EXHIBIT 10.4

 

TIME BROKERAGE AGREEMENT

 

By and Between

 

NEXSTAR FINANCE, L.L.C.

 

and

 

JDG TELEVISION, INC.

 

October 13, 2003

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TABLE OF CONTENTS

 

1.

  

Overall Purpose and Term

   1

2.

  

Station Facilities

   2

3.

  

Revenue

   2

4.

  

Compensation

   2

5.

  

Responsibilities.

   2

6.

  

Revenues and Deposits.

   4

7.

  

Handling of Station Communications

   4

8.

  

The Owner’s Compliance With FCC Rules and Published Policies

   4

9.

  

Programming and the Public Interest.

   5

10.

  

Special Programs

   6

11.

  

Stations Identification

   6

12.

  

Station Facilities.

   6

13.

  

Political Advertising

   7

14.

  

Children’s Programming

   7

15.

  

The Owner’s Responsibility For Compliance with FCC Technical Rules

   8

16.

  

Force Majeure

   8

17.

  

Trade Secrets and Proprietary Information

   8

18.

  

Payola and Conflicts of Interest

   9

19.

  

The Broker’s Compliance with Law

   9

20.

  

Indemnification.

   9

21.

  

Termination.

   10

22.

  

Authorizations

   11

23.

  

Advanced Television/High Definition Television

   11

24.

  

Notices

   12

 

-i-

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25.

  

Modification and Waiver

   13

26.

  

Construction

   13

27.

  

Headings; Interpretation

   13

28.

  

Assignment

   13

29.

  

Counterparts

   13

30.

  

Entire Agreement

   13

31.

  

No Partnership or Joint Venture Created

   14

32.

  

Severability

   14

33.

  

Legal Effect

   14

34.

  

No Party Deemed Drafter

   14

 

 

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TIME BROKERAGE AGREEMENT

 

This TIME BROKERAGE AGREEMENT (this “Agreement”) is entered into as of October
13, 2003, by and among JDG Television, Inc. (the “Owner”), and Nexstar Finance,
L.L.C. (the “Broker”). Capitalized terms used but not defined herein will have
the meaning set forth in the Purchase Agreement (as defined below).

 

WHEREAS, the Owner is the owner and operator of television broadcast stations
KPOM-TV, Forth Smith, Arkansas, and KFAA-TV, Rogers, Arkansas, and assets
relating thereto (the “Stations”), pursuant to authorizations issued by the
Federal Communications Commission (“FCC”);

 

WHEREAS, the parties hereto have carefully considered the Communications Act of
1934, as amended (the “Communications Act”), and the FCC’s rules and policies
adopted pursuant thereto, and intend that this Agreement in all respects
complies with said Communications Act and FCC rules and policies;

 

WHEREAS, the Owner desires to enter into this Agreement to provide a regular
source of diverse programming and income to sustain the operations of the
Stations;

 

WHEREAS, the Broker desires to provide an over-the-air program service to the
Forth Smith, Fayetteville, Springdale and Rogers, Arkansas area using the
facilities and personnel of the Stations;

 

WHEREAS, the Owner agrees to provide time on the Stations exclusively to the
Broker on terms and conditions that conform to policies of the Owner and the FCC
for time brokerage arrangements and that are as set forth herein;

 

WHEREAS, the Broker agrees to provide broadcast programming of the Broker’s
selection that conforms with the policies of the Owner and with all rules and
published policies of the FCC, and as set forth herein;

 

WHEREAS, the Owner maintains, and will continue to maintain during the term of
this Agreement, ultimate control over the Stations’ facilities including control
over the Stations’ finances and programming and the Owner’s personnel; and

 

WHEREAS, contemporaneously herewith, the Owner and the Broker have entered into
a Purchase Agreement (the “Purchase Agreement”) pursuant to which the Broker
will, subject to FCC consent and certain other terms and conditions, purchase
substantially all of the assets of the Stations;

 

NOW, THEREFORE, in consideration of the foregoing, and of the mutual promises
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which the Owner and the Broker hereby acknowledge, the Owner and
the Broker, intending to be bound legally, hereby agree as follows:

 

1. Overall Purpose and Term. In accordance with the terms and subject to the
limitations set forth herein: (a) the Broker will provide programming to the
Owner for the

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Stations, promote the Stations and their programming, sell commercial and other
time on the Stations and bill for and collect the payments for time sales on the
Stations; and (b) the Owner will maintain the Stations’ transmitting and
microwave relay facilities, and make such facilities available to the Broker for
the purposes described herein. Subject to the terms of this Agreement, each
party hereby warrants and covenants that it will fulfill said obligations, and
their other obligations specified herein, to the fullest extent permitted by law
(including the FCC’s rules and published policies) in a diligent, reasonable
manner. The Broker will begin its time brokerage activities with regard to the
Stations pursuant to this Agreement at 12:01 AM, Forth Smith, Arkansas time, on
October 16, 2003, and such date is referred to in this Agreement as the
“Commencement Date.” The term of this Agreement will be the period from the
Commencement Date until the Closing (as such term is defined in the Purchase
Agreement) or the earlier termination of this Agreement (the “Term”).

 

2. Station Facilities. During the Term, the Owner will make the Stations’
television broadcasting transmission facilities available to the Broker for
broadcast on the Stations of programs selected by the Broker in accordance with
the terms and conditions hereof, and advertising/commercial announcements sold
by the Broker, which may originate from the Stations’ studios, the Broker’s
studios or from other sources contracted for by the Broker. In addition, the
Owner will make available to the Broker, at no additional cost, during the Term,
exclusive use (other than the Owner’s own use for the Stations pursuant to this
Agreement) of all of the Owner’s studio and production facilities and other
assets, for the Broker’s use in its activities with regard to the Stations
pursuant to this Agreement.

 

3. Revenue. The Broker will be entitled to all revenues resulting from the sale
of advertising and other time on the Stations during the Term, including,
without limitation, all revenue from the sale of advertising and other time
during the Owner’s public service programming or other programming provided by
the Owner pursuant to Sections 9 and 10, or otherwise resulting from the
operation of the Stations during the Term.

 

4. Compensation. As consideration for the Owner permitting the Broker to
broadcast the Broker’s programming on the Stations pursuant to the terms of this
Agreement, the Broker will pay to the Owner the amounts described on Exhibit A.

 

5. Responsibilities.

 

(a) The Broker’s Responsibilities.

 

  (i) The Broker will employ and be responsible for paying the salaries,
commissions, payroll taxes, insurance and all other related costs for employees
of the Broker engaged in the Broker’s time brokerage activities under this
Agreement.

 

  (ii) The Broker will be responsible for utilizing the Broker’s and the Owner’s
employees to operate and maintain the Owner’s studio, production and master
control facilities and to acquire, compile, produce, broadcast and sell the
Stations’ programming and commercial messages.

 

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  (iii) In performing its obligations under this Agreement, the Broker will use
its commercially reasonable efforts to adhere to and fulfill all of the terms,
conditions and obligations under all Contracts and Leases.

 

(b) The Owner’s Responsibilities. The Owner will employ and be responsible for
paying the salaries, commissions, payroll taxes, insurance and all other related
costs of its employees. In this regard, the Owner will employ, at a minimum,
David Needham as the full-time General Manager of Station KPOM-TV, and Michael
Cleveland as the full-time Engineering Manager/Chief Engineer/Chief Operator for
Station KFAA-TV. Such General Manager and Engineering Manager (the “Managers”)
will be responsible for overseeing all operational aspects of the respective
Stations. Owner also will employ, as employees shared with Broker, Carol Sharem
as the full-time receptionist at Station KPOM-TV, and Pamela Pense as the
full-time receptionist at Station KFAA-TV. The Owner will be responsible for all
(A) lease obligations in connection with property leased (if any) to the Owner,
(B) utility bills for utility services at the Stations’ main studio/office
location(s) and their tower/transmitter sites, (C) telephone system maintenance
costs and local exchange and long distance telephone service costs for the
Owner’s telephone system(s) and usage at the Stations’ main studio/office
location(s) and at the Stations’ tower/transmitter sites, (D) costs of
engineering and technical personnel necessary to assure compliance with the
FCC’s rules and published policies and maintenance and repair of the Stations’
transmitting and microwave relay facilities, (E) all liabilities and obligations
under all Contracts to which the Owner is a party relating to the business and
operations of the Stations, (F) premiums for insurance required to be maintained
by the Owner under this Agreement, (G) real and personal property taxes, (H)
business, license and FCC regulatory fees, and (I) reasonable maintenance and
repair costs for the Stations’ studio, transmission and production equipment,
all of which (with the exception of the salary and employment costs of David
Needham) are subject to reimbursement by Broker and included in the Monthly
Costs in accordance with the terms set forth on Exhibit A.

 

(c) Additional Responsibilities.

 

 

  (i) The Broker will be fully responsible for the supervision and direction of
its employees, and the Owner will be fully responsible for the supervision and
direction of its employees.

 

  (ii) The Broker and the Owner will pay their respective expenses owed to third
parties with regard to the Stations and in no event will any such payable remain
unpaid for more than thirty (30) days after it is due unless such payable is
being disputed in good faith.

 

  (iii) Except as otherwise mutually agreed, as between the Owner and the
Broker, the Owner is and will continue to be responsible, subject to
reimbursement by Broker in accordance with the terms set forth on Exhibit A, for
all its obligations pursuant to any contracts of employment of employees of the
Stations and any contracts with labor unions to which the Owner is a party.

 

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(d) Renewal, Modification and Cancellation of Contracts. The Owner will comply
with all reasonable requests of the Broker with respect to the renewal and
cancellation of Owner contracts (in accordance with their terms) or the entry
into or the modification of Owner contracts which affect the Broker’s time
brokerage activities with regard to the Stations pursuant to this Agreement.

 

6. Revenues and Deposits.

 

(a) Revenues from Broadcast Time Sales and Uses of Stations’ Studio/Production
Facilities during the Term. The Broker will have the exclusive right to sell,
either directly or indirectly through sales representatives, and will be solely
responsible for billing and collecting payments for, all programs and
commercials aired on the Stations during the Term (whether during programming
selected by Broker or programming selected by the Owner), and production fees
for uses of the Stations’ studio/production facilities during the Term. The
Broker may contract and bill in its own name for the sale of broadcast time on
the Stations during the Term and uses of the Stations’ studio/production
facilities during the Term. The Broker also will have the right to negotiate for
and to receive all compensation due to the Stations during the Term (i) from
cable television systems pursuant to the “retransmission consent” provisions of
the Cable Television Consumer Protection and Competition Act of 1992, as
amended, and the FCC’s rules enacted pursuant thereto, and (ii) from DBS
providers pursuant to the Satellite Home Viewer Improvement Act of 1999 and the
FCC’s rules enacted pursuant thereto, and the Owner will take, and refrain from
taking, actions as to matters under such Acts and rules from time to time in
accordance with the Broker’s reasonable requests.

 

(b) Bank Accounts for Revenues from Broker’s Activities/Payments By Broker from
Such Revenues. The Broker may deposit any sums it receives pursuant to Section
6(a) or otherwise with respect to the Stations into a bank account (or accounts)
of the Broker established by the Broker, in the Broker’s name, for this purpose
(the “Broker Bank Account(s)”), and the funds in the Broker Bank Account(s) will
be the property of the Broker, except as otherwise provided herein or in the
Purchase Agreement. The Broker is authorized to endorse payments received in
names other than Broker’s (e.g., “KPOM,,” “KPOM-TV,” “KFAA,” or “KFAA-TV”) in
order to deposit such payments into the Broker Bank Account(s).

 

7. Handling of Station Communications. The Owner will receive and handle mail,
faxes, telephone calls and e-mail from members of the public in connection with
the operation of the Stations. Any such communications received by Broker shall
be forwarded promptly to Owner.

 

8. The Owner’s Compliance With FCC Rules and Published Policies. The Owner will
comply in all material respects with all FCC rules and published policies
applicable to the Stations. Without limiting the foregoing sentence, the Owner’s
obligations will include ascertaining the needs and interests of the Stations’
service areas, maintaining the Stations’ political broadcasting and public
inspection files and the Stations’ maintenance logs, setting political
advertising policies, meeting equal employment opportunity requirements with
regard to the Owner’s employees, preparing the Stations’ quarterly
issues/programs lists and making all required FCC filings with regard to the
Stations.

 

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9. Programming and the Public Interest.

 

(a) Throughout the Term, the Broker will program the Stations so as to maintain
a general, advertiser-supported, national-network-affiliated,
entertainment/sports format, with some mix permitted of home shopping,
religious, foreign language and infomercial programming. The Stations will not
become a predominantly home shopping, religious, foreign language and/or
infomercial stations. The programming selected by the Broker will consist of
such materials as are determined by the Broker to be appropriate and/or in the
public interest including public affairs programming, children’s programming,
public service announcements, entertainment, news, weather reports, sports,
promotional material, commercial material and advertising. Without limiting the
foregoing sentence, the Broker will program on the Stations at least a total of
four (4) hours per week of news, public affairs, or other non-sports,
non-entertainment programming, between the hours of 6:00 AM and 12:00 midnight,
local time; and at least three (3) hours per week of “core” children’s
programming between the hours of 7:00 AM and 10:00 PM.

 

(b) For the Term, to facilitate the programming of the Stations, the Owner,
subject to any relevant contractual provision contained therein, will assign to
the Broker its NBC network affiliation agreement and its syndicated programming
agreements and the Broker agrees to perform, consistent with all contractual
provisions thereof, the Owner’s contractual obligations thereunder.

 

(c) During the Term, the Broker’s management personnel designated by the Broker
will meet at least monthly with the Owner’s Managers in order to help formalize
the Owner’s oversight over the Broker’s activities at the Stations. At such
meetings, the Owner will, among other things, (i) provide the Broker with the
results of the Owner’s ongoing efforts to ascertain the problems, needs and
interests of the Stations’ service areas, so that the programming and public
service announcements selected and/or scheduled by the Broker for the Stations
will be responsive thereto, (ii) inform the Broker of all views, comments,
suggestions and complaints concerning the Broker’s programming, (iii) provide
suggestions for future public service programs and public service announcements,
and (iv) review the Broker’s programming for children. In the event the Owner
determines that additional attention should be directed to particular community
needs, the Broker will cooperate to assure that the Stations’ locally-produced
programming serves those needs. If the Owner acquires syndicated programming or
if the Owner uses Broker’s employees for the production of local programs in
addition to the informational and public affairs programming described above in
this Section 9, then all expenses for such additional programming will be paid
by the Owner and will not be included in the reimbursements due the Owner under
this Agreement. Such programs will be aired on the Stations at a mutually
agreeable time between 6:00 AM and 12:00 midnight, local time.

 

(d) The Broker will provide the Owner promptly with all documents the Broker
receives which are required to be placed in the Stations’ political or public
inspection files. The Broker will, upon reasonable request by the Owner, provide
the Owner with information with respect to programs and public service
announcements broadcast on the Stations which are responsive to the problems,
needs and issues facing the residents of the Stations’ service areas and the
Broker’s programming for children, so as to assist the Owner in the preparation
of required programming reports, and will assist the Owner upon request in

 

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compiling such other information which is reasonably necessary to enable the
Owner to prepare other records and reports required by the FCC or other
government agencies. The Broker shall furnish to the Owner upon request any
other information that is reasonably necessary to enable the Owner to prepare
any records or reports required by the FCC or other governmental entities.

 

(e) The Owner will have the full and unrestricted right to reject, delete and
not broadcast any material contained in any part of the programming selected
and/or scheduled by the Broker which the Owner in good faith determines would be
contrary to law, the public interest or the standards set forth on Exhibit B.
The Owner will retain ultimate control over the Stations’ policies and
standards, and, in that regard, has adopted the written standards attached as
Exhibit B, for the acceptance of programming material and commercial
announcements. The Broker hereby covenants, warrants and represents that with
regard to the Stations it will, at all times during the Term, comply in all
material respects with such standards for acceptance of programming material and
commercial announcements.

 

10. Special Programs. The Owner reserves the right, in good faith, to preempt
the Broker’s programs for the Stations to broadcast special programs on occasion
concerning issues or events of local, regional or national importance in the
event that the Broker does not broadcast the same on its own initiative or in
the event that the Owner reasonably determines in good faith that the amount of
the Broker’s coverage of such issues or events is inadequate; provided that in
all such cases the Owner will use its best efforts to give the Broker reasonable
notice of the Owner’s intention to preempt programs scheduled by the Broker.

 

11. Stations Identification. The Owner will be responsible for the proper
broadcast of FCC-required station identification announcements on the Stations.
The Broker, while conducting its activities with regard to the Stations pursuant
to this Agreement, will broadcast all required station identification
announcements in form and content approved by the Owner with respect to the
Stations in full compliance with FCC rules and published policies.

 

12. Station Facilities.

 

(a) Operation of the Stations. The Owner agrees that the Stations will be
operated throughout the Term in all material respects in accordance with the
authorizations issued by the FCC and all applicable FCC rules and published
policies. During the Term, the Owner will make the Stations available to the
Broker for program transmissions, at least at ninety five percent (95%) of the
Stations’ currently authorized effective radiated power, for the entire time
that the Stations are on the air, except for downtime occasioned by required
maintenance and other interruptions contemplated by Section 12(b) and events
described in Section 16. Any routine or non-emergency maintenance work affecting
operation of the Stations at full power will be scheduled with at least
forty-eight (48) hours prior notice to the Broker, and, to the extent possible,
will not take place during a rating period; and, to the extent possible, the
Owner will cause such maintenance work to be performed between the hours of 1:00
AM and 6:00 AM, local time.

 

(b) Interruption of Normal Operations. If the Stations suffer any loss or damage
of any nature to their transmission or studio facilities which results in the
interruption of service or the inability of the Stations to operate with their
maximum authorized facilities, the

 

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Owner will immediately notify the Broker of such loss or damage and the Owner
will undertake such repairs as are necessary to restore full-time operation of
the Stations with their maximum authorized facilities as expeditiously as
possible following the occurrence of any such loss or damage. If the Owner is
unable to or does not commence such repairs as soon as possible, then the Broker
may undertake such repairs at its own expense.

 

(c) Studio Location. The Owner will maintain main studio facilities, within the
Stations’ principal community contours and in accordance with the FCC’s rules
and published policies, and will staff said main studios consistent with the
FCC’s rules and published policies.

 

13. Political Advertising. The Owner will be responsible ultimately for
compliance with the political broadcasting requirements of the Communications
Act and the FCC’s rules and published policies promulgated thereunder. The
Broker, under the supervision and review of the Owner, will prepare and
distribute appropriate political disclosure statements for the Stations and the
Owner and the Broker will jointly determine the Stations’ lowest unit charge for
the sale of advertising and program time to legally qualified candidates. The
Broker, while conducting its activities with regard to the Stations pursuant to
this Agreement, will comply with said political broadcasting requirements, rules
and published policies. The Broker promptly will supply to the Owner such
information as may be reasonably necessary to permit the Owner to verify
compliance with the requirements of Section 315 of the Communications Act. To
the extent that the Owner believes necessary in the Owner’s sole discretion, the
Broker will release advertising availabilities and program time as required by
the FCC’s rules and published policies to permit the Stations to comply with the
reasonable access provisions of Section 312(a)(7) of the Communications Act and
the equal opportunities provision of Section 315 of the Communications Act and
the rules and published policies of the FCC promulgated thereunder.

 

14. Children’s Programming. The Owner will be ultimately responsible for
insuring the Stations’ compliance with the Children’s Television Act of 1990 [47
U.S.C. 303a and 303b], and the rules and published policies of the FCC
promulgated thereunder, including ensuring that the Stations comply with the
commercial limits established therein and serve the educational and
informational needs of children. The Broker, while conducting its activities
with regard to the Stations pursuant to this Agreement, will comply with said
Children’s Television Act and FCC rules and published policies by presenting a
reasonable amount of children’s programming, including educational/informational
programming, but in any event no less than three (3) hours per week of “core”
children’s programming between the hours of 7:00 AM and 10:00 PM, and by
strictly observing the limitations on advertising content and amount. The
Broker, under the supervision and review of the Owner, will be responsible for
preparing all necessary reports and certifications and for placement of the same
in the Stations’ public inspection files. Upon delivery of such reports and
certifications, they will be certified by the Broker as true and correct in all
material respects. Such reports and certifications will include the following:
(a) a quarterly report on children’s programming pursuant to Section
73.3526(e)(11)(iii) of the FCC’s rules; and (b) a certificate with respect to
compliance with advertising limits in children’s programs pursuant to Section
73.3526(e)(11)(ii) of the FCC’s rules. Such advertising certification will be in
the form of the attached Exhibit C. In completing each such quarterly
certificate, the Broker will list the titles of all children’s programs carried
on

 

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the Stations in the past quarter in which the advertising limits apply, both
local and network, all program segments during which the allowed commercial
limits were exceeded, and a separate memo explaining why any excesses occurred.
In carrying out its obligations with respect to children’s programming, the
Broker will further maintain records with respect to commercial matter in
children’s programming either in the form of logs of programs reflecting the
commercial time, tapes of the programs, lists of commercial minutes aired in
identified children’s programs, or appropriate certificates from networks and
syndicators with respect to compliance with the FCC’s requirements on commercial
limits.

 

15. The Owner’s Responsibility For Compliance with FCC Technical Rules. The
Owner will employ a Chief Engineer who will be responsible for maintaining the
Stations’ transmission facilities. The Owner will employ a Chief Operator, as
that term is defined by the rules and published policies of the FCC (who may
also hold the position of Chief Engineer), who will be responsible for ensuring
compliance by the Stations with the technical operating and reporting
requirements established by the FCC.

 

16. Force Majeure. Each party will carry standard property and casualty
insurance for the property and equipment it owns. The Owner’s policy(ies) for
such coverage will have an aggregate policy limit that is not less than the
aggregate limit of the policy(ies) normally maintained by the Owner for such
property and equipment prior to the date hereof. If any failure or impairment of
facilities or any delay or interruption in the broadcast of programs, or failure
at any time to furnish facilities, in whole or in part, for broadcast, occurs
due to causes beyond the control of the Owner, then such failure, impairment,
delay or interruption, by itself, will not constitute a breach of or an event of
default under this Agreement and the Owner will not be liable to the Broker for
any such failure, impairment, delay or interruption so long as (if the Owner
elects to remedy such failure, impairment, delay or interruption) the Owner
undertakes and continues reasonable efforts to remedy any such failure,
impairment, delay or interruption by returning the Stations to its condition
prior to such damage. Promptly thereafter, if the Owner elects to do so by
written notice to the Broker, the Owner will obtain any applicable insurance
proceeds and apply such proceeds to the cost of remedying such failure,
impairment, delay or interruption; provided that, if the Owner determines that
it will not do so, then the Owner will give the Broker prompt written notice of
such determination. If the Owner elects not to remedy such failure, impairment,
delay or interruption (or if the Owner makes no election prior to the tenth
(10th) day after such failure, impairment, delay or interruption occurs), then
the Broker may elect to obtain such insurance proceeds and effect such remedy by
giving the Owner written notice to that effect.

 

17. Trade Secrets and Proprietary Information. In the event that: (a) any trade
secrets or other proprietary information of the Broker in connection with this
Agreement becomes known to the Owner, and (b) such trade secrets and or
proprietary information are not otherwise available in the public domain or
known publicly, the Owner agrees to maintain the confidentiality of such trade
secrets and/or proprietary information and not to use or disclose any such trade
secrets and/or proprietary information without the prior written consent of the
Broker (except as required by law, rule or regulation, or by order of any
government agency or court). In the event that: (i) any trade secrets or other
proprietary information of the Owner in connection with this Agreement become
known to the Broker, and (ii) such trade secrets and/or proprietary information
are not otherwise available in the public domain or known publicly, prior

 

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to the Closing the Broker agrees to maintain the confidentiality of such trade
secrets and/or proprietary information and not to use or disclose any such trade
secrets and/or proprietary information without the prior written consent of the
Owner (except as required by law, rule or regulation, or by order of any
government agency or court). The provisions of this Section 17 will survive any
termination of this Agreement.

 

18. Payola and Conflicts of Interest. Each of the Broker and the Owner agrees
not to, and to use reasonable efforts to cause its employees who have the
ability to cause the broadcast of programs and/or commercial matter on the
Stations not to, accept any consideration, compensation or gift or gratuity of
any kind whatsoever, regardless of its value or form, including a commission,
discount, bonus, material, supplies or other merchandise, services or labor
(collectively, “Consideration”), whether or not pursuant to written contracts or
agreements between the Broker, the Owner and merchants or advertisers, in
consideration for the broadcast of any matter on the Stations unless the payor
is identified, in the broadcast for which Consideration was provided, as having
paid for or furnished such Consideration, in accordance with Sections 317 and
507 of the Communications Act [47 U.S.C. §§ 317 and 508] and the FCC’s rules and
published policies. The Broker agrees to execute, and, as a condition of each
such employee’s employment, to cause each of the Broker’s employees to execute,
at least once every calendar year, a payola/conflict of interest affidavit in
the form of the attached Exhibit D, and the Broker agrees to deliver the
originals of all such affidavits to the Owner as expeditiously as possible
following their execution.

 

19. The Broker’s Compliance with Law. The Broker agrees that, throughout the
Term, the Broker will comply with all laws, rules, regulations and policies
applicable to the functions performed by it in connection with the Stations,
including meeting equal employment opportunity requirements with respect to the
Broker’s employees performing duties in connection with the Stations.

 

20. Indemnification.

 

(a) The Broker’s Indemnification of the Owner. The Broker will indemnify and
hold the Owner and the Owner’s employees, agents and contractors harmless,
including, without limitation, in respect of reasonable attorney’s fees, from
and against all liability, claims, damages and causes of action (“Losses”)
arising out of or resulting from acts or omissions of the Broker involving: (i)
libel and slander; (ii) infringement of trade marks, service marks or trade
names; (iii) violations of law, rules, regulations, or orders (including the
FCC’s rules and published policies); (iv) invasion of rights of privacy or
infringement of copyrights or other proprietary rights; (v) breaches of this
Agreement; (vi) the broadcast of programming furnished by Broker, or (vii)
Broker’s sale of advertising and the operation of Broker’s business relating to
the Stations. The Broker’s obligation to indemnify and hold the Owner and the
Owner’s employees, agents and contractors harmless against the Losses specified
above will survive any termination of this Agreement.

 

(b) The Owner’s Indemnification of the Broker. The Owner will indemnify and hold
the Broker and the Broker’s employees, agents and contractors harmless,
including, without limitation, in respect of reasonable attorney’s fees, from
and against all Losses arising out of or resulting from acts or omissions of the
Owner involving: (i) libel and slander; (ii)

 

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infringement of trademarks, service marks or trade names; (iii) violations of
law, rules or regulations (including the FCC’s rules and published policies);
(iv) invasion of rights of privacy or infringement of copyrights and other
proprietary rights; (v) the broadcast of programming furnished by the Owner;
(vi) the operation of the Owner’s business relating to the Stations; or (vii)
breaches of this Agreement. The Owner’s obligation to indemnify and hold the
Broker and the Broker’s employees, agents and contractors harmless against
Losses specified above will survive any termination of this Agreement.

 

(c) Indemnification Procedures. The procedures for making a claim for
indemnification under Section 20(a) or 20(b) and defending and settling any
related third-party claim related hereto will be identical to those set forth in
Section 9.5 of the Purchase Agreement as if set forth herein, mutatis mutandis.

 

(d) Insurance. The Broker and the Owner each will maintain broadcasters’
liability insurance policies covering libel, slander, invasion of privacy and
the like, general liability, blanket crime, property damage, business
interruption, automobile liability, and workers’ compensation insurance in forms
and amounts customary in the television broadcast industry (to the extent
commercially reasonable, for example, neither party shall be required to get
insurance specifically with respect to property it does not own), and each of
the parties hereto will name the other as an additional insured under such
policies to the extent that their respective interests may appear and will
provide for notice to the other party prior to cancellation thereof. Upon
request, each party will provide the other with certificates evidencing such
insurance, and will further provide certificates evidencing renewal thereof
prior to the expiration of such policies.

 

21. Termination.

 

(a) Termination Upon Closing. Except to the extent otherwise provided in this
Agreement, this Agreement will terminate effective upon the Closing or the
earlier termination of the Purchase Agreement.

 

(b) Termination Upon Order of Governmental Authority. A “Governmental
Termination Event” will occur if any court or federal, state or local government
authority (including the FCC) orders or takes any action which becomes effective
and which requires the termination or material curtailment of the Broker’s
activities with respect to the Stations pursuant to this Agreement; provided
that such order or action will no longer constitute a Governmental Termination
Event if such action or order is subsequently stayed or ceases to be effective.
If any court or federal, state or local government authority announces or takes
any other action or proposed action which could result in a Governmental
Termination Event, then either the Broker or the Owner may seek administrative
or judicial relief therefrom (in which event the other of them will cooperate
with such effort in any reasonable manner requested) and consult with such
agency and its staff concerning such matters and, in the event that this
Agreement is not terminated, use their reasonable best efforts and negotiate in
good faith a modification to this Agreement which would obviate any such
questions as to validity while preserving, to the extent possible, the intent of
the parties and the economic and other benefits of this Agreement and the
Purchase Agreement and the portions thereof the validity of which are called
into question. If the FCC designates the license renewal application of the
Stations for a hearing as a consequence

 

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of this Agreement or for any other reason, or initiates any revocation or other
proceeding with respect to the authorizations issued to the Owner for the
operation of the Stations, then the Owner and the Broker will each use diligent,
reasonable efforts to contest such action and will each be responsible for its
own expenses incurred as a consequence of such FCC proceeding. The Broker will
cooperate and comply with any reasonable request of the Owner to assemble and
provide to the FCC information relating to the Broker’s performance under this
Agreement. In the event of termination of the Broker’s activities with respect
to the Stations pursuant to this Agreement as a result of any Governmental
Termination Event, the Owner will cooperate reasonably with the Broker to the
extent permitted to enable the Broker to fulfill advertising or other
programming contracts then outstanding. If a Governmental Termination Event
occurs, then the Term will continue until the date upon which the activities of
the Broker and the Owner are required to be ceased, as mandated by the agency or
authority which brought about such Governmental Termination Event.

 

(c) Material Breach. Each party hereto shall have the right to terminate this
Agreement if the other party hereto is in material breach of this Agreement and
such breach remains uncured for at least ten (10) days after the terminating
party has given written notice of such breach to the breaching party; provided
that such right to terminate shall only be in effect during the continuation of
such breach.

 

(d) Effect of Termination. Upon termination of this Agreement, the Monthly Costs
shall be prorated to the effective termination date of this Agreement.

 

22. Authorizations. The Owner owns or holds all material licenses and other
permits and authorizations reasonably necessary for the operation of the
Stations (including licenses, permits and authorizations issued by the FCC), and
neither the Owner nor the Broker (including their affiliates, principals,
employees and agents) will take any action to impair such licenses, permits and
authorizations.

 

23. Advanced Television/High Definition Television.

 

(a) KPOM-DT. The parties acknowledge that, as of the date hereof, KPOM-DT is
operating with facilities less than those authorized in Construction Permit
BPCDT-19991028AEE (the “KPOM-DT CP”) but as authorized by Special Temporary
Authority BEDSTA-20030701CQW (the “KPOM-DT STA”). The KPOM-DT STA expires on
January 17, 2004 and Owner shall file timely extension requests with the FCC as
necessary prior to the Closing. By virtue of being on the air pursuant to the
KPOM-DT STA, the Station is considered to have met the FCC’s May 2002 deadline
for completion of construction of the KPOM-DT CP and said construction permit is
thereby extended until further notice by the FCC.

 

(b) KFAA-DT. The parties acknowledge that, as of the date hereof, the KFAA-DT
facilities authorized by Construction Permit BMPCDT-20021112ABG (the “KFAA-DT
CP”) have not been constructed and an application for extension of time to
construct digital television facilities (File No. BEPCDT-203512ADY) (the
“KFAA-DT Facilities”) is pending before the FCC.

 

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(c) The Owner will proceed with the timely construction of the KFAA-DT
Facilities such that construction is completed within a time frame to which the
Owner and the Broker will subsequently agree or, at the latest, in compliance
with the FCC’s rules for the construction of such KFAA-DT Facilities. All
reasonable fees and expenses (the “DTV Fees”) related to the construction of the
KFAA-DT Facilities will be subject to reimbursement by the Broker pursuant to
the attached Exhibit A; provided that if the Purchase Agreement is terminated
prior to the Closing, the Owner will promptly reimburse the Broker for all DTV
Fees and other amounts expended by the Owner with respect to the KFAA-DT
Facilities, if any, previously reimbursed to the Owner by the Broker.

 

(d) To the extent that the Stations’ digital television channels (the “DTV
Channels”) are operational prior to the Closing, the Broker will have the right
to utilize the DTV Channels and the DTV facilities under the terms and
conditions set forth in this Agreement for the use of the Stations. If the FCC
assesses the Owner any spectrum fees or other charges for the Broker’s use of
the DTV Channels, such FCC fees or other charges will be subject to
reimbursement by Broker pursuant to the attached Exhibit A.

 

24. Notices. All communications or notices required or permitted by this
Agreement shall be in writing and shall be deemed to have been given (i) on the
date of personal delivery to an officer of the other party, or (ii) if sent by
telecopy or facsimile machine to the number shown below, on the date of such
confirmed facsimile or telecopy transmission, or (iii) when properly deposited
for delivery by commercial overnight delivery service, prepaid, or by deposit in
the United States mail, certified or registered mail, postage prepaid, return
receipt requested, the date that is two days after the date set forth in the
records of such delivery service or on the return receipt and addressed as
follows unless and until either of such parties notifies the other in accordance
with this Section of a change of address or change of telecopy number:

 

If to the Owner:

 

                    JDG Television, Inc.

                    111 South Cherokee

                    Muskogee, OK 74402

                    Attention: Mr. John Griffin

                    Telecopy No. (918) 687-1571

 

with a copy (which will not constitute notice to the Owner) to:

 

                    McAfee & Tafat

                    Tenth Floor, Two Leadership Square

                    Oklahoma City, OK 73102-7103

                    Attention: Robert L. Garbrecht, Esquire

                    Telecopy No. (405) 235-0439

 

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If to the Broker:

 

                    Nexstar Broadcasting Group, L.L.C.

                    909 Lake Carolyn Parkway

                    Suite 1450

                    Irving, TX 75039

                    Attention: Perry Sook, President & CEO

                    Telecopy No. (972) 373-8888

 

with a copy (which will not constitute notice to Broker) to:

 

                    Kirkland & Ellis

                    153 East 53rd Street

                    New York, NY 10022

                    Attention: John L. Kuehn, Esquire

                    Telecopy No. (212) 446-4900

 

25. Modification and Waiver. No amendment, supplement or modification of any
provision of this Agreement will be effective unless the same will be in writing
and signed by the party against whom enforcement of any such amendment,
supplement or modification is sought, and then such amendment, supplement or
modification will be effective only in the specific instance and for the purpose
for which given.

 

26. Construction. This Agreement will be governed by and construed in accordance
with the domestic laws of the State of Arkansas, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
Arkansas or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Arkansas.

 

27. Headings; Interpretation. The headings in this Agreement are included for
ease of reference only and will not control or affect the meaning or
construction of the provisions of this Agreement. As used in this Agreement,
“including,” “includes” and the like are not intended to confer any limitation.

 

28. Assignment. This Agreement may not be assigned by either party without the
express written approval of the other party. However, the prior approval of the
Owner is not required for any assignment by the Broker to an affiliate of the
Broker. Where appropriate in the context and consistent with this provision, the
term “Broker” as used herein will mean and include such assignee.

 

29. Counterparts. This Agreement may be signed in any number of counterparts
with the same effect as if the signature(s) on each such counterpart were upon
the same instrument. This Agreement will be effective as of the date first above
written.

 

30. Entire Agreement. This Agreement and the Purchase Agreement, and the
documents referred to herein and therein contain the entire agreement between
the parties with respect to the subject matter of this Agreement, and supersede
any prior understandings, agreements or representations by or between the
parties, written or oral, which may have related to the subject matter hereof in
any way.

 

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31. No Partnership or Joint Venture Created. Nothing in this Agreement will be
construed to create a partnership or joint venture between the Owner and the
Broker or to afford any rights to any third party other than as expressly
provided herein. Neither the Owner nor the Broker will have any authority to
create or assume in the name or on behalf of the other party any obligation,
express or implied, or to act or purport to act as the agent or legally
empowered representative of the other party hereto for any purpose.

 

32. Severability. Whenever possible each provision of this Agreement will be
interpreted so as to be effective and valid under applicable law. Subject to the
provisions of Section 21(b), if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating or otherwise affecting the remainder or such provision or the
remaining provisions of this Agreement.

 

33. Legal Effect. This Agreement will be binding upon and will inure to the
benefit of the parties hereto, their heirs, executors, personal representatives,
successors and assigns.

 

34. No Party Deemed Drafter. No party will be deemed the drafter of this
Agreement and if this Agreement is construed by a court of law such court should
not construe this Agreement or any provision against any party as its drafter.

 

*                    *                     *                    *

 

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IN WITNESS WHEREOF, the parties hereto have executed this Time Brokerage

 

Agreement to be effective as of the date above written.

 

JDG TELEVISION, INC.

By:

 

/S/    JOHN W. GRIFFIN

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Name:

 

John W. Griffin

Title:

 

President

NEXSTAR FINANCE, L.L.C.

By:

 

/S/    PERRY SOOK

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Name:

 

Perry Sook

Title:

 

President

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EXHIBIT A

 

Reimbursement of Expenses

 

A. For each calendar month during the Term, the Broker shall pay the Owner a
monthly fee of $75,000 (the “Monthly Fee”); provided that the Broker shall not
pay the Monthly Fee, or any portion thereof, with respect to the month of
October 2003. The Monthly Fee with respect to November 2003 shall be due and
payable on November 3, 2003 and the Monthly Fee with respect to each following
calendar month during the Term shall be due and payable on the first business
day of such calendar month; provided that for any calendar month during which
this Agreement is not in force for the entire month (other than October 2003),
the Monthly Fee shall be prorated accordingly.

 

B. In addition to the Monthly Fee, at the conclusion of each calendar month
during the Term, the Broker will pay the Owner an amount equal to all of the
Owner’s monthly costs incurred by the Owner in the ordinary course of business
consistent with past practices in connection with its ownership and operation of
the Stations in accordance with the terms and conditions of this Agreement and
the Purchase Agreement (the “Monthly Costs”). The Monthly Costs shall be equal
to the sum of all such expenses (including, but not limited to, syndicated
programming costs, operating expenses resulting from broadcasting programming
provided by Broker, operating expenses otherwise incurred by Owner in connection
with the operation of the Stations and the performance of its obligations
hereunder (including but not limited to insurance fees, FCC fees and property
taxes), and all capital expenses reasonably incurred in making repairs or
replacements to the facilities and equipment used in producing programming and
operating the Stations, provided such capital expenses were approved in writing
by the Broker prior to being expended) for each calendar month incurred by Owner
in connection with providing air time to Broker. For the purposes of October
2003 only, the Monthly Costs shall be prorated such that 50% of the expenses
relating to the operating of the Stations in October 2003 shall be for the
account of Seller, and 50% of the expenses relating to the operation of the
Stations in October 2003 shall be for the account of Buyer. After each calendar
month during the Term, the Owner will submit to the Broker an invoice for the
Monthly Costs incurred during such month, and the amount of such costs reflected
on any such invoice to the extent not previously advanced to the Owner will be
due and payable on the fifth (5th) Business Day after the date upon which such
invoice is received.

 

C. Notwithstanding the anything in this Agreement or the Purchase Agreement to
the contrary, the Broker shall not be responsible for reimbursing the Owner for
(i) compensation paid to employees of the Owner in excess of rates approved by
the Broker, (ii) compensation paid to each employee of the Owner with respect to
whom the Broker gives two weeks prior written notice to the Owner to the effect
that the Broker no longer considers such employee necessary for the operation of
the Stations (provided that the Broker shall reimburse the Owner for regular
compensation for such employee accruing through the date which is two weeks
after such written notice is given), and (iii) severance payments to the Owner’s
employees.

 

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D. If the Broker determines that an item appearing on an invoice submitted by
the Owner is not properly payable by the Broker to the Owner under this
Agreement, then the Broker shall nonetheless timely pay to the Owner all other
items appearing on such invoice which the Broker does not object to, and the
Broker shall submit with such timely payment a written objection to the disputed
item which sets forth the specific basis for the Broker’s objection. The
Broker’s opportunity to object to an item appearing on an invoice will be lost
if the written objection of the disputed item is not provided within thirty (30)
calendar days after the date up on which the applicable invoice is received.
With respect to any item subject to a written objection timely submitted by the
Broker to the Owner, the Broker and the Owner agree to negotiate in good faith
to reach a mutually agreeable resolution within the ten (10) calendar day period
following the Owner’s receipt of such objection. If no resolution is reached
within such period, then each party may thereafter pursue its remedies as
permitted by applicable law and this Agreement.

 

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EXHIBIT B

 

The Broker agrees to cooperate with the Owner in the broadcasting of programs of
the highest possible standard of excellence and for this purpose to observe the
following regulations in the preparation, writing and broadcasting of its
programs:

 

I. Religious Programming. The subject of religion and references to particular
faiths, tenants, and customs shall be treated with respect at all times.
Programs shall not be used as a medium for attack on any faith, denomination, or
sect or upon any individual or organization.

 

II. Controversial Issues. Any discussion of controversial issues or public
importance shall be reasonably balanced with the presentation of contrasting
viewpoints in the course of overall programming; no attacks on the honesty,
integrity, or like personal qualities of any person or group of persons shall be
made during the discussion of controversial issues of public importance; and
during the course of political campaigns, programs are not to be used as a forum
for editorializing about individual candidates. If such events occur, the Owner
may require that responsive programming be aired.

 

III. No Plugola or Payola. The mention of any business activity or “plug” for
any commercial, professional, or other related endeavor, except where contained
in an actual commercial message of a sponsor, is prohibited.

 

IV. Election Procedures. At least ninety (90) days before the start of any
primary or regular election campaign, the Broker will clear with the Owner’s
respective Managers the rate Broker will charge for the time to be sold to
candidates for public office and/or their supporters to make certain that the
rate charged conforms to all applicable laws and the policy of the Stations.

 

V. Required Announcements. The Broker shall broadcast (a) an announcement in a
form satisfactory to the Owner at the beginning of each hour to identify the
Stations, (b) an announcement at the beginning and end of each broadcast day, to
indicate that program time has been purchased by the Broker, and (c) any other
announcement that may be required by law, regulation, or the policy of the
Stations.

 

VI. Credit Terms Advertising. Pursuant to rules of the Federal Trade Commission,
any advertising of credit terms shall be made over the Stations in accordance
with all applicable federal and state laws, including Regulations Z and M.

 

VII. Commercial Record Keeping. No commercial messages (“plugs”) or undue
references shall be made in programming presented over the Stations to any
business venture, profit making activity, or other interest (other than
noncommercial announcements for bona fide charities, church activities, or other
public service activities) in which the Broker is directly or indirectly
interested without the same having been approved in advance by the Owner’s
General Manager and such broadcast being announced and logged as sponsored.

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VIII. No Illegal Announcements. No announcements or promotion prohibited by
federal or state law or regulation of any lottery or game shall be made over the
Stations. Any game, contest, or promotion relating to or to be presented over
the Stations must be fully stated and explained in advance to the Owner, which
reserves the right in its sole discretion to reject any game, contest, or
promotion.

 

IX. Owner’s Discretion Paramount. In accordance with the Owner’s responsibility
under the Communications Act of 1934, as amended, and the rules and regulations
of the Federal Communications Commission, the Owner reserves the right to reject
or terminate any advertising proposed to be presented or being presented over
the Stations which is in conflict with the policy of the Stations or which in
the reasonable judgment of the Owner or its respective Managers would not serve
the public interest.

 

X. Programming in Which Broker has a Financial Interest. The Broker shall advise
the respective Managers of the Stations with respect to any programming
(including commercial(s)) concerning goods or services in which the Broker has a
material financial interest. Any announcements for such goods and services shall
clearly identify the Broker’s financial interest.

 

XI. Programming Prohibitions. The Broker shall not broadcast any of the
following programs or announcements:

 

A. False Claims. False or unwarranted claims for any product or service.

 

B. Unfair Imitation. Infringements of another person’s rights through plagiarism
or unfair imitation or either program idea or copy, or any other unfair
competition.

 

C. Commercial Disparagement. Any disparagement of competitors or competitive
goods.

 

D. Profanity. Any programs or announcements that are obscene, profane, vulgar,
repulsive or offensive, either in theme or treatment.

 

E. Indecency. Any program containing “indecent matter” shall not be broadcast
outside the “safe harbor” time, as those terms are defined by the FCC.

 

F. Slander. Any slanderous statements.

 

G. Unauthenticated Testimonials. Any testimonials which cannot be authenticated.

 

H. Descriptions of Bodily Functions. Any continuity which describes in a
repellent manner internal bodily functions or symptomatic results or internal
disturbances, and no reference to matters which are not considered acceptable
topics in social groups.

 

I. Conflict Advertising. Any advertising matter or announcement which may, in
the reasonable opinion of the Owner, be injurious or prejudicial to the
interests of the public, the Stations, or honest advertising and reputable
business in general.

 

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J. Fraudulent or Misleading Advertisement. Any advertisement matter,
announcement, or claim which Broker knows to be fraudulent, misleading, or
untrue.

 

Owner may waive any of the foregoing regulations in specific instances if, in
its reasonable opinion, good broadcasting in the public interest will be served
thereby.

 

In any case where questions of policy or interpretation arise, Broker shall
submit the same to Owner for decision before making any commitments in
connection therewith.

 

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EXHIBIT C

 

CERTIFICATE REGARDING COMMERCIAL LIMITS IN

CHILDREN’S TELEVISION PROGRAMMING

 

                                 (“Broker”) hereby certifies to
                                                  (“Owner”) that, with respect
to the children’s programs provided by Broker which were broadcast on
                                 (the “Stations”) during the                 
quarter of 200     (ending                     ) to which the commercial limits
set forth in 47 C. F. R. Section 73.670 of the FCC’s rules apply:

 

1. the amount of commercial matter aired during such children’s programs was in
compliance with the commercial limits.

 

2. the amount of commercial matter aired during such children’s programs was in
compliance with such commercial limits, except for the program segments listed
below which exceeded the allowed commercial limits. A separate memo explaining
why any excesses occurred is also attached.

 

[Broker]

By:

 

 

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Name:

 

 

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Title:

 

 

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EXHIBIT D

 

County of                             

 

State of                                 

 

ANTI-PAYOLA/PLUGOLA AFFIDAVIT

 

(Name)                , being first duly sworn, deposes and says as follows:

 

1. I am      (Position)      for [Broker] (“Broker”).

 

2. I have acted in the above capacity since (date) .

 

3. No matter has been broadcast by Stations(s) for which service, money or other
valuable consideration has been directly or indirectly paid, or promised to, or
charged, or accepted, by me from any person, which matter at the time so
broadcast has not been announced or otherwise indicated as paid for or furnished
by such person.

 

4. So far as I am aware, no matter has been broadcast by Stations(s) for which
service, money, or other valuable consideration has been directly or indirectly
paid, or promised to, or charged, or accepted by Stations(s) by the Broker, or
by any independent contractor engaged by the Broker in furnishing programs, from
any person, which matter at the time so broadcast has not been announced or
otherwise indicated as paid for or furnished by such person.

 

5. In the future, I will not pay, promise to pay, request, or receive any
service, money, or any other valuable consideration, direct or indirect, from a
third-party, in exchange for the influencing of, or the attempt to influence,
the preparation or presentation of broadcast matter on Stations(s).

 

6. Except as may be reflected in paragraph 7 hereof, neither I, my spouse nor
any member of my immediate family has any present direct or indirect ownership
interest in any entity engaged in the following business or activities (other
than an investment in a corporation whose stock is publicly held), serves as an
officer or director of, whether with or without compensation, or serves as an
employee of, any entity engaged in the following business or activities:

 

1. The publishing of music;

 

2. The production, distribution (including wholesale and retail sales outlets),
manufacture or exploitation of music, films, tapes, recordings or electrical
transcriptions of any program material intended for radio broadcast use;

 

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3. The exploitation, promotion, or management of persons rendering artistic,
production and/or other services in the entertainment field;

 

4. The ownership or operation of one or more radio or television Stations;

 

5. The wholesale or retail sale of records intended for public purchase;

 

6. The sale of advertising time other than on Stations(s) or any other Stations
owned by the Broker.

 

7. A full disclosure of any such interest referred to in paragraph 6, above, is
as follows:

 

 

    

 

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Affiant

 

Subscribed and sworn to before me

 

this              day of                     , 200    .

 

  

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Notary Public

 

My commission expires:                     

 

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