ASSET EXCHANGE AGREEMENT

 

Exhibit 10.25

ASSET EXCHANGE AGREEMENT

between

EMMIS RADIO, LLC
EMMIS RADIO LICENSE, LLC

and

BONNEVILLE INTERNATIONAL CORPORATION
BONNEVILLE HOLDING COMPANY

January 14, 2005

 

 

TABLE OF CONTENTS

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SCHEDULES

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ASSET EXCHANGE AGREEMENT

     THIS ASSET EXCHANGE AGREEMENT (the “Agreement”), dated as of January 14, 2005, is between EMMIS RADIO, LLC, an Indiana limited liability company (“Emmis Operating”), and EMMIS RADIO LICENSE, LLC, an Indiana limited liability company (“Emmis License”, and together with Emmis Operating, the “Emmis Entities”); and BONNEVILLE INTERNATIONAL CORPORATION, a Utah corporation (“Bonneville International”), and BONNEVILLE HOLDING COMPANY, a Utah corporation (“Bonneville Holding”, and together with Bonneville International, the “Bonneville Entities”).

RECITALS

     WHEREAS, Emmis Operating operates radio stations KKLT (FM) (“KKLT”), KTAR (AM) (“KTAR”) and KMVP (AM) (“KMVP”), each licensed to Phoenix, Arizona (collectively, the “Emmis Stations”), and Emmis License holds the broadcast licenses used in the operation of the Emmis Stations;

     WHEREAS, Bonneville International operates radio station WLUP-FM (“WLUP”) licensed to Chicago, Illinois, and Bonneville Holding holds the broadcast licenses used in the operation of WLUP;

     WHEREAS, Emmis Operating, Bonneville International and Bonneville Holding have entered into a Time Brokerage Agreement (the “Chicago TBA”) dated November 30, 2004, pursuant to which Emmis Operating is now purchasing airtime and providing programming on WLUP;

     WHEREAS, Bonneville International, Emmis Operating, and Emmis License have entered into a Time Brokerage Agreement (the “Phoenix TBA”) dated November 30, 2004, pursuant to which Bonneville International is now purchasing airtime and providing programming on the Emmis Stations;

     WHEREAS, subject to the terms and conditions of this Agreement, the Emmis Entities and the Bonneville Entities desire that (i) the Emmis Entities convey to the Bonneville Entities all of the Emmis Entities’ right, title and interest in substantially all the assets of the Emmis Stations, and (ii) the Bonneville Entities convey to the Emmis Entities all of the Bonneville Entities’ right, title and interest in certain of the assets of WLUP and, in addition, pay to the Emmis Entities $66,000,000; and

     WHEREAS, (i) Emmis Operating desires that its conveyance to and receipt from Bonneville International of like-kind assets as contemplated by this Agreement will, with respect to Emmis Operating, constitute like-kind exchanges qualifying for nonrecognition of gain treatment for Emmis Operating to the extent permitted under Section 1031 of the Code (as defined below); (ii) Bonneville International desires that its conveyance to and receipt from Emmis Operating of like-kind assets as contemplated by this Agreement will, with respect to Bonneville International, constitute like-kind exchanges qualifying for nonrecognition of gain

SIGNATURE PAGE TO ASSET EXCHANGE AGREEMENT

 

 

treatment for Bonneville International to the extent permitted under Section 1031 of the Code; (iii) Emmis License desires that its conveyance to and receipt from Bonneville Holding of like-kind assets as contemplated by this Agreement will, with respect to Emmis License, constitute like-kind exchanges qualifying for nonrecognition of gain treatment for Emmis License to the extent permitted under Section 1031 of the Code; and (iv) Bonneville Holding desires that its conveyance to and receipt from Emmis License of like-kind assets as contemplated by this Agreement will, with respect to Bonneville Holding, constitute like-kind exchanges qualifying for nonrecognition of gain treatment for Bonneville Holding to the extent permitted under Section 1031 of the Code; and

     WHEREAS, upon and subject to the terms and conditions set forth in this Agreement, the Bonneville Entities desire that the Emmis Entities grant, and the Emmis Entities agree to grant, a covenant not to compete, for which the Bonneville Entities will pay additional consideration of $4,000,000.

     NOW THEREFORE, in consideration of the foregoing recitals and the respective covenants, agreements, representations and warranties contained herein, the Parties hereto agree as follows:

ARTICLE I.
TERMINOLOGY

     1.1. Defined Terms.

     As used herein, the following terms have the meanings indicated:

      Affiliate : With respect to any specified Person, another Person which, directly or indirectly controls, is controlled by, or is under common control with, the specified Person.

      Assumed Obligations : Either the Emmis Assumed Obligations or the Bonneville Assumed Obligations.

      Benefit Plans : With respect to each Station of a Transferring Party, all compensation or benefit plans, policies, practices, arrangements and agreements covering any of the Transferring Party’s current or former employees now or previously employed at the Station, or the beneficiaries or dependents of any such employees or former employees, that are or have been established or maintained and are currently in effect, or to which contributions are being made by the Transferring Party or by any other trade or business, whether or not incorporated, that is or has been treated as a single employer together with the Transferring Party under Section 414 of the Code (such other trades and businesses referred to collectively as the “Related Persons”) or to which the Transferring Party or any Related Person is obligated to contribute, including, but not limited to, “employee benefit plans” within the meaning of Section 3(3) of ERISA, employment, retention, change of control, severance, stock option or other equity based, bonus, incentive compensation, deferred compensation, retirement, fringe benefit and welfare plans, policies, practices, arrangements and agreements.

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      Bonneville Assets : The Bonneville Operating Assets and the Bonneville FCC Licenses collectively, but excluding the Bonneville Excluded Assets.

      Bonneville Excluded Assets : The assets excluded from the Bonneville Operating Assets pursuant to Section 2.2 .

      Bonneville Operating Assets : All of the tangible and intangible assets used or held for use in the operation of WLUP, other than the Bonneville FCC Licenses and the Bonneville Excluded Assets.

      Chicago TBA Contracts : The contracts and agreements that Bonneville International assigned to Emmis Operating pursuant to the Chicago TBA.

      Chicago TBA Effective Date : December 1, 2004.

      Code : The Internal Revenue Code of 1986, as amended, together with all regulations and rulings thereunder by any governmental authority.

      Documents : This Agreement, all Exhibits and Schedules to this Agreement, the Chicago TBA, the Phoenix TBA and each other agreement, side letter, certificate or instrument executed and delivered in connection with this Agreement.

      Emmis Assets : The Emmis Operating Assets and the Emmis FCC Licenses collectively, but excluding the Emmis Excluded Assets.

      Emmis Excluded Assets : The assets excluded from the Emmis Operating Assets pursuant to Section 2.2 .

      Emmis Operating Assets : All of the tangible and intangible assets used or held for use in the operation of the Emmis Stations, other than the Emmis FCC Licenses and the Emmis Excluded Assets.

      Exchange Assets : When used with respect to the Emmis Entities as the Transferring Party, the Emmis Assets; and when used with respect to the Bonneville Entities as the Transferring Party, the Bonneville Assets.

      ERISA : Employee Retirement Income Security Act of 1974, as amended.

      FCC : Federal Communications Commission.

      FCC Licenses : The licenses, permits and other authorizations issued by the FCC (including associated call signs), all applications for modification, extension or renewal thereof, and any applications pending for any new licenses, permits or authorizations.

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      FCC Order : The order or decision of the FCC (or its delegatee) granting its consent to the assignment of all the Emmis FCC Licenses to Bonneville Holding and the assignment of all the Bonneville FCC Licenses to Emmis License.

      Final Action : An action of the FCC that has not been reversed, stayed, enjoined, set aside, annulled or suspended; with respect to which no timely petition for reconsideration or administrative or judicial appeal or sua sponte action of the FCC with comparable effect is pending; and as to which the normally applicable time for filing any such petition or appeal (administrative or judicial) or for the taking of any such sua sponte action of the FCC has expired.

      GAAP : Generally accepted accounting principles as in effect for the United States of America as of the date of this Agreement.

      KKFR : Radio station KKFR(FM) in Phoenix, Arizona.

      Knowledge (or any derivative thereof): (i) In the case of the Emmis Entities, only the actual knowledge of the current or former President, Chief Executive Officer, or Chief Financial Officer of Emmis, any other current or former employee of Emmis designated as “vice president” or any higher office, any officer of the Emmis Entities, and the General Manager, Sales Manager or Chief Engineer of any Emmis Station; and (ii) in the case of the Bonneville Entities, only the actual knowledge of the President, Chief Executive Officer, or Chief Financial Officer of either Bonneville Entity, any other current or former employee of either Bonneville Entity designated as corporate “vice president,” a “group vice president,” any higher office or a “vice president” of the WLUP division, any other corporate officer of either Bonneville Entity, and the General Manager, Sales Manager or Chief Engineer of WLUP; provided, however, that any reference to a “former” employee or officer herein will mean only those persons whose employment with an Emmis Entity or a Bonneville Entity has been terminated since January 1, 2004.

      Liabilities : As to any Person, all debts, adverse claims, liabilities and obligations, direct, indirect, absolute or contingent of such Person, whether accrued, vested or otherwise, whether in contract, tort, strict liability or otherwise and whether or not actually reflected, or required by GAAP to be reflected, in such Person’s balance sheets or other books and records.

      Lien : Any mortgage, deed of trust, pledge, hypothecation, title defect, right of first refusal, security interest or other similar adverse interest, encumbrance, easement, restriction, claim, option, lien or charge of any kind (including any liens of the Pension Benefit Guaranty Corporation, Internal Revenue Service or any governmental agency), whether voluntarily incurred or arising by operation of law or otherwise, affecting any assets or property, including any agreement to give or grant any of the foregoing, any conditional sale, financing lease or other title retention agreement, and the filing of or agreement to give any financing statement with respect to any assets or property under the Uniform Commercial Code or comparable law of any jurisdiction.

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      Loss : With respect to any Person, any and all losses, costs, obligations, Liabilities, demands, claims, settlement payments, awards, judgments, fines, penalties, damages and reasonable out-of-pocket expenses, including court costs and reasonable attorney fees, whether or not arising out of a third party claim.

      Material Adverse Condition : A condition which would adversely affect or impair, in any material respect, the right of a Recipient Party to the ownership, use, control or operation of any Station to be transferred to the Recipient pursuant to this Agreement; provided, however, that any condition which requires (i) that the Recipient Party or any of its subsidiaries file periodic reports with the FCC regarding compliance with rules and policies of the FCC pertaining to affirmative action and equal opportunity employment, or (ii) that a Station be operated in accordance with conditions similar to and not more adverse than those contained in the present FCC Licenses issued for operation of such Station, will not be a Material Adverse Condition.

      Material Adverse Effect : A material adverse effect on the assets, business, operations, financial condition or results of operations, in the case of the Emmis Stations, of the Emmis Stations taken as a whole, and in the case of WLUP, of WLUP, except in either case for any such effect resulting from (i) general economic conditions applicable to the radio broadcast industry, (ii) general conditions in the markets in which the applicable Station or Stations operate, or (iii) circumstances that are not likely to recur and either have been substantially remedied or can be substantially remedied without substantial cost or delay.

      Party : Unless otherwise required by the context, the Bonneville Entities on the one hand and the Emmis Entities on the other hand.

      Permitted Lien : (i) Any Lien arising solely by statute (including encumbrances of a landlord) which secures a payment not yet due that arises, and is customarily discharged, in the ordinary course of the applicable Station’s business; (ii) Liens (other than with respect to real estate) arising in connection with operating leases (but not as to financing leases) under the terms of any Station Agreement; (iii) with respect to Emmis Real Property only, the Liens identified on Schedule 3.9 under the heading “Certain Permitted Liens”; (iv) with respect to tangible Bonneville Assets only, the Liens identified on Schedule 4.5(b) under the heading “Certain Permitted Liens”; (iv) such other Liens on the Emmis Assets as approved by the Bonneville Entities in writing, which approval will not be unreasonably withheld, conditioned or delayed; and (v) such other Liens on the Bonneville Assets as approved by the Emmis Entities in writing, which approval will not be unreasonably withheld, conditioned or delayed.

      Person : Any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

      Phoenix TBA Contracts : The contracts and agreements that Emmis Operating assigned to Bonneville International pursuant to the Phoenix TBA.

      Phoenix TBA Effective Date : December 1, 2004.

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      Recipient Party : When used in relation to the Bonneville Entities as the Transferring Party, the Emmis Entities (or Emmis Operating or Emmis License, as the case may be); and when used in relation to the Emmis Entities as the Transferring Party, the Bonneville Entities (or Bonneville International or Bonneville Holding, as the case may be).

      Station , each Station , the Station , a Station or any Station : When used in reference to the Bonneville Entities as the Transferring Party, WLUP; and when used in reference to the Emmis Entities as the Transferring Party, any of the Emmis Stations.

      Station Agreements : The Emmis Station Agreements or Bonneville Stations Agreements, as the case may be.

      Taxes : All federal, state, local and foreign taxes including, without limitation, income, gains, transfer, unemployment, withholding, payroll, social security, real property, personal property, excise, sales, use and franchise taxes, levies, assessments, imposts, duties, licenses and registration fees and charges of any nature whatsoever, including interest, penalties and additions with respect thereto and any interest in respect of such additions or penalties.

      Tax Return : Any return, filing, report, declaration, questionnaire or other document required to be filed for any period with any taxing authority (whether domestic or foreign) in connection with any Taxes (whether or not payment is required to be made with respect to such document).

      TBA : Either the Chicago TBA or the Phoenix TBA.

      Trade Agreements : Emmis Station Agreements or Bonneville Station Agreements, as the case may be, providing for the sale of time on a Station for other than monetary consideration.

      Transfer Taxes : All sales, use, conveyance, recording and other similar transfer taxes and fees applicable to, imposed upon or arising out of the conveyance by the Transferring Party and the receipt by the Recipient of Exchange Assets whether now in effect or hereinafter adopted and regardless of which party such Transfer Tax is imposed upon. Transfer Taxes will in no event include any net or gross income taxes.

      Transferring Party : Either (i) the Emmis Entities collectively in their capacity as the transferors of the Emmis Assets under this Agreement, or (ii) the Bonneville Entities collectively in their capacity as the transferors of the Bonneville Assets under this Agreement.

     1.2. Additional Defined Terms .

     As used herein, the following terms have the meanings defined in the introduction, recitals or section indicated below:

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ARTICLE II.
EXCHANGE OF ASSETS

2.1 Description of Exchange Assets.

     (a)  Emmis Assets . Upon and subject to the terms and conditions of this Agreement and as set forth in Section 2.5 , and except to the extent already effected pursuant to the Phoenix TBA, the Emmis Entities will assign, transfer and convey to the Bonneville Entities all of the Emmis Entities’ right, title and interest in, to and under the Emmis Assets, which will include any right, title and interest in, to and under the following assets and properties of the Emmis Entities:

          (i) Tangible Personal Property . All transmitter equipment and transmission lines, antennas and other broadcast equipment and related spare parts used or held for use principally in the operation of any of the Emmis Stations (including the tower, community antenna, and transmitter building used by KKLT and KKFR on South Mountain, Phoenix, Arizona, but excluding any transmitter equipment, transmission lines, or broadcast equipment used or held for use principally in the operation of radio station KKFR); all studio equipment, office equipment, office furniture, fixtures, rolling stock, materials and supplies, inventories, spare parts and other tangible personal property, including all promotional, sales, marketing and format-specific programming materials, supplies, inventories and property, used or held for use principally in the operation of any of the Emmis Stations; all computer hardware and software used or held for use principally in the operation of any Emmis Station’s traffic, automation,

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continuity, information technology (network, email, print, file, etc.) and office business systems; all personal and notebook computers (and the software and content thereon) used by those employees of the Emmis Stations hired by Bonneville International pursuant to the Phoenix TBA; the tangible personal property otherwise listed on Schedule 3.8 ; and in each case, such modifications, replacements, improvements and additional items, and subject to such deletions, made between the date of this Agreement and the Closing Date with respect to the foregoing tangible personal property of the Emmis Entities in compliance with this Agreement and the Phoenix TBA.

          (ii) Real Property . The real property listed on Schedule 3.9 for the Emmis Stations, including in each case the Emmis Entity’s interest in all structures, fixtures and improvements on such real property, all easements or other appurtenances for the benefit of such real property; and such additional fixtures, improvements and interests in real property made or acquired between the date of this Agreement and the Closing Date and used or held for use by the Emmis Entities principally in the operation of any Emmis Station (collectively, the “Emmis Real Property”).

          (iii) Permits . The FCC Licenses and all other governmental permits, licenses and authorizations (including any renewals, extensions, amendments or modifications thereof or applications therefor) that are listed on Schedule 3.6 , and any other governmental permits, licenses or authorizations, whether now held or subsequently obtained on or before the Closing Date, that are necessary for or principally related to the operation of any Emmis Station.

          (iv) Station Agreements . All contracts, leases (including, but not limited to, real estate leases, use licenses, or occupancy agreements), agreements, commitments and other arrangements, and any amendments or modifications, used or held for use in the operation of the Emmis Stations as of the date of this Agreement (including, but not limited to, those listed on Schedules 3.7(a) , 3.7(b) or 3.9 unless expressly designated as an “excluded” Station Agreement on such Schedules), or made or entered into by any Emmis Entity between the date of this Agreement and the Closing Date in compliance with this Agreement and the Phoenix TBA and used or held for use in the operation of any Emmis Station (collectively, the “Emmis Station Agreements”).

          (v) Intellectual Property . All trade names, trademarks, service marks, copyrights, patents, jingles, slogans, symbols, logos, the applicable call letters, telephone numbers (to the extent transferable), internet addresses, email addresses, websites and domain names, web-site content, inventions, and any other proprietary material, process, trade secret or trade right principally used in the operation of any Emmis Station, and all registrations, applications and licenses for any of the foregoing, including, without limitation, those set forth on Schedule 3.10 ; and any additional such items acquired between the date of this Agreement and the Closing Date and used or held for use principally in the operation of any Emmis Station; and all goodwill associated with any of the foregoing, if any (collectively, the “Emmis Intellectual Property”).

          (vi) Records . The originals or true and complete copies of all of the books, records, accounts, files, logs, ledgers, journals, data, plans, maps, engineering records, technical

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drawings and FCC applications principally pertaining to, or principally used or held for use in, the operation of any Emmis Station, including, but not limited to, computer-readable disk or tape copies of any of such items stored on computer disks or tapes.

          (vii) Miscellaneous Assets . Any other tangible or intangible assets, properties or rights of any kind or nature not otherwise described above in this Section 2.1(a) and now or before the Closing owned or used or held for use principally in connection with the operation of any Emmis Station.

     (b)  Bonneville Assets . Upon and subject to the terms and conditions of this Agreement and as set forth in Section 2.5 , and except to the extent already effected pursuant to the Chicago TBA, the Bonneville Entities will assign, transfer and convey to the Emmis Entities all of the Bonneville Entities’ right, title and interest in, to and under the Bonneville Assets, which will include any right, title and interest in, to and under the following assets and properties of the Bonneville Entities:

          (i) Tangible Personal Property . That certain studio equipment identified on Schedule 2.1(b)(i) ; all rolling stock, transmitter equipment and related spare parts, and transmission lines used or held for use principally in the operation of WLUP; all promotional, sales, marketing and format-specific programming materials, supplies, inventories, and property of that type used or held for use principally in the operation of WLUP; all personal and notebook computers (and the software and content thereon) used by those employees of WLUP hired by Emmis Operating pursuant to the Chicago TBA; and in each case, such modifications, replacements, improvements and additional items, and subject to such deletions, made between the date of this Agreement and the Closing Date with respect to the foregoing tangible personal property of WLUP in compliance with this Agreement and the Chicago TBA.

          (ii) Permits . The FCC Licenses and all other governmental permits, licenses and authorizations (including any renewals, extensions, amendments or modifications thereof or applications therefor) that are listed on Schedule 4.6 , and any other governmental permits, licenses or authorizations, whether now held or subsequently obtained on or before the Closing Date, that are necessary for or principally related to the operation of WLUP.

          (iii) Station Agreements . All contracts, leases (including, but not limited to, real estate lease, use licenses or occupancy agreements), agreements, commitments and other arrangements, and any amendments or modifications, used or held for use in the operation of WLUP as of the date of this Agreement (including, but not limited to, those listed on Schedules 4.7(a) , 4.7(b) , or 4.9 unless expressly designated as an “excluded” Station Agreement on such Schedules), or made or entered into by a Bonneville Entity between the date of this Agreement and the Closing Date in compliance with this Agreement and the Chicago TBA and used or held for use in the operation of WLUP (collectively, the “Bonneville Station Agreements”).

          (iv) Intellectual Property . All trade names, trademarks, service marks, copyrights, patents, jingles, slogans, symbols, logos, the applicable call letters, telephone numbers (to the extent transferable), internet addresses, email addresses, website and domain names, web-site content, inventions, and any other proprietary material, process, trade secret or

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trade right principally used by the Bonneville Entities in the operation of WLUP, and all registrations, applications and licenses for any of the foregoing, including, without limitation, those set forth on Schedule 4.10 ; any additional such items acquired between the date of this Agreement and the Closing Date and used or held for use principally in the operation of WLUP; and all goodwill associated with any of the foregoing, if any (collectively, the “Bonneville Intellectual Property”).

          (v) Records . The originals or true and complete copies of all of the books, records, accounts, files, logs, ledgers, journals, data, plans, maps, engineering records, technical drawings and FCC applications principally pertaining to, or principally used or held for use in, the operation of WLUP, including, but not limited to, computer-readable disk or tape copies of any of such items stored on computer disks or tapes.

          (vi) Miscellaneous Assets . That portion of Bonneville International’s membership interest in FM Broadcasters, LLC relating to WLUP (a 12.5% interest); and any other intangible assets, properties or rights of any kind or nature not otherwise described above in this Section 2.1 (b) and now or before the Closing owned or used or held for use principally in connection with the operation of such Station, including but not limited to all goodwill of such Station, if any.

     (c) For purposes of this Section 2.1 and Section 2.2 , when used with respect to the identification of any asset of any Station or Stations, the phrase “used or held for use principally”, means that such asset has been used or is held for use in the operation of such Station or Stations (individually or collectively) in greater part or other appropriate measure than any station or stations not being sold pursuant to this Agreement.

     2.2 Excluded Assets .

     Notwithstanding any provision of this Agreement to the contrary, the Exchange Assets of each Transferring Party will not include the following assets or property (the “Excluded Assets”):

     (a) Any and all cash, bank deposits and other cash equivalents, certificates of deposit, securities, cash deposits made on behalf of any Station of the Transferring Party to secure contract obligations (except to the extent the Transferring Party receives a credit therefor in determining the Adjustment Amount under Section 2.7 ), and all accounts receivable (other than non-cash receivables under Trade Agreements of the Transferring Party) for services performed or for goods sold or delivered by any Station of the Transferring Party prior to the Closing Date;

     (b) All rights and claims of the Transferring Party whether mature, contingent or otherwise, against third parties with respect to, or which are made under or pursuant to, other Excluded Assets of the Transferring Party or which relate to the period prior to the Closing;

     (c) All prepaid expenses of the Transferring Party (and rights arising therefrom or related thereto) except to the extent the Transferring Party is given a credit therefor in determining the Adjustment Amount under Section 2.7 ;

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     (d) All Benefit Plans of the Transferring Party, except for (i) any employee benefit specified and required to be provided to any employee of the Transferring Party at its Station or Stations under any written employment agreement (excluding, however, any such employee benefit generally provided by the Transferring Party to its employees at its Station or Stations), and (ii) any severance benefit required to be provided under any severance agreement, provided that, in each case, such employment agreement or severance agreement is expressly and individually included pursuant to the TBAs or this Agreement as a Transferring Party’s Station Agreement to be assigned to and assumed by the Recipient Party;

     (e) All Tax Returns (and supporting materials), and all claims of the Transferring Party with respect to any Tax refunds, relating to any Station of the Transferring Party;

     (f) All of the Transferring Party’s rights under or pursuant to this Agreement, the Chicago TBA, the Phoenix TBA, or any other rights in favor of the Transferring Party pursuant to the other Documents;

     (g) All loan agreements, letters of credit and other instruments evidencing indebtedness for borrowed money;

     (h) All contracts of insurance, all coverages and proceeds thereunder and all rights in connection therewith, including, without limitation, rights arising from any refunds due with respect to insurance premium payments to the extent they relate to such insurance policies;

     (i) All tangible personal property disposed of or consumed between the date of this Agreement and the Closing Date in accordance with and pursuant to the terms and provisions of this Agreement;

     (j) The Transferring Party’s corporate minute books, ownership transfer records and other entity records, and any records relating to other Excluded Assets of the Transferring Party and to Liabilities of the Transferring Party other than the Recipient Party’s Assumed Obligations;

     (k) All shares of capital stock, partnership interests, interests in limited liability companies or other equity interest, including, but not limited to, any options, warrants or voting trusts relating thereto which are owned by the Transferring Party and not expressly specified in Section 2.1 ;

     (l) In the case of WLUP, (i) Bonneville International’s lease of office and studio space for WLUP in the John Hancock Center in Chicago, Illinois and any other Station Agreement expressly designated on Schedules 4.7(a) , 4.7(b) or 4.9 as “excluded”; (ii) all rights to the name “Bonneville” and any logo or variation of, and goodwill associated with, such name; (iii) any right to place or use any antenna, transmitter or other equipment on or in the AON Building in Chicago, Illinois, except as provided under the WLUP Auxiliary Antenna Option Agreement; (iv) the prior WLUP employees identified on Schedule 2.2(l) ; (v) any Bonneville Entity tangible assets not described in Section 2.1(b) , including but not limited to any studio or

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office equipment and related spare parts, furniture or fixtures not identified on Schedule 2.1(b)(i) ; (vi) any items of financial, accounting, management information and network software; (vii), any computer hardware or software systems used in the hosting and operation of WLUP’s website or traffic, automation, continuity, information technology (network, email, print, file, etc.) and office business systems; and (viii) any Bonneville Entity intangible property used or held for use principally in connection with the Bonneville Excluded Assets;

     (m) In the case of the Emmis Stations: (i) the employees, items of financial, accounting, management information and network software, remote pick-up (RPU), studio/transmitter link (STL), FCC Licenses, and other items, as each is identified on Schedule 2.2(m) ; (ii) those assets used or held for use principally in the operation of KKFR ( i.e. , not used or held for use principally for the operation of the Emmis Stations collectively or individually when compared to the use, or the holding for use, of such assets in the operation of KKFR) or used or held for use principally by the employees of KKFR ( i.e. , not used or held for use principally by the employees of the Emmis Stations collectively or individually when compared to the use, or the holding for use, of such assets by the employees of KKFR collectively or individually); (iii) any computer hardware or software systems used in the hosting and operation of the Emmis Stations’ websites; (iv) Microsoft software licenses; (v) any Emmis Station Agreement (except for the Amended and Restated Broadcast Agreement, dated June 30, 2004, between Emmis Operating and AZPB Limited Partnership relating to the Arizona Diamondbacks the (“AZPB Agreement”), the Broadcast Rights Agreement (Phoenix Suns/KTAR), dated January 21, 1991, by and between Pulitzer Broadcasting Company and Phoenix Suns Limited Partnership, as amended July 11, 1995, and the Advertising, Promotion and Broadcasting Agreement (Phoenix Mercury/KMVP), dated February 18, 2003, by and between Emmis Communications, Inc. and Phoenix Arena Sports Limited Partnership, as amended on May 16, 2003) to the extent requiring the broadcast of advertising for casinos, casino operations or lotteries, and any other Station Agreement expressly designated on Schedules 3.7(a) , 3.7(b) or 3.9 as “excluded;” (vi) any Emmis Entity intangible property used or held for use principally in connection with the Emmis Excluded Assets, and (vii) all rights to the name “Emmis” and any logo or variation of, and goodwill associated with, such name; and

     (n) Each Station Agreement relating to any Transferring Party’s Station that is either (i) required to be listed, but is not listed, on the Transferring Party’s Schedules to this Agreement and that is subsequently rejected by the Recipient Party pursuant to Section 5.16(a) , or (ii) entered into by the Transferring Party on or after the date of this Agreement without the consent of the Recipient Party in violation of the terms and provisions of this Agreement, including but not limited to the covenants set forth in Section 5.1 , unless the Recipient Party elects in its discretion that such Station Agreement will be assigned to and assumed by the Recipient Party pursuant to this Agreement.

     (o) Proprietary information of the Transferring Party unrelated to its Station(s) that is stored on any personal or notebook computer constituting an Exchange Asset, it being agreed that the Transferring Party will be entitled to remove or delete any such information prior to the Closing.

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     2.3 Emmis Entities’ Assumption of Liabilities .

     (a) To the extent not already assumed pursuant to the Chicago TBA, Emmis Operating will at the Closing assume and agree to pay, discharge and perform the following Liabilities of the Bonneville Entities:

     (i) All Liabilities arising under all Bonneville Station Agreements and the Permits (excluding the Bonneville FCC Licenses) assigned and transferred to the Emmis Entities in accordance with this Agreement to the extent such Liabilities arise during and relate to any period on or after the Closing Date (excluding, however, any Liability arising from or under (A) the breach of any Bonneville Station Agreement by reason of its assignment to the Emmis Entities without a required consent, (B) any other breach or default by any Bonneville Entity upon or prior to the Closing under any Bonneville Station Agreement unless caused by any Emmis Entity’s action or failure to perform under the Chicago TBA, or (C) any Bonneville Station Agreement to the extent relating to the use of any item of property unless possession of such item, and ownership or the right to use of such item in accordance with the terms of such Bonneville Station Agreement, are conveyed to an Emmis Entity as part of the Bonneville Assets).

     (ii) Other Liabilities of the Bonneville Entities to the extent, and only to the extent, the amount thereof is properly included as a credit to the Emmis Entities in calculating the Adjustment Amount for WLUP pursuant to %}!Section 2.7 .

     (b) Emmis License will at the Closing assume and agree to pay, discharge and perform when due the Liabilities arising under the Bonneville FCC Licenses assigned and transferred to Emmis License in accordance with this Agreement to the extent such Liabilities arise during and relate to any period on or after the Closing Date (excluding, however, any Liability arising from any breach or default by any Bonneville Entity upon or prior to the Closing under the Bonneville FCC Licenses unless caused by any Emmis Entity’s action or failure to perform under the Chicago TBA).

     (c) The Liabilities assumed by the Emmis Entities under this Section 2.3 are collectively referred to herein as the “Emmis Assumed Obligations.”

     (d) Except for the Emmis Assumed Obligations, the Emmis Entities will not assume or in any manner be liable for any Liabilities of either Bonneville Entity of any kind or nature, all of which each Bonneville Entity will pay, discharge and perform when due; provided, however, that the Bonneville Entities will have the right to contest in good faith any Liability of the Bonneville Entities.

     2.4 Bonneville Entities’ Assumption of Liabilities .

     (a) To the extent not already assumed pursuant to the Phoenix TBA, Bonneville International will at the Closing assume and agree to pay, discharge and perform the following Liabilities of the Emmis Entities:

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     (i) All Liabilities arising under all Emmis Station Agreements and the Permits (excluding the Emmis FCC Licenses) assigned and transferred to the Bonneville Entities in accordance with this Agreement to the extent such Liabilities arise during and relate to any period on or after the Closing Date (excluding, however, any Liability arising from or under (A) any Emmis Station Agreement to the extent relating to the broadcast of advertising for casinos, casino operations or lotteries other than as required under the Amended and Restated Broadcast Agreement, dated June 30, 2004, between Emmis Operating and AZPB Limited Partnership relating to the Arizona Diamondbacks, the Broadcast Rights Agreement (Phoenix Suns/KTAR), dated January 21, 1991, by and between Pulitzer Broadcasting Company and Phoenix Suns Limited Partnership, as amended July 11, 1995, and the Advertising, Promotion and Broadcasting Agreement (Phoenix Mercury/KMVP), dated February 18, 2003, by and between Emmis Communications, Inc. and Phoenix Arena Sports Limited Partnership, as amended on May 16, 2003, (B) the breach of any Emmis Station Agreement by reason of its assignment to either Bonneville Entity without a required consent, (C) any other breach or default by any Emmis Entity upon or prior to the Closing under any Emmis Station Agreement unless caused by any Bonneville Entity’s action or failure to perform under the Phoenix TBA, or (D) any Emmis Station Agreement to the extent relating to the use of any item of property unless possession of such item, and ownership or the right to use of such item in accordance with the terms of such Emmis Station Agreement, are conveyed to a Bonneville Entity as part of the Emmis Assets).

     (ii) Other Liabilities of the Emmis Entities to the extent, and only to the extent, the amount thereof is properly included as a credit to the Bonneville Entities in calculating the Adjustment Amount for the Emmis Stations pursuant to Section 2.7 .

     (b) Bonneville Holding will at the Closing assume and agree to pay, discharge and perform when due the Liabilities arising under the Emmis FCC License Assets assigned and transferred to Bonneville Holding in accordance with this Agreement to the extent such Liabilities arise during and relate to any period on or after the Closing Date (excluding, however, any Liability arising from any breach or default by any Emmis Entity upon or prior to the Closing under the Emmis FCC Licenses unless caused by any Bonneville Entity’s action or failure to perform under the Phoenix TBA).

     (c) The Liabilities assumed by the Bonneville Entities under this Section 2.4 are collectively referred to herein as the “Bonneville Assumed Obligations.”

     (d) Except for the Bonneville Assumed Obligations, the Bonneville Entities will not assume or in any manner be liable for any Liabilities of any Emmis Entity of any kind or nature, all of which each Emmis Entity will pay, discharge and perform when due; provided, however, that the Emmis Entities will have the right to contest in good faith any Liability of the Emmis Entities.

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     2.5 Exchange of Assets; Boot and Noncompete Payments .

     (a) In consideration of the Bonneville Entities’ conveyance of the Bonneville Assets to the Emmis Entities, the Bonneville Entities’ payment of $66,000,000 and the Bonneville Entities’ assumption of the Bonneville Assumed Obligations, the Emmis Entities agree that, to the extent not already effected pursuant to the Phoenix TBA, at the Closing, (i) Emmis Operating will assign, transfer and convey to Bonneville International, free and clear of any Liens other than Permitted Liens, and Bonneville International will acquire and accept from Emmis Operating, all right, title and interest of Emmis Operating in, to and under all Emmis Operating Assets, and (ii) Emmis License will assign, transfer and convey to Bonneville Holding, free and clear of any Liens other than Permitted Liens, and Bonneville Holding will acquire and accept from Emmis License, all right, title and interest of Emmis License in, to and under all Emmis FCC Licenses.

     (b) In consideration of the Emmis Entities’ conveyance of the Emmis Assets to the Bonneville Entities and the Emmis Entities’ assumption of the Emmis Assumed Obligations, the Bonneville Entities agree that at the Closing, (i) to the extent not already effected pursuant to the Chicago TBA, (A) Bonneville International will assign, transfer and convey to Emmis Operating, free and clear of any Liens other than Permitted Liens, and Emmis Operating will acquire and accept from Bonneville International, all right, title and interest of Bonneville International in, to and under all Bonneville Operating Assets, and (B) Bonneville Holding will assign, transfer and convey to Emmis License, free and clear of any Liens other than Permitted Liens, and Emmis License will acquire and accept from Bonneville Holding, all right, title and interest of Bonneville Holding in, to and under all Bonneville FCC Licenses; and (ii) the Bonneville Entities will pay $66,000,000 (the “Bonneville Boot Payment”) to the Emmis Entities.

     (c) At the Closing, the Bonneville Entities will pay the Noncompete Payment to the Emmis Entities.

     (d) The Bonneville Boot Payment and the Noncompete Payment will be paid by wire transfer of immediately available funds pursuant to wire instructions specified by written notice from the Emmis Entities to the Bonneville Entities at least three (3) days prior to the Closing Date.

     2.6 Asset Values and 1031 Schedules .

     (a) The parties agree that the fair market value of the Emmis Assets is $194,000,000, and the fair market value of the Bonneville Assets is $128,000,000.

     (b) Within 30 days after execution of this Agreement, for the benefit of the other Party’s information, the Emmis Entities and Bonneville Entities will exchange their respective proposed schedules setting forth the respective Emmis Operating Assets and Bonneville Operating Assets in each “exchange group” and “residual group” (as each such term is defined in Treas. Reg. Section 1.1031(j)-1(b)(2)) for their reciprocal like-kind exchange as contemplated by this Agreement.

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     (c) No Party makes any representation, warranty or guaranty with respect to the tax consequences of any other Party arising from the transactions contemplated by this Agreement.

     2.7 Proration Adjustment .

     (a) As of 12:01 a.m. local time on the Closing Date, all operating income (meaning all operating revenues less all operating expenses as such amounts are calculated in compliance with GAAP applied in each case in a manner consistent with the preparation of the Transferring Party’s financial statements previously furnished to the Recipient Party) for each Station will be adjusted and allocated, in each case between the Transferring Party and the Recipient Party, and an adjustment will be made as provided in this Section to the extent necessary to reflect the principle that all operating revenue and operating expenses attributable to the operation of each Station on or before the date preceding the Closing Date will be for the account of the corresponding Transferring Party, and all operating revenue and operating expenses attributable to the operation of each Station on and after the Closing Date will be for the account of the corresponding Recipient Party. This Section 2.7 will only apply to the extent the applicable proration or adjustment is not addressed by the provisions included in Section 4.5 of the Chicago TBA in the case of WLUP, or Section 4.5 of the Phoenix TBA in the case of the Emmis Stations. The net adjustment amount determined in accordance with this Section with respect to the Emmis Stations, and the separate net amount determined in accordance with this Section with respect to WLUP, are each referred to as an “Adjustment Amount”. Notwithstanding the foregoing, (i) the monthly fixed fee or personnel service payments required to be paid under either TBA, and (ii) depreciation of property, plant and equipment, amortization of definite-lived intangibles, and impairment charges, if any, relating to goodwill and FCC licenses, will not be taken into account in determining the Adjustment Amount with respect to any Station.

     (b) Without limiting the generality of foregoing Subsection (a) :

     (i) The Transferring Party will receive a credit for the unapplied portion, as of the Closing, of the security deposits made by the Transferring Party under those Stations Agreements assumed by the Recipient Party at the Closing in accordance with Section 2.3 or 2.4 .

     (ii) An adjustment and proration will be made in favor of the Transferring Party for the amount, if any, of prepaid expenses, the benefit of which accrues to the Recipient Party, and other current assets acquired by the Recipient Party which are paid by the Transferring Party to the extent such prepaid expenses and other current assets relate to the period after the Closing, provided that the credit given the Transferring Party for each prepaid expense will not exceed an amount commensurate with the benefit therefrom to be received by the Recipient Party after the Closing.

     (iii) FCC regulatory fees applicable to the Emmis Stations or WLUP will be prorated.

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     (iv) Emmis Operating will receive a credit $50,000 at Closing for amounts to be applied by Emmis Operating to obtain from the landlord of the John Hancock Center the services of or access to an emergency power generator for the WLUP transmitter equipment located in the John Hancock Center. Such credit shall be reversed (and paid back to Bonneville International) in the event and to the extent that Emmis Operating does not pay $50,000 or more to obtain such services or access within two (2) years after the Closing Date.

     (v) To the extent Bonneville International has not yet made the proration payment in connection with the AZPB Agreement pursuant to the Phoenix TBA, Bonneville International agrees to make such payment ($4,642,857.14) at Closing (subject to such subsequent proration adjustments as contemplated under the Phoenix TBA to the extent such payment ultimately results in an overpayment by Bonneville International).

     (vi) The Recipient Party will receive a credit for any real property taxes to the extent assessed for and allocable to any period prior to Closing and unpaid as of Closing (whether then due or not).

     (c) To the extent not inconsistent with the express provisions of this Agreement, the allocations made pursuant to this Section will be calculated in compliance with GAAP, except materiality limitations or qualifications under GAAP.

     (d) Within sixty (60) days after the Closing Date, each Transferring Party will provide the Recipient Party with a statement setting forth a detailed computation of the Transferring Party’s reasonable and good faith estimate of the Adjustment Amount as of the Closing Date with respect the Transferring Party’s Station or Stations (each, a “Preliminary Adjustment Report”). If the Adjustment Amount reflected on the Preliminary Adjustment Report is a credit to the Recipient Party, the Transferring Party will pay the Recipient Party the amount of the preliminary Adjustment Amount within five (5) business days of receipt of such Preliminary Adjustment Report, and if the Adjustment Amount reflected on the Preliminary Adjustment Report is a charge to the Recipient Party, the Recipient Party will pay the Transferring Party the amount of such preliminary Adjustment Amount within five (5) business days of receipt of such Preliminary Adjustment Report. Within ninety (90) days after the Closing Date, each Recipient Party will deliver to the Transferring Party in writing and in reasonable detail a good faith final determination of the Adjustment Amount determined as of the Closing Date with respect to the Station or Stations transferred by the Transferring Party (“Final Proration Notice”). The Transferring Party will assist the Recipient Party in making such determination, and the Recipient Party will provide the Transferring Party with reasonable access to the properties, books and records relating to the applicable Station or Stations for the purpose of determining the applicable Adjustment Amount. The Transferring Party will have the right to review the computations and workpapers used in connection with the Recipient Party’s preparation of the Adjustment Amount. If the Transferring Party disagrees with the amount of the Adjustment Amount determined by the Recipient Party as set forth in its Final Proration Notice, the Transferring Party will so notify the Recipient Party in writing (the “Dispute Notice”) within thirty (30) days after the date of receipt of the Recipient Party’s Final Proration Notice,

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specifying in detail each item in dispute. If the Recipient Party does not receive a Dispute Notice within such 30-day period, then within five (5) business days after expiration of such 30-day period, the Transferring Party will pay to the Recipient Party or the Recipient Party shall pay to the Transferring Party, as the case may be, an amount equal to the difference between (i) the Adjustment Amount set forth in the Recipient Party’s Final Proration Notice and (ii) the preliminary Adjustment Amount indicated in the Preliminary Adjustment Report. After the receipt of any Dispute Notice, the Recipient Party and the Transferring Party will negotiate in good faith to resolve any disagreements regarding the applicable Adjustment Amount. If agreement is reached within thirty (30) days after the Recipient Party’s receipt of the Dispute Notice, then within five (5) business days after reaching such agreement, the Transferring Party will pay to the Recipient Party or the Recipient Party will pay to the Transferring Party, 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 applicable Preliminary Adjustment Report. Any payment under this Section 2.7(d) will be made as provided in Section 2.7(g) . If agreement is not reached within such 30-day period with respect to a disputed Adjustment Amount, then the dispute resolutions of Section 2.7(e) will apply.

     (e) If the Transferring Party and its auditors and the Recipient Party and its auditors do not, within the 30-day period specified in Section 2.(d) , reach an agreement on an Adjustment Amount, then Parties will ask PricewaterhouseCoopers, LLP (the “Arbitrating Firm”) to resolve the disputed items. The Recipient Party and the Transferring Party will each inform the Arbitrating Firm in writing as to their respective positions concerning the disputed Adjustment Amount, and each will make readily available to the Arbitrating Firm any books and records and work papers relevant to the preparation of such firm’s computation of the disputed Adjustment Amount. The Arbitrating Firm will be instructed to complete its analysis within thirty (30) days from the date of its engagement and upon completion to inform the parties in writing of its own determination of the resolution of the disputed Adjustment Amount and the basis for its determination. Any determination by the Arbitrating Firm in accordance with this Section will be final and binding on the parties for purposes of this Section. The fees and expenses of the Arbitrating Firm shall be borne equally by the Transferring Party and the Recipient Party. Within five (5) business days after the Arbitrating Firm delivers to the parties its written determination of the resolution of the disputed Adjustment Amount, the Transferring Party will pay to the Recipient Party, or the Recipient Party will pay to the Transferring Party, as the case may be, an amount equal to the difference between (i) such Adjustment Amount as determined by the Arbitrating Firm and (ii) the preliminary Adjustment Amount indicated in the applicable Preliminary Adjustment Report. Any such payment will be made as provided in Section 2.7 .

     (f) Notwithstanding the foregoing, if, at any time after payment is made under this Section 2.7 based upon a final Adjustment Amount determined in accordance with the preceding provisions of this Section, a Party identifies any additional item for which adjustment should have been made under this Section 2.7 , such Party shall notify the other Party of each such item, and each Party shall then cooperate as reasonably requested by the other Party in determining, and effecting any payment or refund required to reconcile with, the Adjustment Amount as further revised in accordance with this Section 2.7 .

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     (g) Each payment required under Section 2.7(d)-(f) will be paid by wire transfer in immediately available funds to the account of the payee at a financial institution in the United States. Any payment not received by the payee on or before the applicable due date under Section 2.7(d)-(f) will bear interest from such due date until paid in full at a rate per annum equal to the prime rate in effect on such due date (as published in the Money Rates column of the Eastern Edition of The Wall Street Journal ) plus three percent (3%).

     2.8 Accounts Receivable .

     (a) To the extent a Transferring Party’s accounts receivables (the “Retained Receivables”) are not already collected under the Chicago TBA with respect to WLUP and the Phoenix TBA with respect to the Emmis Stations, the Recipient Party shall continue the collections for the remainder of the Collection Period (as defined in the applicable TBA). Each Recipient Party will, without charge to the Transferring Party, use its usual and customary procedures (which may include referral to a collection agency) to collect the Retained Receivables as the Transferring Party’s agent (but Recipient Party will not have any fiduciary obligations with respect thereto) for collection, provided that (i) the Recipient Party will not be required to commence litigation, employ legal counsel or make any other extraordinary collection efforts, and (ii) the Recipient Party’s obligation to act as the Transferring Party’s agent in the collection of the Retained Receivables will terminate upon expiration of the Collection Period. For the purpose of determining amounts collected by the Recipient Party with respect to the Retained Receivables of the Transferring Party, each payment by an account debtor will be applied to the older or oldest accounts receivable of such account debtor unless the account debtor in writing (a copy of which the Recipient Party will provide to the Transferring Party) identifies such an account as being in dispute and directs that a particular payment be applied to a specific newer account receivable.

     (b) The Recipient Party shall promptly (but in no event more than three (3) business days after receipt) deliver to the Transferring Party the original checks, or deposit all collections, received by the Recipient Party on account of the Retained Receivable into a bank account designated by the Transferring Party under the applicable TBA. The Recipient Party shall deliver a monthly accounting of such collections and deposits to the Transferring Party by the 5th business day following the last day of the month of collection. A Recipient Party will have no right to setoff amounts owed under this Agreement by the Recipient Party to the Transferring Party against any amounts owed under this Agreement by such Transferring Party to the Recipient Party.

     (c) No Transferring Party will engage in any collection efforts against account debtors under its Retained Receivables, except with respect to Retained Receivables reassigned to the Transferring Party as contemplated under the applicable TBA.

     (d) A Recipient Party will not, without the Transferring Party’s prior written consent, compromise or settle for less than full value any of the Transferring Party’s Retained Receivables unless the Recipient Party pays the Transferring Party the full amount of any deficiency. A Recipient Party will be entitled to purchase any Retained Receivable from the Transferring Party for the full amount thereof at any time during or at the expiration of the

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Collection Period. The Recipient Party shall not be liable to the Transferring Party for any loss, claim, expense or liability arising in connection with its collection of the Transferring Party’s Retained Receivables except to the extent arising as a result of (i) the Recipient Party’s failure to comply with the terms and provisions of this Section 2.8 or (ii) the Recipient Party’s willful malfeasance or gross negligence.

     (e) At the end of the Collection Period, each Recipient Party will return to the Transferring Party all files concerning the collection or attempts to collect the Retained Receivables of the Transferring Party and the Recipient Party’s responsibility for the collection of such Retained Receivables will cease, provided that the Recipient Party will promptly pay over to the Transferring Party any amounts received with respect to the Retained Receivables of the Transferring Party after the Collection Period, together with a statement setting forth the components of such amounts. Any payment not received by the Party entitled thereto by the payment date specified in Section 2.8(b) will bear interest from such date until paid in full at a rate per annum equal to the prime rate in effect on such date plus three percent (3.0%) (as published in the Money Rates column of the Eastern Edition of The Wall Street Journal ).

ARTICLE III.
REPRESENTATIONS AND
WARRANTIES OF THE EMMIS ENTITIES

     The Emmis Entities, jointly and severally, represent and warrant to the Bonneville Entities as follows:

     3.1 Organization, Good Standing and Requisite Power .

     Each of the Emmis Entities is a limited liability company duly organized, validly existing and in good standing under the laws of Indiana, and has all requisite power to own, lease and operate the Emmis Assets and carry on its business. Emmis Operating is duly licensed, qualified to do business and in good standing as a foreign entity under the laws of Arizona and Illinois.

     3.2 Authorization and Binding Effect of Documents .

     Each Emmis Entity has all requisite limited liability company power and authority to enter into this Agreement and the other Documents and to consummate the transactions contemplated by this Agreement and each of the other Documents. The execution and delivery of this Agreement and each of the other Documents by each Emmis Entity (as appropriate) and the consummation by each Emmis Entity of the transactions contemplated hereby and thereby have been duly authorized by all necessary limited liability company action (including all necessary member approvals, if any) on the part of each Emmis Entity. This Agreement has been, and each of the other Documents at or prior to the Closing will be, duly executed and delivered by each Emmis Entity. This Agreement constitutes (and each of the other Documents, when executed and delivered, will constitute) the valid and binding obligation of each Emmis Entity enforceable against each Emmis Entity in accordance with its terms except as the enforceability of this Agreement or of any of the other Documents may be affected by

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bankruptcy, insolvency, or similar laws affecting creditors’ rights generally and by judicial discretion in the enforcement of equitable remedies.

     3.3 Absence of Conflicts .

     Except as set forth on Schedule 3.3 , and except for necessary clearances or approvals under the HSR Act or the Act, the execution, delivery and performance by each Emmis Entity of this Agreement and the other Documents, and consummation by each Emmis Entity of the transactions contemplated hereby and thereby, do not and will not (i) conflict with or result in any breach of any of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in a violation of, (iv) give any third party the right to modify, terminate or accelerate any obligation under, or (v) result in the creation of any Lien upon the Emmis Assets under, the provisions of the organizational documents of such Emmis Entity, any indenture, mortgage, lease, loan agreement or other agreement or instrument to which such Emmis Entity is bound or affected, or any law, statute, rule, judgment, order, decree or other legal restriction of any government, governmental agency or court to which such Emmis Entity is subject.

     3.4 Consents .

     Except as set forth on Schedule 3.3 , Schedule 3.7(d) and Schedule 3.9 , and except for any necessary clearances or approvals under the HSR Act or the Act, the execution, delivery and performance by each Emmis Entity of this Agreement and the other Documents, and consummation by each Emmis Entity of the transactions contemplated hereby and thereby, do not and will not require the authorization, consent, approval, exemption, clearance or other action by or notice or declaration to, or filing with, any court, any administrative or other governmental body, or any other third party.

     3.5 Emmis Assets; Title .

     (a) The Emmis Assets constitute all of the assets, properties and rights of every type and description, real, personal and mixed, tangible and intangible, that are currently used in, material to, or necessary for, the operation of the Emmis Stations as currently operated and as operated since January 1, 2004, with the exception of the Emmis Excluded Assets and personnel.

     (b) The representations and warranties of the Emmis Entities regarding title or rights to FCC Licenses, Emmis Real Property interests and Emmis Intellectual Property are set forth in Sections 3.6 , 3.9 and 3.10 . With respect to all other Emmis Assets, the Emmis Entities own and have good title to, or a valid lessee’s or licensee’s interest (pursuant to one or more Emmis Station Agreements included in the Emmis Assets) in, all of such Emmis Assets free and clear of all Liens except (i) Liens described on Schedule 3.5(b) (which the Emmis Entities will cause to be released prior to the Closing and released of record promptly after the Closing) and (ii) Permitted Liens. With respect to Emmis Assets that are Phoenix TBA Contracts, the representations and warranties under this Section 3.5(b) are made only as of the end of the day prior to the Phoenix TBA Effective Date.

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     3.6 Emmis FCC Licenses .

     Except as set forth on Schedule 3.6 :

     (a) Emmis License is the valid and legal holder of each of the FCC Licenses listed on Schedule 3.6 (collectively, the “Emmis FCC Licenses”) free and clear of all Liens, and except as set forth on Schedule 3.6 , any action of the FCC with respect to each Emmis FCC License is a Final Action with the exception of the FCC Order. The expiration date of the term of each main Emmis FCC License is shown on Schedule 3.6 .

     (b) The Emmis FCC Licenses (i) are valid and in full force and effect, and constitute all of the licenses, permits and authorizations used in or required for the current operation of the Emmis Stations under the Communications Act of 1934, as amended, and the rules, regulations and policies of the FCC thereunder (collectively, the “Act”), and (ii) constitute all the currently in effect licenses and authorizations, including amendments and modifications thereto, issued by the FCC for the operation of the Emmis Stations.

     (c) Other than as set forth in the Emmis FCC Licenses or restrictions applicable to the radio broadcast industry generally, none of the Emmis FCC Licenses is subject to any restriction or condition which limits in any material respect the full operation of the applicable Emmis Station as now conducted, and as of the Closing Date, none of the Emmis FCC Licenses will be subject to any restriction or condition which would limit in any material respect the full operation of such Emmis Station as currently operated and as operated since January 1, 2004.

     (d) Subject to the Phoenix TBA, each Emmis Station is being operated by Emmis Operating in all material respects in accordance with the terms and conditions of the Emmis FCC Licenses and the Act, including but not limited to those pertaining to RF emissions; and, to the Knowledge of the Emmis Entities, none of the Emmis Stations is causing material interference to other stations, or is experiencing material interference from other stations in violation of the Act. }A

     (e) No applications, complaints or proceedings are pending or, to the Knowledge of any Emmis Entity, are threatened which may result in the revocation, modification, non-renewal or suspension of any of the Emmis FCC Licenses, the denial of any pending applications, the issuance of any cease and desist order or the imposition of any material fines, forfeitures or other administrative actions by the FCC with respect to any Emmis Station or its operation, other than actions or proceedings affecting the radio broadcasting industry in general.

     (f) To the Knowledge of each Emmis Entity, the Emmis Entities have complied in all material respects with all requirements to file registrations, reports, applications and other documents with the FCC with respect to each Emmis Station, and all such registrations, reports, applications and documents are true, correct and complete in all material respects.

     (g) Other than actions or proceedings affecting the radio broadcasting industry in general or facts relating to the Bonneville Entities, no Emmis Entity has Knowledge of matters (i) which might reasonably be expected to result in the adverse modification, suspension or revocation of or the refusal to renew any of the Emmis FCC Licenses or the imposition of any

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material fines or forfeitures by the FCC against any Emmis Entity, or (ii) which might reasonably be expected to result in the FCC’s denial or delay of approval of the assignment to the Bonneville Entities of any Emmis FCC License or the imposition of any Material Adverse Condition in connection with approval of the transfer to the Bonneville Entities of any Emmis FCC License.

     (h) There are no unsatisfied or otherwise outstanding citations issued by the FCC with respect to any Emmis Station or its operation.

     (i) True, complete and accurate copies of all Emmis FCC Licenses material to the operation of each Emmis Station have been delivered by the Emmis Entities to the Bonneville Entities.

     (j) Except for the Emmis FCC Licenses and the Emmis Permits identified on Schedule 3.6 , there are no material licenses, permits or authorizations from governmental or regulatory authorities required for the lawful operation and conduct of the Emmis Stations as previously and currently operated by the Emmis Entities.

     3.7 Station Agreements .

     (a)  Schedule 3.7(a) lists all Trade Agreements of the Emmis Stations as of the end of the day prior to the Phoenix TBA Effective Date, and sets forth the parties thereto, the contracted value of the remaining time required to be provided from and after the date noted on such Schedule and the contracted value of the goods or services to be received by Emmis Operating from and after the date noted on such Schedule. True and complete copies of all such written Trade Agreements in effect as of such date involving broadcast time of more than $25,000, and true and accurate summaries of all such Trade Agreements that are oral, including all related amendments, modifications and supplements, have been delivered to the Bonneville Entities. Schedule 3.7(a) identifies those Trade Agreements which relate in part to any station other than an Emmis Station.

     (b)  Schedule 3.7(b) lists all the following types of agreements used in or relating to the operation of each Emmis Station as of the date of this Agreement (including the Station Agreements assigned under the Phoenix TBA):

     (i) Agreements for sale of broadcast time on such Emmis Station for monetary consideration that (A) are not terminable by the Emmis Entities without charge or penalty upon thirty (30) days’ or less prior written notice and (B) involve broadcast time of more than $25,000;

     (ii) All network affiliation agreements;

     (iii) All sales agency or advertising representation contracts;

     (iv) Each lease of any Emmis Asset (including a description of the property leased thereunder) other than such agreements not requiring expenditures of more than

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$25,000 in any calendar year and having a term (after taking into account any cancellation right of the Emmis Entities without charge or penalty) of one (1) year or less except for the Emmis Real Property Leases listed on Schedule 3.9 ; 1

     (v) All collective bargaining agreements;

     (vi) All severance agreements, employment agreements, talent agreements and agreements with independent contractors, other than such agreements that (A) do not provide for any severance payments or benefits, (B) do not require expenditures of more than $25,000 in any calendar year and (C) have a term (after taking into account any cancellation right of the Emmis Entities without charge or penalty) of one (1) year or less;

     (vii) All agreements requiring such Emmis Station or either Emmis Entity to acquire goods or services exclusively from a single supplier or provider, or prohibiting such Emmis Station or the owner or operator thereof from providing certain goods or services to any Person other than a specified Person;

     (viii) All agreements that have a remaining term (after taking into account any cancellation rights of the Emmis Entities without charge or penalty) of more than one (1) year or involve a commitment of more than $25,000; and

     (ix) Any other agreement that is material to the business, operations, financial condition or results of operations of any Emmis Station.

Schedule 3.7(b) also lists those Station Agreements relating in part to any station other than an Emmis Station. True and complete copies of all the foregoing Emmis Station Agreements that are in writing, and true and accurate summaries of all the foregoing Emmis Station Agreements that are oral, including all amendments, modifications and supplements, have been delivered to the Bonneville Entities. The Emmis Station Agreements that are not described in Section 3.7(a) or in the foregoing clauses (i) through (ix) of this Section 3.7(b) (without regard to the monetary thresholds set forth in Section 3.7(a) or in such clauses of Section 3.7(b) ) do not involve commitments by parties thereto with an aggregate fair market value of more than $150,000.

     (c)  Schedule 3.7(c) lists all of the contracts and agreements used in or relating to the operation of the Emmis Stations as of the date of this Agreement to which an Affiliate of any Emmis Entity is a party. True and complete copies of those in writing have been delivered to the Bonneville Entities, and summaries of those that are oral are set forth on Schedule 3.7(c) .

     (d) Except as set forth on Schedule 3.7(d) and any other Schedule that relates to any Emmis Station Agreement, with respect to the Emmis Station Agreements which are, individually or in the aggregate, material to the assets, business, operations, financial condition or results of operations of an Emmis Station, (i) such Emmis Station Agreements are valid, binding, in full force and effect, and enforceable against the relevant Emmis Entity in accordance with their terms except as the enforceability of such Emmis Station Agreements may be affected by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally and by judicial

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discretion in the enforcement of equitable remedies; (ii) neither the Emmis Entities nor, to the Knowledge of any Emmis Entity, any other party is in material default under, and no event has occurred which (after the giving of notice or the lapse of time or both) would constitute a material default under, or permit termination, modification or acceleration of, any such Emmis Station Agreements; (iii) neither the Emmis Entities nor any Affiliate of the Emmis Entities has granted or been granted any material waiver or forbearance with respect to any such Emmis Station Agreements not reflected in an amendment or modification; (iv) the Emmis Entities hold the right to enforce and receive the benefits under all such Emmis Station Agreements, free and clear of Liens (other than Permitted Liens) but subject to the terms and provisions of each such agreement; (v) none of the rights of any Emmis Entity or any of its Affiliates under any such Emmis Station Agreements is subject to termination or modification as a result of the consummation of the transactions contemplated by this Agreement; and (vi) except as set forth on Schedule 3.7(a) , 3.7(b) , or 3.9 , no such Emmis Station Agreement requires the consent or approval by any party to such agreement for the consummation of the transactions contemplated by this Agreement. The foregoing to the contrary notwithstanding, with respect to Emmis Station Agreements that are Phoenix TBA Contracts, the representations and warranties under this Section 3.7(d) are made only as of the day prior to the Phoenix TBA Effective Date.

     (e) During the period commencing on the Phoenix TBA Effective Date, no Emmis Entity has entered into, modified, amended, renewed, extended or terminated any Emmis Station Agreement to be assigned to and assumed by the Bonneville Entities pursuant to this Agreement except in accordance with this Agreement (including Section 5.1 ).

     3.8 Tangible Personal Property .

     (a)  Schedule 3.8 lists, as of the date stated on such Schedule, all tangible personal property (other than Emmis Excluded Assets, office supplies and other incidental items) necessary for the conduct of the business and operations of each Emmis Station as now operated.

     (b) Except as specified on Schedule 3.8 , the Emmis Assets that consist of equipment used in or necessary for the operation of each Emmis Station as currently operated and as operated since January 1, 2004, have been properly maintained in all material respects in accordance with industry practices, are in a good state of repair and operating condition (subject to ordinary wear and tear), and comply in all material respects with the Act and other applicable material laws, rules, regulations and ordinances.

     (c) The tangible Emmis Assets include all tangible assets necessary to operate the Emmis Stations other than the Emmis Excluded Assets.

     3.9 Emmis Real Property .

     (a) The list of Emmis Real Property set forth on Schedule 3.9 is a correct and complete list of all of the interests in real estate used or held for use by either Emmis Entity to any material extent in the operation of any Emmis Station. To each Emmis Entity’s Knowledge, except as set forth on Schedule 3.9 , there is no pending, threatened or contemplated lawsuit or

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other legal or administrative proceedings pertaining to any of the Emmis Real Property which would materially affect the current use, occupancy or value of the Emmis Real Property.

     (b) Emmis Operating holds good and marketable, insurable, fee simple title to the parcel of Emmis Real Property designated on Schedule 3.9 as owned in fee simple by Emmis Operating (the “Emmis Owned Real Property”) free and clear of any Liens except (i) Liens described on Schedule 3.5(b) (which the Emmis Entities will cause to be released prior to the Closing and released of record promptly after the Closing), and (ii) Permitted Liens.

     (c) Emmis Operating holds good, insurable title to the easements (the “KTAR Easements”) described on Schedule 3.9 and granted under the agreements or other documents listed on Schedule 3.9 under the heading “Easements” (the “KTAR Easement Agreements”), free and clear of all Liens except Permitted Liens, but subject to the terms and conditions of the KTAR Easement Agreements. The KTAR Easement Agreements constitute all of the agreements and other documents (including all amendments, modifications or supplements) under which either Emmis Entity holds an interest in the KTAR Easements.

     (d) Each lease or sublease (including all amendments, modifications or supplements) under which either Emmis Entity leases or subleases an interest in any Emmis Real Property (each, an “Emmis Real Property Lease”) is specified, and each leased or subleased Emmis Real Property, including but not limited to each transmitter or antenna site (the “Emmis Leased Real Property”), and its use by any Emmis Station are identified, on Schedule 3.9 . Except as set forth on such Schedule, such Emmis Entity holds good title to the lessee’s or sublessee’s interest under each Emmis Real Property Lease free and clear of all Liens except Permitted Liens, but subject to the terms and provisions of each Emmis Real Property Lease and any Liens on the interest of each owner or other party through which such Emmis Entity directly or indirectly derives its interest as lessee or sublessee. True and complete copies of all Emmis Real Property Leases, including all amendments, modifications and supplements, have been delivered to the Bonneville Entities.

     (e) There are no unrecorded leases, subleases, or licenses, written or oral, to which either Emmis Entity is a party, or to the Knowledge of either Emmis Entity, any other unrecorded leases, subleases, or licenses, written or oral, granting any right of use or occupancy to any portion of the Emmis Real Property. To the Knowledge of each Emmis Entity, no party other than an Emmis Entity is in possession of the Emmis Real Property, except to the extent permitted under the terms of the KTAR Easements or Emmis Real Property Leases. There are no outstanding options or rights of first refusal pertaining to any of the Emmis Real Property to which any Emmis Entity is a party, or to the Knowledge of either Emmis Entity, any other outstanding options or rights of first refusal pertaining to any of the Emmis Real Property.

     (f) True and complete copies of all surveys, title policies and real property records in the possession of any Emmis Entity related to any Emmis Real Property have been delivered to the Bonneville Entities.

     (g) Except as set forth on Schedule 3.9 , (i) each Emmis Real Property Lease is legal, valid, binding, in full force and effect and enforceable against the landlord thereunder in

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accordance with its terms; (ii) neither the Emmis Entities nor, to the Knowledge of any Emmis Entity, any other party is in material default under any Emmis Real Property Lease; (iii) to the Knowledge of each Emmis Entity, no event has occurred that, after the giving of notice or the lapse of time or both, would constitute a material default by any party under, or result in the material breach by any party of, or give rise to any right of termination, modification or acceleration of, any Emmis Real Property Lease, and no Emmis Entity has received or given notice alleging any such event has occurred; (iv) none of the rights of an Emmis Entity under any Emmis Real Property Lease is subject to termination or modification as a result of the consummation of the transactions contemplated by this Agreement; (v) no consent or approval by any party to any Emmis Real Property Lease is required for the consummation of the transactions contemplated hereby; and (vi) no Emmis Entity has granted or been granted any waiver or forbearance with respect to any Emmis Real Property Lease except as contained in amendments or modifications. To each Emmis Entity’s Knowledge, (i) no party to any Emmis Real Property Lease has repudiated any portion thereof, and (ii) there are no unresolved disputes or oral agreements currently in effect with respect to any Emmis Real Property Lease.

     (h) With respect to each Emmis Real Property Lease which is a sublease, to each Emmis Entity’s Knowledge, each of the representations and warranties in Section 4.9(g) is true and correct with respect to each underlying master lease.

     (i) Except as set forth on Schedule 3.9 , to the Knowledge of each Emmis Entity, (i) each KTAR Easement Agreement is legal, valid, binding, in full force and effect and enforceable against the fee owners thereunder in accordance with its terms, except as superseded or terminated in accordance with the terms of another KTAR Easement Agreement; (ii) neither the Emmis Entities nor any other party is in material default under any KTAR Easement Agreement; (iii) no event has occurred that, after the giving of notice or the lapse of time or both, would constitute a material default by any party under, or result in the material breach by any party of, or give rise to any right of termination or modification of, any KTAR Easement Agreement, and no Emmis Entity has received or given notice alleging any such event has occurred; (iv) none of the rights of an Emmis Entity under any KTAR Easement Agreement is subject to termination or modification as a result of the consummation of the transactions contemplated by this Agreement; (v) no consent or approval by any party to any KTAR Easement Agreement is required for the consummation of the transactions contemplated hereby; (vi) no Emmis Entity has granted or been granted any waiver or forbearance with respect to any KTAR Easement Agreement; (vii) no party to any KTAR Easement Agreement has repudiated any portion thereof, (viii) no Emmis Entity has received notice alleging that any KTAR Easement is invalid, unenforceable or terminated other than as set forth in another KTAR Easement Agreement, and (ix) there are no unresolved disputes or oral agreements currently in effect with respect to any KTAR Easement Agreement.

     (j) Except as set forth on Schedule 3.9 , (i) all improvements on the Emmis Owned Real Property, and all improvements owned by either Emmis Entity located on the Emmis Leased Real Property or KTAR Easements (which include the towers, antennas, transmitter buildings and transmitter equipment located thereon subject to the right and interest in such improvements held by the fee owner under the terms of the KTAR Easements), are in good working condition and repair (subject to ordinary wear and tear) and, to each Emmis Entitiy’s

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Knowledge, are in compliance in all material respects with applicable federal, state and local laws, building codes, ordinances and regulations, including but not limited to zoning and land use laws, ordinances and regulations. To each Emmis Entity’s Knowledge, the use by any Emmis Station of each portion of the Emmis Owned Real Property, Emmis Leased Real Property and KTAR Easements complies in all material respects with applicable zoning and land use laws, ordinances and regulations.

     3.10 Intellectual Property .

     Other than Emmis Excluded Assets, Schedule 3.10 lists all material trade names, trademarks, service marks, copyrights and patents principally used in the operation of the Emmis Stations, including all registrations, applications and licenses for any of the Emmis Intellectual Property. Except as disclosed on Schedule 3.10 :

     (a) To the Knowledge of each Emmis Entity, the Emmis Entities own free and clear of Liens other than Permitted Liens, all right and interest in, and right and authority to use, or has a valid license to use, in connection with the conduct of the business of the applicable Emmis Station as presently conducted, all of the Emmis Intellectual Property listed on Schedule 3.10 , and all of the rights and properties constituting a part of the Emmis Intellectual Property are in full force and effect.

     (b) There are no outstanding or, to the Knowledge of any Emmis Entity, threatened judicial or adversary proceedings with respect to any of the Emmis Intellectual Property.

     (c) No Emmis Entity has granted to any other person or entity any license or other right or interest in or to any of the Emmis Intellectual Property or to the use thereof.

     (d) No Emmis Entity has Knowledge of any infringement or unlawful use of any of the Emmis Intellectual Property.

     (e) To each Emmis Entity’s Knowledge, no Emmis Entity has violated any provisions of the Copyright Act of 1976, 17 U.S.C. §101, et seq. , in any material respect with regard to the Emmis Intellectual Property.

     (f) The Emmis Entities have delivered to the Bonneville Entities copies of all state and federal registrations and other material documents, if any, establishing any of the rights and properties constituting a part of the Emmis Intellectual Property.

     3.11 Emmis Stations Financial Condition .

     Attached as Schedule 3.11 are the unaudited statements of income of each Emmis Station for the year ended February 28, 2004, and the interim period ended November 30, 2004. Such statements (the “Emmis Stations Statements”) (i) are in accordance with the books and records of Emmis Operating pertaining to each of the Emmis Stations, (ii) have been prepared in accordance with GAAP consistently applied, and (iii) accurately reflect the results of operations of the corresponding Emmis Station for the periods covered, in accordance with GAAP, except

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that the Emmis Stations Statements do not include (A) balance sheets or statements of cash flows, (B) federal income tax expense or benefit, (C) interest income and expense, (D) disclosures required by GAAP in notes accompanying financial statements, (E) retiree benefit expense (pension, health insurance, etc.), and (F) expenses associated with the operations of Emmis Operating or its parent entities generally.

     3.12 Absence of Certain Changes or Events .

     Since June 30, 2004, and through the date of this Agreement, other than as described on Schedule 3.12 or caused by or arising from any Bonneville Entity’s action or failure to perform under the Phoenix TBA:

     (a) There has not been any damage, destruction or other casualty loss with respect to the Emmis Assets (whether or not covered by insurance) which, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect.

     (b) None of the Emmis Entities or the Emmis Stations has suffered any adverse change or development which, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect.

     (c) With respect to the Emmis Stations, no Emmis Entity has:

     (i) amended, terminated, renewed or taken any action or inaction that would result in an amendment, termination or renewal of any Emmis Station Agreement, nor has such action been taken by any other party, except in the ordinary course of business consistent with past practices, or any Emmis Real Property Lease (other than any amendment noted on Schedule 3.9 );

     (ii) mortgaged, pledged or subjected to any Lien, any of the Emmis Assets, except for Permitted Liens;

     (iii) acquired or disposed of any Emmis Assets or entered into any agreement or other arrangement for such acquisition or disposition, except for immaterial amounts in the ordinary course of business consistent with past practices ;

     (iv) entered into any agreement, commitment or other transaction except the Phoenix TBA and those that (A) were entered into in the ordinary course of business consistent with past practice or (B) are not material to the assets, business, operations, results of operations or financial condition of any Emmis Station;

     (v) paid any bonus to any officer, director or employee or granted to any officer, director or employee any other increase in compensation in any form, except in the ordinary course of business consistent with past practices;

     (vi) adopted, amended or renewed any collective bargaining, bonus, profit-sharing, compensation, stock option, pension, retirement, deferred compensation,

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severance or other plan, agreement, trust, fund or arrangement for the benefit of employees (whether or not legally binding) or made any material changes in its policies of employment;

     (vii) entered into any agreement (other than agreements that will be terminated prior to the Closing) with any Affiliate of any Emmis Entity; or

     (viii) operated its business other than in the ordinary course consistent with past practices and, after the Phoenix TBA Effective Date, as otherwise contemplated by the Phoenix TBA; or

     (ix) committed to undertake any of the foregoing.

     3.13 Litigation .

     Except as described in Schedule 3.13 or caused by or arising from any Bonneville Entity’s action or failure to perform under the Phoenix TBA, (i) there are no actions, suits, claims, investigations or administrative or arbitration proceedings pending or, to the Knowledge of any Emmis Entity, threatened against any Emmis Entity before or by any court, arbitration tribunal or governmental department or agency, domestic or foreign, that relates to any Emmis Station or the Emmis Assets; (ii) neither any Emmis Entity nor, to the Knowledge of any Emmis Entity, any of the officers or employees of any Emmis Entity, has been charged with, or to the Knowledge of any Emmis Entity, is under investigation with respect to, any violation of any provision of any federal, state, foreign or other applicable law or administrative regulation in respect of such officer’s or employee’s employment at any Emmis Station or with any Emmis Entity; and (iii) neither any Emmis Entity, any properties or assets of any Emmis Entity nor, to the Knowledge of any Emmis Entity, any officer or e