling down, the Repayment will be given by:

(D x H) + X

where X = G x (I − (D x H))/(C − E).

X should be calculated for each application which is to be scaled down.

		
	3.2 	Each relevant applicant’s scaled down monthly contribution will then be given by:

D + (X/H).

28exv10w1

 

EXHIBIT 10.1

ASSET PURCHASE AGREEMENT 

     THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of May 2, 2008 among Emmis
Television Broadcasting, L.P., an Indiana limited partnership, and Emmis Television License, LLC,
an Indiana limited liability company (individually and collectively, “Seller”), Louisiana Media
Company, LLC, a Delaware limited liability company (“Buyer”) and Emmis Operating Company, an
Indiana corporation (“Emmis Guarantor”).

Recitals

     A. Seller owns and operates the following television broadcast station (the “Station”)
pursuant to certain authorizations issued by the Federal Communications Commission (the “FCC”):

WVUE(TV), New Orleans, Louisiana

     B. Pursuant to the terms and subject to the conditions set forth in this Agreement, Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller, the Station Assets.

     C. The capitalized terms contained and used in this Agreement shall have the respective
meanings ascribed to them on Exhibit A.

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,
except as set forth in Section 1.2, Seller shall sell, assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase and acquire from Seller, all right, title and interest of Seller in
and to all assets and properties of Seller, real and personal, tangible and intangible, that are
owned, leased, licensed, used or held for use in the operation of the Station free and clear of all
Liens (other than Permitted Liens) (collectively, the “Station Assets”), including the following:

          (a) (i) the Permits (to the extent transferable), and (ii) all licenses, permits and other
authorizations issued to Seller by, or pending before, the FCC with respect to the Station,
including those set forth on Schedule 1.1(a) (the “FCC Licenses”), and any renewals or
modifications thereof and additions thereto made between the date hereof and Closing;

          (b) except as set forth in Section 1.2, all of Seller’s equipment, machinery, supplies,
inventory, accessories, tools, computers (including traffic and accounting computers and other
hardware and transferable related software), telecommunications equipment, Transmission Equipment,
Transmission Structures, vehicles, furniture, fixtures, spare parts and other tangible personal
property of every kind and description physically located on the Real

 

 

Property and owned by Seller or its Affiliates or that are used or held for use in the
operation of the Station, including those items listed on Schedule 1.1(b), except for any
retirements or dispositions thereof made between the date hereof and the Closing Date in the
ordinary course of business, pursuant to the terms and subject to the conditions of Section 4.1(c)
(the “Tangible Personal Property”);

          (c) (i) all of the land, buildings, structures, improvements, fixtures and other real property
and the easements, rights of way, appurtenances thereon or thereto and other similar rights and
interests in real property owned by Seller and used or held for use in connection with the Station
(collectively, with the property described on Schedule 1.1(c), the “Owned Real Property”) and (ii)
Seller’s leasehold or license interest in all of the real property leased or licensed by Seller
that is occupied, used or held for use in connection with the Station and all of Seller’s
improvements thereon (collectively, with the property described on Schedule 1.1(c), the “Real
Property Leases”) (the Owned Real Property and the Real Property Leases, collectively, the “Real
Property”);

          (d) all agreements for the sale of advertising time on the Station, and all rights in and to
any Contracts used in the Station’s business to which Seller is a party or by which it is bound, or
to which any of the Station Assets are subject, including those listed on Schedule 1.1(d) (whether
or not any such Contract was entered into in the name of the Station or Seller), together with all
Contracts entered into between the date hereof and Closing in accordance with Article 4
(collectively, the “Station Contracts”);

          (e) all of Seller’s rights in and to the Station’s call letters and Seller’s rights in and to
the trademarks, trade names, service marks, internet domain names, copyrights, patents, programs
and programming material and elements thereof (whether recorded on tape or any other media or
intended for live performance and whether completed or in production), jingles, slogans (other than
as set forth in Section 1.2), logos, transferable software, other intellectual or intangible
property of any kind or nature which is used or held for use in the operation of the Station,
including those listed on Schedule 1.1(e), whether or not any of the foregoing are registered in
any jurisdiction, but including, any registrations, applications for registration, renewals and
foreign counterparts thereof (collectively, the “Intangible Property”);

          (f) Seller’s rights in and to all the information and data, FCC logs and other compliance
records, files, documents, records, and books of account (or copies thereof) relating to the
operation of the Station, including the Station’s 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, litigation files (to the
extent not confidential) and regulatory files, customer credit records, personnel records (in
accordance with Applicable Law), inventory records, accounting records, technical information and
engineering data, maintenance, operating and production records, copies of tax returns relating
solely to the Station (but not Seller’s income taxes), and invoices and quality control records and
manuals, but excluding records relating to Excluded Assets;

          (g) except as set forth in Section 1.2, all claims, counterclaims, credits, causes of action,
choses in action, rights of recovery, and rights of indemnification or setoff against third parties
and other claims arising out of or relating to the Station or the Station Assets to the extent
arising during or attributable to any period after the Effective Time;

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          (h) all goodwill of or relating to the Station; and

          (i) warranties covering Tangible Personal Property to the extent transferable by Seller.

     1.2. Excluded Assets. Notwithstanding anything to the contrary contained herein, the
Station Assets shall not include, and Buyer shall not acquire, 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 Personal Property and Intangible Property disposed of or consumed in the
ordinary course of business and in accordance with the terms of this Agreement (including Article
4) between the date hereof and Closing;

          (c) all Station Contracts that are terminated or expire prior to Closing in accordance with
Article 4;

          (d) Seller’s corporate and trade names unrelated to the operation of the Station (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 Station, and all records not
relating to the operation of the Station;

          (e) all contracts of insurance, all coverages, claims 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) all deposits and prepaid expenses (and rights arising therefrom or related thereto),
except to the extent Seller receives a credit therefor under Section 1.6;

          (h) all rights to payment under the Station’s network affiliation agreement, to the extent
arising during or attributable to any period prior to the Effective Time;

          (i) all claims of Seller with respect to any refunds for taxes paid or to be paid by Seller;

          (j) computers and other assets located at the Emmis Communications Corporation headquarters,
and the centralized server facility, data links, payroll system and other operating systems and
related assets that are used in the operation of multiple stations;

          (k) any non-transferable shrinkwrapped computer software and any other non-transferable
computer licenses that are not material to the operation of the Station;

- 3 -

 

          (l) all claims of Seller with respect to reimbursement of expenses incurred prior to Closing
in connection with the Sprint Nextel 2GHz relocation project;

          (m) any of the rights of Seller under this Agreement and the other agreements, certificates
and documents delivered in connection herewith;

          (n) all claims, counterclaims, credits, causes of action, choses in action, rights of
recovery, and rights of indemnification or setoff against third parties and other claims arising
out of or relating to the Station or the Station Assets to the extent arising during or
attributable to any period prior to the Effective Time, including any matters disclosed on Schedule
2.14;

          (o) the assets listed on Schedule 1.2, and the slogan “Great Media, Great People, Great
Service;”

          (p) the Accounts Receivable; and

          (q) without limiting the generality of Section 1.2(e), and notwithstanding anything to the
contrary in this Agreement, all of Seller’s insurance coverages with respect to Hurricane Katrina
or related events, and all claims and proceeds arising therefrom or attributable thereto (and all
rights and benefits in connection therewith), whether arising during or attributable to any period
before or after the Effective Time.

     1.3. Assumption of Obligations.

          (a) Pursuant to the terms and subject to the conditions of this Agreement, on the Closing
Date, Buyer shall assume only the Assumed Obligations. “Assumed Obligations” means the following
(and only the following), to the extent arising during, or attributable to, any period of time on
or after the Effective Time:

               (i) the obligations of Seller arising during, or attributable to, any period of time on or
after the Effective Time under the Permits, Station Contracts and the FCC Licenses, excluding any
liability or obligation arising from or relating to the performance or non-performance thereof by
Seller prior to the Effective Time;

               (ii) the obligations with respect to the Transferred Employees set forth in Section 5.7
arising during, or attributable to, any period of time on or after the Effective Time or as
otherwise set forth in Section 5.7; and

               (iii) any other liabilities of Seller that Buyer agrees to assume and for which Buyer receives
an adjustment to the Purchase Price pursuant to the provisions of Section 1.6.

          (b) 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 or be the successor to, any other liabilities or obligations of Seller (all
such liabilities and obligations not so assumed, collectively, the “Retained Obligations”).
Without limitation of the foregoing, the term “Retained Obligations” includes the following
liabilities, whether accrued or fixed, absolute or contingent, known or

- 4 -

 

unknown, determined or determinable, and, unless otherwise expressly provided herein, whenever
arising:

               (i) all liabilities and obligations relating to or arising out of the Excluded Assets;

               (ii) any liabilities or obligations of Seller to any employee of Seller not employed by Buyer
(in accordance with this Agreement);

               (iii) all liabilities and obligations of Seller under this Agreement, the other agreements,
certificates and documents delivered in connection herewith or otherwise in connection with the
transactions contemplated hereby and thereby;

               (iv) the obligations of Seller arising during, or attributable to, any period of time prior to
the Effective Time under the Station Contracts, Permits and the FCC Licenses, unless and to the
extent that Buyer receives a credit therefor pursuant to Section 1.6;

               (v) all liabilities and obligations of Seller or any Affiliate of Seller (i) under any
employee stock option or similar incentive or bonus plan of Seller or any Affiliates of Seller or
(ii) to stockholders or other equity owners of Seller or any Affiliate of Seller;

               (vi) any liabilities for income or other taxes relating to the Station or Station Assets
pertaining to the period prior to the Closing Date; and

               (vii) any liabilities in respect of any note, bond or indebtedness for borrowed money.

     1.4. Purchase Price. In consideration for the sale of the Station Assets to Buyer, at
Closing Buyer shall pay Seller by wire transfer of immediately available funds to an account
designated in writing by Seller not later than two Business Days prior to the Closing the aggregate
sum of Forty-One Million Dollars ($41,000,000), subject to adjustment pursuant to Sections 1.6, and
if applicable, Sections 1.10, 5.4, 5.5 and 5.9 (the “Purchase Price”).

     1.5. Deposit. On the date of this Agreement, Buyer shall make a cash deposit in
immediately available funds in an amount equal to 10% of the Purchase Price (the “Deposit”) with
Bank of America (the “Escrow Agent”) pursuant to the Escrow Agreement (the “Escrow Agreement”) of
even date herewith among Buyer, Seller and the Escrow Agent. At Closing, the Deposit shall be
disbursed to Seller and applied to the Purchase Price and any interest accrued thereon shall be
disbursed to Buyer. If this Agreement is terminated by Seller pursuant to Section 10.1(c), the
Deposit shall be disbursed to Seller and credited as partial payment of liquidated damages under
Section 10.5, and any interest accrued thereon shall be disbursed to Buyer. If this Agreement is
otherwise terminated pursuant to its terms, the Deposit and any interest accrued thereon shall be
disbursed to Buyer. The parties shall each instruct the Escrow Agent to disburse the Deposit and
all interest thereon to the party entitled thereto and shall not, by any act or omission, delay or
prevent any such disbursement. Any failure by Buyer to make the Deposit on the date hereof
constitutes a material default as to which the Cure Period under Section 10.1 does not apply
entitling Seller to immediately terminate this Agreement.

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     1.6. Prorations and Adjustments.

          (a) All prepaid and deferred income and expenses relating to the Station Assets and arising
from the operation of the Station shall be prorated between Buyer and Seller in accordance with
accounting principles generally accepted in the United States (“GAAP”) as of 12:01 a.m. on the day
of Closing (the “Effective Time”), such that all revenue, income and expenses relating to the
operation of the Station and the ownership of the Station Assets prior to the Effective Time shall
be for the account of Seller and all revenue, income and expenses relating to the operation of the
Station and the ownership of the Station Assets after the Effective Time shall be for the account
of Buyer. Such prorations shall include all ad valorem, real estate and other property taxes
(except transfer taxes as provided by Section 11.1), music and other license fees, employee
performance incentives set forth in employment agreements or annual compensation plans (excluding
any stock or stock option incentives), any vacation for Transferred Employees (except accruals for
the fiscal year of Seller in which Closing occurs for which there shall be no adjustment), utility
expenses, rent and other amounts under Station Contracts, FCC annual regulatory fees, and similar
prepaid and deferred items. Seller shall receive a credit for all of the Station’s deposits and
prepaid expenses. Sales commissions related to the sale of advertisements broadcast on the Station
prior to the Effective Time shall be the responsibility of Seller, and sales commissions related to
the sale of advertisements broadcast on the Station after the Effective Time shall be the
responsibility of Buyer. To the extent not known, real estate and personal property taxes shall be
apportioned on the basis of taxes assessed for the preceding year, with a reapportionment as soon
as the new tax rate and valuation can be ascertained even if such is ascertained after the
Adjustment Amount is finally determined.

          (b) With respect to trade, barter or similar agreements for the sale of time in exchange for
goods or services assumed by Buyer pursuant to Section 1.1(d), if as of the Effective Time the
Station has an aggregate negative or positive barter balance (i.e., the amount by which the value
of air time to be provided by the Station after the Effective Time exceeds, or conversely, is less
than, the fair market value of corresponding goods and services), there shall be no proration or
adjustment, unless the negative or positive barter balance of the Station as an aggregate exceeds
$15,000, in which event such excess or deficiency, as the case may be, shall be treated either as
prepaid time sales or a receivable of Seller, and adjusted for as a proration in Buyer’s or
Seller’s favor, as applicable. In determining barter balances, the value of air time shall be
based upon Seller’s rates as of Closing, and corresponding goods and services shall include those
to be received by the Station after Closing plus those received by the Station before Closing to
the extent conveyed by Seller to Buyer as a part of the Station Assets.

          (c) No later than three (3) Business Days prior to the scheduled Closing Date, Seller shall
provide Buyer with a statement setting forth a reasonably detailed computation of Seller’s
reasonable and good faith estimate of the Adjustment Amount as of Closing (the “Preliminary
Adjustment Report”). As used herein, the “Adjustment Amount” means the net amount by which the
Purchase Price is to be increased or decreased in accordance with this Section 1.6. If the
Adjustment Amount reflected on the Preliminary Adjustment Report is a credit to Buyer, then the
Purchase Price payable at Closing shall be reduced by the amount of the preliminary Adjustment
Amount, and if the Adjustment Amount reflected on the Preliminary Adjustment Report is a charge to
Buyer, then the Purchase Price payable at Closing shall be increased by the amount of such
preliminary Adjustment Amount. For a period of 90 calendar days after Closing, Seller and its
auditors and Buyer and its auditors may review the Preliminary Adjustment Report and the related
books and records of Seller with respect to the Station, and

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Buyer and Seller will in good faith seek to reach agreement on the final Adjustment Amount.
If agreement is reached within such 90-day period, then promptly thereafter Seller shall pay to
Buyer or Buyer shall pay to Seller, as the case may be, an amount equal to the difference between
(i) the agreed Adjustment Amount and (ii) the preliminary Adjustment Amount indicated in the
Preliminary Adjustment Report. If agreement is not reached within such 90-day period, then the
dispute resolutions of Section 1.6(d) shall apply.

          (d) If the parties do not reach an agreement on the Adjustment Amount within the 90-day period
specified in Section 1.6(c), then Seller and Buyer shall select an independent accounting firm of
recognized national standing (the “Arbitrating Firm”) to resolve the disputed items. If Seller and
Buyer do not agree on the Arbitrating Firm within five (5) calendar days after the end of such
90-day period, then the Arbitrating Firm shall be a nationally recognized independent accounting
firm selected by lot (after excluding one firm designated by Seller and one firm designated by
Buyer). Buyer and Seller shall each inform the Arbitrating Firm in writing as to their respective
positions with respect to the Adjustment Amount, and each shall make available to the Arbitrating
Firm any books and records and work papers relevant to the preparation of the Arbitrating Firm’s
computation of the Adjustment Amount. The Arbitrating Firm shall be instructed to complete its
analysis within thirty (30) calendar days from the date of its engagement and upon completion to
inform the parties in writing of its own determination of the Adjustment Amount, the basis for its
determination and whether its determination is within the Mid-Range or if not, whether it is closer
to Buyer’s or Seller’s written determination of the Adjustment Amount. Any determination by the
Arbitrating Firm in accordance with this Section shall be final and binding on the parties. Within
five (5) calendar days after the Arbitrating Firm delivers to the parties its written determination
of the Adjustment Amount, Seller shall pay to Buyer, or Buyer shall pay to Seller, as the case may
be, an amount equal to the difference between (i) the Adjustment Amount as determined by the
Arbitrating Firm and (ii) the preliminary Adjustment Amount indicated in the Preliminary Adjustment
Report.

          (e) If the Arbitrating Firm’s determination of the Adjustment Amount is within the Mid-Range,
then Seller and Buyer shall each pay one-half of the fees and disbursements of the Arbitrating Firm
in connection with its analysis. If not, then (i) if the Arbitrating Firm determines that the
written position of Buyer concerning the Adjustment Amount is closer to its own determination, then
Seller shall pay the fees and disbursements of the Arbitrating Firm in connection with its
analysis, or (ii) if the Arbitrating Firm determines that the written position of Seller concerning
the Adjustment Amount is closer to its own determination, then Buyer shall pay the fees and
disbursements of the Arbitrating Firm in connection with its analysis. As used herein, the term
“Mid-Range” means a range that (i) equals twenty percent (20%) of the absolute difference between
the written positions of Buyer and Seller as to the Adjustment Amount and (ii) has a midpoint equal
to the average of such written positions of Buyer and Seller.

          (f) Concurrently with the payment of any amount required to be paid under Section 1.6(c) or
(d), the payor shall pay the payee interest on such amount for the period from the Closing Date
until the date paid at a rate equal to seven percent (7%) per annum. All payments to be made under
Section 1.6 shall be paid by wire transfer in immediately available funds to the account of the
payee at a financial institution in the United States and shall for all purposes constitute an
adjustment to the Purchase Price.

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     1.7. Allocation. Buyer and Seller will allocate the Purchase Price among the Station
Assets in accordance with Schedule 1.7 attached hereto. Each of Buyer and Seller shall file its
federal income tax returns and other tax returns reflecting the allocation set forth on Schedule
1.7.

     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 (or on such earlier day after such
consent as Buyer and Seller may mutually agree), subject to the satisfaction or waiver of the
conditions set forth in Articles 6 or 7 below. The date on which the Closing is to occur is
referred to herein as the “Closing Date.”

     1.9. FCC Consent.

          (a) Within five Business Days of the date of this Agreement, Buyer and Seller shall prepare
and file an application with the FCC requesting FCC consent to the assignment of the FCC Licenses
to Buyer (the “FCC Application”). FCC consent to the assignment of the main station FCC Licenses
to Buyer without any material adverse conditions other than those of general applicability is
referred to herein as the “FCC Consent.” Upon filing, Buyer and Seller shall diligently prosecute
the FCC Application and otherwise use their commercially reasonable efforts to obtain the FCC
Consent as expeditiously as practicable. Each party shall promptly provide to the other party a
copy of any pleading, order or other document served on them relating to any such FCC Application.
In addition, each party hereto covenants and agrees to (i) file any amendment or modification to
the FCC Application reasonably requested by the FCC; (ii) otherwise take any other action with
respect to the FCC Application as may be reasonably necessary in connection with the transactions
contemplated hereby; and (iii) cooperate in good faith with the other party hereto with respect to
the foregoing. If the Closing shall not have occurred for any reason within the original effective
period of any FCC Consent, and neither party shall have terminated this Agreement pursuant to its
right under Section 10.1, the parties shall jointly request an extension of the effective period of
such FCC Consent. No extension of the effective period of any FCC Consent shall limit the exercise
by either party of its right to terminate the Agreement under Section 10.1.

          (b) Each party agrees to use commercially reasonable efforts to comply with any condition
imposed on it by any FCC Consent, except that no party shall be required to comply with a condition
if (i) the condition was imposed on it as the result of a circumstance the existence of which does
not constitute a breach by that party of any of its representations, warranties, covenants,
obligations or agreements hereunder and (ii) compliance with the condition would be unduly
burdensome on it in any material respect (financially or otherwise).

          (c) Buyer and Seller shall notify each other of all documents filed with or received from any
Governmental Authority 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 filing with a Governmental Authority
hereunder.

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     1.10. Transition Services and DTV.

          (a) In order to promote an efficient transition following Closing (including, at Buyer’s
election pursuant to Schedule 1.10, completion of the build-out of the Station’s digital television
(“DTV”) facilities and in light of Seller’s experience with respect to the matters set forth on
Schedule 1.10, Seller hereby agrees to use commercially reasonable efforts to provide certain
transition services (the “Transition Services”) to Buyer from and after the Closing Date until and
including December 31, 2008 (the “Transition Period”), to reasonably enable Buyer and Seller to
effectively and efficiently transfer operations of the Station from Seller to Buyer. In
consideration for Seller’s agreement to provide the Transition Services during the Transition
Period, Buyer shall pay to Seller a fee in the aggregate amount of $3,500,000 (the “Services Fee”).
The Services Fee is due at Closing by wire transfer of immediately available funds. Payment of
the Services Fee shall be credited as partial payment of the Purchase Price.

          (b) Buyer acknowledges that construction of the Station’s DTV facilities is not complete and
that completion thereof is not a condition to Closing. If not completed before Closing, then the
terms of Schedule 1.10 shall apply. If after Closing the Transition Services include completion of
such build-out as described on Schedule 1.10, then Buyer shall provide Seller and its vendors and
contractors access to perform such work and any other reasonable assistance requested by Seller in
connection therewith.

          (c) Buyer acknowledges that such build-out will be performed by third-party vendors and
contractors, with equipment manufactured by third-party suppliers, whether procured or now owned by
Seller. With respect to such services and equipment, upon the later of Closing or completion of
such work, all assignable vendor, contractor and manufacturer warranties shall be deemed included
in the Station Assets. Seller makes no representation or warranty to Buyer with respect to any
such services or equipment, all of which are expressly disclaimed, and shall have no liability with
respect thereto, all of which is expressly waived by Buyer.

          (d) Buyer’s remedy for a failure of Seller to comply with this Section 1.10 is as set forth on
Schedule 1.10. In no event will Seller have any liability, whether based on contract, tort
(including negligence or strict liability), warranty or any other legal or equitable grounds, for
any punitive, consequential, indirect, exemplary, special or incidental loss or damage suffered by
Buyer arising from or related to the performance or nonperformance of the Transition Services,
including loss of profits, interest or revenue or interruption of business, even if Seller has been
informed of or might otherwise have anticipated or foreseen the possibility of such losses or
damages.

          (e) During the first fifteen (15) Business Days after Closing, Buyer shall provide to Seller
at no additional cost the services of the Station’s business offices, together with reasonable
access to related systems and records, for the purposes of closing the books of the Station for the
period prior to Closing and of facilitating the distribution of any stock compensation from Seller
to the Station’s employees, all in accordance with the procedures and practices applied by the
business offices for periods prior to Closing; provided, that such access shall not unreasonably
interfere with the operation and business of the Station. During the Transition Period, Buyer
shall provide to Seller at no additional cost reasonable access to the offices and systems of the
Station for the purpose of performing the Transition Services.

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ARTICLE 2: SELLER REPRESENTATIONS AND WARRANTIES

     Seller makes the following representations and warranties to Buyer:

     2.1. Organization. Each Seller and Emmis Guarantor (each a “Seller Company” and
collectively, the “Seller Companies”) 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 (if such qualification is necessary). Each
Seller Company 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 the Seller Companies pursuant hereto
(collectively, the “Seller Ancillary Agreements”) and to consummate the transactions contemplated
hereby and thereby.

     2.2. Authorization. The execution, delivery and performance of this Agreement and the
Seller Ancillary Agreements by each Seller Company have been duly authorized and approved by all
necessary company action of such party and do not require any further authorization or consent of
such party. This Agreement is, and each Seller Ancillary Agreement when made by the Seller
Companies and the other parties thereto will be, a legal, valid and binding agreement of each
Seller Company, 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 FCC Consent
and consents to assign certain of the Station Contracts, the execution, delivery and performance by
the Seller Companies of this Agreement and the Seller Ancillary Agreements and the consummation by
the Seller Companies of any of the transactions contemplated hereby and thereby does not and will
not (i) conflict with any organizational documents of the Seller Companies or any Applicable Law to
which the Seller Companies are subject, (ii) require the consent or approval of, or a filing by the
Seller Companies with, any Governmental Authority or any other Person, (iii) result in the creation
or imposition of any Lien (other than Permitted Liens) upon any of the Station Assets, or (iv)
result in a default or give rise to any right of termination, cancellation or acceleration under
any provision of any Station Contract.

     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 licenses, permits and authorizations required for the present operation of the Station. The
FCC Licenses are in full force and effect. The FCC Licenses are not subject to any condition
except conditions applicable to the broadcast industry generally or as otherwise disclosed on the
face of the FCC Licenses, and have not been revoked, suspended, canceled, rescinded or terminated
and have not expired. There is not pending, or, to Seller’s knowledge, threatened, any action by
or before the FCC or any other Governmental Authority 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 now any FCC order, judgment, decree, notice of violation,
notice of apparent liability or order of forfeiture against the

- 10 -

 

Station outstanding, nor to Seller’s knowledge, is there any action, suit, investigation or
other proceeding pending or threatened by or before the FCC against the Station or the FCC Licenses
or against the Seller with respect to the Station or FCC Licenses.

          (b) The Station is 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 and all other Applicable Laws. Seller has filed or made all material reports
and filings required by the FCC in respect of the Station and has paid all FCC regulatory fees in
respect thereof which have become due.

          (c) To Seller’s knowledge, the Transmission Structures owned by Seller are registered with the
FCC to the extent required by Applicable Law and all such Transmission Structures comply in all
material respects with the FCC Licenses and all Applicable Laws, including the Communications Act
and the rules and regulations promulgated by the Federal Aviation Administration, including to the
extent applicable, all such Applicable Laws concerning the marking, painting, lighting, height and
registration of the Transmission Structures.

          (d) To Seller’s knowledge, there is not pending or threatened any action by or before the FCC
that would materially impair the ability of Seller to assign the FCC Licenses to Buyer or which
would materially impede Seller’s ability to prosecute the FCC Application or obtain the grant of
the FCC Consent (other than proceedings of general applicability).

          (e) The Station has been assigned a channel by the FCC for the provision of DTV service, and
the FCC Licenses include such authorization. The Station is in compliance in all material respects
with the FCC’s rules, policies and deadlines concerning construction of DTV facilities, and the
Station is broadcasting a DTV signal in accordance with such authorization in all material respects
and is in compliance in all material respects with the FCC’s build-out and operational requirements
for digital television. The 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. Seller has timely filed with
the FCC the initial FCC Form 387 DTV Transition Status Report for the Station, and Seller shall
take all commercially reasonable steps to implement the DTV Transition Plan as described in Exhibit
4 of Form 387 and to otherwise satisfy all applicable FCC digital transition deadlines and
requirements. Seller has not leased, licensed, assigned, conveyed or otherwise encumbered the
Station’s digital spectrum or any portion thereof for the provision of any “ancillary or
supplementary services” (as the term is defined by the Communications Act).

          (f) Each of the Station’s retransmission consent agreements 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).

     2.5. Taxes.

          (a) Seller has, in respect of the Station’s business and the Station Assets, filed all
foreign, federal, state, county and local income, excise, property, sales, use, franchise and other
tax returns and reports which are required to have been filed by it under Applicable Law, and such
returns are true and complete in all material respects, and Seller has paid all taxes

- 11 -

 

which have become due pursuant to such returns or pursuant to any assessments which have
become payable.

          (b) Seller has, in all material respects, withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid to any employee in respect of the Station’s
business.

          (c) There are no Liens for unpaid taxes (other than Permitted Liens) on the Station Assets.
Except as set forth on Schedule 2.5, there are no outstanding waivers or agreements extending the
application of any statute of limitations of any jurisdiction for any period with respect to Seller
regarding the assessment or collection of any tax.

          (d) There are no threatened actions or proceedings by any Governmental Authority as to which
Seller has knowledge regarding the assessment or collection of any tax against Seller with respect
to the Station Assets or the Station’s business.

     2.6. Personal Property. Schedule 1.1(b) contains a list of material items of Tangible
Personal Property included in the Station Assets. 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 other than
Permitted Liens. Except as set forth on Schedule 1.1(b), all material items of Tangible Personal
Property are in normal operating condition, ordinary wear and tear excepted.

     2.7. Real Property. Schedule 1.1(c) contains a description of all Real Property
included in the Station Assets. Seller is the sole owner and holder of good and marketable fee
simple title to the Owned Real Property described on Schedule 1.1(c) free and clear of Liens other
than Permitted Liens. Schedule 1.1(c) includes a description of each Real Property Lease existing
on the date hereof. Seller is the sole owner and holder of good, valid and existing title to the
leasehold estate under each Real Property Lease free and clear of Liens other than Permitted Liens.
Seller has made available to Buyer copies of all Real Property Leases that are in writing. To
Seller’s knowledge, the Real Property is not subject to any actual or threatened suit for
condemnation or other taking by any public authority. There are no outstanding options or rights
in any party to purchase or acquire any ownership interest in the Owned Real Property. The Owned
Real Property includes, and the Real Property Leases provide, access to the Real Property and the
Station’s facilities. Except for the Station Contracts, with respect to the Owned Real Property,
there are no written or oral leases, subleases, licenses or other agreements granting any other
Person the right of use or occupancy of any portion thereof.

     2.8. Contracts. Schedule 1.1(d) contains a list of all contracts that are used in the
operation of the Station other than contracts that when combined with any Station Contracts
executed after the date of this Agreement do not exceed the limitations set forth in Section 4.1(j)
and agreements for the sale of advertising time entered into in the ordinary course of business.
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).
Except as set forth on Schedule 2.8, 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

- 12 -

 

material respect. Except as set forth on Schedule 2.8, to Seller’s knowledge, there is no
outstanding notice of default or termination with respect to any Station Contract. 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, no
Hazardous Substance regulated under any applicable Environmental Law has been generated, stored,
transported, spilled, discharged, emitted, disposed of, leaked or released on, in, from or to the
Real Property included in the Station Assets by Seller or, to Seller’s knowledge, by any third
party, except in compliance with Applicable Law. 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 applicable
Environmental Laws. Except as set forth on Schedule 1.1(c) or in any Phase I, Seller has not
received from a Governmental Authority written notice of and is not subject to any decree,
judgment, order, citation, claim, action, suit, proceeding, complaint or demand from a Governmental
Authority based on any alleged material unresolved violation of or liability under applicable
Environmental Law with respect to the Real Property or the operation of the Station Assets.

     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), to
Seller’s knowledge, Seller’s use of the Intangible Property does not infringe upon any third party
rights in any material respect, and, to Seller’s knowledge, no third party is infringing or
misappropriating the rights of Seller in the material Intangible Property. Except as set forth on
Schedule 1.1(b), to Seller’s knowledge, Seller owns all right, title and interest in, or has the
right to use, the Intangible Property free and clear of Liens other than Permitted Liens.

     2.11. Employees; Employee Benefits.

          (a) Except as set forth on Schedule 2.11, (i) Seller is not a party to any collective
bargaining agreement with any labor organization involving employees of the Station, (ii) Seller
has complied in all material respects with all labor and employment laws, rules and regulations
applicable to the Station’s business, including those which relate to prices, wages, hours,
discrimination in employment and collective bargaining, and (iii) there is no unfair labor practice
charge or complaint against Seller in respect of the Station’s 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 Station’s business.

          (b) As used herein, “Benefit Plans” means “employee benefit plans” within the meaning of
Section 3(3) of ERISA and all other written or material unwritten pension, profit-sharing or other
retirement, bonus, deferred compensation, incentive compensation, stock purchase, stock option,
severance or termination pay, change in control arrangement, hospitalization or other medical, life
or other insurance, long- or short- term disability, supplemental unemployment benefit, fringe
benefit, sick pay, vacation pay, or similar plans or programs maintained with respect to employees
or independent contractors of the Station (each “Benefit Plan”).

- 13 -

 

          (c) Each Benefit Plan has been operated and administered in all material respects in
accordance with its terms and Applicable Law (including applicable provisions of ERISA and the
Code).

          (d) All Benefit Plans intended to be qualified under Section 401(a) of the Code (other than
any multiemployer plan, as defined in Section 4001(a)(3) or 3(37) of ERISA or Section 4.4(f) of the
Code) have received favorable determination or opinion letters from the Internal Revenue Service on
which Seller continues to be entitled to rely and no circumstance or event exists or has occurred
that would adversely affect the tax-qualified status of any such Benefit Plan.

          (e) Seller has at all times complied, and currently complies, in all material respects with
the applicable health care continuation requirements for any Benefit Plan that is a welfare benefit
plan (as defined in Section 3(1) of ERISA), including Section 4980B of the Code and Sections
601-608 of ERISA (collectively referred to as “COBRA”) and any applicable health care continuation
coverage requirements under state law. Seller has not offered to provide health or life insurance
coverage to any Transferred Employee (as defined in Section 5.7(a)), or to the family members of
any Transferred Employee, for any period extending beyond the termination of the individual’s
employment, except to the extent required under COBRA or comparable requirements of state law.

     2.12. Insurance. Seller maintains insurance policies or other arrangements with
respect to the Station and the Station Assets consistent with its practices for other stations, and
will maintain such policies or arrangements until the Effective Time.

     2.13. Compliance with Law. Except as set forth on Schedule 2.13, (i) Seller has
complied, and the Station’s business has been conducted by Seller, in all material respects with
all Applicable Laws, and (ii) to Seller’s knowledge, there are no claims or investigations of any
Governmental Authority pending or threatened against Seller in respect of the Station or the
Station Assets 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 Station
that will subject Buyer to liability, affect the use or value of the Station Assets, 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 Station for the years ended February 28, 2007 and February 29, 2008 (the
“Financial Statements”). The Financial Statements are the statements included in the audited
consolidated financial statements of Seller and its Affiliates (but the Financial Statements are
not separately audited). The Financial Statements are consistent with the books and records of the
Station, have been prepared in accordance with GAAP consistently applied and in the aggregate
present fairly in all material respects the financial condition of the Station and the results of
operations of the Station as operated by Seller for the respective periods covered thereby, except
that (i) shared operating expenses (if applicable) are allocated among television stations owned
by Seller as determined by Seller, (ii) employee health insurance expense reflected in the
statements is an estimate of the Station’s share of consolidated health insurance expense and not
necessarily indicative of actual claims activity of the Station, (iii) a portion of departmental

- 14 -

 

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 and 2007, certain bonus and severance costs paid to station employees related to
Seller’s other station sales, certain revenues and expenses associated with operating the Station
as part of a group of stations and expenses attributable to the adoption of accounting
pronouncements.

     2.16. Good Title; Sufficiency of Assets. Seller has good and marketable title to, or
valid contract rights to, as applicable, all of the Station Assets, free and clear of all Liens
(other than Permitted Liens). The Station Assets include all assets that are owned, leased or
licensed by Seller or its Affiliates and used or held for use in the operation of the Station in
all material respects as currently operated, except for the Excluded Assets. Between February 29,
2008 and the date of this Agreement, there has not been any period of four or more consecutive days
during which the Station was off the air for any reason or a period of 15 or more days during which
the Station operated at substantially reduced power.

     2.17. Brokers. No agent, broker, investment banker, firm or other person or entity
acting on behalf, or under the authority, of Seller is or will be entitled to any broker’s or
finder’s fee or any other commission or similar fee directly or indirectly from Buyer or its
Affiliates in connection with any of the transactions contemplated hereby.

     2.18. 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.

ARTICLE 3: BUYER REPRESENTATIONS AND WARRANTIES

     Buyer hereby makes the following representations and warranties to Seller:

     3.1. Organization. Buyer is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, and is qualified to do business in each
jurisdiction in which the Station Assets are located. Buyer has the requisite company 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 and thereby.

     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 company
action of Buyer and do not require any further authorization or consent of Buyer. This Agreement
is, and each Buyer Ancillary Agreement when made by Buyer and the other parties thereto will be, a
legal, valid and binding agreement of Buyer enforceable in accordance with its terms, except in
each case as such enforceability may be limited by bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting
the enforcement of creditors’ rights generally and except as such enforceability is subject to
general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

- 15 -

 

     3.3. No Conflicts. Except for the FCC Consent, 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 and thereby does not and will not (i) conflict
with any organizational documents of Buyer or any Applicable Law to which Buyer is subject, or (ii)
require the consent or approval of, or a filing by Buyer with, any Governmental Authority or any
other Person.

     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 is legally, financially and otherwise qualified to be the
licensee of, acquire, own and operate the Station under the Communications Act and the rules,
regulations and policies of the FCC. There are no facts known to Buyer that would, under
Applicable 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 Station. To Buyer’s
knowledge, no waiver of or exemption from any FCC rule or policy is necessary for the FCC Consent
to be obtained, and there are no matters which might reasonably be expected to result in the FCC’s
denial or delay of approval of the FCC Application.

     3.6. Brokers. No agent, broker, investment banker, firm or other person or entity
acting on behalf, or under the authority, of Buyer is or will be entitled to any broker’s or
finder’s fee or any other commission or similar fee directly or indirectly from Seller or its
Affiliates in connection with any of the transactions contemplated hereby.

ARTICLE 4: SELLER COVENANTS 

     4.1. Seller’s Covenants. Between the date hereof and the Closing Date, except as
permitted by this Agreement or with the prior written consent of Buyer (which shall not be
unreasonably withheld, delayed or conditioned), Seller shall:

          (a) operate the Station in the ordinary course of business and in all material respects in
accordance with FCC rules and regulations and with all other Applicable Laws;

          (b) not materially adversely modify any of the FCC Licenses or make any application to so
modify;

          (c) subject to Section 4.1(d), not other than in the ordinary course of business, sell, lease
or dispose of or agree to sell, lease or dispose of any of the Station Assets unless replaced with
similar items of substantially equal or greater value and utility, or create, assume or permit to
exist any Liens upon the Station Assets, except for Permitted Liens;

          (d) not sell, lease or dispose of or agree to sell, lease, license or dispose of any Real
Property, or create, assume or permit to exist any Liens upon the Real Property, except for
Permitted Liens;

          (e) maintain and replace the Tangible Personal Property in the ordinary course of business
consistent with past practices and use commercially reasonable efforts to preserve in

- 16 -

 

all material
respects the goodwill of or relating to the Station and the current relationships of the Station
with employees, customers, suppliers and advertisers;

          (f) upon reasonable notice, give Buyer reasonable access during normal business hours to the
Station Assets, and, through a representative designated by Seller, the Station’s employees, 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 unreasonably interferes
with the operation of the Station;

          (g) at Buyer’s sole cost and expense, provide Buyer any financial information regarding the
Station that is maintained by Seller on an unconsolidated basis and requested by Buyer that is
reasonably necessary to satisfy any reporting obligations to the Securities and Exchange Commission
or reasonably necessary to obtain acquisition financing for the Station;

          (h) except in the ordinary course of business or as otherwise required by Applicable Law or to
comply with any Benefit Plan or except as set forth on Schedule 4.1(j), (i) not enter into any
employment, labor, or union agreement or plan (or amendments of any such existing agreements or
plan) that will be binding upon Buyer after Closing or (ii) not increase the compensation payable
to any employee of the Station or make any new commitment to pay severance pay that would be
binding on Buyer, except for bonuses and other compensation payable by Seller in connection with
the consummation of the transactions contemplated by this Agreement;

          (i) if requested by Buyer, deliver to Buyer copies of any unaudited monthly statements of
operations of the Station when and in the form generated by Seller in the ordinary course of
business;

          (j) not amend any existing Station Contracts or enter into new Station Contracts that will be
binding upon Buyer after the Closing, except for (A) new time sales agreements and other Station
Contracts made in the ordinary course of business that are terminable on ninety days notice or less
without penalty, (B) other Station Contracts made with Buyer’s prior consent (which shall not be
unreasonably withheld, delayed or conditioned), (C) other Station Contracts that do not require
post-Closing payments by Buyer of more than $200,000 (in the aggregate for all such new contracts),
and (D) those contracts set forth on Schedule 4.1(j); provided that Seller may renew existing
Station Contracts on substantially the same terms as current terms (with rate or fee increases not
exceeding 10% more than the then-existing rate or fee) without need for Buyer’s consent;
for purposes of calculating the amount of said post-Closing payments by Buyer, if a contract
is terminable by giving advance notice, then such amount shall include only the post-Closing amount
that would be payable if a termination notice were given at the Closing (whether or not such notice
is in fact given), but in no event shall such amount be more than the amount payable absent such
termination notice;

          (k) keep in full force and effect Seller’s insurance policies or other similar arrangements
with respect to the Station and the Station Assets;

          (l) not enter into any local marketing agreement, joint sales agreement, shared services
agreement or other similar Contract in respect of the programming or operations of the Station;

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          (m) (i) maintain in effect the FCC Licenses, (ii) file with the FCC all material required
reports and pay or be responsible for any required annual regulatory fees with respect to the
Station, and (iii) promptly deliver to Buyer copies of any material reports, applications or
written responses to the FCC related to the Station which are filed during such period;

          (n) not incur or assume any indebtedness for borrowed money that would be binding on Buyer
after Closing or that would constitute an Assumed Obligation, and not enter into any letter of
credit, performance bond, guarantee in lieu of a letter of credit or other similar obligation that
would be binding on Buyer after Closing;

          (o) pay and discharge when due in the ordinary course of business all outstanding amounts
owing under any of the Station’s program licensing agreements listed on Schedule 1.1(d), to the
extent due pursuant to the terms and conditions of such agreements; and

          (p) except with respect to the Station’s DTV build-out (as to which Section 1.10 applies), to
the extent not made prior to the date hereof, make the capital expenditures allocated for in
Seller’s budget for the Station as set forth on Schedule 4.1(p).

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 the Station (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 all financial
information provided by Seller to Buyer) shall be confidential and shall not be disclosed to any
other Person, 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 Applicable 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 Station prior to Closing. Consistent with the Communications Act and the FCC
rules and regulations, control, supervision and direction of the operation of the Station 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.

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          (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
Seller shall use commercially reasonable efforts to repair or replace such item in all material
respects, and if such repair or replacement is not completed prior to Closing, then the parties
shall proceed to Closing and, as Buyer’s sole remedy, the Purchase Price shall be decreased by an
amount equal to the unpaid portion of the reasonably estimated costs of completing such repair or
replacement, and notwithstanding anything to the contrary in this Agreement, such item shall be
deemed conveyed in its “as is” condition with no representation, warranty or covenant made by
Seller with respect thereto.

          (c) If prior to Closing the Station is off the air or if there is any loss or damage to any
Tangible Personal Property that results in a material reduction in Coverage (a “Broadcast
Interruption”), then Seller shall use commercially reasonable efforts to return the Station to the
air and restore prior Coverage as promptly as practicable. Notwithstanding anything herein to the
contrary, if on the day otherwise scheduled for Closing there is a Broadcast Interruption in excess
of 24 hours, then Buyer may postpone Closing until the date five Business Days after the Station
returns to the air and prior Coverage is restored in all material respects, subject to Section 10.1
and otherwise pursuant to the terms and subject to the conditions of Article 6 and Article 7. As
used herein, “Coverage” means the aggregate number of households that receive the Station’s signal,
including those receiving the analog signal (if the Station is then broadcasting an analog signal)
or digital signal (if the Station has then discontinued analog broadcasts) over the air and those
subscribers of cable and satellite systems who then have authority to carry the Station’s signal.

     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”). Prior to Closing, Buyer
may, in its sole discretion and at its sole expense, upon reasonable notice to Seller and at times
reasonably acceptable to Seller, obtain environmental assessments from the Payne Firm of any Owned
Real Property and any Real Property Leases which are ground leases (subject to any necessary
landlord consent), and if the Payne Firm then recommends or advises further investigation or
testing, Buyer may, at its expense, upon reasonable notice to Seller and at times reasonably
acceptable to Seller, obtain further environmental assessments (collectively, the “Buyer
Environmental Assessments”), subject to any necessary landlord consent. Completion of any Buyer
Environmental Assessment is not a condition to Closing.

          (b) If any Phase I, Buyer Environmental Assessment or any item set forth on Schedule 1.1(c)
identifies a condition that requires remediation in order for the Station to operate in compliance
with all applicable Environmental Laws in all material respects, then, except as set forth below,
Seller shall use commercially reasonable efforts to remediate such condition in all material
respects, and if such remediation is not completed prior to Closing, then the parties shall
proceed to Closing and, as Buyer’s sole remedy, the Purchase Price shall be decreased by an
amount equal to the reasonably estimated unpaid costs of completing such remediation, and
notwithstanding anything to the contrary in this Agreement, such condition shall be deemed an
Assumed Obligation with no representation, warranty or covenant made by Seller with respect
thereto.

- 19 -

 

          (c) Notwithstanding anything herein to the contrary, if at any time such condition exists and
the reasonably estimated cost to remedy all such conditions exceeds $350,000, then Seller may
terminate this Agreement upon written notice to Buyer; provided, however, that if Seller elects to
terminate by written notice to Buyer, Buyer shall have the right, exercisable within ten (10)
business days of the date of termination, to cancel such termination by giving written notice to
Seller that Buyer accepts the obligation to remediate such conditions after Closing and releases
Seller from all representations, obligations and liability to Buyer with respect thereto. In such
event, the Purchase Price shall be decreased by an amount equal to the reasonably estimated unpaid
costs of completing such remediation up to $350,000 less all remediation costs paid by Seller.
Notwithstanding anything to the contrary in this Agreement, all of Seller’s claims against, and
rights of recovery from, third-parties in respect of any remediation costs paid by Seller
(including without limitation insurance claims and proceeds) are Excluded Assets.

     5.6. Consents.

          (a) The parties shall use commercially reasonable efforts to obtain (i) any third party
consents necessary for the assignment of any Station Contract (which shall not require any payment
to any such third party), and (ii) execution of reasonable estoppel certificates by lessors under
any Real Property Leases requiring consent to assignment (if any), but no such consents or estoppel
certificates are conditions to Closing except for the Required Consents (defined below). Receipt
of consent to assign to Buyer the Station’s network affiliation agreement designated with a diamond
on Schedule 1.1(d) and the Station’s main tower leases designated with a diamond on Schedule 1.1(c)
(if any) is a condition precedent to Buyer’s obligation to close under this Agreement (the
“Required Consents”).

          (b) To the extent that any Station Contract may not be assigned without the consent of any
third party, and such consent is not obtained prior to Closing, this Agreement and any assignment
executed pursuant to this Agreement shall not constitute an assignment of such Station Contract;
provided, however, with respect to each such Station Contract, Seller and Buyer shall cooperate to
the extent feasible in effecting a lawful and commercially reasonable arrangement under which Buyer
shall receive the benefits under the Station Contract from and after Closing, and to the extent of
the benefits received, Buyer shall pay and perform Seller’s obligations arising under the Station
Contract from and after Closing in accordance with its terms.

     5.7. Employees.

          (a) Seller has provided Buyer a list showing employee positions and annualized pay rates for
employees of the Station. Except as set forth on Schedule 5.7(a), Buyer shall offer employment to
all persons employed by Seller immediately prior to Closing (including any hired after the date
hereof in the ordinary course of business and consistent with
the terms of this Agreement and the Schedules hereto). Except as set forth on Schedule 5.7(a),
each such offer shall be upon terms that will include a level of compensation and benefits that is
substantially comparable to the level provided to such employee immediately preceding the Closing
(as determined before taking into account Seller’s stock compensation program and based on the
Benefit Plan information provided by Seller to Buyer). With respect to each employee who accepts
such offer (collectively, the “Transferred Employees”), at Closing

- 20 -

 

employment with Seller shall
terminate and employment with Buyer shall commence. Unless Buyer enters into a separate employment
agreement with a Transferred Employee or a Transferred Employee is employed pursuant to a Station
Contract, each Transferred Employee shall be an “at will” employee of Buyer, and no provision
contained herein shall be construed as an agreement for, or guarantee of, continued employment.
Notwithstanding the foregoing, except as set forth on Schedule 5.7(a), at Closing, Buyer shall
assume the employment agreements of all employees who are employed pursuant to Station Contracts.

          (b) With respect to Transferred Employees, Seller shall be responsible for all compensation
and benefits arising prior to the Effective Time, and Buyer shall be responsible for all
compensation and benefits arising after the Effective Time. In addition, with respect to
Transferred Employees, the terms of Schedule 5.7(b) shall apply. Notwithstanding anything herein
to the contrary, Buyer shall grant credit to each Transferred Employee for all unused vacation
accrued as of the Effective Time as an employee of Seller, and Buyer shall assume and discharge
Seller’s obligation to provide such leave to such employees (such obligations being a part of the
Assumed Obligations).

          (c) Buyer shall permit Transferred Employees (and their spouses and dependents) to participate
in its “employee welfare benefit plans” (including health insurance plans) and “employee pension
benefit plans” (as defined in Section 3(1) and 3(2) of ERISA, respectively) in which similarly
situated employees are generally eligible to participate, with coverage effective immediately upon
Closing (and without exclusion from coverage on account of any pre-existing condition), with
service with Seller deemed service with the Buyer for purposes of any length of service
requirements, waiting periods, vesting periods and differential benefits based on length of
service, 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.

          (d) Buyer shall also permit each Transferred Employee who participates in the Seller’s 401(k)
plan to elect to make direct rollovers of their account balances into the Buyer’s 401(k) plan as of
Closing, including the direct rollover of any outstanding loan balances such 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.

          (e) Seller shall retain all liability and responsibility for “COBRA” healthcare continuation
coverage required to be offered and provided under Section 4980B of the Code and Sections 601-608
of ERISA to employees and former employees of Seller and any other COBRA qualified beneficiaries
under Seller’s health plan(s) who have elected or who are eligible to elect COBRA continuation
coverage as of or prior to the Effective Time or who incur a COBRA continuation coverage as of or
prior to the Effective Time or who incur a COBRA qualifying event in connection with the
transactions contemplated by this Agreement.

     5.8. 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 its obligations under this Agreement) and any such qualified
intermediary may re-assign to Seller, provided that no such assignment shall prevent or delay
Closing. If Seller gives notice of such assignment, Buyer shall provide Seller with a written

- 21 -

 

acknowledgment of such notice prior to Closing and pay the Purchase Price (or such portion thereof
as is designated in writing by the qualified intermediary) to or on behalf of the qualified
intermediary at Closing and otherwise reasonably cooperate therewith. Buyer’s obligation to
cooperate with Seller is specifically conditioned upon each of the following: (i) all of Buyer’s
rights and all of Seller’s obligations to Buyer respecting all other provisions of this Agreement
shall not be adversely affected by any such exchange, whether or not such exchange is consummated;
and (ii) Buyer shall not in any way be liable to Seller or any other party whatsoever for any
failure of Seller’s proposed transaction to qualify as a tax-free exchange of like-kind property
under the Code.

     5.9. Title Insurance and Surveys.

          (a) Buyer may order at its own expense (i) commitments for owner’s title insurance policies on
any Owned Real Property, (ii) commitments for lessee’s title insurance policies for any Real
Property leased by Seller, and (iii) an ALTA survey on any parcel of Real Property for which a
title insurance policy is to be obtained. Buyer may request that each title commitment includes a
commitment to issue an ALTA title insurance policy from a nationally recognized, reputable title
insurance company selected by Buyer and qualified to do business in the State of Louisiana,
insuring good, marketable and indefeasible fee simple (or leasehold, if applicable) title to each
parcel of the Real Property contemplated above for such amount as Buyer directs. With respect to
such commitments, title policies and ALTA surveys, Seller shall, at Buyer’s expense, cooperate with
Buyer as Buyer may reasonably request. Seller shall deliver the affidavits described in Section
8.1(xii) at Closing. Completion of such title commitments, surveys and policies is not a condition
to Closing. Any endorsements and title policy requirements shall be the responsibility of Buyer
and no endorsements or title policy requirements are a condition to Closing, subject to Seller’s
obligation to deliver the documents described in Section 8.1.

          (b) If prior to Closing, except as set forth on Schedule 1.1(c), Buyer notifies Seller that
any title commitments or surveys obtained by Buyer with respect to the Owned Real Property disclose
any encumbrance which is not a Permitted Lien or disclose any Station Assets encroaching upon
adjacent real property in any material respect, then, except as set forth below, Seller shall use
commercially reasonable efforts to remove such encumbrance or encroachment in all material respects
or obtain an easement or other reasonable remedy, and if such removal or other remedy is not
completed prior to Closing, then the parties shall proceed to Closing and, as Buyer’s sole remedy,
the Purchase Price shall be decreased by an amount equal to the reasonably estimated unpaid costs
of completing such removal or other remedy, and notwithstanding anything to the contrary in this
Agreement, such encroachment or encumbrance shall be deemed a Permitted Lien and an Assumed
Obligation with no representation, warranty or covenant made by Seller with respect thereto.

          (c) Notwithstanding anything herein to the contrary, except as set forth on Schedule 1.1(c),
if at any time such encumbrance or encroachment exists and the reasonably estimated cost to remedy
all such encumbrances or
encroachments exceeds $350,000, then Seller may terminate this Agreement
upon written notice to Buyer; provided, however, that if Seller elects to terminate by written
notice to Buyer, Buyer shall have the right, exercisable within ten (10) business days of the date
of termination, to cancel such termination by giving written notice to Seller that Buyer accepts
the obligation to remove or remedy such encumbrance or

- 22 -

 

encroachment after Closing and releases
Seller from all representations, obligations and liability to Buyer with respect thereto. In such
event, the Purchase Price shall be decreased by an amount equal to the reasonably estimated unpaid
costs of completing such removal or remediation up to $350,000 less all removal and remediation
costs paid by Seller. Notwithstanding anything to the contrary in this Agreement, all of Seller’s
claims against, and rights of recovery from, third-parties in respect of any removal or remediation
costs paid by Seller (including without limitation insurance claims and proceeds) are Excluded
Assets.

     5.10. Accounts Receivable.

          (a) From the Closing Date until the Second Payment Date (defined below) (the “Collection
Period”), Buyer shall, without charge to Seller, use commercially reasonable efforts to collect the
Accounts Receivable in the ordinary course of business and shall apply all amounts collected from
the Station’s account debtors to the oldest account first, unless the advertiser disputes in good
faith in writing an older account and designates the payment to a newer account. Any amounts
relating to the Accounts Receivable that are paid directly to Seller shall be retained by Seller.
Buyer shall not discount, adjust or otherwise compromise any Accounts Receivable and Buyer shall
refer any disputed Accounts Receivable to Seller. Within ten calendar days after the end of each
month, Buyer shall deliver to Seller a report showing Accounts Receivable collections for the prior
month.

          (b) On the date 90 days following the Closing Date, Buyer shall pay to Seller, without offset,
an aggregate amount equal to 2/3 of the total amount of Accounts Receivable existing at Closing, or
if lower, the amount of actual Accounts Receivable collected to date. On the first day of the
first new fiscal year of Buyer following the Closing but in no event later than February 28, 2009
(the “Second Payment Date”), Buyer shall pay to Seller, without offset, an aggregate amount equal
to the remaining unpaid balance of the Accounts Receivable collected by Buyer. The payment of each
such installment is absolute and unconditional, and Buyer’s remedies for Seller’s performance or
non-performance of any obligation shall in no event include any right of set off, counterclaim or
withholding with respect to such Accounts Receivable. At the end of the Collection Period, any
remaining Accounts Receivable shall be returned to Seller for collection.

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 certifying that (i) the conditions set forth in

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Sections 6.1(a)
and (b) have been satisfied, (ii) all documents to be executed by Buyer and delivered at the
Closing have been executed by a duly authorized officer of Buyer; and (iii) the resolutions adopted
by the member of Buyer authorizing the execution, delivery and performance of this Agreement,
attached to the certificate, were duly adopted at a duly convened meeting thereof, at which a
quorum was present and acting throughout or by unanimous written consent, remain in full force and
effect, and have not been amended, rescinded or modified, except to the extent attached thereto.

     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 and no Applicable Law shall be in effect that prohibits the consummation of all
or any part of the transactions contemplated by this Agreement.

     6.3. FCC Authorization. The FCC Consent shall have been granted and shall be
effective.

     6.4. Deliveries. Buyer shall have complied with its obligations set forth in Section
8.2.

ARTICLE 7: BUYER CLOSING CONDITIONS 

     The obligation of Buyer to consummate the Closing hereunder is subject to satisfaction, at or
prior to Closing, of each of the following conditions (unless waived in writing by Buyer):

     7.1. Representations and Covenants.

          (a) The representations and warranties of Seller made in this Agreement shall be true and
correct in all material respects as of the Closing Date except for changes permitted or
contemplated by the terms of this Agreement.

          (b) The covenants and agreements to be complied with and performed by Seller at or prior to
Closing shall have been complied with or performed in all material respects.

          (c) Buyer shall have received a certificate dated as of the Closing Date from Seller executed
by an authorized officer of Seller certifying that (i) the conditions set forth in Sections 7.1(a)
and (b) have been satisfied, (ii) all documents to be executed by Seller and delivered at the
Closing have been executed by a duly authorized officer of Seller; and (iii) the resolutions
adopted by Seller authorizing the execution, delivery and performance of this Agreement, attached
to the certificate, were duly adopted at a duly convened meeting thereof, at which a quorum was
present and acting throughout or by unanimous written consent, remain in
full force and effect, and have not been amended, rescinded or modified, except to the extent
attached thereto.

     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 and no Applicable Law shall be in effect that prohibits the consummation of all
or any part of the transactions contemplated by this Agreement.

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     7.3. FCC Authorization. The FCC Consent shall have been granted and shall be
effective.

     7.4. Deliveries. Seller shall have complied with its obligations set forth in Section
8.1.

     7.5. Consents. The Required Consents shall have been obtained and delivered to Buyer
and shall be in full force and effect.

ARTICLE 8: CLOSING DELIVERIES

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

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

          (ii) the certificate described in Section 7.1(c);

          (iii) an assignment and assumption of FCC authorizations assigning the FCC Licenses from
Seller to Buyer;

          (iv) an assignment and assumption of contracts assigning the Station Contracts from Seller to
Buyer;

          (v) an assignment and assumption of leases assigning all Real Property Leases from Seller to
Buyer, all Required Consents, and copies of any other consents obtained by Seller prior to Closing;

          (vi) deeds conveying the Owned Real Property from Seller to Buyer, free and clear of all Liens
(other than Permitted Liens), substantially in the same form as the deeds that transferred title to
the Owned Real Property to Seller, with any changes reasonably necessary to conform to the terms of
this Agreement and without expanding any of Seller’s representations, warranties or covenants
hereunder;

          (vii) an assignment of intangible property assigning the Intangible Property from Seller to
Buyer;

          (viii) domain name transfers assigning the Station’s domain names listed on Schedule 1.1(e)
from Seller to Buyer;

          (ix) endorsed vehicle titles conveying the vehicles included in the Tangible Personal Property
from Seller to Buyer;

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

          (xi) all estoppel certificates received by Seller prior to Closing;

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          (xii) any customary owner’s affidavits and gap indemnities reasonably requested from Seller by
any title company retained by Buyer, and any other documents required by Applicable Law in order to
record the deeds;

          (xiii) a customary paydown and lien release letter, together with any appropriate UCC releases
or terminations;

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

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

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

          (i) the Purchase Price in accordance with Section 1.4 hereof;

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

          (iii) the certificate described in Section 6.1(c);

          (iv) an assignment and assumption of contracts assuming the Station Contracts;

          (v) an assignment and assumption of FCC authorizations assuming the FCC Licenses;

          (vi) an assignment and assumption of leases assuming the Real Property Leases;

          (vii) domain name transfers assuming the Station’s domain names listed on Schedule 1.1(e);

          (viii) any documents required by Applicable Law in order to record the deeds; 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, provided 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

- 26 -

 

resolution of such claim or expiration of the applicable statute of limitations, and provided
further that:

          (a) the representations and warranties under Sections 2.1 and 3.1 (Organization), Sections 2.2
and 3.2 (Authorization), and the first sentence of Section 2.16 (Good Title; Sufficiency of Assets)
shall survive indefinitely;

          (b) the representations and warranties under Section 2.5 (Taxes), Sections 2.6 and 2.7
(Personal Property and Real Property, but solely with respect to title) and Section 2.9
(Environmental) shall survive until 30 calendar days following the expiration of the applicable
statute of limitations (including extensions thereof); and

          (c) 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, its employees, agents and Affiliates (collectively, the “Buyer Indemnified
Parties”) from and against any and all losses, costs, damages, liabilities and expenses, including
reasonable attorneys’ fees and expenses (“Damages”) incurred by a Buyer Indemnified Party 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 or operation of the Station and the ownership of the Station Assets 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 any Buyer Indemnified Party under clause (i) of Section 9.2(a)
until, and only to the extent that, the aggregate Damages of all Buyer Indemnified Parties exceeds
$150,000 and (ii) the maximum liability of Seller under clause (i) of Section 9.2(a) shall be an
amount equal to 20% of the Purchase Price.

          (c) From and after Closing, Buyer shall defend, indemnify and hold harmless Seller, its
employees, agents and Affiliates (collectively, the “Seller Indemnified Parties”) from and against
any and all Damages incurred by a Seller Indemnified Party arising out of or resulting from:

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

- 27 -

 

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

               (iii) the Assumed Obligations; or

               (iv) the business or operation of the Station and the ownership of the Station Assets after
the Effective Time.

     9.3. Procedures.

          (a) The indemnified party shall give prompt written notice to the indemnifying party of any
demand, suit, claim or assertion of liability by third parties that is subject to indemnification
hereunder (a “Claim”), but a failure to give such notice or delaying such notice shall not affect
the indemnified party’s rights or the indemnifying party’s obligations except to the extent the
indemnifying party’s ability to remedy, contest, defend or settle with respect to such Claim is
thereby prejudiced and provided that such notice is given within the time period described in
Section 9.1.

          (b) The indemnifying party shall have the right to undertake the defense or opposition to such
Claim with counsel selected by it. In the event that the indemnifying party does not undertake
such defense or opposition in a timely manner, the indemnified party may undertake the defense,
opposition, compromise or settlement of such Claim with counsel selected by it at the indemnifying
party’s cost (subject to the right of the indemnifying party to assume defense of or opposition to
such Claim at any time prior to settlement, compromise or final determination thereof).

          (c) Anything herein to the contrary notwithstanding:

               (i) the indemnified party shall have the right, at its own cost and expense, to participate
in the defense, opposition, compromise or settlement of the Claim;

               (ii) the indemnifying party shall not, without the indemnified party’s written consent,
settle or compromise any Claim or consent to entry of any judgment which does not include the
giving by the claimant to the indemnified party of a release from all liability in respect of such
Claim; and

               (iii) in the event that the indemnifying party undertakes defense of or opposition to any
Claim, the indemnified party, by counsel or other representative of its own choosing and at its
sole cost and expense, shall have the right to consult with the indemnifying party and its counsel
concerning such Claim and the indemnifying party and the indemnified party and their respective
counsel shall cooperate in good faith with respect to such Claim.

ARTICLE 10: TERMINATION AND REMEDIES

     10.1. Termination. Subject to Section 10.3, this Agreement may be terminated prior to
Closing as follows:

          (a) by mutual written consent of Buyer and Seller;

- 28 -

 

          (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;

          (c) by written notice of Seller to Buyer if Buyer breaches its representations or warranties
or defaults in the performance of its covenants contained in this Agreement and such breach or
default is material in the context of the transactions contemplated hereby and is not cured within
the Cure Period; provided, however, that the Cure Period shall not apply to Buyer’s obligations to
make the Deposit on the date hereof and to pay the Purchase Price at Closing;

          (d) by written notice of Seller to Buyer or Buyer to Seller if Closing does not occur by the
date 12 months after the date hereof, provided that if the failure of the Closing to occur by such
date is due to the fault of the party seeking to terminate, then that party shall not have such
termination right; or

          (e) as provided by Section 5.5(c) or Section 5.9(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 scheduled Closing date (provided
that, for purposes of clarity, the scheduled Closing date shall be extended to the next Business
Day following such five (5) Business Day period); 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 (provided that, for
purposes of clarity, the scheduled Closing date shall be extended to the next Business Day
following such five (5) Business Day period).

     10.3. Certain Effects of Termination. Neither party may terminate under Sections
10.1(b) or (c) if it is then in material default under this Agreement. Except as provided by
Section 10.5, the termination of this Agreement shall not relieve any party of any liability for
breach or default under this Agreement prior to the date of termination. Notwithstanding anything
contained herein to the contrary, Sections 1.5 (Deposit) (and Sections 10.4 and 10.5 with respect
to the Deposit), 5.1 (Confidentiality) and 11.1 (Expenses) shall survive any termination of this
Agreement.

     10.4. Specific Performance. In the event of failure or threatened failure by either
party to comply with the terms of this Agreement, the other party shall be entitled to an
injunction restraining such failure or threatened failure and, subject to obtaining any necessary
FCC consent, to enforcement of this Agreement by a decree of specific performance requiring
compliance with this Agreement. Notwithstanding the foregoing, if prior to Closing Seller has the
right to terminate this Agreement pursuant to Section 10.1(c), then Seller’s sole remedy for
Buyer’s breach of this Agreement shall be termination of this Agreement and receipt of the

- 29 -

 

Liquidated Damages pursuant to Section 10.5, except for any failure by Buyer to comply with its
obligations related to the Deposit or Sections 5.1, 5.2 or 5.3, as to which Seller shall be
entitled to all available rights and remedies, including without limitation specific performance.

     10.5. Liquidated Damages. If Seller terminates this Agreement pursuant to Section
10.1(c), then Buyer shall pay Seller on demand the sum of $4,100,000 by wire transfer of
immediately available funds (which amount shall be deemed satisfied if the Deposit in the amount of
$4,100,000 is disbursed to Seller under Section 1.5), such payment shall constitute liquidated
damages (“Liquidated Damages”). If Liquidated Damages are payable hereunder but not paid on
demand, then Buyer shall also pay Seller all costs of collection, including reasonable attorneys’
fees and costs. If Seller terminates this Agreement pursuant to Section 10.1(c), then payment of
Liquidated Damages and, if applicable, costs of collection, shall be the sole and exclusive remedy
of Seller for a breach by Buyer of 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 the request for
FCC Consent shall be paid one-half by Buyer and one-half by Seller. All governmental taxes, fees
and charges applicable to the transfer of the Station Assets under this Agreement shall be paid
one-half by Buyer and one-half by Seller. 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. Any fees or charges imposed by Buyer’s title company shall be paid by Buyer
(including without limitation any escrow fees and any fees related to the money lender’s escrow or
incurred due to Buyer’s financing of the transaction), except that Seller shall be responsible for
any filing fees incurred to record any lien releases on the Station Assets that are not Permitted
Liens.

     11.2. Further Assurances. After Closing, each party shall from time to time, at the
request of and without further cost or expense to the other, execute and deliver such other
instruments of conveyance and assumption and take such other actions as may reasonably be requested
in order to more effectively consummate the transactions contemplated hereby.

     11.3. Assignment. Except as provided by Section 5.8 (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, (iii) Buyer shall remain liable for all of its
obligations hereunder, and (iv) Buyer shall be solely responsible for any third party consents

- 30 -

 

necessary in connection therewith (none of which is a condition to Closing). 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. Any attempted assignment in violation of this Section 11.3 shall be null and void.

     11.4. Notices. Any notice pursuant to this Agreement shall be in writing and shall be
deemed delivered (a) on the date of personal delivery when (i) delivered by hand or (ii) sent by a
nationally recognized overnight courier service or (b) on the date confirmed facsimile
transmission, 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 LLP
	 

	 	1776 K Street, N.W.
	 

	 	Washington, D.C. 20006
	 

	 	Attention: Doc Bodensteiner
	 

	 	Facsimile: (202) 719-7049
	 
	 	 
	if to Buyer:

	 	Louisiana Media Company, LLC
	 

	 	5800 Airline Drive
	 

	 	Metairie, LA 70003
	 

	 	Attention:  Dennis Lauscha
	 

	 	Facsimile:  504-731-1812
	 
	 	 
	with a copy (which shall not

	 	Covington & Burling LLP
	constitute notice) to:

	 	1201 Pennsylvania Avenue NW
	 

	 	Washington, DC 20009
	 

	 	Attention: Eric Dodson Greenberg, Esq.
	 

	 	Facsimile: (202) 778-5193

     11.5. Amendments. No modification, 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 modification, amendment,
waiver, or consent is sought. Neither the failure of either party to enforce, nor the delay of
either party in enforcing, any condition or part of this Agreement at any time shall be

- 31 -

 

construed as a waiver of that condition or part or forfeit any rights to future enforcement
thereof. No action taken pursuant to this Agreement, including any investigation by or on behalf
of either party hereto, shall be deemed to constitute a waiver by the party taking action of
compliance by the other party with any representation, warranty, covenant or agreement contained
herein.

     11.6. Entire Agreement. This Agreement, including the Schedules and Exhibits attached
hereto, constitutes the entire agreement and understanding among the parties hereto with respect to
the subject matter hereof, and supersedes all prior agreements and understandings with respect to
the subject matter hereof, except the NDA, which shall remain in full force and effect. No party
makes any representation or warranty with respect to the transactions contemplated by this
Agreement except as expressly set forth in this Agreement. Without limiting the generality of the
foregoing, Seller makes no representation or warranty to Buyer with respect to any projections,
budgets or other estimates of the Station’s 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 Station.

     11.7. Severability. If any court or governmental authority holds any provision in
this Agreement invalid, illegal or unenforceable in whole or in part 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, including, for the avoidance of
doubt, any Station employee, 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 any conflicts or choice of
law rule or principle thereof that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction.

     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 and Seller shall cooperate with the other in
the investigation, defense or prosecution of any litigation or examination, audit or other
proceeding which is pending or threatened against Buyer or Seller or their Affiliates with respect
to the Station, whether or not any party has notified the other of a claim for indemnity with
respect to such matter. Without limiting the generality of the foregoing, each of Buyer and Seller
shall make available its employees to give depositions or testimony and shall furnish all
documentary or other evidence that the other party may reasonably request. Each of Buyer and
Seller shall reimburse the other for all reasonable and necessary out-of-pocket expenses (including
legal fees

- 32 -

 

and disbursements) incurred in connection with the performance of its obligations under this
Section 11.11.

     11.12. Construction. Except as otherwise expressly provided in this Agreement or as
the context otherwise requires, the following rules of interpretation apply to this Agreement: (i)
the singular includes the plural and the plural includes the singular; (ii) “any” is not exclusive
and the words “include” and “including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without limitation”; (iii) a
reference to any Contract includes permitted supplements and amendments; (iv) a reference to an
Applicable Law includes any effective amendment or modification to such Applicable Law; (v) a
reference to a Person includes its successors, heirs and permitted assigns; (vi) a reference to one
gender shall include any other gender; and (vii) a reference in this Agreement to an Article,
Section, Exhibit or Schedule is to the referenced Article, Section, Exhibit or Schedule of this
Agreement.

     11.13. Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which will be deemed an original and all of which together will constitute
one and the same agreement. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic transmission shall be effective as delivery of a
manually executed original counterpart of this Agreement.

     11.14. Guaranty. Emmis Operating Company, an Indiana corporation (“Emmis Guarantor”)
unconditionally guarantees the payment and performance of any and all obligations and liabilities
of Seller under this Agreement and the other agreements and documents executed and delivered in
connection herewith and any permitted assignees of Seller’s rights or obligations hereunder,
including, without limitation, the obligations and liabilities under Section 9.2. Emmis Guarantor
acknowledges that it has agreed to this unconditional guarantee as an inducement to Buyer to enter
into this Agreement.

[SIGNATURE PAGE FOLLOWS]

- 33 -

 

SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT

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

	 	 	 	 	 	 	 
	BUYER:	 	LOUISIANA MEDIA COMPANY, 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:	 	 
	 
	 	 	 	 	 	 
	EMMIS GUARANTOR:	 	EMMIS OPERATING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

 

 

Schedules

	 	 	 
	Schedule 1.1(a)

	 	FCC Licenses
	 
	Schedule 1.1(b)

	 	Tangible Personal Property
	 
	Schedule 1.1(c)

	 	Real Property
	 
	Schedule 1.1(d)

	 	Station Contracts
	 
	Schedule 1.1(e)

	 	Intangible Property
	 
	Schedule 1.2

	 	Excluded Assets
	 
	Schedule 1.7

	 	Allocation
	 
	Schedule 1.10

	 	DTV
	 
	Schedule 2.3

	 	Other Seller Conflicts
	 
	Schedule 2.5

	 	Taxes
	 
	Schedule 2.8

	 	Contracts Exceptions
	 
	Schedule 2.11

	 	Employee Exceptions
	 
	Schedule 2.13

	 	Compliance with Laws
	 
	Schedule 2.14

	 	Litigation
	 
	Schedule 4.1(j)

	 	Approved New Contracts
	 
	Schedule 4.1(p)

	 	Capital Expenditures
	 
	Schedule 5.7(a)

	 	Employees
	 
	Schedule 5.7(b)

	 	Severance Arrangement

 

 

Exhibit A

Definitions

“Accounts Receivable” means all of Seller’s accounts receivable and any other rights to
payment of cash consideration with respect to the Station for goods or services sold or provided
prior to the Effective Time or otherwise arising during or attributable to any period prior to the
Effective Time.

“Adjustment Amount” has the meaning set forth in Section 1.6(c).

“Affiliate” means, with respect to any Person, any other Person which, directly or indirectly,
Controls, is Controlled by, or is under common Control with, the specified Person.

“Agreement” has the meaning set forth in the Preamble.

“Applicable Law” means any federal, state, local or foreign constitution, treaty, law,
statute, ordinance, rule, regulation, order, writ, decree or any other requirement of any
Governmental Authority.

“Arbitrating Firm” has the meaning set forth in Section 1.6(d).

“Assumed Obligations” has the meaning set forth in Section 1.3.

“Benefit Plan” has the meaning set forth in Section 2.11(b).

“Business Day” means any day excluding Saturdays, Sundays and any day that is a legal holiday under
the laws of the United States or that is a day on which the Escrow Agent or banking institutions
located in New York, New York and New Orleans, Louisiana are authorized or required by Applicable
Law or action of a Governmental Authority to close.

“Buyer” has the meaning set forth in the Preamble.

“Buyer Ancillary Agreements” has the meaning set forth in Section 3.1.

“Buyer Environmental Assessment” has the meaning set forth in Section 5.5(a).

“Buyer Indemnified Parties” has the meaning set forth in Section 9.2(a).

“Claim” has the meaning set forth in Section 9.3(a).

“Closing” has the meaning set forth in Section 1.8.

- 36 -

 

“Closing Date” has the meaning set forth in Section 1.8.

“COBRA” has the meaning set forth in Section 2.11(e).

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

“Communications Act” has the meaning set forth in Section 2.4(b).

“Contracts” means contracts, commitments, arrangements, agreements, leases, licenses, purchase
orders for the sale or purchase of goods or services and any other understandings.

“Cure Period” has the meaning set forth in Section 10.2.

“Damages” has the meaning set forth in Section 9.2(a).

“Dollars” or “$” means United States dollars.

“DTV” has the meaning set forth in Section 1.10(b).

“Effective Time” has the meaning set forth in Section 1.6.

“Environmental Law” means any and all laws, rules, regulations or orders of any United States
of America governmental authorities, any State of Louisiana Governmental Authorities or any other
Governmental Authorities having jurisdiction over the Real Property and relating to pollution or
the environment, including those relating to emissions, discharges, releases or threatened releases
of Hazardous Substances into the environment (including ambient air, surface water, ground water or
land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Escrow Agent” has the meaning set forth in Section 1.5.

“Escrow Agreement” has the meaning set forth in Section 1.5.

“Excluded Assets” has the meaning set forth in Section 1.2.

“FCC” has the meaning set forth in the Recitals.

“FCC Application” has the meaning set forth in Section 1.9(a).

“FCC Consent” has the meaning set forth in Section 1.9(a).

- 37 -

 

“FCC Licenses” has the meaning set forth in Section 1.1(a).

“Financial Statements” has the meaning set forth in Section 2.15.

“GAAP” has the meaning set forth in Section 1.6.

“Governmental Authority” means any federal, state, local or foreign government, legislature,
governmental or administrative agency or commission or any court or other tribunal of competent
jurisdiction.

“Hazardous Substances” means (i) any “hazardous waste” as defined by the Resources Conservation and
Recovery Act of 1976 (“RCRA”) (42 U.S.C. § 6901 et seq.); (ii) any “hazardous substance” as defined
by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §
9601 et seq.) (“CERCLA”); (iii) any “chemical substances”, “new chemical substance” or “hazardous
chemical substance or mixture” or other substance regulated by the Toxic Substances Control Act
(“TSCA”) (42 U.S.C. § 2601 et seq.); and (iv) any substance the presence, use, treatment, storage,
transmission or disposal of which on or from the Real Property is prohibited by any Applicable Law
of any Governmental Authority.

“Intangible Property” has the meaning set forth in Section 1.1(e).

“Lien” means any lien (statutory or otherwise), claim, charge, option, security interest, pledge,
mortgage, restriction on transfer, financing statement or similar encumbrance of any kind or nature
whatsoever (including any conditional sale or other title retention agreement and any lease having
substantially the same effect as any of the foregoing and any assignment or deposit arrangement in
the nature of a security device).

“Liquidated Damages” has the meaning set forth in Section 10.5.

“Mid-Range” has the meaning set forth in Section 1.6(e).

“NDA” has the meaning set forth in Section 5.1.

“Owned Real Property” has the meaning set forth in Section 1.1(c).

“Permits” means all licenses, permits, construction permits, approvals, concessions,
franchises, certificates, consents, qualifications, registrations, privileges and other
authorizations and rights, other than the FCC Licenses, from any Governmental Authority to Seller
currently in effect and used in connection with the Station, including in connection with the use
of any Real Property or Tangible Personal Property, together with any renewals, modifications and
additions thereto between the date hereof and the Closing Date.

- 38 -

 

“Permitted Liens” means (a) the Assumed Obligations, (b) Liens for taxes or assessments which are
not yet due or which are being contested in good faith by appropriate proceedings, (c) statutory
mechanics’, materialmen’s, contractors’, warehousemen’s, repairmen’s and other similar statutory
Liens arising in the ordinary course of business and which are not delinquent, (d) Liens that will
be released at or prior to Closing, (e) the exceptions set forth on Schedule 1.1(c), and (f) such
other easements, rights of way, building and use restrictions, exceptions, reservations and
limitations that do not in any material respect detract from the value of the property subject
thereto or impair the use thereof in the ordinary course of the business of the Station, including
exceptions set forth on Schedule 1.1(c).

“Person” means a human being, labor organization, partnership, firm, enterprise, association, joint
venture, corporation, limited liability company, cooperative, legal representative, foundation,
society, political party, estate, trust, trustee, trustee in bankruptcy, receiver or any other
organization or entity whatsoever, including any Governmental Authority.

“Phase I” has the meaning set forth in Section 5.5(a).

“Preliminary Adjustment Report” has the meaning set forth in Section 1.6(c).

“Purchase Price” has the meaning set forth in Section 1.4.

“Real Property” has the meaning set forth in Section 1.1(c).

“Real Property Leases” has the meaning set forth in Section 1.1(c).

“Required Consents” has the meaning set forth in Section 5.6(a).

“Retained Obligations” has the meaning set forth in Section 1.3.

“Seller” has the meaning set forth in the Preamble.

“Seller Ancillary Agreements” has the meaning set forth in Section 2.1.

“Seller Indemnified Parties” has the meaning set forth in Section 9.2(c).

“Services Fee” has the meaning set forth in Section 1.10.

“Station” has the meaning set forth in the Recitals.

“Station Assets” has the meaning set forth in Section 1.1.

“Station Contracts” has the meaning set forth in Section 1.1(d).

- 39 -

 

“Tangible Personal Property” has the meaning set forth in Section 1.1(b).

“Transition Period” has the meaning set forth in Section 1.10.

“Transition Services” has the meaning set forth in Section 1.10.

“Transferred Employees” has the meaning set forth in Section 5.7(a).

“Transmission Equipment” means all digital, analog or other equipment currently used (or used
between the date hereof and the Closing Date) for the transmission of the Station’s broadcast
signals over the air, including the antenna, transmitter and all associated transmission equipment,
lines and facilities, in each case owned by Seller for use at the Station.

“Transmission Structures” means all towers, including any guy anchors and guy wires, currently used
(or used between the date hereof and the Closing Date) in connection with the operation of the
Station and owned by Seller.

- 40 -

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