Form 10-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Otkyp1OKNcEYgFnzv8S6nC/AM4IxIJZ2UIhGdRMrgvNIqlJMQ+Ok9tSkqk/53QSy liji+GcQxFjrUNHzXePDBA== 0000783005-02-000005.txt : 20020514 0000783005-02-000005.hdr.sgml : 20020514 ACCESSION NUMBER: 0000783005-02-000005 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20020228 FILED AS OF DATE: 20020514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000783005 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351542018 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23264 FILM NUMBER: 02646080 BUSINESS ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE SUITE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3172660100 MAIL ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: EMMIS BROADCASTING CORPORATION DATE OF NAME CHANGE: 19920703 10-K 1 form10k2002.htm FORM 10-K FOR FISCAL YEAR ENDED FEBRUARY 28, 2002 Form 10-K

                                             SECURITIES AND EXCHANGE COMMISSION
                                                   Washington, D.C. 20549

                                                          FORM 10-K

(Mark One)

[  X  ]  Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the Fiscal Year Ended February 28,
         2002

[     ]  Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the Transition Period from
        _________ to _________.

              EMMIS COMMUNICATIONS CORPORATION                                          EMMIS OPERATING COMPANY
       (Exact name of registrant as specified in its                          (Exact name of registrant as specified in its
                          charter)                                                             charter)

                          INDIANA                                                              INDIANA
          (State of incorporation or organization)                             (State of incorporation or organization)

                           0-23264                                                           333-62172-13
                  (Commission file number)                                             (Commission file number)

                         35-1542018                                                           35-2141064
                      (I.R.S.  Employer                                                    (I.R.S.  Employer
                     Identification No.)                                                  Identification No.)

                       ONE EMMIS PLAZA                                                      ONE EMMIS PLAZA
                     40 MONUMENT CIRCLE                                                   40 MONUMENT CIRCLE
                          SUITE 700                                                             SUITE 700
                 INDIANAPOLIS, INDIANA 46204                                          INDIANAPOLIS, INDIANA 46204
          (Address of principal executive offices)                             (Address of principal executive offices)

                       (317) 266-0100                                                       (317) 266-0100
              (Registrant's Telephone Number,                                       (Registrant's Telephone Number,
                    Including Area Code)                                                 Including Area Code)


      SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None

      SECURITIES  REGISTERED  PURSUANT TO SECTION 12(G) OF THE ACT: Class A common stock, $.01 par value;  6.25% Series A Cumulative
Convertible Preferred Stock, $.01 par value.

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,  and
will not be contained,  to the best of the Registrant's  Knowledge,  in definitive proxy or information  statements  incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]

      Indicate by check mark whether the  registrant  (1) has filed all documents and reports  required to be filed by Section 13 or
15(d) of the  Securities  Exchange Act of 1934 during the preceding 12 months (or for such shorter  period that the  registrant  was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [   ].

      The  aggregate  market  value of the  voting  stock  held by  non-affiliates  of the  registrant,  as of April 30,  2002,  was
approximately $1,363,568,000.

      The number of shares outstanding of each of the registrant's classes of common stock, as of April 30, 2002, was:

                                     47,790,845    Class A Common Shares, $.01 par value
                                      5,100,127    Class B Common Shares, $.01 par value
                                              0    Class C Common Shares, $.01 par value

      Emmis Operating  Company has 1,000 shares of common stock  outstanding as of April 30, 2002, and all of these shares are owned
by Emmis Communications Corporation.

                                                DOCUMENTS INCORPORATED BY REFERENCE

              Documents                                                                     Form 10-K Reference
              ---------                                                                     -------------------

Proxy Statement for 2002 Annual Meeting                                                             Part III

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
AND EMMIS OPERATING COMPANY AND SUBSIDIARIES

FORM 10-K

TABLE OF CONTENTS

Page
PART I .................................................................................. 4
Item 1. Business............................................................... 4
Item 2. Properties............................................................. 18
Item 3. Legal Proceedings...................................................... 21

PART II .................................................................................. 22
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters.................................................. 22
Item 6. Selected Financial Data................................................ 23
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation................................... 25
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.............. 34
Item 8. Financial Statements and Supplementary Data........................... 36
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure............................... 85

PART III .................................................................................. 85
Item 10. Directors and Executive Officers of the Registrant..................... 85
Item 11. Executive Compensation................................................. 86
Item 12. Security Ownership of Certain Beneficial Owners
and Management....................................................... 86
Item 13. Certain Relationships and Related Transactions......................... 86

PART IV .................................................................................. 86
Item 14. Exhibits and Reports on Form 8-K....................................... 86

Signatures ................................................................................. 89

PART I

ITEM 1. BUSINESS.

GENERAL

We are a diversified media company with radio broadcasting, television broadcasting and magazine publishing operations. We
operate the sixth largest publicly traded radio portfolio in the United States based on total listeners. Giving effect to the
sale of our two stations in Denver, we operate eighteen FM radio stations and three AM radio stations in the United States that
serve the nation's three largest radio markets of New York City, Los Angeles and Chicago, as well as Phoenix, St. Louis,
Indianapolis and Terre Haute, Indiana. The fifteen television stations we operate serve geographically diverse mid-sized markets
in the U.S. as well as the large markets of Portland and Orlando and have a variety of television network affiliations, including
five with CBS, five with FOX, three with NBC, one with ABC and one with WB.

Our strategy is to selectively acquire underdeveloped media properties in desirable markets and then to create value by
developing those properties to increase their cash flow. We find such underdeveloped properties attractive because they offer
greater potential for revenue and cash flow growth than mature properties. We have been successful in acquiring these types of
media properties and improving their ratings, revenues and cash flow with our marketing focus and innovative programming
expertise. We have created top-performing radio stations which rank, in terms of primary demographic target audience share, among
the top ten stations in the New York City, Los Angeles and Chicago radio markets according to the Fall 2001 Arbitron Survey. We
believe that our strong large-market radio presence and diversity of station formats makes us attractive to a diverse base of
radio advertisers and reduces our dependence on any one economic sector or specific advertiser. Since acquisition, we have
generally improved the margins of our television stations and we believe there is further room for margin improvement.

In addition to our domestic broadcasting properties, we operate news and agriculture information radio networks in Indiana,
publish Texas Monthly, Los Angeles, Atlanta, Indianapolis Monthly, Cincinnati, and Country Sampler and related magazines, have a
59.5% interest in a national radio station in Hungary and own 75% of one FM and one AM radio station in Buenos Aires, Argentina.
We also engage in various businesses ancillary to our broadcasting business, such as consulting and broadcast tower leasing.

BUSINESS STRATEGY

We are committed to maintaining our leadership position in broadcasting, enhancing the performance of our broadcast and
publishing properties, and distinguishing ourselves through the quality of our operations. Our strategy is to maximize
shareholder value by focusing on the following principles:

DEVELOP INNOVATIVE PROGRAMMING. We believe that knowledge of local markets and innovative programming developed to target
specific demographic groups are the most important determinants of individual radio and television station success. We conduct
extensive market research to identify underserved segments of the markets we serve or to assure that we are meeting the needs of
our target audience. Utilizing the research results, we concentrate on providing a focused programming format carefully tailored
to the demographics of our markets and our audiences' preferences.

EMPHASIZE FOCUSED SALES AND MARKETING STRATEGY. We design our local and national sales efforts based on advertiser demand and
our programming compared to the competitive formats within each market. We provide our sales force with extensive training and the
technology for sophisticated inventory management techniques, which provide frequent price adjustments based on regional and
market conditions. Furthermore, additional company resources have been allocated to locate, hire, train and retain top sales
people. In fiscal 2002, we implemented the Emmis Sales Assault Plan (ESAP), a company-wide initiative geared toward attracting
and developing sales leaders in the radio, television and magazine industries. Through February 28, 2002, nearly 100 sales people
were added to our workforce under this program, which was incremental to hirings in the normal course of business.

DEVELOP STRONG LOCAL STATION IDENTITIES FOR OUR TELEVISION STATIONS. We strive to create television stations with a strong
local "brand" within the station's market, allowing viewers and advertisers to identify with the station while building the
station's franchise value. We believe that aggressive promotion and strong local station management, strategies which we have
found successful in our radio operations, are critical to the creation of strong local television stations as well. Additionally,
we believe that the production and broadcasting of local news and events programming can be an important link to the community and
an aid to the station's efforts to expand its viewership. Local news and events programming can provide access to advertising
sources targeted specifically to the local or regional community. We believe that strong local news generates high viewership and
results in higher ratings both for programs preceding and following the news.

PURSUE STRATEGIC ACQUISITIONS AND CREATE CASH FLOW GROWTH BY ENHANCING STATION PERFORMANCE. We have built our portfolio by
selectively acquiring underdeveloped media properties in desirable markets at reasonable purchase prices where our experienced
management team has been able to enhance value. We intend to pursue acquisitions of radio stations, where we believe we can
increase broadcast cash flow, in our current markets. We will also consider acquisitions of individual radio stations or groups
of radio stations in new markets where we expect we can achieve a leadership position. We believe that continued consolidation in
the radio broadcasting industry will create attractive acquisition opportunities as the number of potential buyers for radio
assets declines due to government regulations on the number of stations a company can own in one market. We believe that
attractive acquisition opportunities are also increasingly available in the television broadcasting industry. We intend to
evaluate acquisitions of magazine publishing properties that present opportunities to capitalize on our management expertise to
enhance cash flow at attractive purchase price multiples with minimal capital requirements.

ENCOURAGE A PERFORMANCE BASED, ENTREPRENEURIAL MANAGEMENT APPROACH. We believe that broadcasting is primarily a local business
and that much of its success is the result of the efforts of regional and local management and staff. We have attracted and
retained an experienced team of broadcast professionals who understand the viewing and listening preferences, demographics and
competitive opportunities of their particular market. Our decentralized approach to station management gives local management
oversight of station spending, long-range planning and resource allocation at their individual stations, and rewards all employees
based on those stations' performance. In addition, we encourage our managers and employees to own a stake in the company, and
over 95% of all full-time employees have an equity ownership position in Emmis. We believe that our performance based,
entrepreneurial management approach has created a distinctive corporate culture, making Emmis a highly desirable employer in the
broadcasting industry and significantly enhancing our ability to attract and retain experienced and highly motivated employees and
management.

RADIO STATIONS

    In the following table,  "Market Rank by Revenue" is the ranking of the market revenue size of the principal radio market served
by the station among all radio  markets in the United  States.  Market  revenue and ranking  figures are from Duncan's  Radio Market
Guide (2001 ed.). We own a 40% equity  interest in the publisher of Duncan's  Radio Market  Guide.  "Ranking in Primary  Demographic
Target" is the  ranking  of the  station  among all radio  stations  in its market  based on the Fall 2001  Arbitron  Survey.  A "t"
indicates the station tied with another station for the stated ranking.  "Station Audience Share" represents a percentage  generally
computed by dividing the average number of persons over age 12 listening to a particular  station  during  specified time periods by
the average number of such persons for all stations in the market area as determined by Arbitron.


                                                                                                 RANKING IN
     STATION                   MARKET                                           PRIMARY            PRIMARY          STATION
       AND                     RANK BY                                        DEMOGRAPHIC        DEMOGRAPHIC       AUDIENCE
     MARKET                    REVENUE            FORMAT                      TARGET AGES          TARGET            SHARE
- ----------------            -----------   ----------------------           ----------------   ----------------   ------------

Los Angeles, CA                   1
     KPWR-FM                              Contemporary Hit/Urban                 12-24                1               4.0
     KZLA-FM                              Country                                25-54               17t              2.2

New York, NY                      2
     WQHT-FM                              Contemporary Hit/Urban                 12-24                1               5.7
     WQCD-FM                              Contemporary Jazz                      25-54                4               3.4
     WRKS-FM                              Classic Soul/Smooth R&B                25-54               12t              2.7

Chicago, IL                       3
     WKQX-FM                              Alternative Rock                       18-34                4               2.8

Phoenix, AZ                      14
     KTAR-AM                              News/Talk/Sports                       35-64                1               6.8
     KKFR-FM                              Contemporary Hit/Urban                 18-34                2               4.4
     KKLT-FM                              Soft Adult/Contemporary                25-54                7               3.7
     KMVP-AM                              Sports                                 25-54               24t              0.4

St. Louis, MO                    18
     KSHE-FM                              Album Oriented Rock                    25-54                3               4.5
     KPNT-FM                              Alternative Rock                       18-34                1               4.1
     KIHT-FM                              70's Rock                              25-54                6               3.3
     WMLL-FM                              80's Rock                              18-34               13               1.8
     KFTK-FM                              Talk                                   25-54               21               0.8

Indianapolis, IN                 31
     WIBC-AM                              News/Talk/Sports                       35-64                4               8.9
     WYXB-FM                              Soft Adult/Contemporary                25-54                3t              5.6
     WNOU-FM                              Contemporary Hit                       18-34                4               5.5
     WENS-FM                              Adult Contemporary                     25-54                8               3.8

Terre Haute, IN                 171
     WTHI-FM                              Country                                25-54                1              20.5
     WWVR-FM                              Classic Rock                           25-54                2              12.1

    In addition to our other  domestic  radio  broadcasting  operations,  we own and operate  two radio  networks.  Network  Indiana
provides news and other  programming to nearly 70 affiliated  radio  stations in Indiana.  AgriAmerica  Network  provides farm news,
weather information and market analysis to radio stations across Indiana.

    We also have a 59.5%  interest in a national  radio  station in Hungary and own 75% of one FM and one AM radio station in Buenos
Aires, Argentina.


TELEVISION STATIONS

    In the following table, "DMA Rank" is estimated by the A.C. Nielsen Company  ("Nielsen") as of January 2002.  Rankings are based
on the relative size of a station's  market among the 210  generally  recognized  Designated  Market Areas  ("DMAs"),  as defined by
Nielsen.  "Number of Stations in Market" represents the number of television stations ("Reportable  Stations") designated by Nielsen
as "local" to the DMA,  excluding  public  television  stations and stations which do not meet minimum Nielsen  reporting  standards
(i.e.,  a weekly  cumulative  audience of less than 2.5%) for reporting in the Sunday through  Saturday,  9:00 a.m. to midnight time
period.  "Station Rank" reflects the station's rank relative to other  Reportable  Stations based upon the DMA rating as reported by
Nielsen from 9:00 a.m. to midnight,  Sunday through Saturday during November 2001.  "Station Audience Share" reflects an estimate of
the share of DMA  households  viewing  television  received by a local  commercial  station in comparison to other local  commercial
stations in the market as measured from 9:00 a.m. to midnight, Sunday through Saturday.

                                                                        NUMBER OF                   STATION
  TELEVISION           METROPOLITAN          DMA     AFFILIATION/       STATIONS      STATION      AUDIENCE        AFFILIATION
    STATION             AREA SERVED         RANK        CHANNEL         IN MARKET      RANK          SHARE         EXPIRATION
- --------------    ----------------------  -------  ---------------   -------------  ----------   -----------   --------------
WKCF-TV           Orlando, FL                20         WB/18              6             4t            7       December 31, 2009
KOIN-TV           Portland, OR               23         CBS/6              6             2t           12       September 18, 2002(2)
WVUE-TV           New Orleans, LA            43         Fox/8              7             3             8       March 5, 2006
KRQE-TV           Albuquerque, NM            48         CBS/13             7             3            10       September 18, 2002(2)
WSAZ-TV           Huntington, WV-
                  Charleston, WV             61         NBC/3              4             1            19       October 1, 2002 (2)
WALA-TV           Mobile, AL-
                  Pensacola, FL              63         Fox/10             5             4            10       September 1, 2005
KSNW-TV           Wichita, KS                65         NBC/3              4             2            15       September 1, 2005
WLUK-TV           Green Bay, WI              69         Fox/11             6             2t           15       November 1, 2005
KGMB-TV (1)       Honolulu, HI               72         CBS/9              5             2            13       September 18, 2002(2)
KHON-TV (1)       Honolulu, HI               72         Fox/2              5             1            14       August 2, 2006
KGUN-TV           Tucson, AZ                 73         ABC/9              7             2t           12       February 6, 2005
KMTV-TV           Omaha, NE                  75         CBS/3              5             2            15       September 18, 2002(2)
WFTX-TV           Fort Myers, FL             76         Fox/36             4             3t            9              N/A
KSNT-TV           Topeka, KS                138         NBC/27             4             2            12       September 1, 2005
WTHI-TV           Terre Haute, IN           145         CBS/10             3             1            22       December 31, 2005

(1)      We are currently operating KGMB-TV under a temporary waiver issued by the FCC.  We may be required to sell one of these
        stations.  See Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

(2)      We are currently in negotiations to extend or renew this affiliation agreement and expect the extension or renewal to be
        on terms that are reasonably acceptable to us.

    Emmis also owns and operates nine satellite  stations that primarily  re-broadcast  the signal of certain of our local stations.
A local station and its satellite  station are considered  one station for FCC and multiple  ownership  purposes,  provided that the
stations are in the same market.

     Each of our television  stations is affiliated  with CBS, NBC, ABC, Fox or WB (each a "Network")  pursuant to a written network
affiliation agreement,  except WFTX in Ft. Myers, FL, which is affiliated with Fox pursuant to an oral affiliation  agreement.  Each
affiliation  agreement  provides the affiliated  television  station with the right to rebroadcast  all programs  transmitted by the
Network with which the  television  station is  affiliated.  In return,  the Network has the right to sell a substantial  portion of
the advertising time during such broadcasts.

    The long  established  networks (ABC,  CBS and NBC) have  historically  paid the  affiliated  station to broadcast the network's
programming.  This  network  compensation  payment  varies  depending  on the  time of day that a  station  broadcasts  the  network
programming.  Typically,  prime-time  programming  generates the highest hourly network compensation  payments. In the recent years,
however,  ABC, CBS and NBC have begun to  eliminate or sharply  reduce  compensation  payments to stations for  clearance of network
programming.  In some  cases,  networks  have  undertaken  to cut  compensation  when a  station  is to be sold and the  affiliation
agreement is to be assigned or  transferred,  or when an old  affiliation  agreement  has  expired.  The more  recently  established
networks (Fox and WB) generally pay little or no cash  compensation for the clearance of network  programming.  They tend,  however,
to offer the  affiliated  station  more  advertising  availability  for  local  sale  within  network  programming  than do the long
established networks.

    In the twelve months ended February 2000, 2001 and 2002, we received  approximately $1.9 million,  $2.5 million and $4.6 million
in network compensation payments, which represented less than 1% of our total net revenues in each year.



PUBLISHING OPERATIONS

    We publish the following magazines through our publishing division:

                                                                          Monthly
                                                                            Paid
                                                                        Circulation
                                                                        ------------
                  Regional Magazines:
                  Texas Monthly                                             300,000
                  Los Angeles                                               174,000
                  Atlanta                                                    68,000
                  Indianapolis Monthly                                       44,000
                  Cincinnati Magazine                                        28,000

                  Specialty Magazines*:
                  Country Sampler and Country Marketplace                   426,000

                  * Our specialty magazines are circulated bimonthly.

INTERNET AND NEW TECHNOLOGIES

     We believe that the  development  and explosive  growth of the Internet  present not only a challenge,  but an opportunity  for
broadcasters and publishers.  The primary  challenge is increased  competition for the time and attention of our listeners,  viewers
and readers.  The opportunity is to further  enhance the  relationships  we already have with our listeners,  viewers and readers by
expanding  products and services  offered by our stations and magazines.  For that reason,  we worked with other media  companies to
put together a local media internet venture (LMIV),  which provides content,  website development and hosting services for our radio
stations.  In addition,  we have  individuals at each of our properties  dedicated to website  maintenance  and generating  revenues
from the property's  website.

     We believe that there are  opportunities to improve and expand our television  operations  utilizing new  technologies  such as
those that capitalize on the digital  spectrum and the Internet.  Along with several other major  television  broadcasters and local
stations,  we have invested in iBlast  Networks,  the nation's  largest network for  over-the-air  distribution of digital  content,
applications and services.

COMMUNITY INVOLVEMENT

    We believe that to be successful,  we must be integrally involved in the communities we serve. To that end, each of our stations
participates  in many community  programs,  fundraisers  and  activities  that benefit a wide variety of  organizations.  Charitable
organizations that have been the beneficiaries of our marathons, walkathons,  dance-a-thons,  concerts, fairs and festivals include,
among others,  United Way's  September  11th Fund,  The March of Dimes,  American  Cancer  Society,  Riley  Children's  Hospital and
research  foundations  seeking  cures for cystic  fibrosis,  leukemia  and AIDS and helping to fight drug abuse.  In addition to our
planned  activities,  our  stations and  magazines  take  leadership  roles in community  responses  to natural  disasters,  such as
commercial-free news broadcasts covering the events of September 11th.

INDUSTRY INVOLVEMENT

    We have an active  leadership  role in a wide range of  industry  organizations.  Our  senior  managers  have  served in various
capacities with industry  associations,  including as directors of the National  Association of Broadcasters,  the Radio Advertising
Bureau,  the Radio Futures Committee,  the Arbitron Advisory Council,  the Fox and CBS Affiliates Boards, and as founding members of
the Radio Operators Caucus.  In addition,  our managers have been voted Radio President of the Year and General Manager of the Year,
and at various  times we have been voted  Most  Respected  Broadcaster  in polls of radio  industry  chief  executive  officers  and
managers.



COMPETITION

    Radio and television  broadcasting  stations compete with the other  broadcasting  stations in their respective market areas, as
well as with other advertising media such as newspapers,  magazines,  outdoor  advertising,  transit  advertising,  the Internet and
direct mail marketing.  Cable systems generally do not compete with local stations for programming,  although various national cable
networks  from  time to time  have  acquired  programs  that  otherwise  would  have  been  offered  to local  television  stations.
Competition  within the broadcasting  industry occurs  primarily in individual  market areas, so that a station in one market (e.g.,
New York) does not generally  compete with  stations in other markets  (e.g.,  Chicago).  In each of our markets,  our stations face
competition from other stations with substantial  financial  resources,  including stations  targeting the same demographic  groups.
In addition to management  experience,  factors which are material to competitive  position include the station's rank in its market
in terms of the number of listeners or viewers,  authorized  power,  assigned  frequency,  audience  characteristics,  local program
acceptance  and the number  and  characteristics  of other  stations  in the market  area.  We  attempt to improve  our  competitive
position with  programming and promotional  campaigns  aimed at the demographic  groups targeted by our stations,  and through sales
efforts  designed to attract  advertisers  that have done little or no broadcast  advertising by emphasizing  the  effectiveness  of
radio and  television  advertising  in increasing  the  advertisers'  revenues.  Changes in the policies and rules of the FCC permit
increased  joint  ownership and joint  operation of local  stations.  Those stations  taking  advantage of these joint  arrangements
(including our New York, Los Angeles,  Phoenix, St. Louis,  Indianapolis and Terre Haute clusters) may in certain circumstances have
lower operating costs and may be able to offer  advertisers  more  attractive  rates and services.  Although we believe that each of
our stations can compete  effectively in its market,  there can be no assurance that any of our stations will be able to maintain or
increase its current audience ratings or advertising revenue market share.

    Although the  broadcasting  industry is highly  competitive,  some  barriers to entry  exist.  The  operation of a  broadcasting
station in the United  States  requires a license  from the FCC,  and the number of stations  that can operate in a given  market is
limited  by the  availability  of the  frequencies  that the FCC will  license  in that  market,  as well as by the  FCC's  multiple
ownership rules regulating the number of stations that may be owned and controlled by a single entity.

    The broadcasting  industry  historically has grown in terms of total revenues despite the introduction of new technology for the
delivery of entertainment and information,  such as cable television,  the Internet,  satellite television,  audio tapes and compact
discs.  We believe  that radio's  portability  in  particular  makes it less  vulnerable  than other media to  competition  from new
methods of distribution or other technological  advances.  There can be no assurance,  however, that the development or introduction
in the future of any new media technology will not have an adverse effect on the radio or television broadcasting industry.

ADVERTISING SALES

    Our stations and magazines  derive their  advertising  revenue from local and regional  advertising in the marketplaces in which
they  operate,  as well as from the sale of  national  advertising.  Local  and  most  regional  sales  are made by a  station's  or
magazine's  sales staff.  National sales are made by firms  specializing  in such sales which are  compensated on a  commission-only
basis.  We  believe  that the  volume of  national  advertising  revenue  tends to adjust to shifts in a  station's  audience  share
position more rapidly than does the volume of local and regional  advertising  revenue.  During the twelve months ended February 28,
2002,  approximately  27% of our total net revenues  were derived from  national  sales and 73% were derived from local and regional
sales.  For the year ended  February 28, 2002,  our radio  stations  derived a higher  percentage  of their  revenues from local and
regional sales (79%) than our television (63%) and publishing entities (76%).

EMPLOYEES

    As of February 28, 2002 Emmis had approximately  2,500 full-time  employees and approximately 550 part-time  employees.  We have
approximately  215  employees at various  radio and  television  stations  represented  by unions.  We consider  relations  with our
employees to be good.



FEDERAL REGULATION OF BROADCASTING

    Television and radio  broadcasting  are subject to the jurisdiction of the Federal  Communications  Commission (the "FCC") under
the  Communications  Act of 1934,  as  amended  (and,  as  amended  by the  Telecommunications  Act of 1996 (the  "1996  Act")  (the
"Communications  Act").  Television or radio  broadcasting is prohibited  except in accordance with a license issued by the FCC upon
a finding that the public  interest,  convenience and necessity would be served by the grant of such license.  The FCC has the power
to revoke  licenses  for,  among other  things,  false  statements  made in  applications  or willful or repeated  violations of the
Communications  Act or of FCC rules. In general,  the  Communications  Act provides that the FCC shall allocate  broadcast  licenses
for  television  and radio  stations  in such  manner as will  provide a fair,  efficient  and  equitable  distribution  of  service
throughout the United States. The FCC determines the operating  frequency,  location and power of stations;  regulates the equipment
used by stations;  and regulates  numerous  other areas of television  and radio  broadcasting  pursuant to rules,  regulations  and
policies adopted under authority of the  Communications  Act. The Communications  Act, among other things,  prohibits the assignment
of a  broadcast  license or the  transfer of control of an entity  holding  such a license  without  the prior  approval of the FCC.
Under the  Communications  Act,  the FCC also  regulates  certain  aspects of the  operation of cable  television  systems and other
electronic media that compete with broadcast stations.

    The following is a brief summary of certain  provisions of the  Communications Act and of specific FCC regulations and policies.
Reference  should be made to the  Communications  Act as well as FCC rules,  public  notices and  rulings  for  further  information
concerning the nature and extent of federal  regulation of radio and television  stations.  Other  legislation  has been  introduced
from time to time  which  would  amend the  Communications  Act in  various  respects  and the FCC from time to time  considers  new
regulations or amendments to its existing  regulations.  We cannot predict  whether any such  legislation  will be enacted or new or
amended FCC regulations will be adopted or what their effect would be on Emmis.



LICENSE RENEWAL.  Radio and television  stations operate pursuant to broadcast  licenses that are ordinarily  granted by the FCC for
maximum  terms of eight years and are subject to renewal upon  application  to the FCC. Our licenses  currently  have the  following
expiration dates, until renewed:


            WENS-FM (Indianapolis)                       August 1, 2004
            WIBC-AM (Indianapolis)                       August 1, 2004
            WNOU-FM (Indianapolis)                       August 1, 2004
            WYXB-FM (Indianapolis)                       August 1, 2004
            WTHI-FM (Terre Haute)                        August 1, 2004
            WWVR-FM (Terre Haute)                        August 1, 2004
            WSAZ-TV (Huntington)                         October 1, 2004
            WKQX-FM (Chicago)                            December 1, 2004
            WMLL-FM (St. Louis)                          December 1, 2004
            KSHE-FM (St. Louis)                          February 1, 2005
            WFTX-TV (Fort Myers)                         February 1, 2005
            WKCF-TV (Orlando)                            February 1, 2005
            KFTK-FM (St. Louis)                          February 1, 2005
            KIHT-FM (St. Louis)                          February 1, 2005
            KPNT-FM (St. Louis)                          February 1, 2005
            WALA-TV (Mobile)                             April 1, 2005
            WVUE-TV (New Orleans)                        June 1, 2005
            WTHI-TV (Terre Haute)                        August 1, 2005
            KKLT-FM (Phoenix)                            October 1, 2005
            KKFR-FM (Phoenix)                            October 1, 2005
            KTAR-AM (Phoenix)                            October 1, 2005
            KMVP-AM (Phoenix)                            October 1, 2005
            KPWR-FM (Los Angeles)                        December 1, 2005
            WLUK-TV (Green Bay)                          December 1, 2005
            KZLA-FM (Los Angeles)                        December 1, 2005
            KREZ-TV (Durango)                            April 1, 2006
            WQHT-FM (New York)                           June 1, 2006
            WQCD-FM (New York)                           June 1, 2006
            WRKS-FM (New York)                           June 1, 2006
            KSNW-TV (Wichita)                            June 1, 2006
            KMTV-TV (Omaha)                              June 1, 2006
            KSNT-TV (Topeka)                             June 1, 2006
            KSNG-TV (Garden City)                        June 1, 2006
            KSNC-TV (Great Bend)                         June 1, 2006
            KSNK-TV (McCook-Oberlin)                     June 1, 2006
            KRQE-TV (Albuquerque)                        October 1, 2006
            KGUN-TV (Tucson)                             October 1, 2006
            KBIM-TV (Roswell)                            October 1, 2006
            KHON-TV (Honolulu)                           February 1, 2007
            KAII-TV (Maui)                               February 1, 2007
            KHAW-TV (Hawaii)                             February 1, 2007
            KOIN-TV (Portland)                           February 1, 2007
            KGMB-TV (Honolulu)                           February 1, 2007
            KGMD-TV (Hawaii)                             February 1, 2007
            KGMV-TV (Maui)                               February 1, 2007



    Under the  Communications  Act, at the time an application is filed for renewal for a station license,  parties in interest,  as
well as members of the public,  may apprise the FCC of the service the station has provided  during the  preceding  license term and
urge the denial of the  application.  If such a petition to deny  presents  information  from which the FCC concludes (or if the FCC
concludes on its own motion) that there is a  "substantial  and material"  question as to whether  grant of the renewal  application
would be in the public interest under  applicable  rules and policy,  the FCC may conduct a hearing on specified issues to determine
whether the renewal  application should be granted.  The  Communications Act provides for the grant of a renewal  application upon a
finding by the FCC that the licensee:

o    has served the public interest, convenience and necessity;
o    has committed no serious violations of the Communications Act or the FCC rules; and
o    has committed no other violations of the Communications Act or the FCC rules which would constitute a pattern of abuse.

     If the FCC cannot  make such a finding,  it may deny the  renewal  application,  and only then may the FCC  consider  competing
applications  for the same frequency.  In a vast majority of cases,  the FCC renews a broadcast  license even when petitions to deny
have been filed against the renewal application.

    REVIEW OF OWNERSHIP  RESTRICTIONS.  The 1996 Act requires the FCC to review all of its broadcast ownership rules every two years
to determine  whether the public interest  dictates that such rules be repealed or modified.  The first biennial review concluded on
June 20, 2000. In its first  biennial  review  report,  the FCC stated its intention to commence  several  separate  proceedings  to
examine various ownership rules.  The upcoming 2002 biennial review will generate similar proceedings.

    RADIO OWNERSHIP.  Under FCC rules,  with limited  exceptions,  the number of radio stations that may be owned by one entity in a
given radio market is dependent upon the number of commercial radio stations in that market:

o    if the market has 45 or more  commercial  radio stations,  one entity may own up to eight  stations,  not more than five of
     which may be in the same service (AM or FM);
o    if the market has between 30 and 44  commercial  radio  stations,  one entity may own up to seven  stations,  not more than
     four of which may be in the same service;
o    if the market has between 15 and 29 commercial  radio stations,  a single entity may own up to six stations,  not more than
     four of which may be in the same service; and
o    if the market has  fourteen or fewer  commercial  radio  stations,  one entity may own up to five  stations,  not more than
     three of which may be in the same  service,  except that one entity may not own more than fifty  percent of the stations in the
     market.

    Each of the markets in which our radio stations are located has at least 15 commercial radio stations.

    The FCC has been aggressive in examining issues of market concentration when considering radio station acquisitions,  even where
the  numerical  limits  described  above are not violated.  In some  instances,  the FCC has delayed its approval of proposed  radio
station  purchases  because of market  concentration  concerns,  and in one recent case, the FCC ordered an  evidentiary  hearing to
determine  whether a proposed  transaction  would result in excessive  concentration.  Additionally,  in its biennial review report,
the FCC stated its intention to launch a proceeding  to examine  possible  revisions to the manner in which the FCC counts  stations
and defines a radio "market" for purposes of determining  compliance with the local radio multiple ownership  restrictions.  The FCC
initiated the proceeding in December 2000. In November 2001 the FCC subsumed this  proceeding into a more  comprehensive  proceeding
to review all aspects of the agency's  local radio  multiple  ownership  rules,  including,  among other  things,  whether it may or
should  modify its local  radio  multiple  ownership  rules to address  concerns  of undue  market  concentration.  The FCC has also
requested comment on future regulatory treatment of radio time brokerage  agreements (also known as "local marketing  agreements" or
"LMA's") and radio joint sales agreements.



    TELEVISION  OWNERSHIP.  Pursuant to the 1996 Act, the FCC substantially  revised its local television ownership rules (including
its television "duopoly" rule and radio/television  cross-ownership  rule) in an August 2000 decision, as modified by a January 2002
reconsideration  order.  The FCC's  revised  television  duopoly  rule permits an entity to own two or more  television  stations in
separate  Designated Market Areas ("DMAs").  The rule also permits an entity to own two or more television  stations in the same DMA
if:

o    the coverage areas of the stations do not overlap, or
o    at least eight,  independently-owned  and -operated  full-power  non-commercial and commercial operating stations (known as
     "voices")  will  remain  in the  market  post-merger,  and one of the two  commonly-owned  stations  is not  among the top four
     television stations in the market (based on audience share ratings).

    The Commission will consider permanent waivers of its television duopoly rule where one of the stations is:

o    a "failed station," i.e., off-air for more than four months, or involved in an involuntary bankruptcy proceeding;
o    a "failing station," i.e., having a low audience share and financially struggling; or
o    an unbuilt facility, where the permittee has made substantial progress towards constructing the facility.

    The  television  duopoly rule was appealed to the United  States  Court of Appeals for the District of Columbia  Circuit  ("D.C.
Circuit").  In April 2002 the D.C.  Circuit  issued a decision  remanding the rule to the FCC for further  consideration.  The court
found that the FCC had not  justified  excluding  media other than  television  stations  as "voices" to be counted for  purposes of
determining compliance with the rule.

    Our acquisition of the Lee Enterprises  stations required a waiver of the television duopoly rule because the signals of KHON-TV
and KGMB-TV (one of the Lee Enterprises  stations)  overlap,  the stations serve the same market,  and both stations are rated among
the top four in that  market.  In  approving  the  acquisition,  the FCC granted a temporary  waiver of the rule,  ordering  that an
application  for  divestiture of either  KHON-TV or KGMB-TV (plus  associated  "satellite"  stations) be filed on or before April 1,
2001; that deadline was  subsequently  extended at our request to April 1, 2002. We have filed a request for a further  extension to
and  including  April 1, 2003.  That  request  has been  opposed  by a Honolulu  broadcaster,  and the FCC has  required  us to file
additional  information  concerning our  divestiture  efforts,  which we have done. The FCC has extended our waiver to and including
July 1, 2002,  pending  its review of the  information  we have  submitted.  In  addition  to  responding  to the FCC's  request for
information,  we have filed a request for interim relief, asking that the divestiture  requirement be stayed,  pending review of the
duopoly rule that will be undertaken  pursuant to the court remand described above and the 2002 biennial  review.  We cannot predict
whether either the extension request or the request for interim relief will be granted.

    The FCC's revised radio/television  cross-ownership rule generally permits the common ownership of the following combinations in
the same market, to the extent permitted under the FCC's television duopoly rule:

o    up to two commercial  television stations and six commercial radio stations or one commercial  television station and seven
     commercial radio stations in a market where at least 20 independent media voices will remain post-merger;
o    up to two  commercial  television  stations and four  commercial  radio  stations in a market where at least 10 independent
     media voices will remain post-merger; and
o    two commercial  television  stations and one commercial  radio station in a market  regardless of the number of independent
     media voices that will remain post-merger.

The Commission will consider permanent waivers of its revised  radio/television  cross-ownership rule only if one of the stations is
a "failed station."



    Pursuant to the 1996 Act, the FCC also revised its  restriction  on the national  ownership of television  stations in an August
2000  decision,  as reaffirmed  by a January 2002 order.  The revised FCC rules  restrict the ownership of television  stations on a
nationwide  basis to stations  reaching,  in the  aggregate,  no more than 35 percent of the total national  audience.  In response,
certain  TV  group  owners  filed  comments  with the FCC  and/or  appeals  in the D.C.  Circuit  seeking  elimination,  or at least
relaxation,  of this limit. In February 2002, the D.C. Circuit issued a decision  requiring the FCC to initiate further  proceedings
to justify its  decision  to retain the 35 percent  national  television  reach  limitation.  In the same  decision,  the court also
vacated the FCC's rule prohibiting  common ownership of a television  station and a cable television  system in the same market.  In
early  April  2002,  the FCC  granted  Viacom/CBS  a stay of the May 2002  deadline  that the FCC had set for the  network to divest
certain of its television  stations in order to come into  compliance  with the 35 percent cap; the stay will remain in effect until
one year after the FCC  completes  review of the  "national  cap" as required by the court's  decision.  Fox has  obtained a similar
stay.  The FCC and certain  private  parties  have asked the court to  reconsider  its  decision,  arguing in part that the decision
imposes too  stringent  a standard on the  Commission  for  retention  of  existing  rules in the context of the  agency's  biennial
reviews.

    Current FCC rules also prohibit  common  ownership of a daily  newspaper  and a radio or television  station in the same market.
Pursuant to its biennial review report, the FCC has initiated a proceeding  requesting comment on whether to eliminate,  or at least
relax, this restriction.

    We cannot  predict  the  ultimate  outcome of the  proceedings  described  above,  future  biennial  reviews or other  agency or
legislative initiatives or the impact, if any, that they will have on our business.
                                                                                     =

   ALIEN  OWNERSHIP.  Under the  Communications  Act, no FCC  license may be held by a  corporation  if more than  one-fifth  of its
capital stock is owned or voted by aliens or their  representatives,  a foreign government or representative  thereof,  or an entity
organized under the laws of a foreign country  (collectively,  "Non-U.S.  Persons").  Furthermore,  the  Communications Act provides
that no FCC license may be granted to an entity  directly or indirectly  controlled by another entity of which more than  one-fourth
of its capital  stock is owned or voted by Non-U.S.  Persons if the FCC finds that the public  interest will be served by the denial
of such license.  The FCC staff has  interpreted  this provision to require an  affirmative  public  interest  finding to permit the
grant or  holding of a license,  and such a finding  has been made only in limited  circumstances.  The  foregoing  restrictions  on
alien  ownership  apply in modified form to other types of business  organizations,  including  partnerships  and limited  liability
companies.  Our Amended and Restated  Articles of  Incorporation  and Code of By-Laws  authorize  the Board of Directors to prohibit
such restricted alien ownership,  voting or transfer of capital stock as would cause Emmis to violate the  Communications Act or FCC
regulations.

    ATTRIBUTION OF OWNERSHIP  INTERESTS.  In applying its ownership rules, the FCC requires the "attribution" of broadcast  licenses
held by a  broadcasting  company to  certain of the  company's  stockholders,  officers  or  directors,  such that there  would be a
violation of FCC regulations  where such a stockholder,  officer or director and the  broadcasting  company  together held more than
the permitted  number of stations or a prohibited  combination  of media  outlets in the same market.  The FCC's  attribution  rules
generally deem the following relationships and interests to be attributable for purposes of the FCC's ownership restrictions:

o    all officers and directors of a licensee and its (in)direct parent(s);
o    voting stock interests of at least five percent;
o    stock interests of at least 20 percent,  if the holder is a passive  institutional  investor (i.e.,  investment  companies,
     insurance companies, banks);
o    any  equity  interest  in a limited  partnership  or  limited  liability  company  where the  limited  partner or member is
     "materially involved" in the media-related activities of the LP or LLC;
o    equity and/or debt  interests  which,  in the  aggregate,  exceed 33 percent of the total asset value of a station or other
     media entity (the  "equity/debt  plus policy"),  if the interest  holder  supplies more than 15 percent of the station's  total
     weekly  programming  (usually  pursuant  to a time  brokerage,  local  marketing  or  network  affiliation  agreement)  or is a
     same-market media entity (i.e., broadcast company or newspaper).

    To assess whether a voting stock interest in a direct or indirect parent  corporation of a broadcast  licensee is  attributable,
the FCC uses a "multiplier"  analysis in which  non-controlling  voting stock  interests are deemed  proportionally  reduced at each
non-controlling link in a multi-corporation ownership chain.

    In the January 2001  attribution  reconsideration  order,  the FCC eliminated its "single  majority  shareholder  exemption" for
purposes of the  broadcast  attribution  rules.  The  exemption  had  provided  that,  in cases where one person or entity  (such as
Jeffrey  H.  Smulyan  in the case of Emmis)  held  more than 50  percent  of the  combined  voting  power of the  common  stock of a
broadcasting  company, a minority  shareholder of the company generally would not be deemed to hold an attributable  interest in the
company.  Although  the  FCC  eliminated  the  single  majority  shareholder  exemption,  it  grandfathered  minority  interests  in
broadcasting  companies  with single  majority  shareholders  where the  interests  were  acquired  prior to December  14, 2000 (the
adoption  date of the  January  2001  reconsideration  order).  The FCC's  decision to  eliminate  the single  majority  shareholder
exemption was called into question by a recent federal court  decision,  which reversed and remanded the FCC's decision to eliminate
the  corresponding  exemption for purposes of the cable  television  attribution  rules.  In light of that decision,  the Commission
initiated a proceeding to review the single majority  shareholder  exemption in both the cable and broadcast contexts.  The FCC also
has issued an order  suspending  enforcement of the elimination of the single majority  shareholder  exemption for the broadcast and
MDS industries pending resolution of the cable  ownership/attribution  proceeding.  Thus, the single majority shareholder  exemption
is still technically in force.

    Should the FCC ultimately eliminate the exemption,  any minority interests in Emmis acquired on or after December 14, 2000, will
not be exempt from attribution,  despite Mr. Smulyan's  majority interest.  Moreover,  in the event that Mr. Smulyan no longer holds
more than 50 percent  of the voting  power,  the  interests  of  grandfathered  minority  shareholders  which had  theretofore  been
considered  nonattributable  would become  attributable,  such that any other media  interests held by these  shareholders  would be
combined with Emmis' media  interests for purposes of  determining  compliance  with FCC ownership  rules.  Mr.  Smulyan's  level of
voting  control could  decrease to or below 50 percent as a result of transfers of common stock  pursuant to agreement or conversion
of the Class B Common  Stock into Class A Common  Stock.  In the event of  noncompliance  with the FCC's  attribution  rules,  steps
required to achieve compliance could include  divestitures by either the shareholder or Emmis, as the situation  dictates.  Further,
an attributable  interest of any shareholder  (including  grandfathered  minority  interests) in another  broadcast station or other
media  entity  in a market  where  Emmis  owns or seeks to  acquire  a  station  is still  subject  to  review  by the FCC under its
"equity/debt  plus  policy," and could result in Emmis being unable to obtain one or more FCC  authorizations  needed to conduct its
broadcast  business or FCC  consents  necessary  for future  acquisitions.  Conversely,  Emmis'  media  interests  could  operate to
restrict other media investments by shareholders having or acquiring an interest in Emmis.

    ASSIGNMENTS AND TRANSFERS OF CONTROL.  The  Communications  Act prohibits the assignment of a broadcast  license or the transfer
of control of a broadcast  licensee  without the prior approval of the FCC. In determining  whether to grant such approval,  the FCC
considers a number of factors,  including  compliance  with the various rules limiting  common  ownership of media  properties,  the
"character" of the licensee and those persons holding  attributable  interests  therein,  compliance with the  Communications  Act's
limitations on alien  ownership as well as other  statutory and regulatory  requirements.  When evaluating an assignment or transfer
of control  application,  the FCC is prohibited from considering whether the public interest might be served by an assignment of the
broadcast  license or  transfer  of control of the  licensee  to a party other than the  assignee  or  transferee  specified  in the
application.

    PROGRAMMING AND OPERATION.  The Communications  Act requires  broadcasters to serve the "public interest." Since the late 1970s,
the FCC  gradually  has relaxed or  eliminated  many of the more  formalized  procedures  it developed  to promote the  broadcast of
certain  types of  programming  responsive  to the needs of a station's  community  of license.  However,  licensees  continue to be
required to present  programming  that is responsive to community  problems,  needs and  interests and to maintain  certain  records
demonstrating  such  responsiveness.  Federal law  prohibits  the  broadcast of obscene  material  and  regulates  the  broadcast of
indecent  material,  which  is  subject  to  enforcement  action  by the FCC.  Complaints  from  listeners  concerning  a  station's
programming  often will be considered by the FCC when it evaluates the licensee's  renewal  applications,  although such  complaints
may be filed by concerned  parties and considered by the FCC at any time.  Stations also must pay regulatory  and  application  fees
and follow  various rules  promulgated  under the  Communications  Act that  regulate,  among other things,  political  advertising,
sponsorship  identification,  contest and lottery  advertisements,  and technical  operations,  including  limits on radio frequency
radiation.

    In 1992, Congress enacted the Cable Television  Consumer Protection and Competition Act of 1992 (the "1992 Cable Act").  Certain
provisions of this law, such as signal carriage and retransmission consent, have a direct effect on television broadcasting.



    In April 1997, the FCC adopted rules that require  television  broadcasters to provide digital  television ("DTV") to consumers.
The FCC also adopted a table of allotments  for DTV,  which assigns  eligible  broadcasters a second channel on which to provide DTV
service.  The  FCC's  DTV  allotment  plan is based  on the use of a  "core"  DTV  spectrum  between  channels  2-51.  Although  the
Communications  Act  mandates  that each  television  station  return  one of its two  channels  to the FCC by the end of 2006,  the
Balanced Budget Act of 1997 may  effectively  extend the transition  deadline in some markets by allowing  broadcasters to keep both
their analog and digital  licenses  until at least 85 percent of  television  households in their  respective  markets can receive a
digital  signal.  Local zoning laws and the lack of qualified  tall-tower  builders to construct  the  facilities  necessary for DTV
operations,  among other factors,  including the pace of DTV production and sales,  may cause delays in the DTV transition.  The FCC
has announced  that it will review the progress of DTV every two years and make  adjustments  to the 2006 target date, if necessary.
The FCC is also considering cable operators'  obligations to carry the digital signals of broadcast television  stations,  including
the  obligations  that should  exist  during the DTV  transition  period,  when  broadcasters'  analog and digital  signals  will be
operating simultaneously.

    Television  broadcasters  are allowed to use their DTV channels  according to their best business  judgment,  provided that they
continue to offer at least one free  programming  service that is at least  comparable to today's analog service.  Digital  services
and  programming  can include  multiple  standard  definition  program  channels,  data transfer,  subscription  video,  interactive
materials,  and audio  signals  (so-called  "ancillary"  services).  The FCC has imposed a fee of five  percent of the annual  gross
revenues for television  broadcasters'  use of the DTV spectrum to offer ancillary  services.  The form and amount of these fees may
have a  significant  effect on the  profitability  of such  services.  Broadcasters  will not be required  to air "high  definition"
programming or,  initially,  to simulcast their analog  programming on the digital  channel.  Affiliates of ABC, CBS, NBC and Fox in
the top 10  television  markets  were  required  to be on the air with a digital  signal by May 1,  1999,  and  affiliates  of those
networks in markets 11-30,  including  KOIN-TV,  were required to be on the air with a digital  signal by November 1, 2000;  KOIN-TV
complied with this deadline.  The remaining  commercial  stations,  including all other  television  stations  owned by Emmis,  were
required  to file DTV  construction  permit  applications  by November  1, 2000,  and were  required to be on the air with a digital
signal by May 1,  2002,  absent an  extension  on a  station-by-station  basis.  All  Emmis'  stations  met the  November  1,  2000,
application  deadline.  Stations  WALA,  WKCF,  and WFTX met the May 1, 2002 on-air  deadline,  and the deadline for all other Emmis
stations has been  extended by the FCC to and  including  November 1, 2002.  Additionally,  all of the Emmis  stations  filed timely
applications  to "maximize"  (expand the coverage of) the DTV  facilities in those cases where it was deemed  appropriate to protect
the stations from interference from low power television broadcasters.

    In January  2001,  the FCC  issued a further  order on DTV  transition  issues,  setting a number of  deadlines  for  commercial
broadcasters.  By the end of December 2002,  commercial  stations with both analog and digital  channel  assignments  within the DTV
core spectrum  (channels 2-51) must elect the channel they will use for  broadcasting  after the transition is complete.  By the end
of December 2004, commercial  broadcasters not replicating their existing analog service areas will lose interference  protection in
those portions of their existing  service areas not covered by their digital signals.  Also by the end of December 2004,  commercial
broadcasters must provide a stronger digital signal to their communities of license than was previously required.

    In November 2001, the FCC issued a reconsideration  order on DTV transition issues, which modified many of the rules established
in January  2001.  Specifically,  the  reconsideration  order  temporarily  defers the FCC's  previously  established  deadlines for
broadcasters  to: (1) choose their permanent  post-transition  DTV channel;  (2) provide a DTV signal that  replicates  their analog
service area; and (3) build  maximized DTV  facilities.  The FCC intends to establish  deadlines for these  requirements in its next
periodic  review of the DTV  transition  and  emphasized  that none of the deadlines will be after the later of December 31, 2006 or
the date by which 85 percent of the  television  households  in a  licensee's  market are  capable of  receiving  the signals of DTV
stations.  The order also permits  broadcasters to request special  temporary  authority to construct initial minimal DTV facilities
(i.e.,  facilities that only cover their cities of license) while retaining interference protection for their allotted and maximized
facilities.  The order further allows commercial  stations subject to the May 1, 2002 construction  deadline (i.e.,  stations not in
the top 30 markets) to initially broadcast a digital signal during prime time hours only.

    The FCC has authorized the provision of video programming  directly to home subscribers  through  high-powered  direct broadcast
satellites  ("DBS").  DBS systems currently are capable of broadcasting over 500 channels of digital  television service directly to
subscribers'  equipment  with  18-inch  receiving  dishes and  decoders.  At this time,  several  entities  provide  DBS  service to
consumers  throughout the country.  Other entities hold DBS licenses,  but have not yet commenced service.  DBS operators may import
distant network signals into local television  markets where the individual  household that would receive the distant network signal
is not capable of receiving a sufficiently  strong  "over-the-air"  signal of the local network  affiliate of the given network.  In
November 1999,  Congress enacted the Satellite Home Viewer  Improvement Act ("SHVIA") which authorizes DBS companies also to provide

local television signals to their subscribers pursuant to a retransmission consent agreement with the station. In March 2000, the
FCC adopted regulations governing the statutory requirements for "good faith" negotiations and non-exclusive agreements in
retransmission consent contracts between broadcasters (and all multichannel video program distributors). Broadcasters are
required to negotiate non-exclusive retransmission consent agreements in good faith until January 1, 2006; however, the law
explicitly provides that broadcasters may enter into agreements with competing DBS carriers on different terms.

Moreover, effective January 1, 2002, local television stations became entitled to "must-carry" rights on a DBS system if the
system is providing any local television station(s) to its subscribers. SHVIA also "grandfathered" delivery of the signals of
television stations via DBS to certain subscribers who may have been receiving such signals in violation of prior law. In
November 2000, the FCC adopted rules to implement SHVIA provisions regarding "local-into-local" satellite service, must-carry
election cycle rules and related policies for satellite carriage of broadcast signals. Under the new FCC rules, a broadcast
television station must affirmatively elect must-carry status to require a DBS operator to carry its station; the first elections
were due by July 1, 2001. In response to a challenge to certain provisions of SHVIA, a panel of the U.S. Court of Appeals for the
Fourth Circuit upheld the requirement that DBS operators carry the signal of all local television stations in markets where they
elect to carry any local signals. The court also upheld an FCC rule that permits DBS operators to offer all local television
stations on a single tier or on an a la carte basis. The rule allows consumers to choose between the two options. In response to
broadcasters' first elections, DBS operators issued a large number of carriage denial letters, prompting the FCC to issue an order
in September 2001 clarifying the DBS mandatory carriage rules. In particular, the FCC emphasized that a satellite carrier must
have a "reasonable basis" for rejecting a broadcast station's carriage request.

There are FCC rules and policies, and rules and policies of other federal agencies, that regulate matters such as the use of
auctions to resolve mutually exclusive application requests, network-affiliate relations, the ability of stations to obtain
exclusive rights to air syndicated programming, cable systems' carriage of syndicated and network programming on distant stations,
political advertising practices, application procedures and other areas affecting the business or operations of broadcast stations.

Failure to observe FCC rules and policies can result in the imposition of various sanctions, including monetary fines, the
grant of "short" (less than the maximum term) license renewal terms or, for particularly egregious violations, the denial of a
license renewal application or the revocation of a license.

ADDITIONAL DEVELOPMENTS AND PROPOSED CHANGES. The Commission has adopted rules implementing a new low power FM ("LPFM")
service. The FCC has begun accepting applications for LPFM stations and has granted some of those applications. We cannot
predict whether any LPFM stations will interfere with the coverage of our radio stations.

The FCC has also authorized two companies to launch and operate satellite digital audio radio service ("SDARS") systems on a
nationwide basis. One of those companies, Sirius Satellite Radio, Inc. has launched three satellites and began commercial service
in a few cities in February 2002. The other company, XM Radio, has launched two satellites and is now providing nationwide
service. Currently, the FCC is considering a proposal to permit SDARS to be supplemented by terrestrial "repeating" transmitters
designed to fill "gaps" in satellite coverage. Also, the FCC has undertaken an inquiry regarding rules for the terrestrial
broadcast of digital signals. Among other issues, this inquiry addresses the need for spectrum outside the existing FM band and
the role of existing broadcasters. A technical standard for the provision of terrestrial digital radio broadcasting has been
developed and is currently before the FCC. We cannot predict the impact of SDARS on our radio stations' listenership.

In November 1999, the Commission released proposed rules for terrestrial digital audio broadcasting ("DAB"). The proposed
rules would permit existing AM and FM stations to operate on their current frequencies in either full analog mode, full digital
mode, or a combination of both (at reduced power). DAB technology is still evolving, and it is not yet certain whether DAB
transmission as proposed will be feasible.

In January 2001, the D.C. Circuit concluded that the FCC's Equal Employment Opportunity ("EEO") regulations were
unconstitutional. Accordingly, broadcasters are currently not subject to FCC-imposed EEO regulations. In December 2001, the FCC
solicited public comment on proposed new EEO affirmative action rules. This proceeding remains pending,.

Congress and the FCC have under consideration, and may in the future consider and adopt, new laws, regulations and policies
regarding a wide variety of matters that could, directly or indirectly, affect the operation, ownership and profitability of our
broadcast stations, result in the loss of audience share and advertising revenues for our broadcast stations and/or affect our
ability to acquire additional broadcast stations or finance such acquisitions. Such matters include, but are not limited to:

o    proposals to impose spectrum use or other fees on FCC licensees;
o    proposals to repeal or modify some or all of the FCC's multiple ownership rules and/or policies;
o    proposals to change rules relating to political broadcasting;
o    technical and frequency allocation matters;
o    AM stereo broadcasting;
o    proposals to permit expanded use of FM translator stations;
o    proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages;
o    proposals to tighten safety guidelines relating to radio frequency radiation exposure;
o    proposals permitting FM stations to accept formerly impermissible interference;
o    proposals to reinstate holding periods for licenses;
o    changes to broadcast technical requirements, including those relative to the implementation of SDARS and DAB;
o    proposals to limit the tax deductibility of advertising expenses by advertisers.

    We cannot predict whether any proposed  changes will be adopted,  what other matters might be considered in the future,  or what
impact, if any, the implementation of any of these proposals or changes might have on our business.

    The  foregoing  is only a brief  summary of certain  provisions  of the  Communications  Act and of  specific  FCC  regulations.
Reference should be made to the  Communications Act as well as FCC regulations,  public notices and rulings for further  information
concerning the nature and extent of federal regulation of broadcast stations.

GEOGRAPHIC FINANCIAL INFORMATION

    The Company's  segments operate  primarily in the United States with one national radio station located in Hungary and two radio
stations located in Argentina.  The following tables summarize relevant financial information by geographic area:

                                                               For the year ended February 28 (29),
                                                          2000                2001                2002
                                                    -----------------    ---------------     ---------------
                                                                          (In Thousands)
           Net Revenues:
               Domestic                             $         316,454    $       456,040     $       517,082
               International                                    8,811             14,578              16,698
                                                    -----------------    ---------------     ---------------
               Total                                          325,265            470,618             533,780
                                                    =================    ===============     ===============


                                                                      As of February 28 (29),
                                                           2000                2001               2002
                                                    -----------------    ---------------     ---------------
                                                                          (In Thousands)
           Noncurrent Assets:
               Domestic                             $       1,181,640    $     2,263,796     $     2,229,680
               International                                   32,950             27,970              16,867
                                                    -----------------    ---------------     ---------------
               Total                                        1,214,590          2,291,766           2,246,547
                                                    =================    ===============     ===============

    With respect to EOC, the above information would be identical,  except domestic  noncurrent assets would be $2,218,750 and total
noncurrent assets would be $2,235,617 as of February 28, 2002.


ITEM 2.  PROPERTIES.

    The following  table sets forth  information  as of February 28, 2002 with respect to offices,  studios and broadcast  towers of
stations and magazines  currently  owned by Emmis.  Management  believes that the  properties are in good condition and are suitable
for Emmis' operations.

                                                                             OWNED               EXPIRATION
                                                       YEAR PLACED            OR                    DATE
              PROPERTY                                 IN SERVICE           LEASED                OF LEASE
- --------------------------------------------        ----------------      ----------             ----------
Corporate and Publishing Headquarters/                    1998               Owned                      --
WENS-FM/ WIBC-AM/WNOU-FM/
WYXB-FM/ Indianapolis Monthly
One Emmis Plaza
40 Monument Circle
Indianapolis, Indiana
WENS-FM Tower                                             1985               Owned                      --
WNOU-FM Tower                                             1979               Owned                      --
WIBC-AM Tower                                             1966               Owned                      --
WYXB-FM Tower                                             1965              Leased                Month-to-month

WMLL-FM/KFTK-FM/KIHT-FM/KPNT-FM/KSHE-FM                   1998              Leased                December 2007
800 St.  Louis Union Station
St.  Louis, Missouri
WMLL-FM Tower                                             1984               Owned                      --
KFTX-FM Tower                                             1987              Leased    August 2009 with option to March 2023
KIHT-FM Tower                                             1995              Leased    September 2005 with two 5-year options
KPNT-FM Tower                                             1987               Owned                      --
KSHE-FM Tower                                             1985              Leased                  April 2009

KPWR-FM                                                   1988              Leased                February 2003
2600 West Olive
Burbank, California
KPWR-FM Tower                                             1993              Leased               October 2002 (1)

WQHT-FM/WRKS-FM/WQCD-FM                                   1996              Leased                 January 2013
395 Hudson Street, 7th Floor
New York, New York
WQHT-FM Tower                                             1984              Leased                 January 2010
WRKS-FM Tower                                             1984              Leased                November 2005
WQCD-FM Tower                                             1984              Leased                February 2007

WKQX-FM                                                   2000              Leased       December 2015 with 5 year option
230 Merchandise Mart Plaza
Chicago, Illinois
WKQX-FM Tower                                             1975              Leased                September 2009

Atlanta Magazine Office                                   1997              Leased                  July 2003
1330 Peachtree Street, N.E.
Atlanta, Georgia

Cincinnati Magazine                                       1996              Leased                November 2006
One Centennial Plaza
Cincinnati, OH

Texas Monthly                                             1989              Leased                 August 2009
701 Brazos, Suite 1600
Austin, TX

KHON-TV                                                   1999               Owned                      --
88 Piikoi Street
Honolulu, HI
KHON-TV Tower                                             1978              Leased      December 2008 with 10 year option
                                                                                                        --
WALA-TV                                                   2002               Owned
1501 Satchel Paige Dr.
Mobile, AL
WALA-TV Tower                                             1962               Owned                      --

WFTX-TV                                                   1987               Owned                      --
621 Pine Island Road
Cape Coral, FL
WFTX-TV Tower                                             1985               Owned                      --




WLUK-TV                                                   1966               Owned                      --
787 Lombardi Avenue
Green Bay, WI
WLUK-TV Tower                                             1961               Owned                      --

WTHI-TV/FM/WWVR-FM                                        1954               Owned                      --
918 Ohio Street
Terre Haute, IN
WTHI-TV Tower                                             1965               Owned                      --
WTHI-FM Tower                                             1954               Owned                      --
WWVR-FM Tower                                             1966               Owned                      --

WVUE-TV                                                   1972               Owned                      --
1025 South Jefferson Davis Highway
New Orleans, LA
WVUE-TV Tower                                             1963               Owned                      --

WKCF-TV                                                   1998               Owned                      --
31 Skyine Drive
Lake Mary, FL
WKCF-TV Tower                                             2001              Leased                September 2006

Los Angeles Magazine                                      2000              Leased                November 2010
5900 Wilshire Blvd., Suite 1000
Los Angeles, CA 90036

Country Sampler                                           1988               Owned                      --
707 Kautz Road
St. Charles, IL  60174

RDS/Co-Opportunities                                      1989              Leased                December 2003
324 Campus Lane, Suite B
Suisun, CA  94585

Emmis West (Corporate)                                    1999              Leased                 January 2004
15821 Ventura Blvd., #685
Encino, CA  91436

Slager Radio                                              1998              Leased                December 2004
Szabadsag Ut 117 (Atronyx Bldg. B)
H-2040 Budaors, Hungary
Slager Tower                                              1998              Leased                November 2004

KOIN-TV                                                   1984              Leased        June 2083 with 99 year option
222 S.W. Columbia St.
Portland, OR 97221
KOIN-TV Tower                                             1953               Owned                      --

KSNT-TV                                                   1967               Owned                      --
6835 N.W. U.S. Hwy 24
Topeka, KS 66618
KSNT-TV Tower                                             1967               Owned                      --

WSAZ-TV                                                   1971               Owned                      --
645 5th Avenue
Huntington, WV 25701
WSAZ-TV Tower                                             1954               Owned                      --

KZLA-FM                                                   1997               Owned                      --
7755 Sunset Blvd.
Los Angeles, CA 90045
KZLA-FM Tower                                             1991              Leased                June 30, 2003

KGMB-TV                                                   1952               Owned                      --
1534 Kapiolani Blvd.
Honolulu, HI 96814
KGMB-TV Tower                                             1962               Owned                      --

KMTV-TV 1978 Owned --
10714 Mockingbird Dr.
Omaha, NE 68127
KMTV-TV Tower 1967 Owned --

KGUN-TV 1990 Owned --
7280 E. Rosewood
Tucson, AZ 85710
KGUN-TV Tower 1956 Leased July 2016

KRQE-TV 1953 Owned --
13 Broadcast Plaza S.W.
Albuquerque, NM 87104
KRQE-TV Tower 1959 Owned --

KTAR-AM/KMVP-AM/KKLT-FM/KKFR-FM 1994 Owned --
5300 N. Central Ave.
Phoenix, AZ 85012
KTAR-AM Tower 1958 Owned --
KMVP-AM Tower 1996 Leased December 2008
KKLT-FM Tower 1990 Owned --
KKFR-FM Tower 1998 Leased April 2003

KSNW-TV 1955 Owned --
833 N. Main St.
Wichita, KS 67203

KSNW-TV Tower 1955 Owned --

Argentina 1996 Owned --
Uriarte 1899 (1414) Capital Federal
Buenos Aires, Argentina
Argentina Tower 1996 Owned --

- --------------
(1) In April 2002, Emmis exercised its option to extend the lease until October 2012. The lease contains one additional
ten-year renewal option. Emmis also owns a tower site which it placed in service in 1984 and currently uses as a back-up
facility and on which it leases space to other broadcasters.

ITEM 3. LEGAL PROCEEDINGS.

Emmis currently and from time to time is involved in litigation incidental to the conduct of its business, but Emmis is not
currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on
the financial position or results of operations of Emmis. However, instead of making a required license payment to the Hungarian
government in November 2001, our 59.5% owned national radio station in Hungary requested a modification of the broadcast contract
and ultimately filed suit in arbitration court seeking reformation of the contract and requesting that the payments be reduced.
The Hungarian government then issued an order revoking our station's broadcast license for non-payment of the license fee, and we
appealed the order in the Hungarian ordinary court. The Hungarian government has also filed an action seeking to liquidate our
Hungarian broadcast company. We are vigorously prosecuting the actions in the arbitration court and ordinary court and are
vigorously opposing the action seeking liquidation. However, we cannot predict the outcome of these actions. We do not plan to
continue to operate the station under the present fee arrangement. We do not expect an adverse material financial impact to Emmis
or EOC if the station does not continue to operate.


                                                              PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.

    Emmis' Class A common stock is traded in the  over-the-counter  market and is quoted on the National  Association  of Securities
Dealers Automated Quotation (NASDAQ) National Market System under the symbol EMMS.

    The following table sets forth the high and low sale prices of the Class A common stock for the periods indicated.  No dividends
were paid during any such periods.

                           QUARTER ENDED                               HIGH                       LOW
                           May 2000                                   47.38                     27.00
                           August 2000                                49.13                     31.38
                           November 2000                              34.25                     17.38
                           February 2001                              37.88                     22.13


                           May 2001                                   33.95                     20.06
                           August 2001                                33.65                     23.32
                           November 2001                              24.95                     12.27
                           February 2002                              27.37                     15.85


    At April 30, 2002, there were 3,932 record holders of the Class A common stock, and there were two record holders,  but only one
beneficial owner, of the Class B common stock.

    Emmis intends to retain future  earnings for use in its business and does not  anticipate  paying any dividends on shares of its
common stock in the foreseeable future.


ITEM 6.  SELECTED FINANCIAL DATA
          Emmis Communications Corporation
          FINANCIAL HIGHLIGHTS
                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                    (Dollars in thousands, except share data)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
OPERATING DATA:
    Net revenues                               $     140,583    $     232,836     $     325,265    $     470,618     $     533,780
    Operating expenses                                81,170          143,348           199,818          296,405           348,115
    Corporate expenses                                 7,845           11,904            15,430           17,601            20,283
    Time brokerage fees                                5,667            2,220                 -            7,344               479
    Depreciation and amortization                      7,536           28,314            44,161           74,018           100,258
    Non-cash compensation                              1,482            4,269             7,357            5,400             9,095
    Restructuring fees                                     -                -                 -            2,057               768
    Impairment loss and other (1)                          -                -               896            2,000            10,672
    Operating income                                  36,883           42,781            57,603           65,793            44,110
    Interest expense                                  13,772           35,650            51,986           72,444           129,100
    Loss on donation of radio station                  4,833                -               956                -                 -
    Other income (loss), net (2)                           6            1,914             4,203           38,037           (3,657)

    Income (loss) before income taxes
     and extraordinary item                           18,284            9,045             8,864           31,386          (88,647)
    Income (loss) before extraordinary item           11,084            2,845             1,989           13,736          (63,024)
    Net income (loss)                                 11,084            1,248              (33)           13,736          (64,108)
    Net income (loss) available to
     common shareholders                              11,084            1,248           (3,177)            4,752          (73,092)

    Net income (loss) per share
     available to common shareholders:
      Basic                                    $        0.51    $        0.04     $      (0.09)    $        $0.10    $      (1.54)
      Diluted                                  $        0.49    $        0.04     $      (0.09)    $        $0.10    $      (1.54)
    Weight average common shares
     Outstanding (3):
      Basic                                           21,806           28,906             36,156          46,869            47,334
      Diluted                                         22,724           29,696            36,156           47,940            47,334

                                                                                 FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
BALANCE SHEET DATA:
    Cash                                       $       5,785    $       6,117     $      17,370    $      59,899     $       6,362
    Working capital (4)                               21,635            1,249            28,274           97,885            19,828
    Net intangible assets                            234,558          802,307         1,033,970        1,852,259         1,953,331
    Total assets                                     333,388        1,014,831         1,327,306        2,506,872         2,510,069
    Long-term credit facility, senior subordinated
     debt and senior discount notes (5)              215,000          577,000           300,000        1,380,000         1,343,507
    Shareholders' equity                              43,910          235,549           776,367          807,471           735,557

                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------

OTHER DATA:
    Broadcast/publishing cash flow (6)         $      59,413    $      89,488     $     125,447    $     174,213     $     185,665
    EBITDA before certain charges (6)                 51,568           77,584           110,017          156,612           165,382
    Cash flows from (used in):
     Operating activities                             22,487           35,121            26,360           97,730            69,377
     Investing activities                           (116,693)        (541,470)         (271,946)      (1,110,755)         (175,105)
     Financing activities                             98,800          506,681           256,839        1,055,554            52,191
    Capital expenditures                              16,991           37,383            29,316           26,225            28,416

(1)     Year ended  February 28, 2002  includes a $9.1 million asset  impairment  charge and a $1.6 million  charge  related to the
        early termination of certain TV contracts.

(2)     See  Management's  Discussion  and Analysis of Financial  Condition  and Results of  operations  for a  description  of the
        components of other income in the year ended February 28, 2001.

(3)     In February 2000,  Emmis effected a 2 for 1 stock split of the outstanding  shares of common stock.  Accordingly,  all data
        shown has been retroactively adjusted to reflect the stock split.

(4)     Excludes assets held for sale and credit facility debt to be repaid with proceeds of assets held for sale.

(5)     February 28, 2002 balance excludes $135.0 million of credit facility debt to be repaid with proceeds of assets held for
        sale.

(6)     Broadcast/publishing  cash flow and EBITDA  before  certain  charges are not  measures of liquidity  or of  performance  in
        accordance with accounting  principles  generally accepted in the United States, and should be viewed as a supplement to and
        not a substitute for Emmis' results of operations presented on the basis of accounting  principles generally accepted in the
        United  States.  See  Management's  Discussion  and Analysis of Financial  Condition  and Results of  operations  for a more
        detailed description of broadcast/publishing cash flow and EBITDA before certain charges.


Emmis Operating Company
FINANCIAL HIGHLIGHTS

                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                    (Dollars in thousands, except share data)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
OPERATING DATA:
    Net revenues                               $     140,583    $     232,836     $     325,265    $     470,618     $     533,780
    Operating expenses                                81,170          143,348           199,818          296,405           348,115
    Corporate expenses                                 7,845           11,904            15,430           17,601            20,283
    Time brokerage fees                                5,667            2,220                 -            7,344               479
    Depreciation and amortization                      7,536           28,314            44,161           74,018           100,258
    Non-cash compensation                              1,482            4,269             7,357            5,400             9,095
    Restructuring fees                                     -                -                 -            2,057               768
    Impairment loss and other (1)                          -                -               896            2,000            10,672
    Operating income                                  36,883           42,781            57,603           65,793            44,110
    Interest expense                                  13,772           35,650            51,986           72,444         (104,102)
    Loss on donation of radio station                  4,833                -               956                -                 -
    Other income (loss), net (2)                           6            1,914             4,203           38,037           (4,643)

    Income (loss) before income taxes
     and extraordinary item                           18,284            9,045             8,864           31,386          (64,635)
    Income (loss) before extraordinary item           11,084            2,845             1,989           13,736          (46,802)
    Net income (loss)                                 11,084            1,248              (33)           13,736          (47,886)


                                                                                 FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
BALANCE SHEET DATA:
    Cash                                       $       5,785    $       6,117     $      17,370    $      59,899     $       6,362
    Working capital (3)                               21,635            1,249            28,274           97,885            20,951
    Net intangible assets                            234,558          802,307         1,033,970        1,852,259         1,953,331
    Total assets                                     333,388        1,014,831         1,327,306        2,506,872         2,499,139
    Long-term credit facility and senior
     subordinated debt (4)                           215,000          577,000           300,000        1,380,000         1,117,000
    Shareholders' equity                              43,910          235,549           776,367          807,471           944,467

                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------

OTHER DATA:
    Broadcast/publishing cash flow (5)         $      59,413    $      89,488     $     125,447    $     174,213     $     185,665
    EBITDA before certain charges (5)                 51,568           77,584           110,017          156,612           165,382
    Cash flows from (used in):
     Operating activities                             22,487           35,121            23,471           86,871            67,393
     Investing activities                           (116,693)        (541,470)         (271,946)      (1,110,755)         (175,105)
     Financing activities                             98,800          506,681           259,728        1,066,413            54,175
    Capital expenditures                              16,991           37,383            29,316           26,225            28,416

(1)     Year ended  February 28, 2002  includes a $9.1 million asset  impairment  charge and a $1.6 million  charge  related to the
        early termination of certain TV contracts.

(2)     See  Management's  Discussion  and Analysis of Financial  Condition  and Results of  operations  for a  description  of the
        components of other income in the year ended February 28, 2001.

(3)     Excludes assets held for sale and credit facility debt to be repaid with proceeds of assets held for sale.

(4)     February 28, 2002 balance excludes $135.0 million of credit facility debt to be repaid with proceeds of assets held for
        sale.

(5)     Broadcast/publishing  cash flow and EBITDA  before  certain  charges are not  measures of liquidity  or of  performance  in
        accordance with accounting  principles  generally accepted in the United States, and should be viewed as a supplement to and
        not a substitute for Emmis' results of operations presented on the basis of accounting  principles generally accepted in the
        United  States.  See  Management's  Discussion  and Analysis of Financial  Condition  and Results of  operations  for a more
        detailed description of broadcast/publishing cash flow and EBITDA before certain charges.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

GENERAL

The following discussion pertains to Emmis Communications Corporation ("ECC") and its subsidiaries (collectively, "Emmis" or
the "Company") and to Emmis Operating Company and its subsidiaries (collectively "EOC"). EOC became a wholly owned subsidiary of
ECC in connection with the Company's reorganization (see Note 1c. to our consolidated financial statements) on June 22, 2001.
Unless otherwise noted, all disclosures contained in the Management's Discussion and Analysis of Financial Condition and Results
of Operations in the Form 10-K apply to Emmis and EOC.

Emmis generally evaluates the performance of its operating entities based on broadcast cash flow (BCF) and publishing cash flow
(PCF). Management believes that BCF and PCF are useful because they provide a meaningful comparison of operating performance
between companies in the industry and serve as an indicator of the market value of a group of stations or publishing entities.
BCF and PCF are generally recognized by the broadcast and publishing industries as a measure of performance and are used by
analysts who report on the performance of broadcasting and publishing groups. BCF and PCF do not take into account Emmis' debt
service requirements and other commitments and, accordingly, BCF and PCF are not necessarily indicative of amounts that may be
available for dividends, reinvestment in Emmis' business or other discretionary uses.

BCF and PCF are not measures of liquidity or of performance in accordance with accounting principles generally accepted in the
United States, and should be viewed as a supplement to and not a substitute for our results of operations presented on the basis
of accounting principles generally accepted in the United States. Moreover, BCF and PCF are not standardized measures and may be
calculated in a number of ways. Emmis defines BCF and PCF as revenues net of agency commissions and operating expenses. The
primary source of broadcast advertising revenues is the sale of advertising time to local and national advertisers. Publishing
entities derive revenue from subscriptions and sale of print advertising. Broadcasting revenue is recognized as advertisements
are aired. Publication revenue is recognized in the month of delivery of the publication. The most significant broadcast
operating expenses are employee salaries and commissions, costs associated with programming, advertising and promotion, and
station general and administrative costs. Significant publishing operating expenses are employee salaries and commissions, costs
associated with producing the magazine, and general and administrative costs.

The Company's revenues are affected primarily by the advertising rates its entities charge. These rates are in large part
based on the entities' ability to attract audiences/subscribers in demographic groups targeted by their advertisers. Broadcast
entities' ratings are measured principally four times a year by Arbitron Radio Market Reports for radio stations and by A.C.
Nielsen Company for television stations. Because audience ratings in a station's local market are critical to the station's
financial success, the Company's strategy is to use market research and advertising and promotion to attract and retain audiences
in each station's chosen demographic target group.

In addition to the sale of advertising time for cash, stations typically exchange advertising time for goods or services which
can be used by the station in its business operations. The Company generally confines the use of such trade transactions to
promotional items or services for which the Company would otherwise have paid cash. In addition, it is the Company's general
policy not to pre-empt advertising spots paid for in cash with advertising spots paid for in trade.

ACQUISITIONS, DISPOSITIONS AND INVESTMENTS

During the three year period ended February 28, 2002, we acquired and retained ten radio stations, nine television stations and
three magazine publications for an aggregate cash purchase price of $1.4 billion. A recap of the transactions completed is
summarized hereafter. These transactions impact the comparability of operating results year over year.

Effective May 1, 2002 Emmis completed the sale of substantially all of the assets of KALC-FM in Denver, Colorado to Entercom
Communications Corporation for $88.0 million. Emmis had purchased KALC-FM on January 17, 2001, from Salem Communications
Corporation for $98.8 million in cash plus a commitment fee of $1.2 million and transaction related costs of $0.9 million. On
February 12, 2002, Emmis entered into a definitive agreement to sell KALC-FM to Entercom and Entercom began operating KALC-FM
under a time brokerage agreement on March 16, 2002. Proceeds were used to repay amounts outstanding under our credit facility.
The assets of KALC-FM are reflected as held for sale in the accompanying consolidated balance sheets. Since the agreed-upon sales

price for this station was less than its carrying amount as of February 28, 2002, we recognized an impairment loss of $9.1 million
in fiscal 2002, which is reflected in the accompanying consolidated statements of operations. The $87.7 million of credit
facility debt repaid with the net proceeds of the sale is reflected as a current liability in the accompanying consolidated
balance sheets.

Effective May 1, 2002 Emmis completed the sale of substantially all of the assets of KXPK-FM in Denver, Colorado to Entravision
Communications Corporation for $47.5 million. Emmis had purchased KXPK-FM on August 24, 2000, from AMFM, Inc. for an allocated
purchase price of $35.0 million in cash plus liabilities recorded of $1.2 million and transaction related costs of $0.4 million.
Emmis entered into a definitive agreement to sell KXPK-FM to Entravision on February 12, 2002. Proceeds were used to repay
amounts outstanding under our credit facility. We expect to record a gain on sale of approximately $12 million in our first
quarter of fiscal 2003. The assets of KXPK-FM are reflected as held for sale in the accompanying consolidated balance sheets.
The $47.3 million of credit facility debt repaid with the net proceeds of the sale is reflected as a current liability in the
accompanying consolidated balance sheets.

On March 28, 2001, Emmis completed its acquisition of substantially all of the assets of radio stations KTAR-AM, KMVP-AM and
KKLT-FM in Phoenix, Arizona from Hearst-Argyle Television, Inc. for $160.0 million in cash, plus transaction related costs of $0.7
million. The Company financed the acquisition through a $20.0 million advance payment borrowed under the credit facility in June
2000 and the remainder with borrowings under the credit facility and proceeds from ECC's March 2001 senior discount notes
offering. The acquisition was accounted for as a purchase. Emmis began programming and selling advertising on the radio stations
on August 1, 2000 under a time brokerage agreement. The total purchase price was allocated to property and equipment and
broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets in the accompanying consolidated
balance sheets and are being amortized over 40 years.

On January 15, 2001, Emmis entered into an agreement to sell WTLC-AM and the intellectual property of WTLC-FM (both located in
Indianapolis, Indiana) to Radio One, Inc., for $8.0 million. The FM sale occurred on February 15, 2001 and the AM sale occurred
on April 25, 2001. Emmis retained the FCC license at 105.7 and reformatted the station as WYXB-FM.

On October 6, 2000, Emmis acquired certain assets of radio stations WIL-FM, WRTH-AM, WVRV-FM, KPNT-FM, KXOK-FM (reformatted as
KFTK-FM) and KIHT-FM in St. Louis, Missouri from Sinclair Broadcast Group, Inc. for $220.0 million in cash, plus transaction
related costs of $10.9 million (the "Sinclair Acquisition"). The agreement also included the settlement of outstanding lawsuits
by and between Emmis and Sinclair. The settlement resulted in no gain or loss by either party. This acquisition was financed
through borrowings under Emmis' credit facility and was accounted for as a purchase. The total purchase price was allocated to
property and equipment and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets in the
accompanying consolidated balance sheets and are being amortized over 40 years.

On October 6, 2000, Emmis acquired certain assets of KZLA-FM (the "KZLA Acquisition") in Los Angeles, California from
Bonneville International Corporation in exchange for radio stations WIL-FM, WRTH-AM and WVRV-FM, which Emmis acquired from
Sinclair, as well as radio station WKKX-FM which Emmis already owned (all in the St. Louis, Missouri market). Since the fair
value of WKKX exceeded the book value of the station at the date of the exchange, Emmis recorded a gain on exchange of assets of
$22.0 million. This gain is included in other income, net in the accompanying consolidated statements of operations. From August
1, 2000 through the date of acquisition, Emmis operated KZLA-FM under a time brokerage agreement. The exchange was accounted for
as a purchase. The total purchase price of $185.0 million was allocated to property and equipment and broadcast licenses based on
an appraisal. Broadcast licenses are included in intangible assets in the accompanying consolidated balance sheets and are being
amortized over 40 years.

Effective October 1, 2000 (closed October 2, 2000), Emmis purchased eight network-affiliated and seven satellite television
stations from Lee Enterprises, Inc. for $559.5 million in cash, the payment of $21.3 million for working capital and transaction
related costs of $2.2 million (the "Lee Acquisition"). In connection with the acquisition, Emmis recorded $31.3 million of
deferred tax liabilities and $17.5 million in contract liabilities. Also, Emmis recorded a severance related liability of $1.8
million, of which $1.5 million remains outstanding as of February 28, 2002. This transaction was financed through borrowings
under Emmis' credit facility and was accounted for as a purchase. The Lee Acquisition consisted of the following stations:

- - KOIN-TV (CBS) in Portland, Oregon
- - KRQE-TV (CBS) in Albuquerque, New Mexico (including satellite stations KBIM-TV, Roswell, New Mexico and KREZ-TV, Durango,
Colorado-Farmington, New Mexico)
- - WSAZ-TV (NBC) in Charleston-Huntington, West Virginia
- - KSNW-TV (NBC) in Wichita, Kansas (including satellite stations KSNG-TV, Garden City, Kansas, KSNC-TV, Great Bend, Kansas
and KSNK-TV, Oberlin, Kansas-McCook, Nebraska)
- - KGMB-TV (CBS) in Honolulu, Hawaii (including satellite stations KGMD-TV, Hilo, Hawaii and KGMV-TV, Wailuku, Hawaii)
- - KGUN-TV (ABC) in Tucson, Arizona
- - KMTV-TV (CBS) in Omaha, Nebraska and
- - KSNT-TV (NBC) in Topeka, Kansas.

The total purchase price was allocated to property and equipment, television program rights, working capital related items and
broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets in the accompanying consolidated
balance sheets and are being amortized over 40 years.

Because we already own KHON-TV in Honolulu, and both KHON and KGMB were rated among the top four television stations in the
Honolulu market, FCC regulations prohibited us from owning both stations. However, we received a temporary waiver from the FCC
that has allowed us to operate both stations (and their related "satellite" stations). As a result of recent regulatory
developments, we have requested a stay of divestiture until the FCC completes its biennial review. We are currently awaiting the
FCC's decision. No assurances can be given that the FCC will grant us the stay of divestiture and we may need to sell one of the
two stations in Hawaii.

On August 24, 2000, Emmis acquired the assets of radio station KKFR-FM in Phoenix, Arizona from AMFM, Inc. for an allocated
$72.0 million in cash, plus transaction related costs of $0.5 million (the "AMFM Acquisition"). Emmis financed the acquisition
through borrowings under its credit facility. The acquisition was accounted for as a purchase. The total purchase price was
allocated to property and equipment and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible
assets in the accompanying consolidated balance sheets and are being amortized over 40 years.

In May, 2000, Emmis made an offer to purchase the stock of a company that owns and operates WALR-FM in Atlanta, Georgia.
Because an affiliate of Cox Radio, Inc. held a right of first refusal to purchase WALR-FM, Emmis' offer was made on the condition
that Emmis would receive a $17.0 million break-up fee if WALR-FM was sold pursuant to the right of first refusal. In June, 2000,
the Cox affiliate submitted an offer to purchase WALR-FM under the right of first refusal and an application to transfer the
station's FCC licenses was filed with the FCC. Emmis received the break-up fee upon the closing of the sale of WALR-FM under the
right of first refusal on August 31, 2000, which is included in other income in the accompanying consolidated statements of
operations.

On March 3, 2000, Emmis acquired all of the outstanding capital stock of Los Angeles Magazine Holding Company, Inc. for
approximately $36.8 million in cash plus liabilities recorded of $2.7 million (the "Los Angeles Magazine Acquisition"). Los
Angeles Magazine Holding Company, Inc., through a wholly-owned subsidiary, owns and operates Los Angeles, a city magazine. The
acquisition was accounted for as a purchase and was financed through additional borrowings under its credit facility. The excess
of the purchase price over the estimated fair value of identifiable assets was $36.0 million, which is included in intangible
assets in the accompanying consolidated balance sheets and is being amortized over 15 years.

On December 14, 1999, the Company completed its acquisition of substantially all of the assets of Country Marketplace and
related publications from H&S Media, Inc. for approximately $1.8 million in cash plus liabilities recorded of approximately $.6
million. The acquisition was accounted for as a purchase and was financed through borrowings under the credit facility. The
excess of the purchase price over the estimated fair value of identifiable assets was $2.3 million, which is included in
intangible assets in the accompanying consolidated balance sheets and is being amortized over 15 years.

On November 16, 1999, Emmis purchased an interest in BuyItNow.com L.L.C. for $5.0 million in cash, which represented an
original investment of 2.49% of the outstanding equity of BuyItNow.com L.L.C. During fiscal 2001, Emmis reduced the carrying
value of its investment in BuyItNow.com from $5.0 million to zero as the decline in the value of the investment was deemed to be
other than temporary.

On November 9, 1999, the Company completed its acquisition of 75% of the outstanding common stock of Votionis, S.A.
("Votionis") for $13.3 million in cash plus liabilities recorded of $5.6 million. Additional consideration of $1.6 million was
paid subsequent to closing and up to an additional $0.6 million will be paid by November 2003 if certain conditions are met.
Votionis owns one FM and one AM radio station located in Buenos Aires, Argentina (the "Votionis Acquisition"). The acquisition
was accounted for as a purchase and was financed with proceeds from the Company's October 1999 Common and Preferred Equity
Offerings. Broadcast licenses are included in intangible assets in the accompanying consolidated balance sheets. This broadcast
license is being amortized over 23 years.

On October 29, 1999, the Company completed its acquisition of substantially all of the assets of television station WKCF in
Orlando, Florida (the "WKCF Acquisition") from Press Communications, L.L.C. for approximately $197.1 million in cash. The
purchase price included the purchase of land and a building for $2.2 million. The Company financed the acquisition through a
$12.5 million advance payment borrowed under the credit facility and proceeds from the Company's October 1999 Common and Preferred
Equity Offerings. In connection with the acquisition, the Company recorded $49.3 million in contract liabilities. The
acquisition was accounted for as a purchase. The total purchase price was allocated to property and equipment, television program
rights and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets and are being amortized
over 40 years. WKCF is an affiliate of the WB Television Network. As part of the WKCF Acquisition, the Company entered into an
agreement with the WB Television Network which, among other things, extends the existing network affiliation agreement through
December 2009.

On April 1, 1999, the Company completed its acquisition of substantially all of the assets of Country Sampler, Inc. (the
"Country Sampler Acquisition") for approximately $20.9 million plus liabilities recorded of approximately $4.7 million. The
purchase price was payable with $18.5 million in cash at closing, which was financed through additional borrowings under the
credit facility, $2.0 million payable under a contract with the principal shareholder through April 2003, and $.5 million paid in
October 1999. The acquisition was accounted for as a purchase. The excess of the purchase price over the estimated fair value of
identifiable assets was $17.7 million, which is included in intangible assets in the accompanying consolidated balance sheets and
is being amortized over 15 years.

RESULTS OF OPERATIONS

YEAR ENDED FEBRUARY 28, 2002 COMPARED TO YEAR ENDED FEBRUARY 28, 2001. Net revenues for the year ended February 28, 2002 were
$533.8 million compared to $470.6 million for the same period of the prior year, an increase of $63.2 million or 13.4%. On a pro
forma basis (after giving effect to all acquisitions consummated since March 1, 2000), net revenues for the year ended February
28, 2002 would have decreased $38.2 million or 6.7%. This pro forma decrease in net revenues is generally due to a softening U.S.
economy resulting in an overall decrease in advertisement sales, coupled with the absence of political television advertisements
in the twelve months ended February 28, 2002. The decrease was partially offset by a $3.7 million increase in net revenues
primarily attributable to our television division earning a performance guaranty when our national sales rep agency did not
achieve certain performance targets in the second quarter.

Operating expenses for the year ended February 28, 2002 were $348.1 million compared to $296.4 million for the same period of
the prior year, an increase of $51.7 million or, 17.4%. On a pro forma basis, operating expenses decreased $12.3 million or
3.4%. This pro forma decrease is due to the elimination of certain operational positions in the television division and a
decrease in promotional spending, offset by sales personnel increases in all of our divisions. Also, in the quarter ended
February 28, 2002, we implemented a 10% wage cut which was supplemented with a corresponding 10% Emmis stock award. This
initiative reduced cash operating expenses by approximately $3.1 million for the year ended February 28, 2002.

Broadcast/publishing cash flow for the year ended February 28, 2002 was $185.7 million compared to $174.2 million for the same
period of the prior year, an increase of $11.5 million or 6.6%. On a pro forma basis, broadcast/publishing cash flow for the year
ended February 28, 2002 decreased $25.9 million or 12.2%. This pro forma decrease is due to decreased net revenues partially
offset by decreased operating expenses as discussed above.

Corporate expenses for the year ended February 28, 2002 were $20.3 million compared to $17.6 million for the same period of the
prior year, an increase of $2.7 million or 15.2%. This increase is due to an increase in the number of corporate employees in all
departments as a result of our recent growth and training investments we have made in our personnel.



    EBITDA before  certain  charges is defined as  broadcast/publishing  cash flow less  corporate  expenses.  EBITDA before certain
charges for the year ended  February 28, 2002 was $165.4  million  compared to $156.6 million for the same period of the prior year,
an increase of $8.8 million or 5.6%.  On a pro forma  basis,  EBITDA  before  certain  charges for the year ended  February 28, 2002
decreased  $28.6  million or 14.7%.  This pro forma  decrease  reflects  the pro forma  decrease in  broadcast/publishing  cash flow
coupled with the increase in corporate expenses.

    Depreciation and amortization  expense for the year ended February 28, 2002 was $100.3 million compared to $74.0 million for the
same period of the prior year,  an  increase  of $26.3  million or 35.5%.  Substantially  all of the  increase in  depreciation  and
amortization expense for the year ended February 28, 2002 is due to acquisitions consummated since March 1, 2000.

    Non-cash  compensation  expense for the year ended  February  28, 2002 was $9.1  million  compared to $5.4  million for the same
period of the prior year, an increase of $3.7 million or 68.4%.  Non-cash  compensation  includes  compensation  expense  associated
with stock options granted,  restricted common stock issued under employment  agreements,  common stock contributed to the Company's
Profit  Sharing  Plan and common  stock  issued to  employees  at our  discretion.  This  increase was due to the payment of certain
employee incentives with our common stock and stock issued to supplement the 10% wage reduction discussed above.

    In the twelve months ended February 28, 2002,  the Company  recorded an impairment  loss of $9.1 million  related to the sale of
KALC-FM to Entercom  Communications  Corporation,  effective May 1, 2002, and a $1.6 million charge related to the early termination
of certain  television  contracts.  In the twelve months ended  February 28, 2001, the Company  recorded an impairment  loss of $2.0
million related to the sale of WTLC-AM to Radio One, Inc.

    With respect to Emmis,  interest  expense was $129.1  million for the year ended February 28, 2002 compared to $72.4 million for
the same period of the prior year, an increase of $56.7 million or 78.2%.  This increase  reflects  higher  outstanding  debt due to
acquisitions  consummated  since March 1, 2000,  all of which were financed with debt  (including  our 12.5% senior  discount  notes
issued March 2001), partially offset by lower interest rates on our floating rate senior bank debt.

    With respect to EOC,  interest expense was $104.1 million for the year ended February 28, 2002 compared to $72.4 million for the
same period of the prior year,  an increase  of $31.7  million or 43.8%.  This  increase  reflects  higher  outstanding  debt due to
acquisitions  consummated  since March 1, 2000,  partially  offset by lower  interest  rates on our floating  rate senior debt.  The
difference  between  interest  expense for Emmis and EOC is due to interest  expense  associated with the senior discount notes, for
which ECC is the obligor, and thus it is excluded from the operations of EOC.

    Other income for the twelve  months ended  February 28, 2002 was $1.3 million  compared to other income of $39.4 million for the
same  period of the prior year.  Other  income for the twelve  months  ended  February  28, 2001  includes a $22.0  million  gain on
exchange of assets,  offset by valuation  adjustments on certain investments and a $17.0 million break-up fee received in connection
with the sale of WALR-FM in Atlanta,  Georgia to Cox Radio,  Inc., net of related expenses.  The difference between other income for
Emmis ($1.3  million) and EOC ($0.4  million) for the year ended  February 28, 2002 relates to interest  income on $93.0  million of
cash held in escrow,  pending the  implementation  of the  restructuring  in connection with the senior discount notes issuance (see
Note 4 to our consolidated financial statements, Senior Discount Notes).

    With  respect to Emmis,  our  effective  tax rate for the year ended  February  28,  2002 was a benefit of 28.9%,  compared to a
provision of 56.2% for the same period of the prior year.  With respect to EOC, our effective  tax rate for the year ended  February
28,  2002 was a benefit of 27.6%,  compared to a  provision  of 56.2% for the same period of the prior year.  Both Emmis and EOC had
pre-tax  income in fiscal  2001  versus  pre-tax  losses in fiscal  2002 due to the factors  discussed  above.  The  variance in our
effective  tax rate from the  statutory  tax rate is due to  non-deductible  expenses,  primarily  consisting  of  certain  goodwill
amortization that is not deductible for tax purposes.

    During the twelve months ended February 28, 2002, EOC repaid $128.0 million of  indebtedness  under its credit  facility,  which
permanently  reduced amounts  available  thereunder.  As a result of the early payoff of the  indebtedness,  the Company recorded an
extraordinary loss of approximately $1.1 million, net of taxes, related to unamortized deferred debt costs.

YEAR ENDED FEBRUARY 28, 2001 COMPARED TO YEAR ENDED FEBRUARY 29, 2000. Net revenues for the year ended February 28, 2001 were
$470.6 million compared to $325.3 million for the same period of the prior year, an increase of $145.3 million or 44.7%. The
increase in net revenues for the year ended February 28, 2001 is primarily the result of the Country Sampler Acquisition, WKCF
Acquisition, Argentina Acquisition, Los Angeles Magazine Acquisition, AMFM Acquisition, Lee Acquisition, KZLA Acquisition,
Sinclair Acquisition, Salem Acquisition and our operation of radio stations KKLT-FM, KTAR-AM and KMVP-AM under time brokerage
agreements which we collectively refer to as our "Fiscal 2000-2001 Transactions." Excluding these transactions, net revenues for
the year ended February 28, 2001 would have increased $14.7 million or 4.8%. The remaining increase in net revenues is due to our
ability to realize higher advertising rates resulting from higher ratings at certain broadcasting properties, increases in general
radio spending in the markets in which we operate and our ability to sell more advertising in our publications.

Operating expenses for the year ended February 28, 2001 were $296.4 million compared to $199.8 million for the same period of
the prior year, an increase of $96.6 million or 48.3%. The increase in operating expenses for the year ended February 28, 2001 is
primarily the result of our Fiscal 2000-2001 Transactions. Excluding these transactions, operating expenses for the year ended
February 28, 2001 would have increased $3.6 million or 1.9%. This increase is principally due to higher advertising and
promotional spending at certain of our properties as well as an increase in sales related costs.

Broadcast/publishing cash flow for the year ended February 28, 2001 was $174.2 million compared to $125.4 million for the same
period of the prior year, an increase of $48.8 million or 38.9%. The increase in broadcast/publishing cash flow for the year
ended February 28, 2001 is primarily the result of our Fiscal 2000-2001 Transactions. Excluding these transactions,
broadcast/publishing cash flow for the year ended February 28, 2001 would have increased $11.1 million or 9.4%. This increase is
due to increased net revenues partially offset by increased operating expenses as discussed above.

Corporate expenses for the year ended February 28, 2001 were $17.6 million compared to $15.4 million for the same period of the
prior year, an increase of $2.2 million or 14.1%. These increases are due to an increase in the number of corporate employees in
all departments as a result of the growth of the Company.

EBITDA before certain charges is defined as broadcast/publishing cash flow less corporate and international development
expenses. EBITDA before certain charges for the year ended February 28, 2001 was $156.6 million compared to $110.0 million for
the same period of the prior year, an increase of $46.6 million or 42.4%. This increase was principally due to the increase in
broadcast/publishing cash flow partially offset by an increase in corporate expenses.

Interest expense was $72.4 million for the year ended February 28, 2001 compared to $52.0 million for the same period of the
prior year, an increase of $20.4 million or 39.4%. Included in interest expense for the twelve months ended February 28, 2001 is
$3.4 million for the amortization of debt fees related to our Bridge Loan. The remaining increase reflects higher outstanding
debt due to the Fiscal 2000-2001 Transactions.

Depreciation and amortization expense for the year ended February 28, 2001 was $74.0 million compared to $44.2 million for the
same period of the prior year, an increase of $29.8 million or 67.6%. Substantially all of the increase in depreciation and
amortization expense for the year ended February 28, 2001 relates to our Fiscal 2000-2001 Transactions.

Non-cash compensation expense for the year ended February 28, 2001 was $5.4 million compared to $7.4 million for the same
period of the prior year, a decrease of $2.0 million or 26.6%. Non-cash compensation includes compensation expense associated
with stock options granted, grants of restricted stock and common stock contributed to the Company's Profit Sharing Plan. The
decrease was principally due to a decline in the Company's stock price as compared to the prior year.

Other income for the twelve months ended February 28, 2001 was $39.3 million compared to other income of $4.2 million for the
same period of the prior year. Other income for the twelve months ended February 28, 2001 includes a $22.0 million gain on
exchange of assets, offset by valuation adjustments on certain investments and a $17.0 million break-up fee received in connection
with the sale of WALR-FM in Atlanta, Georgia to Cox Radio, Inc., net of related expenses.

Our effective tax rate for the year ended February 28, 2001 was 56.2%, compared to 77.5% for the same period of the prior
year. The decrease in our effective tax rate in the year ended February 28, 2001 primarily resulted from the relative impact of
the non-deductible tax items in relation to the change in pre-tax income.

LIQUIDITY AND CAPITAL RESOURCES

    CAPITAL REQUIREMENTS AND CAPITAL EXPENDITURES

    Our  primary  uses of capital  have  historically  been,  and are  expected to continue  to be,  funding  acquisitions,  capital
expenditures, working capital and debt service and, in the case of ECC, preferred stock dividend requirements.

    In the fiscal years ended February 2000, 2001 and 2002, we had capital  expenditures  of $29.3 million,  $26.2 million and $28.4
million,  respectively.  These capital expenditures primarily related to the KHON and WALA operating facilities projects,  leasehold
improvements to various office and studio facilities,  broadcast equipment  purchases,  tower upgrades and costs associated with our
conversion  to  digital  television.  We  anticipate  that  future  requirements  for  capital  expenditures  will  include  capital
expenditures  incurred  during  the  ordinary  course of  business,  including  approximately  $11  million  in fiscal  2003 for the
conversion  to digital  television.  Although we expect all of our  stations  will  broadcast a digital  signal by the end of fiscal
2003, we will incur additional  costs,  after fiscal 2003, to upgrade the digital signals of four of our local stations and our nine
satellite  stations.  We expect to fund such capital  expenditures  with cash  generated  from  operating  activities and borrowings
under our credit facility.

    OFF-BALANCE SHEET FINANCINGS AND LIABILITIES

    Other than lease commitments,  legal contingencies  incurred in the normal course of business,  agreements for future barter and
program rights not yet available for broadcast at February 28, 2002, and  employment  contracts for key employees,  all of which are
disclosed  in Note 9 to the  consolidated  financial  statements,  the Company does not have any  off-balance  sheet  financings  or
liabilities.  The  Company  does not have any  majority-owned  subsidiaries  that are not  included  in the  consolidated  financial
statements,  nor does the Company have any interests in or relationships with any "special-purpose  entities" that are not reflected
in the consolidated financial statements.

    SUMMARY DISCLOSURES ABOUT CONTRACTUAL CASH OBLIGATIONS

    The following table reflects a summary of our contractual cash obligations as of February 28, 2002:


                                                                           PAYMENTS DUE BY PERIOD
                                                                           (AMOUNTS IN THOUSANDS)

                                                                 Less Than         1 to 3            4 to 5           After 5
Contractual Cash Obligations:                    Total            1 Year            Years             Years            Years
- -----------------------------               --------------    -------------     -------------    -------------     -------------

Long-term debt (1)                          $    1,622,000    $           -     $      93,583    $     160,491     $   1,367,926
Operating leases                                    50,037            7,959            12,148            9,641            20,289
TV program rights payable (2)                       68,058           27,507            23,310           11,055             6,186
Future TV program rights payable (2)                31,999            5,240            19,831            5,290             1,638
Radio broadcast agreements                           5,098            2,281             2,017              480               320
Employment agreements                               45,554           23,829            17,628            1,581             2,516
                                            --------------    -------------     -------------    -------------     -------------

Total Contractual Cash Obligations          $    1,822,746    $      66,816     $     168,517    $     188,538     $   1,398,875
                                            ==============    =============     =============    =============     =============

(1)  ECC's  senior  discount  notes  accrete to a face value of $370.0  million  in March 2006 and become due in March  2011.  As of
     February 28, 2002, the face value of the senior discount notes was $226.5  million.  With respect to EOC, the above table would
     be the same except ECC's senior  discount  notes would be excluded.  These  contractual  cash  obligations  are not adjusted to
     reflect  credit  facility debt repaid after  February 28, 2002 (See Note 4 to our  consolidated  financial  statements,  Credit
     Facility).

(2)  TV program rights payable  represents  payments to be made to various program  syndicators and  distributors in accordance with
     current contracts for the rights to broadcast  programs.  Future TV program rights payable  represents  commitments for program
     rights not available for broadcast as of February 28, 2002.

DEBT SERVICE AND PREFERRED STOCK DIVIDEND REQUIREMENTS

As of February 28, 2002, EOC had $1.252 billion of corporate indebtedness outstanding under its credit facility ($.952 billion,
of which $0.135 billion is classified as current)and senior subordinated notes ($0.3 billion), and an additional $14.9 million
of other indebtedness. As of February 28, 2002, total indebtedness outstanding for Emmis included all of EOC's indebtedness as
well as $226.5 million of senior discount notes. Emmis also had $143.8 million of convertible preferred stock outstanding. All
outstanding amounts under the credit facility bear interest, at our option, at a rate equal to the Eurodollar rate or an alternative
Base Rate plus a margin. As of February 28, 2002, EOC's weighted average borrowing rate under its credit facility, including
the effects of interest rate swaps (see discussion in Item 7a. below), was approximately 6.3% and the weighted average borrowing
rate, after taking into account amounts outstanding under the senior subordinated notes, was approximately 6.8%. Emmis' weighted
average borrowing rate, which includes the senior discount notes, was approximately 7.6%.

Based on amounts currently outstanding under our senior subordinated notes, the debt service requirements of EOC for these notes
over the next twelve-month period are $24.4 million. ECC has no additional debt service requirements in the next twelve-month
period since interest on its senior discount notes accretes into the principal balance of the notes until March 2006. However,
ECC has preferred stock dividend requirements of $9.0 million for the next twelve-month period. The terms of ECC's preferred stock
provide for a quarterly dividend payment of $.78125 per share on each January 15, April 15, July 15 and October 15. While Emmis
has sufficient liquidity to declare and pay the dividends as they become due, it was not permitted to do so for the October 15,
2001, January 15, 2002 and April 15, 2002 payments. Emmis' leverage ratio under the senior discount notes indenture exceeded 8:1
for the October, January and April payments. Its leverage ratio under the senior subordinated notes indenture exceeded 7:1 for
the January and April payments. For each of these dividend dates, ECC's board of directors set the record date, but did not
declare the dividend. Instead, on each payment date a wholly-owned, unrestricted subsidiary of EOC made a payment of $.78125 per
share to each preferred shareholder of record. This subsidiary was permitted to make the payment to the preferred shareholders
under the senior discount notes and senior subordinated notes indentures. Currently, Emmis meets its leverage ratio requirements
under the senior subordinated notes and expects to meet its leverage ratio requirements under the senior discount notes upon
application of its April 2002 equity proceeds (see Sources of Liquidity). We expect ECC's board of directors to declare each
dividend and deem the obligation to pay each dividend to have been discharged by the subsidiary's prior payment. We also expect
our board of directors to declare, and for Emmis to pay, the July 15, 2002 dividend in the ordinary course of business.

SOURCES OF LIQUIDITY

Our primary sources of liquidity are cash provided by operations and funds available under our credit facility. At February
28, 2002, we had cash and cash equivalents of $6.4 million and net working capital of $19.8 million, excluding assets held for
sale. At February 28, 2001, we had cash and cash equivalents of $59.9 million and net working capital of $97.9 million, excluding
assets held for sale. With respect to EOC, net working capital, excluding assets held for sale, was $21.0 million at February 28,
2002 and $97.9 million at February 28, 2001. We typically use our excess cash to repay amounts outstanding under our credit
facility. We had a large cash balance as of February 28, 2001 due to borrowings under term loans when we refinanced our credit
facility in December 2000, which was used to close our acquisition of three radio stations in March 2001. The decrease in net
working capital from February 28, 2001 to February 28, 2002 was due to the decrease in cash described above and the collection of
tax refunds receivable (related cash collected was used to repay outstanding debt). In December 2001, Emmis instituted a 10% pay
cut for substantially all of its non-contract employees and also began a stock compensation program under its 2001 Equity
Incentive Plan. We expect the stock compensation program, which currently extends through December 2002, to result in reductions
of approximately $14 million in Emmis' cash compensation expense, $11 million of which will be reflected in fiscal 2003. We
expect to issue approximately 0.8 million shares during the first year of the plan. While no formal decisions have been made, it
is likely that the program will continue in some form during the next fiscal year. On April 30, 2002, we had $220.0 million
available under our credit facility, less $6.6 million in outstanding letters of credit.

In April 2002, ECC completed the sale of 4.6 million shares of its Class A common stock at $26.80 per share resulting in total
proceeds of $123.3 million. The net proceeds of $120.2 were contributed to EOC, of which 50% were used to repay outstanding
obligations under the credit facility. The remaining net proceeds were invested and will either repay outstanding obligations
under the credit facility or redeem or repurchase some of Emmis' outstanding 121/2% senior discount notes.

Effective May 1, 2002 Emmis completed the sale of substantially all of the assets of KALC-FM in Denver, Colorado to Entercom
Communications Corporation for $88.0 million. Also effective May 1, 2002 Emmis completed the sale of substantially all of the
assets of KXPK-FM in Denver, Colorado to Entravision Communications Corporation for $47.5 million. The proceeds from the sale of
these stations were used to repay outstanding obligations under the credit facility.

In connection with the $255.7 million of completed or planned debt repayments described above, Emmis expects to write-off
approximately $4 million of deferred debt costs in the first quarter of our fiscal 2003.

As part of our business strategy, we continually evaluate potential acquisitions of radio and television stations, as well as
publishing properties. If we elect to take advantage of future acquisition opportunities, we may incur additional debt or issue
additional equity or debt securities, depending on market conditions and other factors.

INTANGIBLES

At February 28, 2002, approximately 78% of our total assets consisted of intangible assets, such as FCC broadcast licenses,
goodwill, subscription lists and similar assets, the value of which depends significantly upon the operational results of our
businesses. In the case of our radio and television stations, we would not be able to operate the properties without the related
FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor the activities of
our stations for compliance with all regulatory requirements. Historically, all of our licenses have been renewed at the end of
their respective eight-year periods, and we expect that all FCC licenses will continue to be renewed in the future.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued SFAS No. 142 "Goodwill and Other Intangible Assets" that requires companies to cease amortizing
goodwill and certain other indefinite-lived intangible assets, including broadcast licenses. Under SFAS 142, goodwill and certain
indefinite-lived intangibles will not be amortized into results of operations, but instead the recorded value of certain
indefinite-lived intangibles including broadcast licenses will be tested for impairment at least annually with impairment being
measured as the excess of the asset's carrying amount over its fair value. Goodwill will also be tested for impairment at least
annually. Intangible assets that have finite useful lives will continue to be amortized over their useful lives and measured for
impairment in accordance with SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." We adopted SFAS 142 and
began our impairment review on March 1, 2002. We have engaged an independent appraiser to conduct valuations of our
indefinite-lived intangible assets and expect to complete our review after the valuations are completed at the end of May 2002.
As of February 28, 2002, we had net unamortized goodwill and broadcast licenses in the amount of $175.2 million and $1,878.3
million, respectively. The adoption of SFAS 142 will eliminate our amortization of goodwill and indefinite-lived intangibles,
which was approximately $41.8 million and $61.2 million in the years ended February 28, 2001 and 2002, respectively. While this
expense will no longer be reflected on future financial statements, it remains deductible for federal income tax purposes. We
expect that our impairment review, once it is completed, will result in write-downs of some of our goodwill and indefinite-lived
intangibles, but we cannot currently determine the amount of the write-downs. However, we believe the write-down may be
material. Upon adoption, any transitional impairment loss recognized under SFAS 142 will be reported as the cumulative effect of
a change of accounting principle in our consolidated statements of operations. After initial adoption, any impairment losses
under SFAS 142 or 144 will be recorded as operating expenses.

In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets", which
establishes a single model to account for impairment of assets to be held or disposed, incorporating guidelines for accounting and
disclosure of discontinued operations . This statement supercedes SFAS 121 and was adopted by the Company on March 1, 2002. The
adoption of SFAS 144 did not have a material impact on our results of operations or financial position.

SEASONALITY

Our results of operations are usually subject to seasonal fluctuations, which result in higher second and third quarter
revenues and broadcast cash flow. For our radio operations, this seasonality is due to the younger demographic composition of
many of our stations. Advertisers increase spending during the summer months to target these listeners. In addition, advertisers
generally increase spending across all of our segments during the months of October and November, which are part of our third
quarter, in anticipation of the holiday season. Finally, particularly in our television operations, revenues from political
advertising tend to be higher in even numbered calendar years.

INFLATION

The impact of inflation on our operations has not been significant to date. However, there can be no assurance that a high rate
of inflation in the future would not have an adverse effect on our operating results, particularly since our senior bank debt is
largely floating rate debt.

FORWARD-LOOKING STATEMENTS

This report includes or incorporates forward-looking statements within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended. You can identify these forward-looking statements by our use of words such as "intend," "plan," "may,"
"will," "project," "estimate," "anticipate," "believe," "expect," "continue," "potential," "opportunity," and similar expressions,
whether in the negative or affirmative. We cannot guarantee that we actually will achieve these plans, intentions or
expectations. All statements regarding our expected financial position, business and financing plans are forward-looking
statements.

Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking
statements we make. We have included important facts in various cautionary statements in this report that we believe could cause
our actual results to differ materially from forward-looking statements that we make. These include, but are not limited to, the
following:

o material adverse changes in economic conditions in the markets of our company;

o the ability of our stations and magazines to attract and retain advertisers;

o the ability of our stations to attract programming and our magazines to attract writers and photographers;

o uncertainty as to the ability of our stations to increase or sustain audience share for their programs and our magazines
to increase or sustain subscriber demand;

o competition from other media and the impact of significant competition for advertising revenues from other media;
o future regulatory actions and conditions in the operating areas of our company;

o the level of our capital expenditures and whether our programming and other expenses increase at a rate faster than
expected;

o financial community and rating agency perceptions of our business, operations and financial condition and the industry in
which we operate;

o the effects of terrorist attacks, political instability, war and other significant events;

o whether pending transactions, if any, are completed on the terms and at the times set forth, if at all;

o other risks and uncertainties inherent in the radio and television broadcasting and magazine publishing businesses.

The forward-looking statements do not reflect the potential impact of any future acquisitions, mergers or dispositions. We
undertake no obligation to update or revise any forward-looking statements because of new information, future events or otherwise.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

GENERAL

Market risk represents the risk of loss that may impact the financial position, results of operations or cash flows of Emmis
due to adverse changes in financial and commodity market prices and rates. Emmis is exposed to market risk from changes in
domestic and international interest rates (i.e. prime and LIBOR) and foreign currency exchange rates. To manage interest rate
exposure Emmis periodically enters into interest rate derivative agreements. Emmis does not use financial instruments for trading
and is not a party to any leveraged derivatives.

On June 15, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended
in June of 2000 by SFAS No. 138, "Accounting for Derivative Instruments and Hedging Activities." These statements, which were
effective for Emmis on March 1, 2001, establish accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts. These statements require that every derivative instrument be recorded in the
balance sheet as either an asset or a liability measured at its fair value. Changes in the fair value of derivatives are to be

recorded each period in earnings or comprehensive income, depending on whether the derivative is designated and effective as part
of a hedged transaction, and on the type of hedge transaction. Gains or losses on derivative instruments reported in the other
comprehensive income must be reclassified as earnings in the period in which earnings are affected by the underlying hedged item,
and the ineffective portion of all hedges must be recognized in earnings in the current period. These standards result in
additional volatility in reported assets, liabilities, earnings and other comprehensive income.

On March 1, 2001, Emmis recorded the effect of the adoption of SFAS No. 133 which resulted in an immaterial impact to the
results of operations and the financial position of Emmis.

SFAS No. 133 further requires that the fair value and effectiveness of each hedging instrument must be measured quarterly.
The result of each measurement could result in fluctuations in reported assets, liabilities, other comprehensive income and
earnings as these changes in fair value and effectiveness are recorded to the financial statements. For the year ended February
28, 2002, the fluctuations to the aforementioned areas were immaterial to the financial statements taken as a whole and we
anticipate an immaterial effect on an ongoing basis.

INTEREST RATES

At February 28, 2002, the entire outstanding balance under our credit facility, or approximately 76% of EOC's total
outstanding debt (credit facility and senior subordinated debt) and 64% of Emmis' total outstanding debt (EOC's debt plus our
senior discount notes) bears interest at variable rates. Emmis currently hedges a portion of its outstanding debt with interest
rate swap arrangements that effectively set the credit facility's underlying base rate at a weighted average rate of 4.94% on the
three-month LIBOR for agreements in place as of February 28, 2002. The credit facility requires EOC to have fixed interest rates
for a two year period on at least 50% of its total outstanding debt, as defined (including the senior subordinated debt). After
the first two years, this ratio of fixed to floating rate debt must be maintained if EOC's total leverage ratio, as defined, is
greater than 6:1 at any quarter end. The notional amount of the interest rate swap agreements at February 28, 2002 totaled $350.0
million, and the agreements expire at various dates beginning February 3, 2003 to February 8, 2004.

Based on amounts outstanding at February 28, 2002, if the interest rate on our variable debt, including the effect of interest
rate swaps, were to increase by 1.0%, our annual interest expense would be higher by approximately $6.0 million.

FOREIGN CURRENCY

Emmis owns a 59.5% interest in a Hungarian subsidiary which is consolidated in the accompanying financial statements. This
subsidiary's operations are measured in its local currency (forint). Emmis has a natural hedge since some of the subsidiary's
long-term obligations are denominated in Hungarian forints. Emmis owns a 75% interest in an Argentinean subsidiary which is
consolidated in the accompanying financial statements. This subsidiary's operations are measured in its local currency (peso),
which until January 2002, was tied to the U.S. dollar through the Argentine government's convertibility plan. In January 2002,
the Argentine government allowed the peso to devalue and trade against the U.S. dollar independently. While Emmis management
cannot predict the most likely average or end-of-period peso to dollar, or forint to dollar, exchange rates for calendar 2002, we
believe any further devaluation of the forint or peso would have an immaterial effect on our financial statements taken as a
whole, as the Hungarian and Argentine stations accounted for approximately 1% of Emmis' broadcast cash flow, approximately 3% of
Emmis' total revenues and less than 1% of Emmis' total assets as of, and for the year ended, February 28, 2002.

Both subsidiaries have or have had outstanding loans denominated in U.S. dollars. In fiscal 2002, the Hungarian subsidiary
repaid $1.2 million in dollar denominated loans and at February 28, 2002 has $0.7 million outstanding. Also in fiscal 2002 and
subsequent to the devaluation of the peso, the Argentinean subsidiary repaid $2.5 million in dollar denominated loans and as of
February 28, 2002 has no dollar denominated loans outstanding. No gain or loss resulted from these transactions on a consolidated
basis.

Emmis maintains no derivative instruments to mitigate the exposure to foreign currency translation and/or transaction risk.
However, this does not preclude the adoption of specific hedging strategies in the future.



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                                         EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                           (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                             FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                              ------------------------------------------------------------------
                                                                     2000                    2001                    2002
                                                              ------------------      ------------------      ------------------



GROSS REVENUES                                                $          380,995      $          550,073      $          614,414

LESS AGENCY COMMISSIONS                                                   55,730                  79,455                  80,634
                                                              ------------------      ------------------      ------------------

NET REVENUES                                                             325,265                 470,618                 533,780
   Operating expenses                                                    199,818                 296,405                 348,115
   Corporate expenses                                                     15,430                  17,601                  20,283
   Time brokerage fees                                                         -                   7,344                     479
   Depreciation and amortization                                          44,161                  74,018                 100,258
   Non-cash compensation                                                   7,357                   5,400                   9,095
   Restructuring fees                                                        896                   2,057                     768
   Impairment loss and other                                                   -                   2,000                  10,672
                                                              ------------------      ------------------      ------------------


OPERATING INCOME                                                          57,603                  65,793                  44,110
                                                              ------------------      ------------------      ------------------

OTHER INCOME (EXPENSE):
   Interest expense                                                      (51,986)                (72,444)               (129,100)
   Loss on donation of radio station                                        (956)                      -                       -
   Gain (loss) in unconsolidated affiliates                                    -                  (1,360)                 (5,003)
   Other income, net                                                       4,203                  39,397                   1,346
                                                              ------------------      ------------------      ------------------
    Total other income (expense)                                         (48,739)                (34,407)               (132,757)
                                                              ------------------      ------------------      ------------------

INCOME (LOSS) BEFORE INCOME TAXES
   AND EXTRAORDINARY ITEM                                                  8,864                  31,386                 (88,647)
PROVISION (BENEFIT) FOR INCOME TAXES                                       6,875                  17,650                 (25,623)
                                                              ------------------      ------------------      ------------------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS                                    1,989                  13,736                 (63,024)
EXTRAORDINARY LOSS, NET OF TAX                                             2,022                       -                   1,084
                                                              ------------------      ------------------      ------------------
NET INCOME (LOSS)                                                            (33)                 13,736                 (64,108)
PREFERRED STOCK DIVIDENDS                                                  3,144                   8,984                   8,984
                                                              ------------------      ------------------      ------------------
NET INCOME (LOSS) AVAILABLE TO COMMON
   SHAREHOLDERS                                               $           (3,177)      $            4,752      $         (73,092)
                                                              ==================       ==================      =================

BASIC AND DILUTED EARNINGS (LOSS)
   PER COMMON SHARE:
   Before extraordinary item                                  $            (0.03)      $             0.10      $           (1.52)
   Extraordinary item, net of tax                                          (0.06)                       -                  (0.02)
                                                              ------------------       ------------------      -----------------
   Net income (loss) available to common
    shareholders                                              $           (0.09)      $              0.10      $           (1.54)
                                                              =================       ===================      =================


                 The accompanying notes to consolidated financial statements are an integral part of these statements.


                                         EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                                    CONSOLIDATED BALANCE SHEETS
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------

ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                                             $         59,899      $          6,362
    Accounts receivable, net of allowance for
     doubtful accounts of $2,202 and $2,800, respectively                                           97,281                95,240
    Current portion of TV program rights                                                            12,028                 9,837
    Income tax refunds receivable                                                                   13,970                     -
    Prepaid expenses                                                                                17,005                14,847
    Other                                                                                           14,832                13,820
    Assets held for sale                                                                           134,983               123,416
                                                                                          ----------------      ----------------
              Total current assets                                                                 349,998               263,522
                                                                                          ----------------      ----------------

PROPERTY AND EQUIPMENT:
    Land and buildings                                                                              84,983                88,209
    Leasehold improvements                                                                          12,299                12,341
    Broadcasting equipment                                                                         136,312               151,496
    Office equipment and automobiles                                                                44,553                49,160
    Construction in progress                                                                        10,560                16,735
                                                                                          ----------------      ----------------
                                                                                                   288,707               317,941
    Less- Accumulated depreciation and amortization                                                 56,874                86,802
                                                                                          ----------------      ----------------
              Total property and equipment, net                                                    231,833               231,139
                                                                                          ----------------      ----------------

INTANGIBLE ASSETS:
    Broadcast licenses                                                                           1,736,398             1,891,741
    Excess of cost over fair value of net
     assets of purchased businesses                                                                204,462               204,429
    Other intangibles                                                                               33,591                41,135
                                                                                          ----------------      ----------------
                                                                                                 1,974,451             2,137,305
    Less- Accumulated amortization                                                                 122,192               183,974
                                                                                          ----------------      ----------------
              Total intangible assets, net                                                       1,852,259             1,953,331
                                                                                          ----------------      ----------------

OTHER ASSETS:
    Deferred debt issuance costs, net of accumulated
     amortization of $5,729 and $12,227, respectively                                               29,448                37,745
    TV program rights, net of current portion                                                        6,509                 8,818
    Investments                                                                                     11,287                12,315
    Deposits and other                                                                              25,538                 3,199
                                                                                          ----------------      ----------------
     Total other assets, net                                                                        72,782                62,077
                                                                                          ----------------      ----------------

              Total assets                                                                 $     2,506,872      $      2,510,069
                                                                                          ================      ================




               The accompanying notes to consolidated financial statements are an integral part of these balance sheets.


                                         EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                             CONSOLIDATED BALANCE SHEETS - (CONTINUED)
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                                      $         34,206      $         38,995
    Current maturities of other long-term debt                                                       4,187                 7,933
    Current portion of TV program rights payable                                                    28,192                27,507
    Accrued salaries and commissions                                                                10,342                 7,852
    Accrued interest                                                                                17,038                14,068
    Deferred revenue                                                                                17,397                16,392
    Other                                                                                            5,768                 7,531
    Credit facility debt to be repaid with proceeds
      of assets held for sale                                                                            -               135,000
    Liabilities associated with assets held for sale                                                    21                    63
                                                                                          ----------------      ----------------
              Total current liabilities                                                            117,151               255,341

CREDIT FACILITY AND SENIOR SUBORDINATED DEBT                                                     1,380,000             1,117,000
SENIOR DISCOUNT NOTES                                                                                    -               226,507
OTHER LONG-TERM DEBT, NET OF CURRENT PORTION                                                        13,684                 6,949
TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION                                                   47,567                40,551
OTHER NONCURRENT LIABILITIES                                                                         5,531                26,966
DEFERRED INCOME TAXES                                                                              135,468               101,198
                                                                                          ----------------      ----------------
              Total liabilities                                                                  1,699,401             1,774,512
                                                                                          ----------------      ----------------

COMMITMENTS AND CONTINGENCIES (NOTE 9)

SHAREHOLDERS' EQUITY:

    Series A cumulative convertible preferred stock, $0.01
     par value; $50.00 liquidation value; authorized 10,000,000
     shares; issued and outstanding 2,875,000 shares in 2001
     and 2002                                                                                           29                    29
    Class A common stock, $.01 par value; authorized 170,000,000
     shares; issued and outstanding 41,900,315 shares and
     42,761,299 shares in 2001 and 2002, respectively                                                  419                   428
    Class B common stock, $.01 par value; authorized 30,000,000
     shares; issued and outstanding 5,230,396 shares and
     5,250,127 shares in 2001 and 2002, respectively                                                    52                    53
    Additional paid-in capital                                                                     830,299               843,254
    Accumulated deficit                                                                            (22,730)              (95,822)
    Accumulated other comprehensive income                                                            (598)              (12,385)
                                                                                          ----------------      ----------------
              Total shareholders' equity                                                           807,471               735,557
                                                                                          ----------------      ----------------

              Total liabilities and shareholders' equity                                  $      2,506,872      $      2,510,069
                                                                                          ================      ================


               The accompanying notes to consolidated financial statements are an integral part of these balance sheets.


                                         EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            FOR THE THREE YEARS ENDED FEBRUARY 28, 2002
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                  Class A                        Class B                       Series A
                                               Common Stock                   Common Stock                  Preferred Stock
                                        --------------------------     --------------------------    ---------------------------

                                             Shares                       Shares                       Shares
                                           Outstanding      Amount      Outstanding       Amount     Outstanding         Amount
                                        ---------------     ------      -----------     ---------    -----------         -------

BALANCE, FEBRUARY 28, 1999                   26,380,414     $  264           5,164,530    $    52                   -    $     -

Issuance of Class A Common stock in
  exchange for Class B common stock             505,668          5            (505,668)       (5)                   -          -
Exercise of stock options and
  related income tax benefits                   886,496          9              79,720          -                   -          -
Issuance of Class A common
  stock to profit sharing plan                   34,246          -                   -          -                   -          -
Issuance of Class A common stock to
  employees and officers and related
  income tax benefits                            41,987          -                   -          -                   -          -
Sale of Class A common stock, net
  of costs incurred of $14,430               13,384,000        134                   -          -                   -          -
Sale of Series A cumulative
  convertible preferred stock, net
  of costs incurred of  $5,341                        -          -                   -          -           2,875,000         29
Preferred stock dividends paid                        -          -                   -          -                   -          -

Comprehensive Income:
Net income (loss)                                     -          -                   -          -                   -          -
Cumulative translation adjustment                     -          -                   -          -                   -          -
Total comprehensive income                            -          -                   -          -                   -          -
                                        ---------------     ------     ---------------    -------    ----------------    -------
BALANCE, FEBRUARY 29, 2000                   41,232,811        412           4,738,582         47           2,875,000         29
                                        ---------------     ------     ---------------    -------    ----------------    -------

Issuance of Class A Common stock in
  exchange for Class B common stock              17,875          -             (17,875)         -                   -          -
Exercise of stock options and
  related income tax benefits                   482,991          5             509,689          5                   -          -
Issuance of Class A common
  stock to profit sharing plan                   47,281          1                   -          -                   -          -
Issuance of Class A common stock to
  employees and officers and related
  income tax benefits                            82,688          1                   -          -                   -          -
Sale of Class A common stock
  to employees through ESPP                      36,669          -                   -          -                   -          -
Preferred stock dividends paid                        -          -                   -          -                   -          -

Comprehensive Income:
Net income (loss)                                     -          -                   -          -                   -          -
Cumulative translation adjustment                     -          -                   -          -                   -          -
Total comprehensive income                            -          -                   -          -                   -          -
                                        ---------------     ------     ---------------    -------    ----------------    -------
BALANCE, FEBRUARY 28, 2001                   41,900,315        419           5,230,396         52           2,875,000         29
                                        ---------------     ------     ---------------    -------    ----------------    -------

Issuance of Class A Common stock in
  exchange for Class B common stock                   -          -                   -          -                   -          -
Exercise of stock options and
  related income tax benefits                   314,258          3                   -          -                   -          -
Issuance of Class A common
  stock to profit sharing plan                        -          -                   -          -                   -          -
Issuance of Class A common stock to
  employees and officers and related
  income tax benefits                           520,579          6              19,731          1                   -          -
Sale of Class A common stock
  to employees through ESPP                      26,147          -                   -          -                   -          -
Preferred stock dividends paid                        -          -                   -          -                   -          -

Comprehensive Income:
Net income (loss)                                     -          -                   -          -                   -          -
Cumulative translation adjustment                     -          -                   -          -                   -          -
Net unrealized loss on hedged
  derivatives                                         -          -                   -          -                   -          -
Total comprehensive income                            -          -                   -          -                   -          -
                                        ---------------     ------     ---------------    -------    ----------------    -------
BALANCE, FEBRUARY 28, 2002                   42,761,299     $  428           5,250,127    $    53           2,875,000    $    29
                                        ===============     ======     ===============    =======    ================    =======

                 The accompanying notes to consolidated financial statements are an integral part of these statements.


                                           EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - (CONTINUED)
                                            FOR THE THREE YEARS ENDED FEBRUARY 28, 2002
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                                                               Accumulated
                                                        Additional                                Other               Total
                                                          Paid-in           Accumulated       Comprehensive       Shareholders'
                                                          Capital             Deficit            Income              Equity
                                                     ----------------    ---------------     ---------------    ----------------
BALANCE, FEBRUARY 28, 1999                           $        260,186    $       (24,305)    $         (648)    $        235,549

Issuance of Class A Common stock in
  exchange for Class B common stock                                 -                  -                   -                   -
Exercise of stock options and
  related income tax benefits                                  16,761                  -                   -              16,770
Issuance of Class A common
  stock to profit sharing plan                                  1,250                  -                   -               1,250
Issuance of Class A common stock
  to employees and officers and related
  income tax benefits                                           4,807                  -                   -               4,807
Sale of Class A common stock, net
  of costs incurred of $14,430                                383,436                  -                   -             383,570
Sale of Series A cumulative
  convertible preferred stock, net
  of costs incurred of $5,341                                 138,380                  -                   -             138,409
Preferred stock dividends paid                                      -             (3,144)                  -              (3,144)

Comprehensive Income:
Net income (loss)                                                   -               (33)                   -                   -
Cumulative translation adjustment                                   -                  -                (811)                  -
Total comprehensive income                                          -                  -                   -                (844)
                                                     ----------------    ---------------     ---------------    ----------------
BALANCE, FEBRUARY 29, 2000                                    804,820            (27,482)             (1,459)            776,367
                                                     ----------------    ---------------     ---------------    ----------------

Issuance of Class A Common stock in
  exchange for Class B common stock                                 -                  -                   -                   -
Exercise of stock options and
  related income tax benefits                                  18,707                  -                   -              18,717
Issuance of Class A common
  stock to profit sharing plan                                  1,250                  -                   -               1,251
Issuance of Class A common stock
  to employees and officers and related
  income tax benefits                                           4,586                  -                   -               4,587
Sale of Class A common stock
  to employees through ESPP                                       936                  -                   -                 936
Preferred stock dividends paid                                      -             (8,984)                  -              (8,984)

Comprehensive Income:
Net income (loss)                                                   -             13,736                   -
Cumulative translation adjustment                                   -                  -                 861
Total comprehensive income                                          -                  -                   -              14,597
                                                     ----------------    ---------------     ---------------    ----------------
BALANCE, FEBRUARY 28, 2001                           $        830,299    $       (22,730)    $          (598)   $        807,471
                                                     ================    ===============     ===============    ================

Issuance of Class A Common stock in
  exchange for Class B common stock                                 -                  -                   -                   -
Exercise of stock options and
  related income tax benefits                                   3,610                  -                   -               3,613
Issuance of Class A common
  stock to profit sharing plan                                      -                  -                   -                   -
Issuance of Class A common stock
  to employees and officers and related
  income tax benefits                                           8,770                  -                   -               8,777
Sale of Class A common stock
  to employees through ESPP                                       575                  -                   -                 575
Preferred stock dividends paid                                      -             (8,984)                  -              (8,984)

Comprehensive Income:
Net income (loss)                                                   -            (64,108)                  -
Cumulative translation adjustment                                   -                  -              (6,303)
Net unrealized loss on hedged derivatives                           -                  -              (5,484)
Total comprehensive income                                          -                  -                   -             (75,895)
                                                     ----------------    ---------------     ---------------    ----------------
BALANCE, FEBRUARY 28, 2002                           $        843,254    $       (95,822)    $       (12,385)   $        735,557
                                                     ================    ===============    ================    ================

               The accompanying notes to consolidated financial statements are an integral part of these statements.


                                           EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (DOLLARS IN THOUSANDS)

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                           ---------------     ---------------     ---------------

OPERATING ACTIVITIES:
   Net income (loss)                                                       $           (33)    $        13,736     $       (64,108)
   Adjustments to reconcile net income (loss)
     to net cash provided by operating activities -
       Extraordinary item                                                            2,022                   -               1,084
       Depreciation and amortization                                                53,818              94,454             124,335
       Accretion of interest on senior discount notes,
         including amortization of related debt costs                                    -                   -              24,998
       Provision for bad debts                                                       2,550               3,713               4,005
       Provision (benefit) for deferred income taxes                                 6,670              15,810             (25,623)
       Non-cash compensation                                                         7,357               5,400               9,095
       Loss on donation of radio station                                               956                   -                   -
       Gain on exchange of assets                                                        -             (22,000)                  -
       Impairment of asset                                                               -                   -               9,063
       Tax benefits of exercise of stock options                                     2,889              10,859                 999
       Other                                                                          (783)              1,464              (5,928)
   Changes in assets and liabilities -
       Accounts receivable                                                         (13,319)             (9,316)             (2,118)
       Prepaid expenses and other current assets                                   (14,546)            (24,627)              5,127
       Other assets                                                                 (2,507)             12,099              (5,953)
       Accounts payable and accrued liabilities                                     10,165              15,341              (2,709)
       Deferred revenue                                                              4,332                 569                (963)
       Other liabilities                                                           (33,211)            (19,772)             (1,927)
                                                                            --------------     ---------------     ---------------
         Net cash provided by operating activities                                  26,360              97,730              69,377
                                                                           ---------------     ---------------     ---------------

INVESTING ACTIVITIES:
   Purchases of property and equipment                                             (29,316)            (26,225)            (28,416)
   Cash paid for acquisitions                                                     (231,130)         (1,060,681)           (140,746)
   Deposits on acquisitions and other                                              (11,500)            (23,849)             (5,943)
                                                                           ---------------     ---------------     ---------------
       Net cash used in investing activities                                      (271,946)         (1,110,755)           (175,105)
                                                                           ---------------     ---------------     ---------------

FINANCING ACTIVITIES:
   Payments on long-term debt                                                     (426,668)         (1,051,549)           (133,000)
   Proceeds from long-term debt                                                    149,668           2,128,388               5,000
   Proceeds from the issuance of the Company's Class A
     common stock, net of transaction costs                                        383,570                   -                   -
   Proceeds from the issuance the Company's Series A
     cumulative convertible preferred stock, net of
     transaction costs                                                             138,409                   -                   -
   Proceeds from senior discount notes offering                                          -                   -             202,612
   Proceeds from exercise of stock options
     and employee stock purchases                                                   13,881               8,794               3,189
   Payments for debt related costs                                                       -             (21,095)            (16,626)
   Preferred stock dividends                                                       (2,021)              (8,984)             (8,984)
                                                                           --------------      ---------------     ---------------
     Net cash provided by financing activities                                     256,839           1,055,554              52,191
                                                                           ---------------     ---------------     ---------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                    11,253              42,529             (53,537)

CASH AND CASH EQUIVALENTS:
   Beginning of period                                                               6,117              17,370              59,899
                                                                           ---------------     ---------------     ---------------
   End of period                                                           $        17,370     $        59,899     $         6,362
                                                                           ===============     ===============     ===============


                 The accompanying notes to consolidated financial statements are an integral part of these statements.


                                         EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                                                       (DOLLARS IN THOUSANDS)

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                          ----------------     ---------------     ---------------

SUPPLEMENTAL DISCLOSURES:
   Cash paid for-
     Interest                                                              $        41,735     $        58,362     $        99,824
     Income taxes                                                                    9,589                 550               1,281
   Non- cash investing and financing transactions-
     Preferred stock dividends accrued                                               1,123                   -                   -


ACQUISITION OF COUNTRY SAMPLER:
  Fair value of assets acquired                                            $        25,608
  Cash paid                                                                         18,954
                                                                           ---------------
  Liabilities recorded                                                     $         6,654
                                                                           ===============

ACQUISITION OF WKCF-TV:
  Fair value of assets acquired                                            $       246,445
  Cash paid                                                                        197,105
                                                                           ---------------
  Liabilities recorded                                                     $        49,340
                                                                           ===============

ACQUISITION OF VOTIONIS, S.A:
  Fair value of assets acquired                                            $        18,936
  Cash paid                                                                         13,302
                                                                           ---------------
  Liabilities recorded                                                     $         5,634
                                                                           ===============

ACQUISITION OF LOS ANGELES MAGAZINE:
  Fair value of assets acquired                                                                $        39,520
  Cash paid                                                                                             36,827
                                                                                               ---------------
  Liabilities recorded                                                                         $         2,693
                                                                                               ===============

ACQUISITION OF KKFR-FM AND KXPK-FM:
    Fair value of assets acquired                                                              $       110,210
    Cash paid                                                                                          109,052
                                                                                               ---------------
    Liabilities recorded                                                                       $         1,158
                                                                                               ===============

ACQUISITION OF TELEVISION PROPERTIES
   FROM LEE ENTERPRISES, INC:
  Fair value of assets acquired                                                                $       633,639
  Cash paid                                                                                            582,994
                                                                                               ---------------
  Liabilities recorded                                                                         $        50,645
                                                                                               ===============

ACQUISITION OF KIHT-FM, KFTK-FM, KPNT-FM,
   WVRV-FM, WIL-FM AND WRTH-AM:
    Fair value of assets acquired                                                              $       230,891
    Cash paid                                                                                          230,891
                                                                                               ---------------
    Liabilities recorded                                                                       $             -
                                                                                               ===============


               The accompanying notes to consolidated financial statements are an integral part of these statements.


                                         EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                                                       (DOLLARS IN THOUSANDS)

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000               2001                2002
                                                                          ----------------     ---------------     ---------------

EXCHANGE OF ASSETS FOR KZLA-FM:
    Fair value of assets acquired                                                              $       185,000
    Basis in assets exchanged                                                                          163,000
    Gain on exchange of assets                                                                          22,000
    Cash paid                                                                                                -
                                                                                               ---------------
    Liabilities recorded                                                                       $             -
                                                                                               ===============

ACQUISITION OF KALC-FM:
    Fair value of assets acquired                                                              $       100,917
    Cash paid                                                                                          100,917
                                                                                               ---------------
    Liabilities recorded                                                                       $             -
                                                                                               ===============

ACQUISITION OF KKLT-FM, KTAR-AM and KMVP-AM:
    Fair value of assets acquired                                                                                  $       160,746
    Cash paid, net of deposit                                                                                              140,746
    Deposit paid in June 2000                                                                                               20,000
                                                                                                                   ---------------
    Liabilities recorded                                                                                           $             -
                                                                                                                   ===============



               The accompanying notes to consolidated financial statements are an integral part of these statements.


                                              EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                                       (DOLLARS IN THOUSANDS)

                                                                             FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                              ------------------------------------------------------------------

                                                                     2000                    2001                    2002
                                                              ------------------      ------------------      ------------------

GROSS REVENUES                                                $          380,995      $          550,073      $          614,414

LESS AGENCY COMMISSIONS                                                   55,730                  79,455                  80,634
                                                              ------------------      ------------------      ------------------

NET REVENUES                                                             325,265                 470,618                 533,780
   Operating expenses                                                    199,818                 296,405                 348,115
   Corporate expenses                                                     15,430                  17,601                  20,283
   Time brokerage fees                                                         -                   7,344                     479
   Depreciation and amortization                                          44,161                  74,018                 100,258
   Non-cash compensation                                                   7,357                   5,400                   9,095
   Restructuring fees                                                        896                   2,057                     768
   Impairment loss and other                                                   -                   2,000                  10,672
                                                              ------------------      ------------------      ------------------

OPERATING INCOME                                                          57,603                  65,793                  44,110
                                                              ------------------      ------------------      ------------------

OTHER INCOME (EXPENSE):
   Interest expense                                                      (51,986)                (72,444)               (104,102)
   Loss on donation of radio station                                       (956)                       -                       -
   Gain (loss) in unconsolidated affiliates                                    -                  (1,360)                 (5,003)
   Other income, net                                                       4,203                  39,397                     360
                                                              ------------------      ------------------      ------------------
    Total other income (expense)                                         (48,739)                (34,407)               (108,745)
                                                              ------------------      ------------------      ------------------

INCOME (LOSS) BEFORE INCOME TAXES
   AND EXTRAORDINARY ITEM                                                  8,864                  31,386                 (64,635)
PROVISION (BENEFIT) FOR INCOME TAXES                                       6,875                  17,650                 (17,833)
                                                              ------------------      ------------------      ------------------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS                                    1,989                  13,736                 (46,802)
EXTRAORDINARY LOSS, NET OF TAX                                             2,022                       -                   1,084
                                                              ------------------      ------------------      ------------------
NET INCOME (LOSS)                                             $              (33)     $           13,736      $          (47,886)
                                                               =================       =================       =================


                 The accompanying notes to consolidated financial statements are an integral part of these statements.



                                              EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                                    CONSOLIDATED BALANCE SHEETS
                                                       (DOLLARS IN THOUSANDS)

                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------

ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                                             $         59,899      $          6,362
    Accounts receivable, net of allowance for
     doubtful accounts of $2,202 and $2,800, respectively                                           97,281                95,240
    Current portion of TV program rights                                                            12,028                 9,837
    Income tax refunds receivable                                                                   13,970                     -
    Prepaid expenses                                                                                17,005                14,847
    Other                                                                                           14,832                13,820
    Current assets held for sale                                                                   134,983               123,416
                                                                                          ----------------      ----------------
              Total current assets                                                                 349,998               263,522
                                                                                          ----------------      ----------------

PROPERTY AND EQUIPMENT:
    Land and buildings                                                                              84,983                88,209
    Leasehold improvements                                                                          12,299                12,341
    Broadcasting equipment                                                                         136,312               151,496
    Office equipment and automobiles                                                                44,553                49,160
    Construction in progress                                                                        10,560                16,735
                                                                                          ----------------      ----------------
                                                                                                   288,707               317,941
    Less- Accumulated depreciation and amortization                                                 56,874                86,802
                                                                                          ----------------      ----------------
              Total property and equipment, net                                                    231,833               231,139
                                                                                          ----------------      ----------------

INTANGIBLE ASSETS:
    Broadcast licenses                                                                           1,736,398             1,891,741
    Excess of cost over fair value of net
     assets of purchased businesses                                                                204,462               204,429
    Other intangibles                                                                               33,591                41,135
                                                                                          ----------------      ----------------
                                                                                                 1,974,451             2,137,305
    Less- Accumulated amortization                                                                 122,192               183,974
                                                                                          ----------------      ----------------
              Total intangible assets, net                                                       1,852,259             1,953,331
                                                                                          ----------------      ----------------

OTHER ASSETS:
    Deferred debt issuance costs, net of accumulated
     amortization of $5,729 and $11,122, respectively                                               29,448                26,815
    TV program rights, net of current portion                                                        6,509                 8,818
    Investments                                                                                     11,287                12,315
    Deposits and other                                                                              25,538                 3,199
                                                                                          ----------------      ----------------
     Total other assets, net                                                                        72,782                51,147
                                                                                          ----------------      ----------------

              Total assets                                                                 $     2,506,872      $      2,499,139
                                                                                          ================      ================




               The accompanying notes to consolidated financial statements are an integral part of these balance sheets.


                                              EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                             CONSOLIDATED BALANCE SHEETS - (CONTINUED)
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                                      $         34,206      $         38,995
    Current maturities of other long-term debt                                                       4,187                 7,933
    Current portion of TV program rights payable                                                    28,192                27,507
    Accrued salaries and commissions                                                                10,342                 7,852
    Accrued interest                                                                                17,038                14,068
    Deferred revenue                                                                                17,397                16,392
    Other                                                                                            5,768                 6,408
    Credit facility debt to be repaid with proceeds
      of assets held for sale                                                                            -               135,000
    Current liabilities held for sale                                                                   21                    63
                                                                                          ----------------      ----------------
              Total current liabilities                                                            117,151               254,218

CREDIT FACILITY AND SENIOR SUBORDINATED DEBT                                                     1,380,000             1,117,000
OTHER LONG-TERM DEBT, NET OF CURRENT PORTION                                                        13,684                 6,949
TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION                                                   47,567                40,551
OTHER NONCURRENT LIABILITIES                                                                         5,531                26,966
DEFERRED INCOME TAXES                                                                              135,468               108,988
                                                                                          ----------------      ----------------
              Total liabilities                                                                  1,699,401             1,554,672
                                                                                          ----------------      ----------------

COMMITMENTS AND CONTINGENCIES (NOTE 9)

SHAREHOLDERS' EQUITY:

    Common stock, no par value; authorized, issued
     and outstanding 1,000 shares at February 28,
      2001 and 2002                                                                                830,799             1,027,221
    Additional paid-in capital                                                                           -                 8,108
    Accumulated deficit                                                                            (22,730)              (78,477)
    Accumulated other comprehensive income                                                            (598)              (12,385)
                                                                                          ----------------      ----------------
              Total shareholders' equity                                                           807,471               944,467
                                                                                          ----------------      ----------------

              Total liabilities and shareholders' equity                                  $      2,506,872      $      2,499,139
                                                                                          ================      ================




               The accompanying notes to consolidated financial statements are an integral part of these balance sheets.


                                              EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            FOR THE THREE-YEARS ENDED FEBRUARY 28, 2002
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


                                                    Common Stock
                                             -------------------------                               Accumulated
                                                                           Additional                   Other            Total
                                                 Shares                     Paid-in    Accumulated  Comprehensive     Shareholders'
                                              Outstanding      Amount       Capital      Deficit       Income           Equity
                                            --------------  ----------     --------   ------------  --------------   -------------

BALANCE, FEBRUARY 28, 1999                           1,000  $  260,502     $      -   $    (24,305)   $         (648)  $    235,549


Distributions to parent                                  -           -            -         (3,144)                -         (3,144)
Contributions from parent                                -     544,806            -              -                 -        544,806

Comprehensive Income:
Net income (loss)                                        -           -            -            (33)                -
Cumulative translation adjustment                        -           -            -              -              (811)
Total comprehensive income                               -           -            -              -                 -           (844)
                                             -------------  ----------     --------   ------------   ---------------  -------------
BALANCE, FEBRUARY 29, 2000                           1,000     805,308            -        (27,482)           (1,459)       776,367
                                             -------------  ----------     --------   ------------   ---------------  -------------

Distributions to parent                                  -           -            -         (8,984)                -         (8,984)
Contributions from parent                                -      25,491            -              -                 -         25,491

Comprehensive Income:
Net income (loss)                                        -           -            -         13,736                 -
Cumulative translation adjustment                        -           -            -              -               861
Total comprehensive income                               -           -            -              -                 -         14,597
                                             -------------  ----------     --------   ------------   ---------------  -------------
BALANCE, FEBRUARY 28, 2001                           1,000     830,799            -        (22,730)             (598) $     807,471
                                             =============  ==========     ========   ============   ===============  =============

Accrued dividend at reorganization                       -           -            -          1,123                 -          1,123
Distributions to parent                                  -           -                      (8,984)                -         (8,984)
Contributions from parent                                -     196,422        8,108              -                 -        204,530

Comprehensive Income:
Net income (loss)                                        -           -            -        (47,886)                -
Cumulative translation adjustment                        -           -            -              -            (6,303)
Net unrealized loss on hedged derivatives                -           -            -              -            (5,484)
Total comprehensive income                               -           -            -              -                 -        (59,673)
                                             -------------  ----------     --------   ------------   ---------------  --------------
BALANCE, FEBRUARY 28, 2002                           1,000  $1,027,221     $  8,108   $    (78,477)  $       (12,385) $     944,467
                                             =============  ==========     ========   ============   ===============  =============



                 The accompanying notes to consolidated financial statements are an integral part of these statements.



                                                EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (DOLLARS IN THOUSANDS)

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                           ---------------     ---------------     ---------------

OPERATING ACTIVITIES:
   Net income (loss)                                                       $          (33)     $        13,736     $       (47,886)
   Adjustments to reconcile net income (loss)
     to net cash provided by operating activities -
       Extraordinary item                                                            2,022                   -               1,084
       Depreciation and amortization                                                53,818              94,454             124,335
       Provision for bad debts                                                       2,550               3,713               4,005
       Provision (benefit) for deferred income taxes                                 6,670              15,810             (17,833)
       Non-cash compensation                                                         7,357               5,400               9,095
       Loss on donation of radio station                                               956                   -                   -
       Gain on exchange of assets                                                        -             (22,000)                  -
       Impairment of asset                                                               -                   -               9,063
       Other                                                                          (783)              1,464              (5,928)
   Changes in assets and liabilities -
       Accounts receivable                                                         (13,319)             (9,316)             (2,118)
       Prepaid expenses and other current assets                                   (14,546)            (24,627)              5,127
       Other assets                                                                 (2,507)             12,099              (5,952)
       Accounts payable and accrued liabilities                                     10,165              15,341              (2,709)
       Deferred revenue                                                              4,332                 569                (963)
       Other liabilities                                                          (33,211)             (19,772)             (1,927)
                                                                           --------------      ---------------     ---------------
         Net cash provided by operating activities                                  23,471              86,871              67,393
                                                                           ---------------     ---------------     ---------------

INVESTING ACTIVITIES:
   Purchases of property and equipment                                             (29,316)            (26,225)            (28,416)
   Cash paid for acquisitions                                                     (231,130)         (1,060,681)           (140,746)
   Deposits on acquisitions and other                                              (11,500)            (23,849)             (5,943)
                                                                           ---------------     ---------------     ---------------
       Net cash used in investing activities                                      (271,946)         (1,110,755)           (175,105)
                                                                           ---------------     ---------------     ---------------

FINANCING ACTIVITIES:
   Payments on long-term debt                                                     (426,668)         (1,051,549)           (133,000)
   Proceeds from long-term debt                                                    149,668           2,128,388               5,000
   Distributions to parent                                                          (2,021)             (8,984)             (8,984)
   Contributions from parent                                                       538,749              19,653             195,753
   Payments for debt related costs                                                       -             (21,095)             (4,594)
                                                                           ---------------     ---------------     ---------------
     Net cash provided by financing activities                                     259,728           1,066,413              54,175
                                                                           ---------------     ---------------     ---------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                    11,253              42,529            (53,537)

CASH AND CASH EQUIVALENTS:
   Beginning of period                                                               6,117              17,370              59,899
                                                                           ---------------     ---------------     ---------------
   End of period                                                           $        17,370     $        59,899     $         6,362
                                                                           ===============     ===============     ===============


                 The accompanying notes to consolidated financial statements are an integral part of these statements.


                                              EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                                                       (DOLLARS IN THOUSANDS)

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                          ----------------     ---------------     ---------------


SUPPLEMENTAL DISCLOSURES:
   Cash paid for-
     Interest                                                              $        41,735     $        58,362     $        99,824
     Income taxes                                                                    9,589                 550               1,281
   Non- cash investing and financing transactions-
     Preferred stock dividends accrued                                               1,123                   -                   -


ACQUISITION OF COUNTRY SAMPLER:
  Fair value of assets acquired                                            $        25,608
  Cash paid                                                                         18,954
                                                                           ---------------
  Liabilities recorded                                                     $         6,654
                                                                           ===============

ACQUISITION OF WKCF-TV:
  Fair value of assets acquired                                            $       246,445
  Cash paid                                                                        197,105
                                                                           ---------------
  Liabilities recorded                                                     $        49,340
                                                                           ===============

ACQUISITION OF VOTIONIS, S.A:
  Fair value of assets acquired                                            $        18,936
  Cash paid                                                                         13,302
                                                                           ---------------
  Liabilities recorded                                                     $         5,634
                                                                           ===============

ACQUISITION OF LOS ANGELES MAGAZINE:
  Fair value of assets acquired                                                                $        39,520
  Cash paid                                                                                             36,827
                                                                                               ---------------
  Liabilities recorded                                                                         $         2,693
                                                                                               ===============

ACQUISITION OF KKFR-FM AND KXPK-FM:
  Fair value of assets acquired                                                                $       110,210
  Cash paid                                                                                            109,052
                                                                                               ---------------
  Liabilities recorded                                                                         $         1,158
                                                                                               ===============

ACQUISITION OF TELEVISION PROPERTIES
  FROM LEE ENTERPRISES, INC:
    Fair value of assets acquired                                                              $       633,639
    Cash paid                                                                                          582,994
                                                                                               ---------------
    Liabilities recorded                                                                       $        50,645
                                                                                               ===============

ACQUISITION OF KIHT-FM, KFTK-FM, KPNT-FM,
   WVRV-FM, WIL-FM AND WRTH-AM:
    Fair value of assets acquired                                                              $       230,891
    Cash paid                                                                                          230,891
                                                                                               ---------------
    Liabilities recorded                                                                       $             -
                                                                                               ===============


               The accompanying notes to consolidated financial statements are an integral part of these statements.


                                              EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                                                       (DOLLARS IN THOUSANDS)

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                          ----------------     ---------------     ---------------

EXCHANGE OF ASSETS FOR KZLA-FM:
    Fair value of assets acquired                                                              $       185,000
    Basis in assets exchanged                                                                          163,000
    Gain on exchange of assets                                                                          22,000
    Cash paid                                                                                                -
                                                                                               ---------------
    Liabilities recorded                                                                       $             -
                                                                                               ===============

ACQUISITION OF KALC-FM:
    Fair value of assets acquired                                                              $       100,917
    Cash paid                                                                                          100,917
                                                                                               ---------------
    Liabilities recorded                                                                       $             -
                                                                                               ===============

ACQUISITION OF KKLT-FM, KTAR-AM and KMVP-AM:
    Fair value of assets acquired                                                                                  $       160,746
    Cash paid, net of deposit                                                                                              140,746
    Deposit paid in June 2000                                                                                               20,000
                                                                                                                   ---------------
    Liabilities recorded                                                                                           $             -
                                                                                                                   ===============



               The accompanying notes to consolidated financial statements are an integral part of these statements.

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
AND EMMIS OPERATING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation

The following discussion pertains to Emmis Communications Corporation ("ECC") and its subsidiaries (collectively, "Emmis" or
the "Company") and to Emmis Operating Company and its subsidiaries (collectively "EOC"). EOC became a wholly owned subsidiary of
ECC in connection with the Company's reorganization (see Note 1c. below) on June 22, 2001. Unless otherwise noted, all
disclosures contained in these Notes to Consolidated Financial Statements apply to Emmis and EOC. Emmis' foreign subsidiaries
report on a fiscal year ending December 31, which Emmis consolidates into its fiscal year ending February 28 (29). All
significant intercompany balances and transactions have been eliminated.

b. Organization

Emmis Communications Corporation is a diversified media company with radio broadcasting, television broadcasting and magazine
publishing operations. After giving effect to the Company's sale of two stations in Denver, Emmis operates eighteen FM radio
stations and three AM radio stations in the United States that serve the nation's three largest radio markets of New York City,
Los Angeles and Chicago, as well as Phoenix, St. Louis, Indianapolis and Terre Haute, Indiana. The fifteen television stations
Emmis operates serve geographically diverse, mid-sized markets in the U.S., as well as the large markets of Portland and Orlando,
and have a variety of television network affiliations, including five with CBS, five with Fox, three with NBC, one with ABC and
one with WB. Emmis Communications Corporation also publishes Texas Monthly, Los Angeles, Atlanta, Indianapolis Monthly,
Cincinnati, Country Sampler, and Country Marketplace magazines, and has a 59.5% interest in a national radio station in Hungary
(Slager Radio), a 75% interest in one FM and one AM radio station in Buenos Aires, Argentina (Votionis), and engages in certain
businesses ancillary to broadcasting, such as broadcast tower leasing.

c. Reorganization

On June 22, 2001, ECC transferred all of its assets and substantially all of its liabilities, including its credit facility and
its outstanding senior subordinated notes, to EOC, a newly formed, wholly-owned subsidiary in exchange for 1,000 shares of no par
value common stock. As a result, effective June 22, 2001, EOC became the only direct subsidiary of ECC and ECC became a holding
company that conducts its business operations through EOC and its subsidiaries. ECC remains the issuer of the Class A, Class B
and Class C common stock and the convertible preferred stock, and is the obligor of the senior discount notes. However, EOC is
the obligor of the senior subordinated notes and the borrower under the credit facility. Pursuant to the terms of the senior
subordinated notes, EOC is required to file with the SEC periodic reports on Forms 10-Q, 10-K and 8-K as if EOC were required to
do so pursuant to SEC rules and regulations. EOC's financial statements are presented herein for all periods required as if EOC
had existed at the beginning of the earliest period presented because the corporate reorganization was accounted for as a
reorganization of entities under common control.

Substantially all of ECC's business is conducted through its subsidiaries. The credit facility and senior subordinated notes
indenture contain certain provisions that may restrict the ability of ECC's subsidiaries to transfer funds to ECC in the form of
cash dividends, loans or advances. See the accompanying financial statements of EOC and its subsidiaries for the net assets of
the restricted subsidiaries.

d. Revenue Recognition

Broadcasting revenue is recognized as advertisements are aired. Publication revenue is recognized in the month of delivery of
the publication.

e. Allowance for Doubtful Accounts

A provision for doubtful accounts is recorded based on management's judgement of the collectibility of receivables. The
activity in the allowance for doubtful accounts during the years ended February 2000, 2001 and 2002 was as follows:

Balance at Balance
Beginning At End
Of Year Provision Write-Offs Of Year
------------- ------------ ----------- -------------

Year ended February 29, 2000 $ 1,698 $ 2,550 $ (2,324) $ 1,924
Year ended February 28, 2001 1,924 3,713 (3,435) 2,202
Year ended February 28, 2002 2,202 4,005 (3,407) 2,800

f. Television Programming

Emmis has agreements with distributors for the rights to television programming over contract periods which generally run from
one to five years. Each contract is recorded as an asset and a liability at an amount equal to its gross contractual commitment
when the license period begins and the program is available for its first showing. The portion of program contracts which become
payable within one year is reflected as a current liability in the accompanying consolidated balance sheets.

The rights to program materials are reflected in the accompanying consolidated balance sheets at the lower of unamortized cost
or estimated net realizable value. Estimated net realizable values are based upon management's expectation of future advertising
revenues, net of sales commissions, to be generated by the program material. Amortization of program contract costs is computed
under either the straight-line method over the contract period or based on usage, whichever yields the greater amortization for
each program on a monthly basis. Program contract costs that management expects to be amortized in the succeeding year are
classified as current assets. Program contract liabilities are typically paid on a scheduled basis and are not affected by
adjustments for amortization or estimated net realizable value. Certain program contracts provide for the exchange of advertising
air time in lieu of cash payments for the rights to such programming. These contracts are recorded as the programs are aired at
the estimated fair value of the advertising air time given in exchange for the program rights.

g. Time Brokerage Fees

The Company generally enters into time brokerage agreements in connection with acquisitions, pending regulatory approval of
transfer of license assets. Under the terms of these agreements, the Company makes specified periodic payments to the
owner-operator in exchange for the grant to the Company of the right to program and sell advertising of a specified portion of the
station's inventory of broadcast time. The Company records revenues and expenses associated with the portion of the station's
inventory of broadcast time it manages. Nevertheless, as the holder of the FCC license, the owner-operator retains control and
responsibility for the operation of the station, including responsibility over all programming broadcast on the station.

Included in the accompanying consolidated statements of operations for the years ended February 2001 and 2002 are time
brokerage fees of $7.3 million and $0.5 million, respectively.

h. Non-cash Compensation

Non-cash compensation includes compensation expense associated with stock options granted, the issuance of restricted common
stock, common stock contributed to the Company's Profit Sharing Plan, and common stock issued to employees at our discretion. The
Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation." Pro forma disclosure of net income and earnings per share under SFAS No. 123 is presented in Note 8.

In December 2001, Emmis instituted a 10% pay cut for substantially all of its non-contract employees and also began a stock
compensation program under its 2001 Equity Incentive Plan. All Emmis employees who were affected by the pay cut are automatically
eligible to participate in the stock compensation program and all other employees are eligible to participate in the program by
taking a voluntary pay cut. Each participant in the program may elect to receive the portion of their compensation that was cut
in the form of payroll stock that is issued every two weeks or in the form of restricted stock that is issued after the end of the
award year in January 2003. The payroll stock is awarded based on the fair market value of Emmis' Class A Common Stock on the
date it is issued. The restricted stock is awarded based on a discount off the initial value of Emmis' Class A Common Stock.

During the first award year (which extends through December 2002), we expect the stock compensation program to reduce cash
compensation expense by approximately $14 million, but non-cash compensation will increase by the same amount. We expect to issue
approximately 0.8 million shares during the first award year. While no formal decisions have been made, it is likely that the
program will continue in some form during the next fiscal year.

i. Restructuring Fees

In fiscal 2000, 2001 and 2002, Emmis incurred restructuring fees of $896, $2,057 and $768, respectively. The $896 in fiscal
2000 reflects the present value of future payments under a syndicated program agreement that was terminated in connection with
reformatting one of our radio stations. The $2,057 in fiscal 2001 reflects professional fees associated with the evaluation of
structural alternatives. The $768 in fiscal 2002 principally consists of severance and related costs associated with centralizing
certain technical functions of the television division.

j. Cash and Cash Equivalents

Emmis considers time deposits, money market fund shares, and all highly liquid debt instruments with original maturities of
three months or less to be cash equivalents.

k. Property and Equipment

Property and equipment are recorded at cost. Depreciation is generally computed by the straight-line method over the estimated
useful lives of the related assets which are 31.5 years for buildings, not more than 32 years or the life of the lease, whichever
is lower for leasehold improvements, and 5 to 7 years for broadcasting equipment, office equipment and automobiles. Maintenance,
repairs and minor renewals are expensed; improvements are capitalized. Interest was capitalized in connection with the
construction of the KHON operating facility. The capitalized interest was recorded as part of the building. In fiscal 2000
approximately $420 of interest was capitalized. No interest was capitalized in fiscal 2001 or 2002. On a continuing basis, the
Company reviews the financial statement carrying value of property and equipment for impairment. If events or changes in
circumstances were to indicate that an asset carrying value may not be recoverable, a write-down of the asset would be recorded
through a charge to operations.

l. Intangible Assets

Intangible assets are recorded at cost. Generally, broadcast licenses, trademarks and the excess of cost over fair value of net
assets of purchased businesses are being amortized using the straight-line method over 40 years. The cost of the broadcast
license for Slager Radio is being amortized over the seven year initial term of the license. The cost of the broadcast license
for the two stations in Buenos Aires, Argentina is being amortized over the twenty-three year term of the license. The excess of
cost over fair value of net assets resulting from the purchase of publications is being amortized over 15 years. Other
intangibles are amortized using the straight-line method over varying periods, not in excess of 10 years.

Subsequent to the acquisition of an intangible asset, Emmis evaluates whether later events and circumstances indicate the
remaining estimated useful life of that asset may warrant revision or that the remaining carrying value of such an asset may not
be recoverable. When factors indicate that an intangible asset should be evaluated for possible impairment, Emmis uses an estimate
of the related asset's undiscounted future cash flows over the remaining life of that asset in measuring recoverability. If
separately identifiable cash flows are not available for an intangible asset (as would generally be the case for the excess of
cost over fair value of purchased businesses), Emmis evaluates recoverability based on the expected undiscounted cash flows of the
specific business to which the asset relates. If such an analysis indicates that impairment has in fact occurred, Emmis writes
down the remaining net book value of the intangible asset to its fair value. For this purpose, fair value is determined using
quoted market prices (if available), appraisals or appropriate valuation techniques.

In fiscal 2001, the Company determined an intangible balance related to WTLC-AM was impaired and as a result incurred a $2.0
million impairment charge to record the intangible asset at its fair value. This impairment charge is reflected in impairment
loss and other in the accompanying consolidated statements of operations. This station was sold in April 2001.

In fiscal 2002, the Company determined an intangible balance related to KALC-FM was impaired and as a result incurred a $9.1
million impairment charge to record the intangible asset at its fair value. This impairment charge is reflected in impairment
loss and other in the accompanying consolidated statements of operations. This station was sold in May 2002.

m. Assets held for sale

Effective May 1, 2002 Emmis completed the sale of substantially all of the assets of radio station KALC-FM in Denver, Colorado
to Entercom Communications Corporation for $88.0 million. Also effective May 1, 2002, Emmis completed the sale of substantially
all of the assets of radio station KXPK-FM in Denver, Colorado to Entravision Communications Corporation for $47.5 million. The
proceeds from the sale of these stations were used to repay outstanding obligations under the credit facility. As of February 28,
2002, the net carrying amount of the assets held for sale was $123.4 million.

Combined revenues of the assets held for sale were approximately $4.1 million and $11.9 million for the years ended February
2001 and 2002, respectively. Combined operating expenses of the assets held for sale were approximately $4.7 million and $8.6
million for the years ended February 2001 and 2002, respectively. Combined depreciation and amortization of the assets held for
sale were approximately $1.4 million and $3.6 million for the years ended February 2001 and 2002, respectively. In connection
with the sale of KALC-FM, the Company recognized an impairment loss of $9.1 million in fiscal 2002, which is reflected in
impairment loss and other in the accompanying consolidated statements of operations.

n. Advertising and Subscription Acquisition Costs

Advertising and subscription acquisition costs are expensed the first time the advertising takes place, except for certain
direct-response advertising related to the identification of new magazine subscribers, the primary purpose of which is to elicit
sales from customers who can be shown to have responded specifically to the advertising and that results in probable future
economic benefits. These direct-response advertising costs are capitalized as assets and amortized over the estimated period of
future benefit, ranging from six months to two years subsequent to the promotional event. As of February 28, 2001 and 2002, we
had approximately $1.4 million and $1.2 million, respectively, in direct-response advertising costs capitalized as assets. On an
interim basis, the Company defers major advertising campaigns for which future benefits can be demonstrated. These costs are
amortized over the shorter of the period benefited or the remainder of the fiscal year. Advertising expense for the years ended
February 2000, 2001 and 2002 was $15.8 million, $23.9 million and $15.0 million, respectively.

o. Investments

Emmis has a 50% ownership interest (approximately $5,114 as of February 28, 2002) in a partnership in which the sole asset is
land on which a transmission tower is located. The other owner has voting control of the partnership. Emmis has a 29% ownership
interest (approximately $2,627 as of February 28, 2002) in a local media internet venture. Emmis has a 25% ownership interest
(approximately $2,165 as of February 28, 2002) in a company that operates a tower site in Portland, Oregon. Emmis has a 51%
ownership interest (approximately $740 as of February 28, 2002) in a company that operates crafting stores, but Emmis does not
control the operations of the entity. These investments are accounted for using the equity method of accounting. Emmis owns less
than 2% (approximately $970 as of February 28, 2002) of an over-the-air digital content distributor. This investment is accounted
for using the cost method of accounting. During fiscal 2001, Emmis reduced the carrying value of its investment in BuyItNow.com
from $5.0 million to zero as the decline in the value of the investment was deemed to be other than temporary. This expense is
reflected in other income in the accompanying consolidated statements of operations.

p. Deferred Revenue and Barter Transactions

Deferred revenue includes deferred magazine subscription revenue and deferred barter revenue. Deferred magazine subscription
revenue is recognized when the publication is shipped. Barter transactions are recorded at the estimated fair value of the
product or service received. Broadcast revenue from barter transactions is recognized when commercials are broadcast or
publication is delivered. The appropriate expense or asset is recognized when merchandise or services are used or received.
Barter revenues for the years ended February 2000, 2001 and 2002 were $10.2 million, $12.0 million and $15.8 million,
respectively, and barter expenses were $9.8 million, $12.0 million and $15.2 million, respectively.

q. Foreign Currency Translation

The functional currency of Slager Radio is the Hungarian forint. Slager Radio's balance sheet has been translated from forints
to the U.S. dollar using the current exchange rate in effect at the subsidiary's balance sheet date. Slager Radio's results of
operations have been translated using an average exchange rate for the period. The translation adjustment resulting from the
conversion of Slager Radio's financial statements was $811, ($861) and ($754) for the years ended February 2000, 2001 and 2002,
respectively. This adjustment is reflected in shareholders' equity in the accompanying consolidated balance sheets.

The functional currency of the two stations in Argentina is the Argentinean peso, which until January 2002 was tied to the U.S.
dollar through the Argentine government's convertibility plan. In January 2002, the Argentine government allowed the peso to
devalue and trade against the U.S. dollar independently. These two stations' balance sheets have been translated from pesos to
U.S. dollars using the exchange rate in effect at the subsidiary's balance sheet date. The results of operations have been
translated using an average exchange rate for the period. The translation adjustment resulting from the conversion of their
financial statements was $7,057 for the year ended February 2002. This adjustment is reflected in shareholders' equity in the
accompanying consolidated balance sheets.

r. Earnings Per Share

Emmis

Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share", requires dual presentation of basic and
diluted earnings per share ("EPS") on the face of the income statement for all entities with complex capital structures. Basic
EPS is computed by dividing net income available to common shareholders by the weighted-average number of common shares
outstanding for the period (36,155,982, 46,869,050 and 47,334,038 shares for the years ended February 2000, 2001 and 2002,
respectively). Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common
stock were exercised or converted. Potentially dilutive securities at February 2000, 2001 and 2002 consisted of stock options and
the 6.25% Series A cumulative convertible preferred stock. The conversion of the preferred stock is not included in the
calculation of diluted net income per common share for the three years ended February 28, 2002 as the effect of these conversions
would be antidilutive. Additionally, the conversion of stock options is not included in the calculation of diluted net income per
common share for the year ended February 29, 2000 or February 28, 2002 as the effect of their conversion would be antidilutive.
Weighted average common equivalent shares outstanding for the period for purposes of computing diluted EPS are 36,155,982,
47,940,265 and 47,334,038 for the years ended February 2000, 2001 and 2002, respectively. Excluded from the calculation of
diluted net income per share are 2.7 million, 3.7 million and 3.7 million weighted average shares that would result from the
conversion of preferred shares for the years ended February 2000, 2001 and 2002, respectively. In the year ended February 28,
2001, approximately 0.7 million options were excluded from the calculation of diluted net income per share as the effect of their
conversion would be antidilutive.

EOC

Because EOC is a wholly-owned subsidiary of Emmis, disclosure of earnings per share for EOC is not required.

s. Stock Splits

In February 2000, the Company effected a 2 for 1 stock split of the outstanding shares of common stock. Accordingly, all data
shown in the accompanying consolidated financial statements and notes has been retroactively adjusted to reflect the stock split.

t. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

u. Fair Value of Financial Instruments

The carrying amounts of cash, accounts receivable, and accounts payable approximate fair value because of the short maturity of
these financial instruments. The carrying amounts of interest rate swaps are recorded at their fair value of $8,437, as of
February 28, 2002 and are included in other noncurrent liabilities in the accompanying consolidated balance sheets. The change in
fair value of interest rate swaps during the year of $5,484, net of tax, are recorded in accumulated other comprehensive income in
the accompanying consolidated balance sheets. Except for the senior subordinated notes and senior discount notes, the carrying
amounts of long-term debt approximate fair value due to the variable interest rate on such debt. On February 28, 2002, the fair
value of the senior subordinated notes was approximately $308.3 million and the fair value of the senior discount notes was
approximately $268.3 million. Fair value estimates are made at a specific point in time, based on relevant market information
about the financial instrument.

v. Derivative Financial Instruments

On March 1, 2001, Emmis adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by
SFAS No. 138, "Accounting for Derivative Instruments and Hedging Activities." These statements establish accounting and reporting
standards for derivative instruments, including certain derivative instruments embedded in other contracts. These statements
require that every derivative instrument be recorded in the balance sheet as either an asset or a liability measured at its fair
value. Changes in the fair value of derivatives are to be recorded each period in earnings or comprehensive income, depending on
whether the derivative is designated and effective as part of a hedged transaction, and on the type of hedge transaction. Gains
or losses on derivative instruments reported in the other comprehensive income must be reclassified as earnings in the period in
which earnings are affected by the underlying hedged item, and the ineffective portion of all hedges must be recognized in
earnings in the current period. These standards result in additional volatility in reported assets, liabilities, earnings and
other comprehensive income. SFAS No. 133 further requires that the fair value and effectiveness of each hedging instrument must
be measured quarterly. The result of each measurement could result in fluctuations in reported assets, liabilities, other
comprehensive income and earnings as these changes in fair value and effectiveness are recorded to the financial statements.

SFAS No. 133 requires that as of the date of initial adoption the difference between the fair value of the derivative
instruments to be recorded on the balance sheet and the previous carrying amount of those derivatives be reported in net income or
other comprehensive income, as appropriate, as the cumulative effect of a change in accounting principle in accordance with APB 20
"Accounting Changes." On March 1, 2002, Emmis recorded the effect of the adoption of SFAS No. 133 which resulted in an immaterial
impact to the results of operations and the financial position of Emmis. See footnote 4 for discussion of the interest rate swap
agreements in effect during fiscal 2002 and at February 28, 2002.

w. Recent Accounting Pronouncements

x. Reclassifications

Certain reclassifications have been made to the prior years financial statements to be consistent with the February 28, 2002
presentation.

2. COMMON STOCK

Emmis has authorized 170,000,000 shares of Class A common stock, par value $.01 per share, 30,000,000 shares of Class B common
stock, par value $.01 per share, and 30,000,000 shares of Class C common stock, par value $.01 per share. The rights of these
three classes are essentially identical except that each share of Class A common stock has one vote with respect to substantially
all matters, each share of Class B common stock has 10 votes with respect to substantially all matters, and each share of Class C
common stock has no voting rights with respect to substantially all matters. Class B common stock is owned by the principal
shareholder (Jeffrey H. Smulyan). All shares of Class B common stock convert to Class A common stock upon sale or other transfer
to a party unaffiliated with the principal shareholder. At February 28, 2001 and 2002, no shares of Class C common stock were
issued or outstanding. The financial statements presented reflect the issuance of Class A and Class B common stock.

On October 29, 1999, Emmis completed the sale of 7.984 million shares of its Class A common stock at $31.25 per share
resulting in total proceeds of $249.5 million. Net proceeds of $238.3 million were used to fund the acquisition of WKCF-TV in
Orlando, Florida, two radio stations in Buenos Aires, Argentina, and to repay certain outstanding obligations under the credit
facility.

At the same time as its public sale of 7.984 million shares of Class A common stock, Emmis entered into a stock purchase
agreement with Liberty Media Corporation (Liberty) and sold 5.4 million shares of the Company's Class A common stock to Liberty
for $148.5 million on November 18, 1999. Net proceeds of $145.3 million were used to fund the acquisition of WKCF-TV in Orlando,
Florida, two radio stations in Buenos Aires, Argentina, and to repay certain outstanding obligations under the credit facility.

3. PREFERRED STOCK

Emmis has authorized 10,000,000 shares of preferred stock, which may be issued with such designations, preferences,
limitations and relative rights as Emmis' Board of Directors may authorize.

On October 29, 1999, ECC completed the sale of 2.875 million shares of 6.25% Series A cumulative convertible preferred stock
at $50 per share resulting in total proceeds of $143.8 million. Net proceeds of $138.4 million were used to fund the acquisition
of WKCF-TV in Orlando, Florida, two radio stations in Buenos Aires, Argentina, and to repay certain outstanding obligations under
the credit facility.

The 6.25% Series A cumulative convertible preferred stock has a liquidation preference of $50 per share and a par value of
$.01 per share. Each preferred share is convertible at the option of the holder into 1.28 shares of Class A common stock, subject
to certain events. Dividends are cumulative and payable quarterly in arrears on January 15, April 15, July 15, and October 15 of
each year at an annual rate of $3.125 per preferred share.

From April 15, 2001 to October 15, 2002, Emmis may redeem the preferred stock at a redemption premium equal to 104.911% of the
stated liquidation preference (plus accumulated and unpaid dividends, if any) if certain conditions are met. Beginning on October
15, 2002, and each October 15 thereafter, Emmis may redeem the preferred stock for cash at the following redemption premiums
(which are expressed as a percentage of the liquidation preference per share), plus in each case accumulated and unpaid dividends,
if any, whether or not declared to the redemption date:



                                    Year                                    Amount
                                    ----                                   --------
                                    2002                                   103.571%
                                    2003                                   102.679%
                                    2004                                   101.786%
                                    2005                                   100.893%
                                    2006 and thereafter                    100.000%

The terms of ECC's  preferred  stock  provide for a quarterly  dividend  payment of $.78125 per share on each  January 15, April 15,
July 15 and October 15.  While  Emmis has  sufficient  liquidity  to declare  and pay the  dividends  as they become due, it was not
permitted to do so for the October 15, 2001,  January 15, 2002 and April 15, 2002 payments.  Emmis'  leverage ratio under the senior
discount  notes  indenture  exceeded  8:1 for the  October,  January  and April  payments.  Its  leverage  ratio  under  the  senior
subordinated  notes  indenture  exceeded 7:1 for the January and April payments.  For each of these dividend  dates,  ECC's board of
directors  set the record  date,  but did not declare the  dividend.  Instead,  on each payment  date a  wholly-owned,  unrestricted
subsidiary of EOC made a payment of $.78125 per share to each  preferred  shareholder  of record.  This  subsidiary was permitted to
make the  payment  to the  preferred  shareholders  under the  senior  discount  notes and  senior  subordinated  notes  indentures.
Currently,  Emmis meets its leverage ratio requirements  under the senior  subordinated notes and expects to meet its leverage ratio
requirements under the senior discount notes upon application of its April 2002 equity proceeds  (discussed  above).  When permitted
to do so under the indentures,  management  expects ECC's board of directors to declare each dividend and deem the obligation to pay
each dividend to have been discharged by the subsidiary's prior payment.

4.   CREDIT FACILITY, SENIOR SUBORDINATED NOTES AND SENIOR DISCOUNT NOTES

    The credit facility,  senior  subordinated  notes and senior discount notes were comprised of the following at February 28, 2001
and 2002:

                                                                            2001                     2002
                                                                       ---------------         ---------------
Credit Facility
   Revolver                                                            $             -         $             -
   Term Note A                                                                 480,000                 398,453
   Term Note B                                                                 600,000                 553,547
8 1/8% Senior Subordinated Notes Due 2009                                      300,000                 300,000
                                                                       ---------------         ---------------
                                                                             1,380,000               1,252,000
Less:   Credit facility debt to be repaid with proceeds
        of assets held for sale                                                      -                 135,000
                                                                       ---------------         ---------------
      EOC                                                                    1,380,000               1,117,000

12 1/2% Senior Discount Notes Due 2011                                               -                 226,507
                                                                       ---------------         ---------------
      Emmis                                                            $     1,380,000         $     1,343,507
                                                                       ===============         ===============

CREDIT FACILITY

    On December 29, 2000 ECC entered into an amended and restated credit  facility for $1.4 billion  (consisting of a $320.0 million
revolver,  a $480.0 million term note A and a $600.0  million term note B), which included a provision  allowing ECC to increase the
commitment by $500.0 million under  circumstances  described in the credit facility.  In June 2001, upon completion of the Company's
reorganization  (see Note 1c),  the Company  repaid  $93.0  million of term notes and  transferred  the credit  facility to EOC. The
repayment  resulted  in the  cancellation  of a  portion  of the term  notes  and the  Company  recorded  an  extraordinary  loss of
approximately  $1.1 million,  net of taxes,  related to  unamortized  deferred debt issuance  costs for the year ended  February 28,
2002.  During the year,  EOC repaid and cancelled an additional  $35.0 million in term notes.  On November 30, 2001, EOC amended the
financial covenants of its credit facility through November 30, 2002 (the "Amendment  Period"),  which, among other things,  reduced
total  availability  under the revolver to $220.0 million and resulted in the amortization of $1.4 million of deferred debt issuance
costs into interest expense during the year ended February 28, 2002

    The revolver and term note A mature  February 28, 2009 and the term note B matures  August 31, 2009.  Net deferred debt costs of
approximately  $20.0 million  relating to the credit facility are reflected in the  accompanying  consolidated  balance sheets as of
February 28, 2002, and are amortized over the life of the credit facility as a component of interest expense.

    Prior to the existing credit facility,  EOC entered into a bridge financing arrangement in October 2000 that provided up to $1.0
billion in capacity.  The bridge  financing  was  replaced by the existing  credit  facility  and  accordingly  $3.4 million of fees
associated with the bridge financing were amortized into interest expense during the year ended February 28, 2001.

    The amended and  restated  credit  facility  provides  for letters of credit to be made  available  to EOC not to exceed  $100.0
million.  The aggregate  amount of outstanding  letters of credit and amounts borrowed under the revolver cannot exceed the revolver
commitment. At February 28, 2002, $6.6 million in letters of credit were outstanding.

    All outstanding  amounts under the credit  facility bear interest,  at the option of EOC, at a rate equal to the Eurodollar Rate
or an  alternative  base rate (as  defined  in the  credit  facility)  plus a margin.  The margin  over the  Eurodollar  Rate or the
alternative  base rate varies (ranging from 0% to 2.9% and 0.5% to 3.5% during the Amendment  Period),  depending on Emmis' ratio of
debt to operating cash flow, as defined in the agreement.  The  weighted-average  interest rate on borrowings  outstanding under the
credit facility,  including the effects of interest rate swaps  (discussed  below) was  approximately  6.3% and 7.4% at February 28,
2002 and  February  28, 2001,  respectively.  Interest is due on a calendar  quarter  basis under the  alternative  base rate and at
least every three months under the  Eurodollar  Rate. The credit  facility  requires EOC to have fixed interest rates for a two year
period on at least 50% of its total  outstanding  debt, as defined  (including the senior  subordinated  debt).  After the first two
years,  this ratio of fixed to floating rate debt must be maintained if EOC's total leverage ratio, as defined,  is greater than 6:1
at any quarter end. The notional  amount of interest rate  protection  agreements at February 28, 2002 totaled $350.0  million.  The
interest rate swap agreements,  which expire at various dates beginning February 3, 2003 to February 8, 2004,  effectively establish
interest rates on the credit  facility's  underlying  base rate  approximating  a weighted  average rate of 4.94% on the three-month
LIBOR interest rate.

    As indicated in footnote  1u.,  Emmis  accounts for interest  rate swap  arrangements  under SFAS No. 133 as amended by SFAS No.
138. The fair market value of these swaps at February  28,  2002,  was a liability of $8,437 which is reflected in the  accompanying
consolidated  balance  sheets,  with an associated  income tax asset of $2,953.  As Emmis has  designated  these  interest rate swap
agreements as cash flow hedges and the swaps were highly  effective  during the year ended  February 28, 2002, the net liability was
recorded  as a  component  of  comprehensive  income and the  ineffectiveness  was not  material.  Interest  paid  under  these swap
arrangements was $0 and $3,648 for the years ended February 28, 2001 and 2002, respectively.

    The aggregate  amount of term notes A and B begin amortizing in December 2003. The annual  amortization and reduction  schedules
for debt outstanding as of February 28, 2002, are as follows:

                                        SCHEDULED AMORTIZATION/REDUCTION OF CREDIT FACILITY

      Year Ended            Term Loan A           Term Loan B             Total         Adjusted Total
   February 28 (29),         Amortization        Amortization         Amortization      Amortization (1)
- --------------------     ----------------    ----------------     ----------------     -----------------
         2003                $         -         $         -          $         -          $         -
         2004                     16,934               1,384               18,318               10,084
         2005                     69,729               5,535               75,265               41,359
         2006                     73,714               5,535               79,249               43,406
         2007                     75,706               5,535               81,242               44,430
         2008                     79,691               5,535               85,226               46,478
         2009                     82,679               5,535               88,214               48,014
         2010                          -             524,486              524,486              523,129
                             -----------         -----------          -----------      ---------------
        Total                $   398,453         $   553,547          $   952,000          $   756,900
                             ===========         ===========          ===========      ===============

                (1) Adjusted to give effect to the repayment of $60.1 million of credit facility debt in April
                    2002 with 50% of net equity offering proceeds and the repayment of $135.0 million of credit
                    facility debt in May 2002 with net proceeds from asset sales.

    Proceeds from raising additional equity, issuing additional  subordinated debt, or from asset sales, as well as excess cash flow
beginning in February 29, 2004, may be required to repay amounts  outstanding under the credit facility.  These mandatory  repayment
provisions  may apply  depending  on EOC's  total  leverage  ratio,  as defined  under the credit  facility.  Additionally,  EOC may
reborrow amounts paid in accordance with these provisions under certain circumstances.

The credit facility contains various financial and operating covenants and other restrictions with which EOC must comply,
including, among others, restrictions on additional indebtedness, incurrence of liens, engaging in businesses other than its
primary business, paying cash dividends on common stock, redeeming or repurchasing capital stock of ECC, acquisitions and asset
sales, as well as requirements to maintain certain financial ratios. After giving effect to the November 2001 amendment, EOC was
in compliance with these covenants at February 28, 2002. The credit facility provides that an event of default will occur if
there is a change of control of ECC, as defined. A change of control includes, but is not limited to, Jeffrey H. Smulyan or any
beneficial holder ceasing to own at least 35% of the general voting rights of the capital stock of ECC. Substantially all of
Emmis' assets, including the stock of Emmis' wholly-owned subsidiaries, are pledged to secure the credit facility.

SENIOR SUBORDINATED NOTES

On February 12, 1999, ECC issued $300 million of 8 1/8% senior subordinated notes. The senior subordinated notes were sold at
100% of the face amount. In March 1999, EOC filed an Exchange Offer Registration Statement with the SEC to exchange the senior
subordinated notes for new series B notes registered under the Securities Act. The terms of the series B notes are identical to
the terms of the senior subordinated notes. In June 2001, ECC transferred the senior discount notes to EOC as part of the
company's reorganization (see Note 1c).

On or after March 15, 2004 and until March 14, 2007, the notes may be redeemed at the option of EOC in whole or in part at
prices ranging from 104.063% to 101.354% plus accrued and unpaid interest. On or after March 15, 2007, the notes may be redeemed
at 100% plus accrued and unpaid interest. Upon a change of control (as defined), EOC is required to make an offer to purchase the
notes then outstanding at a purchase price equal to 101% plus accrued and unpaid interest. Interest on the notes is payable
semi-annually. The notes have no sinking fund requirements and are due in full on March 15, 2009.

The notes are guaranteed by certain subsidiaries of EOC and expressly subordinated in right of payment to all existing and
future senior indebtedness (as defined) of EOC. The notes will rank pari passu with any future senior subordinated indebtedness
(as defined) and senior to all subordinated indebtedness (as defined) of EOC.

The indenture relating to the notes contains covenants with respect to EOC which include limitations of indebtedness,
restricted payments (including preferred stock dividend payments, see Note 3), transactions with affiliates, issuance and sale of
capital stock of restricted subsidiaries, sale/leaseback transactions and mergers, consolidations or sales of substantially all of
EOC's assets. EOC was in compliance with these covenants at February 28, 2002.

SENIOR DISCOUNT NOTES

On March 27, 2001, Emmis received $202.6 million of proceeds from the issuance of senior discount notes due 2011, less
approximately $12.0 million of debt issuance costs. The notes, for which ECC is the obligor, accrete interest at a rate of 12.5%
per year, compounded semi-annually to an aggregate principal amount of $370.0 million on March 15, 2006. Commencing on September
15, 2006, interest is payable in cash on each March 15 and September 15, with the aggregate principal amount of $370.0 million due
on March 15, 2011. The notes have no sinking fund requirement. A portion of the net proceeds was used to fund the acquisition of
three radio stations in Phoenix, Arizona and the remaining net proceeds ($93.0 million) were placed in escrow. In June 2001, upon
completion of the Company's reorganization (see Note 1c), the proceeds held in escrow were released and used to reduce outstanding
borrowings under the credit facility.

In June 2001, ECC filed an Exchange Offer Registration Statement with the SEC to exchange the senior discount notes for new
senior discount notes registered under the Securities Act. The terms of the new senior discount notes are identical to the terms
of the senior discount notes they replaced.

Prior to March 15, 2004, the Company may, at its option, use the net cash proceeds of one or more Public Equity Offerings (as
defined), to redeem up to 35% of the aggregate principal amount of the notes at a redemption price equal to 112.5% plus accrued
and unpaid interest, provided that at least $240.5 million of the aggregate principal amount at maturity of the notes originally
issued remains outstanding after such redemption. Additionally, any time prior to March 15, 2006, the Company may redeem all or
part of the notes at a redemption price equal to 100% of the accreted value (as defined) of the notes plus the applicable premium
(as defined) as of, and liquidating damages (as defined), if any, to the date of redemption. On or after March 15, 2006 and until
March 14, 2009, the notes may be redeemed at the option of the Company in whole or in part at prices ranging from 106.25% to
102.083% plus accrued and unpaid interest. On or after March 15, 2009, the notes may be redeemed at 100% plus accrued and unpaid
interest. Upon a change of control (as defined), the Company is required to make an offer to purchase the notes then

outstanding. Prior to March 15, 2006, the purchase price will be 101% of the accreted value of the notes. On or after March 15,
2006, the purchase price will be 101% of the outstanding principal amount of the notes plus accrued and unpaid interest.

The notes are unsecured obligations of ECC and will rank pari passu with all future senior indebtedness (as defined) and senior
in right of payment to future subordinated indebtedness (as defined). The notes are subordinated to all indebtedness and
liabilities (as defined) of ECC's subsidiaries.

The indenture relating to the notes contains covenants with respect to the Company which include limitations of indebtedness,
restricted payments (including preferred stock dividend payments, see Note 3), transactions with affiliates, issuance and sale of
capital stock of restricted subsidiaries, and mergers, consolidations or sales of substantially all of the Company's assets. The
Company was in compliance with these covenants at February 28, 2002.

5. OTHER LONG-TERM DEBT

Other long-term debt was comprised of the following at February 28, 2001 and 2002:

2001 2002
--------------- ---------------
Hungary:
License Obligation $ 10,605 $ 11,285
Bonds Payable 2,207 2,261
Notes Payable 1,872 659
Other 3,187 677
--------------- ---------------
Total Other Long-Term Debt 17,871 14,882
Less: Current Maturities 4,187 7,933
--------------- ---------------
Other Long-Term Debt, Net of
Current Maturities $ 13,684 $ 6,949
=============== ===============

The License Obligation is payable to the Hungarian government in Hungarian forints, by Emmis' Hungarian subsidiary in four
equal annual installments that commenced in November 2000. The License Obligation of $11.3 million as of February 28, 2002, is
reflected net of an unamortized discount of $0.2 million. The obligation is non-interest bearing; however, in accordance with the
license purchase agreement, a Hungarian cost of living adjustment is calculated annually and is payable, concurrent with the
principal payments, on the outstanding obligation. The cost of living adjustment is estimated each reporting period and is
included in interest expense. Prevailing market interest rates in Hungary exceed inflation by approximately 3%. Accordingly, the
License Obligation has been discounted at an imputed interest rate of approximately 3% to reflect the obligation at its fair
value. Slager is currently trying to renegotiate the terms of the license payments. See Note 9d for further discussion.

The Hungarian Bonds and Notes Payable are payable by Emmis' Hungarian subsidiary to the minority shareholders of the
subsidiary. The Bonds, payable in Hungarian forints, are due on maturity at November 2004 and bear interest at the Hungarian
State Bill rate plus 3% (approximately 13.7% and 17.5% at February 28, 2001 and 2002, respectively). Interest is payable
semi-annually. The Notes Payable and accrued interest, payable in U.S. dollars, are due December 31, 2002 and bear interest at the
prime rate plus 2%.

6. ACQUISITIONS, DISPOSITONS AND INVESTMENTS

allocated to property and equipment and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible
assets in the accompanying consolidated balance sheets and are being amortized over 40 years.



7.   PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

    Unaudited  pro forma  summary  information  is  presented  below for the years ended  February  28, 2001 and 2002,  assuming the
following  events all had occurred on the first day of the pro forma periods  presented  below:  (a) the acquisition of (i) KKLT-FM,
KTAR-AM and KMVP-AM in March 2001, (ii) KALC-FM in January 2001, (iii) KZLA-FM,  eight  network-affiliated  television stations from
Lee  Enterprises,  Inc.  and  KPNT-FM,  KXOK-FM AND KIHT-FM in October  2000,  (iv)  KKFR-FM  and  KXPK-FM in August  2000,  (b) the
disposition  of (i) WTLC-AM in April 2001 and (ii) WKKX-FM in October 2000;  (c) the issuance of the senior  discount notes in March
2001 and subsequent pay-down of senior debt and (d) the refinancing of the credit facility in December 2000.

    Preparation of the pro forma summary  information was based upon  assumptions  deemed  appropriate by the Company's  management.
The pro forma summary  information  presented below is not  necessarily  indicative of the results that actually would have occurred
if the  transactions  indicated above had been  consummated at the beginning of the periods  presented,  and is not intended to be a
projection of future results.

         EMMIS

                                                                                 Pro Forma
                                                          ------------------------------------------------------
                                                                 2001                                2002
                                                          -------------------                -------------------


          Net revenues                                    $           571,956                $           533,780
                                                          ===================                ===================

          Broadcast/publishing cash flow                  $           211,578                $           185,665
                                                          ===================                ===================

          Net loss before extraordinary item              $            (9,896) (A)           $           (62,973)
                                                          ===================                ===================

          Net loss available to common
           shareholders before extraordinary
           loss                                           $           (18,880) (A)           $           (71,957)
                                                          ===================                ===================

          Basic and diluted net loss available
           to common shareholders before
           extraordinary loss                             $             (0.40) (A)          $              (1.52)
                                                          ===================               ====================

          Weighted average shares outstanding:
           Basic                                                       46,869                             47,334
           Diluted                                                     46,869                             47,334

         (A)  Includes approximately $39 million of nonrecurring pre-tax other income.


         EOC

    Unaudited pro forma summary information is presented below for the twelve months ended February 28, 2001 and 2002, using the
same assumptions as those described in the Emmis pro formas, except that interest expense on ECC's senior discount notes is not
reflected.

    Preparation of the pro forma summary  information was based upon  assumptions  deemed  appropriate by the Company's  management.
The pro forma summary  information  presented below is not  necessarily  indicative of the results that actually would have occurred
if the  transactions  indicated above had been  consummated at the beginning of the periods  presented,  and is not intended to be a
projection of future results.



                                                                                 Pro Forma
                                                          ------------------------------------------------------
                                                                 2001                                2002
                                                          -------------------                -------------------


          Net revenues                                    $           571,956                $           533,780
                                                          ===================                ===================

          Broadcast/publishing cash flow                  $           211,578                $           185,665
                                                          ===================                ===================

          Net income (loss) before extraordinary item     $             7,305 (A)            $           (45,772)
                                                          ===================                ===================

         (A)  Includes approximately $39 million of nonrecurring pre-tax other income.

8.   EMPLOYEE BENEFIT PLANS

    a.   1994 Equity Incentive Plan

    At the 1994 annual  meeting,  the  shareholders  of Emmis  approved  the 1994 Equity  Incentive  Plan.  Under this Plan,  awards
equivalent to 2,000,000 shares of common stock may be granted.  The awards,  which have certain  restrictions,  may be for incentive
stock options,  nonqualified  stock options,  shares of restricted stock, stock  appreciation  rights,  performance units or limited
stock  appreciation  rights.  Under this Plan,  all awards are granted with an exercise  price equal to the fair market value of the
stock except for shares of restricted  stock which may be granted with a purchase price at amounts  greater than or equal to the par
value of the  underlying  stock.  No more than  1,000,000  shares of Class B common stock are available for grant and issuance under
this Plan.  The stock  options under this Plan are  generally  not  exercisable  for one year after the date of grant and expire not
more than 10 years from the date of grant.  Under this Plan,  awards  equivalent to 223,000 shares of common stock are available for
grant at February 28, 2002. Certain stock options awarded remain outstanding as of February 28, 2001 and 2002.

b.       1995 Equity Incentive Plan

    At the 1995 annual  meeting,  the  shareholders  of Emmis  approved  the 1995 Equity  Incentive  Plan.  Under this Plan,  awards
equivalent  to  1,300,000  shares of common  stock may be granted  pursuant to  employment  agreements.  Under the Plan,  no further
awards are available for grant at February 28, 2002.  Certain stock options  awarded remain  outstanding as of February 28, 2001 and
2002.

    c.   Non-Employee Director Stock Option Plan

    At the 1995 annual meeting, the shareholders of Emmis approved a Non-Employee  Director Stock Option Plan. Under this Plan, each
non-employee  director,  as of January 24, 1995,  was granted an option to acquire  10,000  shares of the  Company's  Class A common
stock.  Thereafter,  upon  election  or  appointment  of  any  non-employee  director  or  upon a  continuing  director  becoming  a
non-employee  director,  such  individual  will also become  eligible to receive a comparable  option.  In addition,  an  equivalent
option will be  automatically  granted on an annual  basis to each  non-employee  director.  All awards are granted with an exercise
price equal to the fair market  value of the stock on the date of grant.  Under this Plan,  awards  equivalent  to 20,000  shares of
Class A common stock are  available  for grant at February  28,  2002.  Certain  stock  options  awarded  remain  outstanding  as of
February 28, 2001 and 2002.

    d.   1997 Equity Incentive Plan

    At the 1997 annual  meeting,  the  shareholders  of Emmis  approved  the 1997 Equity  Incentive  Plan.  Under this plan,  awards
equivalent to 2,000,000 shares of common stock may be granted.  The awards,  which have certain  restrictions,  may be for incentive
stock options,  nonqualified stock options,  shares of restricted stock, stock appreciation  rights or performance units. Under this
Plan,  all awards are granted  with a purchase  price equal to the fair market  value of the stock  except for shares of  restricted
stock which may be granted with an exercise  price at amounts  greater than or equal to the par value of the  underlying  stock.  No
more than  1,000,000  shares of Class B common stock are available for grant and issuance  under this Plan.  The stock options under
this Plan are  generally  not  exercisable  for one year  after the date of grant and expire not more than 10 years from the date of
grant.  Under this Plan,  awards  equivalent to 81,000 shares of common stock are available for grant at February 28, 2002.  Certain
stock options and restricted stock awarded remain outstanding as of February 28, 2001 and 2002.

e. 1999 Equity Incentive Plan

At the 1999 annual meeting, the shareholders of Emmis approved the 1999 Equity Incentive Plan. Under this plan, awards
equivalent to 3,000,000 shares of common stock may be granted. The awards, which have certain restrictions, may be for incentive
stock options, nonqualified stock options, shares of restricted stock, stock appreciation rights or performance units. Under this
Plan, all awards are granted with a purchase price equal to the fair market value of the stock except for shares of restricted
stock which may be granted with an exercise price at amounts greater than or equal to the par value of the underlying stock. No
more than 1,000,000 shares of Class B common stock are available for grant and issuance under this Plan. The stock options under
this Plan are generally not exercisable for one year after the date of grant and expire not more than 10 years from the date of
grant. Under this Plan, awards equivalent to 201,000 shares of common stock are available for grant at February 28, 2002. Certain
stock options and restricted stock awarded remain outstanding as of February 28, 2001 and 2002.

f. 2001 Equity Incentive Plan

At the 2001 annual meeting, the shareholders of Emmis approved the 2001 Equity Incentive Plan. Under this plan, awards
equivalent to 3,000,000 shares of common stock may be granted. The awards, which have certain restrictions, may be for incentive
stock options, nonqualified stock options, shares of restricted stock, stock appreciation rights or performance units. Under this
Plan, all awards are granted with a purchase price equal to the fair market value of the stock except for shares of restricted
stock which may be granted with an exercise price, if any, at amounts greater than or equal to the par value of the underlying
stock. No more than 1,000,000 shares of Class B common stock are available for grant and issuance under this Plan. The stock
options under this Plan generally expire not more than 10 years from the date of grant. Under this Plan, awards equivalent to
2,733,000 shares of common stock are available for grant at February 28, 2002. Certain stock awards remain outstanding as of
February 28, 2002.

g. Other Disclosures Related to Stock Option and Equity Incentive Plans

The Company accounts for its Stock Option Plans in accordance with APB Opinion No. 25 ("APB 25"), under which compensation
expense is recognized only to the extent the exercise price of the option is less than the fair market value of the share of stock
at the date of grant. An alternative method would be to follow Statement of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation" (SFAS 123), which considers the stock options as compensation expense to the Company, based on their
fair value at the date of grant. The Company has elected to continue to use the APB 25 method for accounting, but has adopted the
disclosure requirements of SFAS 123. Accordingly, compensation expense reflected in non-cash compensation in the consolidated
statements of operations related to the plans summarized above was $7,357, $5,400 and $9,095 for the years ended February 2000,
2001 and 2002, respectively. Had compensation expense related to these plans been determined based on fair value at date of
grant, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated below:

Year Ended February 28 (29),
------------------------------------------------------------------
2000 2001 2002
------------------ ----------------- -----------------
Net Income Available to Common Shareholders:
As Reported $ (3,177) $ 4,752 $ (73,092)
Pro Forma $ (8,741) $ 113 $ (85,760)

Basic EPS:
As Reported $ (.09) $ .10 $ (1.54)
Pro Forma $ (.24) $ .00 $ (1.81)

Diluted
As Reported $ (.09) $ .10 $ (1.54)
Pro Forma $ (.24) $ .00 $ (1.81)



    Because the fair value method of accounting  has not been applied to options  granted prior to March 1, 1995,  the resulting pro
forma  compensation  cost may not be  representative  of that to be expected in future years.  The fair value of each option granted
is  estimated  on the date of grant  using  the  Black-Scholes  option  pricing  model  utilizing  the  following  weighted  average
assumptions:

                                                                           Year Ended February 28 (29),
                                                       ------------------------------------------------------------------
                                                               2000                   2001                    2002
                                                       ------------------       -----------------       -----------------
       Risk-Free Interest Rate:                                 6.12%                 4.54%                   5.41%
       Expected Life (Years):                                   5.2                    6.4                     8.3
       Expected Volatility:                                   44.31%                 56.79%                  57.67%

    Expected dividend yields were zero for fiscal 2000, 2001 and 2002.

    A summary of the status of options and restricted stock at February 2000, 2001 and 2002 and the related activity for the year,
including the adoption of the 2001 Equity Incentive Plan, is as follows:

                                                       2000                           2001                           2002
                                           ----------------------------   ---------------------------    -------------------------
                                             Number of        Weighted      Number of       Weighted       Number of     Weighted
                                             Options/          Average      Options/         Average       Options/       Average
                                            Restricted        Exercise     Restricted       Exercise      Restricted     Exercise
                                               Stock            Price         Stock           Price          Stock         Price
                                           -----------      -----------   -----------     -----------    -----------   -----------
Outstanding at
  Beginning of Year                         3,485,386           14.63      4,559,168          18.07       4,144,793        23.14
Granted                                     2,012,000           23.39        814,629          34.66       1,089,369        29.01
Exercised                                    (922,298)          16.20     (1,092,688)          9.78        (250,420)       17.56
Lapsing of restrictions on stock awards             -               -       (101,805)             -        (190,162)           -
Expired and other                             (15,920)          18.57        (34,511)         20.32         (40,067)       23.68
Outstanding at
  End of Year                               4,559,168           18.07      4,144,793          23.14       4,753,513        25.39
Exercisable at
  End of Year                               2,537,168           13.92      2,008,680          19.26       2,464,827        21.10
Total Available for Grant                   2,530,325                      1,792,400                      3,257,944

    During the years ended February 2000,  2001 and 2002, all options were granted with an exercise price equal to fair market value
of the stock on the date of grant.  During fiscal 2000,  2001 and 2002, the Company  entered into  employment  agreements  providing
for grants of  135,600,  9,200 and 26,190  shares,  respectively,  at a weighted  average  fair value of $22.70,  $35.51 and $27.57,
respectively.

    The following information relates to options outstanding and exercisable at February 28, 2002:

                                        Options Outstanding                                 Options Exercisable
                ------------------------------------------------------------------   ----------------------------
                                                       Weighted        Weighted                          Weighted
                     Range of                           Average         Average                           Average
                     Exercise          Number of       Exercise        Remaining         Number of       Exercise
                      Prices            Options          Price       Contract Life        Options          Price
                ----------------    --------------  --------------  --------------    --------------  -----------
                     $3.80-$7.60          19,600         $ 6.90       1.0 years            19,600         $ 6.90
                      7.60-11.40         208,760           7.78       1.0 years           208,760           7.78
                     11.40-15.20          26,564          14.44       1.6 years            26,564          14.44
                     15.20-19.00         511,930          16.56       1.3 years           511,930          16.56
                     19.00-22.80       1,055,751          21.35       2.3 years         1,055,084          21.35
                     22.80-26.60         177,328          24.63       2.9 years           177,328          24.63
                     26.60-30.40       2,076,722          28.60       8.2 years           240,000          28.02
                     30.40-34.20               -               -         - years                -              -
                     34.20-38.00         676,858          35.40       8.0 years           255,561          35.38

    In addition to the benefit plans noted above, Emmis has the following employee benefit plans:

    h.   Profit Sharing Plan

    In  December  1986,  Emmis  adopted a profit  sharing  plan that  covers all  nonunion  employees  with six  months of  service.
Contributions  to the plan are at the  discretion  of the Emmis Board of Directors and can be made in the form of newly issued Emmis
common  stock or cash.  Historically,  all  contributions  to the plan have been in the form of Emmis  common  stock.  Contributions
reflected in non-cash  compensation  in the  consolidated  statements of operations for the years ended February 2000, 2001 and 2002
were $1,250, $1,250, and $0 respectively.

i. 401(k) Retirement Savings Plan

Emmis sponsors two Section 401(k) retirement savings plans. One covers substantially all nonunion employees age 18 years and
older who have at least six months of service and the other covers substantially all union employees that meet the same
qualifications. Employees may make pretax contributions to the plans up to 15% of their compensation, not to exceed the annual
limit prescribed by the Internal Revenue Service. Emmis may make discretionary matching contributions to the plans in the form of
shares of the Company's Class A common stock. Effective March 1, 1996, Emmis began to match 50% of employee contributions up to $2
thousand. Emmis' contributions to the plans totaled $807, $1,337 and $1,684 for the years ended February 2000, 2001 and 2002,
respectively.

j. Defined Contribution Health and Retirement Plan

Emmis contributes to a multi-employer defined contribution health and retirement plan for employees who are members of a
certain labor union. Amounts charged to expense related to the multi-employer plan were approximately $345, $441, and $465 for the
years ended February 2000, 2001 and 2002, respectively.

k. Employee Stock Purchase Plan

Effective March 1, 1995, the Company implemented an employee stock purchase plan which permits employees to purchase, via
payroll deduction, shares of the Company's Class A common stock, at fair market value, up to an amount not to exceed 10% of an
employee's annual gross pay.

Effective March 1, 2000, the Company replaced its previous employee stock purchase plan with a new plan that allows employees
to purchase shares of the Company's Class A common stock at the lesser of 90% of the fair value of such shares at the beginning or
end of each semi-annual offering period. Purchases are subject to a maximum limitation of $22.5 annually per employee. The
Company will not record compensation expense pursuant to this plan as it is designed to meet the requirements of Section 423(b) of
the Internal Revenue Code.

9. OTHER COMMITMENTS AND CONTINGENCIES

a. TV Program Rights Payable

The Company has obligations to various program syndicators and distributors in accordance with current contracts for the rights
to broadcast programs. Future payments scheduled under contracts for programs available as of February 28, 2002, are as follows:

2003 $ 27,507
2004 12,852
2005 10,458
2006 7,964
2007 3,091
Thereafter 6,186
-------------------
68,058
Less: Current Portion 27,507
-------------------
TV Program Rights Payable, Net
of Current Portion $ 40,551
===================

In addition, the Company has entered into commitments for future program rights (programs not available as of February 28,
2002). Future payments scheduled under these commitments are summarized as follows: Year ended February 2003 - $5,240, 2004 -
$11,224, 2005 - $8,607, 2006 - $3,789, 2007 - $1,501 and thereafter - $1,638.

b. Radio Broadcast Agreements

The Company has entered into agreements to broadcast certain syndicated programs and sporting events. Future payments scheduled
under these agreements are summarized as follows: Year ended February 2003 - $2,281, 2004 - $1,036, 2005 - $981, 2006 - $240, 2007
- - $240 and thereafter - $320. Expense related to these broadcast rights totaled $1,780, $2,376, and $2,522 for the years ended
February 2000, 2001 and 2002, respectively.

In connection with reformatting one of its radio stations, the Company terminated a syndicated program agreement in fiscal
2000. The contract required continued payments in the event of termination, and these payments are included in the future
payments disclosed above. The discounted present value of these payments of $896 is reflected in the accompanying consolidated
statements of operations as restructuring fees.

c. Operating Leases

The Company leases certain office space, tower space, equipment and automobiles under operating leases expiring at various
dates through August 2019. Some of the lease agreements contain renewal options and annual rental escalation clauses (generally
tied to the Consumer Price Index or increases in the lessor's operating costs), as well as provisions for payment of utilities and
maintenance costs.

Future minimum rental payments (exclusive of future escalation costs) required by non-cancelable operating leases, with an
initial term of one year or more as of February 28, 2002, are as follows:

2003 $ 7,959
2004 6,472
2005 5,676
2006 5,240
2007 4,401
Thereafter 20,289
-----------------
$ 50,037
=================

Minimum payments have not been reduced by minimum sublease rentals of approximately $124 due in the future under non-cancelable
subleases.

Rent expense totaled $4,404, $6,457, and $7,995 for the years ended February 2000, 2001 and 2002, respectively. Rent expense
for the years ended February 2000, 2001 and 2002 is net of sublease income of approximately $148, $86 and $0, respectively.

d. Employment Agreements

The Company enters into employment agreements with certain officers and employees. These agreements generally specify base
salary, along with bonuses and grants of stock and/or stock options based on certain criteria. Future minimum cash payments
scheduled under terms of these agreements are summarized as follows: Year ended February 2003 - $23,829, 2004 - $13,800, 2005 -
$3,828, 2006 - $961, 2007 - $620 and thereafter - $2,516.

In addition to future cash payments, at February 28, 2002, 66,800 shares of common stock and options to purchase 1,091,500
shares of common stock have been granted in connection with current employment agreements. Additionally, up to 21,000 shares and
options to purchase up to 148,500 shares of common stock may be granted (or have been granted subject to forfeiture) under the
agreements in the next two years.

e. Litigation

The Company currently, and from time to time, is involved in litigation incidental to the conduct of its business, but the
Company is not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material
adverse effect on the financial position or results of operations of the Company. However, instead of making a required license
payment to the Hungarian government in November 2001, our 59.5% owned national radio station in Hungary requested a modification
of the broadcast contract and ultimately filed suit in arbitration court seeking reformation of the contract and requesting that
the payments be reduced. The Hungarian government then issued an order revoking our station's broadcast license for non-payment
of the license fee, and our station appealed the order in the Hungarian ordinary court. The Hungarian government has also filed
an action seeking to liquidate our Hungarian broadcast company. Our station is vigorously prosecuting the actions in the
arbitration court and ordinary court and is vigorously opposing the action seeking liquidation. However, we cannot predict the
outcome of these actions. We do not plan to continue to operate the station under the present fee arrangement. We do not expect
an adverse material financial impact to Emmis or EOC if the station does not continue to operate.



10.  INCOME TAXES

    The provision (benefit) for income taxes for the years ended February 2000, 2001 and 2002, consisted of the following:

                  EMMIS:

                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------
                         Current:
                           Federal                                   $       105    $     1,540    $         -
                           State                                             100            300              -
                                                                     -----------    -----------    -----------
                                                                             205          1,840              -
                                                                     -----------    -----------    -----------
                         Deferred:
                           Federal                                         6,010         14,360        (25,189)
                           State                                             660          1,450           (434)
                                                                     -----------    -----------    -----------
                                                                           6,670         15,810        (25,623)
                                                                     -----------    -----------    -----------
                         Provision (benefit) for
                           income taxes                                    6,875         17,650        (25,623)

                         Tax benefit of extraordinary
                           item                                            1,250              -            664
                                                                     -----------    -----------    -----------

                         Net provision (benefit) for income taxes    $     5,625    $    17,650    $   (26,287)
                                                                     ===========    ===========    ===========

                  EOC:

                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------
                         Current:
                           Federal                                   $       105    $     1,540    $         -
                           State                                             100            300              -
                                                                     -----------    -----------    -----------
                                                                             205          1,840              -
                                                                     -----------    -----------    -----------
                         Deferred:
                           Federal                                         6,010         14,360        (17,399)
                           State                                             660          1,450           (434)
                                                                     -----------    -----------    -----------
                                                                           6,670         15,810        (17,833)
                                                                     -----------    -----------    -----------
                         Provision (benefit) for
                           income taxes                                    6,875         17,650        (17,833)

                         Tax benefit of extraordinary
                           item                                            1,250              -            664
                                                                     -----------    -----------    -----------

                         Net provision (benefit) for income taxes    $     5,625    $    17,650    $   (18,497)
                                                                     ===========    ===========    ===========


    The provision  (benefit) for income taxes for the years ended  February 2000,  2001 and 2002,  differs from that computed at the
Federal statutory corporate tax rate as follows:

                  EMMIS:
                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------

                         Computed income taxes at 35%                $     3,102    $    10,985    $   (31,026)
                         State income tax                                    494          1,138           (282)
                         Nondeductible foreign losses                        893          1,778          1,084
                         Nondeductible goodwill                            1,394          1,537          2,637
                         Nondeductible interest                                -              -            616
                         Other                                               992          2,212          1,348
                                                                     -----------    -----------    -----------
                         Provision (benefit) for income taxes        $     6,875    $    17,650    $   (25,623)
                                                                     ===========    ===========    ===========



                  EOC:
                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------

                         Computed income taxes at 35%                $     3,102    $    10,985    $   (22,620)
                         State income tax                                    494          1,138           (282)
                         Nondeductible foreign losses                        893          1,778          1,084
                         Nondeductible goodwill                            1,394          1,537          2,637
                         Nondeductible interest                                -              -              -
                         Other                                               992          2,212          1,348
                                                                     -----------    -----------    -----------
                         Provision (benefit) for income taxes        $     6,875    $    17,650    $   (17,833)
                                                                     ===========    ===========    ===========



    The components of deferred tax assets and deferred tax liabilities at February 2001 and 2002 are as follows:

                  EMMIS:
                                                                                      2001              2002
                                                                                  -------------    -------------
                         Deferred tax assets:
                           Net operating loss carryforwards                       $       2,183    $       44,443
                           Compensation relating to stock options                         3,373             5,601
                           Non-cash interest expense                                          -             8,412
                           Impairment loss                                                    -             3,444
                           Other                                                          5,257             8,731
                           Valuation allowance                                           (1,506)           (2,017)
                                                                                  -------------    --------------
                             Total deferred tax assets                                    9,307    $       68,614
                                                                                  -------------    --------------
                         Deferred tax liabilities
                           Intangible assets                                           (136,526)         (167,130)
                           Other                                                         (8,249)           (2,682)
                                                                                  -------------    --------------
                             Total deferred tax liabilities                            (144,775)         (169,812)
                                                                                  -------------    --------------
                             Net deferred tax liability                           $    (135,468)   $     (101,198)
                                                                                  =============    ==============


                  EOC:
                                                                                      2001              2002
                                                                                  -------------    -------------
                         Deferred tax assets:
                           Net operating loss carryforwards                       $       2,183    $       45,065
                           Compensation relating to stock options                         3,373             5,601
                           Non-cash interest expense                                          -                 -
                           Impairment loss                                                    -             3,444
                           Other                                                          5,257             8,731
                           Valuation allowance                                           (1,506)           (2,017)
                                                                                  -------------    --------------
                             Total deferred tax assets                                    9,307            60,824
                                                                                  -------------    --------------
                         Deferred tax liabilities
                           Intangible assets                                           (136,526)         (167,130)
                           Other                                                         (8,249)           (2,682)
                                                                                  -------------    --------------
                             Total deferred tax liabilities                            (144,775)         (169,812)
                                                                                  -------------    --------------
                             Net deferred tax liability                           $    (135,468)   $     (108,988)
                                                                                  =============    ==============


    A valuation  allowance  is provided  when it is more likely  than not that some  portion of the  deferred  tax asset will not be
realized.  A valuation  allowance has been  provided for the net  operating  loss  carryforwards  related to the  Company's  foreign
subsidiaries  since these  subsidiaries  have not yet generated  taxable  income  against  which the net  operating  losses could be
utilized.  With respect to Emmis,  the expiration of net operating loss  carryforwards,  excluding those at the Company's  Hungarian
subsidiary,  which do not expire,  approximate  $1,177 in 2005,  $758 in 2006 and  $103,686  thereafter.  With  respect to EOC,  the
expiration  of net  operating  loss  carryforwards,  excluding  those at the Company's  Hungarian  subsidiary,  which do not expire,
approximate $1,177 in 2005, $758 in 2006 and $104,672 thereafter.



11.  SEGMENT INFORMATION

    The Company's  operations  are aligned into four business  segments:  Radio,  Television,  Publishing,  and  Interactive.  These
business  segments are  consistent  with the  Company's  management  of these  businesses  and its  financial  reporting  structure.
Corporate represents expense not allocated to reportable segments.

    The Company's  segments operate  primarily in the United States with one radio station located in Hungary and two radio stations
located in Argentina.  Total  revenues of the radio station in Hungary for the years ended  February  2000,  2001 and 2002 were $7.4
million,  $6.2 million and $7.2 million,  respectively.  This station's long lived assets as of February 28, 2001 and 2002 were $9.6
million and $6.9 million,  respectively.  Total  revenues of the radio  stations in Argentina for the years ended  February 28, 2001
and 2002 were $8.4 million and $9.5 million,  respectively.  Total  revenues for these stations were not material for the year ended
February 29,  2000.  Long lived assets for these  stations as of February  28, 2001 and 2002 were $18.4  million and $10.0  million,
respectively.

    The Company evaluates  performance of its operating  entities based on broadcast cash flow (BCF) and publishing cash flow (PCF).
Management  believes  that BCF and PCF are useful  because they provide a meaningful  comparison  of operating  performance  between
companies in the industry and serve as an  indicator  of the market  value of a group of stations or  publishing  entities.  BCF and
PCF are generally  recognized by the broadcast and publishing  industries as a measure of  performance  and are used by analysts who
report on the  performance  of  broadcasting  and  publishing  groups.  BCF and PCF do not take into  account  Emmis'  debt  service
requirements and other  commitments and,  accordingly,  BCF and PCF are not necessarily  indicative of amounts that may be available
for dividends, reinvestment in Emmis' business or other discretionary uses.

         BCF and PCF are not measures of liquidity or of performance in accordance with  accounting  principles  generally  accepted
in the United  States,  and should be viewed as a supplement  to, and not a substitute  for, our results of operations  presented on
the basis of accounting  principles  generally accepted in the United States.  Moreover,  BCF and PCF are not standardized  measures
and may be  calculated  in a number  of ways.  Emmis  defines  BCF and PCF as  revenues  net of  agency  commissions  and  operating
expenses.  The primary source of broadcast  advertising revenues is the sale of advertising time to local and national  advertisers.
Publishing  entities derive revenue from  subscriptions and sale of print advertising  inventory.  Interactive  derives revenue from
the sale of  advertisements  on the websites of the  Company's  stations.  The most  significant  broadcast  operating  expenses are
employee  salaries  and  commissions,  costs  associated  with  programming,  advertising  and  promotion,  and station  general and
administrative  costs.  Significant  publishing  operating  expenses are employee  salaries and  commissions,  costs associated with
producing a magazine,  and general and administrative  costs.  Significant  interactive operating expenses are employee salaries and
general and administrative costs.

YEAR ENDED FEBRUARY 28, 2002              Radio        Television     Publishing     Interactive     Corporate     Consolidated
                                      -------------  -------------   -------------  -------------  -------------   -------------
Net revenues                          $     256,619  $     205,460   $      70,880  $         821  $           -   $     533,780
Operating expenses                          142,872        139,256          64,437          1,550              -         348,115
                                      -------------  -------------   -------------  -------------  -------------   -------------
Broadcast/publishing cash flow              113,747         66,204           6,443           (729)             -         185,665
Corporate expenses                                -              -               -              -         20,283          20,283
Depreciation and amortization                33,507         53,513           8,477              9          4,752         100,258
Time brokerage fees                             479              -               -              -              -             479
Non-cash compensation                             -              -               -              -          9,095           9,095
Impairment loss and other                     9,063          1,609               -              -              -          10,672
Restructuring fees                                -              -               -              -            768             768
                                      -------------  -------------   -------------  -------------  -------------   -------------
Operating income (loss)               $      70,698  $      11,082   $      (2,034) $        (738) $     (34,898)  $      44,110
                                      =============  =============   =============  =============  =============   =============
Total assets                          $   1,037,598  $   1,288,428   $      88,913  $         248  $      94,882   $   2,510,069
                                      =============  =============   =============  =============  =============   =============

With respect to EOC, the above information would be identical, except corporate total assets would be $83,952 and consolidated
total assets would be $2,499,139.

YEAR ENDED FEBRUARY 28, 2001              Radio        Television     Publishing     Interactive     Corporate     Consolidated
                                      -------------  -------------   -------------  -------------  -------------   -------------
Net revenues                          $     239,590  $     156,835   $      74,088  $         105  $           -   $     470,618
Operating expenses                          132,918         97,327          65,538            622              -         296,405
                                      -------------  -------------   -------------  -------------  -------------   -------------
Broadcast/publishing cash flow              106,672         59,508           8,550           (517)             -         174,213
Corporate expenses                                -              -               -              -         17,601          17,601
Depreciation and amortization                21,470         33,574          14,941              5          4,028          74,018
Time brokerage fees                           7,344              -               -              -              -           7,344
Non-cash compensation                             -              -               -              -          5,400           5,400
Impairment loss and other                     2,000              -               -              -              -           2,000
Restructuring fees                                -              -               -              -          2,057           2,057
                                      -------------  -------------   -------------  -------------  -------------   -------------
Operating income (loss)               $      75,858  $      25,934   $      (6,391) $        (522) $     (29,086)  $      65,793
                                      =============  =============   =============  =============  =============   =============
Total assets                          $     920,002  $   1,312,270   $      96,550  $          26  $     178,024   $   2,506,872
                                      =============  =============   =============  =============  =============   =============

YEAR ENDED FEBRUARY 29, 2000              Radio        Television     Publishing     Interactive      Corporate    Consolidated
                                      -------------  -------------   -------------  -------------  -------------   ------------
Net revenues                          $     189,000  $      82,160   $      54,105  $           -  $           -   $     325,265
Operating expenses                          100,184         53,178          46,456              -              -         199,818
                                      -------------  -------------   -------------  -------------  -------------   -------------
Broadcast/publishing cash flow               88,816         28,982           7,649              -              -         125,447
Corporate expenses                                -              -               -              -         15,430          15,430
Depreciation and amortization                16,694         17,138           6,934              -          3,395          44,161
Time brokerage fees                               -              -               -              -              -               -
Non-cash compensation                             -              -               -              -          7,357           7,357
Impairment loss and other                         -              -               -              -              -               -
Restructuring fees                              896              -               -              -              -             896
                                      -------------  -------------   -------------  -------------  -------------   -------------
Operating income (loss)               $      71,226  $      11,844   $         715  $           -  $     (26,182)  $      57,603
                                      =============  =============   =============  =============   ============   =============
Total assets                          $     474,403  $     701,672   $      68,927  $           -  $      82,304   $   1,327,306
                                      =============  =============   =============  =============  =============   =============


12.  RELATED PARTY TRANSACTIONS

    Two officers of Emmis are partners in a law firm which provides  legal services to Emmis.  Legal fees paid to this law firm were
approximately $756, $926 and $606 for the years ended February 2000, 2001 and 2002, respectively.

    Emmis  has made  interest-bearing  loans to  various  officers  and  employees.  The  approximate  amount  of such  indebtedness
outstanding at February 28, 2001 and 2002, was $1,072 and $1,117,  respectively,  net of an allowance of $849 and $0,  respectively.
These loans bear interest at the Company's average  borrowing rate of approximately  8.0% and 7.6% for the years ended February 2001
and 2002.

    During the year ended February 28, 2002, the Company  purchased  approximately $26 in corporate gifts and specialty items from a
company owned by the spouse of Norman H. Gurwitz.  Also during the last fiscal year,  Emmis made payments of  approximately  $258 to
a company  owned by Mr.  Smulyan for use of an airplane to transport  employees to various  trade shows and  meetings.  Furthermore,
Emmis made  payments  of $405 to a  management  company  for direct  operating  expenses  incurred by Emmis' use of the plane and an
allocation of certain maintenance costs of the airplane.

    A significant  amount of business is conducted between EOC and its parent company,  ECC. This activity includes equity financing
and  certain  debt  financing  arrangements  as well as  reimbursement  by EOC to ECC for  corporate  overhead  expenses.  Corporate
overhead  expenses are third party costs  incurred in the ordinary  course of conducting  business as a parent  holding  company and
include, but are not limited to, SEC filing fees and expenses, and legal, accounting, trustee and outside director fees.


13.  FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND SUBSIDIARY NON-GUARANTORS

    Emmis  conducts a  significant  portion of its  business  through  subsidiaries.  The  senior  subordinated  notes are fully and
unconditionally  guaranteed,  jointly and severally, by certain direct and indirect subsidiaries (the "Subsidiary  Guarantors").  As
of February 28, 2002,  subsidiaries  holding  Emmis'  interest in its radio  stations in Hungary and  Argentina,  as well as certain
other subsidiaries  conducting joint ventures with third parties,  did not guarantee the senior  subordinated notes (the "Subsidiary
Non-Guarantors").  The claims of creditors of Emmis  subsidiaries  have  priority  over the rights of Emmis to receive  dividends or
distributions from such subsidiaries.

    Presented below is condensed  consolidating financial information for the Parent Company Only, the Subsidiary Guarantors and the
Subsidiary Non-Guarantors as of February 28, 2001 and 2002 and for each of the three years in the period ended February 28, 2002.

    Emmis uses the equity  method with  respect to  investments  in  subsidiaries.  Separate  financial  statements  for  Subsidiary
Guarantors are not presented based on management's  determination that they do not provide  additional  information that is material
to investors.


                                                          Emmis Operating Company
                                                   Condensed Consolidating Balance Sheet
                                                          As of February 28, 2002


                                                                                            Eliminations
                                                   Parent                     Subsidiary       and
                                                   Company       Subsidiary      Non-      Consolidating
                                                    Only         Guarantors   Guarantors      Entries      Consolidated
                                               ------------------------------------------------------------------------

CURRENT ASSETS:
   Cash and cash equivalents                    $           -  $      4,970  $     1,392  $            -  $       6,362
   Accounts receivable, net                                 -        91,244        3,996               -         95,240
   Current portion of TV
     program rights                                         -         9,837            -               -          9,837
   Income tax refunds receivable                            -             -            -               -              -
   Prepaid expenses                                       612        14,049          186               -         14,847
   Other                                                  271        13,475           74               -         13,820
   Assets held for sale                                     -       123,416            -               -        123,416
                                                -------------  ------------  -----------  --------------  -------------
     Total current assets                                 883       256,991        5,648               -        263,522

   Property and equipment, net                         35,957       192,690        2,492               -        231,139
   Intangible assets, net                               5,637     1,933,846       13,848               -      1,953,331
   Investment in affiliates                         2,274,321             -            -      (2,274,321)             -
   Other assets, net                                   43,428        12,655          527          (5,463)        51,147
                                                -------------  ------------  -----------  --------------  -------------
     Total assets                               $   2,360,226  $  2,396,182  $    22,515  $   (2,279,784) $   2,499,139
                                                =============  ============   ==========   =============   ============

CURRENT LIABILITIES:
   Accounts payable                             $      15,646  $     18,373  $     4,976  $            -  $      38,995
   Current maturities of other
     long-term debt                                        34            10       10,722          (2,833)         7,933
   Current portion of TV
     program rights payable                                 -        27,507            -               -         27,507
   Accrued salaries and
     commissions                                          214         7,363          275               -          7,852
   Accrued interest                                    14,047             -           21               -         14,068
   Deferred revenue                                         -        16,392            -               -         16,392
   Other                                                2,813         3,595            -               -          6,408
   Credit facility debt to be repaid with
     proceeds of assets held for sale                 135,000             -            -               -        135,000
   Liabilities associated with assets
     held for sale                                          -            63            -               -             63
                                                 ------------    ----------   ----------   -------------  -------------
     Total current liabilities                        167,754        73,303       15,994          (2,833)       254,218

Credit facility and senior
   subordinated debt                                1,117,000             -            -               -      1,117,000
TV program rights payable,
   net of current portion                                   -        40,551            -               -         40,551
Other long-term debt, net of
   current portion                                         41           366        9,172          (2,630)         6,949
Other noncurrent liabilities                           21,976         4,403          587               -         26,966
Deferred income taxes                                 108,988             -            -               -        108,988
                                                -------------  ------------  -----------  --------------  -------------
   Total liabilities                                1,415,759       118,623       25,753          (5,463)     1,554,672

Shareholders' equity
   Common stock                                     1,027,221             -            -               -      1,027,221
   Additional paid-in capital                           8,108             -        4,393          (4,393)         8,108
   Subsidiary investment                                    -     1,883,897       20,650      (1,904,547)             -
   Retained earnings /
     (accumulated deficit)                            (78,477)      393,662      (21,380)       (372,282)       (78,477)
   Accumulated other
     comprehensive loss                               (12,385)            -       (6,901)          6,901        (12,385)
                                                -------------  ------------  -----------  --------------  -------------
     Total shareholders' equity                       944,467     2,277,559       (3,238)     (2,274,321)       944,467
                                                -------------  ------------  -----------  --------------  -------------
       Total liabilities and
         shareholders' equity                   $   2,360,226  $  2,396,182  $    22,515  $   (2,279,784) $   2,499,139
                                                =============  ============  ===========  ==============  =============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Operations
                                                For the Year Ended February 28, 2002


                                                                                        Eliminations
                                                  Parent                    Subsidiary       and
                                                  Company     Subsidiary       Non-     Consolidating
                                                   Only       Guarantors    Guarantors     Entries     Consolidated
                                               --------------------------------------------------------------------

Net revenues                                   $       1,695  $   515,387  $    16,698  $          -   $    533,780
   Operating expenses                                  1,204      332,311       14,600             -        348,115
   Corporate expenses                                 20,283            -            -             -         20,283
   Depreciation and amortization                       4,752       91,979        3,527             -        100,258
   Non-cash compensation                               6,821        2,274            -             -          9,095
   Time brokerage agreement fees                           -          479            -             -            479
   Impairment loss and other                               -       10,672            -             -         10,672
   Restructuring fees                                    768            -            -             -            768
                                               -------------  -----------  -----------  ------------   ------------
Operating income (loss)                              (32,133)      77,672       (1,429)            -         44,110
                                               -------------  -----------  -----------  ------------   ------------
Other income (expense)
   Interest income (expense)                        (102,109)        (285)      (2,324)          616       (104,102)
   Income (loss) from unconsolidated
    affiliates                                        (4,232)        (771)           -             -         (5,003)
   Other income (expense), net                         1,403         (466)        (756)          179            360
                                               -------------  -----------  -----------  ------------   ------------
Total other income (expense)                        (104,938)      (1,522)      (3,080)          795       (108,745)
                                               -------------  -----------  -----------  ------------   ------------

Income (loss) before income taxes                   (137,071)      76,150       (4,509)          795        (64,635)

Provision (benefit) for income taxes                 (46,770)      28,937            -             -        (17,833)
                                               -------------  -----------  -----------  ------------   ------------
Income (loss) before extraordinary loss              (90,301)      47,213       (4,509)          795        (46,802)
Extraordinary loss, net of tax                         1,084            -            -             -          1,084
Equity in earnings (loss) of subsidiaries             43,499            -            -       (43,499)             -
                                               -------------  -----------  -----------  ------------   ------------
Net income (loss)                              $     (47,886) $    47,213  $    (4,509) $    (42,704)  $    (47,886)
                                               =============  ===========  ===========   ===========   ============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Cash Flows
                                                For the Year Ended February 28, 2002

                                                                                          Eliminations
                                                   Parent                    Subsidiary       and
                                                   Company     Subsidiary       Non-     Consolidating
                                                    Only       Guarantors    Guarantors     Entries      Consolidated
                                               ----------------------------------------------------------------------

CASH FLOWS FROM OPERATING
   ACTIVITIES:
   Net income (loss)                           $     (47,886) $    47,213  $    (4,509) $    (42,704)  $    (47,886)
   Adjustments to reconcile net
     income (loss) to net cash
     provided by (used in) operating
     activities -
     Extraordinary item                                1,084            -            -             -          1,084
     Depreciation and amortization                    10,226      110,582        3,527             -        124,335
     Provision for bad debts                               -        4,005            -             -          4,005
     Provision (benefit) for deferred
       income taxes                                 (17,833)            -            -             -        (17,833)
     Non-cash compensation                             6,821        2,274            -             -          9,095
     Equity in earnings of subsidiaries              (43,499)           -            -        43,499              -
     Impairment of asset                                   -        9,063            -             -          9,063
     Other                                               795          375       (6,303)         (795)        (5,928)
   Changes in assets and
     liabilities -
     Accounts receivable                                   -       (3,649)        1,531            -         (2,118)
     Prepaid expenses and other
       current assets                                  3,082        1,202          843             -          5,127
     Other assets                                      2,057       (9,364)       1,355             -         (5,952)
     Accounts payable and accrued
       liabilities                                     5,035       (6,965)        (779)            -         (2,709)
     Deferred revenue                                      -         (963)           -             -           (963)
     Other liabilities                                24,482      (15,553)     (10,856)            -         (1,927)
                                               -------------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         operating activities                        (55,636)     138,220      (15,191)            -         67,393
                                               -------------  -----------  -----------  ------------   ------------

CASH FLOWS FROM INVESTING
   ACTIVITIES:
   Purchase of property and
     equipment                                        (2,252)     (27,299)       1,135             -        (28,416)
   Cash paid for acquisitions                              -     (140,746)           -             -       (140,746)
   Deposits on acquisitions and other                 (5,943)           -            -             -         (5,943)
                                               -------------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         investing activities                         (8,195)    (168,045)       1,135             -       (175,105)
                                               -------------  -----------  -----------  ------------   ------------

CASH FLOWS FROM FINANCING
   ACTIVITIES:
   Payments on long-term debt                       (133,000)           -            -             -       (133,000)
   Proceeds from long-term debt                        5,000            -            -             -          5,000
   Intercompany                                      141,250       30,777       14,742             -        186,769
   Debt related costs                                 (4,594)           -            -             -         (4,594)
                                               -------------  -----------  -----------  ------------   ------------
       Net cash provided by
         financing activities                          8,656       30,777       14,742             -         54,175
                                               -------------  -----------  -----------  ------------   ------------


INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                              (55,175)         952          686             -        (53,537)

CASH AND CASH EQUIVALENTS:
   Beginning of period                                55,175        4,018          706             -         59,899
                                               -------------  -----------  -----------  ------------   ------------
   End of period                               $           -  $     4,970  $     1,392  $          -   $      6,362
                                               =============  ===========  ===========  ============   ============


                                                          Emmis Operating Company
                                                   Condensed Consolidating Balance Sheet
                                                          As of February 28, 2001


                                                                                            Eliminations
                                                    Parent                     Subsidiary       and
                                                    Company      Subsidiary      Non-      Consolidating
                                                     Only        Guarantors   Guarantors     Entries       Consolidated
                                               ------------------------------------------------------------------------

CURRENT ASSETS:
   Cash and cash equivalents                    $      55,175  $      4,018  $       706  $            -  $      59,899
   Accounts receivable, net                                 -        91,754        5,527               -         97,281
   Current portion of TV
     program rights                                         -        12,028            -               -         12,028
   Income tax refunds receivable                       13,970             -            -               -         13,970
   Prepaid expenses                                     2,032        14,646          327               -         17,005
   Other                                                1,932        12,124          776               -         14,832
   Assets held for sale                                     -       134,983            -               -        134,983
                                                -------------  ------------  -----------  --------------  -------------
     Total current assets                              73,109       269,553        7,336               -        349,998

   Property and equipment, net                         38,151       189,350        4,332               -        231,833
   Intangible assets, net                                   -     1,830,503       21,756               -      1,852,259
   Investment in affiliates                         2,169,004             -            -      (2,169,004)             -
   Other assets, net                                   68,113         9,706        1,882          (6,919)        72,782
                                                -------------  ------------  -----------  --------------  -------------
     Total assets                               $   2,348,377  $  2,299,112  $    35,306  $   (2,175,923) $   2,506,872
                                                =============  ============   ==========   =============   ============

CURRENT LIABILITIES:
   Accounts payable                             $       6,908  $     22,499  $     4,799  $            -  $      34,206
   Current maturities of other
     long-term debt                                        34            18        4,135               -          4,187
   Current portion of TV
     program rights payable                                 -        28,192            -               -         28,192
   Accrued salaries and
     commissions                                        1,410         8,482          450               -         10,342
   Accrued interest                                    16,236             -          802               -         17,038
   Deferred revenue                                         -        17,397            -               -         17,397
   Other                                                  813         4,955            -               -          5,768
   Liabilities associated with
     assets held for sale                                   -            21            -               -             21
                                                 ------------  ------------   ----------  --------------  -------------
     Total current liabilities                         25,401        81,564       10,186               -        117,151

Credit facility and senior
   subordinated debt                                1,380,000             -            -               -      1,380,000
TV program rights payable,
   net of current portion                                   -        47,567            -               -         47,567
Other long-term debt, net of
   current portion                                         37           598       19,968          (6,919)        13,684
Other noncurrent liabilities                                -         4,884          647               -          5,531
Deferred income taxes                                 135,468             -            -               -        135,468
                                                -------------  ------------  -----------  --------------  -------------
   Total liabilities                                1,540,906       134,613       30,801          (6,919)     1,699,401

Shareholders' equity
   Common stock                                       830,799             -            -               -        830,799
   Additional paid-in capital                               -             -        4,393          (4,393)             -
   Subsidiary investment                                    -     1,818,050       17,581      (1,835,631)             -
   Retained earnings /
     (accumulated deficit)                            (22,730)      346,449      (16,871)       (329,578)       (22,730)
   Accumulated other
     comprehensive loss                                  (598)            -         (598)            598           (598)
                                                -------------  ------------  -----------  --------------  -------------
Total shareholders' equity                            807,471     2,164,499        4,505      (2,169,004)       807,471
                                                -------------  ------------  -----------  --------------  -------------
       Total liabilities and
         shareholders' equity                   $   2,348,377  $  2,299,112  $    35,306  $  (2,175,923)  $   2,506,872
                                                =============  ============  ===========  =============   =============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Operations
                                                For the Year Ended February 28, 2001


                                                                                        Eliminations
                                                  Parent                    Subsidiary       and
                                                  Company     Subsidiary       Non-     Consolidating
                                                   Only       Guarantors    Guarantors     Entries     Consolidated
                                               --------------------------------------------------------------------

Net revenues                                   $       1,876  $   454,164  $    14,578  $          -   $    470,618
   Operating expenses                                  1,692      281,409       13,304             -        296,405
   Corporate expenses                                 17,601            -            -             -         17,601
   Depreciation and amortization                       4,028       66,527        3,463             -         74,018
   Non-cash compensation                               4,050        1,350            -             -          5,400
   Time brokerage agreement fees                           -        7,344            -             -          7,344
   Corporate restructuring fees
     and other                                         2,057        2,000            -             -          4,057
                                               -------------  -----------  -----------  ------------   ------------
Operating income (loss)                              (27,552)      95,534       (2,189)            -         65,793
                                               -------------  -----------  -----------  ------------   ------------
Other income (expense)
   Interest income (expense)                         (69,608)        (297)      (3,221)          682        (72,444)
   Other income (expense), net                        11,972       26,977         (354)         (558)        38,037
                                               -------------  -----------  -----------  ------------   ------------
Total other income (expense)                         (57,636)      26,680       (3,575)          124        (34,407)
                                               -------------  -----------  -----------  ------------   ------------

Income (loss) before income taxes                    (85,188)     122,214       (5,764)          124         31,386

Provision (benefit) for income
   taxes                                             (28,201)      45,851            -             -         17,650
                                               -------------  -----------  -----------  ------------   ------------
                                                     (56,987)      76,363       (5,764)          124         13,736
Equity in earnings (loss) of
   subsidiaries                                       70,723            -            -       (70,723)             -
                                               -------------  -----------  -----------  ------------   ------------
Net income (loss)                              $      13,736  $    76,363  $    (5,764) $    (70,599)  $     13,736
                                               =============  ===========  ===========  ============   ============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Cash Flows
                                                For the Year Ended February 28, 2001

                                                                                         Eliminations
                                                   Parent                    Subsidiary      and
                                                   Company    Subsidiary       Non-     Consolidating
                                                    Only      Guarantors    Guarantors     Entries     Consolidated
                                               --------------------------------------------------------------------

CASH FLOWS FROM OPERATING
   ACTIVITIES:
   Net income (loss)                             $    13,736  $    76,363  $    (5,764) $    (70,599)  $     13,736
   Adjustments to reconcile net
     income (loss) to net cash
     provided by (used in) operating
     activities -
     Depreciation and amortization                     9,758       81,233        3,463             -         94,454
     Provision for bad debts                               -        3,713            -             -          3,713
     Provision for deferred income
       taxes                                          15,810            -            -             -         15,810
     Non-cash compensation                             4,050        1,350            -             -          5,400
     Equity in earnings of
       subsidiaries                                  (70,723)           -            -        70,723              -
     Gain on exchange of assets                            -      (22,000)           -             -        (22,000)
     Other                                               379          348          861          (124)         1,464
   Changes in assets and
     liabilities -
     Accounts receivable                                   -       (7,114)      (2,202)            -         (9,316)
     Prepaid expenses and other
       current assets                               (12,716)      (11,527)        (384)            -        (24,627)
     Other assets                                     10,435        1,216          448             -         12,099
     Accounts payable and accrued
       liabilities                                     9,070        5,493          778             -         15,341
     Deferred revenue                                      -          569            -             -            569
     Other liabilities                                  (220)     (23,096)       3,544             -        (19,772)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         operating activities                        (20,421)     106,548          744             -         86,871
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM INVESTING
   ACTIVITIES:
   Purchase of property and
     equipment                                        (3,683)     (22,323)        (219)            -        (26,225)
   Cash paid for acquisitions                              -   (1,060,681)           -             -     (1,060,681)
   Deposits on acquisitions and other                (23,849)           -            -             -        (23,849)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash used in investing
         activities                                  (27,532)  (1,083,004)        (219)            -     (1,110,755)
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM FINANCING
   ACTIVITIES:
   Payments on long-term debt                     (1,048,388)           -       (3,161)            -     (1,051,549)
   Proceeds from long-term debt                    2,128,388            -            -             -      2,128,388
   Intercompany                                     (956,225)     977,910      (11,016)            -         10,669
   Debt related costs                                (21,095)           -            -             -        (21,095)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash provided by
         financing activities                        102,680      977,910      (14,177)            -      1,066,413
                                                 -----------  -----------  -----------  ------------   ------------

INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                               54,727        1,454      (13,652)            -         42,529

CASH AND CASH EQUIVALENTS:
   Beginning of period                                   448        2,564       14,358             -         17,370
                                                 -----------  -----------  -----------  ------------   ------------
   End of period                                 $    55,175  $     4,018  $       706  $          -   $     59,899
                                                 ===========  ===========  ===========  ============   ============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Operations
                                                For the Year Ended February 29, 2000

                                                                                         Eliminations
                                                   Parent                   Subsidiary       and
                                                   Company    Subsidiary       Non-     Consolidating
                                                    Only      Guarantors    Guarantors     Entries     Consolidated
                                               --------------------------------------------------------------------

Net revenues                                   $       1,810  $   314,644  $     8,811  $          -   $    325,265
   Operating expenses                                  1,252      191,666        6,900             -        199,818
   Corporate expenses                                 15,430            -            -             -         15,430
   Depreciation and amortization                       3,395       37,733        3,033             -         44,161
   Non-cash compensation                               5,518        1,839            -             -          7,357
   Time brokerage agreement fees                           -            -            -             -              -
   Programming restructuring cost                          -          896            -             -            896
Operating income (loss)                              (23,785)      82,510       (1,122)            -         57,603
                                               -------------  -----------  -----------  ------------   ------------
Other income (expense)
   Interest income (expense)                         (49,257)        (107)      (3,363)          741        (51,986)
   Loss on donation of station                             -         (956)           -             -           (956)
   Other income (expense), net                         3,428           13         (502)        1,264          4,203
                                               -------------  -----------  -----------  ------------   ------------
Total other income (expense)                         (45,829)      (1,050)      (3,865)        2,005        (48,739)
                                               -------------  -----------  -----------  ------------   ------------

Income (loss) before income taxes                    (69,614)      81,460       (4,987)        2,005          8,864

Provision (benefit) for income
   taxes                                             (22,689)      29,564            -             -          6,875
                                               -------------  -----------  -----------  ------------   ------------
                                                     (46,925)      51,896       (4,987)        2,005          1,989
Extraordinary item, net of tax                        (2,022)           -            -             -         (2,022)
Equity in earnings (loss) of
   subsidiaries                                       48,914            -            -       (48,914)             -
                                               -------------  -----------  -----------  ------------   ------------
Net income (loss)                              $         (33) $    51,896  $    (4,987) $    (46,909)  $        (33)
                                               =============  ===========  ===========  ============   ============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Cash Flows
                                                For the Year Ended February 29, 2000

                                                                                          Eliminations
                                                   Parent                   Subsidiary        and
                                                   Company    Subsidiary       Non-      Consolidating
                                                    Only      Guarantors    Guarantors      Entries    Consolidated
                                               ---------------------------------------------------------------------

CASH FLOWS FROM OPERATING
   ACTIVITIES:
   Net income (loss)                             $      (33)  $    51,896  $    (4,987) $    (46,909)  $        (33)
   Adjustments to reconcile net
     income (loss) to net cash
    provided by (used in) operating
     activities -
     Extraordinary item                                2,022            -            -             -          2,022
     Depreciation and amortization                     5,805       44,980        3,033             -         53,818
     Provision for bad debts                               -        2,550            -             -          2,550
     Provision for deferred income
       taxes                                           6,670            -            -             -          6,670
     Non-cash compensation                             5,518        1,839            -             -          7,357
     Equity in earnings of
       subsidiaries                                  (48,914)           -            -        48,914              -
     Gain on exchange of assets                            -            -            -             -              -
     Loss on donation of radio station                     -          956            -             -            956
     Other                                             2,033            -         (811)       (2,005)          (783)
   Changes in assets and
     liabilities -
     Accounts receivable                                   -      (13,029)        (290)            -        (13,319)
     Prepaid expenses and other
       current assets                                 (1,258)     (13,101)        (187)            -        (14,546)
     Other assets                                     (8,393)       7,382       (1,496)             -        (2,507)
     Accounts payable and accrued
       liabilities                                      (391)       9,255        1,301             -         10,165
     Deferred revenue                                      -        4,332            -             -          4,332
     Other liabilities                               (13,278)     (19,933)           -             -        (33,211)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         operating activities                        (50,219)      77,127       (3,437)            -         23,471
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM INVESTING
   ACTIVITIES:
   Purchase of property and
     equipment                                        (8,124)     (21,170)         (22)            -        (29,316)
   Cash paid for acquisitions                              -     (217,828)     (13,302)            -       (231,130)
   Deposits on acquisitions and other                 (5,000)      (6,500)           -             -        (11,500)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash used in investing
         activities                                  (13,124)    (245,498)     (13,324)            -       (271,946)
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM FINANCING
   ACTIVITIES:
   Payments on long-term debt                       (426,668)           -            -             -       (426,668)
   Proceeds from long-term debt                      149,668            -            -             -        149,668
   Intercompany                                      338,505      167,789       30,434             -        536,728
   Debt related costs                                      -            -            -             -              -
                                                 -----------  -----------  -----------  ------------   ------------
   Net cash provided by
      financing activities                            61,505      167,789       30,434             -        259,728
                                                 -----------  -----------  -----------  ------------   ------------
INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                               (1,838)        (582)      13,673             -         11,253

CASH AND CASH EQUIVALENTS:
   Beginning of period                                 2,286        3,146          685             -          6,117
                                                 -----------  -----------  -----------  ------------   ------------
   End of period                                 $       448  $     2,564  $    14,358  $          -   $     17,370
                                                 ===========  ===========  ===========  ============   ============



14.      SUBSEQUENT EVENTS

    In April 2002, ECC completed the sale of 4.6 million  shares of its Class A common stock at $26.80 per share  resulting in total
proceeds  of $123.3  million.  The net  proceeds  of $120.2 were  contributed  to EOC, of which 50% were used to repay  outstanding
obligations  under the credit  facility.  The remaining net proceeds  were  invested and will either repay  outstanding  obligations
under the credit facility or redeem or repurchase some of Emmis' outstanding 121/2% senior discount notes.

    Effective May 1, 2002 Emmis  completed the sale of  substantially  all of the assets of KALC-FM in Denver,  Colorado to Entercom
Communications  Corporation  for $88.0  million.  Emmis had  purchased  KALC-FM  on January  17,  2001,  from  Salem  Communications
Corporation  for $98.8 million in cash plus a commitment  fee of $1.2 million and  transaction  related  costs of $0.9  million.  On
February  12, 2002,  Emmis  entered into a definitive  agreement to sell KALC-FM to Entercom and Entercom  began  operating  KALC-FM
under a time  brokerage  agreement on March 16, 2002.  Proceeds were used to repay amounts  outstanding  under the credit  facility.
The assets of KALC-FM are reflected as held for sale in the accompanying  consolidated  balance sheets.  The $87.7 million of credit
facility  debt repaid  with the net  proceeds of the sale is  reflected  as a current  liability  in the  accompanying  consolidated
balance sheets.

    Effective May 1, 2002 Emmis completed the sale of substantially all of the assets of KXPK-FM in Denver,  Colorado to Entravision
Communications  Corporation  for $47.5 million.  Emmis had purchased  KXPK-FM on August 24, 2000,  from AMFM,  Inc. for an allocated
purchase price of $35.0 million in cash plus  liabilities  recorded of $1.2 million and  transaction  related costs of $0.4 million.
Emmis  entered  into a  definitive  agreement to sell KXPK-FM to  Entravision  on February  12,  2002.  Proceeds  were used to repay
amounts  outstanding  under the  credit  facility.  We expect to record a gain on sale of  approximately  $12  million  in our first
quarter of fiscal  2003.  The assets of KXPK-FM are  reflected as held for sale in the  accompanying  consolidated  balance  sheets.
The $47.3  million of credit  facility  debt repaid with the net  proceeds of the sale is  reflected  as a current  liability in the
accompanying consolidated balance sheets.

    In connection with the $255.7 million of completed or planned debt repayments described above, Emmis expects to write-off
approximately $4 million of deferred debt costs in the first quarter of our fiscal 2003.

15.  QUARTERLY FINANCIAL DATA (UNAUDITED)

         EMMIS
                                                                                 Quarter Ended
                                                          ---------------------------------------------------------
                                                                                                                           Full
                                                            May 31         Aug. 31         Nov. 30        Feb. 28          Year
                                                          -----------    -----------    -----------     -----------    -----------

Year ended February 28, 2001
   Net revenues                                           $   100,519    $   109,069    $   143,606     $   117,424    $   470,618
   Operating income (loss)                                     18,603         25,223         26,164          (4,197)        65,793
   Net income (loss) before extraordinary item                  5,911         16,638         11,566         (20,379)        13,736
Net income (loss) available to common shareholders              3,665         14,392          9,320         (22,625)         4,752
   Basic earnings per common share:
     Before extraordinary item                            $      0.08    $      0.31    $      0.20     $    (0.48)    $      0.10
     Net income (loss) available to common shareholders   $      0.08    $      0.31    $      0.20     $    (0.48)    $      0.10
   Diluted earnings per common share:
     Before extraordinary item                            $      0.08    $      0.30    $      0.20     $    (0.48)    $      0.10
     Net income (loss) available to common shareholders   $      0.08    $      0.30    $      0.20     $    (0.48)    $      0.10

Year ended February 28, 2002
   Net revenues                                           $   137,335    $   142,447    $   137,119     $   116,879    $   533,780
   Operating income (loss)                                     15,399         25,691         16,824         (13,804)        44,110
   Net income (loss) before extraordinary item                (13,477)        (6,070)       (11,698)        (31,779)       (63,024)
   Net income (loss) available to common shareholders         (15,723)        (9,400)       (13,944)        (34,025)       (73,092)
   Basic earnings per common share:
     Before extraordinary item                            $    (0.33)    $     (0.18)   $     (0.29)    $     (0.72)   $     (1.52)
     Net income (loss) available to common shareholders   $    (0.33)    $     (0.20)   $     (0.29)    $     (0.72)   $     (1.54)
   Diluted earnings per common share:
     Before extraordinary item                            $    (0.33)    $     (0.18)   $     (0.29)    $     (0.72)   $     (1.52)
     Net income (loss) available to common shareholders   $    (0.33)    $     (0.20)   $     (0.29)    $     (0.72)   $     (1.54)



         EOC
                                                                                 Quarter Ended
                                                          ---------------------------------------------------------
                                                                                                                           Full
                                                            May 31         Aug. 31         Nov. 30        Feb. 28          Year
                                                          -----------    -----------    -----------     -----------    -----------

   Year ended February 28, 2001
     Net revenues                                         $   100,519    $   109,069    $   143,606     $   117,424    $   470,618
     Operating income (loss)                                   18,603         25,223         26,164          (4,197)        65,793
     Net income (loss)                                          5,911         16,638         11,566         (20,379)        13,736


   Year ended February 28, 2002
     Net revenues                                         $   137,335    $   142,447    $   137,119     $   116,879    $   533,780
     Operating income (loss)                                   15,399         25,691         16,824         (13,804)        44,110
     Net income (loss) before extraordinary item              (10,862)        (2,079)        (7,268)        (26,593)       (46,802)
     Net income (loss)                                        (10,862)        (3,163)        (7,268)        (26,593)       (47,886)


                                                REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of Emmis Communications Corporation and Subsidiaries:

    We have audited the accompanying  consolidated balance sheets of EMMIS  COMMUNICATIONS  CORPORATION (an Indiana corporation) and
Subsidiaries  as of February 28, 2002 and 2001,  and the related  consolidated  statements of operations,  changes in  shareholders'
equity and cash flows for each of the three years in the period  ended  February 28,  2002.  We have also  audited the  accompanying
consolidated  balance sheets of EMMIS OPERATING COMPANY (an Indiana corporation and wholly owned subsidiary of Emmis  Communications
Corporation) and Subsidiaries as of February 28, 2002 and 2001, and the related  consolidated  statements of operations,  changes in
shareholders'  equity and cash flows for each of the three years in the period ended February 28, 2002.  These financial  statements
are the  responsibility of the Companies'  management.  Our  responsibility  is to express an opinion on these financial  statements
based on our audits.

    We conducted our audits in accordance with auditing standards  generally accepted in the United States.  Those standards require
that we plan and perform the audits to obtain  reasonable  assurance  about  whether the financial  statements  are free of material
misstatement.  An audit  includes  examining,  on a test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and significant  estimates made by management,  as well
as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial  statements referred to above present fairly, in all material respects,  the financial position of
Emmis  Communications  Corporation and  Subsidiaries as of February 28, 2002 and 2001, and the results of their operations and their
cash flows for each of the three years in the period ended  February 28, 2002 in conformity  with  accounting  principles  generally
accepted in the United States and the financial  position of Emmis  Operating  Company and  Subsidiaries as of February 28, 2002 and
2001,  and the results of their  operations  and their cash flows for each of the three years in the period ended  February 28, 2002
in conformity with accounting principles generally accepted in the United States.

    As discussed in Note 1v. of the notes to  consolidated  financial  statements,  effective March 1, 2001, the Company changed its
accounting  for  derivative  instruments  and hedging  activities  pursuant to the  provisions of Statement of Financial  Accounting
Standards No. 133, "Accounting for Derivative Hedging Activities."



                                                                                        /s/   ARTHUR ANDERSEN LLP
                                                                                        -------------------------

                                                                                        ARTHUR ANDERSEN LLP



Indianapolis, Indiana,
May 2, 2002.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by this item with respect to directors or nominees to be directors of Emmis is incorporated by
reference from the section entitled "Proposal No. 1: Election of Directors" in the Emmis 2002 Proxy Statement and the section
entitled "Compliance with Section 16(a) of the Securities Exchange Act of 1934" in the Emmis 2002 Proxy Statement.

Listed below is certain information about the executive officers of Emmis or its affiliates who are not directors or nominees
to be directors.

AGE AT YEAR FIRST
FEBRUARY 28, ELECTED
NAME POSITION 2002 OFFICER
---------------------- ------------------------------ ------------- -------------
Randy Bongarten Television Division President 51 2000

Richard F. Cummings Radio Division President 49 1984

Norman H. Gurwitz Executive Vice President- 53 1987
Human
Resources and Secretary

Set forth below is the principal occupation for the last five years of each executive officer of the Company or its affiliates
who is not also a director.

Randy Bongarten is employed as President of Emmis Television since October 2000 and President of Emmis International since June
1998. Prior to June 1998, Mr. Bongarten had served as President of GAF Broadcasting and as Executive Vice President of Operations
for Emmis Radio Division.

Richard F. Cummings was the Program Director of WENS from 1981 to March 1984, when he became the National Program Director and
a Vice President of Emmis. He became Executive Vice President--Programming in 1988 and became Radio Division President in
December 2001.

Norman H. Gurwitz currently serves as Executive Vice President -- Human Resources, a position he assumed in 1998. Previously
he served as Corporate Counsel for Emmis from 1987 to 1998 and as a Vice President from 1988 to 1995. He became Secretary of
Emmis in 1989 and became an Executive Vice President in 1995. Prior to 1987, he was a partner in the Indianapolis law firm of
Scott & Gurwitz. Mr. Gurwitz is the brother-in-law of Richard A. Leventhal, a director of the Company.

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this item is incorporated by reference from the section entitled "Executive Compensation" in the
Emmis 2002 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required by this item is incorporated by reference from the section entitled "Voting Securities and Beneficial
Owners" in the Emmis 2002 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by this item is incorporated by reference from the section entitled "Certain Transactions" in the Emmis
2002 Proxy Statement.
PART IV

ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K.

Financial Statements

The financial statements filed as a part of this report are set forth under Item 8.
Reports on Form 8-K

On December 13, 2001, the Company filed a Form 8-K that contained Exhibit B to the articles of incorporation for Emmis
Communications Corporation.

On February 13, 2002, the Company filed a Form 8-K to disclose quarterly pro forma financial information by business segment
for the seven quarters ended November 30, 2001.

Exhibits

The following exhibits are filed or incorporated by reference as a part of this report:

3.1 Second Amended and Restated Articles of Incorporation of Emmis Communications Corporation, incorporated by reference
from Exhibit 3.1 to Emmis' Annual Report on Form 10-K/A for the fiscal year ended February 29, 2000, and Exhibit B to
the Second Amended and Restated Articles of Incorporation of Emmis Communications Corporation, incorporated by
reference from Exhibit 3 to Emmis' Form 8-K filed December 13, 2001.

3.2 Amended and Restated Bylaws of Emmis Communications Corporation, incorporated by reference from Exhibit 3.2 to the
Company's Form 10-K/A for the fiscal year ended February 29, 2000.

3.3 Form of stock certificate for Class A common stock, incorporated by reference from Exhibit 3.5 to the 1994 Emmis
Registration Statement on Form S-1, File No. 33-73218, the "1994 Registration Statement".

4.1 Indenture dated February 12, 1999 among Emmis Communications Corporation, certain subsidiary guarantors and IBJ Whitehall
Bank and Trust Company, as trustee, including as an exhibit thereto the form of note, incorporated by reference to
Exhibit 4.1 to Emmis' Registration Statement on Form S-4, File No. 333-74377, as amended (the "1999 Registration
Statement").



4.2        Indenture  dated March 27, 2001 among Emmis  Communications  Corporation and The Bank of Nova Scotia Trust Company of New
           York, as trustee,  including as an exhibit  thereto the form of note,  incorporated by reference to Exhibit 4.1 to Emmis'
           Registration Statement on Form S-4, File No. 333-621604, as amended (the "2001 Registration Statement").

10.1       Emmis  Communications  Corporation  Profit  Sharing  Plan,  incorporated  by  reference  from  Exhibit  10.4 to the  1994
           Registration Statement.++

10.2       Emmis  Communications  Corporation  1994 Equity  Incentive Plan,  incorporated by reference from Exhibit 10.5 to the 1994
           Registration Statement.++

10.3       The Emmis  Communications  Corporation  1995  Non-Employee  Director  Stock Option Plan,  incorporated  by reference from
           Exhibit 10.15 to Emmis' Annual Report on Form 10-K for the fiscal year ended February 28, 1995 (the "1995 10-K").++

10.4       The Emmis  Communications  Corporation  1995 Equity  Incentive Plan  incorporated  by reference from Exhibit 10.16 to the
           1995 10-K.++

10.5       Emmis  Communications  Corporation  1997 Equity  Incentive  Plan,  incorporated  by reference from Exhibit 10.5 to Emmis'
           Annual Report on Form 10-K for the fiscal year ended February 28, 1998 (the "1998 10-K").++

10.6       Emmis  Communications  Corporation  1999 Equity  Incentive  Plan,  incorporated  by reference  from the  Company's  proxy
           statement dated May 26, 1999.++

10.7       Emmis  Communications  Corporation  2001 Equity  Incentive  Plan,  incorporated  by reference  from the  Company's  proxy
           statement dated May 25, 2001.++

10.8       Employment  Agreement  dated as of March 1, 1994, by and between Emmis  Broadcasting  Corporation and Jeffrey H. Smulyan,
           incorporated  by reference  from Exhibit 10.13 to Emmis'  Annual  Report on Form 10-K for the fiscal year ended  February
           28, 1994 and  amendment to Employment  Agreement,  effective  March 1, 1999,  between the Company and Jeffrey H. Smulyan,
           incorporated  by reference from Exhibit 10.2 to Emmis'  Quarterly  Report on Form 10-Q for the quarter ended November 30,
           1999.++

10.9       Employment  Agreement  dated as of March 1, 1999, by and between Emmis  Communications  Corporation and Walter Z. Berger,
           incorporated  by reference  from Exhibit 10.9 to Emmis' Annual Report on Form 10-K for the fiscal year ended February 28,
           1999.++

10.10      Fourth  Amended  and  Restated  Revolving  Credit and Term Loan  Agreement,  and First  Amendment  to Fourth  Amended and
           Restated Revolving Credit and Term Loan Agreement,  incorporated by reference from Exhibits 10.1 and 10.2,  respectively,
           to Emmis' Form 8-K filed on April 12, 2001.

10.11      Second Amendment to Fourth Amended and Restated Revolving Credit and Term Loan Agreement.

10.12      Third Amendment to Fourth Amended and Restated  Revolving Credit and Term Loan Agreement,  incorporated by reference from
           Exhibit 10.1 to Emmis' Quarterly Report on Form 10-Q for the quarter ended November 30, 2001.

10.13      Asset Purchase  Agreement,  dated as of February 12, 2002, by and among  Entercom  Communications  Corporation  and Emmis
           Communications Corporation. *

10.14      Asset Purchase Agreement,  dated as of February 12, 2002, by and among Entravision  Communications  Corporation and Emmis
           Communications Corporation. *

10.15      Purchase  and  Sale  Agreement,  dated  as of May 7,  2000,  by and  among  Lee  Enterprises,  Incorporated,  New  Mexico
           Broadcasting  Co. and Emmis  Communications  Corporation,  incorporated  by reference from Exhibit 2.1 to Emmis' Form 8-K
           filed on October 16, 2000.

10.16 Option Agreement, dated as of June 5, 2000, by and among Hearst-Argyle Properties, Inc. and Emmis Communications
Corporation. *

10.17 Asset Purchase Agreement, dated as of June 21, 2000, by and among Sinclair Radio of St. Louis, Inc., Sinclair Radio of
St. Louis Licensee, LLC and Emmis Communications Corporation, incorporated by reference from Exhibit 2.2 to Emmis' Form
8-K filed on October 16, 2000.

10.18 Asset Exchange Agreement, dated as of October 6, 2000, between Emmis Communications Corporation, Emmis 106.5 FM
Broadcasting Corporation of St. Louis and Emmis 106.5 FM License Corporation of St. Louis, and Bonneville International
Corporation and Bonneville Holding Company, incorporated by reference from Exhibit 2.3 to Emmis' Form 8-K filed on
October 16, 2000.

10.19 Asset Purchase Agreement, dated as of June 19, 2000, by and among Emmis Communications Corporation, AMFM Houston, Inc.,
AMFM Ohio, Inc. and AMFM Radio Licenses, LLC, incorporated by reference from Exhibit 10.2 to Emmis' Form 8-K filed on
October 16, 2000.

10.20 Asset Purchase Agreement by and among Emmis Communications Corporation, Country Sampler, Inc. and Mark A. Nickel, dated
as of February 23, 1999, together with associated Consulting Agreement and Letter Agreement, incorporated by reference
from Exhibit 10.16 to Emmis' Annual Report on Form 10-K for the fiscal year ended February 28, 1999.

21 Subsidiaries of Emmis.*

23 Consent of Accountants.*

24 Powers of Attorney.*

99.1 Letter of Acknowledgement with respect to Arthur Andersen's Audit.*

- ------------------------
* Filed with this report.
++ Management contract or compensatory plan or arrangement.



Signatures.

    Pursuant to the requirements of Section 13 or 15(d) of the Securities  Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.



                                                                                EMMIS COMMUNICATIONS CORPORATION




Date:             May 10, 2002                                               By:  /s/ Jeffrey H. Smulyan
                                                                                     -----------------------
                                                                                       Jeffrey H. Smulyan
                                                                                       Chairman of the Board

    Pursuant to the requirements of the Securities  Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and on the dates indicated.

                                                SIGNATURE                                         TITLE

Date:         May 10, 2002          /s/ Jeffrey H. Smulyan               President, Chairman of the Board and
                                    ----------------------
                                    Jeffrey H. Smulyan                   Director (Principal Executive Officer)

Date:         May 10, 2002          /s/ Walter Z. Berger                 Executive Vice President, Treasurer,
                                    --------------------
                                    Walter Z. Berger                     Chief Financial Officer and Director
                                                                         (Principal Accounting Officer)

Date:         May 10, 2002          Susan B. Bayh*                       Director
                                    -------------
                                    Susan B. Bayh

Date:         May 9, 2002           Gary L. Kaseff*                      Executive Vice President, General
                                    --------------
                                    Gary L. Kaseff                       Counsel and Director

Date:         May 10, 2002          Richard A. Leventhal*                Director
                                    --------------------
                                    Richard A. Leventhal

Date:         May 8, 2002           Greg A. Nathanson*                   Director
                                    -----------------
                                    Greg A. Nathanson

Date:         May 13, 2002          Frank V. Sica*                       Director
                                    -------------
                                    Frank V. Sica

Date:         May 9, 2002           Lawrence B. Sorrel*                  Director
                                    ------------------
                                    Lawrence B. Sorrel


*By:              /s/  J. Scott Enright
                  ---------------------
                  J. Scott Enright
                  Attorney-in-Fact

EX-10 3 ex10-13.htm KALC-FM SALES AGREEMENT EXHIBIT 10-13


                                                 ASSET PURCHASE AGREEMENT

                                               Dated as of February 12, 2002

                                                           Among

                                                 EMMIS RADIO CORPORATION,

                                             EMMIS RADIO LICENSE CORPORATION,

                                               ENTERCOM COMMUNICATIONS CORP.

                                                   ENTERCOM DENVER, LLC

                                                            and

                                               ENTERCOM DENVER LICENSE, LLC






                                                  RADIO STATION KALC(FM)






                                              ASSET PURCHASE AGREEMENT


                  THIS ASSET PURCHASE AGREEMENT, dated as of February 12,  2002 (this &#147;Agreement”), among Emmis Radio
Corporation, an Indiana corporation (“Emmis Radio”), and  Emmis Radio License Corporation, a California corporation
(“Emmis License” together with Emmis Radio, the “Emmis Entities”), Entercom Communications Corp., a Pennsylvania
- -
corporation (“Entercom”), Entercom Denver, LLC, a Delaware limited liability company (“Entercom Denver”) and Entercom
Denver License, LLC, a Delaware limited liability company (“Entercom Denver License,” and together with Entercom and
Entercom Denver, “Buyer”).

                                                   W I T N E S S E T H :

                  WHEREAS, Emmis Radio is engaged in the business of owning and operating Radio Broadcast Station KALC(FM)
licensed to Denver, Colorado (the &#147;Station&#148;);

                  WHEREAS, Emmis License holds the broadcast licenses issued by the FCC and used in the operation of the
Station; and

                  WHEREAS, the Emmis Entities desire to sell to Buyer, and Buyer desires to purchase from the Emmis
Entities, substantially all of the assets, properties and business relating to the Station, all on the terms and subject
to the conditions set forth herein;

                  NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, it is
hereby agreed among the Emmis Entities and Buyer as follows:

ARTICLE I

                                                        DEFINITIONS


Section 1.1.      Definitions.  As used in this Agreement, the following terms have the meanings specified or referred to
                  -----------
in this Section 1.1:
        -----------

                 “Administrative Violation” has the meaning specified in Section 5.9.

                  “Adjustment Date” has the meaning specified in Section 2.11.

                  “Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls,
is controlled by or is under common control with such Person.

                  “Antenna Landlord” has the meaning specified in Section 9.7(b).

                  “Antenna Lease” has the meaning specified in Section 9.1.

                  “Antenna Lease Early Termination Right” has the meaning specified in Section 9.1.

                  “Appraisal Firm” means BIA Financial Network, Inc.

                  “Asset Allocation” has the meaning specified in Section 2.10.

                  “Assignment Applications” has the meaning specified in Section 5.3(a).

                  “Assignment Opposition” has the meaning specified in Section 8.3.

                  “Assumed Liabilities” has the meaning specified in Section 2.3(a).

                  “Balance Sheet” has the meaning specified in Section 3.4.

                  “Balance Sheet Date” has the meaning specified in Section 3.4.

                  “Barter Agreements” shall mean contracts for the sale of time on the Station in exchange for programming.

                  “Business” has the meaning specified in Section 2.1.

                  “Buyer” has the meaning specified in the introductory paragraph hereof.

                  “Buyer Ancillary Agreements” has the meaning specified in Section 4.2(a).

                  “Buyer Group Member” means Buyer, its Affiliates, directors, officers, employees and agents and their
respective successors and assigns.

                  “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, U.S.C.§§
9601 et seq., any amendments thereto, any successor statutes, and any regulations promulgated thereunder.

                  “Claim Notice” has the meaning specified in Section 9.3(a).

                  “Closing” has the meaning specified in Section 2.4.

                  “Closing Date” has the meaning specified in Section 2.4.

                  “Closing Date Adjustments” has the meaning specified in Section 2.11.

                  “COBRA Coverage” has the meaning specified in Section 2.3(b).

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

                  “Communications Act” means the Communications Act of 1934, as amended.

                  “Contaminant” means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special
waste, petroleum or petroleum-derived substance or waste, or any constituent of any such substance or waste.

                  “Earnest Money Deposit” has the meaning specified in Section 2.5.

                  “Emmis Entities” has the meaning specified in the introductory paragraph hereof.

                  “Emmis Entities Ancillary Agreements” has the meaning specified in Section 3.3(a).

                  “Emmis Group Member” means each Emmis Entity and its Affiliates, directors, officers, employees and
agents and their respective successors and assigns.

                  “Emmis License” has the meaning specified in the introductory paragraph hereof.

                  “Emmis Radio” has the meaning specified in the introductory paragraph hereof.

                  “Employee Plans” has the meaning specified in Section 3.22(a).

                  “Encumbrance” means any lien, claim, charge, security interest, mortgage, pledge, easement, conditional
sale or other title retention agreement, defect in title, covenant or other restrictions of any kind.

                  “Entercom” has the meaning specified in the introductory paragraph hereof.

                  “Entercom Denver” has the meaning specified in the introductory paragraph hereof.

                  “Entercom Denver License” has the meaning specified in the introductory paragraph hereof.

                  “Environmental Assessments” has the meaning specified in Section 5.6.

                  “Environmental Conditions” means the state of the environment, including natural resources (e.g. flora
and fauna), soil, surface water, ground water, any drinking water supply, subsurface strata or ambient air.

                  “Environmental Laws” means all applicable foreign, federal, state, district and local laws, all
applicable rules, policy statements and regulations promulgated thereunder, and all applicable orders, consent decrees,
judgments, governmental notices, permits and governmental demand letters issued, promulgated or entered pursuant thereto,
relating to pollution or protection of the environment (including, without limitation, ambient air, surface water, ground
water, land surface, or subsurface strata), including, without limitation, (i) laws relating to emissions, discharges,
releases or threatened releases of Hazardous Materials into the environment and (ii) laws relating to the identification,
generation, manufacture, processing, distribution, use, treatment, storage, disposal, recovery, transport or other
handling of Hazardous Materials.  Environmental Laws shall include, without limitation, CERCLA, as amended, RCRA, as
amended, the Toxic Substances Control Act, as amended, the Hazardous Materials Transportation Act, as amended, the Clean
Water Act, as amended, the Safe Drinking Water Act, as amended, the Clean Air Act, as amended, the Occupational Safety
and Health Act, as amended, and all analogous laws promulgated or issued by any Governmental Body that are enacted and
currently in effect.

                  “Environmental Reports” means any and all written analyses, summaries or explanations, known by, and
identified in the environmental records of, the Emmis Entities of (i) any Environmental Conditions in, on or about the
current or former properties of the Emmis Entities or (ii) the Emmis Entities' compliance with, or liability under, any
Environmental Laws.

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

                  “ERISA Affiliate” means any person which is (or at any relevant time was) a member of a controlled group
of corporations within the meaning of Code Section 414(b), any trade or business which is under common control within the
meaning of Code Section 414(c), and any affiliated service group, within the meaning of Code Section 414(m) or (o), of
which either of the Emmis Entities is (or at any relevant time was) a member.

                  “Escrow Account” has the meaning specified in Section 2.5.

                  “Escrow Agent” has the meaning specified in Section 2.5.

                  “Escrow Agreement” means the Escrow Agreement to be executed and delivered by the Emmis Entities, Buyer
and the Escrow Agent contemporaneously with the execution and delivery of this Agreement.

                  “Event of Loss” has the meaning specified in Section 11.13(a).

                  “Excluded Assets” has the meaning specified in Section 2.2.

                  “Excluded Liabilities” has the meaning specified in Section 2.3(b).

                  “Expense” means any and all expenses incurred in connection with investigating, defending or asserting
any claim, action, suit or proceeding incident to any matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or costs, witness fees, and reasonable fees and
disbursements of legal counsel, investigators, expert witnesses, consultants, accountants and other professionals).

                  “FAA” means the Federal Aviation Administration.

                  “FCC” means the Federal Communications Commission.

                  “FCC Consent” means action by the FCC granting its consent to the assignment to Buyer (or Affiliates of
Buyer) of the Station Licenses as contemplated by this Agreement pursuant to appropriate applications filed by the
parties with the FCC.

                  “Final Order” means an order or action of the FCC that, by reason of expiration of time or exhaustion of
remedies, is no longer subject to administrative or judicial reconsideration or review in the normal course.

                  “GAAP” means generally accepted accounting principles in the United States on the date of this Agreement.

                  “Governmental Body” means any foreign, federal, state, local or other governmental authority or
regulatory body.

                  “Governmental Permits” has the meaning specified in Section 3.9(a).

                  “Hazardous Materials” means all pollutants, contaminants, chemicals, wastes, and any other carcinogenic,
ignitable, corrosive, reactive, toxic, infectious, radioactive or otherwise hazardous substances or materials (whether
solids, liquids or gases) subject to regulation, control or remediation under Environmental Laws but excluding materials
occurring naturally at or about any facility.  By way of example only, the term Hazardous Materials includes petroleum,
urea formaldehyde, flammable, explosive and radioactive materials, PCBs, pesticides, herbicides, asbestos, acids, metals,
solvents and waste waters.

                  “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

                  “Indemnified Party” has the meaning specified in Section 9.3(a).

                  “Indemnitor” has the meaning specified in Section 9.3(a).

                  “Intellectual Property” has the meaning specified in Section 3.13(a).

                  “Knowledge of Buyer” means, as to a particular matter, the actual knowledge of the following persons:
the President of Buyer, the Chief Financial Officer of Buyer, the Treasurer of Buyer, the Chief Human Resources Officer
of Buyer, the General Counsel of Buyer, the Director of Engineering of Buyer and the Controller of Buyer.

                  “Knowledge of the Emmis Entities” means, as to a particular matter, the actual knowledge of the
President, Chief Financial Officer, General Counsel, Treasurer, Secretary, Director of Engineering and Human Resources
Director of each Emmis Entity, and the General Manager, the Chief Engineer and General Sales Manager of the Station.

                  “Letter Agreement” has the meaning specified in Section 4.7.

                  “Liability” means any and all claims, debts, liabilities, obligations and commitments of any nature
whatsoever, whether known or unknown, asserted or unasserted, fixed, absolute or contingent, matured or unmatured,
accrued or unaccrued, liquidated or unliquidated or due or to become due, whenever or however arising (including those
arising out of any contract or tort, whether based o negligence, strict liability or otherwise) and whether or not the
same would be required by GAAP to be reflected as a liability in financial statements or disclosed in the notes thereto.

                  “Loss” means any and all losses, costs, obligations, liabilities, settlement payments, awards,
judgments, fines, penalties, damages, expenses, deficiencies or other charges.

                  “Material Adverse Effect” means a material adverse effect on the business, operations, or financial
condition of the Station, the Business or the Purchased Assets, or any event or condition which would, with the passage
of time, constitute such a “material adverse effect,” other than changes relating to generally applicable economic
conditions or the radio broadcasting industry in general.

                  “Material Station Agreements” has the meaning specified in Section 5.5.

                  “OSHA” means the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq., any amendment thereto,
any successor statute, and any regulations promulgated thereunder.

                  “Other Station” means Radio Broadcast Station KXPX(FM).

                  “Payment Date” has the meaning specified in Section 2.11.

                  “Permitted Encumbrance” means (a) liens for Taxes, assessments or other governmental charges which are
not yet due and payable, (b) liens for mechanics, materialmen's and similar encumbrances with respect to any amounts not
yet due and payable, and (c) Encumbrances securing payments under the Personal Property Leases set forth in Schedule 3.12.
                                                                                                            -------------

                  “Person” means any person, employee, individual, corporation, limited liability company, partnership,
trust, or any other non-governmental entity or any governmental or regulatory authority or body.

                  “Personal Property” has the meaning specified in Section 3.11.

                  “Personal Property Leases” has the meaning specified in Section 3.12.

                  “Proposed Acquisition Transaction” has the meaning specified in Section 5.13.

                  “Public Filings” has the meaning specified in Section 6.5.

                  “Purchased Assets” has the meaning specified in Section 2.1.

                  “Purchase Price” has the meaning specified in Section 2.6.

                  “RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., and any successor
statute, and any regulations promulgated thereunder.

                  “Real Property” has the meaning specified in Section 3.10(a).

                  “Real Property Leases” has the meaning specified in Section 3.10(c).

                  “Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water, groundwater or property.

                  “Required Consent” has the meaning specified in Section 8.6.

                  “Requirements of Law” means any foreign, federal, state or local law, rule or regulation, Governmental
Permit or other binding determination of any Governmental Body.

                  “Shared Assets” means the assets and rights shared with the Other Station as of the date hereof which,
pursuant to the terms and provisions of this Agreement, the TBA or the disclosure schedules attached hereto, are
identified as assets or rights shared with the Other Station.

                  “Specified Event” has the meaning specified in Section 11.13(b).

                  “Split Contract” means those Shared Assets consisting of the Station Agreements described in Item 2 of
Schedule 3.18.
- -------------

                  “Station” has the meaning specified in the first recital hereof.

                  “Station Agreements” has the meaning specified in Section 3.19.

                  “Station Licenses” has the meaning specified in Section 2.1(b).

                  “Tax” means any federal, state, local or foreign net income, alternative or add-on minimum, gross
income, gross receipts, property, sales, use, transfer, gains, license, excise, employment, payroll, withholding or
minimum tax, or any other tax custom, duty, governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount imposed by any Governmental Body.

                  “TBA” means the Time Brokerage Agreement to be executed and delivered by Emmis Radio and Entercom Denver
contemporaneously with the execution and delivery of this Agreement.

                  “TBA Effective Date” means the “Effective Date” of the TBA as defined in Section 2.2 of the TBA.

                  “Threshold Amount” has the meaning specified in Section 9.1.

                  “Time Sales Agreements” shall mean contracts for the sale of time on the Station for cash.

                  “Trade Agreements” shall mean contracts for the sale of time on the Station in exchange for merchandise
or services used or useful for the benefit of the Station, excluding Barter Agreements.

                  “Tribune Entities” has the meaning specified in Section 4.7.

                  “Transferred Employees” has the meaning specified in Section 6.2(a).

ARTICLE II

                                           PURCHASE AND SALE OF PURCHASED ASSETS

Section 2.1.      Purchase and Sale of Purchased Assets.  Upon the terms and subject to the conditions of this Agreement,
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on the Closing Date, the Emmis Entities shall sell, transfer, assign, convey and deliver to Buyer and the Buyer shall
purchase from the Emmis Entities, free and clear of all Encumbrances (except for Permitted Encumbrances), all of the
assets, properties and business (excepting only the Excluded Assets) of every kind and description, wherever located,
real, personal or mixed, tangible or intangible, relating to the Station or the business of the Station (the “Business”)
as the same shall exist on the Closing Date (herein collectively referred to as the “Purchased Assets”), including,
without limitation, all right, title and interest of the Emmis Entities in, to and under:

(a)      All receivables due to the Station pursuant to the Trade Agreements and accounts receivable generated by the
Business for periods commencing on the TBA Effective Date and continuing as long as the TBA is in effect, but excluding
any amounts payable by Buyer to Emmis Radio in accordance with the TBA;

(b)      All licenses, permits and other authorizations issued by the FCC for the operation of the Station, including, but
not limited to, those listed on Schedule 3.9(b) (the “Station Licenses”), all licenses, permits, permissions and other
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authorizations issued by any other governmental agencies to the Emmis Entities for the operation of the Station, the
right to use the Station's call letters, and all applications for modification, extension or renewal thereof, and any
pending applications for any new licenses, permits, permissions or authorizations pending on the Closing Date, including,
but not limited to, those listed on Schedule 3.9(b).
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(c)      The Real Property Leases and any option, right or contract to purchase, lease, possess or occupy real property
described in Schedule 3.10(c);
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(d)      All machinery, equipment (including computers and office equipment), auxiliary and translator facilities,
transmitting towers, transmitters, broadcast equipment, antennae, supplies, inventory (including all programs, records,
tapes, recordings, compact discs, cassettes, spare parts and equipment), advertising and promotional materials,
engineering plans, records and data, vehicles, furniture and other personal property owned by the Emmis Entities used in
or relating to the Station or the Business, including, without limitation, the items listed or referred to in
Schedule 3.11, but excluding any such property disposed of by the Emmis Entities or Buyer, between the date hereof and the
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Closing Date in accordance with the terms of this Agreement and the TBA;

(e)      The Personal Property Leases and the personal property leased thereunder listed in Schedule 3.12;
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(f)      The trademarks, trade names (including the right to use the trade name “KALC”), service marks and copyrights (and
all goodwill associated therewith), registered or unregistered, relating to the Station or the Business, and the
applications for registration thereof and the patents and applications therefor and the licenses relating to any of the
foregoing including, without limitation, the items listed in Schedule 3.13(a);
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(g)      (i) All contracts for the sale of broadcast time for advertising or other purposes on the Station made in the
ordinary course of the Business and consistent with past practice, (ii) the contracts, agreements or understandings
listed or described in Schedule 3.18 and designated on such Schedule as an “Assumed Contract” and (iii) any other
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contract, agreement or understanding (evidenced in writing) entered into by an Emmis Entity in respect of the Business
which (A) is of the nature described in subsection (b), (c) or (f) of Section 3.18 but which, by virtue of its specific
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terms, is not required to be listed in Schedule 3.18 or (B) is entered into after the date hereof consistent with the
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provisions of Section 5.4(c) of this Agreement or by or at the direction of Buyer in accordance with the terms of the TBA;
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(h)      All advertising customer lists, mailing lists, processes, trade secrets, know-how and other proprietary or
confidential information used in or relating to the Business, the Purchased Assets or the Station;

(i)      All rights, claims or causes of action of the Emmis Entities against third parties arising under warranties from
manufacturers, vendors and others in connection with the Purchased Assets, the Station or the Business;

(j)      All prepaid rentals and other prepaid expenses (except for prepaid insurance) arising from payments made by
either Emmis Entity to the extent relating to the operation of the Business prior to the Closing Date for goods or
services to be received on and after the Closing Date, to the extent the Emmis Entities receive a credit therefor under
Section 2.11;
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(k)      All jingles, slogans, commercials and other promotional materials used in or relating to the Station or the
Business;

(l)      All books and records (including all computer programs used primarily in connection with the operation of the
Business, the Purchased Assets or the Station) of the Emmis Entities relating to the assets, properties, business and
operations of the Business, the Purchased Assets or the Station including, without limitation, all files, logs,
programming information and studies, technical information and engineering data, news and advertising studies or
consulting reports and sales correspondence, but excluding any books and records (including computer programs) relating
to a business of the Emmis Entities unrelated to the Business, the Purchased Assets or the Station; and

(m)      All other assets or properties not referred to above which are reflected on the Balance Sheet or acquired by
either Emmis Entity in the ordinary course of the Business after the Balance Sheet Date but prior to Closing, except
(i) any such assets or properties disposed of after the Balance Sheet Date in the ordinary course of the Business
consistent with the terms of this Agreement and the TBA, and (ii) Excluded Assets.

Section 2.2.      Excluded Assets.  Notwithstanding the foregoing, the Purchased Assets shall not include the following
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(herein referred to as the “Excluded Assets”):

(a)      All cash and cash equivalents (including any marketable securities or certificates of deposit) of the Emmis
Entities;

(b)      All claims, rights and interests of the Emmis Entities in and to any refunds for federal, state or local
franchise, income or other Taxes for periods prior to the Closing Date (subject to claims of Buyer for proration of
property and other Taxes or fees of any nature whatsoever under this Agreement and the TBA);

(c)      Any rights, claims or causes of action of the Emmis Entities against third parties except to the extent relating
to the assets, properties, business or operations of the Business, the Purchased Assets or the Station;

(d)      All bonds held, contracts or policies of insurance and prepaid insurance with respect to such contracts or
policies;

(e)      Each Emmis Entity's corporate seal, corporate minute books, stock record books, corporate records relating to
incorporation, corporate Tax returns and related documents and supporting work papers and any other records and returns
relating to Taxes, assessments and similar governmental levies (other than real and personal property Taxes, assessments
and levies imposed on the Purchased Assets);

(f)      All bids from other parties in connection with the sale or transfer of the Station;

(g)      The contracts, agreements or understandings of the Emmis Entities, pursuant to Section 3.18, which are required
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to be listed, but are not listed on Schedule 3.18; the contracts, agreements or understandings of the Emmis Entities
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listed in Schedule 3.18 and designated on such Schedule as a “Contract Not Assumed”; and any contract, agreement or
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understanding listed on Schedule 3.18 which has expired prior to the Closing Date;
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(h)      Any trade name, trademarks, service marks or logos using or incorporating the name “Emmis” or the Emmis “e” logo;

(i)      All records and documents relating to Excluded Assets or to liabilities other than Assumed Liabilities and not
relating to the Business, the Purchased Assets, the Station or the Assumed Liabilities;

(j)      All trusts, trust assets, trust accounts, reserves, insurance policies, or other assets, including, but not
limited to, those listed in Schedule 3.22 and relating to employees or to funding the employee benefit plans, agreements
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or arrangements sponsored, maintained, contributed to, or administered by either Emmis Entity;

(k)      Any rights of or payment due to either Emmis Entity under or pursuant to this Agreement, the TBA or the other
agreements with Buyer contemplated hereby;

(l)      All accounts receivable arising out of the operation of the Business for periods prior to the TBA Effective Date;
and

                  (m)      The portion of the Shared Assets which,  as identified and provided in the TBA or the disclosure
schedules attached hereto, are to be retained by the Emmis Entities or transferred to the purchaser of the Other Station.

Section 2.3.      Assumption of Liabilities.
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(a)      Upon the terms and subject to the conditions of this Agreement, on the Closing Date, Buyer shall deliver to the
Emmis Entities an undertaking and assumption, in a form reasonably acceptable to the Emmis Entities and Buyer and
consistent with this Agreement, pursuant to which Buyer shall assume and be obligated for, and shall agree to pay,
perform and discharge in accordance with their terms, the following obligations and liabilities of the Emmis Entities
(except to the extent such obligations and liabilities constitute Excluded Liabilities):

(i)      All liabilities and obligations under Environmental Laws related to, associated with or arising out of, in each
                  case provided that the condition giving rise to such liability or obligation did not exist prior to the
                  Closing Date, (A) the occupancy, operation, use or control of any of the Real Property listed or
                  described in Schedule 3.10(a) on or after the Closing Date or (B) the operation of the Business by Buyer
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                  on or after the Closing Date, including, without limitation, any Release or storage of any Hazardous
                  Materials on, at or from (1) any such real property (including, without limitation, all facilities,
                  improvements, structures and equipment thereon, surface water thereon or adjacent thereto and soil or
                  groundwater thereunder) or any conditions whatsoever on, under or in such real property or (2) any real
                  property or facility owned by a third party at which Hazardous Materials generated by the Business were
                  sent on or after the Closing Date, but excluding all liabilities and obligations arising out of or
                  caused by either Emmis Entity's actions;

(ii)     All liabilities and obligations arising under the Real Property Leases, Personal Property Leases, and all other
                  agreements and contracts assigned and transferred to Buyer at Closing in accordance with this Agreement
                  to the extent such liabilities and obligations have not already been assumed in accordance with the
                  terms of the TBA and to the extent such obligations arise during and relate to any period on or after
                  the Closing Date;

(iii)    All liabilities and obligations that arise with respect to events occurring on and after the Closing Date
                  relating to operation of the Station and the Business and ownership of the Purchased Assets; and

(iv)     Notwithstanding anything to the contrary set forth in the foregoing provisions of this Section 2.3(a) or in
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                  Section 2.3(b) or elsewhere in this Agreement, those liabilities of the Emmis Entities to the extent,
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                  and only to the extent, the amount thereof is included as a credit to Buyer in calculating the Closing
                  Date Adjustments as ultimately determined pursuant to Section 2.11.
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                  All of the foregoing to be assumed by Buyer hereunder are referred to herein as the “Assumed
Liabilities.”

(b)      Buyer shall not assume or be obligated for any of, and the Emmis Entities shall solely retain, pay, perform,
defend and discharge all of, their respective liabilities or obligations of any and every kind whatsoever, direct or
indirect, known or unknown, absolute or contingent, not expressly assumed by Buyer under Section 2.3(a) and,
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notwithstanding anything to the contrary in Section 2.3(a) (except Section 2.3(a)(iv)), including, without limitation
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(herein referred to as “Excluded Liabilities”):

(i)      All liabilities and obligations of either or both of the Emmis Entities to be paid or performed and arising
                  before the Closing Date in connection with the operation of the Station and the Business and the
                  ownership of the Purchased Assets other than those obligations assumed by Buyer in connection with the
                  TBA;

(ii)     Any foreign, federal, state, county or local income Taxes which arise from the operation of the Station or the
                  Business or the ownership of the Purchased Assets prior to the Closing Date;

(iii)    Any liability or obligation of either or both of the Emmis Entities in respect of indebtedness for borrowed money
                  or any intercompany payable of either or both of the Emmis Entities or any of their Affiliates;

(iv)     All liabilities and obligations under Environmental Laws related to, associated with or arising out of (A) the
                  occupancy, operation, use or control of any of the Real Property listed or described in Schedule 3.10(a)
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                  prior to the Closing Date or (B) the operation of the Business prior to the Closing Date, in each case
                  existing or the condition precedent thereto existing prior to the Closing Date, including, without
                  limitation, any Release or storage of any Hazardous Materials prior to the Closing Date on, at or from
                  (1) any such real property (including, without limitation, all facilities, improvements, structures and
                  equipment thereon, surface water thereon or adjacent thereto and soil or groundwater thereunder) or any
                  conditions whatsoever on, under or in such real property or (2) any real property or facility owned by a
                  third party at which Hazardous Materials generated by the Business were sent prior to the Closing Date;

(v)      Any liabilities or obligations, whenever arising (i) related to, associated with or arising out of any pension,
                  profit sharing, or welfare employee benefit plan or other employee benefit plan, program or arrangement
                  of the Emmis Entities providing any of the benefits described in 3(1) or 3(2) of ERISA, or providing any
                  employment, consulting, severance, vacation, retirement, post-retirement, bonus, stay bonus, deferred
                  compensation, incentive compensation, stock ownership, stock options, stock appreciation rights, stock
                  purchase rights, phantom stock rights, insurance, worker's compensation, disability, unemployment,
                  medical, or other benefit; and (ii) relating to any current, former or retired employees, including but
                  not limited to those plans, programs or arrangements listed in Schedule 3.22 and the obligation to
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                  provide continuation coverage as defined in Section 4980B of the Code (“COBRA Coverage”) to any employee
                  of either Emmis Entity arising prior to Closing;

(vi)     Any costs and expenses incurred by either or both of the Emmis Entities incident to its negotiation and
                  preparation of this Agreement or the TBA and its or their performance and compliance with the agreements
                  and conditions contained herein or therein;

(vii)    Any of either or both of the Emmis Entities' liabilities or obligations under this Agreement, the TBA or the
                  Emmis Entities Ancillary Agreements;

(viii)   Any liabilities or obligations of either or both of the Emmis Entities to be paid or performed on or after the
                  Closing Date in connection with the operation of the Station and the Business and the ownership of the
                  Purchased Assets, to the extent such liabilities and obligations, but for a breach or default by either
                  Emmis Entity, would have been paid, performed or otherwise discharged prior to the Closing Date or to
                  the extent the same arise out of any such breach or default (unless such breach or default is caused by
                  Buyer's action or failure to perform as required under the TBA);

(ix)     Any of either or both of the Emmis Entities' liabilities or obligations relating to the Excluded Assets;

(x)      Any liabilities or obligations of either or both of the Emmis Entities arising out of or relating to the
                  employment of employees or independent contractors of the Station or the Business before and upon the
                  Closing, including, without limitation, accrued salary, payroll and wages, accrued sick pay, accrued
                  commissions, accrued “comp” time, accrued vacation time, and the proper classification of individuals
                  providing services to either Emmis Entity as independent contractors or as employees, as the case may be;

(xi)     Any obligations or liabilities relating to or arising out of any claims or pending litigation proceedings to the
                  extent based on events occurring prior to Closing;

(xii)    Any obligations or liabilities relating to the employment prior to or upon Closing by either or both of the Emmis
                  Entities, and/or termination prior to or upon Closing by either or both of the Emmis Entities, of
                  employees employed at the Station or in connection with the Business; and

(xiii)   Any obligations or liabilities arising out of or in connection with any contracts of either of the Emmis Entities
                  not required to be assumed by Buyer under this Agreement or the TBA.

Section 2.4.      Closing Date.  The purchase and sale of the Purchased Assets provided for in Section 2.1 (the “Closing”)
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shall be consummated at 10:00 A.M., local time, on a date agreed upon by Emmis Radio and Buyer, occurring within 10 days
after the conditions set forth in Articles VII and VIII are satisfied or, if permissible, waived or such other date, as
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may be agreed upon by Emmis Radio and Buyer, at the offices of Bose McKinney & Evans LLP, 2700 First Indiana Plaza, 135
North Pennsylvania Street, Indianapolis, Indiana  46204, provided, that in no event shall the Closing take place any
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earlier than the third (3rd) business day after the expiration of any cure period which has commenced after the giving of
written notice of a breach of any representation or warranty as provided in Section 10.1(a), or at such other place or at
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such other time as shall be agreed upon by Emmis Radio and Buyer (such date and time being hereinafter called the
“Closing Date”).

Section 2.5.      Earnest Money.  Within two (2) business days after the execution and delivery of this Agreement, Buyer
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shall deposit Eight Million Eight Hundred Thousand Dollars ($8,800,000) (the “Earnest Money Deposit”), in an escrow
account (the “Escrow Account”) with Bank One Trust Company, National Association (the “Escrow Agent”) in accordance with
the escrow agreement to be executed contemporaneously with this Agreement by and among the Emmis Entities, Buyer and the
Escrow Agent (the “Escrow Agreement”), in a form reasonably acceptable to the parties thereto.  The Earnest Money Deposit
shall be held and disbursed in accordance with the terms of the Escrow Agreement and the provisions of this Section 2.5.
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(a)      At the Closing, the Emmis Entities and Buyer shall jointly instruct the Escrow Agent to disburse the Earnest
Money Deposit held by the Escrow Agent pursuant to the Escrow Agreement to Buyer, together with all interest and other
earnings on the Earnest Money Deposit not previously distributed to Buyer.

(b)      If this Agreement is terminated pursuant to Sections 10.1(a)(i), (iii), (iv), (v), (vi), (vii), (viii), (ix) or
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(x) and Section 2.5(c) does not apply, the Emmis Entities and Buyer shall jointly instruct the Escrow Agent to disburse
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the Earnest Money Deposit held by the Escrow Agent pursuant to the Escrow Agreement to Buyer, together with all interest
and other earnings on the Earnest Money Deposit not previously distributed to Buyer.

(c)      If this Agreement is terminated pursuant to Section 10.1(a)(ii), the Emmis Entities and Buyer shall jointly
                                                     -------------------
instruct the Escrow Agent (i) to disburse the Earnest Money Deposit held by the Escrow Agent pursuant to the Escrow
Agreement to the Emmis Entities, and (ii) to disburse to Buyer all interest and other earnings on the Earnest Money
Deposit not previously distributed to Buyer.

Section 2.6.      Purchase Price.  The purchase price for the Purchased Assets shall be equal to Eighty-Eight Million
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Dollars ($88,000,000), as adjusted pursuant to Sections 2.11 and 11.13(a)(i) (the “Purchase Price”).
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Section 2.7.      Payment of Purchase Price.  The payment of the Purchase Price shall be made by bank wire transfer of
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immediately available funds to such bank account or accounts designated by the Emmis Entities for such purpose not less
than three (3) business days before the date such payment is required to be made.

Section 2.8.      Closing Date Deliveries.
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(a)      On the Closing Date, the Emmis Entities shall execute and deliver or cause to be delivered to Buyer (i) a bill of
sale and assignments, in a form reasonably acceptable to Buyer, conveying all of the Purchased Assets, (ii) all of the
documents and instruments required to be delivered by the Emmis Entities pursuant to Article VIII, (iii) copies of the
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certificates or articles of incorporation of the Emmis Entities, each certified as of a recent date by the Secretaries of
State of the state of their incorporation, (iv) certificates of good standing of the Emmis Entities, each issued as of a
recent date by the Secretaries of State of their state of incorporation and the Secretary of State of the State of
Colorado (solely as to Emmis Radio), (v) a certificate of the secretary or assistant secretary of each of the Emmis
Entities as to the resolutions of its board of directors and stockholders (if applicable) authorizing the execution and
delivery of this Agreement and the transactions contemplated hereby and the incumbency and signatures of its officers
executing this Agreement and any the Emmis Entities Ancillary Agreement, (vi) an opinion of the Emmis Entities' legal and
communications counsel, dated as of the Closing Date, in the form attached hereto as Exhibit A-1 and Exhibit A-2, (vii) a
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certification of non-foreign status, in form and substance reasonably satisfactory to Buyer, in accordance with Treas.
Reg. § 1.1445-2(b), and (viii) payoff letters together with copies of UCC-3 termination statements executed by the Emmis
Entities senior and subordinated lenders, such payoff letters including commitments to file the UCC-3 termination
statements following receipt of the payoff amounts as soon as practicable following the Closing and such other documents
and instruments as may be reasonably necessary to evidence that the Purchased Assets at Closing are free and clear of all
Encumbrances other than Permitted Encumbrances.

(b)      On the Closing Date, Buyer shall deliver or cause to be delivered to the Emmis Entities the Purchase Price,
payable in the manner described in Section 2.7, and execute and deliver (i) all of the documents and instruments required
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to be delivered by the Buyer pursuant to Article VII, (ii) copies of the charter or certificate of formation, as
                                         -----------
applicable, of each entity constituting Buyer, certified as of a recent date by the secretary of state of its state of
incorporation or formation, as applicable, (iii) a certificate of good standing of each entity constituting Buyer, issued
as of a recent date by the secretary of state of the state of its incorporation or formation, as applicable, (iv) a
certificate of the secretary or assistant secretary of Buyer as to the resolutions of its member(s) or board of directors
and stockholders (as applicable) authorizing the execution and delivery of this Agreement and the transactions
contemplated hereby and the incumbency and signatures of its officers executing this Agreement and any Buyer Ancillary
Agreement, (v) the undertaking and assumption described in Section 2.3(a), (vi) a certification of non-foreign status, in
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form and substance reasonably satisfactory to the Emmis Entities, in accordance with Treas. Reg. § 1.1445-2(b), and (vi)
an opinion of the Buyer's legal counsel, dated as of the Closing Date, in the form attached hereto as Exhibit B-1.
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Section 2.9.      Further Assurances.
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(a)      On the Closing Date, the Emmis Entities shall (i) deliver to Buyer such other bills of sale, endorsements,
assignments and other good and sufficient instruments of conveyance and transfer as Buyer may reasonably request or as
may be otherwise reasonably necessary to vest in Buyer all the right, title and interest of the Emmis Entities in, to or
under any or all of the Purchased Assets and (ii) take all steps as may be reasonably necessary to put Buyer in actual
possession and control of all the Purchased Assets.  From time to time following the Closing, the Emmis Entities shall
execute and deliver, or cause to be executed and delivered, to Buyer such other instruments of conveyance and transfer as
Buyer may reasonably request or as may be otherwise necessary to more effectively convey and transfer to, and vest in,
Buyer and put Buyer in possession of, any part of the Purchased Assets.  Notwithstanding anything in this Agreement to
the contrary, this Agreement shall not constitute an agreement to assign any license, certificate, approval,
authorization, agreement, contract, lease, easement or other commitment included in the Purchased Assets if an attempted
assignment thereof without the consent of a third party thereto would constitute a breach thereof.

(b)      On the Closing Date, Buyer shall deliver to the Emmis Entities such other undertakings and assumptions and other
good and sufficient instruments of conveyance, transfer and assumption as the Emmis Entities may reasonably request or as
may be otherwise reasonably necessary to evidence Buyer's assumption of and obligation to pay, perform and discharge the
Assumed Liabilities.  From time to time following the Closing, Buyer shall execute and deliver, or cause to be executed
and delivered, to the Emmis Entities such other undertakings and assumptions as the Emmis Entities may reasonably request
or as may be otherwise necessary to more effectively evidence Buyer's assumption of and obligation to pay, perform and
discharge the Assumed Liabilities.

Section 2.10.     Allocation.  The Purchase Price shall be allocated among the Assets as provided in this Section (the
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“Asset Allocation”).  The Emmis Entities and Buyer shall use good faith efforts to agree upon, prior to Closing, an
allocation of the Purchase Price among the Purchased Assets which, if agreed upon within sixty (60) days after the date
hereof, will be incorporated in a schedule to be executed by the parties prior to or at Closing.  If the Emmis Entities
and Buyer are unable to so agree, the Emmis Entities and Buyer shall then promptly retain the Appraisal Firm to appraise
the classes of the Purchased Assets.  The Appraisal Firm shall be instructed to perform an appraisal of the classes of
Purchased Assets and to deliver a report to the Emmis Entities and Buyer as soon as reasonably practicable.  Buyer and
the Emmis Entities shall bear equally the fees, costs and expenses of the Appraisal Firm.  The Emmis Entities shall use
reasonable efforts to make available to Buyer and the Appraisal Firm copies of any appraisals prepared in connection with
the Emmis Entities' acquisition of the Station.  Each party shall prepare IRS Form 8594 allocating the Purchase Price in
accordance with Section 1060 of the Code and in accordance with the Asset Allocation, and shall forward it within ninety
(90) days after the Closing Date to the other party for their approval, which approval shall not be unreasonably
withheld, conditioned or delayed.  Buyer and the Emmis Entities shall each file with their respective Federal income tax
return for the tax year in which the Closing occurs, IRS Form 8594 containing the information agreed upon by the parties
pursuant to the immediately preceding sentence.  Buyer agrees to report the purchase of the Purchased Assets, and the
Emmis Entities agree to report the sale of the Assets on their respective tax returns in a manner consistent with the
information agreed upon by the parties pursuant to this Section and contained in its respective IRS Form 8594.  Each
party shall provide the other party with a copy of its IRS Form 8594 as filed with the Internal Revenue Service.
Notwithstanding anything to the contrary in this Agreement, the provisions of this Section 2.10 shall survive the Closing
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for the full period of any applicable statute of limitations plus sixty (60) days.

Section 2.11.     Prorations and Adjustments.  Except as otherwise provided in the TBA, the operation of the Station and
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the income and normal operating expenses, attributable thereto through 11:59 p.m. on the day prior to the Closing Date
(the “Adjustment Date”) shall be for the account of the Emmis Entities and thereafter for the account of Buyer including,
but not limited to, expenses and income or benefit for or resulting from goods or services received by the Business, real
and personal property taxes and assessments, power and utilities charges, and rents and similar prepaid and deferred
items (the “Closing Date Adjustments”).  All special assessments and similar charges or liens imposed against the
Purchased Assets in respect of any period of time through the Adjustment Date, whether payable in installments or
otherwise, shall be the responsibility of the Emmis Entities, and amounts with respect to such special assessments,
charges or liens in respect of any period of time after the Adjustment Date shall be the responsibility of Buyer, and
such charges shall be adjusted as required hereunder.  Without limiting the generality of the foregoing, (a) the Emmis
Entities shall receive a credit for the unapplied portion, as of the Adjustment Date, of the security deposits made by
the Emmis Entities under those Station Agreements assumed by Buyer at Closing in accordance with Section 2.3(a); and (b)
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with respect to each vacation or portion thereof earned but not taken before the Adjustment Date by each Transferred
Employee hired by Buyer, Buyer shall receive a credit equal to the compensation equivalent thereof plus payroll and
unemployment taxes thereon.  To the extent not inconsistent with the express provisions of this Agreement, the Closing
Date Adjustments shall be made in accordance with GAAP.  Three (3) days prior to the Closing Date, Buyer shall estimate
all apportionments pursuant to this Section 2.11 and shall deliver a statement of its estimates to the Emmis Entities
                                    ------------
(which statement shall set forth in reasonable detail the basis for those estimates).  At the Closing, Buyer shall pay to
the Emmis Entities, or the Emmis Entities shall pay to Buyer, as the case may be (as an adjustment to the Purchase
Price), the net amount due as a result of the estimated apportionments.  Within sixty (60) days after the Closing (the
“Payment Date”), the Emmis Entities shall deliver to Buyer a statement of any adjustments to Buyer's estimate of the
apportionments, and Buyer shall pay to the Emmis Entities, or the Emmis Entities shall pay to Buyer, as the case may be,
any amount due as a result of the adjustment; provided, however, if Buyer disputes the Emmis Entities' determinations, or
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if at any time after delivery of the Emmis Entities' statement of determinations, Buyer or the Emmis Entities determine
that any item included in the apportionments is inaccurate, or that an additional item should be included in the
apportionments, the parties shall confer with regard to the matter and an appropriate adjustment and payment shall be
made as agreed upon by the parties (or, if they are unable to resolve the matter, they shall engage
PriceWaterhouseCoopers LLP to resolve the matter, whose decision on the matter shall be binding and whose fees and
expenses shall be borne equally by the parties).  If the amount of Taxes which are to be prorated pursuant to this
Section 2.11 is not known by sixty (60) days after the Closing Date, then the amount of such Taxes will be estimated as
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of such date and once the amount of such Taxes is known, Buyer shall pay to the Emmis Entities, or the Emmis Entities
shall pay to Buyer, as the case may be, the net amount due as a result of the actual apportionment of such Taxes.
Concurrently with the payment of any amount required to be paid under this Section 2.11, the payor shall pay the payee
                                                                           ------------
interest on such amount calculated at the rate of six percent (6%) per annum from the Closing Date to the date paid.

ARTICLE III

                                              REPRESENTATIONS AND WARRANTIES
                                                            OF
                                                    THE EMMIS ENTITIES

                  As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated
hereby, the Emmis Entities jointly and severally make the following representations and warranties to the Buyer, all of
which are true, correct, and complete as of the date hereof:

Section 3.1.      Organization.  Emmis Radio is a corporation duly organized, validly existing and in good standing under
                  ------------
the laws of the State of Indiana.  Emmis License is a corporation duly organized, validly existing and in good standing
under the laws of the State of California.  Emmis Radio is duly qualified as a foreign corporation to do business in, and
is in good standing under, the laws of the State of Colorado.  The Emmis Entities have the requisite corporate power and
authority to own or lease and to operate the Station, to use the Purchased Assets used by it and to carry on the Business
as conducted by it, and to enter into and perform this Agreement.

Section 3.2.      Subsidiaries and Investments.  Neither Emmis Entity, directly or indirectly, (a) owns, of record or
                  ----------------------------
beneficially, any outstanding voting securities or other equity interests in any corporation, partnership, joint venture
or other entity which is involved in or relates to the Business, the Station or the Purchased Assets, or (b) otherwise
controls any such corporation, partnership, joint venture or other entity which is involved primarily in or relates to
the Business.  The Emmis Entities do not, directly or indirectly, (x) own, of record or beneficially, any outstanding
voting securities or other equity interests in any corporation, partnership, joint venture or other entity which is
involved in or relates to the Business or (y) otherwise control any such corporation, partnership, joint venture or other
entity which is involved in or relates primarily to the Business, the Station or the Purchased Assets.

Section 3.3.      Authority of the Emmis Entities.
                  -------------------------------

(a)      Each Emmis Entity has the requisite corporate power and authority to execute and deliver this Agreement and all
of the other agreements, including the TBA, and instruments to be executed and delivered by the Emmis Entities pursuant
hereto (collectively, the “Emmis Entities Ancillary Agreements”), to consummate the transactions contemplated hereby and
thereby and to comply with the terms, conditions and provisions hereof and thereof.

(b)      The execution, delivery and performance of this Agreement and the Emmis Entities Ancillary Agreements by each
Emmis Entity (to the extent a party thereto) have been duly authorized and approved by all necessary action of the Emmis
Entities and do not require any further authorization or consent of the Emmis Entities, or their respective
stockholders.  This Agreement is, and the TBA and each other Emmis Entities Ancillary Agreement when executed and
delivered by each Emmis Entity and the other parties thereto will be, a legal, valid and binding agreement of each Emmis
Entity enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of
creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

(c)      Except as set forth in Schedule 3.3(c), none of the execution, delivery and performance by either Emmis Entity of
                                ---------------
this Agreement, the TBA or the other Emmis Entities Ancillary Agreements, the consummation by either Emmis Entity of any
of the transactions contemplated hereby or thereby or compliance by either Emmis Entity with or fulfillment by either
Emmis Entity of the terms, conditions and provisions hereof or thereof will:

(i)      conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of
                  default or an event creating rights of acceleration, termination or cancellation or a loss of rights
                  under, or result in the creation or imposition of any Encumbrance upon any of the Purchased Assets
                  under, the certificate of incorporation or bylaws of either Emmis Entity, any Station Agreement, any
                  Governmental Permit or any judgment, order, award or decree to which either Emmis Entity is a party or
                  any of the Purchased Assets, the Station or the Business is subject or by which the Emmis Entities are
                  bound, or any statute, other law or regulatory provision affecting either Emmis Entity or the Business,
                  the Station or the Purchased Assets; or

(ii)     require the approval, consent, authorization or act of, or the making by either Emmis Entity of any declaration,
                  filing or registration with, any third party or any foreign, federal, state or local court, governmental
                  or regulatory authority or body, except for such of the foregoing as are necessary pursuant to the HSR
                  Act or the Communications Act.

Section 3.4.      Financial Statements.  The Emmis Entities have furnished Buyer accurate and complete copies of  (a) the
                  --------------------
unaudited balance sheet of the Business as of February 28, 2001 and the related statement of operations for the four (4)
month period then ended, and (b) the unaudited balance sheet (the “Balance Sheet”) of the Business as of December 31,
2001 (the “Balance Sheet Date”) and the related statement of operations for the ten (10) months then ended.  Such balance
sheets and statements of operations (i) have been prepared from and are in accordance in all material respects with the
books and records regularly maintained by the Emmis Entities, and (ii) have been prepared in accordance with GAAP
consistently applied and present fairly and accurately, in all material respects, the financial position and results of
operations of the Station and the Business as of their respective dates and for the respective periods covered thereby,
with the exceptions that (A) statements of cash flows are not included, (B) federal income tax, expense or benefit are
not shown,  (C) interest income and expense are not shown, and (D) such statements do not contain the disclosures
required by GAAP in notes accompanying financial statements.

Section 3.5.      Operations Since Balance Sheet Date.
                  -----------------------------------

(a)      Except as set forth in Schedule 3.5(a), during the period from the Balance Sheet Date to the date hereof,
                                ---------------
inclusive, there has been:

(i)      no fact, event, change or effect having, or which may have a Material Adverse Effect;

(ii)     no damage, destruction, loss or claim (whether or not covered by insurance) or condemnation or other taking which
                  materially adversely affects the Purchased Assets, the Station or the Business; and

(iii)    no adverse change in employee relations which has had or would reasonably be expected to have a Material Adverse
                  Effect.

(b)      Except as set forth in Schedule 3.5(b), since the Balance Sheet Date through the date hereof, the operations of
                                --------------
the Station and the Business have been conducted only in the ordinary course and in conformity with past practice.
Without limiting the generality of the foregoing, since the Balance Sheet Date, except as set forth in such Schedule
                                                                                                            ---------
3.5(b), the Emmis Entities have not, in respect of the Station, the Business or the Purchased Assets:
- -------

(i)      sold, leased, transferred or otherwise disposed of (including any transfers to any Affiliate of either Emmis
                  Entity), or mortgaged or pledged, or imposed or suffered to be imposed any Encumbrance (other than
                  Permitted Encumbrances) on, any of the Purchased Assets, other than personal property having a value, in
                  the aggregate, of less than $20,000 sold or otherwise disposed of for fair value in the ordinary course
                  of the Business consistent with past practice;

(ii)     canceled without fair consideration therefor any debts owed to or claims held by either Emmis Entity relating to
                  the Station (including the settlement of any claims or litigation) or waived any right of significant
                  value to either Emmis Entity relating to the Station, the Business or the Purchased Assets, other than
                  in the ordinary course of the Business consistent with past practice;

(iii)    created, incurred, guaranteed or assumed, or agreed to create, incur, guarantee or assume, any indebtedness for
                  borrowed money except in the ordinary course of business consistent with past practice;

(iv)     entered into any capitalized leases;

(v)      accelerated collection of notes or accounts receivable generated by the Business to a date prior to the date such
                  collection would have occurred in the ordinary course of the Business;

(vi)     delayed payment of any account payable or other liability of the Business beyond its due date or the date when
                  such liability would have been paid in the ordinary course of the Business consistent with past practice;

(vii)    granted or instituted any increase in any rate of salary or compensation or any profit sharing, bonus, incentive,
                  deferred compensation, insurance, pension, retirement, medical, hospital, disability, welfare or other
                  employee benefit plan other than in the ordinary course of the Business consistent with past practices;

(viii)   changed the accounting methods, principles, or practices materially affecting the Purchased Assets, the Business
                  or the Station, except insofar as may have been required by law or by a change in GAAP;

(ix)     made any acquisition (by merger, consolidation, acquisition of stock or assets or otherwise) of any corporation,
                  partnership or other business organization or division thereof or interest therein; or

(x)      entered into any agreement or made any commitment to take any action described in subparagraphs (i) through (ix)
                  above.

Section 3.6.      No Undisclosed Liabilities.  Except as set forth in Schedule 3.6, to the Knowledge of the Emmis
                  --------------------------                          ------------
Entities, the Emmis Entities are not subject, with respect to the Station, the Purchased Assets or the Business, to any
liability (including, without limitation, unasserted claims), whether absolute, contingent, accrued or otherwise, which
is not shown or reserved for in the Balance Sheet, other than liabilities of the same nature as those set forth in the
Balance Sheet and the notes thereto and incurred in the ordinary course of the Business after the Balance Sheet Date.

Section 3.7.      Taxes.  The Emmis Entities, in respect of the Business, either filed or obtained extensions for filings
                  -----
pursuant to established procedures all foreign, federal, state, county or local income, excise, property, sales, use,
franchise or other Tax returns and reports which are required to have been filed by them under applicable law on or prior
to the date of this Agreement and have paid or made provision for the payment of all Taxes which have become due pursuant
to such returns or pursuant to any assessments which have become payable and which are not being contested in good faith
by appropriate proceedings.  All monies required to be withheld by the Emmis Entities from employees of the Business for
income Taxes, social security and other payroll Taxes have been collected or withheld, and either paid to the respective
Governmental Bodies, set aside in accounts for such purpose, or accrued, reserved against and entered upon the books of
the Emmis Entities.  There is no liability for Taxes that could give rise to a lien or Encumbrance on the Purchased
Assets in the hands of Buyer, other than as to any such Tax which is not yet due and payable.

Section 3.8.      Sufficiency of Assets.  Except as set forth in Schedules 3.8 and 3.11 and except for the Excluded
                  ---------------------                          -------------     ----
Assets, the Purchased Assets constitute all of the material assets necessary for and used by the Emmis Entities in the
conduct of the Business and the operation of the Station as currently conducted, and the Purchased Assets in all material
respects are in such good and serviceable condition and repair (subject to normal wear and tear) as is necessary for the
conduct of the Business and the operation of the Station as currently conducted.

Section 3.9.      Governmental Permits; Station Licenses.
                  --------------------------------------

(a)      The Emmis Entities own, hold or possess all licenses, franchises, permits, privileges, immunities, approvals and
other authorizations from a Governmental Body (other than the Station Licenses) that are necessary to entitle the Emmis
Entities to own or lease, operate and use their assets and to carry on and conduct the Business substantially as
conducted immediately prior to the date of this Agreement, except for such Governmental Permits as to which the failure
to so own, hold or possess would not have a Material Adverse Effect (herein collectively called “Governmental Permits”).
Schedule 3.9(a) sets forth a list and brief description of each such Governmental Permit held by the Emmis Entities as of
- ---------------
the date of this Agreement.  Except as set forth in Schedule 3.9(a), the Emmis Entities have fulfilled and performed in
                                                    ---------------
all material respects their obligations under each of the Governmental Permits, and no event has occurred or condition or
state of facts exists which constitutes or, after notice or lapse of time or both, would constitute a material breach or
material default under any such Governmental Permit.  No notice of cancellation, of default or of any dispute concerning
any Governmental Permit, or of any event, condition or state of facts described in the preceding sentence, has been
received by either Emmis Entity.  Except as set forth in Schedule 3.9(a), each of the Governmental Permits is valid,
                                                         ---------------
subsisting and in full force and effect, and may be assigned and transferred to the Buyer in accordance with this
Agreement and at the time of assignment to the Buyer will be in full force and effect, in each case without (i) the
occurrence of any breach, default or forfeiture of rights thereunder or (ii) the consent, approval or act of, or the
making of any filing with, any Governmental Body or other party.

(b)      Set forth on Schedule 3.9(b) are the Station Licenses and all applications for modification, extension or renewal
                      ---------------
thereof, and any pending applications for any new licenses, permits, permissions or authorizations pending on the Closing
Date.  The Station Licenses are all of the licenses, permits, and other authorizations used or necessary to lawfully
operate the Station in the manner and to the full extent as it is now operated, and the Station Licenses are validly
issued and held by Emmis License.  Emmis License has delivered to Buyer true and complete copies of the Station Licenses,
including any and all amendments and other modifications thereto.  Except as set forth on Schedule 3.9(b), (i) the
                                                                                          ---------------
Station Licenses are in full force and effect, are valid for the balance of the current license term applicable generally
to radio stations licensed to communities in the state where the Station is located, are unimpaired by any acts or
omissions of either of the Emmis Entities or any of their Affiliates, or the employees, agents, officers, directors, or
shareholders of either of the Emmis Entities or any of their Affiliates, and are free and clear of any restrictions which
might limit the full operation of the Station in the manner and to the full extent as it is now operated (other than
restrictions under the terms of the Station Licenses themselves); (ii) Emmis License has not received any notice of any
violations of the Station Licenses, the Communications Act or the rules and regulations thereunder; (iii) there is no
action by or before the FCC currently pending or, to the Knowledge of the Emmis Entities, threatened to revoke, cancel,
rescind, modify or refuse to renew in the ordinary course any of the Station Licenses; (iv) there are no applications,
proceedings, or complaints pending or, to the Knowledge of the Emmis Entities, threatened which may have an adverse
effect on the Business, the Purchased Assets or the operation of the Station (other than rulemaking proceedings that
apply to the radio broadcasting industry generally); (v) the Emmis Entities are not aware of any reason why those of the
Station Licenses subject to expiration might not be renewed in the ordinary course for a full term without material
qualifications or of any reason why any of the Station Licenses might be revoked; (vi) the Station is in compliance with
the FCC's policy on exposure to radio frequency radiation; (vii) no renewal of any Station License would constitute a
major environmental action under the rules and regulations of the FCC; and (viii) there are no facts which, under the
Communications Act or the existing rules and regulations of the FCC, would disqualify Emmis License from assigning the
Station Licenses or from consummating the transactions contemplated herein within the times contemplated herein.  Emmis
License maintains an appropriate public inspection file at the Station's studios in accordance with FCC rules and
regulations.  Access to the Station's transmission facilities is restricted in accordance with the policies, rules and
regulations of the FCC.

(c)      All information contained in any applications for modification, extension or renewal of the Station Licenses, and
any pending applications for any new licenses, permits, permissions or authorizations pending on the Closing Date,
including, but not limited to, those listed on Schedule 3.9(b), is true, complete and accurate in all material respects.
                                               ---------------

Section 3.10.     Real Property; Real Property Leases.
                  -----------------------------------

(a)      The Emmis Entities do not own any real property which is used in the operation of the Station or the Business.
Schedule 3.10(a) contains a brief description of all real property leased by the Emmis Entities in connection with the
- ----------------
operation of Business and the Station as currently operated and each option held by the Emmis Entities to acquire any
real property (the “Real Property”).  No Real Property other than that listed on Schedule 3.10(a) is used in, held for
use in connection with, or necessary for the conduct of the Business or operation of the Station as it is now operated.

(b)      To the Knowledge of the Emmis Entities, there are no encroachments upon the Real Property by any buildings,
structures, or improvements located on adjoining real estate.  To the Knowledge of the Emmis Entities, none of the
buildings, structures, or improvements (including without limitation any ground radials, guy wires or guy anchors)
constructed on the Real Property encroaches upon adjoining real estate, and all such buildings, structures, and
improvements are constructed in conformity with or are “grandfathered” with respect to all “setback” lines, easements,
and other restrictions, or rights of record, or that have been established by any applicable building or safety code or
zoning ordinance.  To the Knowledge of the Emmis Entities, such “grandfathered” approvals shall survive indefinitely the
transfer of the Real Property to Buyer.  To the Knowledge of the Emmis Entities, no utility lines serving the Real
Property necessary for the operation of the Station as currently conducted pass over the lands of others except where
appropriate easements have been obtained.  No guy wires supporting any tower necessary for the operation of the Station
as currently conducted pass over the lands of others except where appropriate easements have been obtained.  To the
Knowledge of the Emmis Entities, neither the whole nor any part of any Real Property leased by the Emmis Entities is
subject to any pending or threatened suit for condemnation or other taking by any public authority.  To the Knowledge of
the Emmis Entities, there exists no writ, injunction, decree, order or judgment, nor any litigation pending or threatened
relating to the Emmis Entities' use, lease, occupancy or operation of any of the Real Property.  To the Knowledge of the
Emmis Entities, their use and occupancy of the Real Property complies with all regulations, codes, ordinances, and
statutes of all applicable governmental authorities, including without limitation all environmental protection and
sanitary laws and regulations, occupational safety and health regulations, and electrical codes.  To the Knowledge of the
Emmis Entities, there are no material structural defects in the buildings, structures, and improvements located on the
Real Property, roofs are in good condition and repair, and all plumbing equipment, heating, ventilating and air
conditioning equipment, electrical wiring, and water and sewage systems are operating properly and are free of any
material defects.  To the Knowledge of the Emmis Entities, the tower on the Real Property can structurally support all of
the permitted equipment necessary for the operation of the Station as currently conducted in accordance with sound
engineering practices.  To the Knowledge of the Emmis Entities, all Real Property has legal and insurable access from a
public roadway for vehicles and by foot.

(c)      Schedule 3.10(c) sets forth a list of each lease or similar agreement under which an Emmis Entity is lessee of,
         ----------------
or holds or operates, any Real Property owned by any third Person, which are the sole and complete agreements concerning
the Emmis Entities' use of the leased premises (the “Real Property Leases”).  Each Real Property Lease is legal, valid,
binding, enforceable and in full force and effect.  Neither of the Emmis Entities nor, to the Knowledge of the Emmis
Entities, any other party is in default, violation or breach in any respect under any Real Property Lease, and no event
has occurred and is continuing that constitutes or, with notice or the passage of time or both, would constitute a
default, violation or breach thereunder by the Emmis Entities or, to the Knowledge of the Emmis Entities, by any other
party.  No amount payable under any Real Property Lease is past due.  The Emmis Entities have not received any notice of
a default, offset or counterclaim under any Real Property Lease or any other communication asserting non-compliance with
any Real Property Lease.  The Emmis Entities have the exclusive right to use and occupy that portion of the premises
which is exclusively leased to the Emmis Entities under each Real Property Lease.  The Emmis Entities enjoy peaceful and
undisturbed possession of that portion of the premises leased by the Emmis Entities under the Real Property Leases.
Except as set forth on Schedule 3.10(c), the Emmis Entities' interests under the Real Property Leases are free and clear
                       ----------------
of all Encumbrances other than Permitted Encumbrances, the terms and provisions of such leases and any Encumbrance on the
leased property created or caused by the landlord on the leased Real Property.  The Emmis Entities have delivered to
Buyer, true and complete copies of the Real Property Leases, together, in the case of any subleases or similar occupancy
agreements, with copies of all other leases.  Except as disclosed in Schedule 3.10(c), the Emmis Entities have full legal
                                                                     ----------------
power and authority to assign their rights under the Real Property Leases to Buyer in accordance with this Agreement on
terms and conditions no less favorable than those in effect on the date hereof, and such assignment will not affect the
validity, enforceability and continuity of any such lease.

(d)      All utilities that are required for the full and complete occupancy and use of the Real Property for the purposes
for which such properties are presently being used by the Emmis Entities, including, without limitation, electric, water,
sewer, telephone and similar services, have been connected and are in good working order.  By the Closing Date, the Emmis
Entities will have paid all charges for such utilities, including, without limitation, any “tie-in” charges or connection
fees, except for those charges that will not become due until after the Closing Date and that are to be prorated between
the Emmis Entities and Buyer pursuant to Section 2.11.
                                         ------------

Section 3.11.     Personal Property.  Schedule 3.11 contains a list as of December 31, 2001 of all machinery, equipment,
                  -----------------   -------------
vehicles, furniture and other personal property owned or leased by the Emmis Entities having an original cost of $5,000
or more and relating to the Business or used, held by the Emmis Entities or others for use by the Station, or necessary
to operate the Station as currently operated (the “Personal Property”).  Except as set forth on Schedule 3.11, the
Personal Property in all material respects is in good operating condition and repair (reasonable wear and tear excepted),
is maintained in compliance with good engineering practice, is performing satisfactorily, is not in need of repair, has
been properly maintained in accordance with the manufacturers' recommendations and industry practices, is available for
immediate use and is otherwise sufficient to permit the Station to operate in accordance with the Station Licenses and
the rules and regulations of the FCC.

Section 3.12.     Personal Property Leases.  Schedule 3.12 contains a list of each lease or other agreement or right under
                  ------------------------   -------------
which either Emmis Entity is lessee of, or holds or operates, any Personal Property owned by a third party and relating
to the Business or used, held for use by the Station, or necessary to operate the Station as it is now operated, except
those which are terminable by the Emmis Entity without penalty on 30 days' notice or less or which provide for annual
rentals less than $5,000 (the “Personal Property Leases”).

Section 3.13.     Intellectual Property.
                  ---------------------

(a)      Schedule 3.13(a) contains a list of (i) all call signs, United States and foreign patents, pending patent
         ----------------
applications, trademark registrations, pending trademark applications, trade names, service marks, copyrights, logos,
domain names, and other similar intangible property rights, issued to, licensed to, assigned to, filed by, or used to
promote or identify the Station, or otherwise used in connection with the Business by either Emmis Entity, and (ii) all
agreements, contracts and understandings therefor (the “Intellectual Property”).

(b)      Except as disclosed in Schedule 3.13(b), the Emmis Entities either:  (i) own the entire right, title and interest
                                ----------------
in and to the Intellectual Property listed in Schedule 3.13(a), free and clear of Encumbrances except for Permitted
                                              ----------------
Encumbrances; or (ii) have the valid right and license to use the Intellectual Property in the conduct of the Business
and the operation of the Station.

(c)      Except as disclosed in Schedule 3.13(c), (i) all patents and registrations identified in Schedule 3.13(a) are in
                                ----------------                                                  ----------------
force, and all applications identified in Schedule 3.13(a) are pending without challenge (other than office actions that
                                          ----------------
may be pending before the Patent and Trademark Office or its foreign equivalents); (ii) the Intellectual Property listed
on Schedule 3.13(a) is valid and enforceable; and (iii) the Emmis Entities have the right to bring actions for
   ----------------
infringement or unauthorized use of the Intellectual Property listed on Schedule 3.13(a).
                                                                        ----------------

(d)      Except as disclosed in Schedule 3.13(d), (i) no written claim has been made or asserted that alleges the
                                ----------------
Intellectual Property owned or licensed by the Emmis Entities and material to the conduct of the Business infringes the
intellectual property of another Person; (ii) no litigation, arbitration or other proceeding is currently pending with
respect to the Intellectual Property owned or licensed by the Emmis Entities; and (iii) no written claim has been made or
asserted that challenges the validity or ownership of any Intellectual Property owned or licensed by the Emmis Entities
and material to the conduct of the Business.

(e)      Use of the Intellectual Property listed on Schedule 3.13(a) as now used in the operation of the Station does not
                                                    ----------------
infringe any copyright, patent, trademark, trade name, service mark, or other similar right of any third party.  The
Emmis Entities have not sold, licensed or otherwise disposed of any of the Intellectual Property to any person or entity
and the Emmis Entities have not agreed to indemnify any person or entity for any patent, trademark or copyright
infringement.

Section 3.14.     Accounts Receivable.  All accounts receivable of the Emmis Entities relating to the Business have arisen
                  -------------------
from bona fide transactions by the Emmis Entities in the ordinary course of the Business consistent with past practice
and constitute only valid claims which are not subject to counterclaims or setoffs.

Section 3.15.     Title to Purchased Assets.  Except for the Encumbrances securing the senior credit facility of Emmis
                  -------------------------
Operating Company (each of which the Emmis Entities shall cause to be released from the Purchased Assets at Closing),
Emmis Radio has good and marketable title to all of the Purchased Assets (or a valid leasehold or license interest, in
the case of any leased or licensed assets, as applicable), free and clear of all Encumbrances, except for Permitted
Encumbrances and, in the case of each Real Property Lease, Encumbrances created or caused by the landlord on the leased
Real Property.  At Closing, Emmis Radio shall convey to Buyer good and marketable title to the Purchased Assets free and
clear of all Encumbrances, except for Permitted Encumbrances and, in the case of each Real Property Lease, Encumbrances
created or caused by the landlord on the leased Real Property.

Section 3.16.     Employees.
                  ---------

(a)      Schedule 3.16 contains:  (i) a list of all individuals employed by either Emmis Entity in connection with the
         -------------
Business as of the date hereof; and (ii) the titles and positions of such employees.  Since the Balance Sheet Date,
except as disclosed on Schedule 3.16 or as has occurred in the ordinary course of the Business and consistent as to
                       -------------
timing and amount with past practices, the Emmis Entities have not:  (A) increased the compensation payable or to become
payable to or for the benefit of any of their employees (other than normal annual salary increases consistent with past
practice), (B) provided any of their employees with increased security or tenure of employment, (C) increased the amount
payable to any of their employees upon the termination of such persons' employment, or (D) increased, augmented or
improved benefits granted to or for the benefit of their employees under any bonus, profit sharing, pension, retirement,
deferred compensation, insurance or other direct or indirect benefit plan or arrangement.  The Emmis Entities are not a
party to any agreement or arrangement, written or oral, with salaried or non-salaried employees except as described in
Schedule 3.18 or included among the Contracts.
- -------------

(b)      Each of the Emmis Entities represents and warrants that the Emmis Entities have provided a schedule to Buyer
containing a true and accurate listing of the current rate of compensation provided by the Emmis Entities to their
employees employed by the Emmis Entities in connection with the Business as of the date hereof.

Section 3.17.     Employee Relations.
                  ------------------

(a)      Except as set forth on Schedule 3.17, as pertains to the Station and the persons employed in connection with the
                                -------------
Station, the Emmis Entities are not a party to any (i) labor collective bargaining union or similar agreement or (ii) any
employment, severance, incentive or other similar agreement, arrangement, commitment or understanding.

(b)      Except as set forth on Schedule 3.17, as pertains to the Station and the persons employed in connection with the
                                -------------
Station, (i) no union or similar organization represents employees of the Emmis Entities and, to the Knowledge of the
Emmis Entities, no such organization is attempting to organize such employees; (ii) there are no unfair labor practice
charges pending or, to the Knowledge of the Emmis Entities, threatened against the Emmis Entities; (iii) there is no
pending or threatened strike, slowdown, picket, work stoppage, or arbitration proceedings involving labor matters or
other labor disputes affecting the Emmis Entities, the Business or the Station; and (iv) the Emmis Entities have not
experienced any strike, work stoppage or other significant labor difficulties of any nature at the Station.

(c)      No director, officer or employee of the Emmis Entities is a party to any employment or other agreement that
entitles him or her to compensation or other consideration upon the acquisition by any Person of control of the Station.

Section 3.18.     Contracts.  Set forth in Schedule 3.18, is a list of each contract, agreement, lease or other agreement
                  ---------                -------------
relating to the Business, the operation of the Station or the Purchased Assets to which either Emmis Entity is a party as
of the date of this Agreement, except for Time Sales Agreements, Barter Agreements, Trade Agreements, contracts that
relate solely to Excluded Assets, and contracts that could impose an obligation or liability on Buyer of less than $5,000
individually and less than $25,000 in the aggregate.  Except as set forth on Schedule 3.18, neither Emmis Entity is a
                                                                             -------------
party to or bound by:

(a)      Any contract for the future lease, purchase or sale of real property;

(b)      Any contract for the purchase, rental or use of any recordings, radio programming or programming services which
is not terminable by an Emmis Entity without penalty on thirty (30) days' notice or less or which provides for
performance over a period of more than ninety (90) days or which involves the payment after the date hereof of more than
$5,000;

(c)      Any contract for the purchase of merchandise, supplies or personal property or for the receipt of services (other
than services referred to in clause (b) above) which is not terminable by an Emmis Entity on thirty (30) days' notice or
less or which provides for performance over a period of more than ninety (90) days or which involves the payment after
the date hereof of more than $5,000;

(d)      Any Time Sales Agreement which was not made in the ordinary course of the Business and consistent with past
practice;

(e)      Any guarantee of the obligations of the Station's customers, suppliers, or employees;

(f)      Any sales agency, advertising representative or advertising or public relations contract which is not terminable
by an Emmis Entity without penalty on thirty (30) days' notice or less or which provides for payments over a period of
more than ninety (90) days or which involves the payment after the date hereof of more than $5,000;

(g)      Any employee collective bargaining agreement, employment agreement, consulting, advisory or service agreement,
deferred compensation agreement or covenant not to compete;

(h)      Any contract which an Emmis Entity reasonably anticipates will involve the payment of more than $5,000;

(i)      Any partnership, joint venture or other similar agreement or arrangement;

(j)      Any agreement or instrument which provides for, or relates to, the incurrence by an Emmis Entity of debt for
borrowed money (except for such agreements or instruments which shall not apply to Buyer or its Affiliates upon Closing);
or

(k)      Any agreement outside of the ordinary course of the Business containing any covenant or provision prohibiting an
Emmis Entity from engaging in any line or type of business (except for such agreements which shall not apply to Buyer or
its Affiliates upon Closing).

Schedule 3.18 also indicates whether each contract, agreement or other instrument listed therein is to be deemed an
- -------------
“Assumed Contract” or a “Contract Not Assumed” for purposes of this Agreement.  Schedule 3.18 accurately reflects, as of
the date specified on such schedule, (i) the Station trade balance, (ii) the current receivables due to the Station under
the Trade Agreements, and (iii) the obligations for broadcast time on the Station under the Trade Agreements.

Section 3.19.     Status of Contracts Except as set forth in Schedule 3.19, each of the leases, contracts and other
                  -------------------                        -------------
agreements listed in Schedules 3.10(c), 3.12, 3.13(a) and 3.18 (provided, in the case of Schedule 3.18, such contract or
                     -----------------  ----  -------     ----                           -------------
other agreement is designated therein as an “Assumed Contract”), but excluding the contracts and other agreements
designated in Schedule 3.18 as a “Contract Not Assumed” (the “Station Agreements”), constitutes a valid and binding
              -------------
obligation of either or both Emmis Entities and, to the Knowledge of the Emmis Entities, the other parties thereto
(subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of
creditors' rights generally) and is in full force and effect (subject to bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of creditors' rights generally) and (except as set forth in
Schedule 3.3(c) and except for those Station Agreements which by their terms will expire prior to the Closing Date or will
- ---------------
be otherwise terminated prior to the Closing Date in accordance with the provisions hereof or at the direction of Buyer)
may be transferred to the Buyer pursuant to this Agreement on terms and conditions no less favorable than those in effect
on the date hereof and which will not, by reason of assignment to Buyer, increase the obligations or liabilities of Buyer
under such agreement and will be in full force and effect at the time of such transfer, in each case without breaching
the terms thereof or resulting in the forfeiture or impairment of any rights thereunder and without the consent, approval
or act of, or the making of any filing with, any other party.  Each Emmis Entity has fulfilled and performed in all
material respects its obligations under each of the Station Agreements to which it is a party, and neither Emmis Entity
is in, or alleged to be in, breach or default under any of the Station Agreements and, to the Knowledge of the Emmis
Entities, no other party to any of the Station Agreements has breached or defaulted thereunder, and no event has occurred
and no condition or state of facts exists which, with the passage of time or the giving of notice or both, would
constitute such a default or breach by an Emmis Entity or, to the Knowledge of the Emmis Entities, by any such other
party.  The Emmis Entities have heretofore been delivered or made available to the Buyer complete and correct copies of
each of the written Station Agreements, together with all amendments thereto, or true and complete memoranda describing
the terms of all oral Station Agreements, and all liabilities and obligations under such Station Agreements can be
ascertained from such copies or memoranda.  There are no oral contracts material to the operation of the Business or the
Station.  Except as otherwise disclosed on Schedule 3.19 or as permitted or contemplated in the TBA, the Station
                                           -------------
Agreements as amended through the date of this Agreement will not be modified or renewed without Buyer's written consent,
which consent shall not be unreasonably withheld.

Section 3.20.     No Violation, Litigation or Regulatory Action.  Except as set forth in Schedule 3.20, each Emmis Entity
                  ---------------------------------------------                          -------------
has complied in all material respects with, and is not in violation in any material respect of, all laws, regulations,
rules, writs, injunctions, ordinances, franchises, decrees or orders of any court or of any foreign, federal, state,
municipal or other Governmental Body which affect or are applicable to the Purchased Assets, the Station or the
Business.  Without limiting the generality of the foregoing, except as set forth in Schedule 3.20:
                                                                                    -------------

(a)      There are no unsatisfied judgments outstanding against the Emmis Entities, the Purchased Assets, the Station or
the Business;

(b)      There are no lawsuits, suits or proceedings pending or, to the Knowledge of the Emmis Entities, threatened
against the Emmis Entities in respect of the Purchased Assets, the Station or the Business;

(c)      There are no claims or investigations pending or, to the Knowledge of the Emmis Entities, threatened against the
Emmis Entities in respect of the Purchased Assets, the Station or the Business;

(d)      There is no action, suit or proceeding pending or, to the Knowledge of the Emmis Entities, threatened which
questions the legality or propriety of the transactions contemplated by this Agreement or the TBA;

(e)      The Station's transmitting and studio equipment is operating in accordance with the terms and conditions of the
Station Licenses and all underlying construction permits, and the rules, regulations and policies of the FCC, including,
without limitation, all regulations concerning equipment authorization and human exposure to radio frequency radiation.
The Station is not causing interference in material violation of FCC rules to the transmission of any other broadcast
station or communications facility; and the Emmis Entities have not received any complaints with respect thereto.  To the
Knowledge of the Emmis Entities, no other broadcast station or communications facility is causing interference in
violation of FCC rules to the Station's transmissions or the public's reception of such transmissions;

(f)      The Emmis Entities have, in the conduct of the Business and the operation of the Station, complied in all
material respects with all applicable laws, rules and regulations relating to the employment of labor;

(g)      Neither of the Emmis Entities has received notification from the FCC that either Emmis Entity's employment
practices fail to comply with FCC rules and policies;

(h)      All material ownership reports, employment reports, tax returns and other material documents required to be filed
by either of the Emmis Entities with the FCC or other Governmental Body have been filed, and all material items as are
required to be placed in the Station's local public inspection files have been placed in such files.  All material proofs
of performance and measurements that are required to be made by either of the Emmis Entities with respect to the
Station's transmission facilities have been completed and filed at each Station.  All information contained in the
foregoing documents is true, complete and accurate in all material respects; and

(i)      To the knowledge of the Emmis Entities, all towers and other structures on the Real Property are painted and
lighted in accordance with the requirements of the Station Licenses, the FCC, FAA and all applicable requirements of
federal, state and local law, and  appropriate notification to the FAA has been filed for such tower where required by
the FCC's rules and regulations.

Section 3.21.     Insurance.  Set forth on Schedule 3.21 is an accurate and complete description of the policies of fire
                  ---------                -------------
and extended coverage and casualty, liability and other forms of insurance that each of the Emmis Entities currently
maintain in respect of the Purchased Assets, the Station and the Business, in such amounts and against such risks and
losses as will provide adequate insurance coverage for the replacement cost of the Purchased Assets, the Station and the
Business for all risks normally insured against by a Person or entity carrying on the same business as the Emmis
Entities.  All insurance policies listed on Schedule 3.21 are in full force and effect and there are no outstanding
                                            -------------
claims under any insurance policy or default with respect to provisions in any such policy which claim or default
individually or in the aggregate would reasonably be expected to have a Material Adverse Effect on the Purchased Assets,
the Station or the Business.

Section 3.22.     Employee Plans; ERISA.
                  ---------------------

(a)      Schedule 3.22 sets forth a list of each benefit and compensation plan, program and arrangement including, but not
         -------------
limited to “employee benefit plans” within the meaning of Section 3(3) of ERISA and pension, retirement, post-retirement,
profit sharing, deferred compensation, stock ownership, stock option, stock purchase, stock appreciation rights, stock
bonus or other similar plan relating to the Business, the Station and the Purchased Assets; each medical, vision, dental,
disability, worker's compensation, or other health plan; each life insurance plan relating to the Business, the Station
and the Purchased Assets; and any other employee benefit plan relating to the Business, the Station and the Purchased
Assets which covers or has covered employees or former employees of the Emmis Entities (the “Employee Plans”).

(b)      The Emmis Entities warrant that the Closing will not result in the imposition of liability with respect to any
multiemployer plan or defined benefit plan which could be assessed against Buyer.

(c)      Each Employee Plan and each related trust agreement, annuity contract or other funding instrument is in
compliance in all material respects, both as to form and operation, with applicable law (including, where applicable,
ERISA and the Code).

(d)      Each Employee Plan which is intended to be qualified under Code Section 401(a) is so qualified, has been so
qualified during the period from its adoption to date, and has been determined by the Internal Revenue Service to be so
qualified, and each trust forming a part of such Employee Plan is exempt from tax pursuant to Code Section 501(a).  The
Emmis Entities do not know of any fact or set of circumstances that have adversely affected or could reasonably adversely
affect the qualification of such Employee Plan.  Except for as set forth in Schedule 3.22, (i) neither Emmis Entity has
                                                                            -------------
or had any liability for unpaid contributions with respect to any Employee Plan that is an “employee pension benefit
plan” as defined in Section 3(2) of ERISA; (ii) the Emmis Entities have made all required contributions under such plan
for all periods; and (iii) proper accruals have been made and are reflected on the appropriate balance sheet, books and
records.

(e)      No plan which is an employee benefit plan under Section 3(3) of ERISA has engaged in a transaction that is a
Prohibited Transaction as defined in Section 406 of ERISA and Section 4975 of the Code for which there is no exemption
and with respect to which an Emmis Entity has on the date hereof incurred any Liability which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect upon the Business, the Station and the
Purchased Assets (taken as a whole).

Section 3.23.     Environmental Protection.  In respect of the Business and the Purchased Assets, except as set forth in
                  ------------------------
Schedule 3.23:
- -------------

(a)      The Emmis Entities are and at all material times have been in material compliance with all applicable
Environmental Laws, the Emmis Entities hold all material Permits required under Environmental Laws for the operation of
the Business, and no modification or change to the operations of the Business will be required upon the renewal of any
such Permits other than modifications or changes required due to changes in law occurring after the date hereof.

(b)      No claims arising under Environmental Laws are pending or, to the Knowledge of the Emmis Entities, threatened
against the Emmis Entities, (i) there are no writs, injunctions, decrees, orders or judgments outstanding or, to the
Knowledge of the Emmis Entities, threatened relating to compliance with or liability under any Environmental Law, and
(ii) the Emmis Entities have no material liability under any Environmental Law.

(c)      There have been no spills, discharges or releases of Hazardous Materials by the Emmis Entities or any of its
Affiliates or, to the Knowledge of the Emmis Entities, by third parties, in, on or under the real property currently or
formerly owned, leased or used by the Emmis Entities that could result in any material investigation or material remedial
action by any Governmental Body pursuant to any Environmental Law.

(d)      No facility or property of the Emmis Entities or, to the Knowledge of the Emmis Entities, to which the Emmis
Entities transported or arranged for the transportation of any Hazardous Materials is listed or proposed for listing on
the National Priorities List promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA), or on any similar federal
or state list of sites requiring investigation or remediation.

(e)      There are no asbestos-containing materials or polychlorinated biphenyls in any of the Purchased Assets.  There
are no underground storage tanks, or underground piping associated with such tanks, in each case that are used in
operation of the Business, except those that comply with applicable Environmental Laws and are scheduled on Schedule
                                                                                                            ---------
3.23.  To the Knowledge of the Emmis Entities, there are no underground storage tanks in place in the Real Property and
there are no underground storage tanks that have been removed from the Real Property.

(f)      To the Knowledge of the Emmis Entities, there are no liens, restrictive covenants or other land use restrictions
under Environmental Laws on any of the properties leased or used by the Emmis Entities, and no government actions have
been taken, or are in process that could subject any of such properties to such liens, restrictive covenants or other
land use restrictions, and the Emmis Entities are not required to place any notice or restriction relating to Hazardous
Materials in any deed to such property.

(g)      The Emmis Entities have neither released any person nor waived any rights or defenses with respect to any
Environmental Conditions or any claim arising under any Environmental Law.

(h)      There is no Environmental Report in the possession or control of the Emmis Entities or any of their Affiliates
relating to the current or prior business of the Emmis Entities that has not been delivered to Buyer.

Section 3.24.     Insolvency Proceedings.  Neither the Emmis Entities nor the Purchased Assets are the subject of any
                  ----------------------
pending or threatened insolvency proceedings of any character, including, without limitation, bankruptcy, receivership,
reorganization, composition or arrangement with creditors, voluntary or involuntary.  The Emmis Entities have not made an
assignment for the benefit of creditors or taken any action in contemplation of or which would constitute a valid basis
for the institution of any such insolvency proceedings.  After giving effect to this transaction, each Emmis Entity
(i) will have sufficient capital to carry on its business and transactions, (ii) will be able to pay its debts as they
mature or become due, and (iii) will own assets the fair value of which will be greater than the sum of all liabilities
(including contingent liabilities) not specifically assumed by Buyer pursuant to the terms of this Agreement.  The Emmis
Entities are not insolvent nor will they become insolvent as a result of entering into this transaction.

Section 3.25.     Citizenship.  The Emmis Entities are not a “foreign person” as defined in Section 1445(f)(3) of the
                  -----------
Code.  On the Closing Date, each Emmis Entity will deliver to Buyer an affidavit to that effect, verified as true and
sworn to under penalty of perjury by a duly-authorized officer of each Emmis Entity.  The affidavit shall also set forth
the name, address, taxpayer identification number, and such additional information as may be required to exempt the
transaction from the withholding provisions of Section 1445 of the Code.  Buyer shall have the right to furnish copies of
the affidavit to the Internal Revenue Service.

Section 3.26.     Disclosure.  To the Knowledge of the Emmis Entities, neither this Agreement nor the TBA contains any
                  ----------
untrue statement of a material fact or omits to state a material fact necessary to make any statement herein or therein
not misleading.

Section 3.27.     Transactions with Affiliates.  No Affiliate of an Emmis Entity owns or leases property or is a party to
                  ----------------------------
any contract affecting the operation of the Station and the Business and the ownership of the Purchased Assets.

Section 3.28.     No Finder.  None of the Emmis Entities or any party acting on either Emmis Entity's behalf has paid or
                  ---------
become obligated to pay any fee or commission to any broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.

ARTICLE IV

                                              REPRESENTATIONS AND WARRANTIES
                                                         OF BUYER

                  As an inducement to the Emmis Entities to enter into this Agreement and to consummate the transactions
contemplated hereby, Buyer makes the following representations and warranties to the Emmis Entities, all of which are
true, correct, and complete as of the date hereof:

Section 4.1.      Organization.  Entercom is a corporation duly organized, validly existing and in good standing under the
                  ------------
laws of the State of Pennsylvania.  Each of Entercom Denver and Entercom Denver License are limited liability companies
duly organized, validly existing and in good standing under the laws of the State of Delaware.  Entercom Denver is, or
will be at Closing, duly qualified as a foreign limited liability company to do business in, and is in good standing
under, the laws of the State of Colorado.  Buyer has the requisite corporate and limited liability company power and
authority (as the case may be) to own or lease and to operate the properties and assets used in connection with its
business as currently being conducted or to be acquired pursuant hereto, and to enter into and perform this Agreement.

Section 4.2.      Authority of Buyer.
                  ------------------

(a)      Buyer has the requisite corporate and limited liability company power and authority (as the case may be) to
execute and deliver this Agreement and all of the other agreements (including the TBA) and instruments to be executed and
delivered by Buyer pursuant hereto (collectively, the “Buyer Ancillary Agreements”), to consummate the transactions
contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof.

(b)      The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements by Buyer have been
duly authorized and approved by all necessary action of Buyer and do not require any further authorization or consent of
Buyer or its stockholders or members (as the case may be).  This Agreement is, and the TBA and each other Buyer Ancillary
Agreement when executed and delivered by Buyer and the other parties thereto will be, a legal, valid and binding
agreement of Buyer enforceable in accordance with its respective terms, except in each case as such enforceability may be
limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement
of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

(c)      Except as set forth in Schedule 4.2, none of the execution and delivery by Buyer of this Agreement, the TBA and
                                ------------
the other Buyer Ancillary Agreements, the consummation by Buyer of any of the transactions contemplated hereby or thereby
or compliance by Buyer with or fulfillment by Buyer of the terms, conditions and provisions hereof or thereof will:

(i)      conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of
                  default or an event creating rights of acceleration, termination or cancellation or a loss of rights
                  under, or result in the creation or imposition of any Encumbrance upon any assets of Buyer under, the
                  certificate of incorporation or the certificate of formation, as applicable, or bylaws or operating
                  agreement, as applicable, of Buyer, any indenture, note, mortgage, lease, guaranty or material
                  agreement, or any judgment, order, award or decree, to which Buyer is a party or any of the assets of
                  Buyer is subject or by which Buyer is bound, or any statute, other law or regulatory provision affecting
                  Buyer or its assets; or

(ii)     require the approval, consent, authorization or act of, or the making by Buyer of any declaration, filing or
                  registration with, any third party or any foreign, federal, state or local court, governmental or
                  regulatory authority or body, except for such of the foregoing as are necessary pursuant to the HSR Act
                  or the Communications Act.

Section 4.3.      Litigation.  As of the date of this Agreement, Buyer is not a party to any action, suit or proceeding
                  ----------
pending or, to the Knowledge of Buyer, threatened which, if adversely determined, would reasonably be expected to
materially restrict the ability of Buyer to consummate the transactions contemplated by this Agreement.  There is no
order to which Buyer is subject which would reasonably be expected to restrict the ability of Buyer to consummate the
transactions contemplated by this Agreement.

Section 4.4.      No Finder.  Neither Buyer nor any party acting on its behalf has paid or become obligated to pay any fee
                  ---------
or commission to any broker, finder or intermediary for or on account of the transactions contemplated by this Agreement.

Section 4.5.      Qualifications as FCC Licensee.  Except as set forth on Schedule 4.5, Buyer knows of no fact or
                  ------------------------------                          ------------
circumstance which would, under the federal antitrust laws or the Communications Act, disqualify or preclude Entercom
Denver License from becoming the licensee of the Station.  Except as set forth on Schedule 4.5, there are no proceedings,
                                                                                  ------------
complaints, notices of forfeiture, claims, or investigations pending or, to the Knowledge of Buyer, threatened against
Buyer or any principal, officer, director, or owner of Buyer that would materially impair the qualifications of Entercom
Denver License to become a licensee of the Station.

Section 4.6.      Adequacy of Financing.  Entercom Denver will have, as of the Closing Date, on hand (or access through
                  ---------------------
committed credit facilities to) adequate funds to pay the Purchase Price.

                  Section 4.7.  Letter Agreement and Option Agreement.  Buyer has furnished the Emmis Entities with a true
                                -------------------------------------
and accurate copy of the letter agreement dated February 11, 2002 from Tribune Broadcasting Company and Tribune Denver
Radio, Inc. (collectively, the “Tribune Entities”) to Entercom (the “Letter Agreement”).  Buyer has fulfilled and
performed in all material respects its obligations under the Letter Agreement, and Buyer is not in, or alleged to be in,
breach or default under the Letter Agreement and, to the Knowledge of Buyer, the Tribune Entities have not breached or
defaulted thereunder, and no event has occurred and no condition or state of facts exists which, with the passage of time
or the giving of notice or both, would constitute such a default or breach by Buyer or, to the Knowledge of Buyer, by the
Tribune Entities.

ARTICLE V

                                             ACTION PRIOR TO THE CLOSING DATE

                  The respective parties hereto covenant and agree to take the following actions between the date hereof
and the Closing Date:

Section 5.1.      Investigation of the Business.  Upon the request of Buyer, the Emmis Entities shall afford to the
                  -----------------------------
officers, employees and authorized representatives of Buyer (including, without limitation, independent public
accountants, attorneys and consultants) reasonable access during normal business hours, and upon not less than 24-hours
prior notice, to the offices, properties, employees and business and financial records (including computer files,
retrieval programs and similar documentation) of the Business to the extent Buyer shall reasonably deem necessary or
desirable and shall furnish to Buyer or its authorized representatives such additional information concerning the
Business as shall be reasonably requested; provided, however, that any such investigation shall be conducted in such a
                                           --------  -------
manner as not to interfere unreasonably with the operations of the Emmis Entities.  It is expressly understood that,
pursuant to this Section 5.1, Buyer, at its sole expense, shall be entitled to make such engineering inspections of the
                 -----------
Station, such inspections of the Station for the purpose of appraising the Purchased Assets and such audits of the
Station's financial records as Buyer may desire, so long as the same do not unreasonably interfere with the operation of
the Station; provided, that neither the furnishing of such information to Buyer or its representatives nor any
             --------
investigation made heretofore or hereafter by Buyer shall affect Buyer's right to rely upon any representation or
warranty made by the Emmis Entities in this Agreement, each of which shall survive any furnishing of information to Buyer
or its agents, or any investigation by Buyer or its agents, to the extent provided herein.

Section 5.2.      Preserve Accuracy of Representations and Warranties.  Each of the parties hereto shall refrain from
                  ---------------------------------------------------
taking any action which would render any representation or warranty contained in Article III or IV of this Agreement
                                                                                 -----------    --
inaccurate as of the Closing Date.  Each party shall promptly notify the other of any action, suit or proceeding that
shall be instituted or threatened against such party to restrain, prohibit or otherwise challenge the legality of any
transaction contemplated by this Agreement.  The Emmis Entities shall promptly notify Buyer, and Buyer shall promptly
notify the Emmis Entities, of any lawsuit, claim, proceeding or investigation that may be threatened, brought, asserted
or commenced against the other which would have been listed in Schedule 3.20 or would be an exception to Section 4.3 if
                                                               -------------                             -----------
such lawsuit, claim, proceeding or investigation had arisen prior to the date hereof.

Section 5.3.      FCC Consent; HSR Act Approval; Other Consents and Approvals.
                  -----------------------------------------------------------

(a)      As promptly as practicable after the date of this Agreement, but in any event no later than five (5) business
days thereafter, the Emmis Entities and Buyer shall file with the FCC applications requesting its consent to the
assignment of the Station Licenses (and any extensions or renewals thereof) to Entercom Denver License from Emmis License
(the “Assignment Applications”).  The Emmis Entities and Buyer will cooperate in the preparation of such Assignment
Applications and will diligently take, or cooperate in the taking of, all necessary, desirable and proper steps, provide
any additional information reasonably required and otherwise take all steps necessary to prosecute expeditiously the
Assignment Applications and to obtain promptly the FCC's consent and approval of the Assignment Applications.  Any fees
assessed by the FCC incident to the filing or grant of such applications shall be borne equally by Buyer and Emmis
License, with each party responsible for one half of any such fees assessed.  Each of the Emmis Entities and Buyer shall
make available to the other, promptly after the filing thereof, copies of all reports filed by it or its Affiliates on or
prior to the Closing Date with the FCC in respect of the Station.

(b)      As promptly as practicable after the execution and delivery of this Agreement, but in any event no later than ten
(10) business days thereafter, the Emmis Entities and Buyer shall file with the Federal Trade Commission and the
Antitrust Division of the Department of Justice the notifications and other information required to be filed by such
commission or department under the HSR Act, or any rules and regulations promulgated thereunder, with respect to the
transactions contemplated by the TBA and this Agreement.  Each of the Emmis Entities and Buyer covenants to file as
promptly as practicable such additional information as may be requested to be filed by such commission or department.
Each of the Emmis Entities and Buyer warrants that all such filings by it will be, as of the date filed, true and
accurate in all material respects and in accordance with the requirements of the HSR Act and any such rules and
regulations.  Each of the Emmis Entities and Buyer agrees to make available to the other such other information as may be
required by such commission or department to be filed as additional information requested by such agencies under the HSR
Act and such rules and regulations.  Buyer, on the one hand, and the Emmis Entities, on the other hand, shall equally
bear the cost of any filing fees payable under the HSR Act in connection with the notifications and information described
in this Section 5.3(b).
        --------------

(c)      The Emmis Entities and the Buyer shall each use commercially reasonable efforts to obtain all consents,
amendments or permits from Governmental Bodies, which are required by the terms thereof or this Agreement for the
consummation of the transactions contemplated by this Agreement, and shall jointly, diligently and expeditiously
prosecute, and shall cooperate fully with each other in the prosecution of, such requests for approval or waiver and all
proceedings necessary to secure such approvals and waivers.

Section 5.4.      Operations of the Station Prior to the Closing Date.
                  ---------------------------------------------------

(a)      Prior to the Closing Date, except as approved by Buyer pursuant to Section 5.4(c), and subject to the terms of
                                                                            --------------
the TBA and any action or failure to perform by Buyer as required under the TBA, the Emmis Entities shall:

(i)      use their commercially reasonable efforts to operate and carry on the operations of the Station and the Business
                  only in the ordinary course consistent with past practices and FCC rules and regulations;

(ii)     use their commercially reasonable efforts to maintain the Purchased Assets in their present condition (reasonable
                  wear and tear in normal use excepted);

(iii)    continue making capital expenditures at budgeted levels through the Closing Date;

(iv)     maintain its books and records in the usual and ordinary manner, on a basis consistent with prior periods;

(v)      comply in all material respects with all laws, rules, ordinances and regulations applicable to it, to the
                  Purchased Assets and to the Business and the operation of the Station;

(vi)     retain the Station's libraries of recordings and other programming;

(vii)    maintain the present character and entertainment format of the Station and the quality of their programs; and

(viii)   maintain all inventories of supplies, tubes, and spare parts at levels consistent with the Station's prior
                  practices.

(b)      Prior to the TBA Effective Date, the Emmis Entities shall, consistent with past practice, use their commercially
reasonable efforts to:

(i)      continue to promote and conduct advertising on behalf of the Station and the Business at levels substantially
                  consistent with past practice;

(ii)     maintain the business organization of the Station intact;

(iii)    preserve the goodwill of the suppliers, contractors, licensors, employees, customers, distributors and others
                  having business relations with the Business or the Station;

(iv)     maintain the employment of each current employee who is necessary for the continued operation of the Station and
                  the Business as currently operated;

(v)      preserve the Station's present customers and business relations; and

(vi)     perform all Station Agreements without default and shall pay all of its trade accounts payable in a timely
                  manner; provided, however, that the Emmis Entities may dispute, in good faith, any of its alleged
                          --------  -------
                  obligations.

(c)      Notwithstanding Section 5.4(a) and (b), subject to the terms of the TBA and any action or failure to perform by
                         --------------     ---
Buyer as required under the TBA, and (x) except as expressly contemplated by this Agreement, (y) except as set forth in
Schedule 5.4(c) or (z) except with the express prior written approval of the Buyer, which shall not be unreasonably
- ---------------
withheld, conditioned or delayed, the Emmis Entities shall not, in respect of the Station:

(i)      make any material change in the Business or the operations of the Station;

(ii)     make any capital expenditure, or enter into any contract or commitment therefor, in excess of $20,000 in the
                  aggregate;

(iii)    enter into any contract for the purchase of real property or exercise any option to extend a lease listed in
                  Schedule 3.10(c);
                  ----------------

(iv)     sell, lease (as lessor), transfer or otherwise dispose of (including any transfers to any Affiliates of either of
                  the Emmis Entities), or mortgage or pledge, or impose or suffer to be imposed any Encumbrance on, any of
                  the assets or properties of either of the Emmis Entities, other than inventory and minor amounts of
                  personal property sold or otherwise disposed of in the ordinary course of the Business and other than
                  Permitted Encumbrances;

(v)      create, incur or assume, or agree to create, incur or assume, any indebtedness for borrowed money (other than
                  money borrowed or advances from either of the Emmis Entities or any Affiliate of either of the Emmis
                  Entities in the ordinary course of the Business), except in the ordinary course of the Business;

(vi)     institute any material increase in any profit-sharing, bonus, incentive, deferred compensation, insurance,
                  pension, retirement, medical, hospital, disability, welfare or other employee benefit plan with respect
                  to its employees, other than in the ordinary course of the Business of the Business or as required by
                  any such plan or Requirements of Law;

(vii)    make any material change in the compensation of its employees, other than changes made in accordance with normal
                  compensation practices and consistent with past compensation practices;

(viii)   enter into any employment agreement for services to be performed on behalf of the Station or the Business, except
                  for those employment agreements for employees to replace former employees who resigned or who have been
                  terminated, on similar terms and conditions and at comparable rates of compensation to those terms and
                  conditions and rates of compensation provided to the former employees; or

(ix)     acquiesce in any infringement, unauthorized use or impairment of the Intellectual Property or change the
                  Station's call signs.

Section 5.5.      Third Party Consents.  Each Emmis Entity shall use its commercially reasonable efforts to obtain the
                  --------------------
consents of the other contracting parties to the transactions contemplated hereby to the extent required by the Station
Agreements requiring such consent, and to the extent reasonably necessary, Buyer will cooperate as reasonably requested
by the Emmis Entities in obtaining such consents; provided, that neither the Emmis Entities nor Buyer shall be required
                                                  --------
to pay or incur any material cost or expense to obtain any such third party consent, except in the case of the Emmis
Entities, costs or expenses otherwise required to be paid or incurred by the Emmis Entities in accordance with the terms
of the applicable Station Agreement or license.  The delivery of such consents that are identified on Schedules 3.10(c),
                                                                                                      -------------------
3.13(a) and 3.18 to be material to the operation of the Station (“Material Station Agreements”) shall, pursuant to
- -------     ----
Section 8.6, be a condition to Buyer's obligation to close.  To the extent that transfer or assignment hereunder by the
- -----------
Emmis Entities to Buyer of any Station Agreement or license is not permitted or is not permitted without the consent of
another Person, this Agreement shall not be deemed to constitute an undertaking to assign the same if such consent is not
given or if such an undertaking otherwise would constitute a breach thereof or cause a loss of benefits thereunder.  If
any such third party consent, approval or waiver is not obtained before the Closing, the parties shall use their
commercially reasonable efforts to cooperate, and to cause each of their respective Affiliates to so cooperate, in
effecting any lawful arrangement to provide to Buyer or its designated Affiliates the economic benefits of the Station
Agreements for which third party consents, approvals, or waivers are not obtained; and Buyer shall pay and perform the
Emmis Entities' obligations arising under each Station Agreement during and attributable to any period on and after the
Closing Date, to the extent commensurate with the benefit derived by Buyer on and after the Closing Date under each such
Station Agreement.

Section 5.6.      Environmental Site Assessments.  The Emmis Entities and Buyer shall cooperate in using their respective
                  ------------------------------
commercially reasonable efforts to obtain the consent of the landlord under the Station's broadcast tower lease to allow
Buyer or its agents access to such site to the extent Buyer desires to obtain a Phase I Environmental Assessment or other
related studies for such site (the “Environmental Assessments”), which Environmental Assessments shall be obtained within
thirty (30) days of receipt of the landlords' consent.  Any such Environmental Assessments shall not relieve the Emmis
Entities of any obligation with respect to any representation, warranty or covenant of the Emmis Entities in this
Agreement or waive any condition to Buyer's obligations under this Agreement.  The cost of completing the Environmental
Assessments shall be paid by Buyer.  In the event that (i) notwithstanding the commercially reasonable efforts of the
Emmis Entities and Buyer, such consent of the landlord is not obtained within thirty (30) days after the date of this
Agreement, and (ii) Buyer does not waive in writing the condition precedent under Section 8.7 prior to expiration of such
                                                                                  -----------
thirty (30) day period, then either the Emmis Entities or Buyer may terminate this Agreement by written notice to the
other.

Section 5.7.      Public Announcement.  None of the Emmis Entities, Buyer or any of their Affiliates shall, without the
                  -------------------
approval of the other, make any press release or other public announcement concerning the transactions contemplated by
this Agreement, except as and to the extent that any such party shall be so obligated by law or by the rules, regulations
or policies of any national securities exchange or association, in which case the other party shall be advised and the
parties shall use reasonable efforts to cause a mutually agreeable release or announcement to be issued.

Section 5.8.      Interim Financial Statements.  The Emmis Entities shall deliver to Buyer, within five (5) business days
                  ----------------------------
of its preparation, copies of any monthly, quarterly or annual financial statements relating solely to the Business that
may be prepared by it or any of their Affiliates during the period from the date hereof through the TBA Effective Date.
Such financial statements shall fairly present, in all material respects, the financial position and results of
operations of the Station and the Business as at the dates and for the periods indicated, and shall be prepared on a
basis consistent and in accordance with the basis upon which the financial statements identified in Section 3.4 were
                                                                                                    -----------
prepared.

Section 5.9.      Administrative Violations.  If the Emmis Entities receive any finding, order, complaint, citation or
                  -------------------------
notice prior to the Closing Date which states that any aspect of the Station's operations violates any rule or regulation
of the FCC or of any other Governmental Body (an “Administrative Violation”), including, without limitation, any rule or
regulation concerning environmental protection, the employment of labor, or equal employment opportunity, the Emmis
Entities shall promptly notify Buyer of the Administrative Violation, shall use their best efforts to remove or correct
the Administrative Violation, and be responsible for the payment of all costs associated therewith, including any fines
or back pay that may be assessed.

Section 5.10.     Bulk Sales Act.  Each Emmis Entity agrees to jointly and severally indemnify, defend, and hold Buyer
                  --------------
harmless against any claims, liabilities, costs, or expenses, including reasonable attorneys' fees, that Buyer may incur
as a result of the failure to comply with the bulk sales provisions of the Uniform Commercial Code or similar laws with
respect to the transactions contemplated hereby.

Section 5.11.     Adverse Developments.  The Emmis Entities and Buyer shall promptly notify the other of any unusual or
                  --------------------
materially adverse developments of which the Emmis Entities or Buyer, as the case may be, acquire knowledge that occur
prior to Closing with respect to the Purchased Assets or the operation of the Station or the Business; provided, however,
                                                                                                       --------  -------
that the Emmis Entities' compliance with the disclosure requirements of this Section 5.11 shall not relieve the Emmis
                                                                             ------------
Entities of any obligation with respect to any representation, warranty or covenant of the Emmis Entities in this
Agreement or waive any condition to Buyer's obligations under this Agreement.

Section 5.12.     Additional Covenant.  The Emmis Entities and Buyer shall make all commercially reasonable efforts to
                  -------------------
cause the consummation of the transactions contemplated by this Agreement.  The Emmis Entities and Buyer shall not take
any action that is inconsistent with their obligations under this Agreement in any material respect or that could
reasonably be expected to hinder or delay the consummation of the transactions contemplated by this Agreement.

Section 5.13.     No Solicitation Covenant.  The Emmis Entities shall not, and shall use their respective best efforts to
                  -------------------------
cause their respective Affiliates, representatives and agents (including, without limitation, investment bankers,
attorneys and accountants) not to, directly or indirectly, through any officer, director, agent or otherwise, enter into,
solicit, initiate, conduct or continue any discussions or negotiations with, or encourage or respond to any inquiries or
proposals or offers by, or provide any information to, or otherwise cooperate in any other way with, any corporation,
partnership, person or other entity or group, other than the Buyer and its representatives and agents, concerning (i) any
sale of all or any portion of the Purchased Assets, the Business or the Station, (ii) any merger, acquisition,
consolidation, recapitalization, liquidation, dissolution or similar transaction involving the Purchased Assets, the
Business or the Station, or (iii) any transaction that would have an effect similar to the transactions described in (i)
or (ii) (each such transaction being referred to herein as a “Proposed Acquisition Transaction”).  Each Emmis Entity
hereby represents that it is not engaged in discussions or negotiations with any party other than Buyer with respect to
any Proposed Acquisition Transaction.

Section 5.14.     Copies of FCC Applications.  The Emmis Entities shall promptly deliver to Buyer copies of any
                  --------------------------
applications filed with the FCC with respect to the Station upon filing the same with the FCC.

Section 5.15.     Estoppel Certificates.  The Emmis Entities shall use commercially reasonable efforts to obtain an
                  ---------------------
executed version of an estoppel certificate from the landlord under the lease of the Station's broadcast tower site in a
form reasonably acceptable to Buyer.

Section 5.16.     Trade Agreements.  From the date of this Agreement through the Closing, without the prior written
                  ----------------
consent of the Buyer which shall not be unreasonably withheld, the Emmis Entities shall not modify or amend any existing
Trade Agreements or enter into any new Trade Agreements.

Section 5.17.     Leasehold Title Insurance.  If Buyer chooses to obtain leasehold title insurance with respect to the
                  -------------------------
lease of the Station's broadcast tower site, the Emmis Entities shall cooperate as reasonable requested by Buyer in
assisting Buyer at its expense to obtain such insurance, provided that obtaining such insurance shall not be a condition
precedent to Buyer's obligation to close the transactions contemplated by this Agreement.

Section 5.18.     Non-Compete Covenant.
                  --------------------
                  (a)      As a material inducement for Buyer to enter into this Agreement, the Emmis Entities covenant
and agree that during the two (2) year period commencing on the date of this Agreement, neither of the Emmis Entities nor
any of their Affiliates shall adopt, maintain or otherwise use any variant of a “Hot Adult Contemporary” or a
“Modern/Alternative Adult Contemporary” format for the broadcast programming of the Other Station; provided, however, that
(i) such restriction shall not apply to any person or entity as the owner of the Other Station other than the Emmis
Entities or any of their Affiliates, (ii) such restriction shall not apply to the Emmis Entities or any of their
Affiliates as the owner or operator of any other radio station, and (iii) continued use of the Other Station's current
broadcast programming format shall not violate such restriction.

                  (b)      The Emmis Entities acknowledge and agree that the restriction in Section 5.18(a) is reasonable
                                                                                            ---------------
in scope and duration and necessary to protect the legitimate business interests of Buyer as the owner of the Station.
The Emmis Entities further agree that Buyer shall be irreparably harmed in the event of a breach by the Emmis Entities of
such restriction, and that in such event, Buyer shall be entitled to injunctive relief to enforce such restriction in
addition to any other remedy available at law or in equity in connection with such a breach.  In any action to enforce
such restriction, the Emmis Entities shall waive the defense that there is another adequate remedy at law or equity and
agree that Buyer shall have the right to enforce such restriction under the terms of this Section 5.18 without being
                                                                                          ------------
required to prove actual damages, post bond or furnish other security.

ARTICLE VI

                                                   ADDITIONAL AGREEMENTS

Section 6.1.      Taxes; Sales, Use and Transfer Taxes.
                  ------------------------------------

(a)      Subject to the terms of the TBA, the Emmis Entities shall be liable for and shall pay all Taxes (whether assessed
or unassessed) applicable to the Business, the Station or the Purchased Assets, in each case attributable to periods (or
portions thereof) ending prior to the Closing Date.  Subject to the TBA, Buyer shall be liable for and shall pay all
Taxes (whether assessed or unassessed) applicable to the Business, the Station or the Purchased Assets, in each case
attributable to periods (or portions thereof) beginning on and after the Closing Date.  For purposes of this Section
                                                                                                             --------
6.1(a), any period beginning before and ending after the Closing Date shall be treated as two partial periods, one ending
- ------
on the day preceding the Closing Date and the other beginning on the Closing Date.

(b)      Any sales, use or other transfer Taxes payable by reason of transfer and conveyance of the Business, the Station
or the Purchased Assets hereunder and any documentary stamp or transfer Taxes payable by reason of the real estate or
interests therein included in the Purchased Assets shall be borne equally by Buyer and the Emmis Entities.  Except as
otherwise provided in Section 5.3, all fees relating to any filing with any Governmental Body required for transfer and
                      -----------
conveyance of the Business, the Station or the Purchased Assets hereunder, other than amounts (including Taxes) owing to
any Governmental Body as of the date hereof or with respect to events occurring prior to the date hereof, shall be borne
equally by Buyer and the Emmis Entities.

(c)      The Emmis Entities or Buyer, as the case may be, shall provide reimbursement for any Tax paid by the other party
all or a portion of which is the responsibility of the Emmis Entities or Buyer, as the case may be, in accordance with
the terms of this Section 6.1.  Within a reasonable time prior to the payment of any said Tax, the party paying such Tax
                  -----------
shall give notice to the other party of the Tax payable and the portion which is the liability of each party, although
failure to do so will not relieve the other party from its liability hereunder.

Section 6.2.      Employees; Employee Benefit Plans.
                  ---------------------------------

(a)      On the TBA Effective Date, Buyer may extend offers of employment to employees of the Station or those employees
listed on Schedule 6.2 whom it desires to offer employment (other than any employees of the Emmis Entities who remain
          ------------
employees of those corporations in accordance with the requirements of the TBA) on such terms and conditions that Buyer
shall determine in its own discretion (such employees who accept Buyer's offer of employment hereinafter referred to as
the “Transferred Employees”).  Nothing in this Agreement shall obligate Buyer to hire any employees of either of the
Emmis Entities.  Each Emmis Entity waives any claims against Buyer or any of the Transferred Employees arising from such
employment, including, without limitation, any claims arising from any employment agreement or non-compete agreement.
The Emmis Entities shall terminate the employment of all employees hired by Buyer effective on the TBA Effective Date and
shall cooperate with, and use all reasonable efforts to assist, and not interfere with or impede Buyer in its efforts to
secure satisfactory employment arrangements with the Transferred Employees to whom Buyer makes offers of employment.

(b)      Effective immediately upon the TBA Effective Date, each Transferred Employee shall be eligible to become a
participant in such employee benefit plans (as such term is defined in Section 3(3) of ERISA) and such other programs and
arrangements as may be provided by Buyer to similarly situated employees.  Buyer shall not be obligated to provide, nor
shall assume any obligation or liability relating to, COBRA Coverage for any employee of an Emmis Entity or any
beneficiary who incurs a qualifying event on or prior to the Closing Date.

(c)      The Emmis Entities shall be solely responsible for the Employee Plans and all obligations and liabilities
thereunder.  Buyer shall not assume any of the Employee Plans or any obligation or liability thereunder.  The Emmis
Entities shall be responsible for, and shall indemnify and hold harmless Buyer from and against any adverse consequences
that Buyer may suffer resulting from, arising out of, relating to, in the nature of, or caused by, any actions taken by
either Emmis Entity or any ERISA Affiliate with respect to an Employee Plan.

(d)      Except as otherwise provided in Section 6.2, the Emmis Entities will remain responsible for all claims under the
                                         -----------
applicable Employee Plans for health, accident, sickness, and disability benefits deemed incurred prior to the TBA
Effective Date by Transferred Employees regardless of whether payment is made after the TBA Effective Date.  For all
purposes under such Employee Plans, employees will be considered to have terminated employment with the Emmis Entity as
of the TBA Effective Date.  For purposes of this Agreement:  (i) a claim for health benefits (including, without
limitation, claims for medical, prescription drug and dental expenses) will be deemed to have been incurred on the date
on which the related medical service or material was rendered to or received by the Transferred Employee claiming such
benefit, (ii) a claim for sickness or disability benefits based on an injury or illness occurring on or prior to the TBA
Effective Date will be deemed to have been incurred prior to the TBA Effective Date, and (iii) in the case of any claim
for benefits other than health benefits and sickness and disability benefits (e.g., life insurance benefits), a claim
will be deemed to have been incurred upon the occurrence of the event giving rise to such claims.

(e)      Any preexisting condition clause in any of the health coverage (including medical, dental and disability
coverage) included in Buyer's benefits programs shall be waived for the Transferred Employees to the extent such
crediting does not result in the duplication of benefits.

(f)      Buyer agrees to provide a severance plan or policy for all Transferred Employees in accordance with state law or
pursuant to the terms of any severance plan sponsored by Buyer.  Buyer shall assume all liability for severance pay and
similar obligations payable to any Transferred Employee covered by any severance plan sponsored by Buyer.

(g)      Seller shall be responsible for all liabilities or obligations under the Worker Adjustment and Retraining
Notification Act and any state law equivalent statutes resulting from the events or actions contemplated by the TBA.

(h)      Each Emmis Entity will remain responsible for (i) all benefits payable under the terms of the Employee Plans to
its employees who, as of the close of business on the day immediately preceding the TBA Effective Date, were determined
to be disabled in accordance with the applicable provisions of the health, accident, sickness, salary continuation, or
short-term or long-term disability benefit plans or programs of such Emmis Entity, and (ii) all benefits payable under
the terms of the Employee Plans to its employees, who as of the close of business on the business day immediately
preceding the TBA Effective Date, were receiving short-term disability benefits in accordance with the applicable
provisions of the short term disability benefit plans or programs of such Emmis Entity; and (iii) all benefits payable
under the terms of the Employee Plans to employees of an Emmis Entity who, as of the close of business on the business
day immediately preceding the TBA Effective Date, were on any type of leave other than vacation leave.

(i)      Nothing contained herein, expressed or implied, is intended to confer upon any Transferred Employee any right to
continued employment for any period of time by reason of this Agreement.  Nothing contained herein is intended to confer
upon any Transferred Employee any particular term or condition of employment.

                  (j)      From and after the TBA Effective Date, Buyer shall assume and comply with each employment
agreement identified on Schedule 3.18 as an “Assumed Contract.”
                        -------------

Section 6.3.      Control of Operations Prior to Closing Date.  Notwithstanding anything contained herein or in the TBA to
                  -------------------------------------------
the contrary, the Closing shall not be consummated prior to the grant by the FCC of the FCC Consent.  The Emmis Entities
and Buyer acknowledge and agree that at all times commencing on the date hereof and ending on the Closing Date, except as
set forth in and pursuant to the terms and conditions of the TBA, neither Buyer nor any of its employees, agents or
representatives, directly or indirectly, shall, or have any right to, control, direct or otherwise supervise, or attempt
to control, direct or otherwise supervise any of the management or operations of the Station, it being understood that
the operation, management, control and supervision of all programs, equipment, operations and other activities of the
Station shall be the sole responsibility, and at all times prior to the Closing Date remain within the complete control
and discretion, of the Emmis Entities, subject to the terms of Section 5.4 of this Agreement and the provisions of the
                                                               -----------
TBA.

Section 6.4.      Non-Solicitation of Employees.  Commencing with the TBA Effective Date and continuing for two (2) years
                  -----------------------------
thereafter, neither Emmis Entity nor any of their Affiliates shall directly or indirectly, for itself or on behalf of any
other individual or entity, hire any Transferred Employee, or induce or attempt to induce any such Transferred Employee
to leave his or her employment with any of the Buyer or any of its Affiliates.

Section 6.5.      Public Filings.  The Emmis Entities acknowledge that Buyer may be obligated to use the pre-Closing
                  --------------
financial statements of the Emmis Entities and other information in connection with filings under the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Public Filings”), to be issued or filed by
Buyer.  For a period of three (3) years from the Closing Date, the Emmis Entities shall cooperate in a commercially
reasonable manner with Buyer so that Buyer can obtain information sufficient for Buyer to prepare such Public Filings, in
each case the out-of-pocket costs for which shall be borne solely by Buyer.  The foregoing cooperation of the Emmis
Entities shall include (i) with respect to the period of time that the Station, the Purchased Assets and the Business was
owned or controlled by an Emmis Entity, compiling the requisite financial information, including supplying financial
information for purposes of comfort letters to be issued in connection with Public Filings, (ii) granting Buyer and its
accountants full and complete access to the books and records of the Emmis Entities and to any personnel knowledgeable
about such books and records (including the accountants of the Emmis Entities), in each case, to the extent reasonably
requested by Buyer and (iii) with respect to the period of time that the Station, the Purchased Assets and the Business
was owned or controlled by the Emmis Entities, signing customary management representation letters related to the
financial statements and any comfort letters.  With respect to matters described in clause (i), for periods prior to the
time the Station was owned or controlled by the Emmis Entities, the Emmis Entities agree to provide all relevant
financial information in their possession with respect to such periods, to contact the former owners of the Station on
behalf of Buyer and to assist Buyer in arranging access to financial information of such former owners.

Section 6.6.      Assignment and Assumption of Split Contracts.  The Emmis Entities shall use their commercially
                  --------------------------------------------
reasonable efforts to negotiate a division of the benefits and obligations of each Split Contract with the other party
thereto on terms and conditions reasonably acceptable to Buyer such that the benefits and obligations under each Split
Contract are equitably divided between the Station and the Other Station (or, to the extent the economic benefits are
currently enjoyed by any other stations of the Emmis Entities or their Affiliates, such benefits and obligations shall be
equitably divided between the Station and the relevant Emmis Entity or Affiliate of such Entity).  Promptly upon the
delivery of Buyer's consent to the terms and conditions of the division of the rights and obligations under any Split
Contract, the Emmis Entities shall assign such Split Contract to Buyer and Buyer shall assume such Split Contract.  To
the extent the rights and obligations of any Split Contract have not been divided and assumed by Buyer on or prior to
Closing, the obligations of the parties under this Section 6.6 shall survive until the earlier of (i) the division and
                                                   -----------
assumption by Buyer of any Split Contract, or (ii) the expiration thereof.

Section 6.7.      Main Station License and Antenna Structure Registration.  The Emmis Entities shall use their
                  -------------------------------------------------------
commercially reasonable efforts to correct promptly the discrepancies described in Schedule 3.9(b) between the Station's
                                                                                   ---------------
main transmitter license and the Station's antenna structure registration relating to geographic coordinates and tower
height.  Notwithstanding anything to the contrary in this Agreement, the Emmis Entities shall bear all costs arising out
of or related to such corrective actions, including, but not limited to, filing fees, attorneys' fees and fees associated
with services performed by engineering consultants.  Notwithstanding anything to the contrary in this Agreement, the
obligations of the Emmis Entities set forth in this Section 6.7 shall survive and continue until such discrepancies are
                                                    -----------
fully corrected.

Section 6.8.      Shared Assets.  With respect to the Shared Assets to be divided and allocated between the Station and
                  -------------
the Other Station in accordance with the provisions of this Agreement, the TBA and the schedules thereto, in any
agreement with the purchaser for the sale of the Other Station, the Emmis Entities shall cause such agreement to contain
comparable duties and obligations for such purchaser of the Other Station as are contained in this Agreement, the TBA and
the schedules thereto.

ARTICLE VII

                                            CONDITIONS PRECEDENT TO OBLIGATIONS
                                                            OF
                                                    THE EMMIS ENTITIES

                  The obligations of the Emmis Entities under this Agreement to consummate the Closing shall, at the
option of the Emmis Entities, be subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:

Section 7.1.      No Misrepresentation or Breach of Covenants and Warranties.
                  ----------------------------------------------------------

(a)      There shall have been no material breach by Buyer in the performance of any of its respective covenants and
agreements contained herein.

(b)      Each of the representations and warranties of Buyer contained or referred to in this Agreement shall be true and
correct in all material respects (without regard to any materiality limitation contained in any representation or
warranty) on the Closing Date as though made on the Closing Date (except to the extent that they expressly speak as of a
specific date or time other than the Closing Date, in which case they need only have been true and correct in all
material respects as of such specified date or time), except for changes therein specifically permitted by this Agreement
or the TBA.

(c)      Buyer shall have delivered to the Emmis Entities certificates, dated as of the Closing Date and signed on behalf
of Buyer by its President or any Vice President, certifying that the conditions described in subsections (a) and (b)
above have been satisfied.

Section 7.2.      No Restraint or Litigation.
                  --------------------------

(a)      Any applicable waiting period under the HSR Act shall have expired or been terminated, and there shall not be in
effect any preliminary or permanent injunction or other order, decree or ruling by a court of competent jurisdiction or
by a Governmental Body, no statute, rule, regulation or executive order shall have been promulgated or enacted by a
Government Body and there shall not be in effect any temporary restraining order of a court of competent jurisdiction,
which, in any case, restrains or prohibits the transactions contemplated hereby.

(b)      There shall not be in existence any suit, action, proceeding or investigation instigated by a Governmental Body
before any court or governmental agency or body to prohibit the transactions contemplated by this Agreement; provided,
                                                                                                             --------
however, that this condition may not be invoked by either of the Emmis Entities if any such action, suit, or proceeding
- -------
was solicited or encouraged by, or instituted as a result of any act or omission of, either of the Emmis Entities in
breach of this Agreement.

Section 7.3.      FCC Consent.  The FCC Consent shall have been granted without any condition or qualification which is
                  -----------
materially adverse to the Emmis Entities.

Section 7.4.      Payment.  Buyer shall have delivered the Purchase Price to the Emmis Entities in accordance with Section
                  --------                                                                                         --------
2.7.
- ---

Section 7.5.      Closing Documents.  Buyer shall deliver to the Emmis Entities all of the closing documents specified in
                  -----------------
Section 2.8(b), all of which documents shall be dated as of the Closing Date, duly executed, and in a form customary in
- --------------
transactions of this type and reasonably acceptable to the Emmis Entities.

                  Notwithstanding the failure of any one or more of the foregoing conditions, the Emmis Entities may
proceed with the Closing without satisfaction, in whole or in part, of any one or more of such conditions and without
written waiver; provided, that Closing shall be deemed a waiver of only such conditions.
                --------

ARTICLE VIII

                                       CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

                  The obligations of Buyer under this Agreement to consummate the Closing shall, at the option of Buyer,
be subject to the satisfaction on or prior to the Closing Date, of the following conditions:

Section 8.1.      No Misrepresentation or Breach of Covenants and Warranties.
                  ----------------------------------------------------------

(a)      There shall have been no material breach by either Emmis Entity in the performance of any of its respective
covenants and agreements contained herein.

(b)      Each of the representations and warranties of each Emmis Entity contained or referred to in this Agreement shall
be true and correct in all material respects (without regard to any materiality limitation contained in any
representation or warranty) on the Closing Date as though made on the Closing Date (except to the extent that they
expressly speak as of a specific date or time other than the Closing Date, in which case they need only have been true
and correct in all material respects as of such specified date or time), except for changes therein specifically
permitted by this Agreement or the TBA.

(c)      The Emmis Entities shall have delivered to Buyer certificates, dated as of the Closing Date and signed on behalf
of each Emmis Entity by its President or any Vice President, certifying that the conditions described in subsections (a)
and (b) above have been satisfied.

Section 8.2.      No Restraint or Litigation.
                  --------------------------

(a)      Any applicable waiting period under the HSR Act shall have expired or been terminated, and there shall not be in
effect any preliminary or permanent injunction or other order, decree or ruling by a court of competent jurisdiction or
by a Governmental Body, no statute, rule, regulation or executive order shall have been promulgated or enacted by a
Government Body and there shall not be in effect any temporary restraining order of a court of competent jurisdiction,
which, in any case, restrains or prohibits the transactions contemplated hereby.

(b)      There shall not be in existence any suit, action, proceeding or investigation instigated by a Governmental Body
before any court or governmental agency or body to prohibit the transactions contemplated by this Agreement; provided,
                                                                                                             --------
however, that this condition may not be invoked by Buyer if any such action, suit, or proceeding was solicited or
- -------
encouraged by, or instituted as a result of any act or omission of, Buyer in breach of this Agreement.

Section 8.3.      FCC Consent.  The FCC Consent shall have been granted without any condition or qualification which is
                  -----------
materially adverse to Buyer or to the operation of the Station and no objection, opposition or other filing raising
issues concerning the Assignment Applications (an “Assignment Opposition”) shall have been filed.  In the event an
Assignment Opposition has been filed which, in the reasonable judgment of Buyer and Buyer's FCC counsel, could lead to
denial or designation for hearing of the Assignment Applications or to the imposition of any condition or qualification
materially adverse to the operation of the Station, then the FCC Consent shall have become a Final Order.

Section 8.4.      Station Licenses.  On the Closing Date, Emmis License shall be the lawful holder of the Station
                  ----------------
Licenses, and the Station Licenses shall be in full force and effect, in accordance with their terms.

Section 8.5.      Closing Documents.  The Emmis Entities shall deliver to Buyer all of the closing documents specified in
                  -----------------
Section 2.8(a), all of which documents shall be dated as of the Closing Date, duly executed, and in a form customary in
- --------------
transactions of this type and reasonably acceptable to Buyer.

Section 8.6.      Third Party Consents.  The Emmis Entities shall have obtained all consents required under the Material
                  --------------------
Station Agreements in connection with the consummation of the Transaction (a “Required Consent”), such that after the
Closing the Buyer will continue to enjoy all of their rights and privileges under the Material Station Agreements subject
only to the same obligations as are currently binding thereunder, pursuant to the present terms thereof.

Section 8.7.      Satisfactory Environmental Assessments.  Buyer shall have received the Environmental Assessments, and
                  --------------------------------------
such Environmental Assessments shall not reflect (i) the existence of conditions in any material respect contrary to any
representation or warranty in this Agreement; or (ii) the presence of any Contaminant on the Station's broadcast tower
site that would cause Buyer as the owner of the Station to incur or be obligated for any material cost or liability for
the removal or the remediation of any such Contaminant.

                  Notwithstanding the failure of any one or more of the foregoing conditions, Buyer may proceed with the
Closing without satisfaction, in whole or in part, of any one or more of such conditions and without written waiver;
provided, that Closing shall be deemed a waiver of any such conditions.
- --------

ARTICLE IX

                                                      INDEMNIFICATION

Section 9.1.      Indemnification by the Emmis Entities  Each Emmis Entity agrees jointly and severally to indemnify and
                  -------------------------------------
hold harmless each Buyer Group Member from and against any and all Loss and Expense incurred by such Buyer Group Member
in connection with or arising from:

(i)      any breach by either Emmis Entity of, or any other failure of either Emmis Entity to perform, any of its
                  covenants, agreements or obligations in this Agreement or in any Emmis Entities Ancillary Agreement;

(ii)     any breach of any warranty or the inaccuracy of any representation of either Emmis Entity contained or referred
                  to in this Agreement or any certificate delivered by or on behalf of either Emmis Entity pursuant
                  hereto;

(iii)    any Encumbrances on the Purchased Assets except for Permitted Encumbrances;

(iv)     all Administrative Violations and alleged Administrative Violations of either Emmis Entity occurring prior to the
                  Closing Date (except to the extent caused by Buyer's actions under the TBA);

(v)      the litigation described on Schedule 3.20;
                                     -------------

(vi)     the failure of either Emmis Entity to perform and discharge any Excluded Liabilities;

(vii)    any actions of the Emmis Entities or their Affiliates, their employees, contractors or agents (including their
                  negligence) in performing or failing to perform any of their obligations under the TBA; and

(viii)   subject to Section 9.7, Buyer's being required to remove the Station's broadcast antenna from its current
                    -----------
                  location because of the exercise, on or before May 4, 2004 (consistent with the terms of the Letter
                  Agreement), by the landlord under the Lease and License Agreement, dated as of February 27, 1998, by and
                  among KGWN Inc. and Shamrock Broadcasting License of Denver, Inc. (the “Antenna Lease”) of the
                  landlord's early right of termination thereunder upon 180 days' advance written notice (the “Antenna
                  Lease Early Termination Right”).
                  -----------------------------

provided, however, that if Closing occurs, the Emmis Entities shall not be required to indemnify and hold harmless
- --------  -------
pursuant to clause (ii) with respect to Loss and Expense incurred by Buyer Group Members until the aggregate amount of
all such Loss and Expense exceeds One Hundred Twenty-Five Thousand Dollars ($125,000) (the “Threshold Amount”), in which
event the Emmis Entities shall be liable for Seventy-Five Thousand Dollars ($75,000) of the Threshold Amount plus the
full amount of such Losses and Expenses in excess of the Threshold Amount; provided, however, that if Closing occurs, the
                                                                           --------  -------
aggregate amount of Losses and Expenses incurred by Buyer Group Members that the Emmis Entities shall be required to
indemnify and hold harmless against pursuant to clauses (ii) and (viii) shall not exceed Seventeen Million Six Hundred
Thousand Dollars ($17,600,000).  In determining whether the Emmis Entities shall be obligated to indemnify Buyer under
this Section 9.1, once the Threshold Amount has been satisfied, each representation and warranty (except those in Section
     -----------                                                                                                  --------
3.4) and each covenant  (except in Section 5.8) contained in this Agreement for which indemnity may be sought hereunder
- ---                                -----------
shall be read solely for purposes of determining whether a breach of such representation, warranty or covenant has
occurred without regard to materiality qualifications (including Material Adverse Effect) that may be contained therein.
The indemnification provided for in this Section 9.1 shall terminate two (2) years after the Closing Date (and no claims
                                         -----------
shall be made by any Buyer Group Members under this Section 9.1 thereafter), except that the indemnification by the Emmis
                                                    -----------
Entities shall continue in any event as to:

                  (A)  the covenants of the Emmis Entities set forth in Sections 2.10, 6.1, 6.2, 6.5, 6.6, 6.7, 6.8, 11.2
                                                                        -------------  ---  ---  ---  ---  ---  ---  ----
         or 11.10, as to all of which no time limitation shall apply other than the full period of any applicable statute
            -----
         of limitations plus sixty (60) days;

                  (B)  any Loss or Expense incurred by any Buyer Group Member in connection with or arising out of the
         failure of the Emmis Entities to perform any Excluded Liability, as to which no time limitation shall apply;

                  (C)  any Loss or Expense of which any Buyer Group Member has notified the Emmis Entities in accordance
         with the requirements of Section 9.3 on or prior to the date such indemnification would otherwise terminate in
                                  -----------
         accordance with this Section 9.1, as to which the obligation of the Emmis Entities shall continue until the
                              -----------
         liability of the Emmis Entities shall have been determined pursuant to this Article IX, and the Emmis Entities
                                                                                     ----------
         shall have reimbursed all Buyer Group Members for the full amount of such Loss and Expense in accordance with
         this Article IX;
              ----------

                  (D)  the representations and warranties of the Emmis Entities set forth in Sections 3.7, 3.22, or 3.23,
                                                                                             ------------  -----    ----
         as to all of which no time limitation shall apply other than the full period of any applicable statute of
         limitations plus sixty (60) days; and

                  (E)  the representations and warranties of the Emmis Entities set forth in Section 3.15, as to which no
                                                                                             ------------
         time limitation shall apply.

                  (F)  the indemnification obligation under Section 9.1(viii), which shall continue until November 1, 2004.
                                                            -----------------

Section 9.2.      Indemnification by Buyer.  Subject to the limitation on the Emmis Entities' right to indemnification
                  ------------------------
arising from the exclusive nature of the remedy of liquidated damages in the event of termination of this Agreement by
the Emmis Entities and the application of Section 2.5(c) as set forth in Section 10.2, Buyer agrees to indemnify and hold
                                          --------------                 ------------
harmless each Emmis Group Member from and against any and all Loss and Expense incurred by such Emmis Group Member in
connection with or arising from:

(i)      any breach by Buyer, or any other failure of Buyer to perform, any of its covenants, agreements or obligations in
                  this Agreement or in any Buyer Ancillary Agreement;

(ii)     any breach of any warranty or the inaccuracy of any representation of Buyer contained or referred to in this
                  Agreement or any certificate delivered by or on behalf of Buyer pursuant hereto;

(iii)    the failure of Buyer to perform any of the Assumed Liabilities and Buyer's (or any successor's or assignee's)
                  operation of the Business and/or the ownership and/or use of the Purchased Assets after the Closing
                  Date;

(iv)     all Administrative Violations and alleged Administrative Violations of the Emmis Entities occurring for the first
                  time after the Closing Date; and

(v)      any action or failure of Buyer to perform or discharge its obligations under the TBA.

provided, however, that if Closing occurs, Buyer shall not be required to indemnify and hold harmless pursuant to
- --------  -------
clause (ii) with respect to Loss and Expense incurred by Emmis Group Members until the aggregate amount of all such Loss
and Expense exceeds One Hundred Twenty-Five Thousand Dollars ($125,000) (the “Threshold Amount”), in which event Buyer
shall be liable for Seventy-Five Thousand Dollars ($75,000) of the Threshold Amount plus the full amount of such Losses
and Expenses in excess of the Threshold Amount; provided, however, that if Closing occurs, the aggregate amount of Losses
                                                --------  -------
and Expenses incurred by Emmis Group Members that Buyer shall be required to indemnify and hold harmless against pursuant
to clauses (ii) shall not exceed Seventeen Million Six Hundred Thousand Dollars ($17,600,000).  In determining whether
Buyer shall be obligated to indemnify the Emmis Entities under this Section 9.2, once the Threshold Amount has been
                                                                    -----------
satisfied, each representation and warranty and each covenant contained in this Agreement for which indemnity may be
sought hereunder shall be read solely for purposes of determining whether a breach of such representation, warranty or
covenant has occurred without regard to materiality (including Material Adverse Effect) qualifications that may be
contained therein.  The indemnification provided for in this Section 9.2 shall terminate two (2) years after the Closing
                                                             -----------
Date (and no claims shall be made by any Emmis Group Member under this Section 9.2 thereafter), except that the
                                                                       -----------
indemnification by Buyer shall continue in any event as to:

                  (A)      the covenants of Buyer set forth in Sections 2.10, 6.1, 6.2, 11.2 or 11.10, as to all of which
                                                               -------------  ---  ---  ----    -----
         no time limitation shall apply other than the full period of any applicable statute of limitations plus sixty
         (60) days;

                  (B)      any Loss or Expense incurred by any Emmis Group Member in connection with or arising out of the
         failure of Buyer to perform any Assumed Liabilities, as to which no time limitation shall apply; and

                  (C)      any Loss or Expense of which any Emmis Group Member has notified Buyer in accordance with the
         requirements of Section 9.3 on or prior to the date such indemnification would otherwise terminate in accordance
                         -----------
         with this Section 9.2, as to which the obligation of Buyer shall continue until the liability of Buyer shall have
                   -----------
         been determined pursuant to this Article IX, and Buyer shall have reimbursed all Emmis Group Members for the full
                                          ----------
         amount of such Loss and Expense in accordance with this Article IX.
                                                                 ----------

Section 9.3.      Notice of Claims.
                  ----------------

(a)      Any Buyer Group Member or Emmis Group Member seeking indemnification hereunder (the “Indemnified Party”) shall
give promptly to the party obligated to provide indemnification to such Indemnified Party (the “Indemnitor”) a written
notice (a “Claim Notice”) describing in reasonable detail the facts giving rise to the claim for indemnification
hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of
such claim, and a reference to the provision of this Agreement or any other agreement, document or instrument executed
hereunder or in connection herewith upon which such claim is based.  The failure of any Indemnified Party to give the
Claim Notice promptly as required by this Section 9.3 shall not affect such Indemnified Party's rights under this Article
                                          -----------                                                             --------
IX except to the extent such failure is actually prejudicial to the rights and obligations of the Indemnitor.
- --

(b)      After the giving of any Claim Notice pursuant hereto, the amount of indemnification to which an Indemnified Party
shall be entitled under this Article IX shall be determined: (i) by the written agreement between the Indemnified Party
                             ----------
and the Indemnitor; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii) by any other
means to which the Indemnified Party and the Indemnitor shall agree in writing.  The judgment or decree of a court shall
be deemed final when the time for appeal, if any, shall have expired and no appeal shall have been taken or when all
appeals taken shall have been finally determined.  The Indemnified Party shall have the burden of proof in establishing
the amount of Losses and Expenses suffered by it.

Section 9.4.      Third Person Claims.
                  -------------------

(a)      In order for a party to be entitled to any indemnification provided for under this Agreement in respect of,
arising out of or involving a claim or demand made by any third Person against the Indemnified Party, such Indemnified
Party must notify the Indemnitor in writing, and in reasonable detail, of the third Person claim promptly after receipt
by such Indemnified Party of written notice of the third Person claim.  Thereafter, the Indemnified Party shall promptly
deliver to the Indemnitor copies of all notices and documents (including court papers) received by the Indemnified Party
relating to the third Person claim.  Notwithstanding the foregoing, should a party be physically served with a complaint
with regard to a third Person claim, the Indemnified Party must notify the Indemnitor with a copy of the complaint within
five (5) business days after receipt thereof and shall deliver to the Indemnitor within seven (7) business days after the
receipt of such complaint copies of notices and documents (including court papers) physically served upon the Indemnified
Party relating to the third Person claim.  The failure of any Indemnified Party to give the Claim Notice promptly (or in
five (5) business days in the case of service of a complaint upon the Indemnified Party) as required by this Section 9.4
                                                                                                             -----------
shall not affect such Indemnified Party's rights under this Article IX except to the extent such failure is actually
                                                            ----------
prejudicial to the rights and obligations of the Indemnitor.

(b)      In the event of the initiation of any legal proceeding against the Indemnified Party by a third Person, the
Indemnitor shall have the sole and absolute right after the receipt of notice, at its option and at its own expense, to
be represented by counsel of its choice and to control, defend against, negotiate, settle or otherwise deal with any
proceeding, claim, or demand which relates to any loss, liability or damage indemnified against hereunder; provided,
                                                                                                           --------
however, that the Indemnified Party may participate in any such proceeding with counsel of its choice and at its
- -------
expense.  The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or
settlement of any such legal proceeding, claim or demand.  To the extent the Indemnitor elects not to defend such
proceeding, claim or demand, and the Indemnified Party defends against or otherwise deals with any such proceeding, claim
or demand, the Indemnified Party may retain counsel, reasonably acceptable to the Indemnitor, at the expense of the
Indemnitor, and control the defense of such proceeding.  Neither the Indemnitor nor the Indemnified Party may settle any
such proceeding which settlement obligates the other party to pay money, to perform obligations or to admit liability
without the consent of the other party, such consent not to be unreasonably withheld.  After any final judgment or award
shall have been rendered by a court, arbitration board or administrative agency of competent jurisdiction and the time in
which to appeal therefrom has expired, or a settlement shall have been consummated, or the Indemnified Party and the
Indemnitor shall arrive at a mutually binding agreement with respect to each separate matter alleged to be indemnified by
the Indemnitor hereunder, the Indemnified Party shall forward to the Indemnitor notice of any sums due and owing by it
with respect to such matter and the Indemnitor shall pay all of the sums so owing to the Indemnified Party by wire
transfer, certified or bank cashier's check within thirty (30) days after the date of such notice.

(c)      To the extent of any inconsistency between this Section 9.4 and Section 6.1(c), the provisions of Section 6.1(c)
                                                         -----------     --------------                    --------------
shall control.

Section 9.5.      Limitations.
                  -----------

(a)      In any case where an Indemnified Party recovers from third Persons any amount in respect of a matter with respect
to which an Indemnitor has indemnified it pursuant to this Article IX, such Indemnified Party shall promptly pay over to
                                                           ----------
the Indemnitor the amount so recovered (after deducting therefrom the full amount of the expenses incurred by it in
procuring such recovery), but not in excess of the sum of (i) any amount previously so paid by the Indemnitor to or on
behalf of the Indemnified Party in respect of such matter and (ii) any amount expended by the Indemnitor in pursuing or
defending any claim arising out of such matter.

(b)      Except in claims of common law fraud or except for remedies that cannot be waived as a matter of law and
injunctive and provisional relief, if the Closing occurs, this Article IX shall be the exclusive remedy for breaches of
                                                               ----------
this Agreement (including any covenant, obligation, representation or warranty contained in this Agreement or in any
certificate delivered pursuant to this Agreement).

Section 9.6.      Mitigation.  Each of the parties agrees to take all reasonable steps to mitigate their respective Losses
                  ----------
and Expenses upon and after becoming aware of any event or condition which could reasonably be expected to give rise to
any Losses and Expenses that are indemnifiable hereunder.

Section 9.7.      Broadcast Antenna.
                  -----------------

(a)      The Emmis Entities' indemnification obligation under Section 9.1(viii) shall be subject to the terms and
                                                              ----------------
provisions of this Section 9.7.
                   -----------

(b)      As used in this Agreement, the term “Antenna Landlord” shall mean the landlord under the Antenna Lease.

(c)      Buyer shall comply with the terms and conditions set forth in the Letter Agreement; Buyer shall comply in all
material respects with the terms and provisions of the Option Agreement dated as of December 24, 2001 between the Tribune
Entities and Buyer; and Buyer shall, from and after the Closing Date, comply in all material respects with the terms and
conditions of the Antenna Lease.

(d)      If Buyer receives the Antenna Landlord's notice of its exercise of the Antenna Lease Early Termination Right,
Buyer shall promptly furnish the Emmis Entities with a copy of such notice.

(e)      Buyer and the Emmis Entities shall cooperate as reasonably requested by the other in taking such action as
reasonably necessary to mitigate, consistent with Section 9.6, the Losses and Expenses indemnifiable pursuant to Section
                                                  -----------                                                    --------
9.1(viii).  Such actions shall include, but not be limited to, attempting to persuade the Antenna Landlord not to
- ---------
exercise the Antenna Lease Early Termination Right or, if exercised, to withdraw such exercise; provided, that Buyer
                                                                                                --------
shall not be required to pay or incur any cost or expense with respect to such attempts to persuade the Antenna Landlord
not to exercise the Antenna Lease Early Termination Right.

ARTICLE X

                                                 TERMINATION AND REMEDIES

Section 10.1.     Termination.
                  -----------

(a)      Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be terminated at any
time prior to the Closing:

(i)      by the mutual written consent of Emmis Radio and Buyer;

(ii)     provided that neither Emmis Entity is then in material breach of this Agreement, by written notice from Emmis
                  Radio in the event of a material breach by Buyer of any of its agreements, representations or warranties
                  contained in this Agreement, and the failure of Buyer to cure such breach within thirty (30) days after
                  receipt of written notice from Emmis Radio requesting such breach to be cured;

(iii)    provided that Buyer is not then in material breach of this Agreement, by written notice from Buyer in the event
                  of a material breach by either Emmis Entity of any of its respective agreements, representations or
                  warranties contained in this Agreement, and the failure of the Emmis Entities to cure such breach within
                  thirty (30) days after receipt of written notice from Buyer requesting such breach to be cured;

(iv)     provided that the terminating party is not then in material breach of this Agreement, by written notice from
                  Emmis Radio or Buyer if any court of competent jurisdiction in the United States or other United States
                  Governmental Body shall have issued a final and non-appealable order, decree or ruling permanently
                  restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

(v)      by written notice from Emmis Radio or Buyer if, for any reason, the Assignment Applications are designated for
                  hearing by the FCC; provided, however, that notice of termination must be given within twenty (20) days
                                      --------  -------
                  after release of the hearing designation order and that the party giving such notice is not in default
                  and has otherwise complied with its obligations under this Agreement;

(vi)     provided that the terminating party is not then in material breach of this Agreement, by written notice from
                  Emmis Radio or Buyer, if the TBA Effective Date shall not have occurred by June 1, 2002; provided,
                                                                                                           --------
                  however, that the right to terminate this Agreement under this Section 10.1(a)(vi) shall not be
                  -------                                                        -------------------
                  available to any party whose failure to fulfill any obligation under this Agreement or the TBA shall
                  have been the cause of, or resulted in, the failure of the TBA Effective Date to occur prior to such
                  date;

(vii)    provided that the terminating party is not then in material breach of this Agreement, by written notice from
                  Emmis Radio or Buyer if the Closing shall not have occurred on or before one (1) year from date of
                  Agreement (or such later date as may be mutually agreed to by the Emmis Entities and Buyer); provided,
                                                                                                               --------
                  however, that the right to terminate this Agreement under this Section 10.1(a)(vii) shall not be
                  -------                                                        --------------------
                  available to any party whose failure to fulfill any obligation under this Agreement or the TBA shall
                  have been the cause of, or resulted in, the failure of the Closing to occur prior to such date;

(viii)   by written notice from Buyer pursuant to the provisions of Section 11.13(a)(ii) hereof;
                                                                    --------------------

(ix)     by written notice from Buyer, pursuant to the provisions of Section 11.13(b) hereof; and
                                                                     ----------------

(x)      by written notice from Buyer or the Emmis Entities pursuant to Section 5.6.
                                                                        -----------

(b)      In the event that this Agreement shall be terminated pursuant to this Article X, all further obligations of the
                                                                               ---------
parties under this Agreement (other than Sections 5.7, 11.2 through 11.5 and 11.7 through 11.16, and Articles IX and X)
                                         ------------  ----         ----     ----         -----      -----------     -
shall be terminated without further liability of any party to the other, except that each party shall remain liable to
the other party hereto for any breach of its obligations under this Agreement prior to such termination.

Section 10.2.     Emmis Entities' Remedies.  If this Agreement is terminated by Emmis Radio and Section 2.5(c) applies,
                  ------------------------                                                      --------------
Buyer and the Emmis Entities agree that (i) the Emmis Entities shall be entitled to receive from Buyer upon such
termination, as liquidated damages and not as a penalty, Seventeen Million Six Hundred Thousand Dollars ($17,600,000)
(the “Liquidated Damage Amount”), which, subject to Section 11.16, shall constitute the sole and exclusive remedy of the
Emmis Entities for Buyer's breach of this Agreement if Closing does not occur; (ii) the Emmis Entities shall be entitled
to collect a portion of the Liquidated Damage Amount by receiving a disbursement of the Earnest Money Deposit held by the
Escrow Agent pursuant to the Escrow Agreement; and (iii) the Emmis Entities shall be entitled to pursue any other remedy
available to recover the full amount of the Liquidated Damage Amount from Buyer, provided that, subject to Section 11.16,
                                                                                                           -------------
the total monetary damages (including any amount received from the Escrow Agent under the Escrow Agreement) to which the
Emmis Entities shall be entitled shall not exceed the Liquidated Damage Amount.  BUYER ACKNOWLEDGES AND AGREES THAT THE
EMMIS ENTITIES' RECEIPT OF THE LIQUIDATED DAMAGE AMOUNT SHALL CONSTITUTE PAYMENT OF LIQUIDATED DAMAGES HEREUNDER AND NOT
A PENALTY AND THAT THE LIQUIDATED DAMAGE AMOUNT IS REASONABLE IN LIGHT OF THE SUBSTANTIAL BUT INDETERMINATE HARM
ANTICIPATED TO BE CAUSED BY BUYER'S MATERIAL BREACH OR DEFAULT UNDER THIS AGREEMENT, THE DIFFICULTY OF PROOF OF LOSS AND
DAMAGES, THE INCONVENIENCE AND NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND THE VALUE OF THE
TRANSACTIONS TO BE CONSUMMATED HEREUNDER.

Section 10.3.     Buyer's Remedies.  The Emmis Entities acknowledge that the Station is of a special, unique and
                  -----------------
extraordinary character, and that damages alone are an inadequate remedy for a breach of this Agreement by the Emmis
Entities.  Accordingly, as an alternative to termination of this Agreement under Section 10.1, Buyer shall be entitled,
                                                                                 ------------
in the event of the Emmis Entities' breach, to enforcement of this Agreement (subject to obtaining any required approval
of the FCC or the Department of Justice) by a decree of specific performance or injunctive relief requiring the Emmis
Entities to fulfill their obligations under this Agreement.  Such right of specific performance or injunctive relief
shall be in addition to, and not in lieu of, Buyer's right to recover damages and to pursue any other remedies available
to Buyer for the Emmis Entities' breach.  In any action to specifically enforce the Emmis Entities' obligations
contemplated by this Agreement, the Emmis Entities shall waive the defense that there is an adequate remedy at law or in
equity and agree that Buyer shall be entitled to obtain specific performance of the Emmis Entities' obligations
contemplated by this Agreement without being required to prove actual damages, post bond or furnish other security.  As a
condition to seeking specific performance, Buyer shall not be required to tender the Purchase Price as contemplated by
Section 2.6 but shall be required to demonstrate that Buyer is ready, willing and able to tender the Purchase Price as
- -----------
contemplated by such Section.

Section 10.4.     Termination Notice.  Each notice given by a party pursuant to Section 10.1(a) to terminate this
                  ------------------                                            ---------------
Agreement shall specify the Subsection of Section 10.1(a) pursuant to which the notice is given.  If at the time a party
                                          ---------------
gives a termination notice, the party is entitled to give the notice pursuant to more than one Subsection of Section
                                                                                                             --------
10.1(a) , the Subsection pursuant to which the notice is given and termination is effected shall be deemed to be the
- --------
Subsection specified in the notice; provided, that the party giving the notice is at such time entitled to terminate this
                                    --------
Agreement pursuant to the specified Subsection.

ARTICLE XI

                                                    GENERAL PROVISIONS

Section 11.1.     Survival of Representations, Warranties and Obligations.  All representations, warranties, covenants and
                  -------------------------------------------------------
obligations contained in this Agreement shall survive the consummation of the transactions contemplated by this
Agreement; provided, however, that, except as otherwise provided in Article IX, the representations and warranties
           --------  -------                                        ----------
contained in Articles III and IV of this Agreement shall terminate two (2) years after the Closing Date.  Notwithstanding
             ------------     --
the foregoing or anything to the contrary contained in this Agreement, (a) the representations and warranties contained
in Sections 3.7, 3.22 and 3.23, shall survive for other than the full period of any applicable statute of limitations
   ------------  ----     ----
plus sixty (60) days, and (b) the representations and warranties contained in Section 3.15 shall survive without
                                                                              ------------
limitation.  Except as otherwise provided herein, no claim shall be made for the breach of any representation or warranty
contained in Article III or IV after the date on which such representations and warranties terminate as set forth in this
             -----------    --
Section 11.1.
- ------------

Section 11.2.     Confidential Nature of Information.  Each party agrees that it will treat in confidence all documents,
                  ----------------------------------
materials and other information which it shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated hereby (whether obtained before or after the
date of this Agreement), the investigation provided for herein and the preparation of this Agreement and other related
documents, and, in the event the transactions contemplated hereby shall not be consummated, each party will return to the
other party all copies of nonpublic documents and materials which have been furnished in connection therewith.  Without
limiting the right of either party to pursue all other legal and equitable rights available to it for violation of this
Section 11.2 by the other party, it is agreed that other remedies cannot fully compensate the aggrieved party for such a
- ------------
violation of this Section 11.2 and that the aggrieved party shall be entitled to injunctive relief to prevent a violation
                  ------------
or continuing violation hereof.

Section 11.3.     Governing Law; Venue.  This Agreement and the transactions contemplated hereby shall be governed by and
                  --------------------
construed in accordance with the laws of the State of New York without reference to its choice of law rules.

Section 11.4.     Notices.  All notices or other communications required or permitted hereunder shall be in writing and
                  -------
shall be deemed given or delivered when delivered personally or by messenger or 72 hours after having been sent by
registered or certified mail or when delivered by private courier addressed as follows:

                  If to Emmis Radio or Emmis License:

                  c/o Emmis Communications Corporation
                  One Emmis Plaza
                  40 Monument Circle, Suite 700
                  Indianapolis, Indiana  46204
                  Attention:  Jeffrey H. Smulyan, Chairman
                  Attention:  J. Scott Enright, Esq.

                  With a copy to:

                  Emmis Communications Corporation
                  15821 Ventura Boulevard, Suite 685
                  Encino, California  91436
                  Attention:  Gary Kaseff, Esq.

                  and

                  Bose McKinney & Evans LLP
                  135 N. Pennsylvania Street, Suite 2700
                  Indianapolis, Indiana  46204
                  Attention:  David L. Wills

                  If to Buyer, to:

                  Entercom Communications Corp.
                  401 City Avenue
                  Suite 409
                  Bala Cynwyd, Pennsylvania 19004
                  Attention:  David Field

                  with a copy to:

                  Latham & Watkins
                  555 Eleventh Street, N.W.
                  Suite 1000
                  Washington, D.C.  20004
                  Attn:  Joseph D. Sullivan

or to such other address as such party may indicate by a notice delivered to the other parties hereto.

Section 11.5.     Assignment; Successors and Assigns.
                  ----------------------------------

(a)      The rights of any party under this Agreement shall not be assignable by such party hereto prior to the Closing
without the written consent of the other parties hereto.  Notwithstanding the foregoing, (i) Buyer may make a collateral
assignment of its rights under this Agreement for the benefit of its senior lenders, and the Emmis Entities agree to
execute acknowledgments of any assignment(s) and collateral assignment(s) pursuant to this Section 11.5 in such forms as
                                                                                           ------------
Buyer or Buyer's lender(s) may from time to time reasonably request, (ii) either party may assign all or a part of their
rights under this Agreement to an Affiliate of the assigning party, and (iii) either party may assign all or a part of
their rights under this Agreement in the case of a merger, consolidation or change of control.  As to Buyer making an
assignment pursuant to (ii) in the preceding sentence, the following shall apply: (w) the representations and warranties
of Buyer hereunder shall be true and correct in all respects as applied to the assignee, (x) both Buyer and the assignee
shall execute and deliver to the Emmis Entities a written instrument in form and substance satisfactory to the Emmis
Entities within their reasonable judgment in which both Buyer and the assignee agree to be jointly and severally liable
for performance of all of Buyer's obligations under this Agreement, (y) such assignment shall not materially delay
issuance of the FCC Consent, and (z) Buyer and the assignee shall deliver such other documents and instruments as
reasonably requested by the Emmis Entities, including appropriate certified resolutions of the boards of directors of
Buyer and the assignee.

(b)      This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and
permitted assigns.  Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any
person other than the parties and successors and assigns permitted by this Section 11.5 any right, remedy or claim under
                                                                           ------------
or by reason of this Agreement.

Section 11.6.     Access to Records after Closing.
                  -------------------------------

(a)      For a period of six (6) years after the Closing Date, the Emmis Entities and their representatives shall have
reasonable access to all of the books and records of the Business transferred to Buyer hereunder to the extent that such
access may reasonably be required by the Emmis Entities in connection with matters relating to or affected by the
operations of the Business prior to the Closing Date.  Such access shall be afforded by Buyer upon receipt of reasonable
advance notice and during normal business hours.  The Emmis Entities shall be solely responsible for any costs or
expenses incurred by it pursuant to this Section 11.6(a).  If Buyer shall desire to dispose of any of such books and
                                         ---------------
records prior to the expiration of such six-year period, it shall, prior to such disposition, give the Emmis Entities a
reasonable opportunity, at the Emmis Entities’ expense, to segregate and remove such books and records as the other party
may select.

(b)      For a period of six (6) years after the Closing Date, Buyer and its representatives shall have reasonable access
to all of the books and records relating to the Business which the Emmis Entities or any of their Affiliates may retain
after the Closing Date.  Such access shall be afforded by the Emmis Entities and their Affiliates upon receipt of
reasonable advance notice and during normal business hours.  Buyer shall be solely responsible for any costs and expenses
incurred by it pursuant to this Section 11.6(b).  If the Emmis Entities or any of their Affiliates shall desire to
                                ---------------
dispose of any of such books and records prior to the expiration of such six-year period, the Emmis Entities shall, prior
to such disposition, give Buyer a reasonable opportunity, at Buyer’s expense, to segregate and remove such books and
records as the other party may select.

Section 11.7.     Entire Agreement; Amendments.  This Agreement, the Exhibits and Schedules referred to herein, the TBA
                  ----------------------------
and the other documents delivered pursuant hereto contain the entire understanding of the parties hereto with regard to
the subject matter contained herein or therein, and supersede all prior agreements, understandings or intents between or
among any of the parties hereto.  The parties hereto, by mutual agreement in writing, may amend, modify and supplement
this Agreement.

Section 11.8.     Interpretation.  Article titles and headings to sections herein are inserted for convenience of
                  --------------
reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.  The
Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein.

Section 11.9.     Waivers.  Any term or provision of this Agreement may be waived, or the time for its performance may be
                  -------
extended, by the party or parties entitled to the benefit thereof.  The failure of any party hereto to enforce at any
time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect
the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such
provision.  No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

Section 11.10.    Expenses.  Except as otherwise expressly provided herein or in the TBA, each of the Emmis Entities and
                  --------
Buyer will pay all of its own respective costs and expenses incident to its negotiation and preparation of this Agreement
and the TBA and to its performance and compliance with all agreements and conditions contained herein on its part to be
performed or complied with, including the fees, expenses and disbursements of its counsel and accountants.

Section 11.11.    Partial Invalidity.   Wherever possible, each provision hereof shall be interpreted in such manner as to
                  ------------------
be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been contained herein unless the deletion of
such provision or provisions would result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.

Section 11.12.    Execution in Counterparts.  This Agreement may be executed in one or more counterparts, each of which
                  -------------------------
shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall
become binding when one or more counterparts have been signed by each of the parties and delivered to each of the Emmis
Entities and Buyer.

Section 11.13.    Risk of Loss; Damage to Facilities.
                  ----------------------------------

(a)      Risk of Loss.  Subject to the TBA, the risk of loss or damage to the Purchased Assets shall be on the Emmis
         ------------
Entities prior to the Closing Date and thereafter shall be on Buyer.  Notwithstanding anything in this Agreement to the
contrary, including, without limitation, Section 9.1, if any of the Purchased Assets is damaged or destroyed prior to the
                                         -----------
Closing Date (any such event being referred to as an “Event of Loss”) and such Event of Loss shall materially affect the
operations of the Station, and repair or replacement cannot be accomplished by the scheduled Closing Date, but can be
accomplished within sixty (60) days after that date, the Emmis Entities may postpone the Closing Date for that 60-day
period in order to undertake such repair or replacement; if, however, the repair or replacement cannot be accomplished
within that 60-day period, Buyer may elect by written notice to the Emmis Entities within twenty (20) days after Buyer
has received notice that any Event of Loss has occurred:

(i)      to consummate the Closing on the scheduled Closing Date and accept all the Purchased Assets as is, in which event
                  the Emmis Entities shall reduce the Purchase Price as necessary to reflect the full cost to repair or
                  replace the property which is the subject of the Event of Loss (less amounts due to the assigning party
                  for repairs or replacements of the property prior to the Closing); or

(ii)     to terminate this Agreement without liability on the part of the Emmis Entities or Buyer.

(iii)    If the Closing Date is postponed pursuant to this Section 11.13(a) beyond the time specified in Section
                                                           ----------------                              --------
                  10.1(a)(vii), the parties shall amend their application to the FCC to request an extension of the date
                  ------------
                  of Closing.

(b)      Failure of Broadcast Transmission.  The Emmis Entities shall give prompt written notice to Buyer if any of the
         ---------------------------------
following (a “Specified Event”) shall occur at the Station:  (i) the regular broadcast transmissions of the Station in
the normal and usual manner is interrupted or discontinued or (ii)  the Station is operated at less than its licensed
antenna height above average terrain or at less than seventy percent (70%) of its licensed effective radiated power.  If
any Specified Event at the Station persists for more than seventy-two (72) hours (or, in the event of force majeure or
utility failure affecting generally the markets served the Station, ninety-six (96) hours), whether or not consecutive,
during any period of thirty (30) consecutive days, then Buyer may, at its option:  (x) terminate this Agreement by
written notice given to the Emmis Entities not more than ten (10) days after the expiration of such thirty (30) day
period, or (y) proceed in the manner set forth in Section 11.13(a).  Notwithstanding the foregoing, the number of hours
                                                  ----------------
during which the regular broadcast transmissions of the Station in the normal and usual manner are interrupted shall not
be taken into account for purposes of this Section 11.13(b) provided such interruption is (i) in connection with the
                                           ----------------
Emmis Entities' replacement of the Station's broadcast antenna and such work (including, but not limited to, the
scheduled time of its performance) and the number of hours of interruption have been previously approved in writing by
Buyer, which approval will not be unreasonably withheld, or (ii) in connection with the Antenna Landlord's activities on
or relating to the tower on which the Station's broadcast antenna is located (including installation of a digital
television antenna on such tower) and such activities do not violate the terms and provisions of the Antenna Lease.

Section 11.14.    Actions Pursuant to the TBA.  Notwithstanding anything contained herein to the contrary, the Emmis
                  ---------------------------
Entities shall not be deemed to have breached any of their representations, warranties, covenants or agreements contained
herein or to have failed to satisfy any condition precedent to Buyer's obligation to perform under this Agreement (nor
shall the Emmis Entities have any liability or responsibility to Buyer in respect of any such representations,
warranties, covenants, agreements or conditions precedent), in each case to the extent that the inaccuracy of any such
representation, the breach of any such warranty, covenant or agreement or the inability to satisfy any such condition
precedent arises out of or otherwise relates to (i) any actions taken by or under the authorization of Buyer or its
Affiliates (or any of their respective officers, directors, employees, agents or representatives) in connection with
Buyer's performance of its obligations under the TBA or otherwise, or (ii) the failure of Buyer to perform any of its
obligations under the TBA.  Buyer acknowledges and agrees that the Emmis Entities shall not be deemed responsible for or
have authorized or consented to any action or failure to act on the part of Buyer or its Affiliates (or any of their
respective officers, directors, employees, agents or representatives) in connection with the TBA solely by reason of the
fact that prior to Closing, Emmis License shall have the legal right to control, manage, and supervise the operation of
the Station and the conduct of the Business, except to the extent the Emmis Entities actually exercise any control,
management or supervision of the operation of the Station or the conduct of the Business.

Section 11.15.    No Third Party Beneficiaries.  The Emmis Entities and Buyer do not intend by the execution, delivery or
                  ----------------------------
performance of this Agreement to confer a benefit upon any person or entity not a party to this Agreement.

Section 11.16.    Attorneys' Fees.  If either party initiates any litigation against the other party involving this
                  ---------------
Agreement, the prevailing party in such action shall be entitled to receive reimbursement from the other party for all
reasonable attorneys' fees and other costs and expenses incurred by the prevailing party in respect of that litigation,
including any appeal, and such reimbursement may be included in the judgment or final order issued in that proceeding.

                                       [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
                                                  SIGNATURE PAGE FOLLOWS]





385173v2
                  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year
first above written.

                                                              EMMIS RADIO CORPORATION


                                                              By:  ________________________________
                                                              Name:  _____________________________
                                                              Title:  ______________________________


                                                              EMMIS RADIO LICENSE CORPORATION


                                                              By:  ________________________________
                                                              Name:  _____________________________
                                                              Title:  ______________________________


                                                              ENTERCOM COMMUNICATIONS CORP.


                                                              By:  ________________________________
                                                              Name:  _____________________________
                                                              Title: ______________________________


                                                              ENTERCOM DENVER, LLC


                                                              By:  ________________________________
                                                              Name:  _____________________________
                                                              Title: ______________________________


                                                              ENTERCOM DENVER LICENSE, LLC


                                                              By:  ________________________________
                                                              Name:  _____________________________
                                                              Title: ______________________________








385173v2
                                                        Exhibit A-1
                                                        -----------

                                       Opinion of the Emmis Entities' Legal Counsel

The opinion of the Emmis Entities' general counsel shall consist of a written opinion, dated as of the Closing Date, that:

1.       Emmis Radio is a corporation duly formed, validly existing and in good standing under the laws of the State of
         Indiana, and is in good standing and duly qualified to do business under the laws of the State of Colorado, with
         corporate power and authority to enter into the Documents and perform its obligations thereunder.

2.       Emmis License is a corporation duly formed, validly existing and in good standing under the laws of the State of
         California, with corporate power and authority to enter into the Documents and perform its obligations thereunder.

3.       The execution, delivery and performance of the Documents executed and delivered by each Emmis Entity pursuant to
         or in connection with the Asset Purchase Agreement have been duly authorized by all necessary corporate action
         (including any necessary shareholder approval) on the part of each Emmis Entity.

4.       Each of the Documents constitutes a legally valid and legally binding obligation of each of the Emmis Entities,
         enforceable against each Emmis Entity that is a party thereto in accordance with its terms.

5.       The execution and delivery by each Emmis Entity, and the consummation by each of the Emmis Entities of the
         transactions contemplated by the Asset Purchase Agreement on the date hereof do not:

         (i)      violate the provisions of the Governing Documents, or

         (ii)     result in the breach of or a default under any of the Documents.

The opinion may be made subject to customary qualifications and limitations, including references to applicable
disclosure schedules to the Asset Purchase Agreement.






                                                        Exhibit A-2
                                                        -----------

                                   Opinion of the Emmis Entities' Communications Counsel

The opinion of the Emmis Entities' FCC counsel shall consist of a written opinion, dated as of the Closing Date, that:

1.       Emmis License holds the Station Licenses, which (A) are in full force and effect and constitute all of the
licenses, permits and authorizations required by the FCC for operation of an FM radio station operating on 105.9 mHz and
licensed to Denver, Colorado; (B) constitute all of the licenses and authorizations issued by the FCC to Emmis License
for or in connection with the operation of the Station, and (C) except for such conditions as may appear on the face
thereof, are not subject to any conditions outside the ordinary course.  The term “full force and effect” means only the
following: (1) the orders issuing the Station Licenses have become effective under 47 C.F.R. § 1.102; (2) to our
knowledge, all express FCC-imposed conditions precedent have been satisfied; (3) no stay of effectiveness has been
issued; and (4) the Station Licenses have not expired by their own terms or been invalidated or modified by any
subsequent FCC action.

2.       The FCC has issued its consent (the “FCC Consent”) to the assignment of the Station Licenses by Emmis License to
Buyer without the imposition of conditions outside the ordinary course.

3.       The FCC Consent constitutes all authorizations, approvals and consents required under the Communications Act to
permit the assignment of the Station Licenses by Emmis License to Buyer.

4.       The FCC Consent is in effect, and has not been reversed, stayed, enjoined, set aside, annulled or suspended.

5.       Except as set forth in Schedule 3.9(a) of the Asset Purchase Agreement, there is no FCC or judicial order,
judgment, decree, notice of apparent liability or order of forfeiture outstanding, and to counsel's knowledge, no action,
suit, notice of apparent liability, order of forfeiture, investigation or other proceeding pending, by or before the FCC
or any court of competent jurisdiction against, the Station or Emmis License that might result in a revocation,
cancellation, suspension, non-renewal, notice of apparent liability, short-term renewal or materially adverse
modification of the FCC Consent or the Station Licenses, except FCC proceedings generally affecting the radio industry,
to which neither Emmis License nor its affiliates are a party.

The opinion may be made subject to customary qualifications and limitations, including references to applicable
disclosure schedules to the Asset Purchase Agreement.






                                                        Exhibit B-1
                                                        -----------

                                             Opinion of Buyer’s Legal Counsel

1.       Entercom is a corporation duly organized, is validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, with corporate power and authority to enter into the Documents and to perform its
obligations thereunder.

2.       Entercom Denver is a limited liability company duly organized, is validly existing and in good standing under the
laws of the State of Delaware, is qualified to do business under the laws of the State of Colorado, with limited
liability company power and authority to enter into the Documents and to perform its obligations thereunder.

3.       Entercom Denver License is a limited liability company duly organized, is validly existing and in good standing
under the laws of the State of Delaware, with limited liability company power and authority to enter into the Documents
and to perform its obligations thereunder.

4.       The execution, delivery and performance of the Documents executed and delivered by Entercom, Entercom Denver and
Entercom Denver License pursuant to or in connection with the Asset Purchase Agreement have been duly authorized by all
necessary corporate or limited liability company action, as the case may be, on the part of Entercom, Entercom Denver and
Entercom Denver License, respectively.

5.       Each of the Documents constitutes a legally valid and legally binding obligation of Entercom, Entercom Denver and
Entercom Denver License, enforceable against each of Entercom, Entercom Denver and Entercom Denver License that is a
party thereto in accordance with its terms.

6.       The execution, delivery and performance by Entercom, Entercom Denver, LLC and Entercom Denver License, LLC of
their obligations under the Agreement do not:

         (i)      violate any provision of the Governing Documents, or

         (ii)     result in a breach of or a default under any of the Documents.

 The opinion may be made subject to customary qualifications and limitations, including references to applicable
 disclosure schedules to the Asset Purchase Agreement.

EX-10 4 ex10-14.htm KXPK-FM SALES AGREEMENT Exhibit 10.14










                                                 ASSET PURCHASE AGREEMENT

                                               Dated as of February 12, 2002

                                                           Among

                                                  EMMIS RADIO CORPORATION

                                              EMMIS RADIO LICENSE CORPORATION

                                                            and

                                          ENTRAVISION COMMUNICATIONS CORPORATION





                                                   RADIO STATION KXPK-FM







                                                             i
                                                     TABLE OF CONTENTS
                                                                                                                       PAGE
                                                                                                                       ----


ARTICLE I DEFINITIONS.............................................................................................1

     Section 1.1. Definitions.....................................................................................1
                 ------------

ARTICLE II PURCHASE AND SALE OF PURCHASED ASSETS..................................................................5

     Section 2.1. Purchase and Sale of Purchased Assets...........................................................5
                 --------------------------------------
     Section 2.2. Excluded Assets.................................................................................7
                 ----------------
     Section 2.3. Assumption of Liabilities.......................................................................8
                 --------------------------
     Section 2.4. Closing Date....................................................................................9
                 -------------
     Section 2.5. Purchase Price..................................................................................9
                 ---------------
     Section 2.6. Payment of Purchase Price.......................................................................9
                 --------------------------
     Section 2.7. Closing Date Deliveries........................................................................10
                 ------------------------
     Section 2.8. Further Assurances.............................................................................10
                 -------------------
     Section 2.9. Allocation.....................................................................................11
                 -----------
     Section 2.10. Prorations and Adjustments....................................................................11
                  ---------------------------
     Section 2.11. Earnest Money.................................................................................13
                  --------------

ARTICLE III REPRESENTATIONS AND WARRANTIES  OF  THE EMMIS ENTITIES...............................................13

     Section 3.1. Organization...................................................................................14
                 -------------
     Section 3.2. Subsidiaries and Investments...................................................................14
                 -----------------------------
     Section 3.3. Authority of the Emmis Entities................................................................14
                 --------------------------------
     Section 3.4. Financial Statements...........................................................................15
                 ---------------------
     Section 3.5. Operations Since Balance Sheet Date............................................................15
                 ------------------------------------
     Section 3.6. No Undisclosed Liabilities.....................................................................16
                 ---------------------------
     Section 3.7. Taxes..........................................................................................16
                 ------
     Section 3.8. Availability of Assets and Legality of Use.....................................................16
                 -------------------------------------------
     Section 3.9. Governmental Permits...........................................................................17
                 ---------------------
     Section 3.10. Real Property; Real Property Leases...........................................................17
                  ------------------------------------
     Section 3.11. Personal Property.............................................................................18
                  ------------------
     Section 3.12. Personal Property Leases......................................................................18
                  -------------------------
     Section 3.13. Intellectual Property.........................................................................18
                  ----------------------
     Section 3.14. [Intentionally Omitted].......................................................................18
                  ------------------------
     Section 3.15. Title to Purchased Assets.....................................................................18
                  --------------------------
     Section 3.16. Employees.....................................................................................19
                  ----------
     Section 3.17. Employee Relations............................................................................19
                  -------------------
     Section 3.18. Contracts.....................................................................................19
                  ----------
     Section 3.19. Status of Contracts...........................................................................20
                  --------------------
     Section 3.20. No Violation, Litigation or Regulatory Action.................................................21
                  ----------------------------------------------
     Section 3.21. Insurance.....................................................................................21
                  ----------
     Section 3.22. Employee Plans; ERISA.........................................................................21
                  ----------------------
     Section 3.23. Environmental Protection......................................................................22
                  -------------------------
     Section 3.24. No Finder.....................................................................................23
                  ----------

ARTICLE IV REPRESENTATIONS AND WARRANTIES  OF BUYER..............................................................23

     Section 4.1. Organization...................................................................................23
                 -------------
     Section 4.2. Authority of Buyer.............................................................................23
                 -------------------
     Section 4.3. Litigation.....................................................................................24
                 -----------
     Section 4.4. No Finder......................................................................................24
                 ----------
     Section 4.5. Qualifications as FCC Licensee.................................................................24
                 -------------------------------
     Section 4.6. Adequacy of Financing..........................................................................25
                 ----------------------

ARTICLE V ACTION PRIOR TO THE CLOSING DATE.......................................................................25

     Section 5.1. Investigation of the Business..................................................................25
                 ------------------------------
     Section 5.2. Preserve Accuracy of Representations and Warranties............................................25
                 ----------------------------------------------------
     Section 5.3. FCC Consent; HSR Act Approval; Other Consents and Approvals....................................25
                 ------------------------------------------------------------
     Section 5.4. Operations of the Station Prior to the Closing Date............................................26
                 ----------------------------------------------------
     Section 5.5. Public Announcement............................................................................26
                 --------------------
     Section 5.6. Interim Financial Statements...................................................................27
                 -----------------------------

ARTICLE VI ADDITIONAL AGREEMENTS.................................................................................27

     Section 6.1. Taxes; Sales, Use and Transfer Taxes...........................................................27
                 -------------------------------------
     Section 6.2. Employees; Employee Benefit Plans..............................................................27
                 ----------------------------------
     Section 6.3. Control of Operations Prior to Closing Date....................................................28
                 --------------------------------------------

ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS  OF THE EMMIS ENTITIES...........................................29

     Section 7.1. No Misrepresentation or Breach of Covenants and Warranties.....................................29
                 -----------------------------------------------------------
     Section 7.2. No Restraint or Litigation.....................................................................29
                 ---------------------------
     Section 7.3. FCC Consent....................................................................................29
                 ------------

ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER........................................................30

     Section 8.1. No Misrepresentation or Breach of Covenants and Warranties.....................................30
                 -----------------------------------------------------------
     Section 8.2. No Restraint or Litigation.....................................................................30
                 ---------------------------
     Section 8.3. FCC Consent....................................................................................30
                 ------------

ARTICLE IX INDEMNIFICATION.......................................................................................31

     Section 9.1. Indemnification by the Emmis Entities..........................................................31
                 --------------------------------------
     Section 9.2. Indemnification by Buyer.......................................................................32
                 -------------------------
     Section 9.3. Notice of Claims...............................................................................32
                 -----------------
     Section 9.4. Third Person Claims............................................................................33
                 --------------------
     Section 9.5. Limitations....................................................................................34
                 ------------
     Section 9.6. Mitigation.....................................................................................34
                 -----------

ARTICLE X TERMINATION............................................................................................34

     Section 10.1. Termination...................................................................................34
                  ------------
     Section 10.2. Earnest Money; Liquidated Damages.............................................................35
                  ----------------------------------
     Section 10.3. Termination Notice............................................................................36

ARTICLE XI GENERAL PROVISIONS....................................................................................36

     Section 11.1. Survival of Representations, Warranties and Obligations.......................................36
                  --------------------------------------------------------
     Section 11.2. Confidential Nature of Information............................................................36
                  -----------------------------------
     Section 11.3. Governing Law.................................................................................36
                  --------------
     Section 11.4. Notices.......................................................................................36
                  --------
     Section 11.5. Successors and Assigns........................................................................37
                  -----------------------
     Section 11.6. Access to Records after Closing...............................................................38
                  --------------------------------
     Section 11.7. Entire Agreement; Amendments..................................................................38
                  -----------------------------
     Section 11.8. Interpretation................................................................................38
                  ---------------
     Section 11.9. Waivers.......................................................................................38
                  --------
     Section 11.10. Expenses.....................................................................................39
                   ---------
     Section 11.11. Partial Invalidity...........................................................................39
                   -------------------
     Section 11.12. Execution in Counterparts....................................................................39
                   --------------------------
     Section 11.13. Disclaimer of Warranties.....................................................................39
                   -------------------------
     Section 11.14. Risk of Loss; Damage to Facilities...........................................................40
                   -----------------------------------




                                                        ASSET PURCHASE AGREEMENT

                  ASSET PURCHASE AGREEMENT, dated as of February 12, 2002 (this “Agreement”), among Emmis Radio
Corporation, an Indiana corporation (“Emmis Radio”), and Emmis Radio License Corporation, a California corporation
(“Emmis License” and together with Emmis Radio, the “Emmis Entities”), and Entravision Communications Corporation, a
- -
Delaware corporation (“Buyer”).

                                                   W I T N E S S E T H :

                  WHEREAS, Emmis Radio is engaged in the business of owning and operating Radio Broadcast Station KXPK-FM
licensed to Evergreen, Colorado (the “Station”);

                  WHEREAS, Emmis License holds the broadcast licenses used in the operation of the Station; and

                  WHEREAS, the Emmis Entities desire to sell to Buyer, and Buyer desires to purchase from the Emmis
Entities, certain of the assets and properties relating to the Station, all on the terms and subject to the conditions
set forth herein;

                  NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, it is
hereby agreed among the Emmis Entities and Buyer as follows:



ARTICLE I.........

                                                        DEFINITIONS


Section 1.1.  ....Definitions.  As used in this Agreement, the following terms have the meanings specified or referred to
                  -----------
in this Section 1.1:
        -----------

                  “Affected Employees” has the meaning specified in Section 6.2(a).

                  “Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls,
is controlled by or is under common control with such Person.

                  “Appraisal Firm” means BIA Consulting, Inc.

                  “Asset Allocation” has the meaning specified in Section 2.9.

                  “Assumed Liabilities” has the meaning specified in Section 2.3(a).

                  “Balance Sheet” has the meaning specified in Section 3.4.

                  “Balance Sheet Date” has the meaning specified in Section 3.4.

                  “Business” means the business of the Station.

                  “Buyer” has the meaning specified in the introductory paragraph hereof.

                  “Buyer Ancillary Agreements” has the meaning specified in Section 4.2(a).

                  “Buyer Group Member” means Buyer, its Affiliates, directors, officers, employees and agents and their
respective successors and assigns.

                  “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§
9601 et seq., any amendments thereto, any successor statutes, and any regulations promulgated thereunder.

                  “Claim Notice” has the meaning specified in Section 9.3(a).

                  “Closing” has the meaning specified in Section 2.4.

                  “Closing Date” has the meaning specified in Section 2.4.

                  “Closing Date Adjustments” has the meaning specified in Section 2.10(a).

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

                  “Communications Act” means the Communications Act of 1934, as amended.

                  “Contaminant” means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special
waste, petroleum or petroleum-derived substance or waste, or any constituent of any such substance or waste.

                  “Earnest Money” means the amount deposited with the Escrow Agent under the Escrow Agreement pursuant to
Section 2.11(a), but excluding the interest and other earnings thereon.
- ---------------

                  “Emmis Entities” has the meaning specified in the introductory paragraph hereof.

                  “Emmis Entities Ancillary Agreements” has the meaning specified in Section 3.3.

                  “Emmis Denver FCC Authorizations” means the broadcast licenses issued by the FCC to Emmis License for
the operation of the Station.

                   “Emmis Group Member” means each Emmis Entity and its Affiliates, directors, officers, employees and
agents and its respective successors and assigns.

                  “Emmis License” has the meaning specified in the introductory paragraph hereof.

                  “Emmis Radio” has the meaning specified in the introductory paragraph hereof.

                  “Employee Plans” has the meaning specified in Section 3.22(a).

                  “Encumbrance” means any lien, claim, charge, security interest, mortgage, pledge, easement, conditional
sale or other title retention agreement, defect in title, covenant or other restrictions of any kind.

                  “Environmental Encumbrance” means an Encumbrance in favor of any Governmental Body for (a) any liability
under any Environmental Law, or (b) damages arising from, or costs incurred by such Governmental Body in response to, a
Release or threatened Release of a Contaminant into the environment.

                  “Environmental Law” means all Requirements of Laws derived from or relating to all federal, state and
local laws or regulations relating to or addressing the environment, health or safety, including but not limited to
CERCLA, OSHA and RCRA and any state equivalent thereof.

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

                  “Escrow Agent” means Bank One Trust Company, National Association.

                  “Escrow Agreement” means the standard form of escrow agreement currently used by the Escrow Agent when
acting as the escrow agent for a monetary deposit, with such changes as are reasonably requested by either the Emmis
Entities or Buyer, as executed and delivered by the Emmis Entities, Buyer and the Escrow Agent contemporaneously with the
execution and delivery of this Agreement.

                  “Excluded Assets” has the meaning specified in Section 2.2.

                  “Excluded Liabilities” has the meaning specified in Section 2.3(b).

                   “Expense” means any and all expenses incurred in connection with investigating, defending or asserting
any claim, action, suit or proceeding incident to any matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or costs, witness fees, and reasonable fees and
disbursements of legal counsel, investigators, expert witnesses, consultants, accountants and other professionals).

                  “FCC” means the Federal Communications Commission.

                  “FCC Consent” means action by the FCC granting its consent to the assignment to Buyer (or Affiliates of
Buyer) of the Emmis Denver FCC Authorizations as contemplated by this Agreement pursuant to appropriate applications
filed by the parties with the FCC.

                  “GAAP” means generally accepted accounting principles in the United States on the date of this Agreement.

                  “Governmental Body” means any foreign, federal, state, local or other governmental authority or
regulatory body.

                  “Governmental Permits” has the meaning specified in Section 3.9(a).

                  “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

                  “Indemnified Party” has the meaning specified in Section 9.3(a).

                  “Indemnitor” has the meaning specified in Section 9.3(a).

                  “Knowledge of the Emmis Entities” means, as to a particular matter, the actual knowledge of the
Chairman, Chief Executive Officer, President, Chief Financial Officer, General Counsel, Secretary and Human Resources
Director of each Emmis Entity, and the General Manager and General Sales Manager of the Station.

                  “Knowledge of Buyer” means, as to a particular matter, the actual knowledge of the following persons:
the Chairman and Chief Executive Officer of Buyer, the President of Buyer, the Chief Financial Officer of Buyer, the
Treasurer of Buyer, the Chief Human Resources Officer of Buyer, the General Counsel of Buyer and the Controller of Buyer.

                   “Liability(ies)” means any and all claims, debts, liabilities, obligations and commitments of any
nature whatsoever, whether known or unknown, asserted or unasserted, fixed, absolute or contingent, matured or unmatured,
accrued or unaccrued, liquidated or unliquidated or due or to become due, whenever or however arising (including those
arising out of any contract or tort, whether based o negligence, strict liability or otherwise) and whether or not the
same would be required by GAAP to be reflected as a liability in financial statements or disclosed in the notes thereto.

                  “Loss” means any and all losses, costs, obligations, liabilities, settlement payments, awards,
judgments, fines, penalties, damages, expenses, deficiencies or other charges.

                  “Material Adverse Effect” means a material adverse effect on the assets, results of operations or
financial condition of the Station, other than changes (a) relating to generally applicable economic conditions or the
radio broadcasting industry in general, (b) resulting from the announcement by the Emmis Entities of the intention to
sell the Purchased Assets or the Business or (c) resulting from the execution of this Agreement (including the identity
of Buyer) or the consummation of the transactions contemplated hereby.

                  “OSHA” means the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq., any amendment thereto,
any successor statute, and any regulations promulgated thereunder.

                  “Other Station” means radio station KALC-FM, Denver, Colorado.

                  “Permitted Encumbrance” means (a) liens for Taxes, assessments or other governmental charges which are
not yet due and payable, (b) easements, servitudes, rights-of-way, covenants, consents, conditions, reservations,
encroachments, minor defects or irregularities in title, variations and other restrictions affecting the use of any Real
Property which in the aggregate do not materially impair the use of the Purchased Assets for the purposes for which they
are or may reasonably be expected to be held and (c) the leases set forth in Schedule 3.12 or Schedule 3.18 and licenses
                                                                             -------------    -------------
set forth in Schedule 3.13.
             -------------

                  “Person” means any person, employee, individual, corporation, limited liability company, partnership,
trust, or any other non-governmental entity or any governmental or regulatory authority or body.

                  “Purchased Assets” has the meaning specified in Section 2.1.

                  “Purchase Price” has the meaning specified in Section 2.5.

                  “RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., and any successor
statute, and any regulations promulgated thereunder.

                  “Real Property” has the meaning specified in Section 3.10.

                  “Real Property Leases” has the meaning specified in Section 3.10.

                  “Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water, groundwater or property.

                  “Remedial Action” means actions required to (a) clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (b) prevent the Release or threatened Release or minimize the further
Release of Contaminants or (c) investigate and determine if a remedial response is needed and to design such a response
and post-remedial investigation, monitoring, operation and maintenance and care.

                  “Requirements of Law” means any foreign, federal, state or local law, rule or regulation, Governmental
Permit or other binding determination of any Governmental Body.

                  “Station” has the meaning specified in the first recital hereof.

                  “Station Agreements” has the meaning specified in Section 2.1(f).

                  “Tax” means any federal, state, local or foreign net income, alternative or add-on minimum, gross
income, gross receipts, property, sales, use, transfer, gains, license, excise, employment, payroll, withholding or
minimum tax, or any other tax custom, duty, governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount imposed by any Governmental Body.

                   “Trade Agreements” shall mean contracts for the sale of time on the Station in exchange for merchandise
or services used or useful for the benefit of the Station.

ARTICLE II

                                           PURCHASE AND SALE OF PURCHASED ASSETS

Section 2.1.      Purchase and Sale of Purchased Assets.  Upon the terms and subject to the conditions of this Agreement,
                  -------------------------------------
on the Closing Date, the Emmis Entities shall sell, transfer, assign, convey and deliver to Buyer and the Buyer shall
purchase from the Emmis Entities, free and clear of all Encumbrances (except for Permitted Encumbrances), the following
assets and properties (excepting only the Excluded Assets) owned or held by the Emmis Entities and used principally in
the operation of the Station as the same shall exist on the Closing Date (herein collectively referred to as the
“Purchased Assets”):

(a)      The Emmis Denver FCC Authorizations and all other assignable Governmental Permits principally used in the
operation of the Station that are listed in Schedule 3.9(a);
                                            ---------------

(b)      The Real Property Leases and any option, right or contract to purchase real property described in Schedule 3.10;
                                                                                                           -------------

(c)      All machinery, equipment (including computers and office equipment), auxiliary and translator facilities,
transmitting towers, transmitters, broadcast equipment, antennae, supplies, inventory (including all programs, records,
tapes, recordings, compact discs, cassettes, spare parts and equipment), advertising and promotional materials,
engineering plans, records and data, vehicles, furniture and other personal property owned by the Emmis Entities and
principally used in the operation of the Station, including, without limitation, the items listed or referred to in
Schedule 3.11, but excluding any such property disposed of by an Emmis Entity in compliance with this Agreement;
- -------------

(d)      The personal property leases and the personal property leased thereunder listed in Schedule 3.12;
                                                                                            -------------

(e)      The trademarks, trade names (including the right to use the trade name “KXPK”), service marks and copyrights (and
all goodwill associated therewith), registered or unregistered, owned by the Emmis Entities and used principally in the
operation of the Station, and the applications for registration thereof and the patents and applications therefor and the
licenses relating to any of the foregoing including, without limitation, the items listed in Schedule 3.13(a);
                                                                                             ----------------

(f)      The contracts, agreements, leases, licenses, commitments or other understandings listed or described in Schedules
                                                                                                                 ----------
3.10, 3.12, 3.13 and 3.18 and not designated on such Schedule as a “Contract Not Assumed” (collectively, the “Station
- ----  ----  ----     ----
Agreements”);

(g)      All advertising customer lists, mailing lists, processes, trade secrets, know-how and other proprietary or
confidential information exclusively used in or relating to the Business;

(h)      All rights, claims or causes of action of the Emmis Entities against third parties arising under warranties from
manufacturers, vendors and others in connection with the Purchased Assets;

(i)      All prepaid rentals and other prepaid expenses (except for prepaid insurance) arising from payments made by
either Emmis Entity in the ordinary course of the operation of the Business prior to the Closing Date for goods or
services to the extent such goods or services are to be used in the operation of the Station but have not been received
at the Closing Date;

                  (j)      All jingles, slogans, commercials and other promotional materials principally used in the
operation of the Station;

(k)      All books and records (including all computer programs used primarily in connection with the operation of the
Business or the Station) of the Emmis Entities relating to the assets, properties, business and operations of the
Business or the Station including, without limitation, all files, logs, programming information and studies, technical
information and engineering data, news and advertising studies or consulting reports and sales correspondence, but
excluding any books and records (including computer programs) that do not relate principally to the Business or the
Station; and

(l)      All other assets or properties not referred to above which are reflected on the Balance Sheet or acquired by
either Emmis Entity in the ordinary course of the Business after the Balance Sheet Date but prior to Closing for use
principally in the operation of the Station, except (i) any such assets or properties disposed of after the Balance Sheet
Date in the ordinary course of the Business and (ii) Excluded Assets.

Section 2.2.      Excluded Assets.  Notwithstanding the foregoing, the Purchased Assets (including, but not limited to,
                  ---------------
the Station Agreements) shall not include the following (herein referred to as the “Excluded Assets”):

(a)      All cash and cash equivalents (including any marketable securities or certificates of deposit) of the Emmis
Entities;

(b)      All claims, rights and interests of the Emmis Entities in and to any refunds for federal, state or local
franchise, income or other Taxes or fees of any nature whatsoever for periods prior to the Closing Date;

(c)      Any rights, claims or causes of action of the Emmis Entities against third parties relating to the assets,
properties, business or operations of the Business arising out of transactions occurring prior to the Closing Date,
except to the extent and only to the extent any such claims relate to the Purchased Assets;

(d)      All bonds held, contracts or policies of insurance and prepaid insurance with respect to such contracts or
policies;

(e)      Each Emmis Entity’s corporate seal, corporate minute books, stock record books, corporate records relating to
incorporation, corporate Tax returns and related documents and supporting work papers and any other records and returns
relating to Taxes, assessments and similar governmental levies (other than real and personal property Taxes, assessments
and levies imposed on the Purchased Assets);

(f)      All records prepared in connection with the sale or transfer of the Station, including bids received from others
and analyses relating to the Station and the Purchased Assets;

(g)      The contracts, agreements or understandings of the Emmis Entities listed in Schedule 3.10, Schedule 3.12,
                                                                                     -------------  -------------
Schedule 3.13 and Schedule 3.18 and designated on such Schedules as a “Contract Not Assumed” and any contract, agreement
- -------------     -------------
or understanding listed on Schedule 3.18 which has expired prior to the Closing Date;
                           -------------

(h)      Any trade name, trademarks, service marks or logos using or incorporating the name “Emmis” or the Emmis “e” logo;

(i)      All records and documents relating to Excluded Assets or to liabilities other than Assumed Liabilities;

(j)      Any employee benefit agreement, plan or arrangement provided, sponsored or maintained by either Emmis Entity;

(k)      Any rights of or payment due to either Emmis Entity under or pursuant to this Agreement or the other agreements
with Buyer contemplated hereby; and

                  (l)      All accounts receivable arising out of the operation of the Business for periods prior to the
Closing Date.

Section 2.3.      Assumption of Liabilities.
                  -------------------------

                  (a)      Buyer shall at Closing assume and agree to pay, discharge and perform the following Liabilities
of the Emmis Entities and the Station (collectively, the "Assumed Liabilities"):

                  (i)      All Liabilities arising under all Station Agreements assigned and transferred to Buyer 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 either (A) the breach of any Station Agreement
         by reason of its assignment to Buyer without a required consent or (B) any other breach or default by an Emmis
         Entity upon or prior to Closing under any Station Agreement); and

                  (ii)     Notwithstanding anything to the contrary set forth in the foregoing provisions of this Section
                                                                                                                  --------
         2.3(a) or in Section 2.3(b) or elsewhere in this Agreement, those Liabilities of the Emmis Entities to the
         ------       --------------
         extent, and only to the extent, the amount thereof is included as a credit to Buyer in calculating the Closing
         Date Adjustments as ultimately determined pursuant to Section 2.10.
                                                               ------------

                  (b)      Buyer shall not assume or be obligated for any of, and the Emmis Entities shall solely retain,
pay, perform, and discharge all of, their respective Liabilities of any and every kind whatsoever, direct or indirect,
known or unknown, absolute or contingent, not expressly assumed by Buyer under Section 2.3(a) and, notwithstanding
                                                                               --------------
anything to the contrary in Section 2.3(a), none of the following shall be “Assumed Liabilities” for purposes of this
                            --------------
Agreement:

(i)      any foreign, federal, state, county or local income Taxes which arise from the operation of the Station or the
                  Business or the ownership of the Purchased Assets prior to the Closing Date;

(ii)     any liability or obligation of an Emmis Entity in respect of indebtedness for borrowed money or any intercompany
                  payable of an Emmis Entity or any of its Affiliates;

(iii)    all liabilities and obligations related to, associated with or arising out of (A) the occupancy, operation, use
                  or control of any of the Real Property prior to the Closing Date or (B) the operation of the Station
                  prior to the Closing Date, in each case incurred or imposed as an environmental, health or safety
                  Requirement of Law existing prior to the Closing Date, including, without limitation, any Release or
                  storage of any Contaminants prior to the Closing Date on, at or from (1) any such real property
                  (including, without limitation, all facilities, improvements, structures and equipment thereon, surface
                  water thereon or adjacent thereto and soil or groundwater thereunder) or any conditions whatsoever on,
                  under or in such real property or (2) any real property or facility owned by a third party at which
                  Contaminants generated by the Business were sent prior to the Closing Date;

(iv)     any liabilities or obligations, whenever arising, related to, associated with or arising out of the Employee
                  Plans;

(v)      any costs and expenses incurred by the Emmis Entities incident to their negotiation and preparation of this
                  Agreement and their performance and compliance with the agreements and conditions contained herein or
                  therein;

(vi)     any of the Emmis Entities´ liabilities or obligations under this Agreement or the Emmis Entities Ancillary
                  Agreements; and

                           (vii)    any and all Liabilities arising out of or related to contracts relating to the Station
                  that are not identified in this Agreement as a Station Agreement, including, without limitation, all
                  contracts identified in this Agreement as “Contracts Not Assumed.”

                  All liabilities and obligations of the Emmis Entities which do not constitute Assumed Liabilities are
referred to herein as the “Excluded Liabilities.”

Section 2.4.      Closing Date.  The purchase and sale of the Purchased Assets provided for in Section 2.1 (the “Closing”)
                  ------------                                                                 -----------
shall be consummated at 10:00 A.M., local time, on a date agreed upon by Emmis Radio and Buyer, occurring within five (5)
days after the conditions set forth in Articles VII and VIII are satisfied or, if permissible, waived or such other date,
                                       ------------     ----
as may be agreed upon by Emmis Radio and Buyer, at the offices of Bose McKinney & Evans LLP, 2700 First Indiana Plaza,
135 North Pennsylvania Street, Indianapolis, Indiana  46204, or at such other place or at such other time as shall be
agreed upon by Emmis Radio and Buyer (such date and time being hereinafter called the “Closing Date”).

Section 2.5.      Purchase Price.  The purchase price for the Purchased Assets (the “Purchase Price”) shall be equal to
                  --------------
$47,535,000, subject to adjustment as provided in Section 2.10.
                                                  ------------

Section 2.6.      Payment of Purchase Price.   Buyer shall pay to the Emmis Entities at Closing a cash amount (the
                  -------------------------
“Closing Payment”) equal to (i) the Purchase Price (as preliminarily adjusted pursuant to Section 2.10(d)), minus (ii) the
amount of the Earnest Money.  The payment shall be made in immediately available funds pursuant to written wire transfer
instructions delivered by the Emmis Entities to Buyer no later than three (3) business days prior to the Closing Date.
Also at Closing, an amount equal to the Earnest Money shall be paid by the Escrow Agent’s disbursement of the Earnest
Money to the Emmis Entities by wire transfer of immediately available funds pursuant to joint written instructions from
the Emmis Entities and Buyer, and the Emmis Entities and Buyer shall instruct the Escrow Agent to disburse all of the
interest and earnings on the Earnest Money to Buyer.

Section 2.7.      Closing Date Deliveries.
                  -----------------------

(a)      On the Closing Date, the Emmis Entities shall deliver or cause to be delivered (i) to Buyer (A) a bill of sale,
special warranty deed, assignments and other instruments of transfer and conveyance transferring the Purchased Assets to
Buyer, and evidence of the termination or release of all Encumbrances (other than Permitted Encumbrances) on the
Purchased Assets, in each case in form acceptable to Buyer in its reasonable judgment,  (B) to the extent available from
applicable jurisdictions, governmental certificates, dated as of a date as near as reasonably practicable to the Closing
Date, showing that each Emmis Entity is duly organized and in good standing in its state of formation and, as to Emmis
Radio, is authorized to transact business as a foreign corporation and is in good standing in the State of Colorado, and
(C) a certificate of the secretary or assistant secretary of each Emmis Entity as to (1) the resolutions of its board of
directors and stockholders (if applicable) authorizing the execution and delivery of this Agreement and the transactions
contemplated hereby and (2) the incumbency and signatures of its officers executing this Agreement and any Emmis Entities
Ancillary Agreement, and (ii) joint disbursement instructions to the Escrow Agent.

(b)      On the Closing Date, Buyer shall deliver or cause to be delivered (i) to the Emmis Entities (A) the Closing
Payment, payable in the manner described in Section 2.6, (B) a certificate of good standing of Buyer issued as of a
                                            -----------
recent date by the secretary of state of the state of its incorporation, (C) a certificate of the secretary or assistant
secretary of Buyer as to (1) the resolutions of its board of directors and stockholders (if applicable) authorizing the
execution and delivery of this Agreement and the transactions contemplated hereby and (2) the incumbency and signatures
of its officers executing this Agreement and any Buyer Ancillary Agreement, and (D) an undertaking and assumption for the
Assumed Liabilities in form acceptable to Emmis Radio in its reasonable judgment, and (ii) joint disbursement
instructions to the Escrow Agent.

Section 2.8.      Further Assurances.
                  ------------------

(a)      On the Closing Date, the Emmis Entities shall take all steps as may be reasonably necessary to put Buyer in
actual possession and control of all the Purchased Assets.  From time to time following the Closing, the Emmis Entities
shall execute and deliver, or cause to be executed and delivered, to Buyer such other instruments of conveyance and
transfer as Buyer may reasonably request or as may be otherwise necessary to more effectively convey and transfer to, and
vest in, Buyer and put Buyer in possession of, any part of the Purchased Assets, and, in the case of licenses,
certificates, approvals, authorizations, agreements, contracts, leases, easements and other commitments included in the
Purchased Assets which cannot be transferred or assigned effectively without the consent of third parties, which consent
has not been obtained prior to the Closing, to cooperate with Buyer at its reasonable request in endeavoring to obtain
such consent.  Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any license, certificate, approval, authorization, agreement, contract, lease, easement or other
commitment included in the Purchased Assets if an attempted assignment thereof without the consent of a third party
thereto would constitute a breach thereof.

(b)      On the Closing Date, Buyer shall take such other actions as the Emmis Entities may reasonably request or as may
be otherwise reasonably necessary to evidence Buyer’s assumption of and obligation to pay, perform and discharge the
Assumed Liabilities.  From time to time following the Closing, Buyer shall execute and deliver, or cause to be executed
and delivered, to the Emmis Entities such other undertakings and assumptions as the Emmis Entities may reasonably request
or as may be otherwise necessary to more effectively evidence Buyer’s assumption of and obligation to pay, perform and
discharge the Assumed Liabilities.

Section 2.9.      Allocation.  The Purchase Price shall be allocated among the Purchased Assets as provided in this
                  ----------
Section (the “Asset Allocation”).  Upon execution of this Agreement, the Emmis Entities and Buyer shall retain the
Appraisal Firm to appraise the classes of the Purchased Assets.  The Appraisal Firm shall be instructed to perform an
appraisal of the classes of Purchased Assets and to deliver a report to the Emmis Entities and Buyer as soon as
reasonably practicable (the “Appraisal Report”).  Buyer shall pay the fees, costs and expenses of the Appraisal Firm.
The Emmis Entities shall use reasonable efforts to make available to Buyer and the Appraisal Firm copies of any
appraisals prepared in connection with the Emmis Entities’ acquisition of the Station.  Buyer shall prepare IRS Form 8594
allocating the Purchase Price in accordance with Section 1060 of the Code and in accordance with the Asset Allocation,
and shall forward it to the Emmis Entities for their approval promptly following the completion of the Appraisal Report,
which approval shall not be unreasonably withheld, conditioned or delayed.  Buyer and the Emmis Entities shall each file
with their respective Federal income tax return for the tax year in which the Closing occurs, IRS Form 8594 containing
the information agreed upon by the parties pursuant to the immediately preceding sentence.  Buyer agrees to report the
purchase of the Purchased Assets, and the Emmis Entities agree to report the sale of the Purchased Assets, on their
respective tax returns in a manner consistent with the information agreed upon by the parties pursuant to this Section
and contained in its respective IRS Form 8594.  Notwithstanding anything to the contrary in this Agreement, the
provisions of this Section 2.9 shall survive the Closing for the full period of any applicable statute of limitations
                   -----------
plus sixty (60) days.

Section 2.10.     Prorations and Adjustments.
                  --------------------------

(a)      All operating income and operating expenses of the Station shall be adjusted and allocated between the Emmis
Entities and Buyer, and an adjustment in the Purchase Price shall be made as provided in this Section, to the extent
necessary to reflect the principle that all such income and expenses attributable to the operation of the Station on or
before the date preceding the Closing Date shall be for the account of the Emmis Entities, and all such income and
expenses attributable to the operation of the Station on and after the Closing Date shall be for the account of Buyer.
The net amount by which the Purchase Price is to be increased or decreased in accordance with this Section is herein
referred to as the “Closing Date Adjustments”.

                  (b)      Without limiting the generality of the foregoing:

                           (i)      The Emmis Entities shall receive a credit for the unapplied portion, as of Closing, of
         the security deposits made by the Emmis Entities under those Station Agreements assumed by Buyer at Closing in
         accordance with Section 2.3.
                         -----------

                  (ii)     With respect to each vacation or portion thereof earned but not taken before the Closing Date
         by each Station employee hired by Buyer, Buyer shall receive a credit equal to the compensation equivalent
         thereof.

                  (c)      To the extent not inconsistent with the express provisions of this Agreement, the allocations
   made pursuant to this Section shall be made in accordance with GAAP.

                  (d)      Three (3) business days prior to the Closing Date, the Emmis Entities shall provide Buyer with
   a reasonably detailed statement (the “Preliminary Adjustment Report”) setting forth in reasonable detail the Emmis
   Entities’ reasonable and good faith estimate of the Closing Date Adjustments.  The Purchase Price payable on the
   Closing Date shall be adjusted based on the Preliminary Adjustment Report.  After the Closing Date, Buyer shall make
   its determination of the Closing Date Adjustments and deliver a written report of such determination to the Emmis
   Entities within ninety (90) days after the Closing Date.  The items shown in the Buyer’s report shall be final and
   binding on the parties for purposes of determining the adjusted Purchase Price under this Section 2.10(d) unless within
                                                                                             ---------------
   sixty (60) business days after receiving such report, the Emmis Entities object to such determination by giving to
   Buyer written notice setting forth their determination and the basis for their determination.  In the event of such an
   objection and the failure of the parties within twenty (20) business days thereafter to reach agreement, the parties
   shall promptly engage PriceWaterhouseCoopers LLP (the “Independent Accounting Firm”) to make a final determination of
   the adjusted Purchase Price based on its determination of the Closing Date Adjustments.  The Emmis Entities and Buyer
   shall each inform the Independent Accounting Firm in writing of their respective determinations of the Closing Date
   Adjustments, and shall cooperate as reasonably requested by the Independent Accounting Firm in its determination of the
   Closing Date Adjustments.  The Independent Accounting Firm shall be instructed to complete its determination of the
   adjusted Purchase Price within thirty (30) days from the date of its engagement and upon completion to inform the
   parties in writing of its determination, the basis for its determination and whether the Emmis Entities’ or Buyer’s
   written statement of the Closing Date Adjustments is closer to its own determination.  The determination by the
   Independent Accounting Firm shall be final and binding upon the parties for purposes of determining the adjusted
   Purchase Price under this Section 2.10.  The fees of the Independent Accounting Firm shall be paid (i) by Buyer if the
                             ------------
   Emmis Entities’ determination is closer to the Independent Accounting Firm’s determination, (ii) by the Emmis Entities
   if Buyer’s determination is closer to the Independent Accounting Firm’s determination, and (iii) otherwise 50% by the
   Emmis Entities and 50% by Buyer.  In the event the adjusted Purchase Price as finally determined under this Section
                                                                                                               --------
   2.10(d) exceeds or is less than the preliminary determination of the adjusted Purchase Price pursuant to the
   -------
   Preliminary Adjustment Report, the Emmis Entities or Buyer, as appropriate, shall pay the other the amount of such
   excess or deficiency within ten (10) business days after the final determination of the adjusted Purchase Price.

                  (e)      If from the date hereof through February 28, 2003, the Station’s current studios premises are
   sublet or the Emmis Entities otherwise obtain any relief during that period from the rent and other payments which are
   payable under the lease agreement for such premises and the shared premises being used in connection with the operation
   of the Other Station, Buyer will be entitled to a return and reduction of the Purchase Price, on a dollar-for-dollar
   basis (subject to a maximum return and reduction of $122,500), if the difference of the following is a positive
   number:  (1) (i) the amount paid by the owner and/or operator of the Other Station to the Emmis Entities during such
   period for the premises of the Other Station, plus (ii) the amount paid during the period by the subtenant for the
                                                 ----
   Station’s premises and/or the other relief obtained by the Emmis Entities plus (iii) $122,500, less (2) the gross
   amount payable under that lease agreement during such period.  The Emmis Entities shall use commercial reasonably
   efforts to obtain a subtenant or other relief as contemplated above, provided that the owner and/or operator of the
   Other Station, or the landlord, may not consent to any such arrangement, and any such arrangement may be infeasible due
   to the real estate market conditions in Denver.

Section 2.11.              Earnest Money.
                           -------------

                  (a)      Within two (2) business days of the execution of this Agreement, Buyer shall deposit with the
Escrow Agent in immediately available funds the sum of $5,906,250.

                  (b)      The Escrow Agent shall hold the Earnest Money under the terms of the Escrow Agreement in trust
for the benefit of the Emmis Entities and Buyer.

                  (c)      If Closing does not occur, the Earnest Money shall be delivered to the Emmis Entities or
returned to Buyer in accordance with Section 10.2, and if Closing does occur, the Earnest Money shall be applied at
                                     ------------
Closing as provided in Section 2.6.
                       -----------

                  Section 2.12.     Accounts Receivable.  Within three (3) business days after the Closing Date, the Emmis
                                    -------------------
Entities shall deliver to Buyer a complete and detailed list of all the Station’s accounts receivable arising from the
broadcast of advertising time on the Station prior to the Closing Date (the “Emmis Entities’ AR”).  For a period of one
hundred eighty (180) days after the Closing Date (the “Collection Period”), Buyer will promptly forward to the address
for the Emmis Entities set forth in Section 11.4 below any amounts received by Buyer at the Station representing any of
                                    ------------
the Emmis Entities’ AR.  Buyer shall not be required to institute any legal proceedings to enforce the collection of such
accounts receivable or to refer any of such accounts receivable to a collection agency.  Buyer shall incur no liability
to the Emmis Entities for any uncollected account.



ARTICLE III

                                              REPRESENTATIONS AND WARRANTIES
                                                            OF
                                                     THE EMMIS ENTITIES

                  As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated
hereby, the Emmis Entities jointly and severally represent and warrant to Buyer as follows:

Section 3.1.      Organization.  Each of the Emmis Entities is a corporation duly organized, validly existing and in good
                  ------------
standing under the laws of the state of its incorporation, and has the requisite corporate power and authority to own or
lease and to operate those Purchased Assets operated by it, to use the Purchased Assets used by it and to carry on the
Business as now conducted by it.

Section 3.2.      Subsidiaries and Investments.  Neither Emmis Entity, directly or indirectly, (a) owns, of record or
                  ----------------------------
beneficially, any outstanding voting securities or other equity interests in any corporation, partnership, joint venture
or other entity which is primarily involved in or relates primarily to the Business or (b) otherwise controls any such
corporation, partnership, joint venture or other entity which is involved primarily in or relates primarily to the
Business.

Section 3.3.      Authority of the Emmis Entities.
                  -------------------------------

(a)      Each Emmis Entity has the requisite corporate power and authority to execute and deliver this Agreement and all
of the other agreements and instruments to be executed and delivered by the Emmis Entity pursuant hereto (collectively,
the “Emmis Entities Ancillary Agreements”), to consummate the transactions contemplated hereby and thereby and to comply
with the terms, conditions and provisions hereof and thereof.

(b)      The execution, delivery and performance of this Agreement and the Emmis Entities Ancillary Agreements by each
Emmis Entity (to the extent a party thereto) have been duly authorized and approved by all necessary action of the Emmis
Entities and do not require any further authorization or consent of the Emmis Entities, or their respective
stockholders.  This Agreement is, and each other Emmis Entities Ancillary Agreement when executed and delivered by each
Emmis Entity and the other parties thereto will be, a legal, valid and binding agreement of the Emmis Entity enforceable
in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy,
moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights
generally and except as such enforceability is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(c)      Except as set forth in Schedule 3.3(c), none of the execution and delivery by either Emmis Entity of this
                                ---------------
Agreement or the other Emmis Entities Ancillary Agreements, the consummation by either Emmis Entity of any of the
transactions contemplated hereby or thereby or compliance by either Emmis Entity with or fulfillment by either Emmis
Entity of the terms, conditions and provisions hereof or thereof will:

(i)      conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of
                  default or an event creating rights of acceleration, termination or cancellation or a loss of rights
                  under, or result in the creation or imposition of any Encumbrance upon any of the Purchased Assets
                  under, the certificate or articles of incorporation or bylaws of either Emmis Entity, any Station
                  Agreement, any Governmental Permit or any judgment, order, award or decree to which either Emmis Entity
                  is a party or any of the Purchased Assets is subject or by which either Emmis Entity is bound, or any
                  statute, other law or regulatory provision affecting either Emmis Entity or the Purchased Assets,
                  except, in any case, as would not reasonably be expected to have a Material Adverse Effect; or

(ii)     require the approval, consent, authorization or act of, or the making by either Emmis Entity of any declaration,
                  filing or registration with, any third party or any foreign, federal, state or local court, governmental
                  or regulatory authority or body, except for such of the foregoing as are necessary pursuant to the HSR
                  Act or the Communications Act and except, in any case, as would not reasonably be expected to have a
                  Material Adverse Effect.

Section 3.4.      Financial Statements.  The Emmis Entities have furnished Buyer accurate and complete copies of (a) the
                  --------------------
unaudited balance sheet of the Station as of February 28, 2001, and the related statement of operations of the Station
for the sixth-month period then ended, and (b) the unaudited balance sheet (the “Balance Sheet”) of the Station as of
December 31, 2001 (the “Balance Sheet Date”) and the related statement of operations of the Station for the ten-month
period then ended.  Such balance sheets and statements (i) have been prepared from and are in accordance in all material
respects with the books and records regularly maintained by the Emmis Entities, and (ii) have been prepared in accordance
with GAAP and present fairly, in all material respects, the financial position and the results of operations of the
Station as of the dates and for the periods indicated, with the exceptions that (A) statements of cash flows are not
included, (B) federal income tax, expense or benefit are not shown,  (C) interest income and expense are not shown, and
(D) such statements do not contain the disclosures required by GAAP in notes accompanying financial statements.

Section 3.5.      Operations Since Balance Sheet Date.
                  -----------------------------------

(a)      Except as set forth in Schedule 3.5(a), to the Knowledge of the Emmis Entities, during the period from the
                                ---------------
Balance Sheet Date to the date hereof, inclusive, there has been:

(i)      no change in the financial condition or the results of operations of the Station or the Business which has had a
                  Material Adverse Effect; or

(ii)     no damage, destruction, loss or claim (whether or not covered by insurance) or condemnation or other taking which
                  materially adversely affects the Purchased Assets, the Station or the Business.

(b)      Except as set forth in Schedule 3.5(b), since the Balance Sheet Date through the date hereof, the Business has
                                --------------
been conducted only in the ordinary course and in conformity with past practice. Without limiting the generality of the
foregoing, since the Balance Sheet Date through the date hereof, except as set forth in such Schedule, the Emmis Entities
have not, in respect of the Station:

(i)      sold, leased, transferred or otherwise disposed of (including any transfers to any Affiliate of either Emmis
                  Entity), or mortgaged or pledged, or imposed or suffered to be imposed any Encumbrance (other than
                  Permitted Encumbrances) on, any of the Purchased Assets, other than personal property having a value, in
                  the aggregate, of less than $25,000 sold or otherwise disposed of for fair value in the ordinary course
                  of the Business consistent with past practice;

(ii)     canceled without fair consideration therefor any debts owed to or claims held by either Emmis Entity relating to
                  the Station (including the settlement of any claims or litigation) or waived any right of significant
                  value to either Emmis Entity relating to the Station, other than in the ordinary course of the Business
                  consistent with past practice;

(iii)    created, incurred, guaranteed or assumed, or agreed to create, incur, guarantee or assume, any indebtedness for
                  borrowed money or entered into any capitalized leases except in the ordinary course of business
                  consistent with past practice;

(iv)     accelerated collection of notes or accounts receivable generated by the Business to a date prior to the date such
                  collection would have occurred in the ordinary course of the Business;

(v)      granted or instituted any increase in any rate of salary or compensation or any profit sharing, bonus, incentive,
                  deferred compensation, insurance, pension, retirement, medical, hospital, disability, welfare or other
                  employee benefit plan other than in the ordinary course of the Business consistent with past practices;
                  or

(vi)     entered into any agreement or made any commitment to take any action described in subparagraphs (i) through (v)
                  above.

Section 3.6.      No Undisclosed Liabilities.  Except as set forth in Schedule 3.6, neither the Station nor the Business
                  --------------------------                          ------------
is subject to any liability (including, without limitation, unasserted claims), whether absolute, contingent, accrued or
otherwise, which is not shown or reserved for in the Balance Sheet, other than liabilities of the same nature as those
set forth in the Balance Sheet and the notes thereto and incurred in the ordinary course of the Business after the
Balance Sheet Date.

Section 3.7.      Taxes.  The Emmis Entities have, in respect of the Business, either filed or obtained extensions for
                  -----
filings pursuant to established procedures all foreign, federal, state, county or local income, excise, property, sales,
use, franchise or other Tax returns and reports which are required to have been filed by them under applicable law on or
prior to the date of this Agreement and have paid or made provision for the payment of all Taxes which have become due
pursuant to such returns or pursuant to any assessments which have become payable and which are not being contested in
good faith by appropriate proceedings.  All monies required to be withheld by the Emmis Entities from employees of the
Business for income Taxes, social security and other payroll Taxes have been collected or withheld, and either paid to
the respective Governmental Bodies, set aside in accounts for such purpose, or accrued, reserved against and entered upon
the books of the Emmis Entities.

Section 3.8.      Availability of Assets and Legality of Use.  Except as set forth in Schedule 3.8 and except for the
                  ------------------------------------------                          ------------
Excluded Assets, the Purchased Assets constitute all the material assets used by the Emmis Entities in the conduct of the
Business and, as of the date of this Agreement, are in good and serviceable condition (subject to normal wear and tear).

Section 3.9.      Governmental Permits.
                  --------------------

(a)      Emmis License owns, holds or possesses the Emmis Denver FCC Authorizations, and the Emmis Entities own, hold or
possess all other licenses, franchises, permits, privileges, immunities, approvals and other authorizations from a
Governmental Body that are necessary to entitle them to own or lease, operate and use the Purchased Assets and to carry
on and conduct the Business substantially as conducted immediately prior to the date of this Agreement, except for such
Governmental Permits as to which the failure to so own, hold or possess would not have a Material Adverse Effect (herein
collectively called “Governmental Permits”).  Schedule 3.9(a) sets forth a list and brief description of each such
Governmental Permit held by each Emmis Entity as of the date of this Agreement.

(b)      Except as set forth in Schedule 3.9(b), each Emmis Entity has fulfilled and performed in all material respects
                                ---------------
its obligations under each of the Governmental Permits, and no event has occurred or condition or state of facts exists
which constitutes or, after notice or lapse of time or both, would constitute a material breach or material default under
any such Governmental Permit.  No notice of cancellation, of default or of any dispute concerning any Governmental
Permit, or of any event, condition or state of facts described in the preceding sentence, has been received by either
Emmis Entity.  Except as set forth in Schedule 3.9(b), each of the Governmental Permits is valid, subsisting and in full
                                      ---------------
force and effect, and, subject to the receipt of the FCC Consent, to the Knowledge of the Emmis Entities, may be assigned
and transferred to the Buyer in accordance with this Agreement and at the time of assignment to the Buyer will be in full
force and effect, in each case without (a) the occurrence of any breach, default or forfeiture of rights thereunder or
(b) the consent, approval or act of, or the making of any filing with, any Governmental Body or other party (other than
the FCC as contemplated by Section 5.3).  Except as set forth on Schedule 3.9(b), the Station is being operated in all
                           -----------                           ---------------
material respects in accordance with the Emmis Denver FCC Authorizations and in compliance in all material respects with
the Communications Act, the rules and regulations thereunder, and all other laws and regulations, federal, state and
local, applicable to the Station.  Neither Emmis Entity has received any notice of any violations of the Emmis Denver FCC
Authorizations, the Communications Act or the rules and regulations thereunder relating to the Station.  There is no
action by or before the FCC currently pending or, to the Knowledge of the Emmis Entities, threatened to revoke, cancel,
rescind, modify or refuse to renew in the ordinary course any of the Emmis Denver FCC Authorizations.

Section 3.10.     Real Property; Real Property Leases.  The Emmis Entities do not own any real property which is used in
                  -----------------------------------
the operation of the Station or the Business.  Schedule 3.10 contains a brief description of all real property leased by
                                               -------------
the Emmis Entities and principally used in the operation of the Station, and each option held by either Emmis Entity to
acquire any real property for use principally in the operation of the Station (the “Real Property”).  Schedule 3.10 also
sets forth a list of each lease or similar agreement under which either Emmis Entity is lessee of, or holds or operates,
any real property owned by any third Person and principally used in the operation of the Station (the “Real Property
Leases”).  As of the date of this Agreement, to the Knowledge of the Emmis Entities, no Real Property is subject to any
- ------
pending or threatened suit for condemnation or other taking by any public authority.

Section 3.11.     Personal Property.  Schedule 3.11 contains a list as of December 31, 2001 of all machinery, equipment,
                  -----------------   -------------
vehicles, furniture and other personal property owned by the Emmis Entities having an original cost of $10,000 or more
and principally used in the operation of the Station.

Section 3.12.     Personal Property Leases.  Schedule 3.12 contains a list of each lease or other agreement or right under
                  ------------------------   -------------
which either Emmis Entity is lessee of, or holds or operates, any machinery, equipment, vehicle or other tangible
personal property owned by a third party and used principally in the Business, except those which are terminable by the
Emmis Entity without penalty on 30 days’ notice or less or which provide for annual rentals less than $10,000.

Section 3.13.     Intellectual Property.
                  ---------------------

(a)      Schedule 3.13(a) contains a list of all United States and foreign patents, pending patent applications, trademark
         ----------------
registrations, pending trademark applications and domain names issued to, assigned to and filed by either Emmis Entity
principally for use in the operation of the Station.

(b)      Except as disclosed in Schedule 3.13(b), to the Knowledge of the Emmis Entities, the Emmis Entities either (i)
                                ----------------
own the entire right, title and interest in and to the items listed in Schedule 3.13(a), free and clear of Encumbrances
                                                                       ----------------
except for Permitted Encumbrances; or (ii) have the right and license to use the same in the conduct of the Business.

(c)      Except as disclosed in Schedule 3.13(c), to the Knowledge of the Emmis Entities,  (i) all patents and
                                ----------------
registrations identified in Schedule 3.13(a) are in force, and all applications identified in Schedule 3.13(a) are
                            ----------------                                                  ----------------
pending without challenge (other than office actions that may be pending before the Patent and Trademark Office or its
foreign equivalents); (ii) the intellectual property owned by the Emmis Entities and principally used in the conduct of
the Business is valid and enforceable; and (iii) the Emmis Entities have the right to bring actions for infringement or
unauthorized use of such intellectual property.

(d)      Except as disclosed in Schedule 3.13(d), to the Knowledge of the Emmis Entities, (i) during the Emmis Entities’
                                ----------------
ownership of the Station, no written claim has been made or asserted that alleges the intellectual property owned by the
Emmis Entities and principally used in the conduct of the Business infringes the intellectual property of another Person;
(ii) no litigation, arbitration or other proceeding is currently pending with respect to such intellectual property; and
(iii) during the Emmis Entities’ ownership of the Station, no written claim has been made or asserted that challenges the
validity or the Emmis Entities’ ownership of any such intellectual property.

Section 3.14.     [Intentionally Omitted]
                  -----------------------

Section 3.15.     Title to Purchased Assets.  Except for the Encumbrances securing the senior credit facility of Emmis
                  -------------------------
Operating Company (each of which the Emmis Entities shall cause to be released from the Purchased Assets at Closing),
Emmis Radio has good and marketable title to all of the tangible personal properties included in the Purchased Assets,
free and clear of all Encumbrances, except for Permitted Encumbrances.

Section 3.16.     Employees.  Schedule 3.16 contains:  (a) a list of all employees of the Station as of a recent date
                  ---------   -------------
whose annual salary exceeds $75,000; and (b) the then current rate of compensation of such employees.  Since the Balance
Sheet Date, except as disclosed on Schedule 3.16 or as has occurred in the ordinary course of the Business and consistent
                                   -------------
as to timing and amount with past practices, the Emmis Entities have not:  (i) increased the compensation payable or to
become payable to or for the benefit of any employees of the Station (other than normal annual salary increases
consistent with past practice), (ii) provided any such employees with increased security or tenure of employment,
(iii) increased the amount payable to any such employees upon the termination of such persons’ employment, or
(iv) increased, augmented or improved benefits granted to or for the benefit of such employees under any bonus, profit
sharing, pension, retirement, deferred compensation, insurance or other direct or indirect benefit plan or arrangement.

Section 3.17.     Employee Relations.
                  ------------------

(a)      Except as set forth on Schedule 3.17, the Emmis Entities are not a party to any collective bargaining agreement
                                -------------
or employment agreement relating to the Station.

(b)      Except as set forth on Schedule 3.17, no union or similar organization represents employees of the Station and,
                                -------------
to the Knowledge of the Emmis Entities, no such organization is attempting to organize such employees.

(c)      Except as set forth on Schedule 3.17, no director, officer or employee of the Station is a party to any
                                -------------
employment or other agreement that entitles him or her to compensation or other consideration upon the acquisition by any
Person of control of the Station.

Section 3.18.     Contracts.  Except as set forth in Schedule 3.18 or any other Schedule hereto, as of the date of this
                  ---------                          -------------
Agreement, the Emmis Entities, with respect to the Business, are not a party to or bound by:

(a)      Any contract for the future purchase or sale of real property;

(b)      Any contract for the purchase, rental or use of any recordings, radio programming or programming services which
is not terminable by an Emmis Entity without penalty on 30 days’ notice or less or which provides for performance over a
period of more than 90 days or which involves the payment after the date hereof of more than $10,000;

(c)      Any contract for the purchase of merchandise, supplies or personal property or for the receipt of services (other
than services referred to in clause (b) above) which is not terminable by an Emmis Entity on 30 days’ notice or less or
which provides for performance over a period of more than 90 days or which involves the payment after the date hereof of
more than $10,000;

(d)      Any contract for the sale of broadcast time for advertising or other purposes which was not made in the ordinary
course of the Business consistent with past practice;

(e)      Any guarantee of the obligations of the Station’s customers, suppliers, or employees;

(f)      Any sales agency, advertising representative or advertising or public relations contract which is not terminable
by an Emmis Entity without penalty on 30 days’ notice or less or which provides for payments over a period of more than
90 days or which involves the payment after the date hereof of more than $10,000;

(g)      Any barter agreement or other agreement with advertisers for broadcasting or commercial time on the Station in
exchange for goods or services;

(h)      Any employee collective bargaining agreement, employment agreement (other than employment agreements terminable
without premium or penalty on notice of 30 days or less under which the only monetary obligation is to make current wage
or salary payments and provide current fringe benefits), consulting, advisory or service agreement, deferred compensation
agreement or covenant not to compete;

(i)      any written contract which an Emmis Entity reasonably anticipates will involve the payment of more than $10,000
in the year ended December 31, 2002;
(j)      any partnership, joint venture or other similar agreement or arrangement;

(k)      any agreement or instrument which provides for, or relates to, the incurrence by an Emmis Entity of debt for
borrowed money (except for such agreements or instruments which shall not apply to the Buyer or its Affiliates upon
Closing); or

(l)      any agreement outside of the ordinary course of the Business containing any covenant or provision prohibiting an
Emmis Entity from engaging in any line or type of business (except for such agreements which shall not apply to the Buyer
or its Affiliates upon Closing).

Schedule 3.18 also indicates whether each contract, agreement or other instrument listed therein is to be deemed a
- -------------
“Contract Not Assumed” for purposes of this Agreement.

Section 3.19.     Status of Contracts.  Except as set forth in Schedule 3.19 or in any other Schedule hereto, each Station
                  -------------------                          -------------
Agreement constitutes a valid and binding obligation of an Emmis Entity and, to the Knowledge of the Emmis Entities, the
other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting
the enforcement of creditors’ rights generally) and is in full force and effect (subject to bankruptcy, insolvency,
reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally) and (except
as set forth in Schedule 3.3(c) and except for those Station Agreements which by their terms will expire prior to the
                ---------------
Closing Date or will be otherwise terminated prior to the Closing Date in accordance with the provisions hereof or at the
direction of Buyer) may be transferred to the Buyer pursuant to this Agreement and will be in full force and effect at
the time of such transfer, in each case without breaching the terms thereof or resulting in the forfeiture or impairment
of any rights thereunder and without the consent, approval or act of, or the making of any filing with, any other party.
Each Emmis Entity has fulfilled and performed in all material respects its obligations under each of the Station
Agreements to which it is a party, and neither Emmis Entity is in, or alleged to be in, breach or default under any of
the Station Agreements and, to the Knowledge of the Emmis Entities, no other party to any of the Station Agreements has
breached or defaulted thereunder, and no event has occurred and no condition or state of facts exists which, with the
passage of time or the giving of notice or both, would constitute such a default or breach by an Emmis Entity or, to the
Knowledge of the Emmis Entities, by any such other party.  Complete and correct copies of each of the Station Agreements,
together with all amendments thereto, have heretofore been delivered or made available to the Buyer by the Emmis Entities.

Section 3.20.     No Violation, Litigation or Regulatory Action.  Except as set forth in Schedule 3.20:
                  ---------------------------------------------                          -------------

(a)      Each Emmis Entity has complied with all laws, regulations, rules, writs, injunctions, ordinances, franchises,
decrees or orders of any court or of any foreign, federal, state, municipal or other Governmental Body which are
applicable to the Purchased Assets, the Station or the Business, except where the failure to comply would not have a
Material Adverse Effect on the operating and financial condition of the Business, individually and taken as a whole;

(b)      There are no lawsuits, suits or proceedings pending or, to the Knowledge of the Emmis Entities, threatened
against either Emmis Entity in respect of the Purchased Assets, the Station or the Business; and

(c)      To the Knowledge of the Emmis Entities, there are no claims or investigations pending or threatened against
either Emmis Entity in respect of the Purchased Assets, the Station or the Business which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect; and

(d)      There is no action, suit or proceeding pending or, to the Knowledge of the Emmis Entities, threatened which
questions the legality or propriety of the transactions contemplated by this Agreement.

Section 3.21.     Insurance.  The Emmis Entities currently maintain, in respect of the Purchased Assets, the Station and
                  ---------
the Business, policies of fire and extended coverage and casualty, liability and other forms of insurance in such amounts
and against such risks and losses as are in the judgment of the Emmis Entities prudent for the Business.  Except as set
forth in Schedule 3.21 with respect to the Business, there are no outstanding claims under any insurance policy or
         -------------
default with respect to provisions in any such policy which claim or default individually or in the aggregate would
reasonably be expected to have a Material Adverse Effect.

Section 3.22.     Employee Plans; ERISA.
                  ---------------------

(a)      Schedule 3.22 sets forth a list of each pension, retirement, profit sharing, deferred compensation, stock bonus
         -------------
or other similar plan relating to the Business; each medical, vision, dental or other health plan; each life insurance
plan relating to the Business; and any other employee benefit plan relating to the Business (the “Employee Plans”), in
each case, to which either Emmis Entity is on the date hereof required to contribute, or which either Emmis Entity on the
date hereof sponsors for the benefit of any employees, or under which employees (or their beneficiaries) of either Emmis
Entity is on the date hereof eligible to receive benefits, including, without limitation, any Employee Benefit Plan (as
defined in Section 3(3) of  ERISA).

(b)      All Employee Plans which are Employee Benefit Plans are on the date hereof in compliance in all material respects
with the provisions of ERISA, the Code and the rules and regulations promulgated thereunder to the extent that ERISA, the
Code and such rules and regulations are intended to apply.  Neither Emmis Entity maintains, sponsors, participates in or
contributes to any employee pension benefit plan (as defined in Section 3(2) of ERISA) that is subject to Title IV of
ERISA pr Section 412 of the Code.  No plan which is an Employee Benefit Plan has engaged in a transaction that is a
Prohibited Transaction as defined in Section 406 of ERISA and Section 4975 of the Code for which there is no exemption
and with respect to which an Emmis Entity has on the date hereof incurred any Liability which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect upon the Business and the Purchased Assets
(taken as a whole).  Neither Emmis Entity, on the date hereof, participates in, or owes withdrawal Liability to, any
Multiemployer Plan (as defined in Section 4000(a)(3) of ERISA).

Section 3.23.     Environmental Protection.  Except as set forth in Schedule 3.23:
                  ------------------------                          -------------

(a)      Each Emmis Entity has, in respect of the Business, obtained all environmental, health and safety Governmental
Permits necessary for its operation, and all such Governmental Permits are in good standing and each Emmis Entity is in
compliance in all material respects with all terms and conditions of such Permits;

(b)      as of the date of this Agreement, none of the Emmis Entities, with respect to the Business, or any of the present
Real Property or operations, or the past Real Property or operations, is, as of the date of this Agreement, subject to
any on-going investigation by, order from or agreement with any Person (including without limitation any prior owner or
operator of Real Property) respecting (i) any Environmental Law, (ii) any Remedial Action or (iii) any claim of Losses
and Expenses arising from the Release or threatened Release of a Contaminant into the environment;

(c)      as of the date of this Agreement, neither Emmis Entity is, with respect to the Business, subject to any judicial
or administrative proceeding, order, judgment, decree or settlement alleging or addressing a violation of or liability
under any Environmental Law;

(d)      as of the date of this Agreement, neither Emmis Entity has, with respect to the Business:

(i)      reported a Release of a hazardous substance pursuant to Section 103(a) of CERCLA, or any state equivalent;

(ii)     filed a notice pursuant to Section 103(c) of CERCLA;

(iii)    filed a notice pursuant to Section 3010 of RCRA, indicating the generation of any hazardous waste, as that term
                  is defined under 40 CFR Part 261 or any state equivalent ; or

(iv)     filed any notice under any applicable Environmental Law reporting a substantial violation of any applicable
                  Environmental Law; and

(e)      there is not as of the date of this Agreement, nor to the Knowledge of the Emmis Entities has there ever been, on
or in any Real Property:

(i)      any treatment, recycling, storage or disposal of any hazardous waste, as that term is defined under 40 CFR Part
                  261 or any state equivalent, that requires or required a Governmental Permit pursuant to Section 3005 of
                  RCRA;

(ii)     any underground storage tank or surface impoundment or landfill or waste pile;

(iii)    Neither Emmis Entity has received any notice or claim to the effect that it is or may be liable to any Person as
                  a result of the Release or threatened Release of a Contaminant; and

(iv)     as of the date of this Agreement, no Environmental Encumbrance has attached to any Real Property.

Section 3.24.     No Finder.  None of the Emmis Entities or any party acting on either Emmis Entity’s behalf has paid or
                  ---------
become obligated to pay any fee or commission to any broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.

ARTICLE IV

                                              REPRESENTATIONS AND WARRANTIES
                                                          OF BUYER

                  As an inducement to the Emmis Entities to enter into this Agreement and to consummate the transactions
contemplated hereby, Buyer represents and warrants to the Emmis Entities as follows.

Section 4.1.      Organization.  Buyer is a corporation duly organized, validly existing and in good standing under the
                  ------------
laws of the state of its incorporation.  Buyer has the requisite corporate power and authority to own, lease and operate
the properties and assets used in connection with its business as currently being conducted or to be acquired pursuant
hereto.

Section 4.2.      Authority of Buyer.
                  ------------------

(a)      Buyer has the requisite corporate power and authority to execute and deliver this Agreement and all of the other
agreements and instruments to be executed and delivered by Buyer pursuant hereto (collectively, the “Buyer Ancillary
Agreements”), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and
- ----------
provisions hereof and thereof.

(b)      The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements by Buyer have been
duly authorized and approved by all necessary action of Buyer and do not require any further authorization or consent of
Buyer or its stockholders.  This Agreement is, and each other Buyer Ancillary Agreement when executed and delivered by
Buyer and the other parties thereto will be, a legal, valid and binding agreement of Buyer enforceable in accordance with
its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as
such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

(c)      Except as set forth in Schedule 4.2, none of the execution and delivery by Buyer of this Agreement and the other
                                ------------
Buyer Ancillary Agreements, the consummation by Buyer of any of the transactions contemplated hereby or thereby or
compliance by Buyer with or fulfillment by Buyer of the terms, conditions and provisions hereof or thereof will:

(i)      conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of
                  default or an event creating rights of acceleration, termination or cancellation or a loss of rights
                  under, or result in the creation or imposition of any Encumbrance upon any assets of Buyer under, the
                  certificate of incorporation or bylaws of Buyer, any indenture, note, mortgage, lease, guaranty or
                  material agreement, or any judgment, order, award or decree, to which Buyer is a party or any of the
                  assets of Buyer is subject or by which Buyer is bound, or any statute, other law or regulatory provision
                  affecting Buyer or its assets; or

(ii)     require the approval, consent, authorization or act of, or the making by Buyer of any declaration, filing or
                  registration with, any third party or any foreign, federal, state or local court, governmental or
                  regulatory authority or body, except for such of the foregoing as are necessary pursuant to the HSR Act
                  or the Communications Act.

Section 4.3.      Litigation.  Buyer is not a party to any action, suit or proceeding pending or threatened which, if
                  ----------
adversely determined, would reasonably be expected to restrict the ability of Buyer to consummate the transactions
contemplated by this Agreement.  There is no order to which Buyer is subject which would reasonably be expected to
restrict the ability of Buyer to consummate the transactions contemplated by this Agreement.

Section 4.4.      No Finder.  Neither Buyer nor any party acting on its behalf has paid or become obligated to pay any fee
                  ---------
or commission to any broker, finder or intermediary for or on account of the transactions contemplated by this Agreement.

Section 4.5.      Qualifications as FCC Licensee.  Buyer knows of no fact or circumstance which would, under the federal
                  ------------------------------
antitrust laws, or the Communications Act, disqualify or preclude Buyer from being approved as an assignee of the Emmis
Denver FCC Authorizations.  There are no proceedings, complaints, notices of forfeiture, claims, or investigations
pending or threatened against Buyer or any principal, officer, director, or owner of Buyer that would materially impede
the Buyer’s ability to prosecute the applications filed with the FCC to assign the Emmis Denver FCC Authorizations to
Buyer or to seek the FCC Consent.  Buyer is legally and financially qualified to serve as licensee of the Station.

Section 4.6.      Adequacy of Financing.  Buyer has, as of the date of this Agreement, and will have, as of the Closing
                  ---------------------
Date, on hand (or access through committed credit facilities to) adequate funds to pay the Purchase Price.

ARTICLE V

                                             ACTION PRIOR TO THE CLOSING DATE

                  The respective parties hereto covenant and agree to take the following actions between the date hereof
and the Closing Date:

Section 5.1.      Investigation of the Business.  Upon the request of Buyer, the Emmis Entities shall afford to the
                  -----------------------------
officers, employees and authorized representatives of Buyer (including, without limitation, independent public
accountants, attorneys and consultants) reasonable access during normal business hours, and upon not less than 24-hours
prior notice, to the offices, properties, employees and business and financial records (including computer files,
retrieval programs and similar documentation) of the Business to the extent Buyer shall reasonably deem necessary or
desirable and shall furnish to Buyer or its authorized representatives such additional information concerning the
Business as shall be reasonably requested; provided, however, that neither Emmis Entity shall be required to violate any
                                           --------  -------
obligation of confidentiality to which it is subject in discharging its obligations pursuant to this Section 5.1.  Buyer
                                                                                                     -----------
agrees that any such investigation shall be conducted in such a manner as not to interfere unreasonably with the
operations of the Emmis Entities.

Section 5.2.      Preserve Accuracy of Representations and Warranties.  Each of the parties hereto shall refrain from
                  ---------------------------------------------------
taking any action which would render any representation or warranty contained in Article III or IV of this Agreement
                                                                                 -----------    --
inaccurate as of the Closing Date.  Each party shall promptly notify the other of any action, suit or proceeding that
shall be instituted or threatened against such party to restrain, prohibit or otherwise challenge the legality of any
transaction contemplated by this Agreement.  The Emmis Entities shall promptly notify Buyer, and Buyer shall promptly
notify the Emmis Entities, of any lawsuit, claim, proceeding or investigation that may be threatened, brought, asserted
or commenced against the other which would have been listed in Schedule 3.20 or would be an exception to Section 4.3, or
                                                               -------------                             -----------
been a qualification to Section 4.3 if such lawsuit, claim, proceeding or investigation had arisen prior to the date
                        -----------
hereof.

Section 5.3.      FCC Consent; HSR Act Approval; Other Consents and Approvals.
                  -----------------------------------------------------------

(a)      Within five business days after the date of this Agreement, the Emmis Entities and Buyer shall file with the FCC
applications requesting its consent to the assignment of the Emmis Denver FCC Authorizations (and any extensions or
renewals thereof) to Buyer from Emmis License.  The Emmis Entities and Buyer will cooperate in the preparation of such
application and will diligently take, or cooperate in the taking of, all necessary, desirable and proper steps, provide
any additional information reasonably required and otherwise use reasonable efforts to obtain promptly the requested
consent and approval of the FCC.  Any fees assessed by the FCC incident to the filing or grant of such applications shall
be borne equally by Buyer and Emmis License, with each party responsible for one half of any such fees assessed.  Each of
the Emmis Entities and Buyer shall make available to the other, promptly after the filing thereof, copies of all reports
filed by it or its Affiliates on or prior to the Closing Date with the FCC in respect of the Station.

(b)      The Emmis Entities and Buyer each acknowledge and agree that no filings or other notifications under the HSR Act
will be necessary in connection with the transactions contemplated by this Agreement.

(c)      The Emmis Entities and the Buyer shall each use reasonable efforts to obtain all consents and amendments from the
parties to the Station Agreements and all consents, amendments or permits from Governmental Bodies, which are required by
the terms thereof or this Agreement for the consummation of the transactions contemplated by this Agreement; provided,
                                                                                                             --------
however, that neither the Emmis Entities nor the Buyer shall have any obligation to offer or pay any consideration in
- -------
order to obtain any such consents or amendments.

Section 5.4.      Operations of the Station Prior to the Closing Date.
                  ---------------------------------------------------

(a)      Prior to the Closing Date, except as approved by Buyer in writing, the Emmis Entities shall keep and maintain the
Purchased Assets in good operating condition and repair (wear and tear in ordinary usage excepted).  Buyer agrees and
acknowledges that Buyer intends to change the format of the Station and to hire few if any of the Station’s employees,
and that therefore the Emmis Entities’ have no obligation to preserve the goodwill of the Station.

(b)      Notwithstanding Section 5.4(a), and except as expressly contemplated in Schedule 5.4(b) or elsewhere in this
                         --------------                                          --------------
Agreement or except with the express prior written approval of the Buyer, the Emmis Entities shall not, in respect of the
Station:

(i)      make any capital expenditure, or enter into any contract or commitment therefor, in excess of $10,000 in the
                  aggregate;

(ii)     enter into any contract for the purchase of real property or exercise any option to extend a lease listed in
                  Schedule 3.10;
                  -------------

(iii)    sell, lease (as lessor), transfer or otherwise dispose of (including any transfers to any Affiliates of an Emmis
                  Entity), or mortgage or pledge, or impose or suffer to be imposed any Encumbrance on, any of the
                  Purchased Assets, other than inventory and minor amounts of personal property sold or otherwise disposed
                  of in the ordinary course of the Business and other than Permitted Encumbrances; or

(iv)     create, incur or assume, or agree to create, incur or assume, any indebtedness for borrowed money except in the
                  ordinary course of the Business, other than money borrowed or advances from an Affiliate of an Emmis
                  Entity.

Section 5.5.      Public Announcement.  None of the Emmis Entities, Buyer or any of their Affiliates shall, without the
                  -------------------
approval of the other, make any press release or other public announcement concerning the transactions contemplated by
this Agreement, except as and to the extent that any such party shall be so obligated by law or by the rules, regulations
or policies of any national securities exchange or association, in which case the other party shall be advised and the
parties shall use reasonable efforts to cause a mutually agreeable release or announcement to be issued.

Section 5.6.      Interim Financial Statements.  The Emmis Entities shall deliver to Buyer copies of any monthly,
                  ----------------------------
quarterly or annual financial statements relating solely to the Business that may be prepared by it or any of their
Affiliates during the period from the date hereof through the Closing Date.  Such financial statements shall fairly
present, in all material respects, the financial position and results of operations of the Business as at the dates and
for the periods indicated, and shall be prepared on a basis consistent and in accordance with the basis upon which the
financial statements identified in Section 3.4 were prepared.
                                   -----------

ARTICLE VI

                                                   ADDITIONAL AGREEMENTS

Section 6.1.      Taxes; Sales, Use and Transfer Taxes.
                  ------------------------------------

(a)      The Emmis Entities shall be liable for and shall pay all Taxes (whether assessed or unassessed) applicable to the
Business or the Purchased Assets, in each case attributable to periods (or portions thereof) ending prior to the Closing
Date.  Buyer shall be liable for and shall pay all Taxes (whether assessed or unassessed) applicable to the Business or
the Purchased Assets, in each case attributable to periods (or portions thereof) beginning on or after the Closing Date.
For purposes of this Section 6.1(a), any period beginning before and ending after the Closing Date shall be treated as
                     --------------
two partial periods, one ending on the date immediately preceding the Closing Date and the other beginning on the Closing
Date.

(b)      Any sales, use or other transfer Taxes payable by reason of transfer and conveyance of the Business or the
Purchased Assets hereunder and any documentary stamp or transfer Taxes payable by reason of the real estate or interests
therein included in the Purchased Assets shall be borne equally by Buyer and the Emmis Entities.

(c)      The Emmis Entities or Buyer, as the case may be, shall provide reimbursement for any Tax paid by the other party
all or a portion of which is the responsibility of the Emmis Entities or Buyer, as the case may be, in accordance with
the terms of this Section 6.1.  Within a reasonable time prior to the payment of any said Tax, the party paying such Tax
                  -----------
shall give notice to the other party of the Tax payable and the portion which is the liability of each party, although
failure to do so will not relieve the other party from its liability hereunder.

Section 6.2.      Employees; Employee Benefit Plans.
                  ---------------------------------

(a)      On the Closing Date, Buyer may (but without any obligation to do so) offer employment to any or all of the
Station’s employees, and the employment by the Emmis Entities of such employees who accept employment with Buyer (the
“Affected Employees”) shall terminate on the Closing Date.  The Emmis Entities will use all reasonable efforts to assist,
and not interfere with or impede, Buyer in its efforts to secure satisfactory employment arrangements with prospective
Affected Employees.

(b)      Effective immediately upon the Closing Date, each Affected Employee shall be eligible to become a participant in
the Buyer’s benefit programs, and such other programs and arrangements as may be provided by Buyer to similarly situated
employees.

(c)      The Emmis Entities shall be solely responsible for the Employee Plans and all obligations and liabilities
thereunder.  Buyer shall not assume any of the Employee Plans or any obligation or liability thereunder.  The Emmis
Entities shall be responsible for, and shall indemnify and hold harmless Buyer from and against any adverse consequences
that Buyer may suffer resulting from, arising out of, relating to, in the nature of, or caused by, any actions taken by
either Emmis Entity or any ERISA Affiliate with respect to an Employee Plan.

                  (d)      Buyer shall reimburse the Emmis Entities for any severance paid by the Emmis Entities to any
other employee of the Station as of the Closing Date whose employment is terminated by the Emmis Entities on or after the
Closing Date if Buyer or an Affiliate of Buyer hires such employee within one (1) year after that employee’s termination
date with the Emmis Entities.

                  (e)      The Emmis Entities shall also be responsible for all liabilities or obligations under the
Worker Adjustment and Retraining Notification Act and any state law equivalent statutes resulting from the events or
actions contemplated herein.

                  (f)      Nothing contained herein, expressed or implied, shall confer upon any Affected Employee any
right to (i) continued employment for any period of time or (ii) any particular term or condition of employment.  Also,
nothing in this Agreement is intended to require the Emmis Entities to agree to pay any “stay” or similar bonuses to any
current employee of the Station in order to induce such employee to continue employment with the Station through the
Closing Date.

Section 6.3.      Control of Operations Prior to Closing Date.  Notwithstanding anything contained herein to the contrary,
                  -------------------------------------------
the Closing shall not be consummated prior to the grant by the FCC of the FCC Consent.  The Emmis Entities and Buyer
acknowledge and agree that at all times commencing on the date hereof and ending on the Closing Date, neither Buyer nor
any of its employees, agents or representatives, directly or indirectly, shall, or have any right to, control, direct or
otherwise supervise, or attempt to control, direct or otherwise supervise any of the management or operations of the
Station, it being understood that the operation, management, control and supervision of all programs, equipment,
operations and other activities of the Station shall be the sole responsibility, and at all times prior to the Closing
Date remain within the complete control and discretion, of the Emmis Entities, subject to the terms of Section 5.4 of
                                                                                                       -----------
this Agreement.

                  Section 6.4. Shared  Facilities and Assets.  Buyer  acknowledges  that portions of the Station’s  studios
                               -----------------------------
and certain of the Station’s  assets and rights are shared with the Other Station.  Accordingly,  Buyer agrees to cooperate
in good faith with the operator and/or owner of the Other Station (which may be a non-Emmis entity),  as applicable,  as to
such shared assets and rights,  including but not limited to allocating  responsibility as to receiving invoices and making
payments as to the  applicable  contracts  listed in Schedule  3.18.  Furthermore,  Buyer agrees to cooperate in good faith
                                                     --------------
(prior to the Closing to the extent  feasible) to effect the allocation of shared assets and rights as  contemplated in the
disclosure  schedules to this Agreement,  and to eliminate or minimize the Emmis  Entities’  involvement as to these shared
rights following the Closing to the extent feasible.

ARTICLE VII

                                            CONDITIONS PRECEDENT TO OBLIGATIONS
                                                             OF
                                                    THE EMMIS ENTITIES

                  The obligations of the Emmis Entities under this Agreement to consummate the Closing shall, at the
option of the Emmis Entities, be subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:

Section 7.1.      No Misrepresentation or Breach of Covenants and Warranties.  There shall have been no material breach by
                  ----------------------------------------------------------
Buyer in the performance of any of its respective covenants and agreements contained herein; each of the representations
and warranties of Buyer contained or referred to herein shall be true and correct in all material respects on the Closing
Date as though made on the Closing Date (except to the extent that they expressly speak as of a specific date or time
other than the Closing Date, in which case they need only have been true and correct in all material respects as of such
specified date or time), except for changes therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by the Emmis Entities; and there shall have been delivered to the Emmis
Entities a certificate or certificates to such effect, dated as of the Closing Date, signed on behalf of Buyer by its
Chief Executive Officer.

Section 7.2.      No Restraint or Litigation.
                  --------------------------

(a)      There shall not be in effect any preliminary or permanent injunction or other order, decree or ruling by a court
of competent jurisdiction or by a Governmental Body, no statute, rule, regulation or executive order shall have been
promulgated or enacted by a Government Body and there shall not be in effect any temporary restraining order of a court
of competent jurisdiction, which, in any case, restrains or prohibits the transactions contemplated hereby.

(b)      There shall not be in existence any suit, action, proceeding or investigation instigated by a Governmental Body
before any court or governmental agency or body to prohibit the transactions contemplated by this Agreement.

Section 7.3.      FCC Consent.  The FCC Consent shall have been granted, without any condition or qualification which is
                  -----------
materially adverse to the Emmis Entities.

                  Notwithstanding the failure of any one or more of the foregoing conditions, the Emmis Entities may
proceed with the Closing without satisfaction, in whole or in part, of any one or more of such conditions and without
written waiver.  To the extent that at the Closing Buyer delivers to the Emmis Entities a written notice specifying in
reasonable detail the failure of any of such conditions or the breach by Buyer of any of the representations or
warranties of Buyer herein, and nevertheless the Emmis Entities proceed with the Closing, the Emmis Entities shall be
deemed to have waived for all purposes any rights or remedies either may have against Buyer by reason of the failure of
any such conditions or the breach of any such representations or warranties to the extent described in such notice.



ARTICLE VIII

                                       CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

                  The obligations of Buyer under this Agreement to consummate the Closing shall, at the option of Buyer,
be subject to the satisfaction on or prior to the Closing Date, of the following conditions:

Section 8.1.      No Misrepresentation or Breach of Covenants and Warranties.  There shall have been no material breach by
                  ----------------------------------------------------------
either Emmis Entity in the performance of any of its respective covenants and agreements contained herein; each of the
representations and warranties of each Emmis Entity contained or referred to in this Agreement shall be true and correct
in all material respects on the Closing Date as though made on the Closing Date (except to the extent that they expressly
speak as of a specific date or time other than the Closing Date, in which case they need only have been true and correct
in all material respects as of such specified date or time), except for changes (i) therein specifically permitted by
this Agreement or (ii) resulting from any transaction expressly consented to in writing by Buyer or any transaction
contemplated by this Agreement; and there shall have been delivered to Buyer certificates to such effect, dated as of the
Closing Date and signed on behalf of each Emmis Entity by its President or any Vice President.

Section 8.2.      No Restraint or Litigation.
                  --------------------------

(a)      There shall not be in effect any preliminary or permanent injunction or other order, decree or ruling by a court
of competent jurisdiction or by a Governmental Body, no statute, rule, regulation or executive order shall have been
promulgated or enacted by a Government Body and there shall not be in effect any temporary restraining order of a court
of competent jurisdiction, which, in any case, restrains or prohibits the transactions contemplated hereby.

(b)      There shall not be in existence any suit, action, proceeding or investigation instigated by a Governmental Body
before any court or governmental agency or body to prohibit the transactions contemplated by this Agreement.

Section 8.3.      FCC Consent.  The FCC Consent shall have been granted, without any condition or qualification which is
                  -----------
materially adverse to Buyer or to the operations of the Station.

                  Notwithstanding the failure of any one or more of the foregoing conditions, Buyer may proceed with the
Closing without satisfaction, in whole or in part, of any one or more of such conditions and without written waiver.  To
the extent that at the Closing either Emmis Entity delivers to Buyer a written notice specifying in reasonable detail the
failure of any of such conditions or the breach by either Emmis Entity of any of its representations or warranties
herein, and nevertheless Buyer proceeds with the Closing, Buyer shall be deemed to have waived for all purposes any
rights or remedies it may have against the Emmis Entities by reason of the failure of any such conditions or the breach
of any such representations or warranties to the extent described in such notice.

ARTICLE IX

                                                      INDEMNIFICATION

Section 9.1.      Indemnification by the Emmis Entities.  The Emmis Entities agree jointly and severally to indemnify and
                  -------------------------------------
hold harmless each Buyer Group Member from and against any and all Loss and Expense incurred by such Buyer Group Member
in connection with or arising from:

(i)      any breach by either Emmis Entity of, or any other failure of either of Emmis Entity to perform, any of its
                  covenants, agreements or obligations in this Agreement or in any Emmis Entities Ancillary Agreement;

(ii)     any breach of any warranty or the inaccuracy of any representation of either Emmis Entity contained or referred
                  to in this Agreement or any certificate delivered by or on behalf of either Emmis Entity pursuant
                  hereto; or

(iii)    the failure of either Emmis Entity to perform any Excluded Liabilities and any other obligation, indebtedness or
                  liability of either Emmis Entity (other than the Assumed Liabilities and any Loss and Expense
                  indemnifiable by Buyer under Section 9.2).
                                               -----------

provided, however, that the Emmis Entities shall not be required to indemnify and hold harmless pursuant to clause (ii)
- --------  -------
with respect to Loss and Expense incurred by Buyer Group Members until, and then only to the extent that, the aggregate
amount of all such Loss and Expense exceeds $225,000 (the “Threshold Amount”), provided, further, that once the Threshold
Amount has been exceeded, the Emmis Entities shall be liable for the full amount of such damages.  The aggregate amount
that the Emmis Entities shall be required to indemnify and hold harmless pursuant to clause (ii) with respect to Loss and
Expense incurred by Buyer Group Members shall not exceed $7,000,000.  The indemnification provided for in this
Section 9.1 shall terminate eighteen (18) months after the Closing Date (and no claims shall be made by any Buyer Group
Members under this Section 9.1 thereafter), except that the indemnification by the Emmis Entities shall continue in any
                   -----------
event as to:

                  (A)  the covenants of the Emmis Entities set forth in Section 2.10, 6.1, 6.2, 11.2 or 11.10, as to all
                                                                        ------------  ---  ---  ----    -----
         of which no time limitation shall apply other than the full period of any applicable statute of limitations;

                  (B)  any Loss or Expense incurred by any Buyer Group Member in connection with or arising out of the
         failure of the Emmis Entities to perform as required in Section 9.1(iii), as to which no time limitation shall
                                                                 ----------------
         apply;

                  (C)  any Loss or Expense of which any Buyer Group Member has notified the Emmis Entities in accordance
         with the requirements of Section 9.3 on or prior to the date such indemnification would otherwise terminate in
                                  -----------
         accordance with this Section 9.1, as to which the obligation of the Emmis Entities shall continue until the
                              -----------
         liability of the Emmis Entities shall have been determined pursuant to this Article IX, and the Emmis Entities
                                                                                     ----------
         shall have reimbursed all Buyer Group Members for the full amount of such Loss and Expense in accordance with
         this Article IX.
              ----------

Section 9.2.      Indemnification by Buyer.  Subject to Section 10.2, Buyer agrees to indemnify and hold harmless each
                  ------------------------              ------------
Emmis Group Member from and against any and all Loss and Expense incurred by such Emmis Group Member in connection with
or arising from:

(i)      any breach by Buyer, or any other failure of Buyer to perform, any of its covenants, agreements or obligations in
                  this Agreement or in any Buyer Ancillary Agreement;

(ii)     any breach of any warranty or the inaccuracy of any representation of Buyer contained or referred to in this
                  Agreement or any certificate delivered by or on behalf of Buyer pursuant hereto; or

(iii)    the failure of Buyer to perform any of the Assumed Liabilities.

The indemnification provided for in this Section 9.2 shall terminate eighteen (18) months after the Closing Date (and no
                                         -----------
claims shall be made by any Emmis Group Member under this Section 9.2 thereafter), except that the indemnification by
                                                          -----------
Buyer shall continue in any event as to:

                  (A)      the covenants of Buyer set forth in Section 2.10, 6.1, 6.2, 11.2 or 11.10, as to all of which
                                                               ------------  ---  ---  ----    -----
         no time limitation shall apply other than the full period of any applicable statute of limitations;

                  (B)      any Loss or Expense incurred by any Emmis Group Member in connection with or arising out of the
         failure of Buyer to perform as required in Section 9.2(iii), as to which no time limitation shall apply;
                                                    ----------------

                  (C)      any Loss or Expense of which any Emmis Group Member has notified Buyer in accordance with the
         requirements of Section 9.3 on or prior to the date such indemnification would otherwise terminate in accordance
                         -----------
         with this Section 9.2, as to which the obligation of Buyer shall continue until the liability of Buyer shall have
                   -----------
         been determined pursuant to this Article IX, and Buyer shall have reimbursed all Emmis Group Members for the full
                                          ----------
         amount of such Loss and Expense in accordance with this Article IX.
                                                                 ----------

Section 9.3.      Notice of Claims.
                  ----------------

                  (a)  Any Buyer Group Member or Emmis Group Member seeking indemnification hereunder (the “Indemnified
Party”) shall give promptly to the party obligated to provide indemnification to such Indemnified Party (the
“Indemnitor”) a written notice (a “Claim Notice”) describing in reasonable detail the facts giving rise to the claim for
indemnification hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation
of the amount of such claim, and a reference to the provision of this Agreement or any other agreement, document or
instrument executed hereunder or in connection herewith upon which such claim is based.  The failure of any Indemnified
Party to give the Claim Notice promptly as required by this Section 9.3 shall not affect such Indemnified Party’s rights
                                                            -----------
under this Article IX except to the extent such failure is actually prejudicial to the rights and obligations of the
           ----------
Indemnitor.

                  (b)  After the giving of any Claim Notice pursuant hereto, the amount of indemnification to which an
Indemnified Party shall be entitled under this Article IX shall be determined: (i) by the written agreement between the
                                               ----------
Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii)
by any other means to which the Indemnified Party and the Indemnitor shall agree in writing.  The judgment or decree of a
court shall be deemed final when the time for appeal, if any, shall have expired and no appeal shall have been taken or
when all appeals taken shall have been finally determined.  The Indemnified Party shall have the burden of proof in
establishing the amount of Losses and Expenses suffered by it.

Section 9.4.      Third Person Claims.
                  -------------------

                  (a)  In the event indemnification provided for under this Agreement is sought in respect of, arising out
of or involving a claim or demand made by any third Person against the Indemnified Party, the Indemnified Party shall
provide the Indemnitor, in addition to the Claim Notice, copies of all written notices and documents (including any
complaint and other court papers) relating to the third Person claim promptly after the Indemnified Party’s receipt
thereof.  The failure of an Indemnified Party to provide the Indemnifying Party copies of such notices and documents
promptly after the Indemnified Party’s receipt thereof shall not affect the Indemnified Party’s rights under this Article
IX except to the extent such failure is actually prejudicial to the rights and obligations of the Indemnitor.
- --

                  (b)  In the event of the initiation of any legal proceeding against the Indemnified Party by a third
Person, the Indemnitor shall have the sole and absolute right after the receipt of notice, at its option and at its own
expense, to be represented by counsel of its choice and to control, defend against, negotiate, settle or otherwise deal
with any proceeding, claim, or demand which relates to any loss, liability or damage indemnified against hereunder;
provided, however, that the Indemnified Party may participate in any such proceeding with counsel of its choice and at
its expense.  The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or
settlement of any such legal proceeding, claim or demand.  To the extent the Indemnitor elects not to defend such
proceeding, claim or demand, and the Indemnified Party defends against or otherwise deals with any such proceeding, claim
or demand, the Indemnified Party may retain counsel, reasonably acceptable to the Indemnitor, at the expense of the
Indemnitor, and control the defense of such proceeding.  Neither the Indemnitor nor the Indemnified Party may settle any
such proceeding which settlement obligates the other party to pay money, to perform obligations or to admit liability
without the consent of the other party, such consent not to be unreasonably withheld.  After any final judgment or award
shall have been rendered by a court, arbitration board or administrative agency of competent jurisdiction and the time in
which to appeal therefrom has expired, or a settlement shall have been consummated, or the Indemnified Party and the
Indemnitor shall arrive at a mutually binding agreement with respect to each separate matter alleged to be indemnified by
the Indemnitor hereunder, the Indemnified Party shall forward to the Indemnitor notice of any sums due and owing by it
with respect to such matter and the Indemnitor shall pay all of the sums so owing to the Indemnified Party by wire
transfer, certified or bank cashier’s check within 30 days after the date of such notice.

                  (c)  To the extent of any inconsistency between this Section 9.4 and Section 6.1(c), the provisions of
                                                                       -----------     --------------
Section 6.1(c) shall control.
- --------------

Section 9.5.      Limitations.  Except for remedies that cannot be waived as a matter of law and injunctive and
                  -----------
provisional relief, if the Closing occurs, this Article IX shall be the exclusive remedy for breaches of this Agreement
                                                ----------
(including any covenant, obligation, representation or warranty contained in this Agreement or in any certificate
delivered pursuant to this Agreement) or otherwise in respect of the transactions contemplated hereby.

Section 9.6.      Mitigation.  Each of the parties agrees to take all reasonable steps to mitigate their respective Losses
                  ----------
and Expenses upon and after becoming aware of any event or condition which could reasonably be expected to give rise to
any Losses and Expenses that are indemnifiable hereunder.

ARTICLE X

                                                        TERMINATION

Section 10.1.     Termination.
                  -----------

(a)      Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be terminated at any
time prior to the Closing:

(i)      by the mutual consent of Emmis Radio and Buyer;

(ii)     provided that neither Emmis Entity is then in material breach of this Agreement, by written notice from Emmis
                  Radio in the event of a material breach by Buyer of any of its agreements, representations or warranties
                  contained in this Agreement, and the failure of Buyer to cure such breach within thirty (30) days after
                  receipt of written notice from Emmis Radio requesting such breach to be cured;

(iii)    provided that Buyer is not then in material breach of this Agreement, by written notice from Buyer in the event
                  of a material breach by either Emmis Entity of any of its respective agreements, representations or
                  warranties contained in this Agreement, and the failure of the Emmis Entities to cure such breach within
                  thirty (30) days after receipt of written notice from Buyer requesting such breach to be cured;

(iv)     provided that the terminating party is not then in material breach of this Agreement, by written notice from
                  Emmis Radio or Buyer if any court of competent jurisdiction in the United States or other United States
                  Governmental Body shall have issued a final and non-appealable order, decree or ruling permanently
                  restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
                  hereby;

(v)      provided that the terminating party is not then in material breach of this Agreement, by written notice from
                  Emmis Radio or Buyer if the Closing shall not have occurred within one (1) year after the date of this
                  Agreement (or such later date as may be mutually agreed to by Emmis Radio and Buyer); or

                           (vi)     pursuant to Section 11.14.
                                                -------------

(b)      In the event that this Agreement shall be terminated pursuant to this Article X, all further obligations of the
                                                                               ---------
parties under this Agreement (other than Sections 5.5, 11.2 through 11.5, and 11.7 through 11.14, and Articles IX and X)
                                         ------------------         ----      ----         -----      -----------     -
shall be terminated without further liability of any party to the other; provided that nothing herein shall relieve any
                                                                         --------
party from liability for any breach of this Agreement.
Section 10.2.     Earnest Money; Liquidated Damages.
                  ---------------------------------

                  (a)      If this Agreement is terminated prior to Closing for any reason other than as specified in
Section 10.2(b), Buyer shall be entitled to the return of the Earnest Money (and interest and earnings thereon), and
- ---------------
Buyer and the Emmis Entities shall cooperate in taking such action as required under the Escrow Agreement to effect the
Escrow Agent’s distribution of the Earnest Money to Buyer.

                  (b)      If this Agreement is terminated prior to Closing by Emmis Radio pursuant to Section
                                                                                                       --------
10.1(a)(ii), the Emmis Entities’ sole remedy at law or in equity under this Agreement shall be (i) the termination by
Emmis Radio of this Agreement, and (ii) the recovery from Buyer of (A) an amount equal to Eleven Million Eight Hundred
Twelve Thousand Five Hundred Dollars ($11,812,500) (the "Liquidated Damage Amount") and (B) the Emmis Entities’
reasonable attorney fees and other costs of collection incurred by the Emmis Entities in enforcing their right to recover
the Liquidated Damage Amount (such fees and other costs herein referred to as the "Emmis Entities’ Enforcement Costs").
The Emmis Entities shall be entitled to collect a portion of the Liquidated Damage Amount by receiving a disbursement of
the Earnest Money held by the Escrow Agent pursuant to the Escrow Agreement, and Buyer and the Emmis Entities shall
cooperate in taking such action as required under the Escrow Agreement to effect the Escrow Agent’s distribution of the
Earnest Money to the Emmis Entities.  The Emmis Entities shall also be entitled to pursue any other remedy available to
the Emmis Entities at law or in equity to recover the entire Liquidated Damage Amount and Emmis Entities’ Enforcement
Costs, provided that the total monetary damages (including any amount received from the Escrow Agent under the Escrow
Agreement) to which the Emmis Entities shall be entitled shall not exceed the sum of the Liquidated Damage Amount plus
the Emmis Entities’ Enforcement Costs.  BUYER ACKNOWLEDGES AND AGREES THAT THE EMMIS ENTITIES’ RECEIPT OF THE LIQUIDATED
DAMAGE AMOUNT SHALL CONSTITUTE PAYMENT OF LIQUIDATED DAMAGES HEREUNDER AND NOT A PENALTY AND THAT THE  LIQUIDATED DAMAGE
AMOUNT IS REASONABLE IN LIGHT OF THE SUBSTANTIAL BUT INDETERMINATE HARM ANTICIPATED TO BE CAUSED BY BUYER’S MATERIAL
BREACH OR DEFAULT UNDER THIS AGREEMENT, THE DIFFICULTY OF PROOF OF LOSS AND DAMAGES, THE INCONVENIENCE AND
NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND THE VALUE OF THE TRANSACTIONS TO BE CONSUMMATED HEREUNDER.

Section 10.3.     Termination Notice.  Each notice given by a party pursuant to Section 10.1(a) to terminate this
                                                                                ---------------
Agreement shall specify the Subsection of Section 10.1(a)      pursuant to which the notice is given.  If at the time a
                                          --------------------
party gives a termination notice, the party is entitled to give the notice pursuant to more than one Subsection of
Section 10.1(a), the Subsection pursuant to which the notice is given and termination is effected shall be deemed to be
- ---------------
the Subsection specified in the notice provided that the party giving the notice is at such time entitled to terminate
this Agreement pursuant to the specified Subsection.



ARTICLE XI

                                                    GENERAL PROVISIONS

Section 11.1.     Survival of Representations, Warranties and Obligations.  All representations, warranties, covenants and
                  -------------------------------------------------------
obligations contained in this Agreement shall survive the consummation of the transactions contemplated by this
Agreement; provided, however, that, except as otherwise provided in Article IX, the representations and warranties
           --------  -------                                        ----------
contained in Articles III and IV of this Agreement shall terminate eighteen (18) months after the Closing Date.  Except
             ------------     --
as otherwise provided herein, no claim shall be made for the breach of any representation or warranty contained in
Article III or IV after the date on which such representations and warranties terminate as provided in this Agreement.
- -----------    --

Section 11.2.     Confidential Nature of Information.  Each party agrees that it will treat in confidence all documents,
                  ----------------------------------
materials and other information which it shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated hereby (whether obtained before or after the
date of this Agreement), the investigation provided for herein and the preparation of this Agreement and other related
documents, and, in the event the transactions contemplated hereby shall not be consummated, each party will return to the
other party all copies of nonpublic documents and materials which have been furnished in connection therewith.  Without
limiting the right of either party to pursue all other legal and equitable rights available to it for violation of this
Section 11.2 by the other party, it is agreed that other remedies cannot fully compensate the aggrieved party for such a
- ------------
violation of this Section 11.2 and that the aggrieved party shall be entitled to injunctive relief to prevent a violation
                  ------------
or continuing violation hereof.

Section 11.3.     Governing Law.  This Agreement and the transactions contemplated hereby shall be governed by and
                  -------------
construed in accordance with the laws of the State of New York without reference to its choice of law rules.

Section 11.4.     Notices.  All notices or other communications required or permitted hereunder shall be in writing and
                  -------
shall be deemed given or delivered when delivered personally or by messenger or 72 hours after having been sent by
registered or certified mail or when delivered by private courier addressed as follows:

If to Emmis Radio or Emmis License:

                  c/o Emmis Communications Corporation
                  One Emmis Plaza
                  40 Monument Circle, Suite 700
                  Indianapolis, Indiana  46204
                  Attention:  Jeffrey H. Smulyan, Chairman
                  Attention:  J. Scott Enright, Esq.

                  With a copy to:

                  Emmis Communications Corporation
                  15821 Ventura Boulevard, Suite 685
                  Encino, California  91436
                  Attention:  Gary Kaseff, Esq.

                  and

                  Bose McKinney & Evans LLP
                  135 N. Pennsylvania Street, Suite 2700
                  Indianapolis, Indiana  46204
                  Attention:  David L. Wills


                  If to Buyer, to:

                  Entravision Communications Corporation
                  2425 Olympic Boulevard, Suite 6000 West
                  Santa Monica, California 90404
                  Attention:  Walter F. Ulloa

                  with a copy to:

                  Entravision Communications Corporation
                  2425 Olympic Boulevard, Suite 6000 West
                  Santa Monica, California 90404
                  Attention:  Michael G. Rowles, Esq.

or to such other address as such party may indicate by a notice delivered to the other parties hereto.

Section 11.5.     Successors and Assigns.
                  ----------------------

(a)      The rights of any party under this Agreement shall not be assignable by such party hereto prior to the Closing
without the written consent of the other parties hereto; provided, however, that the Emmis Entities acknowledge and agree
                                                         --------  -------
that the Emmis Denver FCC Authorizations shall be held in the name of Entravision Holdings, LLC, a wholly-owned
subsidiary of Buyer, and that the FCC applications filed by the parties pursuant to Section 5.3(a) shall reflect
                                                                                    --------------
Entravision Holdings, LLC as the assignee.

(b)      This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and
permitted assigns.  Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any
person other than the parties and successors and assigns permitted by this Section 11.5 any right, remedy or claim under
                                                                           ------------
or by reason of this Agreement.

Section 11.6.     Access to Records after Closing.  For a period of six years after the Closing Date, the Emmis Entities
                  -------------------------------
and their representatives shall have reasonable access to all of the books and records of the Business transferred to
Buyer hereunder to the extent that such access may reasonably be required by the Emmis Entities in connection with
matters relating to or affected by the operations of the Business prior to the Closing Date.  Such access shall be
afforded by Buyer upon receipt of reasonable advance notice and during normal business hours.  The Emmis Entities shall
be solely responsible for any costs or expenses incurred by it pursuant to this Section 11.6.  If Buyer shall desire to
                                                                                ------------
dispose of any of such books and records prior to the expiration of such six-year period, it shall, prior to such
disposition, give the Emmis Entities a reasonable opportunity, at the Emmis Entities’ expense, to segregate and remove
such books and records as the other party may select.

                  For a period of six years after the Closing Date, Buyer and its representatives shall have reasonable
access to all of the books and records relating to the Business which the Emmis Entities or any of their Affiliates may
retain after the Closing Date.  Such access shall be afforded by the Emmis Entities and their Affiliates upon receipt of
reasonable advance notice and during normal business hours.  Buyer shall be solely responsible for any costs and expenses
incurred by it pursuant to this Section 11.6.  If the Emmis Entities or any of their Affiliates shall desire to dispose
                                ------------
of any of such books and records prior to the expiration of such six-year period, the Emmis Entities shall, prior to such
disposition, give Buyer a reasonable opportunity, at Buyer’s expense, to segregate and remove such books and records as
the other party may select.

Section 11.7.     Entire Agreement; Amendments.  This Agreement, the Exhibits and Schedules referred to herein, and the
                  ----------------------------
other documents delivered pursuant hereto contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior agreements, understandings or intents between or
among any of the parties hereto.  The parties hereto, by mutual agreement in writing, may amend, modify and supplement
this Agreement.

Section 11.8.     Interpretation.  Article titles and headings to sections herein are inserted for convenience of
                  --------------
reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. The
Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein.

Section 11.9.     Waivers.  Any term or provision of this Agreement may be waived, or the time for its performance may be
                  -------
extended, by the party or parties entitled to the benefit thereof.  The failure of any party hereto to enforce at any
time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect
the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such
provision.  No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

Section 11.10.    Expenses.  Except as otherwise expressly provided herein, each of the Emmis Entities and Buyer will pay
                  --------
all of its own respective costs and expenses incident to its negotiation and preparation of this Agreement, and to its
performance and compliance with all agreements and conditions contained herein on its part to be performed or complied
with, including the fees, expenses and disbursements of its counsel and accountants.

Section 11.11.    Partial Invalidity.  Wherever possible, each provision hereof shall be interpreted in such manner as to
                  ------------------
be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been contained herein unless the deletion of
such provision or provisions would result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.

Section 11.12.    Execution in Counterparts.  This Agreement may be executed in one or more counterparts, each of which
                  -------------------------
shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall
become binding when one or more counterparts have been signed by each of the parties and delivered to each of the Emmis
Entities and Buyer.

Section 11.13.    Disclaimer of Warranties.  Neither Emmis Entity makes any representations or warranties with respect to
                  ------------------------
any projections, forecasts or forward-looking information provided to Buyer.  There is no assurance that any projected or
forecasted results will be achieved.  EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND WARRANTIES
IN THIS AGREEMENT AND THE CERTIFICATES DELIVERED BY EMMIS RADIO AND EMMIS LICENSE PURSUANT TO SECTION 2.7, THE EMMIS
                                                                                              -----------
ENTITIES ARE SELLING THE BUSINESS AND THE PURCHASED ASSETS ON AN “AS IS, WHERE IS” BASIS AND THE EMMIS ENTITIES DISCLAIM
ALL OTHER WARRANTIES, REPRESENTATIONS AND GUARANTIES WHETHER EXPRESS OR IMPLIED.  THE EMMIS ENTITIES MAKE NO
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AND NO IMPLIED WARRANTIES
WHATSOEVER.  Buyer acknowledges that neither Emmis Entity nor any of its representatives, Affiliates or any other Person
has made any representation or warranty, express or implied, as to the accuracy or completeness of any memoranda, charts,
summaries or schedules heretofore made available to Buyer, its representatives or Affiliates, or any other information
which is not included in this Agreement or the Schedules hereto, and neither Emmis Entity nor its representatives or
Affiliates nor any other Person will have or be subject to any liability to Buyer, any Affiliate of Buyer or any other
Person resulting from the distribution of any such information to, or use of any such information by, Buyer, any
Affiliate of Buyer or any of their agents, consultants, accountants, counsel or other representatives.

Section 11.14.    Risk of Loss; Damage to Facilities.  The risk of loss or damage to the Purchased Assets shall be on the
                  ----------------------------------
Emmis Entities prior to the Closing Date and thereafter shall be on Buyer.  Notwithstanding anything in this Agreement to
the contrary, if any of the Purchased Assets is damaged or destroyed prior to the Closing Date (any such event being
referred to as an “Event of Loss”) and such Event of Loss shall materially affect the operations of the Station, and
repair or replacement cannot be accomplished by the scheduled Closing Date but can be accomplished within 60 days after
that date, the Emmis Entities may postpone the Closing Date for that 60-day period in order to undertake such repair or
replacement; if, however, the repair or replacement cannot be accomplished within that 60-day period, Buyer may elect by
written notice to Emmis Radio within 20 days after Buyer has received notice that any Event of Loss has occurred:

                  (i)  to consummate the Closing on the scheduled Closing Date and accept all the Purchased Assets as is,
in which event the Emmis Entities shall assign to Buyer at the Closing all of their rights under any insurance policies
and to all insurance proceeds covering that Event of Loss (less amounts due to the assigning party for repairs or
replacements of the property prior to the Closing); or
                  (ii)  to terminate this Agreement without liability on the part of the Emmis Entities or Buyer.



                                       [REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]










                  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year
first above written.



                                                              EMMIS RADIO CORPORATION



                                                              By:  /s/ J. Scott Enright_______________
                                                                   --------------------
                                                                      J. Scott Enright, Vice President



                                                              EMMIS RADIO LICENSE CORPORATION



                                                              By:  /s/ Gary Kaseff___________________
                                                                   ---------------
                                                                      Gary Kaseff, Executive Vice President


                                                              ENTRAVISION COMMUNICATIONS CORPORATION



                                                              By:  /s/ Walter F. Ulloa_________________
                                                                   -------------------
                                                                      Walter F. Ulloa, Chairman and CEO

EX-10 5 ex10-16.htm OPTION AGREEMENT WITH HEARST-ARGYLE Exhibit 10.16












                                                 OPTION AGREEMENT
                                                      between

                                          HEARST-ARGYLE PROPERTIES, INC.

                                                        and


                                         EMMIS COMMUNICATIONS CORPORATION



                                             Dated as of June 5, 2000














1.       Option..................................................................................................1

         1.1.     Grant of Option................................................................................1

         1.2.     Exercise Procedures............................................................................1

2.       Purchase of Assets and Assumption of Liabilities........................................................1

         2.1.     Purchase of Assets.............................................................................1

         2.2.     Excluded Assets................................................................................3

         2.3.     Assumed Liabilities............................................................................3

         2.4.     Liabilities Not Assumed........................................................................4

3.       Option Payments and Purchase Price......................................................................4

         3.1.     Option Payments................................................................................4

         3.2.     Amount.........................................................................................4

         3.3.     Allocation.....................................................................................5

4.       Closing Date; Cash Payment; Purchase Price Adjustment; Collection of Accounts Receivable................5

         4.1.     Closing........................................................................................5

         4.2.     Cash Payment...................................................................................5

         4.3.     Purchase Price Adjustment......................................................................5

         4.4.     Collection of Accounts Receivable..............................................................6

5.       Nonassignable Contracts or Licenses.....................................................................7

6.       Representations and Warranties of Seller................................................................7

         6.1.     Organization, Power, Standing and Qualification................................................7

         6.2.     Due Authorization..............................................................................7

         6.3.     Freedom to Contract............................................................................7

         6.4.     Assets.........................................................................................8

         6.5.     Financial Information.........................................................................10

         6.6.     Title to Property.............................................................................11

         6.7.     Condition of Property.........................................................................11

         6.8.     Labor Matters.................................................................................11

         6.9.     Transactions with Affiliates; Entire Business.................................................12

         6.10.    Litigation....................................................................................12

         6.11.    Compliance with Law...........................................................................12

         6.12.    Employee Benefit Plans........................................................................12

         6.13.    Tax Matters...................................................................................12

         6.14.    Environmental Matters.........................................................................13

         6.15.    Brokers.......................................................................................13

         6.16.    Disclaimer of Seller..........................................................................13

         6.17.    Full Disclosure...............................................................................13

7.       Representation and Warranties of Buyer.................................................................13

         7.1.     Organization, Power and Standing..............................................................13

         7.2.     Authorization.................................................................................13

         7.3.     Freedom to Contract...........................................................................13

         7.4.     Litigation....................................................................................14

         7.5.     Brokers.......................................................................................14

         7.6.     Qualifications as FCC Licensee................................................................14

         7.7.     Adequacy of Financing.........................................................................14

         7.8.     Breaches......................................................................................14

8.       Pre-Closing Covenants..................................................................................14

         8.1.     Transactions and Conduct of Business Pending the Closing......................................14

         8.2.     Regulatory and Other Approvals................................................................15

         8.3.     FCC Application...............................................................................15

9.       Conditions Precedent to Closing........................................................................16

         9.1.     Conditions Precedent to the Obligations of Buyer to Complete the Closing......................16

         9.2.     Conditions Precedent to the Obligations of Seller to Complete the Closing.....................17

10.      Additional Agreements..................................................................................18

         10.1.    Further Information...........................................................................18

         10.2.    Record Retention..............................................................................18

         10.3.    Tax-Free Exchange.............................................................................18

         10.4.    Employee and Employee Benefit Matters.........................................................18

         10.5.    Tax Matters...................................................................................19

         10.6.    Use of Names..................................................................................20

         10.7.    Audited Financial Statements..................................................................20

         10.8.    No Solicitation...............................................................................20

11.      Survival; Indemnification..............................................................................20

         11.1.    Survival of Representations and Warranties....................................................20

         11.2.    Indemnification of Buyer......................................................................21

         11.3.    Indemnification of Seller.....................................................................22

         11.4.    Exclusive Provisions; No Rescission...........................................................22

12.      Termination of Agreement...............................................................................22

         12.1.    Termination...................................................................................22

         12.2.    Survival......................................................................................23

13.      Miscellaneous..........................................................................................23

         13.1.    Certain Definitions...........................................................................23

         13.2.    Expenses......................................................................................25

         13.3.    Notices.......................................................................................25

         13.4.    Publicity; Confidentiality....................................................................26

         13.5.    Entire Agreement..............................................................................26

         13.6.    Waivers and Amendments........................................................................27

         13.7.    Governing Law.................................................................................27

         13.8.    Binding Effect; No Assignment.................................................................27

         13.9.    Seller Not Responsible for Buyer’s Actions Under TBA..........................................27

         13.10.   Variations in Pronouns........................................................................28

         13.11.   Counterparts..................................................................................28

         13.12.   Exhibits and Schedules........................................................................28

         13.13.   Headings......................................................................................28

         13.14.   Severability of Provisions....................................................................28

         13.15.   No Third Party Beneficiary....................................................................28

         13.16.   Specific Performance..........................................................................28








                                                 OPTION AGREEMENT
                                                 ----------------


         This OPTION AGREEMENT made this 5th day of June, 2000, is by and between Hearst-Argyle  Properties,  Inc.,
a Delaware  corporation,  with offices at 888 Seventh Avenue,  New York, New York 10106 (the  “Seller”),  and Emmis
Communications  Corporation,  an Indiana  corporation,  with offices at One Emmis Plaza, 40 Monument Circle,  Suite
700, Indianapolis, Indiana 46204 (the “Buyer”).

                                               W I T N E S S E T H:
                                               - - - - - - - - - -

         WHEREAS,  Seller owns and  operates  radio  stations  KTAR-AM,  KMVP-AM and KKLT-FM  (the  “Stations”)  in
Phoenix, Arizona pursuant to licenses issued by the Federal Communications Commission (the “FCC”); and

         WHEREAS,  Seller  desires to sell, and Buyer desires to purchase,  substantially  all of the assets owned,
used or held for use primarily in the conduct of the business and  operations  of the  Stations,  and in connection
therewith,  Buyer has agreed to assume certain of the  liabilities of Seller  relating to the Stations,  all on the
terms set forth herein; and

         WHEREAS,  concurrently  with the  execution and deliver of this  Agreement,  Seller and Buyer have entered
into a Program Service and Time Brokerage Agreement, dated as of the date hereof (the “TBA”); and

         WHEREAS, certain terms used herein have the meanings ascribed to such terms in Section 13.1 hereof.

         NOW,  THEREFORE,   in  consideration  of  the  foregoing  and  of  the  respective  promises,   covenants,
representations and warranties herein contained, it is agreed:

1.       Option.
         ------

1.1.     Grant of Option.  Seller grants to Buyer the  exclusive  right and option (the  “Option”) to purchase,  on
         ---------------
the Closing  Date (as  defined  below),  the Assets (as defined  below),  and assume the  Assumed  Liabilities  (as
defined below),  upon and subject to the terms and conditions of this  Agreement,  including,  without  limitation,
Section 10.3.

1.2.     Exercise  Procedures.  Buyer may exercise the Option only by giving written  notification of such exercise
         --------------------
to Seller at any time during the  earlier to occur of (i) the period  commencing  on the date that Seller  provides
written  notification  to Buyer  (“Early  Notification”)  that Buyer may  exercise the Option and ending sixty (60)
calendar  days  after  the date of the  Early  Notification  (the  “Early  Exercise  Period”),  or (ii) the  period
commencing  on the third  anniversary  of the date  hereof and ending  thirty  (30)  calendar  days after the third
anniversary  of the date hereof (the  “Exercise  Period”).  If the Option is properly  exercised,  Seller and Buyer
shall  be  required  to  consummate  the  purchase  and  sale of the  Assets,  and the  assumption  of the  Assumed
Liabilities,  in accordance with this Agreement.  Anything  contained  herein to the contrary  notwithstanding,  if
Seller  gives the Early  Notification  and Buyer  shall not  exercise  the Option on or before the end of the Early
Exercise Period, then the Option shall terminate and become null and void.

2.       Purchase of Assets and Assumption of Liabilities.
         ------------------------------------------------

2.1.     Purchase of Assets.  On the terms and subject to the  conditions  set forth in this  Agreement  and except
         ------------------
as provided in Section 2.2, provided that the Option is properly  exercised,  on the Closing Date, Seller agrees to
                            --------
sell,  transfer,  assign,  convey and  deliver to Buyer,  and Buyer  agrees to  purchase,  acquire  and accept from
Seller,  all of Seller’s  right,  title and interest in and to all of the assets,  properties  and rights of Seller
owned,  leased,  licensed  or used  by  Seller  primarily  in the  conduct  of the  business  and  operations  (the
“Business”) of the Stations, as and to the extent existing on the Closing Date (such assets,  properties and rights
are  hereinafter  collectively  referred to as the “Assets”),  free and clear of all liens and  encumbrances  other
than  Permitted  Liens.  Without  limitation  of the  foregoing,  but except as provided in Section 2.2, the Assets
include the following:

(a)      Real Property.  All real property owned by Seller which is described on Schedule  6.4(c) hereto,  together
         -------------                                                           ----------------
with all easements,  licenses,  interests and all of the rights arising out of the ownership thereof or appurtenant
thereto  (the  “Real  Property”),  together  with  all  buildings,  structures,   facilities,  fixtures  and  other
improvements on the Real Property (the “Improvements”);

(b)      Real Property Leases.  The Real Property Leases listed on Schedule 6.4(c) hereto (the “Leases”);
         --------------------                                      ---------------

(c)      Inventory.  All Inventory  which is owned by Seller  primarily with respect to the conduct of the Business
         ---------
as and to the extent existing on the Closing Date;

(d)      Tangible  Personal  Property.  All Tangible Property owned or used by Seller primarily with respect to the
         ----------------------------
conduct of the  Business,  including,  but not  limited to, the  Tangible  Property  set forth on  Schedule  6.4(a)
                                                                                                   ----------------
hereto,  together with any  modifications,  replacements,  improvements to such Tangible  Property,  and subject to
such additional Tangible Property and deletions  therefrom,  made or acquired by Seller between the date hereof and
the Closing Date in accordance with the terms and provisions of this Agreement or the TBA;

(e)      Contracts.  To the extent  assignable,  all  contracts  and other  agreements  (other  than the Leases) to
         ---------
which Seller is a party and which relate  primarily to the conduct of the Business  (the  “Contracts”),  including,
but not limited to, those set forth on Schedule 6.4(d) hereto;
                                       ---------------

(f)      Intangible  Property.  All  Intangible  Property  (other  than  corporate  names,  logos,   trademarks  or
         --------------------
tradenames)  owned or used by Seller  primarily  with respect to the conduct of the  Business,  and all  associated
goodwill,  including but not limited to the Intangible Property (other than corporate names,  logos,  trademarks or
tradenames) listed on Schedule 6.4(b) hereto and all of the corporate names,  logos,  trademarks and tradenames set
                      ---------------
forth on Schedule 2.1(f) hereto;
         ---------------

(g)      Books and Records.  All general,  financial  and  personnel  records,  correspondence  and other files and
         -----------------
records,  including  customer  lists and sales  records  of  Seller,  pertaining  primarily  to the  conduct of the
Business as and to the extent existing on the Closing Date;

(h)      Goodwill.  All of Seller’s goodwill in the Business;
         --------

(i)      Claims.  All claims,  causes of action,  rights of recovery and rights of set-off arising primarily out of
         ------
the conduct of the Business as and to the extent existing on the Closing Date; and

(j)      Licenses.  All  licenses,  permits,  and  regulatory  approvals of Seller  pertaining to the Stations (the
         --------
“Licenses”),  including, without limitation, all licenses and authorizations issued by the FCC authorizing Seller’s
operation of the Stations (the “FCC Licenses”) as set forth on Schedule 6.4(f) hereto.

2.2.     Excluded  Assets.  Any  provision  of this  Agreement  to the  contrary  notwithstanding,  Buyer shall not
         ----------------
acquire and there shall be excluded from the Assets the following (the “Excluded Assets”):

(a)      Cash.  All cash,  marketable  securities,  commercial  paper,  certificates  of  deposit  and  other  bank
         ----
deposits, treasury bills and other cash equivalents;

(b)      Accounts  Receivables.  All accounts  receivables owned by Seller and arising primarily out of the conduct
         ---------------------
of the Business;

(c)      Prepaid Expenses.  All prepaid expenses relating primarily to the conduct of the Business;
         ----------------

(d)      Bank Accounts.  All rights with respect to bank accounts;
         -------------

(e)      Intercompany  Accounts.  All  rights of Seller or the  Business  with  respect to any  obligations  of any
         ----------------------
other  business unit of Seller,  any Affiliate of Seller or any director or officer  (other than those officers who
are Transferred Employees (as defined below)) of Seller or of any Affiliate of Seller;

(f)      Certain Names.  All rights to use the corporate  names,  logos,  trademarks or tradenames not set forth on
         -------------
Schedule 2.1(f) hereto or any  derivatives or variances  thereof which are not set forth on Schedule 2.1(f) hereto,
- ---------------                                                                             ---------------
including but not limited to, the name “Hearst”,  “Hearst-Argyle”,  the Hearst and  Hearst-Argyle  corporate  logos
and any derivatives or variances thereof;

(g)      Insurance.  All  insurance  policies and all rights of every nature and  description  under or arising out
         ---------
of such policies;

(h)      Employee  Benefit Plans.  Except as expressly set forth in Section 10.4, all Plans,  including all rights,
         -----------------------
obligations and liabilities under and all assets of the Plans;

(i)      Loan  Documents.  All  notes,  bonds,  loan  agreements,  and other  instruments  evidencing  or  securing
         ---------------
liabilities  for  indebtedness  for borrowed  money owed to a third party,  including  guarantees of the foregoing,
except for  capitalized  leases  included  in the  Contracts  listed on  Schedule  6.4(d) or not  required to be so
                                                                         ----------------
listed; and

(j)      Other Matters.  All rights of Seller under this  Agreement,  the TBA, and the  agreements and  instruments
         -------------
delivered  to Seller by Buyer  pursuant to this  Agreement  and all other  assets of Seller  which are not owned or
used by Seller primarily in the conduct of the Business, including those listed on Schedule 2.2(j).
                                                                                   ---------------

2.3.     Assumed  Liabilities.  Subject  to the terms and  conditions  set forth in this  Agreement  and  except as
         --------------------
provided in Section 2.4, if the Option is properly  exercised  Buyer agrees that, on the Closing Date,  Buyer shall
assume and thereafter  pay,  perform and discharge  when due the following  obligations  and  liabilities of Seller
with respect to the Business as and to the extent existing on the Closing Date (the “Assumed Liabilities”):

(a)      Real Property  Lease  Obligations.  All  obligations  of Seller  arising during and relating to the period
         ---------------------------------
after the Closing under the Leases;

(b)      Obligations  Under  Contracts.  All  obligations of Seller arising during and relating to the period after
         -----------------------------
the Closing under the Contracts; and

(c)      Other  Matters.  All  liabilities  expressly  set forth as being  assumed or payable by Buyer  pursuant to
         --------------
Section 10.4.

2.4.     Liabilities  Not Assumed.  Anything  contained in this  Agreement to the contrary  notwithstanding,  Buyer
         ------------------------
shall not  assume and there  shall be  excluded  from the  Assumed  Liabilities  all  obligations  of Seller or the
Business to any other  business  unit of Seller,  any  Affiliate of Seller or any  director or officer  (other than
those  officers who are  Transferred  Employees)  of Seller or of any  Affiliate of Seller.  Except for the Assumed
Liabilities,  Buyer shall not assume or be liable or obligated for any  obligations or liabilities of Seller of any
kind or nature, whether accrued or unaccrued,  fixed, absolute or contingent,  determined or determinable,  matured
or  unmatured,  due or to become  due,  asserted or  unasserted,  or known or unknown,  and  regardless  of whether
required by  generally  accepted  accounting  principles  to be  reflected  on a balance  sheet or disclosed in the
related notes (the  “Excluded  Liabilities”).  Seller shall pay,  perform and discharge in a timely manner or shall
make adequate provision for all of the Excluded  Liabilities;  provided,  however, that Seller may contest, in good
                                                               --------   -------
faith, any claim of liability asserted by a third party in respect thereof.

3.       Option Payments and Purchase Price.
         ----------------------------------

3.1.     Option Payments.  As of the date hereof,  in consideration  for the grant of the Option,  Buyer shall pay,
         ---------------
in the manner  provided in Section 4.2, to Seller or to a Person  designated in writing by Seller,  an amount equal
to Twenty  Million  Dollars  ($20,000,000)  (the  “Initial  Option  Payment”).  Provided  that the  Closing has not
occurred,  on or before each of the dates which are the first and second  anniversaries  of the date hereof,  Buyer
shall pay, in the manner  provided in Section  4.2, to Seller or to a Person  designated  in writing by Seller,  an
amount equal to Five Million Dollars  ($5,000,000)  (each a “Future Option  Payment,” and together with the Initial
Option  Payment,  the “Option  Payments”).  Anything  contained in this Agreement to the contrary  notwithstanding,
unless  this  Agreement  is  terminated  by Buyer  pursuant  to Section  12.1(c) or by Buyer or Seller  pursuant to
Section  12.1(d),  the Option  Payments and the Creditable  Interest (as defined below) shall not be refundable and
Seller  shall be entitled to retain the Option  Payments  and the  Creditable  Interest  regardless  of whether the
Closing shall occur or this  Agreement or the TBA shall be  terminated.  Seller shall  deposit the Option  Payments
in an interest  bearing  account.  If this Agreement is terminated by Buyer pursuant to Section 12.1(c) or by Buyer
or Seller pursuant to Section 12.1(d),  the Option Payments and the Creditable  Interest shall be refunded to Buyer
within two (2)  Business  Days of any such  termination.  For  purposes of this  Agreement,  “Creditable  Interest”
shall be an amount  equal to (a) 50% of any actual  interest  earned by Seller or  Seller’s  designee on the Option
Payments made by Buyer to Seller  pursuant to this  Agreement  during the period  beginning on the date the Initial
Option  Payment is paid and ending on the date which is the one year  anniversary of such date, and (b) 100% of any
actual  interest  earned by Seller or  Seller’s  designee  on the Option  Payments  made by Buyer  pursuant to this
Agreement  to Seller  during the period  beginning on the date which is the day after the one year  anniversary  of
the date the  Initial  Option  Payment is paid and ending on the date which is the  earlier to occur of the Closing
Date or the date which is the day preceding the date on which the Creditable Interest shall be refunded to Buyer.

3.2.     Amount.  The  purchase  price (the  “Purchase  Price”) for the Assets  shall be (i) an amount equal to One
         ------
Hundred  Sixty  Million  Dollars  ($160,000,000)  reduced  by the  Option  Payments  made in  accordance  with  the
provisions set forth in Section 3.1 and the Creditable  Interest as calculated  pursuant to Section 3.1 (the “Cash
Payment”),  payable at the Closing in the manner  provided in Section 4.2, and (ii) the  assumption by Buyer of the
- -------
Assumed  Liabilities.  The  Purchase  Price  shall be subject to  adjustment  after the date  hereof as provided in
Section 4.3.

3.3.     Allocation.  The Purchase  Price shall be allocated  among the Assets on a schedule to be attached  hereto
         ----------
as  Schedule  3.3 and  agreed to by the  parties  hereto  on or prior to the  Closing  Date.  Such  purchase  price
    -------------
allocation  shall be made  consistent  with  Section  1060 of the Code.  Each of the parties  hereto shall not, and
shall not permit any of its  Affiliates to, take a position  (except as required  pursuant to any Order) on any Tax
Return,  before any  governmental  agency  charged with the  collection of any Tax, or in any judicial  proceeding,
that is in any way inconsistent with the Purchase Price allocation determined in accordance with this Section 3.3.

4.       Closing Date; Cash Payment; Purchase Price Adjustment; Collection of Accounts Receivable.
         ----------------------------------------------------------------------------------------

4.1.     Closing.  The closing  hereunder  (the  “Closing”)  shall take place at 10:00 a.m.,  New York time, at the
         -------
offices of Clifford  Chance Rogers & Wells LLP, 200 Park Avenue,  New York, New York 10166, on the date that is the
five (5) Business Days after the satisfaction or waiver of the conditions  precedent  contained in Section 9, or at
such other date or at such other  place or time as the  parties may  mutually  agree upon in writing  (such date of
the Closing is hereinafter referred to as the “Closing Date”).

4.2.     Cash Payment.  Buyer shall make the Option  Payments by bank wire transfer in immediately  available funds
         ------------
to a bank account  designated  in writing to Buyer by Seller not less than two  Business  Days before the date such
Option  Payments  are  required  to be made  pursuant  to Section  3.1.  At the  Closing,  Buyer shall pay the Cash
Payment by bank wire transfer in immediately  available  funds to a bank account  designated in writing to Buyer by
Seller not less than two Business Days before the Closing Date.

4.3.     Purchase Price Adjustment.  The Purchase Price shall be adjusted as follows:
         -------------------------

(a)      Seller  shall  receive a credit  for the  unapplied  portion,  as of the  Closing  Date,  of the  security
deposits  made by Seller  under  those  Leases and  Contracts  which  Buyer has agreed to assume  after the Closing
pursuant to Section 2.3 of this Agreement.

(b)      Buyer shall be given a credit in the amount equal to the financial  value  (determined in accordance  with
generally  accepted  accounting  principles  consistently  applied)  of all time  required to be  broadcast  on the
Stations on or after the  Closing  Date under the trade  agreements  included  as part of the  Contracts  for which
Seller has received  goods and services  prior to the Closing Date (“Buyer’s  Trade  Credit”),  and Seller shall be
given a credit for the financial value  (determined in accordance  with generally  accepted  accounting  principles
consistently  applied)  of the goods and  services  to be  received  on or after the  Closing  Date under the trade
agreements  included as part of the  Contracts  for which Seller has  broadcast  time on the Stations  prior to the
Closing Date  (“Seller’s  Trade  Credit”),  provided,  that,  Seller’s  Trade Credit shall not exceed Buyer’s Trade
Credit by more than Twenty-Five Thousand Dollars ($25,000).

(c)      If consents to the  assignment  to Seller of the Real Estate Leases  listed on Schedule  4.3(c),  have not
                                                                                        -----------------
been  obtained as of the Closing Date,  Buyer shall be given a credit,  as of the Closing Date, of One Million Five
Hundred Thousand Dollars ($1,500,000.00).

(d)      Anything in this  Agreement  to the contrary  notwithstanding,  all  operating  income and expenses of the
Stations shall be further  adjusted and allocated  between  Seller and Buyer to the extent  necessary to effect the
principle  that all such  income and  expenses  attributable  to the  operation  of the  Stations  on and after the
Closing Date shall be for the account of Buyer and all such income and expenses  attributable  to the  operation of
the  Stations on or before the Closing Date shall be for the account of Seller.  The net amount of any  Adjustments
to the  Purchase  Price  pursuant  to this  Section  4.3 shall be  hereinafter  referred  to as the  “Acquisition
Adjustment  Amount.”  Anything in this  Agreement to the contrary  notwithstanding,  the operating  income to which
- ------------------
Buyer is entitled under the TBA, and the operating  expenses  required to be paid by Buyer under the TBA, shall not
be taken into account in determining the Acquisition Adjustment Amount.

(e)      Three (3) business  days prior to the Closing Date,  Seller shall  provide Buyer with a statement  setting
forth a detailed  computation of Seller's  reasonable and good faith estimate of the Acquisition  Adjustment Amount
as of the Closing  Date (the  "Preliminary  Acquisition  Adjustment  Report").  Thereafter,  Seller and Buyer shall
                               --------------------------------------------
have thirty (30) calendar days after the Closing Date to review the Preliminary  Acquisition  Adjustment Report and
the related  books and records of Seller,  and Buyer and Seller will in good faith seek to reach  agreement  on the
final  Acquisition  Adjustment  Amount as of the  Closing  Date.  If an  agreement  is reached  within  thirty (30)
calendar  days after the Closing Date,  then if the  Acquisition  Adjustment  Amount  reflected on the  Preliminary
Acquisition  Adjustment  Report is a credit to Buyer,  Seller  shall pay to Buyer by wire  transfer of  immediately
available  funds,  within five (5) calendar  days after such  agreement is reached,  the amount of the  preliminary
Acquisition  Adjustment Amount, and if the Acquisition  Adjustment Amount reflected on the Preliminary  Acquisition
Adjustment  Report is a charge to Buyer,  then Buyer shall pay to Seller by wire transfer of immediately  available
funds,  within five (5) calendar days after such agreement is reached,  the amount of the  preliminary  Acquisition
Adjustment  Amount.  If  agreement  is not reached  within  such 30-day  period,  then the dispute  resolutions  of
Section 4.3(f) shall apply.

(f)      If Seller and Buyer do not, within the 30-day period  specified in Section  4.3(e),  reach an agreement on
the  Acquisition   Adjustment   Amount  reflected  on  the  Preliminary   Acquisition   Adjustment   Report,   then
PriceWaterhouseCoopers,  or such other accounting firm as mutually agreed to by Seller and Buyer (the “Acquisition
Arbitrating  Firm")  shall  resolve  the  disputed  items.  Buyer and  Seller  shall each  inform  the  Acquisition
- -----------------
Arbitrating  Firm in writing as to their  disagreement  concerning the Acquisition  Adjustment  Amount reflected on
the  Preliminary  Acquisition  Adjustment  Report,  and  each  shall  make  readily  available  to the  Acquisition
Arbitrating  Firm any books and records and work papers relevant to the  preparation of such firm's  computation of
the Acquisition  Adjustment Amount.  The Acquisition  Arbitrating Firm shall be instructed to complete its analysis
within  thirty (30)  calendar  days from the date of its  engagement  and upon  completion to inform the parties in
writing of its own  determination  of the  Acquisition  Adjustment  Amount.  Any  determination  by the Acquisition
Arbitrating  Firm in accordance  with this Section 4.3(f) shall be final and binding on the parties for purposes of
this  Section  4.3(f).  Within  five (5)  calendar  days after the  Acquisition  Arbitrating  Firm  delivers to the
parties its written  determination of the Acquisition  Adjustment Amount,  the Acquisition  Adjustment Amount shall
be paid in accordance  with the provisions of Section  4.3(e).  The costs and fees of the  Acquisition  Arbitrating
Firm shall be borne one-half by Seller and one-half by Buyer.

4.4.     Collection of Accounts  Receivable.  As soon as practicable  after the Closing Date,  Seller shall deliver
         ----------------------------------
to  Buyer a  complete  and  detailed  list of all  Seller’s  accounts  receivable  arising  from the  broadcast  of
advertising  time on the  Stations  prior to the  Closing  Date.  For a period  of one  hundred  fifty  (150)  days
following  the Closing Date (the  "Acquisition  Collection  Period"),  Buyer will use its  reasonable  efforts,  as
                                   -------------------------------
Seller's  agent,  to collect such  accounts  receivable in the usual and ordinary  course of business.  Buyer shall
not be required to institute any legal  proceedings  to enforce the  collection  of such accounts  receivable or to
refer  any of such  accounts  receivable  to a  collection  agency.  Buyer  shall  not  adjust  any  such  accounts
receivable or grant credit  without  Seller's  prior written  consent,  and any such  accounts  receivable  amounts
collected  on behalf of Seller shall be paid to Seller  within five (5)  calendar  days after the end of each month
during such 150 day period.  Within five (5)  calendar  days after the one hundred  fiftieth  (150th) day after the
Closing Date,  Buyer shall deliver to Seller a statement  listing all  uncollected  accounts  receivable,  together
with all files  concerning the collection or attempts to collect such accounts  receivable.  Other than cooperating
with any subsequent reasonable requests for information by Seller,  Buyer's  responsibility for such accounts shall
thereafter  cease.  Buyer shall incur no liability to Seller for any  uncollected  account.  All sums  collected by
Buyer  during  the  Acquisition  Collection  Period  from any person  obligated  with  respect to any such  account
receivable shall be applied first to such account receivable,  provided,  however, if such person so obligated with
                                                               --------   -------
respect to any such account  receivable  shall (a)  identify in writing  that such  account is in dispute,  and (b)
request in writing  that a  particular  payment be applied to a specific  account  receivable  of Buyer,  Buyer may
apply the sums  collected as so designated.  After full  satisfaction  of Seller's  account,  the balance,  if any,
shall be applied to Buyer's accounts.

5.       Nonassignable  Contracts or Licenses.  To the extent that  assignment  hereunder by Seller to Buyer of any
         ------------------------------------
Lease,  Contract or License is not  permitted  or is not  permitted  without the consent of any third  party,  this
Agreement  shall not be deemed to constitute an  undertaking  to assign the same if such consent is not given or if
such an undertaking  otherwise  would  constitute a breach of or cause a loss of benefits  thereunder.  Seller will
use  commercially  reasonable  efforts to obtain any and all such third party  consents;  provided,  however,  that
                                                                                          --------   -------
Seller  shall not be required to pay or incur any cost or expense to obtain any third party  consent  which  Seller
is not  otherwise  required  to pay or incur in  accordance  with the terms of the  applicable  Lease,  Contract or
License.  Buyer shall cooperate with Seller in obtaining such third party  consents,  provided that Buyer shall not
                                                                                      --------
be required to agree to any adverse  change in the terms or  conditions  of any such Lease,  Contract or License or
to pay or provide any fee or other  consideration  to a third party in order to obtain such third party’s  consent.
If any such third  party  consent is not  obtained  before the  Closing,  Seller will  cooperate  with Buyer but at
Buyer’s  sole  expense in any  reasonable  arrangement  designed to provide to Buyer after the Closing the benefits
under the applicable Lease, Contract or License.

6.       Representations and Warranties of Seller.  Seller represents and warrants to Buyer as follows:
         ----------------------------------------

6.1.     Organization,  Power,  Standing and  Qualification.  Seller is a corporation  duly  incorporated,  validly
         --------------------------------------------------
existing and in good standing  under the laws of the State of Delaware,  and Seller is duly  authorized,  qualified
and licensed to do business as a foreign  corporation  and is in good  standing  under the laws of Arizona.  Seller
has all requisite corporate power and authority to enter into and perform the Transaction Agreements.

6.2.     Due  Authorization.  The execution and delivery by Seller of the Transaction  Agreements,  the performance
         ------------------
by it of its obligations  under the Transaction  Agreements,  and the transactions  contemplated by the Transaction
Agreements,  have been duly and validly  authorized by all necessary  corporate action on the part of Seller.  This
Agreement  has been duly  executed and  delivered by Seller and is, and upon  execution and delivery of the TBA the
TBA will be, a valid and binding obligation of Seller enforceable in accordance with its terms.

6.3.     Freedom to  Contract.  Except as set forth on  Schedule  6.3 hereto,  the  execution  and  delivery of the
         --------------------                           -------------
Transaction  Agreements  do  not,  and  the  consummation  of the  transactions  contemplated  by  the  Transaction
Agreements  will not,  (i) violate or conflict with the provisions of the certificate of  incorporation  or by-laws
of Seller,  (ii) result in the  imposition  of any  material  lien under,  cause the  acceleration  of any material
obligation  under,  or violate or conflict with the material  terms,  conditions  or provisions  of, or require any
material consent under, any material note,  indenture,  mortgage,  lease,  guaranty or other material  agreement or
instrument to which Seller is a party or by which it is bound,  (iii)  result in a material  breach or violation by
Seller of any of the  material  terms,  conditions  or  provisions  of any Law or Order the breach or  violation of
which would be material to the Assets,  the Business or the transactions  contemplated  pursuant to this Agreement,
or (iv) except for filings  under the HSR Act as  described  in Section 8.2 and the  expiration  of the  applicable
waiting  period  under the HSR Act,  and the filings  with the FCC as  described in Section 8.3 and the consent and
the approval of the FCC,  require any material  consent or approval of,  filing with or notice to any  Governmental
or Regulatory Body where the failure to obtain or make such consent,  approval,  filing or notice would be material
to the Assets, Business or the transactions contemplated pursuant to this Agreement.

6.4.     Assets.
         ------

(a)      Tangible  Property.  Schedule  6.4(a) hereto sets forth a true,  correct and complete list, as of the date
         ------------------   ----------------
of this  Agreement,  of each  material  item of Tangible  Property  owned by Seller  primarily  with respect to the
conduct of the Business.

(b)      Intangible  Property.  Schedule  6.4(b)  hereto sets forth a true,  correct and complete  list,  as of the
         --------------------   ----------------
date of this  Agreement,  of all material  Intangible  Property (to the extent  reducible to written form) owned or
used by Seller  primarily  with respect to the conduct of the  Business,  and  indicates  whether each item of such
Intangible  Property is owned or licensed by Seller, and if licensed,  identifies the license.  Except as set forth
on Schedule  6.4(b),  to the  knowledge of Seller,  none of the  Intangible  Property set forth on Schedule  6.4(b)
   ----------------                                                                                ----------------
infringes  upon the  material  rights of any other  Person,  nor, to the  knowledge of Seller,  is such  Intangible
Property materially infringed upon by any other Person.

(c)      Real Property and Real Property  Leases.  Schedule  6.4(c) hereto sets forth a true,  correct and complete
         ---------------------------------------   ----------------
list, as of the date of this  Agreement,  of all Real Property and  Improvements  owned by Seller and all Leases to
which  Seller  is a party and which  relate  primarily  to the  conduct  of the  Business.  Seller  has  heretofore
delivered  or made  available  to  Buyer a  true,  correct  and  complete  description  of the  Real  Property  and
Improvements  and true,  correct and complete  copies of the Leases.  Seller holds good title to each parcel of the
Real  Property  and good  title  to the  Improvements,  free and  clear of any  liens or  encumbrances  other  than
Permitted Liens.

(d)      Material  Contracts.  Schedule 6.4(d) hereto sets forth a true,  correct and complete list, as of the date
         -------------------   ---------------
of this  Agreement,  of each of the following  contracts and other  agreements to which Seller is a party and which
relate  primarily to the conduct of the Business (other than contracts and other  agreements which are not included
in the Assumed Liabilities or in the Assets) (collectively, the “Material Contracts”):

(A)      contracts  and other  agreements  for the  future  acquisition  or sale of any  assets  involving  $20,000
                  individually  (or in the  aggregate,  in the case of any related  series of  contracts  and other
                  agreements),  other than for  acquisitions of programming or sales of advertising in the ordinary
                  course of business consistent with past practice;

(B)      contracts and other agreements relating to joint ventures or partnerships;

(C)      contracts  and  other  agreements  calling  for  future  aggregate  purchase  prices,  payments  or  other
                  consideration  to or from Seller in any one year  having a value of more than  $20,000 in any one
                  case (or in the aggregate,  in the case of any related series of contracts and other  agreements)
                  other than for  acquisitions  of programming  or sales of  advertising in the ordinary  course of
                  business consistent with past practice;

(D)      contracts and other  agreements  containing  covenants of Seller  prohibiting  or materially  limiting the
                  right to compete in any line of  business,  prohibiting  or  restricting  its  ability to conduct
                  business with any Person or in any  geographical  area, or requiring the  acquisition of goods or
                  services exclusively from a single supplier or provider;

(E)      contracts  and other  agreements  relating to the  acquisition  by Seller of any operating  business,  the
                  capital stock of any other Person or,  except for Tangible  Property or  programming  acquired in
                  the ordinary course of business  consistent with past practices,  or any other assets or property
                  (real or personal) for a purchase price of more than $20,000  individually  (or in the aggregate,
                  in the case of any related series of contracts and other agreements);

(F)      contracts and other  agreements  requiring  the payment by or to Seller of a royalty,  override or similar
                  commission or fee of more than $20,000 in any one year;

(G)      all collective bargaining agreements;

(H)      contracts  and other  agreements  relating  to the  creation of liens or the  guarantee  of the payment of
                  liabilities or performance of obligations of any other Person by Seller;

(I)      all network affiliation contracts;

(J)      all sales agency or advertising representation contracts;

(K)      all employment contracts;

(L)      all  contracts  with  independent  contractors  other than those not requiring  expenditures  of more than
                  $20,000 in any calendar year and having a term of not more than one (1) year; and

(M)      all contracts and other  agreements  for the sale of broadcast time on any Station for other than monetary
                  consideration  having a value of more than $20,000,  including the parties thereto, the financial
                  value of the time  required to be provided from and after the date  indicated on  Schedule 6.4(d)
                                                                                                    ---------------
                  and the  estimated  financial  value of the goods or  services  to be received by Seller from and
                  after such date.

True, correct and complete copies of all of the Material Contracts have been delivered by Seller to Buyer.

(e)      Validity of Real  Property  Leases and  Material  Contracts.  Except as  disclosed  on  Schedule 6.4(e)(1)
         -----------------------------------------------------------                             ------------------
hereto,  (i) each of the Leases and Material  Contracts is a valid,  binding  agreement,  enforceable in accordance
with its  terms,  of Seller  and,  to the  knowledge  of  Seller,  of each  other  party  thereto,  subject  to the
qualifications  that  enforcement  of the rights and  remedies  created  thereby  is  subject  to:  (A) bankruptcy,
insolvency,  reorganization,  moratorium and other laws of general application affecting the rights and remedies of
creditors;  and  (B) general  principles  of equity  (regardless  of whether such  enforcement  is  considered in a
proceeding  in equity or at law),  (ii) Seller  is not in default in any material  respect under any of such Leases
or Material  Contracts,  nor does any  condition  exist that with notice or lapse of time or both would  constitute
such a default,  (iii) to  the  knowledge  of Seller,  no other party to any such Lease or Material  Contract is in
default in any  material  respect  thereunder,  nor does any  condition  exist that with notice or lapse of time or
both would  constitute  such a  default,  and  (iv) no  consent  or  approval  by any party to any of the Leases or
Material Contracts is required for the consummation of the transactions  contemplated  hereby.  Seller has obtained
consent to the assignment to Buyer of the Lease and Contracts set forth on Schedule 6.4(e)(2).
                                                                           ------------------

(f)      Licenses.  Schedule  6.4(f) sets forth a list of all FCC Licenses and all other material  Licenses held by
         --------   ----------------
Seller  relating  to the  operation  of the  Stations  or required  for the lawful  conduct of the  Business as now
conducted.  Seller is the valid and legal holder of each of the FCC Licenses.  The  expiration  date of the term of
each FCC  License is shown on  Schedule 6.4(f).  The FCC  Licenses  (i) are  valid and in full force and effect and
                               ---------------
(ii) constitute  all of the  material  licenses,  permits and  authorizations  used in or required  for the current
operation  of the  Stations  under the  Communications  Act of 1934,  as amended,  and the rules,  regulations  and
policies  of the FCC  (collectively,  the  “Communications  Act”).  None  of the FCC  Licenses  is  subject  to any
restriction  or  condition  which  would in any  respect  limit  the full  operation  of the  Stations  as they are
currently operated by Seller.  Seller knows of no fact or circumstance  which would, under the Communications  Act,
disqualify or preclude  Seller from  assigning  the FCC Licenses to Buyer.  There are no  proceedings,  complaints,
notices of forfeiture,  claims, or investigations  pending or, to Seller’s knowledge,  threatened,  against Seller,
or any officer,  director,  or stockholder of Seller that would  materially  impair the ability of Seller to assign
the FCC Licenses to Buyer or which would  materially  impede Seller’s  ability to prosecute the FCC Applications or
seek the grant of the FCC Consents (as defined herein).  Except as noted in Schedule  6.4(f),  each of the Stations
                                                                            ----------------
is  licensed by the FCC to  operate,  and is  operating,  with the  facilities  authorized  by its  respective  FCC
License.  There is not, as of the date hereof,  pending,  or to the knowledge of Seller  threatened,  any action or
proceeding by or before the FCC to revoke,  cancel,  rescind or modify (including a reduction in coverage area) any
of the FCC Licenses  (other than  proceedings to amend FCC rules of general  applicability)  or refuse to renew the
FCC Licenses, and there is not now issued or outstanding,  or to the knowledge of Seller pending or threatened,  by
or before the FCC,  any order to show  cause,  notice of  violation,  notice of  apparent  liability,  or notice of
forfeiture  or complaint  against  Seller with  respect to any  Station,  other than  regularly  scheduled  license
renewal  proceedings.  Each Station  respectively is operating,  and the Assets are operated,  in compliance in all
material  respects  with the FCC  Licenses  and the  Communications  Act.  There are no  unsatisfied  or  otherwise
outstanding  citations  issued by the FCC with respect to any  Station.  To the best of Seller’s  knowledge,  there
exist no facts,  conditions  or  events  relating  to Seller or the  Stations  that  would  cause the  denial of an
application  for  consent  from the FCC with  respect to the  assignment  of the FCC  Licenses  as provided in this
Agreement or the  imposition of any material  adverse  condition in  connection  with the granting of such consent.
True, complete and accurate copies of all FCC Licenses have been delivered by Seller to Buyer.

6.5.     Financial Information.
         ---------------------

(a)      Financial  Statements.  Seller has  delivered to or made  available  to Buyer true and complete  copies of
         ---------------------
the unaudited  balance sheets of the Stations as of March 31, 2000 and December 31, 1999 and the related  unaudited
statements  of  operating  income for the periods  March 19, 1999 through  December  31, 1999,  and January 1, 2000
through March 31, 2000 (such  financial  statements  are  hereinafter  collectively  referred to as the “Financial
Statements”).  Except as disclosed on Schedule  6.5(a)  hereto,  the  Financial  Statements  (i) were compiled from
- ----------
books and records  regularly  maintained by  management  of Seller and used to prepare the financial  statements of
Seller,  (ii)  were  prepared  in  accordance  with  Seller’s  accounting  policies  and  principles,  which are in
accordance with generally accepted  accounting  principles,  applied on a basis consistent with prior periods,  and
(iii) present  fairly,  in all material  respects,  the financial  position of the Stations as of their  respective
dates and the results of operations of the Stations for the periods then ended,  excluding  information which would
have been contained in the Statement of Cash Flows and footnotes to the financial statements.

(b)      Absence  of  Changes.  Except  for  the  execution  and  delivery  of  this  Agreement,  the  TBA  and the
         --------------------
transactions  to take place  pursuant  hereto and except as set forth on  Schedule  6.5(b)  hereto or arising  from
                                                                          ----------------
Buyer’s action or failure to perform under the TBA, since March 31, 2000:

(i)      there has not been any adverse  change or any event or development  (including any damage,  destruction or
         loss, whether or not covered by insurance) which,  individually or together with other such events,  would
         reasonably be expected to result in a Material Adverse Effect;

(ii)     the Stations  have not incurred  any  liabilities  of a kind  required by  generally  accepted  accounting
         practices to be set forth on a balance sheet other than (A)  liabilities  incurred in the ordinary  course
         of business since March 31,  2000 consistent  with past practice,  (B) liabilities  which in the aggregate
         are not material to the Business,  (C)  liabilities  which are not Assumed  Liabilities or (D) liabilities
         set forth on the Financial Statements; and

(iii)    Seller has not with respect to the operation of the Stations:

(A)      amended  or  terminated  any  Lease or  Material  Contract  except  in the  ordinary  course  of  business
                  consistent with past practice;

(B)      mortgaged,  pledged or  subjected  to any lien or  encumbrance,  any of the Assets,  except for  Permitted
                  Liens;

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

(D)      entered  into any  agreement,  commitment  or other  transaction  other  than in the  ordinary  course  of
                  business consistent with past practice;

(E)      paid any bonus to any  employee of the  Stations  or granted to any  employee  of the  Stations  any other
                  increase in compensation in any form,  except in the ordinary course of business  consistent with
                  past practice; or

(F)      operated the business of each Station other than in the ordinary course consistent with past practice.

6.6.     Title to  Property.  Seller has,  and at the  Closing,  Seller  will convey to Buyer,  good title to, or a
         ------------------
valid  lessee’s or  licensee’s  interest  (pursuant to one or more  contracts or other  agreements  included in the
Assets) in, all of the Assets free and clear of all liens, claims and encumbrances except for Permitted Liens.

6.7.     Condition of Property.  All material  items of Tangible  Property  owned or used by Seller and included in
         ---------------------
the Assets are in good operating condition, normal wear and tear excepted.

6.8.     Labor Matters.
         -------------

(a)      Except as listed on  Schedule 6.8(a),  as of the date of this  Agreement,  there is not pending or, to the
                              ---------------
knowledge  of Seller,  threatened  against  Seller  any labor  dispute,  strike or work  stoppage  that  affects or
interferes with the operation of any Station,  and Seller has no knowledge of any  organizational  effort currently
being made or  threatened  by or on behalf of any labor union with respect to  employees  of any  Station.  None of
the Stations have experienced any strike,  work stoppage or other similar  significant  labor  difficulties  within
the twelve (12) months preceding the date of this Agreement.

(b)      Except as set forth on  Schedule 6.8(b),  (i) Seller is not a signatory or a party to, or otherwise  bound
                                 ---------------
by, a collective  bargaining  agreement which covers employees or former employees of any Station,  (ii) Seller has
not  agreed to  recognize  any union or other  collective  bargaining  unit with  respect to any  employees  of any
Station,  and (iii) no union or other  collective  bargaining unit has been certified as representing any employees
of any Station.

(c)      Schedule 6.8(c)  sets forth a true and complete  list,  as of the date of this  Agreement,  of all persons
         ---------------
employed by Seller in connection  with the  operation of a Station who earn more than $15,000 per year,  and states
for each such employee the title or position,  the current level of  compensation  (including  bonuses) and whether
such employee is employed under a written contract.

6.9.     Transactions with Affiliates;  Entire Business.  Except as set forth on Schedule 6.9  hereto,  (i) none of
         ----------------------------------------------                          ------------
Seller or any of its  Affiliates  provides or causes to be  provided  any assets,  services  or  facilities  to the
Stations  which are material to the conduct of the  Business,  and (ii) the  Stations do not provide or cause to be
provided any assets,  services or facilities to Seller or any of its  Affiliates  which are material to the conduct
of the  Business.  Except as set forth on Schedule 6.9 hereto,  the  conveyance  of the Assets will convey to Buyer
                                          ------------
the entire  Business of the Stations,  and all tangible and intangible  property used by the Stations in connection
with the  conduct of the  Business  as  heretofore  conducted  by Seller,  except for the  Excluded  Assets and the
Excluded  Liabilities  and  assets and  properties  disposed  of since the date  hereof in the  ordinary  course of
business consistent with past practice without violation of this Agreement.

6.10.    Litigation.  Except as  described in Schedule  6.10 hereto or caused by or arising from Buyer’s  action or
         ----------                           --------------
failure to perform under the TBA:  (a) there is no material  Action or  Proceeding  pending or, to the knowledge of
Seller,  threatened  against  Seller  which  relates  primarily to any of the  Stations,  the Assets or the Assumed
Liabilities;  and  (b) there  is no Order to which  Seller is subject  which  relates to any of the  Stations,  the
Assets or the Assumed Liabilities and which has or would reasonably be expected to have a Material Adverse Effect.

6.11.    Compliance  with  Law.  Except  as set forth on  Schedule  6.11  hereto,  (i)  Seller  is not in  material
         ---------------------                            --------------
violation of any Law or Order with respect to the Business or the Assets or the Assumed  Liabilities  the violation
of which would be material to the  Business or the Assets;  and (ii) Seller has all material  licenses,  permits or
other governmental authorizations necessary for the conduct of the Business or the ownership or use of the Assets.

6.12.    Employee  Benefit  Plans.  Schedule  6.12  hereto  identifies  each  Plan.  Seller has  furnished  or made
         ------------------------   --------------
available to Buyer copies of the Plans (and, if applicable,  related trust  agreements) and all amendments  thereto
and each Plan’s  summary plan  description  and any  summaries  of material  modifications  thereto.  Schedule 6.12
hereto  identifies  each Plan  which is (i) a  “multiemployer  plan” as  defined  for  purposes  of and  subject to
Subtitle E of Title IV of ERISA (a “Multiemployer Plan”), or (ii) a Plan otherwise subject to Title IV of ERISA.

6.13.    Tax Matters.  Except as disclosed in Schedule 6.13 (with paragraph  references  corresponding to those set
         -----------                          -------------
forth below):

(a)      Seller has timely  filed  (taking  into  account all  available  extensions)  all Tax  Returns  concerning
material  Taxes  applicable to the Business or required to be filed by applicable  Law prior to the date hereof and
has paid all amounts shown as due on those Tax Returns.

(b)      There are no liens with respect to any Taxes,  upon any of the Assets,  other than (i) Taxes,  the payment
of which is not yet due, or (ii) Taxes or charges being contested,  which are not in the aggregate  material to the
Stations.

6.14.    Environmental  Matters.  Prior to  March 19,  1999,  to the  knowledge  of  Seller,  and  since  March 19,
         ----------------------
1999:  (i) no  material Order has been issued, no material  Environmental Claim has been filed, no material penalty
has been assessed and no material  investigation or review is pending or, to Seller’s knowledge,  threatened by any
Governmental  or  Regulatory  Body with  respect  to any  alleged  failure by Seller to have any  material  license
required under  applicable  Environmental  Laws, the violation of which would reasonably be expected to be material
to the Assets or the Business;  (ii) no Hazardous  Materials are or have been present on any of the real properties
operated or leased by Seller in  connection  with the conduct of the Business  where such presence or release would
result in any material  liability of Buyer after the Closing;  and  (iii) Seller was not or is not, as the case may
be, in violation  of, and has not received any claim or notice that it is in violation of, any  Environmental  Law,
the violation of which would reasonably be expected to be material to the Assets or the Business.

6.15.    Brokers.  Except  for  Deutsche  Bank Alex  Brown,  whose  fees,  commissions  and  expenses  are the sole
         -------
responsibility  of Seller,  all negotiations  relative to this Agreement and the transactions  contemplated  hereby
have been carried out by Seller  directly with Buyer without the  intervention of any Person on behalf of Seller in
such  manner as to give  rise to any  valid  claim by any  Person  against  Buyer  for a  finder’s  fee,  brokerage
commission or similar payment.

6.16.    Disclaimer  of Seller.  Except as otherwise  provided in this  Section 6, the Assets to be sold  hereunder
         ---------------------
to Buyer are to be sold AS IS WITHOUT  ANY IMPLIED  WARRANTY OF  MERCHANTABILITY  OR FITNESS  FOR  INTENDED  USE OR
OTHER EXPRESSED OR IMPLIED WARRANTY.

6.17.    Full Disclosure.  To Seller’s knowledge,  this Agreement  (including any Schedule hereto) does not contain
         ---------------
and the closing  certificate  to be  delivered  by Seller  pursuant to  Section 9.1(e)  will not contain any untrue
statement  of a  material  fact and this  Agreement  (including  any  Schedule  hereto)  does  not omit  (and  such
certificate  will not omit) to state any  material  fact  necessary  to make any  statement  herein or therein  not
misleading.

7.       Representation and Warranties of Buyer.  Buyer represents and warrants to Seller that:
         --------------------------------------

7.1.     Organization,  Power and Standing.  Buyer is a corporation  duly organized,  validly  existing and in good
         ---------------------------------
standing  under  the laws of its  jurisdiction  of  incorporation.  Buyer  has all  requisite  corporate  power and
authority  and all  necessary  licenses and permits to carry on its business as it has been and is currently  being
conducted,  and to own,  lease and  operate  the  properties  and assets  used in  connection  therewith  and to be
acquired pursuant hereto.

7.2.     Authorization.  The execution and delivery of the  Transaction  Agreements by Buyer and the performance by
         -------------
it of its  obligations  under the  Transaction  Documents  and the  transactions  contemplated  by the  Transaction
Agreements,  have been duly and validly  authorized by all necessary  corporate  action on the part of Buyer.  This
Agreement  has been duly  executed and  delivered by Buyer and, is a, and upon  execution  and delivery of the TBA,
the TBA will be, a valid and binding obligation of Buyer enforceable in accordance with their terms.

7.3.     Freedom  to  Contract.  The  execution  and  delivery  of the  Transaction  Agreements  do  not,  and  the
         ---------------------
consummation  of the  transactions  contemplated by the  Transaction  Agreements will not,  (i) violate or conflict
with the  provisions of the articles of  incorporation  or by-laws of Buyer,  (ii) result  in the imposition of any
lien under,  cause the acceleration of any obligation  under, or violate or conflict with the terms,  conditions or
provisions of, or require any consent under, any note, indenture,  mortgage,  lease, guaranty or other agreement or
instrument  to which  Buyer is a party or by which it is  bound,  (iii) result  in a breach  by Buyer of any of the
terms,  conditions or provisions  of, or require any consent  under,  any Law or Order or  (iv) except  for filings
under the HSR Act as described in Section 8.2 and the  expiration of the  applicable  waiting  period under the HSR
Act, and for filings  with the FCC as  described  in Section 7.3 and the consent and  approval of the FCC,  require
any consent or approval of, filing with or notice to any Governmental or Regulatory Body.

7.4.     Litigation.  Buyer is not a party to any Action or Proceeding  pending or threatened,  which, if adversely
         ----------
determined,  would  reasonably be expected to adversely  affect or restrict the ability of Buyer to consummate  the
transactions  contemplated  by this Agreement.  There is no Order to which Buyer is subject which would  reasonably
be expected to adversely  affect or restrict the ability of Buyer to consummate the  transactions  contemplated  by
this Agreement.

7.5.     Brokers.  All negotiations  relative to this Agreement and the transactions  contemplated hereby have been
         -------
carried  out by Buyer  directly  with  Seller  without  the  intervention  of any Person on behalf of Buyer in such
manner as to give rise to any valid claim by any Person  against  Seller for a finder’s fee,  brokerage  commission
or similar payment.

7.6.     Qualifications  as FCC Licensee.  Buyer knows of no fact or  circumstance  which would,  under the federal
         -------------------------------
antitrust laws or the  Communications  Act,  disqualify or preclude Buyer from being approved as an assignee of the
FCC Licenses.  There are no proceedings,  complaints,  notices of forfeiture,  claims, or investigations pending or
threatened against Buyer or any principal,  officer,  director,  or owner of Buyer that would materially impair the
qualification  of Buyer to assume the FCC Licenses or which would  materially  impede Buyer’s  ability to prosecute
the  applications  filed with the FCC to assign the FCC Licenses to Buyer or to seek the grant of consents from the
FCC to the  assignment  of the FCC  Licenses  to Buyer.  Buyer is legally  and  financially  qualified  to serve as
licensee of the Stations.

7.7.     Adequacy of Financing.  Buyer has adequate  funds on hand to pay the Initial  Option  Payment,  the Future
         ---------------------
Option Payments and the Purchase Price.

7.8.     Breaches.  Buyer is not aware of any breaches by Seller of its  representations  and warranties  contained
         --------
in this Agreement or the certificate to be delivered by Seller pursuant to Section 9.1(e).

8.       Pre-Closing Covenants.
         ---------------------

8.1.     Transactions and Conduct of Business Pending the Closing.
         --------------------------------------------------------

(a)      Examinations  and  Investigations.  At any time  prior  to the  Closing  Date,  Buyer  shall be  entitled,
         ---------------------------------
through its employees and  representatives  to enter upon and make such  investigation  of the assets,  properties,
business and operations of the Stations,  and such  examination of the books and records,  financial  condition and
operations  of the  Stations,  and shall have access to the  employees  of the  Stations,  as Buyer may  reasonably
request.  Any such  investigation  and examination shall be conducted and access to employees shall be available at
reasonable times and under reasonable  circumstances;  provided,  however, that such investigation and access shall
not unreasonably  interfere with the business  operations of Seller. All information  provided to Buyer pursuant to
this Section 8.1(a) shall be subject to the provisions of the Confidentiality Agreement.

(b)      Conduct of  Business.  From the date hereof  through  the  Closing  Date,  Seller  shall use  commercially
         --------------------
reasonable  efforts to conduct the Business in the ordinary  course  consistent  with past practice in all material
respects.

(c)      Third Party  Consents.  Seller and Buyer agree to use  commercially  reasonable  efforts to take, or cause
         ---------------------
to be taken,  all actions and to do, or cause to be done, all things  necessary,  proper or advisable to consummate
and make effective as promptly as practicable the transactions contemplated by this Agreement,  including,  without
limitation,  the obtaining of all necessary  waivers,  consents and approvals and the continuance in full force and
effect of Licenses,  Leases and Contracts and the  fulfillment of each  condition to the other party’s  obligations
set forth in Section 9.

8.2.     Regulatory  and Other  Approvals.  Seller  and Buyer  will  (a) take  all  commercially  reasonable  steps
         --------------------------------
necessary or desirable,  and proceed diligently and in good faith and use all commercially  reasonable  efforts, as
promptly as practicable  to obtain all consents,  approvals or actions of, to make all filings with and to give all
notices to  Governmental or Regulatory  Bodies (except for the FCC  Applications  (as defined  below))  required of
such parties or their  Affiliates  to consummate  the  transactions  contemplated  hereby,  (b) provide  such other
information and  communications  to such  Governmental or Regulatory Bodies as such parties or such Governmental or
Regulatory Bodies may reasonably  request in connection  therewith and (c) cooperate with each other as promptly as
practicable in connection  with the  foregoing.  Each party hereto will provide  prompt  notification  to the other
party hereto or its Affiliates  when any such consent,  approval,  action,  filing or notice  referred to in clause
(a) above is  obtained,  taken,  made or given,  as  applicable,  and will advise  each other  party  hereto of any
communications   (and,  unless  precluded  by  Law,  provide  copies  to  each  other  party  hereto  of  any  such
communications  that  are in  writing,  other  than  the  filings  under  the HSR Act  described  below)  with  any
Governmental or Regulatory Body regarding any of the  transactions  contemplated by this Agreement.  In addition to
and not in  limitation  of the  foregoing,  Seller and Buyer will within ten (10)  calendar days of the exercise of
the  Option  (a) take  promptly  all  actions  necessary  to make  the  filings  required  of each of them or their
Affiliates  under the HSR Act,  (b) comply  at the  earliest  practicable  date  with any  request  for  additional
information  received  by each of them or their  Affiliates  from the Federal  Trade  Commission  or the  Antitrust
Division of the  Department  of Justice  pursuant to the HSR Act and  (c) cooperate  with each other in  connection
with any filing under the HSR Act and in connection with resolving any  investigation  or other inquiry  concerning
the transactions  contemplated by this Agreement  commenced by either the Federal Trade  Commission,  the Antitrust
Division of the Department of Justice or state attorneys general.

8.3.     FCC  Application.  Not later than ten (10)  calendar  days after the date of the  exercise  of the Option,
         ----------------
Seller and Buyer shall file with the FCC substantially  complete applications (the “FCC Applications”)  seeking the
FCC’s consent to the assignment of the FCC Licenses from Seller to Buyer and Buyer’s  assumption thereof (the “FCC
Consent”).  Seller and Buyer shall  diligently  and promptly take all actions  necessary,  or desirable and proper,
- -------
to prosecute  the FCC  Applications  expeditiously.  Seller  shall  timely  publish  and/or  broadcast  the notices
required  by the rules and  regulations  of the FCC  pertaining  to the FCC  Applications.  Seller and Buyer  shall
cooperate  with each other in the  preparation  and  prosecution  of the FCC  Applications.  Seller and Buyer shall
provide to each other copies of any and all  petitions and  pleadings  filed by any third party,  and copies of any
and all  correspondence  and orders  received  from the FCC,  with respect to any of the FCC  Applications.  In the
event that the FCC  imposes any  condition  upon Buyer or Seller with  respect to any FCC  Applications,  the party
subject  to such  condition  shall use its best  efforts to comply  therewith;  provided,  however,  that the party
                                                                                --------   -------
subject to such  condition  shall not be required to take any action which would have a Material  Adverse Effect on
such party or any  Affiliate of such party.  Buyer shall not enter into any  agreement or  transactions  to acquire
any other broadcast  properties or stations in the Phoenix,  Arizona market, nor shall Buyer take any other action,
including but not limited to, entering into a time brokerage agreement,  local marketing agreement,  or joint sales
agreement,  which  could  have  the  effect  of  delaying  action  by the  FCC  upon  the FCC  Applications  or the
consummation  of the  transactions  contemplated  hereby.  Buyer and Seller shall  oppose any  petitions to deny or
other objections  filed with respect to any  applications for the FCC Consent and any requests for  reconsideration
or judicial  review of the FCC Consent and otherwise  use their  commercially  reasonable  efforts to cause the FCC
Order to become a Final  Action as soon as  practicable.  If the  Closing  shall not have  occurred  for any reason
within the original  effective  period of the FCC Consent,  and neither party shall have  terminated this Agreement
under  Section 10, the parties shall jointly  request an extension of the effective  period of the FCC Consent.  No
extension of the FCC Consent shall limit the right of any party to exercise its rights under Section 12.

9.       Conditions Precedent to Closing.
         -------------------------------

9.1.     Conditions  Precedent to the  Obligations  of Buyer to Complete the Closing.  The  obligations of Buyer to
         ---------------------------------------------------------------------------
enter  into and  complete  the  Closing  are  subject to the  fulfillment  on or prior to the  Closing  Date of the
following conditions, any one or more of which may be waived by Buyer in writing:

(a)      Representations,  Warranties  and Covenants.  The  representations  and warranties of Seller  contained in
         -------------------------------------------
this  Agreement  shall be true,  correct and  complete on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date,  except as expressly  stated herein to be made as of a specified date
and except for changes  permitted  hereunder  or caused by Buyer’s  action or failure to perform  under the TBA and
except where the failure of any such  representations  or  warranties  to be true,  correct and complete  would not
reasonably be expected,  individually or in the aggregate,  to have a Material  Adverse  Effect.  Seller shall have
performed and complied in all material  respects with all covenants and  agreements  required by this  Agreement to
be performed or complied with by it on or prior to the Closing Date.

(b)      Consents,  Waivers,  Licenses,   Filings,  etc.  All  consents,   approvals,   authorizations,   licenses,
         -----------------------------------------------
registrations,  declarations  or filings listed on  Schedule 9.1(b)  to this Agreement  shall have been obtained or
                                                    ---------------
made,  as the case may be,  except  where the failure to obtain or make any of the  foregoing  (or in lieu  thereof
waivers)  would not  reasonably  be  expected,  individually  or in the  aggregate  with  other such  failures,  to
materially  adversely  affect Buyer or to have a Material Adverse Effect.  The applicable  waiting period under the
HSR Act in respect of the transactions contemplated hereby shall have expired.

(c)      Injunction,  etc. At the  Closing,  there shall not be any Order  outstanding  against any party hereto or
         -----------------
Law  promulgated  that prevents the  consummation  of, and no Action or  Proceeding  shall be pending or threatened
against a party  hereto  which  questions  the  legality  of,  seeks to  restructure  or to restrain or prevent the
consummation  of, the  transactions  contemplated by this Agreement or any of the conditions to the consummation of
the transactions contemplated by this Agreement.

(d)      Opinions of Counsel to Seller.  Buyer shall have  received  an opinion of Clifford  Chance  Rogers & Wells
         -----------------------------
LLP,  counsel to Seller,  covering legal matters with respect to the  transactions  contemplated by this Agreement,
in form and substance reasonably satisfactory to Buyer.

(e)      Resolutions  and Closing  Certificate of Seller.  Seller shall have  delivered to Buyer (i) a  certificate
         -----------------------------------------------
dated as of the Closing Date and executed by Seller’s  Secretary  certifying that the  resolutions,  as attached to
such  certificate,  were duly  adopted by  Seller’s  Board of  Directors  (and if required  by  applicable  Law, by
Seller’s stockholders)  authorizing and approving the execution and delivery of this Agreement and the consummation
of the  transactions  contemplated  hereby  and that such  resolutions  remain in full  force and effect and (ii) a
certificate  signed by an  authorized  officer of Seller,  dated the Closing  Date,  as to the matters set forth in
Section 9.1(a) and in form and substance reasonably satisfactory to Buyer.

(f)      Conveyancing  Documents.  Seller shall have executed and delivered to Buyer an Assignment  and  Assumption
         -----------------------
Agreement,  a Bill  of  Sale,  an  Assignment  of  Trademarks,  and a Deed  or  Deeds,  each  in a form  reasonably
satisfactory to Buyer.

(g)      FCC  Consents.  The parties  shall have  obtained the FCC Consent with respect to each Station  within the
         -------------
time period set forth herein without any Material  Adverse Effect,  and any conditions which the FCC Consent or any
FCC Order  requires to be satisfied  prior to the  transfer of the FCC License to Buyer shall have been  satisfied.
Each of the FCC Licenses shall be in full force and effect.

9.2.     Conditions  Precedent to the  Obligations of Seller to Complete the Closing.  The obligations of Seller to
         ---------------------------------------------------------------------------
enter into and  complete  the Closing  are  subject to the  fulfillment  on or prior to the  Closing  Date,  of the
following conditions, any one or more of which may be waived by Seller:

(a)      Representations,  Warranties  and Covenants.  The  representations  and  warranties of Buyer  contained in
         -------------------------------------------
this  Agreement  shall be true,  correct and complete in all  material  respects on and as of the Closing Date with
the same force and effect as though made on and as of the  Closing  Date except as  expressly  stated  herein to be
made as of a specified  date.  Buyer shall have performed and complied in all material  respects with all covenants
and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date.

(b)      Consents,  Waivers,  Licenses,   Filings,  etc.  All  consents,   approvals,   authorizations,   licenses,
         -----------------------------------------------
registrations,  declarations  or filings listed on  Schedule 9.1(b)  to this Agreement  shall have been obtained or
                                                    ---------------
made,  as the case may be,  except  where the failure to obtain or make any of the  foregoing  (or in lieu  thereof
waivers)  would not  reasonably  be  expected,  individually  or in the  aggregate  with  other such  failures,  to
materially  adversely  affect  Seller.  The  applicable  waiting  period  under  the  HSR  Act  in  respect  of the
transactions contemplated hereby shall have expired.

(c)      Injunction,  etc. At the  Closing,  there shall not be any Order  outstanding  against any party hereto or
         -----------------
Law  promulgated  that  prevents  the  consummation,  and no Action or  Proceeding  shall be pending or  threatened
against a party  hereto  which  questions  the  legality  of,  seeks to  restructure  or to restrain or prevent the
consummation  of, the  transactions  contemplated by this Agreement or any of the conditions to the consummation of
the transaction  contemplated by this Agreement  which, in the case of any such Order, Law or Action or Proceeding,
would reasonably be expected to materially adversely affect Seller.

(d)      Opinion  of Counsel  to Buyer.  Seller  shall  have  received  an  opinion  of Bose  McKinney & Evans LLP,
         -----------------------------
counsel to Buyer, covering legal matters with respect to the transactions  contemplated by this Agreement,  in form
and substance reasonably satisfactory to Seller.

(e)      Resolutions  and Closing  Certificate  of Buyer.  Buyer shall have  delivered to Seller (i) a  certificate
         -----------------------------------------------
dated as of the Closing Date and executed by Buyer’s  Secretary  certifying  that the  resolutions,  as attached to
such  certificate,  were duly adopted by Buyer’s Board of Directors (and if required by applicable  Law, by Buyer’s
stockholders)  authorizing  and approving the execution and delivery of this Agreement and the  consummation of the
transactions  contemplated  hereby and that such resolutions remain in full force and effect and (ii) a certificate
signed by an authorized  officer of Buyer,  dated the Closing  Date, as to the matters set forth in Section  9.2(a)
and in form and substance reasonably satisfactory to Seller.
(f)      Delivery of Funds.  Buyer  shall have  delivered  to Seller the Option  Payments  and the Cash  Payment in
         -----------------
accordance with Sections 3 and 4.2.

(g)      Conveyancing  Documents.  Buyer shall have executed and delivered to Seller an Assignment  and  Assumption
         -----------------------
Agreement,  a Bill  of  Sale,  an  Assignment  of  Trademarks  and a  Deed  or  Deeds,  each  in a form  reasonably
satisfactory to Seller.

(h)      FCC  Consents.  The parties  shall have  obtained an FCC Consent with  respect to each Station  within the
         -------------
time period set forth herein.

10.      Additional Agreements.
         ---------------------

10.1.    Further  Information.  Following the Closing,  each party will afford to the other party,  its counsel and
         --------------------
its accountants,  during normal business hours,  reasonable  access to the books and records relating to the Assets
or the Assumed  Liabilities  in its  possession  with respect to periods prior to the Closing and the right to make
copies and extracts  therefrom,  to the extent that such access may be reasonably  required by the requesting party
(i) to facilitate the  investigation,  litigation and final disposition of any claims which may have been or may be
made against any party or its  Affiliates and (ii) for any other  reasonable  business  purpose.  Each party hereto
and its agents shall keep  confidential  and not disclose any  information  learned as a result of any  examination
conducted  pursuant to this  Section 10.1  to any other Person  without the prior consent of the other party unless
(i) the  disclosure  is in response to legal order or  subpoena or (ii) the  terms are readily  ascertainable  from
public  or  published  information,  or trade  sources  (without  violation  of the  foregoing  provisions  of this
sentence).

10.2.    Record  Retention.  Each party  agrees that for a period of not less than seven  (7) years  following  the
         -----------------
Closing Date, it shall not destroy or otherwise  dispose of any of the books and records  relating to the Assets or
the Assumed  Liabilities  in its  possession  with respect to periods  prior to the Closing.  Each party shall have
the right to destroy  all or part of such books and  records  after the seventh  (7th)  anniversary  of the Closing
Date or, at an earlier  time by giving each other party  hereto  thirty  (30) days'  prior  written  notice of such
intended  disposition and by offering to deliver to the other party, at the other party’s expense,  custody of such
books and records as such first party may intend to destroy.

10.3.    Tax-Free Exchange.  Buyer acknowledges that Seller desires to make a qualified,  tax-deferred  exchange of
         -----------------
its interest in certain  property of like-kind with the Assets  pursuant to and in accordance  with Section 1031 of
the Code.  Buyer  shall  cooperate,  in good faith,  as  reasonably  requested  by Seller,  in  enabling  Seller to
effectuate the sale of the Assets  pursuant to this Agreement as part of a like-kind  exchange  pursuant to Section
1031 of the  Code,  including,  without  limitation,  the  assignment  of the  rights of  Seller  pursuant  to this
Agreement to a qualified  intermediary  as defined in Treas.  Reg. Sec.  1.1031(k)-1(g)(4).  Buyer’s  obligation to
cooperate with Seller in order to enable Seller to effectuate a qualified,  tax-deferred  exchange is  specifically
conditioned upon each of the following:

(a)      All of Buyer’s  rights and all of Seller’s  obligations to Buyer  respecting all other  provisions of this
Agreement,  shall not be adversely  affected by any such  exchange,  whether or not such exchange is consummated by
Buyer; and

(b)      Buyer shall not in any way be liable to Seller or any other party  whatsoever  for any failure of Seller’s
proposed transaction to qualify as a tax-free exchange of like-kind property under the Code;

10.4.    Employee and Employee Benefit Matters.
         -------------------------------------

(a)      Buyer shall offer  employment as of the Closing Date to all of the employees  actively  employed by Seller
at the  Stations,  with the same  positions  and  compensation  as so employed by Seller.  As of the Closing  Date,
Buyer shall employ each such  employee who accepts  Buyer’s offer of employment  (collectively,  the  “Transferred
Employees”).  As of the  Closing  Date,  Buyer  shall  cause all  Transferred  Employees  who are not  covered by a
- ---------
collective  bargaining  agreement  (collectively,   the  “Transferred  Non-Union  Employees”)  to  be  eligible  to
participate in “employee  welfare benefit plans” and “employee  pension benefit plans” (as defined in Sections 3(1)
and 3(2) of ERISA) of Buyer in which similarly  situated  employees of Buyer are generally  eligible to participate
from time to time  (“Buyer’s  Plans”),  and all  Transferred  Non-Union  Employees  shall be eligible  for coverage
immediately  after the  Closing  Date (and shall not be  excluded  from  coverage  on  account of any  pre-existing
condition)  under Buyer’s Plans  constituting  employee  welfare  benefit plans to the extent  permitted under such
plans with respect to the Transferred  Non-Union  Employees.  Following the Closing Date, Buyer shall cause Buyer’s
Plans to recognize any prior accrued service credit,  credit towards  satisfying  deductible  expense  requirements
and  out-of-pocket  expense limits of Transferred  Non-Union  Employees for purposes of Buyer’s Plans to the extent
such prior credits and limits are  recognized by Buyer or Buyer’s Plans for similarly  situated  employees of Buyer
(including,  but not limited to, eligibility to participate and vesting,  but excluding benefit accruals).  As soon
as practicable  following the Closing Date,  Buyer shall make  available to the  Transferred  Non-Union  Employees,
Buyer’s  401(k)  Plan in  accordance  with  the  terms  and  provisions  of such  plan.  Seller  shall  cause to be
transferred to Buyer’s 401(k) Plan, in cash, all of the individual  account  balances of the Transferred  Non-Union
Employees  under the 401(k) plan in which the  employees of the Stations now  participate,  upon receipt from Buyer
of evidence  satisfactory  to Seller that Buyer's 401(k) Plan is  tax-qualified.  Buyer shall provide  employees of
the  Stations  who  become  employed  by Buyer and are  covered  by a  collective  bargaining  agreement  listed on
Schedule 6.4(d)  (the “Transferred Union Employees”) benefits in accordance with the terms of such agreement to the
- ---------------
extent such benefits constitute a part of the Assumed  Liabilities.  Except for the employment  contracts listed in
Schedule 6.4(d)  hereto,  nothing  in  this  Agreement  is  intended  to nor  shall  guaranty  employment  for  any
- ---------------
Transferred Employee for any length of time after the Closing Date.

(b)      Seller shall pay,  discharge and be solely  responsible for all liabilities and obligations which arise or
are to be paid or performed under any Plan,  including but not limited to such liabilities and obligations  arising
as a result of or in  connection  with the  termination  of any employee of any Station  before,  or upon  Closing,
including  all  severance  or  termination  pay and all  accrued  vacation,  salary,  wages and other  compensation
payments or benefits,  if any,  which arise or become  payable under any Plan as a result of or in connection  with
such termination.  Buyer shall pay,  discharge and be solely  responsible for all liabilities which arise or become
payable as a result of or in  connection  with Buyer’s  employment  of any  Transferred  Employees  upon Closing or
Buyer’s termination of any Transferred  Employees after Closing,  including,  without limitation,  all severance or
termination  pay and all accrued  vacation,  salary,  wages and other  compensation  payments or benefits  under or
pursuant  to any  employee  benefit  plan of Buyer.  Buyer shall not,  however,  assume or be  obligated  to pay or
perform any liabilities under any Plans (including,  but not limited to, any stay bonus or severance policy,  plan,
arrangement or benefit),  except that (i) Buyer shall provide accrued vacation days to Transferred  Employees,  and
(ii) Buyer shall assume and agree to perform the employer’s  obligations  under the employment  contracts listed on
Schedule 6.4(d) hereto to the extent such obligations constitute Assumed Liabilities.
- ---------------

(c)      Anything  contained  in this  Section 10.4  to the  contrary  notwithstanding,  upon  consummation  of the
Closing,  Buyer shall (i) recognize each union which is a party to a collective  bargaining  agreement set forth in
Schedule 6.4(d)  hereto,  and  (ii) assume  and be  responsible  for the  obligations  of  Seller  under  each such
- ---------------
collective bargaining agreement to the extent such obligations constitute Assumed Liabilities.

10.5.    Tax Matters.  Seller and Buyer, as required under  applicable law, shall file all necessary  documentation
         -----------
and returns with respect to sales, use,  transfer,  real property  transfer,  recording,  gains, stock transfer and
other  similar  taxes and fees (such taxes and fees,  including  any  interest  or  penalties  thereon,  are herein
sometimes called  “Transfer  Taxes”).  Buyer agrees to indemnify,  defend and hold harmless Seller for any Transfer
Taxes arising out of or in connection with the  transactions  effected  pursuant to this  Agreement.  Buyer further
agrees to indemnify,  defend,  and hold harmless  Seller with respect to any  additional  Transfer Taxes imposed by
reason of any indemnity payment under this Section 10.5.

10.6.    Use of Names.  Anything herein to the contrary  notwithstanding,  no interest in or right to use the names
         ------------
“Hearst” or  “Hearst-Argyle”  or any  derivation  thereof or any logo,  trademarks  or trade  name,  other than the
trademarks and trade names set forth in  Schedule 2.1(f)  hereto,  in which Seller has any interest  (collectively,
                                         ---------------
the “Retained Names and Marks”) is being  transferred to Buyer pursuant to the  transactions  contemplated  hereby.
Buyer will,  within 30 days following the Closing Date,  remove or obliterate all the Retained Names and Marks from
its signs, purchase orders, invoices,  sales orders, labels,  letterheads,  shipping documents,  business cards and
other  materials,  and Buyer shall not put into use after the Closing Date any such  materials  not in existence on
the Closing Date that bear any  Retained  Name or Mark,  provided,  Buyer shall be entitled for a period of 10 days
                                                         --------
following the Closing Date to use any signs,  purchase  orders,  invoices,  sales orders,  labels,  letterheads  or
shipping  documents  existing  on the  Closing  Date that bear any  Retained  Name or Mark,  in each case where the
removal of any such  Retained  Name or Mark would be  impractical;  provided,  however,  that Buyer  shall  place a
                                                                    --------   -------
stamp,  mark or other  notation  on any such item that  identifies  the  Business  as a business  of Buyer (and not
Seller) and if  applicable,  that such Retained Name or Mark is a registered  trademark or tradename.  Buyer agrees
that Seller shall have no  responsibility  for claims by third  parties  arising out of, or relating to, the use by
Buyer of any Retained Name or Mark after the Closing Date

10.7.    Audited  Financial  Statements.  Seller  recognizes that Buyer is a publicly  reporting company and agrees
         ------------------------------
that,  anything  contained in this  Agreement  or the  Confidentiality  Agreement to the contrary  notwithstanding,
Buyer shall be entitled at Buyer’s expense to cause audited and unaudited  financial  statements of the Stations to
be prepared for such periods and filed with the  Securities and Exchange  Commission,  and included in a prospectus
distributed to prospective  investors,  as required by Law applicable to Buyer as a publicly  reporting  company or
registrant.  Seller agrees to cooperate with Buyer and the auditing  accountants  as reasonably  requested by Buyer
in  connection  with the  preparation  and filing of such  financial  statements,  including  providing a customary
management  representation  letter consistent with Seller's  representations  and warranties  hereunder in the form
prescribed by generally  accepted auditing standards and using Seller’s  commercially  reasonable efforts to obtain
the consent of Seller’s  independent  accounting  firm to permit Buyer and Buyer’s  auditors to have access to such
firm’s workpapers.

10.8.    No  Solicitation.  From the date of this  Agreement  until the earlier of Closing or  termination  of this
         ----------------
Agreement,  neither  Seller nor any  Affiliate  of Seller shall  directly or  indirectly  (i) knowingly  solicit or
encourage any proposal or offer from any Person  relating to the  acquisition or purchase,  directly or indirectly,
of any  interest in any  material  assets of any Station  (each,  an  “Acquisition  Proposal”),  or  (ii) otherwise
knowingly  assist or  negotiate  with any Person with respect to an  Acquisition  Proposal.  Seller shall  promptly
notify Buyer in writing if an Acquisition Proposal is made after the date of this Agreement.

11.      Survival; Indemnification.
         -------------------------

11.1.    Survival of Representations  and Warranties.  The  representations,  warranties,  covenants and agreements
         -------------------------------------------
of each of Seller  and Buyer  contained  in this  Agreement  shall  survive  the  execution  and  delivery  of this
Agreement and the  completion  of the  transactions  contemplated  hereby (a) with respect to  representations  and
warranties or any  covenants or  agreements to be performed on or before the Closing Date,  until the date which is
twelve (12) months after the Closing Date,  and (b) with respect to each other  covenant or agreement  contained in
this  Agreement,  until  ninety (90) days  following  the last date on which such  covenant or  agreement  is to be
performed or, if no such date is specified,  indefinitely;  provided,  however, that any representation,  warranty,
                                                            --------   -------
covenant or agreement that would  otherwise  terminate in accordance with clause (a) or (b) above shall continue to
survive if a notice of a claim shall have been given under  Sections  11.2 or 11.3 on or prior to such  termination
date,  until the  related  claim for  indemnification  has been  satisfied  or  otherwise  resolved  as provided in
Sections  11.2 or  11.3.  No claim  may be made  against  any  party  hereto  and no party  hereto  shall  have any
liability  to any other  party  hereto  after the  applicable  survival  period for a  representation  or  warranty
specified  above shall have expired,  except that, if a claim shall be made by a party hereto against another party
hereto prior to the expiration of such survival  period,  then such survival period shall be extended as it relates
to such claim until such claim has been satisfied or otherwise resolved as provided in this Section 11.

11.2.    Indemnification of Buyer.
         ------------------------

(a)      Subject to the  limitations  contained in this Section 11,  Seller  agrees to  indemnify,  defend and hold
harmless  Buyer and its  Affiliates  (each,  a “Buyer  Indemnified  Party”)  from and  against  any and all losses,
liabilities,   and  damages,   costs  and  expenses  (including  reasonable  fees  and  disbursements  of  counsel)
(hereinafter  individually,  a “Loss” and  collectively,  “Losses”)  which  arise out of, or result  from,  (i) any
inaccuracy  in or any breach of any  representation  or warranty of Seller  contained  in this  Agreement or in the
officer’s  certificate  delivered  by Seller  pursuant  to  Section  9.1(e),  (ii) any  breach of any  covenant  or
agreement of Seller contained in this Agreement, or (iii) any Excluded Liability.

(b)      No claim may be made against Seller for  indemnification  pursuant to clause (i) of  Section 11.2(a)  with
respect to any individual item of Loss,  unless the aggregate of all Losses of the Buyer  Indemnified  Parties with
respect to clause (i) of Section 11.2(a) shall exceed Two Million Five Hundred Thousand Dollars  ($2,500,000),  and
Seller  shall  not be  required  to pay or be liable  for the  first Two  Million  Five  Hundred  Thousand  Dollars
($2,500,000)  in aggregate  amount of any such  Losses.  The Buyer  Indemnified  Parties  shall not be  indemnified
pursuant to  clause (i)  of  Section 11.2(a)  with respect to any  individual  item of Loss if the aggregate of all
Losses  for  which  the  Buyer  Indemnified  Parties  have  received  indemnification  pursuant  to  clause (i)  of
Section 11.2(a) shall have exceeded Thirty Million Dollars ($30,000,000).

(c)      Each Buyer  Indemnified  Party shall give Seller prompt written notice of any claim,  assertion,  event or
proceeding  (collectively,  a “Buyer  Claim”)  by or in respect  of a third  party of which such Buyer  Indemnified
Party has  knowledge  concerning  any Loss as to which such Buyer  Indemnified  Party may  request  indemnification
hereunder or any Loss as to which the Two Million Five Hundred Thousand Dollar  ($2,500,000)  amount referred to in
subsection (b)  of this  Section 11.2  may be applied.  Seller shall have the right to direct,  through  counsel of
its own  choosing,  the defense or  settlement  of any such Buyer  Claim at its own  expense.  If Seller  elects to
assume the defense of any such Buyer Claim, such Buyer  Indemnified  Party may participate in such defense,  but in
such case the expenses of such Buyer Indemnified  Party shall be paid by such Buyer  Indemnified  Party. Such Buyer
Indemnified  Party shall provide  Seller with access to its records and personnel  relating to any such Buyer Claim
during normal business hours and shall otherwise  cooperate with Seller in the defense or settlement  thereof,  and
Seller shall reimburse such Buyer  Indemnified  Party for all its reasonable  out-of-pocket  expenses in connection
therewith.  If Seller  elects to direct the defense of any such Buyer  Claim,  such Buyer  Indemnified  Party shall
not pay, or permit to be paid,  any part of any Loss  arising  from such Buyer  Claim,  unless  Seller  consents in
writing to such payment or unless Seller,  subject to the last sentence of this subsection (c),  withdraws from the
defense of such asserted  liability,  or unless a final  judgment from which no appeal may be taken by or on behalf
of Seller is entered  against the Buyer  Indemnified  Party for such Loss. If Seller shall fail to defend any Buyer
Claim,  or if, after  commencing  or  undertaking  any such  defense,  fails to  prosecute  or withdraws  from such
defense,  such Buyer  Indemnified  Party shall have the right to undertake  the defense or settlement  thereof,  at
Seller’s  expense.  If such Buyer  Indemnified  Party  assumes  the  defense of such Buyer  Claim  pursuant to this
subsection (c) and proposes to settle such Buyer Claim prior to a final  judgment  thereof or to forego appeal with
respect  thereto,  then such Buyer  Indemnified  Party shall give Seller prompt  written  notice thereof and Seller
shall have the right to participate in the settlement or assume or reassume the defense of such Buyer Claim.

11.3.    Indemnification of Seller.
         -------------------------
(a)      Subject to the  limitations  contained  in this  Section 11,  Buyer agrees to  indemnify,  defend and hold
harmless  Seller and its  Affiliates,  (each,  a “Seller  Indemnified  Party”)  from and against any and all Losses
which  arise out of, or  result  from,  (i) any  inaccuracy  in or any  material  breach of any  representation  or
warranty of Buyer  contained  in this  Agreement or in the  officer’s  certificate  delivered by Buyer  pursuant to
Section  9.2(e),  (ii) any breach of any  covenant or agreement of Buyer  contained  in this  Agreement,  (iii) any
Assumed  Liability,  (iv) Buyer’s use of any Retained Names and Marks pursuant to Section 10.5, or (v)  liabilities
incurred by Buyer resulting from the operation of the Business on and after the Closing Date.

(b)      Each Seller  Indemnified  Party shall give Buyer prompt written notice of any claim,  assertion,  event or
proceeding  (collectively,  a “Seller  Claim”) by or in respect of a third party of which such  Seller  Indemnified
Party has  knowledge  concerning  any Loss as to which such Seller  Indemnified  Party may request  indemnification
hereunder.  Buyer shall have the right to direct,  through  counsel of its own choosing,  the defense or settlement
of any such Seller  Claim at its own  expense.  If Buyer  elects to assume the  defense of any such  Seller  Claim,
such  Seller  Indemnified  Party may  participate  in such  defense,  but in such case the  expenses of such Seller
Indemnified  Party shall be paid by such Seller  Indemnified  Party.  Such Seller  Indemnified  Party shall provide
Buyer with access to its records and personnel  relating to any such Seller Claim during normal  business hours and
shall otherwise  cooperate with Buyer in the defense or settlement  thereof,  and Buyer shall reimburse such Seller
Indemnified  Party for all its  reasonable  out-of-pocket  expenses in  connection  therewith.  If Buyer  elects to
direct the  defense of any such  Seller  Claim,  Buyer  shall not pay,  or permit to be paid,  any part of any Loss
arising from such Seller Claim,  unless Buyer  consents in writing to such payment or unless Buyer,  subject to the
last sentence of this  subsection (b),  withdraws  from the defense of such asserted  liability,  or unless a final
judgment  from which no appeal may be taken by or on behalf of Buyer is entered  against  such  Seller  Indemnified
Party for such Loss. If Buyer shall fail to defend any Seller Claim,  or if, after  commencing or  undertaking  any
such defense,  fails to prosecute or withdraws  from such  defense,  such Seller  Indemnified  Party shall have the
right to  undertake  the defense or  settlement  thereof,  at Buyer’s  expense.  If such Seller  Indemnified  Party
assumes the defense of any such Seller Claim  pursuant to this  subsection and proposes to settle such Seller Claim
prior to a final judgment  thereon or to forego appeal with respect  thereto,  then such Seller  Indemnified  Party
shall give Buyer prompt  written  notice thereof and Buyer shall have the right to participate in the settlement or
assume or reassume the defense of such Seller Claim.

11.4.    Exclusive Provisions;  No Rescission.  Except as set forth in this Agreement,  neither Buyer nor Seller is
         ------------------------------------
making any  representation,  warranty,  covenant  or  agreement  with  respect  to the  matters  contained  herein.
Anything herein to the contrary notwithstanding,  no breach of any representation,  warranty, covenant or agreement
contained  herein  shall  give rise to any right on the part of Buyer or  Seller,  after  the  consummation  of the
purchase and sale of the  Business  contemplated  hereby,  to rescind  this  Agreement  or any of the  transactions
contemplated hereby.

12.      Termination of Agreement.
         ------------------------

12.1.    Termination.  This Agreement may be terminated prior to the Closing as follows:
         -----------

(a)      By the mutual written consent of Seller and Buyer;

(b)      By Seller,  if after the expiration of either the Early Exercise Period or the Exercise Period,  Buyer has
not exercised the Option;

(c)      By either Seller or Buyer,  if a material  breach of this  Agreement  continues for thirty (30) days after
written  notice is provided  by the  non-breaching  party;  provided,  however,  that the right to  terminate  this
                                                            --------   -------
Agreement under this Section 12.1(c) shall not be available to any party who has caused such material breach; or

(d)      By either  Seller or Buyer,  if the  Closing  shall not have  occurred  on or before the date which is the
first anniversary of the date on which Buyer exercises the Option;  provided,  however, that the right to terminate
                                                                    --------   -------
this  Agreement  under this  Section  12.1(d)  shall not be  available  to any party  whose  failure to fulfill any
obligation  under this Agreement  shall have been the cause of, or resulted in, the failure of the Closing to occur
prior to such date.

12.2.    Survival.  In the event this Agreement is terminated  pursuant to Section 12.1,  (i) this  Agreement shall
         --------
become null and void and of no further  force and effect,  except for the  provisions of Sections 13.2 and 13.4 and
the  Confidentiality  Agreement  and  (ii) there  shall be no  liability  on the part of  Seller  or Buyer or their
respective officers,  directors or Affiliates;  provided,  however,  that if such termination shall result from the
                                                --------   -------
willful  breach by a party of the  provisions  contained in this Agreement such party shall be fully liable for any
and all damages, costs and expenses sustained or incurred by the other party hereto as a result of such breach.

13.      Miscellaneous.
         -------------

13.1.    Certain  Definitions.  As used in this Agreement,  the following terms have the following  meanings unless
         --------------------
the context otherwise requires:

                  “Action or Proceeding”  means any action,  suit,  proceeding or arbitration by any Person, or any
investigation or audit by any Governmental or Regulatory Body.

                  “Affiliate,”  means with respect to any Person,  any other Person  controlling,  controlled by or
under common control with such first Person.

                  "Applicable  Portion"  shall mean a fraction,  the  numerator of which shall be the actual number
                   -------------------
of days in the period  beginning on the date of this  Agreement and ending on the Closing Date and the  denominator
of which  shall be the  number of days in the  period  beginning  on the date of this  Agreement  and ending on the
anniversary of the date of this Agreement immediately following the Closing Date.

                  “Business Day” means any day on which  commercial  banks are not authorized or required by law to
close in New York, New York.

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

                  “Confidentiality  Agreement”  means that certain  Confidentiality  Agreement dated April 25, 2000
between Seller and Buyer.

                  “contracts  and other  agreements”  means all executory  contracts,  agreements,  understandings,
indentures,  notes, bonds, loans,  instruments,  leases, mortgages,  franchises,  licenses or commitments which are
legally binding, including collective bargaining agreements.

                  “Environmental  Claim”  means,  with  respect to any Person,  any written  notice or claim by any
other Person alleging or asserting such Person’s  liability for investigatory  costs,  cleanup costs,  Governmental
or Regulatory Body response costs,  damages to natural  resources or other property,  personal  injuries,  fines or
penalties  arising out of, based on or  resulting  from (a) the  presence or release into the  environment,  of any
Hazardous  Material  or  (b) circumstances  forming  the  basis of any  violation,  or  alleged  violation,  of any
Environmental Law.

                  “Environmental  Law” means any Law or Order  relating to the  regulation  or  protection of human
health,  safety or the  environment  or to emissions,  discharges,  releases or threatened  releases of pollutants,
contaminants or toxic or hazardous wastes into the environment.

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

                  “Governmental  or Regulatory  Body” means any court,  tribunal,  arbitrator or any  government or
political  subdivision  thereof,  whether  federal,  state,  county,  local or foreign,  or any agency,  authority,
official or instrumentality of any such government or political subdivision.

                  “Hazardous  Material”  means  petroleum  products,  asbestos  and any  other  chemicals  or other
materials or substances  which are defined as or included in the definition of “hazardous  substances,”  “hazardous
wastes,” “hazardous  materials,”  “extremely hazardous wastes,” “restricted  hazardous wastes,” “toxic substances,”
“toxic pollutants” or words of similar import under any Environmental Law.

                  “HSR Act” means the  Hart-Scott-Rodino  Antitrust  Improvements Act of 1976, as amended,  and the
rules and regulations promulgated thereunder.

                  “Intangible  Property” means all patents and applications  therefor,  copyrights and applications
therefor  (including  rights to renew),  trademarks  and  applications  therefor,  names,  logos,  trade  names and
applications  therefor and service marks and  applications  therefor and the Stations’ call signs and call letters,
jingles and slogans,  websites and internet  domain names,  and other  intellectual  property used primarily by the
Stations.

                  “Inventory” means all raw materials,  work-in-process,  finished goods and merchandise, packaging
materials and other supplies related thereto.

                  “Law” means any law, statute,  rule, regulation,  ordinance,  code and other pronouncement having
the effect of law of the United States of America,  any foreign  country or any domestic or foreign state,  county,
city or other political subdivision or of any Governmental or Regulatory Body.

                  “Material   Adverse  Effect”  means  a  material  adverse  effect  on  the  assets,   properties,
operations, business, results of operations or financial condition of the Stations, taken as a whole.

                  “Order” means any writ,  judgment,  decree,  injunction or similar order of any  Governmental  or
Regulatory Body, in each case whether preliminary or final.

                  “Permitted  Lien” means (i) any lien for Taxes not yet due or  delinquent  or being  contested in
good faith by  appropriate  proceedings,  (ii) any  statutory  lien arising in the  ordinary  course of business by
operation of Law with respect to an  obligation or liability  that is not yet due or  delinquent,  (iii) any  minor
imperfection  of title or similar  lien or  encumbrance  which  individually  or in the  aggregate  with other such
imperfections of title,  liens or encumbrances is not material to the Assets or the Business,  and (iv) in the case
of the Real Property, the matters set forth on Schedule 6.4(c).
                                               ---------------

                  “Person” means any  individual,  corporation,  partnership,  firm,  joint  venture,  association,
joint-stock company, trust, unincorporated organization, Governmental or Regulatory Body or other entity.

                  “Plan” means an “employee  benefit  plan” for  purposes of Section  3(3) of ERISA  maintained  by
Seller or its  Affiliates  with respect to the Stations and each other  employee  benefit plan,  contract and other
arrangement maintained with respect to the Stations,  whether or not subject to ERISA,  including,  but not limited
to,  all  retention,  change  of  control,  severance,  stock  option  or  other  equity  based,  bonus,  incentive
compensation,  retirement,  fringe benefit and welfare plans,  and  arrangements  and  agreements,  maintained with
respect to any Station and the current or former employees of the Station or their dependents.

                  “Real  Property  Leases” means any leases or subleases of real property as to which Seller is the
lessor/sublessor or  lessee/sublessee,  together with any options to purchase the underlying property and leasehold
improvements thereon.

                  “Tangible Property” means all furniture,  fixtures, equipment,  machinery and spare parts and all
other tangible personal property,  including,  without limitation,  transmitters,  antenna,  tools, motor vehicles,
office equipment and supplies.

                  “Tax” and “Taxes”  means all taxes or other  assessments  imposed by any federal,  state or local
taxing  authority,  including income,  excise,  property,  sales,  use, ad valorem,  and franchise taxes other than
Transfer Taxes.

                  “Tax Return” means any return,  report,  information  return,  or other  document  (including any
related or  supporting  information)  filed or required to be filed with any federal,  state or local  governmental
entity or other  authority  in  connection  with the  determination,  assessment  or  collection  of any Tax or the
administration of any laws, regulations or administrative requirements relating to any Tax.

                  “Transaction Agreements” means this Agreement and the TBA.

                  “TBA Effective Date” means the effective date of the TBA as defined in Section 2.2 of the TBA.

13.2.    Expenses.  Except as otherwise  expressly  provided herein,  whether or not the transactions  contemplated
         --------
by this Agreement shall be consummated,  each of the parties hereto shall pay its own expenses (including,  without
limitation,  attorney’s  and  accountants’  fees and  out-of-pocket  expenses)  incident to this  Agreement and the
transactions  contemplated  hereby,  except  that all  filing  fees  (including  all FCC  filing  fees and all fees
required in connection with filings under the HSR Act),  transfer taxes,  recordation taxes, sales taxes,  document
stamps,  or other charges  levied by any  Governmental  or  Regulatory  Body in  connection  with the  transactions
contemplated by this Agreement shall be paid by Buyer.

13.3.    Notices.  All  notices,  requests,  demands and other  communications  required or  permitted  to be given
         -------
hereunder shall be in writing and shall be given personally,  telegraphed,  telexed, sent by facsimile transmission
or sent by prepaid air courier or certified  registered mail,  postage prepaid.  Any such notice shall be deemed to
have been given (a) when received, if delivered in person,  telegraphed,  telexed,  sent by facsimile  transmission
and, in the case of facsimile,  confirmed in writing within three (3) Business Days thereafter,  or sent by prepaid
air courier or (b) three (3) Business  Days  following  the mailing  thereof,  if mailed by registered or certified
first  class  mail,  postage  prepaid,  return  receipt  requested,  in any such case as follows  (or to such other
address or addresses as a party may have advised the other in the manner provided in this Section 13.3):

                  If to Seller:
                  ------------

                  Hearst-Argyle Properties, Inc.
                  888 Seventh Avenue
                  New York, New York  10106

                  Attention:  Bob Marbut, Chairman and Co-Chief Executive Officer and
                  David J. Barrett, President and Co-Chief Executive Officer
                  Facsimile: (212) 887-6855


                  With a copy (which shall not constitute notice) to:

                  Clifford Chance Rogers & Wells LLP
                  200 Park Avenue
                  New York, New York  10166

                  Attention:  Steven A. Hobbs, Esq.
                  Facsimile:  (212) 878-8375


                  If to Buyer:
                  -----------

                  Emmis Communications Corporation
                  One Emmis Plaza
                  40 Monument Circle, Suite 700
                  Indianapolis, Indiana  46204

                  Attention:  Jeffrey H. Smulyan, Chairman
                  Attention:  J. Scott Enright, Esq.
                  Facsimile:  (317) 631-3750


                  With a copy (which shall not constitute notice) to:

                  Emmis Communications Corporation
                  15821 Ventura Boulevard, Suite 685
                  Encino, California 91436

                  Attention:  Gary Kaseff, Esq.
                  Facsimile:  (818) 784-4059

                  and

                  Bose McKinney & Evans LLP
                  135 N. Pennsylvania Street, Suite 2700
                  Indianapolis, Indiana  46204

                  Attention:  David L. Wills
                  Facsimile:  (317) 684-5173

13.4.    Publicity;  Confidentiality.  No publicity  release or public  announcement  concerning  this Agreement or
         ---------------------------
the  transactions  contemplated  hereby shall be made by Buyer or Seller without advance  approval  thereof by each
other party hereto.  While this Agreement is in effect and after this Agreement  terminates,  each party hereto and
its Affiliates  shall keep  confidential,  and shall not disclose,  the terms of this Agreement to any other Person
without the prior consent of each other party hereto  unless  (i) the  disclosure is required by applicable  law or
the  rules of any stock  exchange  or which  such  party’s  securities  are  traded,  (ii) the  terms  are  readily
ascertainable  from  public  or  published  information,  or trade  sources  (without  violation  of the  foregoing
provisions of this sentence),  (iii) the  disclosure is (A) in  connection with any Action or Proceeding in respect
of this  Agreement or (B) to a Governmental  or Regulatory  Body the filing with or consent of which is required in
connection  with the  transactions  contemplated  by this  Agreement  or  (iv) the  disclosure  is to any  officer,
director,  employee or agent of any party  hereto or of any of its  Affiliates  and such Person  needs to know such
information for purposes of consummating the transactions contemplated by or the performance of this Agreement.

13.5.    Entire  Agreement.  The  Confidentiality  Agreement,  TBA and this  Agreement  (including the Exhibits and
         -----------------
Schedules  hereto) and the  agreements,  certificates  and other  documents  delivered  pursuant to this  Agreement
contain the entire agreement among the parties with respect to the  transactions  described  herein,  and supersede
all prior agreements, written or oral, with respect thereto.

13.6.    Waivers and Amendments.  This Agreement may be amended,  superseded,  cancelled,  renewed or extended, and
         ----------------------
the terms  hereof may be waived,  only by a written  instrument  signed by the parties or, in the case of a waiver,
by the party  waiving  compliance.  No delay on the part of any party in exercising  any right,  power or privilege
hereunder shall operate as a waiver thereof.

13.7.    Governing  Law.  This  Agreement  shall be governed by and  construed in  accordance  with the laws of the
         --------------
State of New York without  regard to principles of conflicts of law. Any judicial  proceeding  brought  against any
of the parties to this  Agreement on any dispute  arising out of this Agreement or any matter related hereto may be
brought in the courts of the State of New York,  and, by  execution  and  delivery of this  Agreement,  each of the
parties hereto accepts the non-exclusive  jurisdiction of the aforesaid courts,  and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement.

13.8.    Binding  Effect;  No  Assignment.  This  Agreement  shall be binding  upon and inure to the benefit of the
         --------------------------------
parties and their respective  successors and legal  representatives.  This Agreement is not assignable by any party
hereto  without  the prior  written  consent of the other  parties  hereto and any other  purported  assignment  in
violation  hereof  shall be null and void.  Notwithstanding  the  foregoing,  Seller  may assign all or part of its
rights under this Agreement  prior to the Closing to an Affiliate of Seller or to a “qualified  intermediary”  with
the meaning of Treas.  Reg.  Sec.  1.1031(k)-1(g)(4)(iii)  without the prior  written  consent of Buyer;  provided,
                                                                                                          --------
however,   that  Seller  shall  remain  primarily  liable  for  all  of  its  obligations   under  this  Agreement.
- -------
Notwithstanding  the  foregoing,  Buyer may assign all of its rights  under this  Agreement to a direct or indirect
wholly-owned  subsidiary of Buyer,  provided that (A) the  representations  and warranties of Buyer hereunder shall
be true and correct in all respects as applied to the assignee,  (B) both  Buyer and the assignee shall execute and
deliver  to Seller a  written  instrument  in form and  substance  satisfactory  to Seller  within  its  reasonable
judgment in which both Buyer and the assignee  agree to be jointly and severally  liable for  performance of all of
Buyer’s  obligations  under this  Agreement,  (C) such  assignment  shall not materially  delay issuance of the FCC
Order or expiration or  termination  of the waiting  period under the HSR Act, and (D) Buyer and the assignee shall
deliver such other documents and instruments as reasonably  requested by Seller,  including  appropriate  certified
resolutions of the boards of directors of Buyer and the assignee.

13.9.    Seller  Not  Responsible  for  Buyer’s  Actions  Under  TBA.  Anything  contained  herein to the  contrary
         ------------------------------------
notwithstanding,  Seller shall not be deemed to have breached any representation,  warranty,  covenant or agreement
of Seller  contained  herein or to have  failed to  satisfy  any  condition  precedent  to Buyer’s  obligations  to
purchase the Assets  hereunder  (nor shall Seller have any liability or  responsibility  to Buyer in respect of any
such representation,  warranty,  covenant,  agreement or condition precedent),  in each case to the extent that the
inaccuracy of any such representation,  the breach of any such warranty,  covenant or agreement or the inability to
satisfy any such condition  precedent  arises out of or otherwise  relates to (i) any actions taken by or under the
authorization  of Buyer or its Affiliates (or any of their respective  officers,  directors,  employees,  agents or
representatives)  in  connection  with  Buyer’s  performance  of its  obligations  under the TBA or  otherwise,  or
(ii) the  failure of Buyer to perform any of its  obligations  under the TBA.  Buyer  acknowledges  and agrees that
Seller shall not be deemed to be  responsible  for or have  authorized or consented to any action or failure to act
on the part of Buyer or its  Affiliates  (or any of their  respective  officers,  directors,  employees,  agents or
representatives)  in  connection  with the TBA by reason of the fact that prior to Closing,  Seller  shall have the
legal right to control, manage or supervise the operation of the Stations or the conduct of their business.

13.10.   Variations  in Pronouns.  All pronouns and any  variations  thereof  refer to the  masculine,  feminine or
         -----------------------
neuter, singular or plural, as the context may require.

13.11.   Counterparts.  This  Agreement  may be executed by the parties  hereto in separate  counterparts,  each of
         ------------
which when so executed and delivered  shall be an original,  but all such  counterparts  shall together  constitute
one and the same  instrument.  Each  counterpart  may consist of a number of copies hereof each signed by less than
all, but together signed by all of the parties hereto.

13.12.   Exhibits and  Schedules.  The Exhibits and  Schedules  are a part of this  Agreement as if fully set forth
         -----------------------
herein.  All  references  herein  to  Sections,  subsections,  clauses,  Exhibits  and  Schedules  shall be  deemed
references to such parts of this Agreement, unless the context shall otherwise require.

13.13.   Headings.   The  headings  in  this   Agreement  are  for  reference   only,  and  shall  not  affect  the
         --------
interpretation of this Agreement.

13.14.   Severability  of  Provisions.  If any provision or any portion of any  provision of this  Agreement or the
         ----------------------------
application  of such  provision  or any portion  thereof to any Person or  circumstance,  shall be held  invalid or
unenforceable,  the remaining  portion of such  provision and the remaining  provisions of this  Agreement,  or the
application  of such  provision  or portion of such  provision as is held  invalid or  unenforceable  to persons or
circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby.

13.15.   No Third Party  Beneficiary.  The terms and  provisions  of this  Agreement  are  intended  solely for the
         ---------------------------
benefit of each party hereto and their respective  successors or permitted assigns,  and it is not the intention of
the parties to confer  third-party  beneficiary  rights  upon any other  Person  other than any Person  entitled to
indemnity under Section 11.

13.16.   Specific  Performance.  Seller  acknowledges that the Stations are of a special,  unique and extraordinary
         ---------------------
character,  and  that  damages  alone  are  an  inadequate  remedy  for a  breach  of  this  Agreement  by  Seller.
Accordingly,  as an alternative to termination of this Agreement under  Section 12.1,  Buyer shall be entitled,  in
the event of Seller’s  material  breach,  to  enforcement  of this  Agreement  (subject to  obtaining  any required
approval  of the FCC or  clearance  under the HSR Act) by a decree of specific  performance  or  injunctive  relief
requiring  Seller to  fulfill  its  obligations  under  this  Agreement.  Such  right of  specific  performance  or
injunctive  relief shall be in addition to, and not in lieu of, Buyer’s right to recover  damages and to pursue any
other remedies  available to Buyer for Seller’s breach. In any action to specifically  enforce Seller’s  obligation
to close the  transactions  contemplated  by this  Agreement,  Seller  shall  waive the  defense  that  there is an
adequate  remedy at law or in equity and agrees  that Buyer shall be entitled  to obtain  specific  performance  of
Seller’s obligation to close without being required to prove actual damages.








                  IN WITNESS  WHEREOF,  the  parties  hereto,  intending  to be  legally  bound  hereby,  have duly
executed this Agreement on the date first above written.


                                                     HEARST-ARGYLE PROPERTIES, INC.


                                                     By:   _________________________________________
                                                           Name:
                                                           Title:



                                                     EMMIS COMMUNICATIONS CORPORATION


                                                     By:   _________________________________________
                                                           Name:
                                                           Title:

EX-21 6 ex21.htm SUBSIDIARIES OF EMMIS EXHIBIT 21


Emmis Communications Corporation
List of Subsidiaries

                            Legal Name                              Organization
                            ----------                              ------------
Emmis Communications Corporation                                        IN
Emmis Operating Company                                                 IN
Emmis Radio Corporation                                                 IN
Emmis Television Broadcasting, L.P.                                     IN
Emmis Publishing, L.P.                                                  IN
Emmis Indiana Broadcasting, L.P.                                        IN
SJL of Kansas Corp.                                                     KS
Topeka Television Corporation                                           MO
Emmis International Broadcasting Corporation                            CA
Slager Radio Rt. (59.5%)                                              Hungary
Emmis Hungarian Holding Co (Magyar Kommunikacios Befektetesi Kft.)    Hungary
Emmis Latin America Broadcasting Corporation                            CA
Emmis South America Broadcasting Corporation                            CA
Emmis Argentina Broadcasting, S.A.                                   Argentina
Emmis Buenos Aires Broadcasting, S.A.                                Argentina
Votionis, S.A. (75%)                                                 Argentina
Emmis Meadowlands Corporation                                           IN
Emmis Publishing Corporation                                            IN
Emmis License Corporation                                               CA
Emmis Television License Corporation                                    CA
Emmis Radio License Corporation                                         CA
Emmis License Corporation of New York                                   CA
Emmis Radio License Corporation of New York                             CA
Emmis Television License Corporation of Wichita                         CA
Emmis Television License Corporation of Topeka                          CA
Emmis Enterprises, Inc.                                                 IN
Mediatex Communications Corporation                                     IN
Los Angeles Magazine Holding Company, Inc.                              IN

EX-23 7 ex23.htm AUDITOR'S CONSENT EXHIBIT 23

                          CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the incorporation of our report
included in this Form 10-K, into the Company's previously filed Registration Statements File
No. 33-83890, No. 333-14657, No. 333-42878, No. 333-62172 and No. 333-71904.





                                                   /s/ ARTHUR ANDERSEN LLP
                                                   -----------------------
                                                   ARTHUR ANDERSEN LLP


Indianapolis, Indiana,
May 13, 2002.

EX-24 8 ex24.htm POWERS OF ATTORNEY Exhibit 24



                                      POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS,  that the person whose signature appears below, hereby
constitutes  and appoints  Jeffrey H. Smulyan,  Walter Z. Berger,  J. Scott Enright and Norman
H.  Gurwitz,  or  any  of  them,  his   attorneys-in-fact  and  agents,  with  full  power  of
substitution and resubstitution  for him in any and all capacities,  to sign the annual report
of Emmis  Communications  Corporation on Form 10-K  under the Securities  Exchange Act of 1934
for the fiscal year ended  February 28,  2002,  and any  amendments  thereto,  and to file the
same, with exhibits thereto and other documents in connection  therewith,  with the Securities
and Exchange Commission,  granting unto each of such  attorneys-in-fact  and agents full power
and  authority  to do and perform  each and every act and thing  requisite  and  necessary  in
connection  with such  matters  and  hereby  ratifying  and  confirming  all that each of such
attorneys-in-fact  and agents or his substitute or  substitutes  may do or cause to be done by
virtue hereto.

Dated:    May 9, 2002                                     /s/   Lawrence B. Sorrel
        ---------------------                             ------------------------------------























                                      POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS,  that the person whose signature appears below, hereby
constitutes  and appoints  Jeffrey H. Smulyan,  Walter Z. Berger,  J. Scott Enright and Norman
H.  Gurwitz,  or  any  of  them,  his   attorneys-in-fact  and  agents,  with  full  power  of
substitution and resubstitution  for him in any and all capacities,  to sign the annual report
of Emmis  Communications  Corporation on Form 10-K  under the Securities  Exchange Act of 1934
for the fiscal year ended  February 28,  2002,  and any  amendments  thereto,  and to file the
same, with exhibits thereto and other documents in connection  therewith,  with the Securities
and Exchange Commission,  granting unto each of such  attorneys-in-fact  and agents full power
and  authority  to do and perform  each and every act and thing  requisite  and  necessary  in
connection  with such  matters  and  hereby  ratifying  and  confirming  all that each of such
attorneys-in-fact  and agents or his substitute or  substitutes  may do or cause to be done by
virtue hereto.


Dated:    May 10, 2002                                     /s/  Richard A. Leventhal
        ---------------------                             ------------------------------------























                                      POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS,  that the person whose signature appears below, hereby
constitutes  and appoints  Jeffrey H. Smulyan,  Walter Z. Berger,  J. Scott Enright and Norman
H.  Gurwitz,  or  any  of  them,  her   attorneys-in-fact  and  agents,  with  full  power  of
substitution  and  resubstitution  for her in any and all capacities,  to the annual report of
Emmis  Communications  Corporation on Form 10-K under the Securities  Exchange Act of 1934 for
the fiscal year ended  February 28,  2002, and any amendments  thereto,  and to file the same,
with exhibits  thereto and other  documents in connection  therewith,  with the Securities and
Exchange Commission,  granting unto each of such  attorneys-in-fact  and agents full power and
authority  to do and  perform  each  and  every  act and  thing  requisite  and  necessary  in
connection  with such  matters  and  hereby  ratifying  and  confirming  all that each of such
attorneys-in-fact  and agents or his substitute or  substitutes  may do or cause to be done by
virtue hereto.


Dated:    May 10, 2002                                      /s/  Susan B. Bayh
        ---------------------                             ------------------------------------























                                      POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS,  that the person whose signature appears below, hereby
constitutes  and appoints  Jeffrey H. Smulyan,  Walter Z. Berger,  J. Scott Enright and Norman
H.  Gurwitz,  or  any  of  them,  his   attorneys-in-fact  and  agents,  with  full  power  of
substitution and resubstitution  for him in any and all capacities,  to sign the annual report
of Emmis  Communications  Corporation on Form 10-K  under the Securities  Exchange Act of 1934
for the fiscal year ended  February 28,  2002,  and any  amendments  thereto,  and to file the
same, with exhibits thereto and other documents in connection  therewith,  with the Securities
and Exchange Commission,  granting unto each of such  attorneys-in-fact  and agents full power
and  authority  to do and perform  each and every act and thing  requisite  and  necessary  in
connection  with such  matters  and  hereby  ratifying  and  confirming  all that each of such
attorneys-in-fact  and agents or his substitute or  substitutes  may do or cause to be done by
virtue hereto.


Dated:    May 9, 2002                                       /s/  Gary L. Kaseff
        ---------------------                             ------------------------------------










                                      POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS,  that the person whose signature appears below, hereby
constitutes  and appoints  Jeffrey H. Smulyan,  Walter Z. Berger,  J. Scott Enright and Norman
H.  Gurwitz,  or  any  of  them,  his   attorneys-in-fact  and  agents,  with  full  power  of
substitution and resubstitution  for him in any and all capacities,  to sign the annual report
of Emmis  Communications  Corporation on Form 10-K  under the Securities  Exchange Act of 1934
for the fiscal year ended  February 28,  2002,  and any  amendments  thereto,  and to file the
same, with exhibits thereto and other documents in connection  therewith,  with the Securities
and Exchange Commission,  granting unto each of such  attorneys-in-fact  and agents full power
and  authority  to do and perform  each and every act and thing  requisite  and  necessary  in
connection  with such  matters  and  hereby  ratifying  and  confirming  all that each of such
attorneys-in-fact  and agents or his substitute or  substitutes  may do or cause to be done by
virtue hereto.


Dated:    May 13, 2002                                      /s/  Frank V. Sica
        ---------------------                             ------------------------------------










                                      POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS,  that the person whose signature appears below, hereby
constitutes  and appoints  Jeffrey H. Smulyan,  Walter Z. Berger,  J. Scott Enright and Norman
H.  Gurwitz,  or  any  of  them,  his   attorneys-in-fact  and  agents,  with  full  power  of
substitution and resubstitution  for him in any and all capacities,  to sign the annual report
of Emmis  Communications  Corporation on Form 10-K  under the Securities  Exchange Act of 1934
for the fiscal year ended  February 28,  2002,  and any  amendments  thereto,  and to file the
same, with exhibits thereto and other documents in connection  therewith,  with the Securities
and Exchange Commission,  granting unto each of such  attorneys-in-fact  and agents full power
and  authority  to do and perform  each and every act and thing  requisite  and  necessary  in
connection  with such  matters  and  hereby  ratifying  and  confirming  all that each of such
attorneys-in-fact  and agents or his substitute or  substitutes  may do or cause to be done by
virtue hereto.



Dated:    May 8, 2002                                       /s/  Greg A. Nathanson
        ---------------------                             ------------------------------------

EX-99 9 ex99-1.htm LETTER OF ACKNOWLEDGEMENT - ARTHUR ANDERSEN Exhibit 99.1





Emmis Communications Corporation and Emmis Operating Company
40 Monument Circle, Suite 700
Indianapolis, IN  46204


Securities and Exchange Commission
450 Fifth Street, N.W
Washington, D.C. 20549


Ladies and Gentlemen:

Emmis Communications Corporation and Emmis Operating Company (together, the "Companies") have received a
representation letter from Arthur Andersen LLP ("Andersen"), the Companies’ independent public accountants, in
connection with the issuance of Andersen's audit report included within this filing on Form 10-K. In its letter,
Andersen has represented to us that its audit of the consolidated balance sheets of the Companies and their
subsidiaries as of February 28, 2002 and 2001, and the related consolidated statements of operations, changes in
shareholders’ equity and cash flows for each of the three years in the period ended February 28, 2002, were
subject to Andersen's quality control system for the U.S accounting and auditing practice. Andersen provided this
representation in order to give us reasonable assurance that the engagement was conducted in compliance with
professional standards, that there was appropriate continuity of Andersen personnel working on the domestic and
foreign audits and availability of national office consultation.


                                                                                        Very truly yours,




                                                                                        Walter Z. Berger
                                                                                        Executive Vice President,
                                                                                        Treasurer and Chief
                                                                                        Financial Officer

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