Exhibit 10.48

 

 

ASSET PURCHASE AGREEMENT

 

DATED NOVEMBER 12, 2004

 

AMONG

 

KSMO, INC.,

KSMO LICENSEE, INC.

 

AND

 

MEREDITH CORPORATION

 

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ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of November 12,
2004, by and among KSMO, Inc., a Maryland corporation (the “Non-License
Seller”), KSMO Licensee, Inc., a Delaware corporation (the “License Seller”)
(each a “Seller” and collectively “Sellers”), and Meredith Corporation, an Iowa
corporation (“Buyer”).

 

R E C I T A L S

 

A.            The License Seller owns those licenses, permits, and
authorizations issued by the FCC, together with certain related assets relating
to television broadcast station KSMO-TV in Kansas City, Missouri, including
digital television station KSMO-DT (collectively, the “Station”).

 

B.            The Non-License Seller owns all of the assets of the Station,
other than the assets owned by License Seller.

 

C.            Sellers desire to sell, and Buyer desires to purchase,
substantially all of the assets of the Station other than the Excluded Assets on
the terms and conditions hereinafter set forth.

 

AGREEMENTS

 

IN CONSIDERATION OF THE ABOVE RECITALS and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:

 

SECTION 1
CERTAIN DEFINITIONS

 

1.1.          Terms Defined in this Section.  The following terms, as used in
this Agreement, have the meanings set forth in this Section.

 

“Accounts Receivable” means the rights of Sellers as of the First Closing Date
to payment for the sale of advertising time and other goods and services
provided by the Station prior to the First Closing Date.

 

“Action” means for any Person, any action, counterclaim, suit, litigation,
arbitration, governmental investigation, or other legal, administrative, or Tax
proceeding, Judgment, complaint, or claim by or against such Person, excluding
any litigation affecting the television broadcasting industry generally in which
such Person is not a named party, and any rule-making proceedings.

 

“Affiliate” means, with respect to any Person, (a) any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person, or (b) an officer or
director of such Person or of an Affiliate of such

 

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Person within the meaning of clause (a) of this definition.  For purposes of
clause (a) of this definition, (i) a Person shall be deemed to control another
Person if such Person (A) has sufficient power to enable such Person to elect a
majority of the board of directors of such Person, or (B) owns a majority of the
beneficial interests in income and capital of such Person, and (ii) a Person
shall be deemed to control any partnership of which such Person is a general
partner.

 

“Assets” means the assets to be transferred or otherwise conveyed by Sellers to
Buyer under this Agreement as specified in Section 2.1.

 

“Assumed Contracts” means (a) all Contracts listed on Schedule 3.5 and/or
Schedule 3.7; (b) Contracts entered into prior to the date of this Agreement
with advertisers for the sale of advertising time or production services for
cash at rates consistent with past practices; (c) Contracts entered into prior
to the date of this Agreement which are not required to be included on Schedule
3.7 hereto; and (d) any Contracts entered into by Sellers between the date of
this Agreement and the License Closing Date (i) as permitted by Section 5.2(g)
hereof and/or (ii) that Buyer agrees in writing to assume.

 

“Business Day” means any day of the year on which banks are not required or
authorized to be closed in the State of New York.

 

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

 

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

 

“Consents” means the consents, permits, or approvals of government authorities
and other third parties necessary to transfer the Assets to Buyer or otherwise
to consummate the transactions contemplated by this Agreement.

 

“Consent-Pending Contract” means a Contract designated to be (i) a FC Assumed
Contract by Buyer regarding which Sellers shall be unable to obtain a necessary
third-party Consent to the assignment thereof to Buyer within sixty (60) days
after the designation of such Contract as a FC Assumed Contract; or (ii) a LC
Assumed Contract regarding which Sellers shall be unable to obtain on or prior
to the License Closing Date a necessary third-party Consent to the assignment
thereof to Buyer upon the License Closing.

 

“Contracts” means all contracts, consulting agreements, leases, non-governmental
licenses, and other agreements (including leases for personal or real property
and employment agreements), written or oral (including any amendments and other
modifications thereto), to which either Seller is a party or that are binding
upon either Seller that relate to or affect the Assets or the business or
operations of the Station and that are in effect on the date of this Agreement
or are entered into by either Seller subsequent to the date hereof pursuant to
the terms hereof.

 

“Effective Time” means 12:01 a.m., Eastern Standard Time, on the date of this
Agreement.

 

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

 

“Excluded Assets” means those items set forth in Sections 2.2(a) through 2.2(n).

 

“FC Assumed Contracts” means the Assumed Contracts assigned by Sellers to Buyer,
subject to the receipt of any necessary third-party Consents, pursuant to the
Assignment and Assumptions Agreement entered into between Buyer and Sellers at
the First Closing.

 

“FCC” means the Federal Communications Commission.

 

“FCC Consent” means action by the FCC granting its consent to the assignment of
the FCC Licenses by License Seller to Buyer as contemplated by this Agreement.

 

“FCC Effective Time” means 12:01 a.m. Eastern Standard Time on the License
Closing Date.

 

“FCC Licenses” means those licenses, permits, and authorizations issued by the
FCC to License Seller in connection with the business and operations of the
Station.

 

“Final Order” means FCC Consent that has not been reversed, stayed, enjoined,
set aside, annulled, or suspended, and with respect to which no requests are
pending for administrative or judicial review, reconsideration, appeal, or stay,
and the time for filing any such request and the time for the FCC to set aside
the action on its own motion have expired.

 

“First Closing” means the consummation of the sale and acquisition of the Assets
(other than the License Assets) pursuant to this Agreement in accordance with
the provisions of Section 7.1.

 

“Governmental Authority” means any court or any federal, state, county, local or
foreign governmental, legislative, or regulatory body, agency, department,
authority, instrumentality, or other subdivision thereof, including the FCC.

 

“Hazardous Material” means any pollutant, contaminant, hazardous or toxic
substance, material, constituent or waste or any pollutant that is labeled or
regulated as such by any Governmental Authority pursuant to any Legal
Requirements concerning the environment, public health and safety, and employee
health and safety.

 

“Intangibles” means all copyrights, trademarks, trade names, service marks,
service names, licenses, patents, permits, jingles, proprietary information,
technical information and data, machinery and equipment warranties, trade
secrets, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Sellers or under which Sellers are licensed or franchised and that are used
in the business and operations of the Station, together with any additions
thereto between the date of this Agreement and the License Closing Date.

 

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“Judgment” means any judgment, writ, order, injunction, determination, award, or
decree of or by any court, judge, justice, or magistrate, including any
bankruptcy court or judge, and any order by any Governmental Authority.

 

“Knowledge” or any derivative thereof with respect to the Sellers means the
actual knowledge of the President, the Chief Financial Officer or the General
Counsel of SBG, or the general manager or main engineer of the Station, after
reasonable inquiry by each person within his area of responsibility.

 

“LC Assumed Contracts” means all of the Assumed Contracts that are not FC
Assumed Contracts, excluding any Assumed Contract that between the date hereof
and the License Closing (i) shall have expired in accordance with its terms upon
the expiration of the full term thereof, and (ii) shall be excluded from FC
Assumed Contracts with the mutual agreement of Buyer and Sellers (such consent
to be given or withheld by either party in such party’s sole discretion).

 

“Legal Requirement” means any statute, ordinance, code, law, rule, regulation,
permit or permit condition, Judgment, or any other requirement, standard, or
procedure enacted, adopted, or applied by any Governmental Authority.

 

“License Assets” means the assets described in Section 2.1(b), but excluding the
Excluded Assets.

 

“License Closing” means the consummation of the sale and acquisition of the
License Assets pursuant to this Agreement in accordance with the provisions of
Section 7.1(b).

 

“License Closing Date” means the date on which the License Closing occurs as
determined pursuant to Section 7.1(b).

 

“Licenses” means all licenses, permits, construction permits, and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to Sellers currently in
effect and used in connection with the conduct of the business or operations of
the Station, together with any additions thereto, between the date of this
Agreement and the License Closing Date.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge, or security interest in or on such
asset, and (b) the title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset.

 

“Material Adverse Effect” means a material adverse effect on the business,
assets, or condition (financial or otherwise) of the Station taken as a whole,
except for any such material adverse effect resulting from (a) general economic
conditions applicable to the television broadcast industry, (b) general
conditions in the markets in which the Station operates, or (c) circumstances
that are not likely to recur and which circumstances (as well as any
consequences thereof) have been substantially remedied.

 

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“Material Contract” means each Assumed Contract (i) that is designated on
Schedules 3.5 or 3.7, as a “Material Contract,” or (ii) that is entered into by
Sellers between the date of this Agreement and the License Closing Date that
requires a third-party Consent for Sellers to assign to Buyer if the failure to
obtain such Consent could reasonably be expected to have a Material Adverse
Effect.

 

“Non-License Assets” means the assets described in Section 2.1(a), but excluding
the Excluded Assets.

 

“Permitted Encumbrances” means (a) encumbrances of a landlord or other statutory
lien not yet due and payable or a landlord’s liens arising in the ordinary
course of business; (b) encumbrances arising in connection with equipment or
maintenance financing or leasing under the terms of Assumed Contracts; (c)
encumbrances for taxes not yet due and payable or which are being contested in
good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on Sellers’ books in accordance with generally accepted
accounting principles; (d) encumbrances that do not materially detract from the
value of any of the Assets or materially interfere with the use thereof as
currently used; or (e) encumbrances for borrowed money which will be removed
prior to the First Closing Date.

 

“Person” means an individual, corporation, association, partnership, joint
venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.

 

“Real Property Interests” means all interests in real property, including
leaseholds and subleaseholds, purchase options, easements, licenses, rights to
access, and rights of way, and all buildings and other improvements thereto,
owned or held by Sellers that are used or held for use in the business or
operations of the Station.

 

“SBG” means Sinclair Broadcast Group, Inc.

 

“Tangible Personal Property” means all machinery, equipment, tools, vehicles,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property owned or held by Sellers that is
used or held for use in the business or operations of the Station.

 

“Tax” means any federal, state, local, or foreign income, gross receipts,
windfall profits, severance, property, production, sales, use, license, excise,
franchise, capital, transfer, employment, withholding, or other tax or
governmental assessment, together with any interest, additions, or penalties
with respect thereto, and any interest in respect of such additions or
penalties.

 

“Tax Return” means any tax return, declaration of estimated tax, tax report, or
other tax statement, or any other similar filing required to be submitted to any
governmental authority with respect to any Tax.

 

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“WB” means The WB Television Network Partners, L.P., d/b/a The WB Television
Network.

 

1.2.          Terms Defined Elsewhere in this Agreement.  For purposes of this
Agreement, the following terms have the meanings set forth in the sections
indicated:

 

Term

 

Section

 

 

 

Benefit Arrangement

 

Section 3.14(a)

 

 

 

Benefit Plans

 

Section 3.14(a)

 

 

 

Buyer

 

Preamble

 

 

 

Claimant

 

Section 9.4

 

 

 

Damages

 

Section 9.2

 

 

 

Employees

 

Section 3.14(a)

 

 

 

Environmental Laws

 

Section 3.16

 

 

 

Estimated Purchase Price

 

Section 2.4(a)

 

 

 

FCC Application

 

Section 5.1(d)

 

 

 

FCC Employees

 

Section 5.7(a)

 

 

 

Financial Statements

 

Section 3.10

 

 

 

First Closing Date

 

Section 2.1(a)

 

 

 

Indemnifying Party

 

Section 9.4

 

 

 

Station

 

Recitals

 

 

 

Lease

 

Section 5.10

 

 

 

License Price

 

Section 2.4(b)

 

 

 

License Seller

 

Preamble

 

 

 

JSA

 

Section 5.8

 

 

 

Multiemployer Plan

 

Section 3.14(a)

 

 

 

Non-License Seller

 

Preamble

 

 

 

Pension Plan

 

Section 3.14(a)

 

 

 

Purchase Price

 

Section 2.3

 

 

 

Sellers

 

Preamble

 

 

 

Station

 

Recitals

 

 

 

Transferred Employees

 

Section 5.7

 

 

 

Welfare Plan

 

Section 3.14(a)

 

1.3.          Rules of Construction.  Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender and any other number as the context requires.  As used
in this Agreement, the word “including” is

 

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not limiting, and the word “or” is not exclusive.  Except as specifically
otherwise provided in this Agreement in a particular instance, a reference to a
Section or Schedule is a reference to a Section of this Agreement or a Schedule
hereto, and the terms “hereof,” “herein,” and other like terms refer to this
Agreement as a whole, including the Schedules to this Agreement, and not solely
to any particular part of this Agreement.  The descriptive headings in this
Agreement are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.

 

SECTION 2
PURCHASE AND SALE OF ASSETS

 

2.1.          Agreement to Purchase and Sell.  The purchase and sale of the
Assets hereunder shall occur as set forth below:

 

(a)           Subject to the terms and conditions set forth in this Agreement,
the Sellers hereby agree to sell, transfer, convey, assign, and deliver to Buyer
on the date hereof (the “First Closing Date”), and Buyer agrees to acquire all
of Sellers’ right, title, and interest in the tangible and intangible assets
used in connection with the conduct of the business or operations of the
Station, but excluding the License Assets listed in Sections 2.1(b)(i) through
2.1(b)(ix) and the Excluded Assets, free and clear of any Liens (except for
Permitted Encumbrances), including the following:

 

(i)            the Tangible Personal Property;

 

(ii)           the FC Assumed Contracts;

 

(iii)          the Intangibles, including any goodwill of the Station related to
the Non-License Assets;

 

(iv)          all of the Sellers’ proprietary information, technical information
and data, machinery and equipment warranties, maps, computer discs and tapes,
plans, diagrams, blueprints, and schematics, but excluding filings with the FCC,
in each case, to the extent relating to the business and operation of the
Station;

 

(v)           all choses in action of the Sellers relating to the Station to the
extent they relate to the period after the Effective Time and do not relate to
the License Assets; and

 

(vi)          all books and records relating to the business or operations of
the Station, but excluding all records required by the FCC to be kept by the
Station.

 

(b)           Subject to the terms and conditions set forth in this Agreement,
the Sellers hereby agree to sell, transfer, convey, assign, and deliver to Buyer
on the License Closing Date, and Buyer agrees to acquire, all of Sellers’ right,
title, and interests in the tangible and intangible assets used in connection
with the conduct of the business or operations of the Station, together with any
additions thereto (as permitted hereby), between the date of this Agreement and
the

 

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License Closing Date, but excluding the Non-License Assets and the Excluded
Assets, free and clear of any Liens (except for Permitted Encumbrances),
including the following:

 

(i)            the Licenses;

 

(ii)           all filings with the FCC to the extent relating to the business
and operation of the Station;

 

(iii)          all records required by the FCC to be kept by the Station;

 

(iv)          all antennas, transmission lines, and transmission equipment;

 

(v)           the Real Property Interests;

 

(vi)          the LC Assumed Contracts;

 

(vii)         the Intangibles “KSMO,” “KSMO-TV” and “The WB 62”;

 

(viii)        any goodwill related to the License Assets; and

 

(ix)           all choses in action of the Sellers relating to the Station to
the extent they relate to the period after the FCC Effective Time and relate to
the License Assets; and

 

2.2.          Excluded Assets.  The Assets shall exclude the following:

 

(a)           Sellers’ cash, investments, cash equivalents and deposits, all
interest payable in connection with any such items and rights in and to bank
accounts marketable, and other securities of Sellers;

 

(b)           any insurance policies, promissory notes, amounts due from
employees, bonds, letters of credit, certificates of deposit, or other similar
items, and any cash surrender value in regard thereto;

 

(c)           any pension, profit-sharing, or employee benefit plans, including
all of Seller’s interest in any Welfare Plan, Pension Plan, or Benefit
Arrangement (each as defined in Section 3.14(a));

 

(d)           all Tangible Personal Property disposed of or consumed in the
ordinary course of business as permitted by this Agreement;

 

(e)           all tax returns and supporting materials, all original financial
statements and supporting materials, all books and records that Sellers are
required by law to retain, all of Sellers’ organizational documents, corporate
books, and records (including minute books and stock ledgers) and originals of
account books of original entry, all records of Sellers relating to

 

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the sale of the Assets, and all records and documents related to any assets
excluded pursuant to this Section 2.2;

 

(f)            any interest in and to any refunds of federal, state, or local
franchise, income, or other taxes for periods prior to the License Closing Date;

 

(g)           all Accounts Receivable;

 

(h)           all rights and claims of Sellers whether mature, contingent, or
otherwise, whether in tort, contract, or otherwise, against third parties
relating to the Assets or the operation of the Station prior to the First
Closing Date, or the License Assets prior to the License Closing Date;

 

(i)            any Contracts which are not Assumed Contracts;

 

(j)            all of each Sellers’ deposits and prepaid expenses; provided any
deposits and prepaid expenses shall be included in the Assets to the extent that
Sellers receive a credit therefor in the proration of the Purchase Price
pursuant to Section 2.3(a);

 

(k)           all rights of Sellers under or pursuant to this Agreement (or any
other agreements contemplated hereby);

 

(l)            all rights to the names “Sinclair,” “Sinclair Broadcast Group,”
“Sinclair Communications,” “Sinclair Television,” and any logo or variation
thereof and goodwill associated therewith;

 

(m)          any and all assets related to any television broadcast station
other than Station owned or operated by SBG or its direct or indirect
subsidiaries as described on Schedule 2.2(m); and

 

(n)           network compensation paid to SBG by WB following the date hereof
solely in return for the agreement entered into on July 4, 1997, between SBG and
WB pursuant to which SBG agreed to affiliate the Station and certain of its
other television broadcast stations with WB.

 

2.3.          Purchase Price.  The purchase price of the Assets (the “Purchase
Price”) shall be Thirty Three Million Five Hundred Thousand Dollars
($33,500,000.00) adjusted as provided below:

 

(a)           Prorations.  The Purchase Price shall be prorated and adjusted
pursuant to this Section 2.3 after each of the First Closing and the License
Asset Closing.  The Purchase Price shall be increased or decreased as required
to effectuate the proration of revenues and expenses.  All revenues and all
expenses arising from the operation of the Station relating to the Non-License
Assets or the License Assets, as applicable, including tower rental, business
and license fees, utility charges, real and personal property taxes and
assessments levied against the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service

 

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charges, payments due under film or programming license agreements, taxes
(except for taxes arising from the transfer of the Assets under this Agreement),
and vacation and personal leave pay shall be prorated between Buyer and Sellers
as of the First Closing or the License Assets Closing, as applicable, in
accordance with the principle that Sellers shall receive all revenues and shall
be responsible for all expenses, costs, and liabilities allocable to the
operation of the Station for the period prior to the Effective Time, Buyer shall
receive all revenues and shall be responsible for all expenses, costs, and
obligations allocable to the operation of the Station for the period after the
FCC Effective Time, and all revenues and all expenses, costs, and liabilities
arising with respect to the operation of the Station during the period between
the Effective Time and the FCC Effective Time shall be allocated between Buyer
and Sellers in accordance with the terms of the JSA, subject to the following:

 

(i)            There shall be no adjustment for, and Sellers shall remain solely
liable with respect to, any Contracts not included in the Assumed Contracts and
any other obligation or liability not being assumed by Buyer in accordance with
Section 2.5.  An adjustment and proration shall be made in favor of Buyer to the
extent that Buyer assumes any liability under any Assumed Contract to refund (or
to credit against payments otherwise due) any security deposit or similar
prepayment paid to Sellers by any lessee or other third party.  An adjustment
and proration shall be made in favor of Sellers to the extent Buyer receives the
right to receive a refund (or to a credit against payments otherwise due) under
any Assumed Contract to any security deposit or similar prepayment paid by or on
behalf of Sellers.

 

(ii)           An adjustment and proration shall be made in favor of Sellers for
the amount, if any, by which the value of the goods or services to be received
by the Station under its trade or barter agreements as of the Effective Time or
the FCC Effective Time, as applicable, for the Station exceeds by more than
Fifty Thousand Dollars ($50,000) the value of any advertising time remaining to
be run by the Station as of the Effective Time or the FCC Effective Time, as
applicable.  An adjustment and proration shall be made in favor of Buyer to the
extent that the amount of any advertising time remaining to be run by the
Station under its trade or barter agreements as of the Effective Time or the FCC
Effective Time, as applicable, exceeds by more than Fifty Thousand Dollars
($50,000) the value of the goods or services to be received by the Station as of
the Effective Time or the FCC Effective Time, as applicable.

 

(iii)          There shall be no proration for program barter.

 

(iv)          An adjustment and proration shall be made in favor of Sellers for
the amount, if any, of prepaid expenses and other current assets which are paid
by Sellers to the extent such prepaid expenses and other current assets relate
to the period after the Effective Time or the FCC Effective Time, as applicable.

 

(v)           There shall be no adjustment for, and Sellers shall remain solely
liable with respect to, any employee benefits or compensation, including wages
(including bonuses which constitute wages), salaries and accrued vacation due to
any employee of Sellers, except that an adjustment and proration in favor of the
Buyer shall be made for vacation pay and personal leave pay liabilities accrued
but unused as of Closing by the Transferred Employees.

 

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(b)           Manner of Determining Adjustments.  The Purchase Price, taking
into account the adjustments and prorations pursuant to Section 2.3(a), will be
determined in accordance with the following procedures:

 

(i)            Sellers shall prepare and deliver to Buyer on the First Closing
Date and the License Closing Date, as applicable, a preliminary settlement
statement which shall set forth Sellers’ good faith estimate of the adjustments
to the Purchase Price under Section 2.3(a).  Such preliminary settlement
statement shall (A) contain all information reasonably necessary to determine
the adjustments to the Purchase Price under Section 2.3(a), to the extent such
adjustments can be determined or estimated as of the date of the preliminary
settlement statement, and such other information as may be reasonably requested
by Buyer, and (B) be certified by Sellers to be true and complete to Sellers’
Knowledge as of the date thereof.

 

(ii)           Not later than ninety (90) days after the First Closing Date or
the License Closing Date, as applicable, Buyer will deliver to Sellers a
statement setting forth Buyer’s determination of the Purchase Price which was
due on such date and the calculation thereof pursuant to Section 2.3(a). 
Buyer’s statement (A) shall contain all information reasonably necessary to
determine the adjustments to the Purchase Price under Section 2.3(a), and such
other information as may be reasonably requested by Sellers, and (B) shall be
certified by Buyer to be true and complete to Buyer’s Knowledge as of the date
thereof.  If Sellers dispute the amount of the Purchase Price determined by
Buyer, they shall deliver to Buyer within thirty (30) days after receipt of
Buyer’s statement a statement setting forth their determination of the amount of
the Purchase Price.  If Sellers notify Buyer of its acceptance of Buyer’s
statement or if Sellers fail to deliver their statement within the thirty (30)
day period specified in the preceding sentence, Buyer’s determination of the
Purchase Price shall be conclusive and binding on the parties as of the last day
of the thirty (30) day period.

 

(iii)          Buyer and Sellers shall use good faith efforts to resolve any
dispute involving the determination of the Purchase Price.  If the parties are
unable to resolve the dispute within forty five (45) days following the delivery
of Buyer’s statement pursuant to Section 2.3(b)(ii), Buyer and Sellers shall
jointly designate an independent certified public accountant not regularly
servicing either Sellers or Buyer within the last five (5) years who shall be
knowledgeable and experienced in the operation of television broadcasting
stations to resolve the dispute.  If the parties are unable to agree on the
designation of an independent certified public accountant, the selection of the
accountant to resolve the dispute shall be submitted to arbitration to be held
in Baltimore, Maryland in accordance with the commercial arbitration rules of
the American Arbitration Association.  The accountant’s resolution of the
dispute shall be final and binding on the parties, and a judgment may be entered
thereon in any court of competent jurisdiction.  Any fees of this accountant
and, if necessary, for arbitration to select such accountant shall be divided
equally between the parties.

 

2.4.          Payment of Purchase Price.  The Purchase Price shall be paid by
Buyer to Sellers as follows:

 

(a)           Payment of Estimated Purchase Price at First Closing.  The sum of
Twenty Six Million Eight Hundred Thousand Dollars ($26,800,000), adjusted by the
estimated

 

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adjustments pursuant to Section 2.3(a), as set forth in Sellers’ preliminary
settlement statement pursuant to Section 2.3(b)(i), is referred to as the
“Estimated Purchase Price”.  At the First Closing, Buyer shall pay or cause to
be paid to Sellers the Estimated Purchase Price by wire transfer of same-day
funds pursuant to wire transfer instructions, furnished by Non License Seller to
Buyer.

 

(b)           Payments of Purchase Price with Respect to License Assets.  The
portion of the Purchase Price allocated to the License Assets shall be Six
Million Seven Hundred Thousand Dollars ($6,700,000) (the “License Price”),
provided, however, if Buyer shall exercise its option to extend the termination
date of this Agreement to the tenth (10th) anniversary of the date hereof
pursuant to Section 8.1 and shall pay or caused to be paid to Sellers the amount
of Three Million Three Hundred Fifty Thousand Dollars ($3,350,000) as required
thereunder, then such extension payment shall be credited to the payment of the
License Price, and the balance of the License Price due at the License Closing
shall be Three Million Three Hundred Fifty Thousand Dollars ($3,350,000).  At
the License Closing, Buyer shall pay or cause to be paid to the License Seller
the License Price (or if applicable the balance thereof) by wire transfer of
same-day funds pursuant to wire transfer instructions furnished by License
Seller to Buyer.

 

(c)           Payments to Reflect Adjustments.  The Purchase Price, as finally
determined pursuant to Section 2.3(b), shall be paid as follows:

 

(i)            If the Purchase Price, as finally determined pursuant to
Section 2.3(b), exceeds the Estimated Purchase Price and the License Price,
Buyer shall pay to Sellers in immediately available funds within five (5)
business days after the date on which the Purchase Price is determined pursuant
to Section 2.3(b) the difference between the Purchase Price and the sum of the
Estimated Purchase Price and the License Price.

 

(ii)           If the Purchase Price, as finally determined pursuant to
Section 2.3(b), is less than the sum of the Estimated Purchase Price and the
License Price, Sellers shall pay to Buyer in immediately available funds within
five (5) business days after the date on which the Purchase Price is determined
pursuant to Section 2.3(b) the difference between the Purchase Price and the sum
of the Estimated Purchase Price and the License Price.

 

2.5.          Assumption of Liabilities and Obligations.  Buyer shall assume and
undertake to pay, discharge, and perform all obligations and liabilities of the
Sellers with respect to (a) the Non-License Assets, including the FC Assumed
Contracts (subject to Section 5.9 hereof), as of the First Closing Date to the
extent that either (i) the obligations and liabilities relate to the time after
the Effective Time, or (ii) the Purchase Price was reduced pursuant to
Section 2.3(a) as a result of the proration of such obligations and liabilities,
and (b) the License Assets, including the LC Assumed Contracts (subject to
Section 5.9 hereof) and the FCC Licenses, as of the License Closing Date to the
extent that either (i) the obligations and liabilities relate to the time after
the FCC Effective Time, or (ii) the Purchase Price was reduced pursuant to
Section 2.3(a) as a result of the proration of such obligations and
liabilities.  Buyer shall not assume any other obligations or liabilities of
Sellers, including (1) any obligations or liabilities with respect to any
Excluded Asset, including any obligations or liabilities under any Contract not
included in the Assumed Contracts, (2) any obligations or liabilities under the
FC Assumed Contracts relating to

 

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the period prior to the Effective Time or under the LC Assumed Contracts
relating to the period prior to the FCC Effective Time, subject to Section 5.9
hereof, except insofar as an adjustment therefor is made in favor of Buyer under
Section 2.3(a), (3) any claims or pending litigation or proceedings relating to
the operation of the Station prior to the First Closing Date, (4) any
obligations or liabilities of Sellers under any employee pension, retirement, or
other benefit plans, or (5) all taxes in connection with the operation of the
Station prior to the Effective Time or the FCC Effective Time (as appropriate). 
The foregoing provisions of this Section 2.5 shall be subject to the terms of
the JSA with respect to the payment, discharge, and performance of all
obligations and liabilities that arise with respect to the operation of the
Station during the period between the Effective Time and the FCC Effective Time.

 

SECTION 3
REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Each Seller represents and warrants to Buyer as follows:

 

3.1.          Organization and Authority of Sellers.  License Seller and
Non-License Seller are corporations formed under the laws and qualified to do
business in the states listed in Schedule 3.1, in each case duly organized, in
good standing, and validly existing under the laws of each such state.  Each
Seller has the requisite corporate power and authority to own, lease, and
operate its properties, to carry on its business in the places where such
properties are now owned, leased, or operated and such business is now
conducted, and to execute, deliver, and perform this Agreement and the documents
contemplated hereby according to their respective terms.  Each Seller is duly
qualified and in good standing in the jurisdiction of incorporation disclosed
above.  Neither Seller is a participant in any joint venture or partnership with
any other Person with respect to any part of the operations of the Station or
any of the Assets.

 

3.2.          Authorization and Binding Obligation.  The execution, delivery,
and performance of this Agreement by each Seller have been duly authorized by
all necessary corporate action on the part of each Seller.  This Agreement has
been duly executed and delivered by each Seller and constitutes its legal,
valid, and binding obligation, enforceable against it in accordance with its
terms, except as the enforceability of this Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors’ rights generally
and by judicial discretion in the enforcement of equitable remedies.

 

3.3.          Absence of Conflicting Agreements; Consents.  Subject to obtaining
the Consents listed on Schedule 3.3, the execution, delivery, and performance by
each Seller of this Agreement and the documents contemplated hereby (with or
without the giving of notice, the lapse of time, or both): (a) do not and will
not require the consent of any third party; (b) does not and will not conflict
with any provision of the Articles of Incorporation of either Seller; (c) does
not and will not conflict with, result in a breach of, or constitute a default
under any applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (d) does not
and will not conflict with, constitute grounds for termination of, result in a
material breach of, by the terms of any material agreement, instrument, license,
or permit to which either Seller is a party or by which either Seller may be
bound legally; and (e) does not and will not create any Lien upon any of the
Assets.  Except for the

 

 

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FCC Consent provided for in Section 5.1 and the other Consents described in
Schedule 3.3, no consent, approval, permit, or authorization of, or declaration
to, or filing with any governmental or regulatory authority or any other third
party is required (a) to consummate this Agreement and the transactions
contemplated hereby, or (b) to permit Sellers to transfer and convey the Assets
to Buyer.  (For purposes of the making of the representations and warranties in
this Section as of the License Closing, the term “Assets” shall refer to the
“License Assets.”)

 

3.4.          Governmental Licenses.

 

(a)           Schedule 3.4(a) includes a true and complete list of the
Licenses.  Sellers have provided to Buyer true and complete copies of the
Licenses (including any amendments and other modifications thereto).  The
Licenses have been validly issued, and the License Seller is the authorized
legal holder of the Licenses.  The Licenses listed on Schedule 3.4(a) comprise
all of the material licenses, permits, and other authorizations required from
any governmental or regulatory authority for the lawful conduct in all material
respects of the business and operations of the Station in the manner and to the
full extent they are now conducted, and none of the Licenses is subject to any
unusual or special restriction or condition that could reasonably be expected to
limit the full operation of the Station as now operated.  The Licenses are in
full force and effect, and the conduct of the business and operations of the
Station is, in all material respects, in accordance therewith.  Sellers have no
reason to believe that, under existing law, rules, regulations, policies, and
procedures of the FCC, any of the FCC Licenses would not be renewed by the FCC
or other granting authority in the ordinary course.

 

(b)           Except as described on Schedule 3.4(b), no action or proceeding is
pending or, to the Knowledge of the Sellers, threatened before the FCC or any
other governmental authority to revoke, refuse to renew or modify the FCC
Licenses, or other authorizations of the Station and, to Sellers’ Knowledge, no
event has occurred which permits, or after notice or lapse of time or both would
permit, the revocation, cancellation, or recission of any of the FCC Licenses. 
There is not now issued, outstanding or pending, or to the Knowledge of Sellers,
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
Sellers with respect to the Station.

 

3.5.          Real Property.  Sellers do not own any fee interests in real
property.  Schedule 3.5 contains a complete and accurate description of all Real
Property Interests (including street address, legal description, where known,
owner, and Sellers’ use thereof).  The Real Property Interests listed on
Schedule 3.5 comprise all interests in real property necessary to conduct the
business and operations of the Station as now conducted.  Except as described on
Schedule 3.5, Non-License Seller owns and has good leasehold title to each Real
Property Interest, and none of the Real Property Interests held by Non-Licensee
Seller is subject to any Lien, except for Permitted Encumbrances.  With respect
to each leasehold or subleasehold interest included in the Real Property
Interests, so long as Sellers fulfill their obligations under the lease
therefor, Sellers have enforceable rights to nondisturbance and quiet enjoyment
against its lessor or sublessor and, to the Knowledge of Sellers, except as set
forth in Schedule 3.5, no third party holds any interest in the leased premises
with the right to foreclose upon Sellers’ leasehold or subleasehold interest. 
Sellers have legal and practical access to all of the Real

 

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Property Interests.  All towers, guy anchors, buildings, and other improvements
included in the Assets are located entirely on the Real Property Interests
listed in Schedule 3.5.  All Real Property Interests (a) are in good condition
and repair consistent with its present use, (b) available for immediate use in
the conduct of the business and operations of the Station, and (c) comply in all
material respects with all applicable material building or zoning codes and the
laws and regulations of any governmental authority having jurisdiction except to
the extent that the current use by Sellers, while permitted, constitutes or
would constitute a “nonconforming use” under current zoning or land use
regulations.

 

3.6.          Tangible Personal Property.  Schedule 3.6 lists all material items
of Tangible Personal Property with those items marked with an asterisk on
Schedule 3.6 consisting of the Tangible Personal Property which is part of the
License Assets.  The Tangible Personal Property listed on Schedule 3.6 comprises
all material items of tangible personal property necessary to conduct the
business and operations of the Station as now conducted.  Except as described in
Schedule 3.6, Sellers own and have good title to each item of Tangible Personal
Property, and none of the Tangible Personal Property owned by Sellers is subject
to any Lien, except for Permitted Encumbrances.  With allowance for normal
repairs, maintenance, wear, and obsolescence, each material item of Tangible
Personal Property is in good operation, condition, and repair and is available
for immediate use in the business and operations of the Station.  All material
items of transmitting and studio equipment included in the Tangible Personal
Property have been maintained in a manner consistent with generally accepted
standards of good engineering practice and will permit the Station and any unit
auxiliaries thereto to operate in accordance with the terms of the FCC Licenses
and the rules and regulations of the FCC and in all material respects with all
other applicable federal, state, and local statutes, ordinances, rules, and
regulations.

 

3.7.          Contracts.  Schedule 3.7 is a true and complete list of all
Contracts which either (a) have a remaining term of more than one year after the
date hereof, or (b) require expenditures in excess of Ten Thousand Dollars
($10,000.00) individually in any calendar year after the Effective Time, except
contracts with advertisers for production or the sale of advertising time on the
Station for cash that may be canceled by Sellers without penalty on not more
than ninety (90) days’ notice.  Sellers have delivered to Buyer true and
complete copies of all written Assumed Contracts (including any amendments and
other modifications to such Contracts).  Other than the Contracts listed on
Schedule 3.7, Sellers require no contract, lease, or other agreement to enable
them to carry on their business in all material respects as now conducted.  All
of the Contracts are in full force and effect and are valid, binding, and
enforceable in accordance with their terms and, with respect to each Contract,
there exists no material default on the part of Sellers or, to the Knowledge of
Sellers, the other parties thereto.  Except as disclosed on Schedule 3.7, other
than in the ordinary course of business, Sellers do not have Knowledge of any
intention by any party to any Contract (a) to terminate such Contract or amend
the terms thereof, (b) to refuse to renew the Contract upon expiration of its
term, or (c) to renew the Contract upon expiration only on terms and conditions
that are more onerous than those now existing.  Except for the need to obtain
the Consents listed on Schedule 3.3, the sale and transfer of the Assets in
accordance with this Agreement will not affect the validity, enforceability, or
continuation of any of the Contracts.

 

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3.8.          Intangibles.  Schedule 3.8 is a true and complete list of all
Intangibles (exclusive of Licenses listed in Schedule 3.4(a)) that are required
to conduct the business and operations of the Station as now conducted.  Sellers
have provided to Buyer copies of all documents establishing or evidencing the
Intangibles listed on Schedule 3.8.  Other than with respect to matters
generally affecting the television broadcasting industry and not particular to
Sellers, to Sellers’ Knowledge, Sellers are not, nor have Sellers received any
notice or demand alleging that Sellers are infringing upon or otherwise acting
adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other Person, and there is no claim or action pending or, to the
Knowledge of Sellers, threatened with respect thereto.

 

3.9.          Title to Properties.  Except as disclosed in Schedules 3.5 or 3.6,
Sellers have good and marketable title to or have valid leasehold interest in
the Assets subject to no Liens, except for Permitted Encumbrances.  (For
purposes of the making of the representations and warranties in this Section as
of the License Closing, the term “Assets” shall refer to the “License Assets.”)

 

3.10.        Financial Statements.  Sellers have furnished Buyer with true and
complete copies of unaudited financial statements of the Station containing a
balance sheet, statement of income, and statement of cash flows as at and for
the fiscal year ended December 31, 2003, and an unaudited balance sheet and
statement of income as at and for the nine (9) months ended September 30, 2004
(collectively, the “Financial Statements”).  The Financial Statements have been
prepared from the books and records of Sellers and have been prepared in a
manner consistent with generally accepted accounting principles (except for the
absence of footnotes and certain year-end adjustments, none of which are
material).  Except as indicated on Schedule 3.10, the Financial Statements
accurately reflect the books, records, and accounts of Sellers, present fairly
the financial condition of the Station as at its respective dates and the
results of operations for the periods then ended, and none of the Financial
Statements understates in any material respect the true costs and expenses of
conducting business or operations of the Station as currently conducted by
Sellers or otherwise materially inaccurately reflects the operations of the
Station.

 

3.11.        Taxes.  Except as set forth in Schedule 3.11, Sellers have filed or
caused to be filed all Tax Returns that are required to be filed with respect to
their ownership and operation of the Station, and have paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such Taxes have become due, or have set aside on their books
adequate reserves (segregated to the extent required by generally accepted
accounting principles) with respect thereto.  Such Tax Returns are true and
complete in all material respects.  There are no legal, administrative, or tax
proceedings pursuant to which Sellers are or could be made liable for any Taxes,
penalties, interest, or other charges, the liability for which could extend to
Buyer as transferee of the business of the Station, and no event has occurred
that could impose on Buyer any transferee liability for any Taxes, penalties, or
interest due or to become due from Sellers.

 

3.12.        Insurance.  Schedule 3.12 is a true and complete list of all
insurance policies of or covering the Assets.  All policies of insurance listed
in Schedule 3.12 are in full force and

 

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effect.  During the past three (3) years, no insurance policy of Sellers or the
Station has been cancelled by the insurer, and no application of Sellers for
insurance has been rejected by any insurer.

 

3.13.        Reports.  All material returns, reports, and statements that the
Station is currently required to file with the FCC or Federal Aviation
Administration have been filed, all reporting requirements of the FCC and
Federal Aviation Administration have been complied with in all material
respects, including, without limitation, items required to be placed in the
Station’s public inspection file.  All of such returns, reports, and statements,
as filed, which relate to the Station, to Sellers’ Knowledge, satisfy all
applicable legal requirements.

 

3.14.        Personal and Employee Benefits.

 

(a)           Employees and Compensation.  Schedule 3.14 contains a true and
complete list of all employees of Sellers or their Affiliates who are employed
at the Station as of the date hereof (collectively, the “Employees”) and
indicates the salary or hourly wage to which each such Employee is currently
entitled (limited in the case of Employees who are compensated on a commission
basis to a general description of the manner in which such commissions are
determined), any bonus for which the Employee may be eligible, the date of hire,
and Employee’s title.  Schedule 3.14 includes all Employees of Sellers who are
on leave pursuant to the Family Medical Leave Act of 1993 or otherwise and
indicates whether such leave is paid or unpaid and when such leave commenced. 
Schedule 3.14 also contains a true and complete list of all employee benefit
plans or arrangements covering any of the Employees, including any:

 

(i)  “employee welfare benefit plan,” as defined in Section 3(1) of ERISA, that
is maintained or administered by Sellers or any Affiliate for the benefit of, or
to which Sellers or any Affiliate contribute or are required to contribute on
behalf of, any Employees (a “Welfare Plan”);

 

(ii)  “multiemployer pension plan,” as defined in Section 3(37) of ERISA, that
is maintained or administered by Sellers or any Affiliate for the benefit of, or
to which Sellers or any Affiliate contribute or are required to contribute on
behalf of, any Employees (a “Multiemployer Plan”);

 

(iii)  “employee pension benefit plan,” as defined in Section 3(2) of ERISA
(other than a Multiemployer Plan), that is maintained or administered by Sellers
or any Affiliate for the benefit of, or to which Sellers or any Affiliate
contribute or are required to contribute on behalf of, any Employees (a “Pension
Plan”);

 

(iv)  employee plan that is maintained in connection with any trust described in
Section 501(c)(9) of the Code, as amended, which benefits any Employee or any
Employee’s dependents or beneficiaries (together with the Welfare Plans,
Multiemployer Plans and Pension Plans, the “Benefit Plans”); and

 

(v)  employment, severance, or other similar contract, arrangement, or policy
and each plan or arrangement (written or oral) providing for insurance coverage

 

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(including any self-insured arrangements), workers’ compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, sick pay
benefits, personal leave benefits, or retirement benefits or for deferred
compensation, profit sharing, bonuses, stock options, stock appreciation rights,
stock purchases, or other forms of incentive compensation or post-retirement
insurance, compensation or benefits that (A) is not a Benefit Plan, and (B) is
entered into, maintained, contributed to, or required to be contributed to by
either Seller or any Affiliate, or under which either Seller or any Affiliate
has any liability (collectively, “Benefit Arrangements”).

 

(b)           Pension Plans.  Sellers do not sponsor, maintain, or contribute to
any Pension Plan other than the Sinclair Broadcast Group 401(k) Profit Sharing
Plan which is a defined contribution profit sharing plan under the terms of
Section 412(h)(1) of the Code.  Such Pension Plan is currently, and has been,
maintained in substantial compliance with its terms and, both as to form and in
operation, with all material requirements prescribed by any and all statutes,
orders, rules, and regulations that are applicable to such plans, including
ERISA and the Code.

 

(c)           Welfare Plans.  Each Welfare Plan is currently, and has been,
maintained in substantial compliance with its terms and both as to form and in
operation with all material requirements prescribed by any and all statutes,
orders, rules, and regulations that are applicable to such plans, including
ERISA and the Code.  Sellers do not sponsor, maintain, or contribute to any
Welfare Plan that provides health or death benefits to former employees of the
Station other than as required by Section 4980B of the Code.

 

(d)           Compliance.  No Pension Plan has been terminated; and there have
been no reportable events (within the meaning of § 4043 of Subtitle C of ERISA)
with respect to any Pension Plan or Benefit Plan.  Neither Sellers, nor to
Sellers’ Knowledge, any plan fiduciary has engaged in any non-exempt “prohibited
transactions” as defined in Section 406 of ERISA or Section 4975 of the Code
with respect to any Benefit Plan.

 

(e)           Benefit Arrangements.  Each Benefit Arrangement has been
maintained in substantial compliance with its terms and with the material
requirements prescribed by all statutes, orders, rules, and regulations that are
applicable to such Benefit Arrangement.  Except for those employment agreements
listed on Schedule 3.7, Sellers have no written or oral contract prohibiting
Seller from terminating any Employee without prior notice and without liability
for any penalty or continuing obligation to such Employee (including, for
example, severance pay).

 

(f)            Multiemployer Plans.  Neither Sellers nor any Affiliates have at
any time contributed to, or been required to contribute to, any Multiemployer
Plan on behalf of any Employees.

 

(g)           Delivery of Copies of Relevant Documents and Other Information. 
Sellers have delivered or made available to Buyer true and complete copies of
each of the following documents:

 

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(i)            each Welfare Plan and Pension Plan, including any amendments
thereto (and, if applicable, related insurance agreements, trust agreements,
annuity contracts, or other funding instruments), and any written descriptions
thereof that have been distributed to Employees, including the current summary
plan description, any summary of material modifications, and any enrollment
forms; and

 

(ii)           each Benefit Arrangement, including any amendments thereto (and
if applicable, any funding instruments), and any written descriptions thereof
that have been distributed to Employees and complete descriptions of any Benefit
Arrangement that is not in writing.

 

(h)           Labor Relations.  Except as set forth in Schedule 3.14, no Seller
is a party to or subject to any collective bargaining agreement or written or
oral agreement with respect to the employment of any Employee, and no Seller is
a party to any oral or written consulting or other agreement with respect to the
personal services of any person who would be an Employee but for the fact that
his status is that of an independent contractor.  With respect to the Employees,
Sellers have complied in all material respects with all laws, rules, and
regulations relating to the employment of labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and have not
received any notice alleging that any Seller has failed to comply with any such
laws, rules, or regulations.  Except as set forth in Schedule 3.14, no
controversies, disputes or proceedings are pending or, to the Knowledge of
Sellers, threatened between any Seller and Employee (singly or collectively). 
Except as set forth on Schedule 3.14, no labor union or other collective
bargaining unit represents or claims to represent any of the Employees.  To the
Knowledge of the Sellers, there is no union campaign being conducted to solicit
cards from any Employees to authorize a union to represent any of the Employees
or to request a National Labor Relations Board certification election with
respect to any Employees.

 

3.15.        Claims and Legal Actions.  Except as disclosed on Schedule 3.15 and
except for any FCC rulemaking proceedings generally affecting the television
broadcasting industry and not particular to Sellers, as of the First Closing,
and if, and only if, the License Closing occurs on or prior to the first
anniversary of the First Closing, as of the License Closing, there is no claim,
legal action, counterclaim, suit, arbitration, or other legal, administrative,
or tax proceeding, nor any order, decree, or judgment, in equity or at law, in
progress or pending or, to the Knowledge of Sellers, threatened against or
relating to the Assets or the business or operations of the Station, or which
seeks to enjoin or obtain damages in respect to the transactions completed
hereby, nor does any Seller know of any basis for the same.  Neither Seller has
received any Judgment against or affecting either Seller for the operation of
such Seller’s business except (i) for FCC and other governmental orders, decrees
and actions which apply to the television broadcasting industry generally, or
(ii) as set forth on Schedule 3.15 hereto.

 

3.16.        Environmental Matters.

 

(a)           Sellers are in compliance in all material respects, and to
Sellers’ Knowledge, the Real Property Interests are in compliance, with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment,

 

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public health and safety, and employee health and safety (“Environmental Laws”),
and no charge, complaint, action, suit, proceeding, hearing, claim, demand, or
notice has been filed or commenced against either Seller alleging any failure to
comply with any such law, rule, or regulation.

 

(b)           Sellers have obtained and currently maintain all material permits,
licenses, and other authorizations that are required under all Environmental
Laws.

 

(c)           With respect to the period during which Sellers have occupied the
Real Property Interests and, to the Knowledge of Sellers, with respect to the
time before Sellers occupied any Real Property Interests, no person has caused
or permitted Hazardous Materials to be stored, deposited, treated, recycled, or
disposed of, on, under, or at any Real Property Interests leased, used, or
occupied by Sellers which Hazardous Materials, if known to be present, would
require cleanup, removal, or some other remedial action under any Environmental
Laws.

 

(d)           To the Knowledge of Sellers, there are not now, nor have there
previously been, tanks, or other facilities on, under or at the Real Property
Interests which contained any Hazardous Materials which, if known to be present
in soils or ground water, would require cleanup, removal, or some other remedial
action under Environmental Laws.

 

(e)           To the Knowledge of Sellers, there are no conditions existing
currently at the Real Property leased, used, or occupied by Sellers which would
subject Sellers to damages, penalties, injunctive relief, or cleanup costs under
any Environmental Laws or which require cleanup, removal, remedial action, or
other response pursuant to Environmental Laws by Sellers.

 

(f)            To the Knowledge of Sellers, the operation of the Station does
not exceed the permissible levels of exposure to RF radiation specified in the
FCC’s current rules, regulations, and policies concerning RF radiation.

 

3.17.        Compliance with Laws.  Sellers comply and have complied in all
material respects with the Licenses and all federal, state and local laws,
rules, regulations and ordinances applicable or relating to the ownership and
operation of the Station, and to Sellers’ knowledge, neither Seller has received
any written notice of any Action pending or threatened alleging non-compliance
therewith.

 

3.18.        Conduct of Business in Ordinary Course.  Since September 30, 2004,
Sellers have conducted their business and operations consistent in all material
respects with past practices and, except as disclosed in Schedule 3.18, have
not:

 

(a)           made any material increase in compensation payable or to become
payable to any of its employees other than those in the normal and usual course
of business or in connection with any change in an employee’s responsibilities
or any bonus payment made or promised to any of its Employees or any material
change in personnel policies, employee benefits, or other compensation
arrangements affecting its Employees;

 

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(b)           made any sale, assignment, lease or other transfer of assets other
than in the normal and usual course of business;

 

(c)           canceled any debts owed to or claims held by Sellers except in the
normal and usual course of business;

 

(d)           made any changes in Sellers’ accounting practices;

 

(e)           suffered any write-down of the value of any Assets or any material
write-off as uncollectable of any accounts receivable which individually or in
the aggregate is material;

 

(f)            transferred or granted any right under or entered into any
settlement regarding the breach or infringement of any license, patent,
copyright, trademark, trade name, franchise or similar right, or modified any
existing rights;

 

(g)           amended or terminated any Contract or License to which any Seller
is a party except in the ordinary course of business;

 

(h)           lowered in any material respects the advertising rates of the
Station in a manner not consistent with past practices or not reflective of
current market conditions;

 

(i)            received notice from any sponsor or any customer as to the
sponsor’s or customer’s intention not to conduct business with the Station, the
result of which loss or losses of business, individually, or in the aggregate,
has had, or could reasonably be expected to have, a Material Adverse Effect;

 

(j)            suffered any Material Adverse Effect.

 

3.19.        Transactions with Affiliates.  Except as disclosed in the Financial
Statements or as described herein, neither Seller has been involved in any
business arrangement or relationship with any Affiliate of Sellers, and no
Affiliate of Sellers owns any property or right, tangible or intangible,
relating to or that is used in the business of the Station.

 

3.20.        Broker.  Neither Sellers nor any Person acting on their behalf has
incurred any liability for any finders’ or brokers’ fees or commissions in
connection with the transactions contemplated by this Agreement.

 

SECTION 4
REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Sellers as follows:

 

4.1.          Organization, Standing, and Authority.  Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Iowa and has the requisite corporate power and authority to execute,
deliver, and perform this agreement and the documents contemplated hereby
according to their respective terms and to own the Assets.

 

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4.2.          Authorization and Binding Obligation.  The execution, delivery,
and performance of this Agreement by Buyer have been duly authorized by all
necessary corporate action on the part of Buyer.  This Agreement has been duly
executed and delivered by Buyer and constitutes a legal, valid, and binding
obligation of Buyer enforceable against Buyer in accordance with its terms,
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally and by
judicial discretion in the enforcement of equitable remedies.

 

4.3.          Absence of Conflicting Agreements and Required Consents.  Subject
to obtaining the Consents listed on Schedule 3.3, the execution, delivery, and
performance by Buyer of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both):  (a) do not
require the consent of any third party that has not been obtained; (b) will not
conflict with the Certificate or Articles of Incorporation or Bylaws of Buyer;
(c) will not conflict with, result in a breach of, constitute a default under,
any applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; and (d) will
not conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of any agreement, instrument, license, or
permit to which Buyer is a party or by which Buyer may be bound.  Except for the
FCC Consent provided for in Section 5.1, or such consents, approvals, permits or
authorizations that have been obtained, no consent, approval, permit, or
authorization of, or declaration to, or filing with any governmental or
regulatory authority or any other third party is required (i) to consummate this
Agreement and the transactions contemplated hereby, or (ii) to permit Buyer to
acquire the Assets from Sellers or to assume certain liabilities and obligations
of Sellers in accordance with Section 2.5.  (For purposes of the making of the
representations and warranties in this Section as of the License Closing, the
term “Assets” shall refer to the “License Assets.”)

 

4.4.          Brokers.  Neither Buyer nor any person or entity acting on its
behalf has incurred any liability for any finders’ or brokers’ fees or
commissions in connection with the transactions contemplated by this Agreement.

 

4.5.          Qualifications of Buyer.  Except as disclosed in Schedule 4.5,
Buyer is and, pending the License Closing, will remain legally, financially, and
otherwise qualified under the Communications Act and all rules, regulations, and
polices of the FCC to acquire and operate the Station.  Except as disclosed in
Schedule 4.5, there are no facts or proceedings which would reasonably be
expected to disqualify Buyer under the Communications Act or otherwise from
acquiring or operating the Station or would cause the FCC not to approve the
assignment of the FCC Licenses to Buyer.  Except as disclosed in Schedule 4.5,
Buyer has no knowledge of any fact or circumstances relating to Buyer or any of
Buyer’s Affiliates that would reasonably be expected to (a) cause the filing of
any objection to the assignment of the FCC License to Buyer, or (b) lead to a
delay in the processing by the FCC of the applications for such assignment. 
Except as disclosed in Schedule 4.5, no waiver of any FCC rule or policy is
necessary to be obtained for the grant of the applications for the assignment of
the FCC Licenses to Buyer, nor will processing pursuant to any exception or rule
of general applicability be requested or required in connection with the
consummation of the transactions herein; however, in the event such a

 

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waiver is necessary, Buyer makes no representation or warranty that the FCC
would grant such a waiver.

 

4.6.          Compliance with Laws.  Except (i) as set forth in Schedule 4.6
hereto, or (ii) for such other non-compliance matters that, individually or in
the aggregate, would not reasonably be expected to interfere in any material
respect with Buyer’s ability to consummate the transactions contemplated by this
Agreement, on the License Closing Date Buyer shall be in compliance with all
applicable federal, state and local laws, rules, and regulations and, to Buyer’s
knowledge, Buyer has received no written notice of any Action pending or
threatened alleging non-compliance therewith.

 

4.7.          Claims and Legal Actions.  Except (i) for any FCC rulemaking
proceedings generally affecting the television broadcasting industry and not
particular to Buyer, (ii) as set forth on Schedule 4.7 hereto, or (iii) for such
other Actions that, individually or in the aggregate, would not reasonably be
expected to interfere in any material respect with Buyer’s ability to consummate
the transactions contemplated by this Agreement, on the License Closing Date
there shall be no pending or, to Buyer’s knowledge, threatened suit, claim,
action, proceeding, or arbitration relating to the business or operations of the
Buyer or which seeks to enjoin or obtain damages in respect to the transactions
completed hereby.  Buyer has received no Judgment against or affecting Buyer for
the operation of its business except (i) for FCC and other governmental orders,
decrees and actions which apply to the television broadcasting industry
generally, (ii) as set forth on Schedule 4.7 hereto, or (iii) for such other
Judgments that, individually or in the aggregate, would not reasonably be
expected to interfere in any material respect with Buyer’s ability of Buyer to
consummate the transactions contemplated by this Agreement.

 

SECTION 5
SPECIAL COVENANTS AND AGREEMENTS

 

5.1.          FCC Consent.

 

(a)           The purchase and sale of the License Assets as contemplated by
this Agreement is subject to the receipt of the FCC Consent prior to the License
Closing, including the grant of any waiver or determination of the FCC that may
be necessary under rules and policies of the FCC in effect as of the date of the
grant of such FCC Consent to permit Buyer to hold the FCC Licenses for the
Station, together with the license for KCTV(TV), Kansas, City Missouri, without
time limitation or any condition requiring the future divestiture of either
station (the “Ownership Waiver”).  Buyer and Sellers acknowledge that under
rules and policies of the FCC in effect as of the date of this Agreement, the
grant of an Ownership Waiver is required to obtain the FCC Consent for Buyer’s
purchase and sale of the License Assets.

 

(b)           Buyer shall provide Sellers written notices regarding the
financial and other information reasonably needed by Buyer to prepare a request
for an Ownership Waiver as soon as practicable.  Sellers shall use their
commercially reasonable efforts to provide such requested information to Buyer
no later than the later of fifteen (15) Business Days after the First Closing
Date or ten (10) Business Days after Sellers’ receipt of the last of such
written notices.  Sellers shall cooperate fully with Buyer in the preparation of
the Ownership Waiver.  Unless

 

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Seller is notified in writing by Buyer that it requires additional time to
consider the basis for the Ownership Waiver, within ten (10) Business Days after
Buyer receives all such information from Sellers, Sellers and Buyer shall
prepare and file with the FCC an appropriate application for FCC Consent (the
“FCC Application”), which application shall include the Ownership Waiver.

 

(c)           If the FCC Application is not submitted to the FCC as provided in
Section 5.1(b), Buyer and Sellers agree to submit the FCC Application for FCC
Consent within ten (10) Business Days after Sellers receive written notice from
Buyer requesting that an appropriate FCC Application be prepared, which written
notice will be promptly provided by Buyer upon receiving advice of its FCC
counsel that it is more likely than not that such FCC Application would be
approved.  Such FCC Application may or may not include the Ownership Waiver, as
Buyer may determine to be necessary or appropriate under the circumstances.

 

(d)           Following the filing of the FCC Application, the parties shall
prosecute the FCC Application with all reasonable diligence and otherwise use
their respective reasonable best efforts to obtain a grant of the FCC
Application as expeditiously as practicable.  Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (i) the condition was imposed on it as
the result of a circumstance, the existence of which does not constitute a
breach by that party of any of its representations, warranties, or covenants
hereunder, and (ii) compliance with the condition would have a material adverse
effect upon it.  Buyer and Sellers agree that any condition requiring the
present or future divestiture of any rights of Buyer or the Sales Agent (as
defined in the JSA) in the Station or KCTV shall constitute a condition
materially adverse to Buyer and also a condition imposed as the result of a
circumstance, the existence of which does not constitute a breach by Buyer of
any of its representations, warranties, or covenants under this Agreement. 
Buyer and Sellers shall oppose any petitions to deny or other objections filed
with respect to the FCC Application and any requests for reconsideration or
judicial review of the FCC Consent.

 

(e)           If the License 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 8, the parties shall jointly
request one or more extensions of the effective period of the FCC Consent.  No
extension of the effective period of the FCC Consent shall limit the exercise by
either party of its right to terminate the Agreement under Section 8.

 

(f)            In the event the FCC Application is denied or dismissed by the
FCC, Buyer agrees to resubmit its application for FCC Consent promptly upon
receiving advice of its FCC counsel that it is more likely than not that such
resubmitted application would be approved.  In the event Buyer elects to seek
reconsideration or judicial review of any such denial or dismissal, Sellers
shall cooperate fully in the prosecution of such reconsideration or review.

 

5.2.          Covenants of Sellers.  Sellers covenant and agree from and after
the execution and delivery of this Agreement to and including the License
Closing Date, unless Buyer shall have otherwise given its prior written consent,
as follows:

 

(a)           Commercially Reasonable Efforts.  Sellers will use their
commercially reasonable efforts to cause the transactions contemplated by this
Agreement to be consummated in accordance with the terms hereof.

 

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(b)           Ordinary Course.  Subject to the provisions of the JSA, each
Seller shall operate the Station and maintain the License Assets, including
equipment relating to the transmission of a digital broadcast signal, in the
ordinary course of business consistent with past practice, including maintaining
appropriate insurance for the License Assets, and maintaining and repairing the
Tangible Personal Property (with suitable replacements being obtained as
necessary with respect thereto).  Each Seller shall use commercially reasonable
efforts to keep its organization intact, preserve and maintain the License
Assets and the properties of the Station, preserve the business and goodwill of
suppliers, customers, Governmental Authorities, and others dealing with such
Seller.  Neither Seller shall create, assume, consent to, or suffer to exist any
Lien on any of the License Assets (other than Permitted Encumbrances).  Each
Sellers’ financial books and records shall be maintained in accordance with
generally accepted accounting principles, in the usual manner on a consistent
basis with prior years.

 

(c)           Compliance with Laws.  Each Seller shall comply in all material
respects with all Legal Requirements and Licenses applicable to such Seller, the
Station, or the conduct of the business.

 

(d)           Access.  Sellers shall give to Buyer and its agents reasonable
access during normal business hours to all of Sellers’ personnel, premises,
properties, assets, financial statements and records, books, contracts,
documents, and commitments of or relating to the Station that are in Sellers’
possession or control, and shall furnish Buyer with all such information
concerning the affairs of the Station as Buyer may reasonably request.  This
shall specifically include access to billing, customer service, and maintenance
personnel and records.

 

(e)           No Inconsistent Action.  Sellers shall take no action that is
inconsistent with their obligations under this Agreement in any material respect
or that could be reasonably expected to hinder or delay the consummation of the
transactions contemplated by this Agreement.  Sellers shall not (i) sell,
transfer, lease, assign, or otherwise dispose of or distribute any of the
License Assets except in the ordinary course of business with suitable
replacements being obtained therefor; (ii) knowingly solicit, encourage,
entertain, negotiate, or enter into any such transaction or agreement of the
nature described in clause (i) above; or (iii) provide any non-public
information about the Station to any third party except as required by
applicable Legal Requirements.

 

(f)            Update of Sellers’ Schedules.  Prior to the License Closing,
Sellers shall provide an updated set of Schedules to Buyer to disclose any
information of the nature of that set forth in the Schedules that relate to
Sections 3.1, 3.3, 3.9, 3.11 and 3.15 and that arise after the date hereof and
that would have been required to be included in the Schedules with respect to
such License Assets if such information had existed on the date hereof;
provided, however, that the foregoing list of Sections shall exclude Section
3.15 in the event that the License Closing shall occur following the first
anniversary of the First Closing Date.  Representations and Warranties of
Sellers required to be made in connection with the License Closing shall be
qualified by the additional disclosures in the updated Schedules only to the
extent that, prior to the License Closing, Buyer shall state in writing that
such additional disclosures are acceptable.

 

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(g)           Contracts.  Each Seller shall comply in all material respects with
the terms of the Contracts to which such Seller is a party.  Sellers will not
renew, extend, amend, terminate, or waive any material right under any Assumed
Contract, or enter into any new Contract or incur any obligation (including
obligations arising from the amendment of any existing Contract) that will be an
Assumed Contract or be otherwise binding on Buyer after the License Closing,
except for (i) production agreements made in the ordinary course of business
consistent with Sellers’ past practices; or (ii) other Contracts (excluding film
and programming Contracts) entered into in the ordinary course of business
consistent with Sellers’ past practices that do not involve consideration under
any one Contract in excess of Twenty-Five Thousand Dollars ($25,000), and in the
aggregate under all such Contracts, in excess of One Hundred Thousand Dollars
($100,000), in each case measured at the License Closing (with in determining
such consideration, Sellers’ termination rights under each such Contracts being
taken into consideration, together with any penalties or fees payable upon
exercise of such termination rights).

 

(i)            Prior to the License Closing License Seller may enter into such
film and programming Contracts as it shall determine to be appropriate in
fulfillment of its responsibility as the holder of the FCC Licenses; provided,
however, that without Buyer’s written consent, no such Contract shall comprise
an Assumed Contract unless such Contract (w) is on such terms as are customary
within the television industry and with the Station’s past practice,
(x) complies with the terms of the JSA, including with respect to the Policy
Statement adopted pursuant thereto and the then applicable budget thereunder,
(y) does not result in an increase in the Station’s average cost of film and
programming as projected for the years to which such film or programming
Contract pertains, and (z) on an aggregate basis with all other film and
programming Contracts obtained for subsequent years, is consistent with the film
and programming budgets for such years, factoring in a 5% annual increase in
film and programming costs for such years based on the then applicable budget. 
Sellers shall provide written notice to Buyer at least five (5) Business Days
prior to their execution of any film or programming Contract unless such
Contract is not intended to be an Assumed Contract.

 

(ii)           Prior to the License Closing Date, Sellers shall deliver to Buyer
a list of all Contracts entered into between the First Closing Date and the
License Closing Date, and shall provide Buyer copies of such Contracts.

 

(h)           Copies of Notices regarding Contracts.  Sellers shall, as soon as
practicable following receipt, provide Buyer a copy of any notices of default
and other material notices or correspondence that either Seller receives from a
third party with respect to any Material Contract.  Each Seller shall provide
Buyer written notice if any party to any Contract that shall comprise an Assumed
Contract indicates in writing to such Seller the intention of such party (a) to
terminate such Contract or amend the terms thereof in any material respect, (b)
to refuse to renew the Contract upon expiration of its term, or (c) to renew the
Contract upon expiration only on terms and conditions that are materially more
onerous than those now existing.  Furthermore, Sellers shall use their
commercially reasonable efforts to obtain as soon as practicable following the
First Closing WB’s agreement (i) to send directly to Buyer written notice of the
occurrence of any defaults under the Station’s affiliation agreement with WB,
and (ii) to permit Buyer the reasonable opportunity to cure any such default
(subject to License

 

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Seller’s control as the Station licensee) or to work with Sellers to effect such
cure, although Buyer shall not be under any obligation to effect such cure.

 

(i)            Licenses.  License Seller will not renew, extend, amend,
terminate, or waive any material right under any License, except for renewals or
extensions of such Licenses in the ordinary course of business on customary
terms without any adverse amendment or modification.  License Seller shall not
take any action that shall cause (i) the License Seller not to be the authorized
legal holder of the Licenses, or (ii) the FCC or any other Governmental
Authority to revoke, refuse to renew or modify the FCC Licenses, or other
authorizations of the Station.  Prior to the License Closing Date, Sellers shall
deliver to Buyer a list of all Licenses issued to either Seller or modified or
renewed between the First Closing Date and the License Closing Date, and shall
provide Buyer copies of such Licenses and any such modifications or renewals.

 

(j)            Reports.  License Seller shall (i) submit on a timely basis all
material returns, reports and statements that as holder of the Licenses, License
Seller is required to file with the FCC or Federal Aviation Administration,
which returns, reports and statements shall to Sellers’ knowledge satisfy all
applicable legal requirements, and (ii) comply to Sellers’ knowledge with all
reporting requirements of the FCC and Federal Aviation Administration, including
items required to be placed in the Station’s public inspection file.

 

(k)           Notice of Legal Actions.  Each Seller shall give written notice to
Buyer within five (5) Business Days of such Seller being notified in writing of
the initiation of any Action against such Seller if such Action relates to the
Assets or the business or operations of the Station, or seeks to enjoin or
obtain damages in respect to the transactions completed hereby, excluding any
FCC rulemaking proceedings generally affecting the television broadcasting
industry and not particular to Sellers.  Such notice shall provide reasonable
details describing such Action.

 

(l)            Transactions with Affiliates.  Neither Seller shall enter into
any Contract with any Affiliate of Sellers with respect to the business or
operation of the Station or which shall be an LC Assumed Contract, and no
Affiliate of Sellers shall own any property or right, tangible or intangible,
that is used in the business or operations of the Station.

 

5.3.          Confidentiality.

 

(a)           Except as necessary for the consummation of the transaction
contemplated by this Agreement and except as and to the extent required by law,
each party will keep confidential any information obtained from the other party
in connection with the transactions contemplated by this Agreement (unless such
information is or thereafter becomes generally available to the public, is
otherwise available to it on a non-confidential basis from another source, or
has been developed independently by it).  If this Agreement is terminated
pursuant to its terms, each party will return to the other party all information
obtained by such party from the other party in connection with the transactions
contemplated by this Agreement.

 

(b)           Sellers agree at all times during and after the term of the JSA,
to hold in confidence and not to use, and to cause the FCC Employees to hold in
confidence and not to use,

 

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except (i) as and to the extent required by law, or (ii) for the benefit of the
Station and Buyer as necessary in performing their duties at the Station, or to
disclose to any Person without written authorization of Buyer, any Confidential
Information of the Station or Buyer.  “Confidential Information” means any
Station or Buyer proprietary information, marketing and product plans, services,
technical data, customer lists and customers, software, developments, processes,
products, technology, designs, drawings, employee information, financial or
other business information regarding the Station in either Seller’s possession
or disclosed to either Seller or the FCC Employees by Buyer or its employees,
either directly or indirectly, in writing or orally.  Confidential Information
excludes any of the foregoing items that have become publicly known and made
generally available through no wrongful act of either Seller or any FCC
Employee, or of others who, to Sellers’ knowledge, were under confidentiality
obligations with respect to the item or items involved.

 

5.4.          Cooperation.  Buyer and Sellers shall reasonably cooperate with
each other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement and in connection with any litigation after the First Closing Date
which relates to the Station for periods prior to the Effective Time.  Buyer and
Sellers shall execute such other documents as may be reasonably necessary and
desirable to the implementation and consummation of this Agreement and otherwise
use their commercially reasonable efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement. 
Notwithstanding the foregoing, neither Buyer nor Sellers shall have any
obligation (a) to expend funds to obtain any of the Consents, other than FCC
Consents or as set forth in Section 5.9 hereof, or (b) to agree to any adverse
change in any License or Assumed Contract in order to obtain a Consent required
with respect thereto.

 

5.5.          Allocation of Purchase Price.  Buyer and Sellers shall retain the
appraisal firm of Bond & Pecaro, Inc., or another mutually acceptable firm, to
determine the allocation of the Purchase Price among the Assets for purposes of
Section 1060 of the Code and Temporary Treasury Regulation Section 1.1060-1T,
with Buyer and Sellers each paying one-half (1/2) of the fees for such
valuation.  No filings made by Buyer or either Seller with any taxing or other
authority shall reflect an allocation other than in the manner established
pursuant to the foregoing, and Buyer and Sellers shall each timely make all
filings required by any taxing authority, including the filing of Internal
Revenue Service Form 8594.

 

5.6.          Access to Books and Records.  To the extent reasonably requested
by Buyer, Sellers shall provide Buyer access and the right to copy from and
after the First Closing Date any books and records relating to the Assets, but
not included in the Assets.  To the extent reasonably requested by Sellers,
Buyer shall provide Sellers access and the right to copy from and after the
First Closing Date any books and records relating to the Assets that are
included in the Assets.

 

5.7.          Employee Matters.

 

(a)           On the First Closing Date, Sellers shall terminate the employment
of all Employees (as defined in Section 3.14(a)) except those designated by
Sellers on Schedule 5.7, which designation shall include two (2) Employees at
the Station who shall remain employed by Sellers to meet their FCC obligation
until the License Closing Date (the “FCC Employees”) and

 

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the general manager of the Station who shall remain employed by Sellers.  On the
First Closing Date, Buyer shall offer employment to each of the Employees, other
than the Employees designated on Schedule 5.7.  On the License Closing Date,
Sellers shall terminate the employment of the FCC Employees and Buyer shall
offer employment to each such FCC Employee.  The Buyer’s offers of employment
will be at a comparable base pay, position, and place of employment as held by
each such Employee immediately prior to the First Closing Date or License
Closing Date, as applicable.  Any such Employees who accept such offers of
employment are referred to herein as the “Transferred Employees”).  Buyer shall
be responsible for paying severance benefits to any Transferred Employees whose
employment with Buyer is terminated on or after the applicable closing (which
shall be payable in accordance with the terms of Buyer’s severance pay policy). 
Buyer also shall be responsible for paying severance benefits, if any, to any
Employee who does not accept the offer of employment made by Buyer in accordance
with the terms of this paragraph and who would be entitled to receive benefits
under the terms of Sellers’ severance pay practice, as disclosed in Schedule
3.14.

 

(b)           Sellers shall pay, discharge, and be responsible for (i) all
salary, wages and liabilities arising out of or relating to the employment of
the Employees by Sellers, and (ii) any liabilities arising under the Benefit
Plans or Benefit Arrangements, provided that Buyer shall pay, discharge and be
responsible for (x) the vacation pay, personal leave pay, severance pay and
COBRA obligations of Seller which have been assumed by Buyer in accordance
with this Section 5.7, and (y) any liabilities arising out of or relating to the
decision to terminate the Employees pursuant to Section 5.7(a) to effectuate the
transaction contemplated by this Agreement, including, for example, any claim
that the decision to terminate such Employees constituted a wrongful
termination.   Buyer shall pay, discharge, and be responsible for all salary,
wages, and liabilities arising out of or relating to the employment or
termination of employment of the Transferred Employees by Buyer.

 

(c)           Buyer shall cause each Transferred Employee to be eligible to
participate in the “employee welfare benefit plans” and “employee pension
benefit plans” (as defined in Section 3(1) and 3(2) of ERISA, respectively) of
Buyer in which similarly situated employees of Buyer are generally eligible to
participate.  In this connection:

 

(i) Each Transferred Employee and his or her spouse and dependents shall be
eligible for immediate coverage under Buyer’s group health plan (i.e., without
regard to any waiting periods or length of service requirements that may
otherwise apply) as of their date of hire with Buyer to the extent that such
individual was participating in Sellers’ group health plan immediately prior to
becoming a Transferred Employee (or the spouse or dependent of a Transferred
Employee), and Buyer’s group health plan shall not apply any preexisting
condition limitations with respect to such Transferred Employee (or his or her
spouse and dependents) except to the extent such limitations applied to such
individual under the Welfare Plans.  In addition, Buyer shall ensure that each
Transferred Employee receives credit under Buyer’s group health plan for any
deductibles or co-payments paid by such Transferred Employee (and his or her
spouse and dependents) under the Welfare Plans for the plan year that includes
the Transferred Employee’s first day of employment with Buyer.  For purposes of
this clause (i), “group health plan” shall have the meaning set forth in Section
4980B(g)(2) of the Code.

 

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(ii)           Each Transferred Employee shall receive past service credit under
Buyer’s applicable vacation and sick leave practices, severance pay and other
health and welfare benefit plans (excluding any retiree medical plans) and
tax-qualified 401(k) plan (collectively, “Buyer’s Applicable Plans”), except
that Buyer is not obligated to offer a Transferred Employee any past service
credit under its defined benefit retirement plan or its retiree medical plan. 
For this purpose, “past service credit” means credit under Buyer’s Applicable
Plans for any service with Sellers or their Affiliates (or any prior owner
thereof) for eligibility, waiting period, vesting, benefit accrual, benefit
differential and all other purposes as if such service had been service with
Buyer, but only to the extent such service was credited by Sellers and their
Affiliates for such purposes effective as of the First Closing Date or the
License Closing Date, as applicable.

 

(iii)          To the extent taken into account in determining prorations
pursuant to Section 2.3 hereof, Buyer shall assume and discharge Sellers’
liabilities for the payment of all unused vacation leave and personal leave
accrued by Transferred Employees as of the First Closing Date or License Closing
Date, as applicable, and to the extent any Transferred Employee asserts a claim
against Sellers with respect to the payment of the accrued vacation leave and
personal leave liability assumed by Buyer, then Buyer shall indemnify, defend,
and hold harmless Sellers from and against any and all liability for the payment
of such accrued vacation leave and personal leave.

 

(d)           Buyer shall assume Sellers’ obligation to provide “continuation
coverage” as defined in Section 4980B of the Code and Section 601 et. seq. of
ERISA (“COBRA”) to each Employee to whom Buyer makes an offer of employment
under the terms of Section 5.7(a) (and to any spouse or children of such
Employee carried as dependents on such Employee’s “group health plan” coverage
from Sellers), regardless of whether or not such Employee accepts Buyer’s offer
of employment.  Buyer shall hold Sellers and any entity required to be combined
with the Sellers under Section 414 of the Code (“Sellers Affected Parties”)
harmless from and fully indemnify such Sellers Affected Parties against any
costs, expenses, losses, damages and liabilities incurred or suffered by such
Sellers Affected Parties directly or indirectly, including, but not limited to,
reasonable attorneys fees and expenses, which arise as a result of any failure
of Buyer on or after the First Closing Date or the License Closing Date, as
applicable, to provide such COBRA benefits to such Employees (and their spouses
and dependents).  Except with respect to those “covered employees” and
“qualified beneficiaries” identified in the first sentence of this Section
5.7(d), Sellers shall retain the obligation to provide “continuation coverage”
under its “group health plan” to any other “covered employee” or “qualified
beneficiary” related to the Station who experiences a “qualified event” under
the terms of COBRA, whether the qualified event occurred prior to, on or after
the transaction contemplated by this Agreement.  The terms “group health plan,”
“qualified beneficiary,” “covered employee” and “qualified event” shall have the
meanings set forth in COBRA.  Sellers shall hold Buyer and any entity required
to be combined with the Buyer under Section 414 of the Code (“Buyer Affected
Parties”) harmless from and fully indemnify such Buyer Affected Parties against
any costs, expenses, losses, damages and liabilities incurred or suffered by
such Buyer Affected Parties directly or indirectly, including, but not limited
to, reasonable attorneys fees and expenses, which arise as a result of any
failure of Sellers to provide such COBRA benefits.

 

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(e)           As of (or, in Sellers’ discretion, prior to) the First Closing
Date or License Closing Date, as applicable, Sellers shall cause each
Transferred Employee to become fully vested in his or her account balance under
the Pension Plan (the “Sellers 401(k) Plan”).  Seller shall furnish to the Buyer
as soon as practicable on or prior to the First Closing Date (or License Closing
Date, if applicable), but not later than the First Closing Date (or License
Closing Date, if applicable), a list, calculated as of the First Closing Date
(or License Closing Date, if applicable), of the amounts of compensation each
Transferred Employee participating in the Sellers 401(k) Plan contributed to
such plan (separately reporting any pre-tax and after-tax contributions) during
the calendar year in which the First Closing Date (or License Closing Date, if
applicable) occurs.  To the extent permitted by law and the terms of the
Sellers’ 401(k) Plan, Sellers shall not require any Transferred Employee to
accept a distribution (including a cash-out distribution) from the Sellers
401(k) Plan sooner than 90 days following the applicable closing date.

 

(f)            Buyer acknowledges and agrees that Buyer’s obligations pursuant
to this Section 5.7 are in addition to, and not in limitation of, Buyer’s
obligation to assume the written employment contracts included in the Assumed
Contracts.

 

(g)           This Section 5.7 shall operate exclusively for the benefit of the
parties to this Agreement and not for the benefit of any other Person,
including, without limitation, any current, future, former or retired employee
of the Sellers, Buyer or their respective Affiliates.

 

5.8.          Joint Sales Agreement.  The License Seller and Buyer agree to
enter into a Joint Sales Agreement (the “JSA”), effective as of the First
Closing Date, substantially in the form of Schedule 5.8 hereto, and providing
Buyer with the right to sell advertising time and provide other non-programming
services to the Station during the period between the First Closing and the
License Closing.

 

5.9.          Consents.

 

(a)           Sellers shall use commercially reasonable efforts to obtain all
necessary Consents required in connection with this Agreement and the
transactions contemplated hereby, including any required Consents of any
Governmental Authorities, with lawful jurisdiction over Sellers.  Sellers shall
make all filings with and give all notices to third parties that may be
reasonably necessary of Sellers in order to consummate the transactions
contemplated hereby.  Except as expressly provided by this Agreement, neither
Sellers nor Buyer shall be required to make any payments to persons or parties
to the Contracts in order to obtain their Consents, except that Sellers agree to
pay any administrative or application fees customarily payable to such persons
or parties in connection with requests for their Consent, or costs or fees
(including reimbursement of legal fees) expressly required by the terms of any
such Contract.  No such consent of a third party shall comprise an effective
“Consent,” as such term is used herein, if such consent shall effect any adverse
change in the terms or conditions of the License or Assumed Contract to which
such consent pertains unless Buyer shall give its consent (which shall not be
unreasonably withheld) in writing to such change.  Nothing in this Section 5.9
shall be construed to require any Consent as a condition to Closing, other than
the Consents required by Section 6.3(e) of this Agreement.

 

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(b)           Regarding each Contract that Buyer shall request in writing to be
a FC Assumed Contract on or following the date hereof, to the extent permitted
by applicable Legal Requirements or by the terms of such Contract, without
material breach of the terms thereof, Buyer shall receive the benefits of such
Contract on and after the date of Buyer’s request and shall be responsible for
and timely perform all obligations under such Contract to the extent arising on
and after such date.  Sellers shall not assign any such Contact to Buyer unless
and until the Consent from the third party to such Contract is actually
received.  In the event that Sellers are able to obtain such Consent, such
Contract shall comprise a FC Assumed Contract hereunder and shall be assigned to
and assumed by Buyer effective as of the date of the third party’s Consent to
the assignment thereof (or effective as of such other date agreed to with such
third party).  In the event that Sellers are unable to obtain a necessary
Consent from a third party to the assignment of a FC Assumed Contract to Buyer
within sixty (60) days following Buyer’s request that such Contract be a FC
Assumed Contract, Sellers shall so advise Buyer and such Contract shall comprise
a Consent-Pending Contract hereunder.  Buyer and Sellers shall cooperate with
one another to provide to Buyer the benefits of such Consent-Pending Contract
until such time of the actual assignment thereof by Sellers to Buyer following
receipt of the necessary third-party Consent.  If, at any time, Buyer is not
able to receive substantially all of the material benefits under any
Consent-Pending Contract, such Consent-Pending Contract shall be treated as a
Contract not to be assumed by Buyer, and Sellers shall remain responsible for
the obligations thereunder.  If at any time any necessary third-party Consent
shall be received by Sellers, such Consent-Pending Contact shall be assigned to
and assumed by Buyer effective as of the date of the third party’s Consent to
the assignment thereof (or effective as of such other date agreed to with such
third party).

 

(c)           In the event that Sellers are unable to obtain on or prior to the
License Closing Date a necessary Consent from a third party to the assignment of
a LC Assumed Contract to Buyer, Sellers shall so advise Buyer and such Contract
shall comprise a Consent-Pending Contract hereunder.  Following the License
Closing, to the extent permitted by applicable Legal Requirements or by the
terms of each such Consent-Pending Contract without material breach of the terms
thereof, Buyer shall receive the benefits of such Consent-Pending Contract on
and after the License Closing Date and shall be responsible for and timely
perform all obligations under such Consent-Pending Contract to the extent
arising on and after the License Closing Date.  Sellers shall not assign any
such Consent-Pending Contact to Buyer unless and until the Consent from the
third party to such Consent-Pending Contract is actually received.  Buyer and
Sellers shall cooperate with one another to provide to Buyer the benefits of
such Consent-Pending Contract until such time of the actual assignment thereof
by Sellers to Buyer following receipt of the necessary third-party Consent.  If,
at any time, Buyer is not able to receive substantially all of the material
benefits under any Consent-Pending Contract, such Consent-Pending Contract shall
be treated as a Contract not to be assumed by Buyer, and Sellers shall remain
responsible for the obligations thereunder.  If at any time after the License
Closing Date any necessary third-party Consent shall be received by Sellers
(other than with respect to a Consent-Pending Contract referred to in the
immediately preceding sentence), such Consent-Pending Contact shall be assigned
to and assumed by Buyer effective as of the date of the third party’s Consent to
the assignment thereof (or effective as of such other date agreed to with such
third party).

 

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(d)           Sellers shall, at their expense, use commercially reasonable
efforts to attempt to obtain any Consents of their landlords for the Station’s
current studio facilities and transmitter site that are necessary with respect
to the Transferred Employees’ provision of services and the ongoing operation of
certain of the Non-License Assets at such locations pursuant to the terms of the
JSA prior to the License Closing.  In the event that Buyer shall determine that
the Station’s current studio facilities should be relocated, Sellers shall
cooperate with Buyer, at Buyer’s expense, in obtaining any consents that shall
be requested by Buyer from the landlord for such facilities to assign the lease
for such facilities, or to sublease such facilities, to third parties identified
by Buyer.

 

5.10.        Lease Agreement.  The License Seller and Buyer agree to enter in a
lease agreement (the “Lease”), effective as of the First Closing Date,
substantially in the form of Schedule 5.10 hereto, and providing the License
Seller with certain rights to use the Assets during the pendency of the JSA.

 

5.11.        No Control.  Notwithstanding any provision of this Agreement to the
contrary, pending the Closing, Sellers shall maintain actual (de facto) and
legal (de jure) control over the Licenses and the Station until the License
Closing.  Specifically, Sellers shall retain responsibility for the operation of
the business and the Station pending the License Closing, including
responsibility for the operation of the business and the Station pending the
License Closing, including responsibility for the following matters:  access to
and use of the facilities of and equipment owned by Sellers; control of the
daily operation of the Station; creation and implementation of policy decisions;
employment and supervision of their Employees; payment of financing obligations
and expenses incurred in the operation of the Station prior to the Closing; and
execution and approval of all applications prepared and filed before the FCC or
any other Governmental Authority.

 

5.12.        Insurance.  Except to the extent that insurance is required under
the terms of the JSA, in which case, the parties agree that comparable insurance
is not required pursuant to this Section 5.12, Sellers shall (i) maintain in
full force and effect with respect to events occurring during the period between
the First Closing and the License Closing policies of insurance of the same
type, character, and coverage of the policies currently carried with respect to
the License Assets of the Station, (ii) submit and prosecute insurance claims in
good faith against such insurance policies in the event of the occurrence of a
loss or other covered event under the terms of such policies, and (iii) apply
any proceeds received on such insurance policies, or remit such proceeds to
Buyer to be applied for such purpose, to restore or replace the Tangible
Personal Property to the extent such claims relate to damage thereto, or to
reimburse the Station, Sellers and Buyer with respect to other expenses, losses,
liabilities and damages sustained if such claims relate to matters other than
damage to Tangible Personal Property.  Sellers shall fulfill their obligations
set forth in the preceding sentence with regard to events occurring during the
period between the First Closing and the License Closing even though claims may
be made by third parties against the Station, Sellers or Buyer, or proceeds may
be received by Sellers from their insurance carriers, subsequent to the License
Closing.

 

5.13.        Compliance with the JSA.  Sellers and Buyer shall comply in all
material respects with the provisions of the JSA.

 

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5.14         Update of Buyer’s Schedules.  Prior to the License Closing, Buyer
shall provide an updated set of Schedules to Sellers to disclose any information
with respect to Sections 4.6 and 4.7 that arise after the date hereof and that
would have been required to be included in the Schedules for those Sections if
such information had existed on the date hereof.  Any Schedules of Buyer so
updated shall be deemed to be made as of the License Closing Date and shall be
qualified by the additional disclosures and updated Schedules only to the extent
that, prior to the License Closing, Sellers shall state in writing that such
additional disclosures are acceptable.

 

5.15         SBG Guaranty.  By its execution hereof with respect to this Section
5.15, SBG irrevocably and unconditionally guarantees to Buyer the full, complete
and timely performance by Sellers of any and all obligations of Sellers under
this Agreement.  This guaranty shall remain in full force and effect so long as
Sellers shall have any obligations or liabilities hereunder.  This guaranty
shall be deemed a continuing guaranty and the waivers of SBG herein shall remain
in full force and effect until the satisfaction in full of all of Sellers’
obligations hereunder.  If any default shall occur by either Seller in its
performance or satisfaction of any of its obligations hereunder, then SBG will
itself perform or satisfy, or cause to be performed or satisfied, such
obligations immediately upon notice from Buyer specifying in summary form the
default.  This guaranty is an absolute, unconditional and continuing guaranty of
payment and performance which shall remain in full force and effect without
respect to future changes in conditions, including any change of law.  SBG
agrees that its obligations hereunder shall not be contingent upon the exercise
or enforcement by Buyer of whatever remedies it may have against Sellers.  To
the maximum extent permitted by law, SBG hereby waives: (i) notice of acceptance
hereof; (ii) notice of any adverse change in the financial condition of either
Seller or of any other fact that might increase SBG’s risk hereunder; and
(iii) presentment, protest, demand, action or delinquency in respect of any of
Sellers’ obligations hereunder.

 

5.16         Nonsolicitation Covenant.  SBG covenants and agrees, on behalf of
itself and its Affiliates, including Sellers, as follows:

 

(a)           For two (2) years following the date hereof, neither it nor any
Affiliate will, without prior written consent of Buyer, directly or indirectly,
for itself or on behalf of any other Person, hire or solicit any of Buyer’s
employees who at the time of solicitation is known by SBG or such Affiliate to
be an employee of Buyer at the Station, or induce or attempt to induce through
any form of direct communication any such employee to leave his or her
employment with Buyer; provided, however, that this provision shall not prohibit
SBG or any Affiliate from making a general, public solicitation or a general,
industry-wide solicitation for employment, or from hiring any of Buyer’s
employees who respond to such a solicitation.

 

(b)           In the event that SBG or any Affiliate commits a breach of any of
the provisions of this Section 5.16, Buyer shall have the right and remedy to
have the provisions of this Section 5.16 specifically enforced, without posting
bond or other security to the extent permitted by law, by any court having
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause immediate irreparable injury to Buyer and that
money damages will not provide an adequate remedy at law for any such breach or
threatened

 

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breach.  Such right and remedy shall be in addition to, and not in lieu of, any
other rights and remedies available to Buyer at law or in equity.

 

(c)           In the event that despite the express agreement of SBG, on behalf
of itself and its Affiliates, any provision of this Section 5.16 shall be
determined by any court or other tribunal of competent jurisdiction to be
unenforceable for any reason whatsoever, the parties agree that this
Section 5.16 shall be interpreted to extend only during the maximum period of
time for which it may be enforceable and/or to the maximum extent in any and all
other respects as to which it may be enforceable, all as determined by such
court or tribunal.

 

SECTION 6
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER

 

6.1.          Conditions to Obligations of Buyer at the First Closing.  All
obligations of Buyer at the First Closing hereunder are subject at Buyer’s
option to the fulfillment prior to or at the First Closing Date of each of the
following conditions:

 

(a)           Obligations, Covenants and Agreements.  Sellers have performed and
complied with all obligations, covenants and agreements required by this
Agreement to be performed or complied with by it prior to or on the First
Closing Date, except where the failure to have performed and complied does not
have a Material Adverse Effect.

 

(b)           Governmental Licenses.  The License Seller is the holder of all
FCC Licenses.  No proceedings are pending, the effect of which could be to
revoke, cancel, fail to renew, suspend, or modify materially and adversely any
FCC License.

 

(c)           Legal Proceedings.  No injunction, restraining order, or decree of
any nature of any court or governmental authority of competent jurisdiction is
in effect that restrains or prohibits the transactions contemplated by this
Agreement.

 

(d)           Deliveries.  Sellers have made or stand willing to make all the
deliveries to Buyer described in Section 7.2.

 

6.2.          Conditions to Obligations of Sellers at the First Closing.  All
obligations of Sellers at the First Closing hereunder are subject at Sellers’
option to the fulfillment prior to or at the First Closing Date of each of the
following conditions:

 

(a)           Obligations, Covenants and Agreements.  Buyer has performed and
complied with all obligations, covenants and agreements required by this
Agreement to be performed or complied with by it prior to or on the First
Closing Date.

 

(b)           Legal Proceedings.  No injunction, restraining order, or decree of
any nature of any court or governmental authority of competent jurisdiction is
in effect that restrains or prohibits the transactions contemplated by this
Agreement.

 

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(c)           Deliveries.  Buyer has made or stands willing to make all the
deliveries described in Section 7.3.

 

6.3.          Conditions to Obligation of Buyer at the License Closing.  All
obligations of Buyer at the License Closing hereunder are subject at Buyer’s
option to the fulfillment prior to or at the License Closing Date of each of the
following conditions:

 

(a)           Representations and Warranties.  The representations and
warranties of Sellers in Sections 3.1, 3.2, 3.3, 3.9, 3.11, 3.15 and 3.20 shall
be true and complete (without any qualifications by materiality) at and as of
the License Closing Date as though made at and as of that time (except for
representations and warranties that speak as of a specific date or time which
need only be true and complete as of such date or time), except where the
failure to be true and complete would not reasonably be expected to have a
Material Adverse Effect, or shall have been caused by Buyer’s failure to fulfill
its obligations under the JSA; provided, however, that the foregoing list of
sections shall exclude Section 3.15 if the License Closing shall occur following
the first anniversary of the First Closing Date.

 

(b)           Obligations, Covenants and Agreements.  Sellers shall have
performed and complied with all obligations, covenants and agreements required
by this Agreement to be performed or complied with by them prior to or on the
License Closing Date, except where the failure to have performed and complied
would not reasonably be expected to have a Material Adverse Effect, or shall
have been caused by Buyer’s failure to fulfill its obligations under the JSA.

 

(c)           FCC Consent.  The FCC Consent shall have become a Final Order and
shall not contain any condition or qualification that requires Buyer to dispose
of television station KCTV or is otherwise materially adverse to Buyer, except
any condition or qualification that is imposed by reason of circumstances or
actions constituting a material breach by Buyer of its representations,
warranties or covenants hereunder.  No action shall have been taken by the FCC
or other Governmental Authority that is pending as of the License Closing Date
with respect to the FCC Consent that makes illegal, restrains, or prohibits the
consummation of the transactions contemplated hereby.

 

(d)           Governmental Licenses.  The License Seller shall be the holder of
all FCC Licenses, and there shall not have been any material modification,
revocation, or non-renewal of any material License.  No proceeding shall be
pending, the effect of which could be to revoke, cancel, fail to renew, suspend,
or modify materially and adversely any FCC License.

 

(e)           Required Consents.  The Consents for the Material Contracts shall
have been obtained without any adverse change in the terms or conditions of each
such Assumed Contract from those in effect under such Contract at such time that
Buyer shall have agreed to assume such Contract.

 

(f)            Deliveries.  The Sellers shall have made or stands willing to
make all deliveries to Buyer described in Section 7.4.

 

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6.4.          Conditions to Obligations of Sellers at the License Closing.  All
obligations of Sellers at the License Closing hereunder are subject at Sellers’
option to the fulfillment prior to or at the License Closing Date of each of the
following conditions:

 

(a)           Representations and Warranties.  All representations and
warranties of Buyer in Sections 4.1, 4.2, 4.3, 4.4, 4.6 and 4.7 shall be true
and complete in all material respects at and as of the License Closing Date as
though made at and as of that time (except for representations and warranties
that speak as of a specific date or time which need only be true and complete as
of such date or time), except where the failure to be true and complete shall
have been caused by either Seller’s failure to fulfill its obligations under the
JSA.

 

(b)           Obligations, Covenants and Agreements.  Buyer shall have performed
and complied with in all material respects all obligations, covenants and
agreements required by this Agreement to be performed and complied with by Buyer
prior to or on the License Closing Date, except where the failure to perform or
comply shall have been caused by either Seller’s failure to fulfill its
obligations under the JSA.

 

(c)           FCC Consent.  The FCC Consent shall have been obtained and shall
not contain any condition or qualification that is materially adverse to
Sellers, except any condition or qualification that is imposed by reason of
circumstances or actions constituting a material breach by Sellers of their
representations, warranties or covenants hereunder.

 

(d)           Deliveries.  Buyer shall have made or stands willing to make all
the deliveries described in Section 7.5.

 

SECTION 7
CLOSING AND CLOSING DELIVERIES

 

7.1.          Closings.

 

(a)           First Closing Date.  Except as otherwise agreed to by Buyer and
Sellers, the First Closing shall take place at 10:00 a.m. on the date hereof.

 

(b)           License Closing Date.  Except as provided below in this Section
7.1 or as otherwise agreed to by Buyer and Sellers, the License Closing shall
take place at 10:00 a.m. on a date to be set by Buyer on at least five (5) days’
written notice to Sellers which shall not be earlier than the first Business Day
after the FCC Consent shall have been issued or later than ten (10) Business
Days after the FCC Consent shall have become a Final Order.

 

(c)           Postponement of Closing.

 

(i)            If any event occurs that prevents signal transmission by the
Station in the normal and usual manner and Sellers cannot restore the normal and
usual transmission before the date on which the License Closing would otherwise
occur pursuant to this Section 7.1 and this Agreement has not been terminated
under Section 8, the License Closing shall be postponed to such date as is
necessary (but only until a date within the effective period of the

 

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FCC Consent (as it may be extended pursuant to Section 5.1 (c)) to allow Sellers
to restore the normal and usual transmission; provided, that the foregoing shall
not apply to postpone the License Closing to the extent any such signal
transmission is not caused by any action of the Sellers.  If the License Closing
is postponed pursuant to this paragraph, the date of the License Closing shall
be mutually agreed to by Sellers and Buyer.

 

(ii)           If there is in effect on the date on which the License Closing
would otherwise occur pursuant to this Section 7.1 any judgment, decree, or
order that would prevent or make unlawful the License Closing on that date, the
License Closing shall be postponed until a date (but only within the effective
period of the FCC Consent (as it may be extended pursuant to Section 5.1(c)), to
be agreed upon by Buyer and Sellers, which such judgment, decree, or order no
longer prevents or makes unlawful the License Closing.  If the License Closing
is postponed pursuant to this paragraph, the date of the License Closing shall
be mutually agreed to by the Sellers and Buyer.

 

(d)           Closing Place.  Each of the First Closing and the License Closing
shall be held at the offices of Thomas & Libowitz, 100 Light Street, Suite 1100,
Baltimore, Maryland 21202, or any other place that is mutually agreed upon by
Buyer and Sellers.

 

7.2.          Deliveries by Sellers at First Closing.  On the First Closing
Date, Sellers shall deliver to Buyer the following, in form and substance
reasonably satisfactory to Buyer and its counsel:

 

(a)           Conveyancing Documents.  Duly executed bills of sale, motor
vehicle titles, assignments, and other transfer documents that are sufficient to
vest good and marketable title to the Assets, other than the License Assets and
the Excluded Assets, in the name of Buyer, free and clear of all Liens, except
for Permitted Encumbrances.

 

(b)           Officer’s Certificate.  A certificate, dated as of the First
Closing Date, executed on behalf of one of the Sellers by an officer of such
Seller, certifying that Sellers have performed and complied with all of its
obligations, covenants, and agreements in this Agreement to be performed and
complied with on or prior to the First Closing Date, except to the extent that
the failure to perform or comply with such covenants shall not have had a
Material Adverse Effect.

 

(c)           Secretary’s Certificate.  A certificate, dated as of the First
Closing Date, executed by each Seller’s Secretary: (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by such Seller’s
Board of Directors and shareholders (if required), authorizing and approving the
execution of this Agreement and the consummation of the transaction contemplated
hereby and that such resolutions remain in full force and effect; and
(ii) providing, as attachments thereto, the Articles of Incorporation and Bylaws
of Sellers.

 

(d)           Good Standing Certificates.  To the extent available from the
applicable jurisdictions, certificates as to the formation and/or good standing
of each Seller issued by the appropriate governmental authorities in the states
of organization and each jurisdiction in which

 

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such Seller is qualified to do business, each such certificate (if available) to
be dated a date not more than a reasonable number of days prior to the First
Closing Date.

 

(e)           Opinions of Counsel.  Opinion of Sellers’ counsel dated as of the
First Closing Date, substantially in the form of Schedule 7.2(e) hereto.

 

(f)            JSA.  The JSA, duly executed by Sellers.

 

(g)           Lease.  The Lease duly executed by Sellers.

 

7.3.          Deliveries by Buyer at First Closing.  On the First Closing Date,
Buyer shall deliver to Sellers the following, in form and substance reasonably
satisfactory to Sellers and their counsel:

 

(a)           Closing Payment.  The payment described in Section 2.4(a).

 

(b)           Officer’s Certificate.  A certificate, dated as of the First
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying
that Buyer has in all material respects performed and complied with all of its
obligations, covenants, and agreements in this Agreement to be performed and
complied with on or prior to the First Closing Date.

 

(c)           Secretary’s Certificate.  A certificate, dated as of the First
Closing Date, executed by Buyer’s Secretary: (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by Buyer’s Board
of Directors, authorizing and approving the execution of this Agreement and the
consummation of the transaction contemplated hereby and that such resolutions
remain in full force and effect; and (ii) providing, as an attachment thereto,
Buyer’s Certificate of Incorporation.

 

(d)           Assumption Agreements.  Appropriate assumption agreements pursuant
to which Buyer shall assume and undertake to perform, subject to receipt of any
necessary third-party Consents, Sellers’ obligations under the FC Assumed
Contracts and to the extent provided in Section 2.5.

 

(e)           Good Standing Certificates.  To the extent available from the
applicable jurisdictions, certificates as to the formation and/or good standing
of Buyer issued by the appropriate governmental authorities in the states of
organization and each jurisdiction in which Buyer needs to be qualified in order
to operate the Station, each such certificate (if available) to be dated a date
not more than a reasonable number of days prior to the First Closing Date.

 

(f)            Opinion of Counsel.  An opinion of Buyer’s counsel dated as of
the First Closing Date, substantially in the form of Schedule 7.3(f) hereto.

 

(g)           JSA.  The JSA duly executed by Buyer.

 

(h)           Lease.  The Lease duly executed by Buyer.

 

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7.4.          Deliveries by Sellers at License Closing.  Prior to or on the
License Closing Date, Sellers shall deliver to Buyer the following, in form and
substance reasonably satisfactory to Buyer and its counsel:

 

(a)           Conveyancing Documents.  Duly executed assignments and other
transfer documents that are sufficient to vest good and marketable title to the
License Assets in the name of Buyer, free and clear of all Liens and obligations
except for Permitted Encumbrances.

 

(b)           Officer’s Certificate.  A certificate, dated as of the License
Closing Date, executed on behalf of one of the Sellers by an officer of such
Seller, certifying: (i) that the representations and warranties of Sellers in
Sections 3.1, 3.2, 3.3, 3.9, 3.11, 3.15 and 3.20, are true and complete (without
any qualifications by materiality) at and as of the License Closing Date as
though made at and as of that time (except for representations and warranties
that speak as of a specific date or time which need only be true and complete as
of such date or time); and (ii) that Sellers have performed and complied with
all obligations, covenants and agreements required by this Agreement to be
performed or complied with by them prior to or on the License Closing Date,
except to the extent that the failure of such representations and warranties to
be true and correct and the failure to perform or comply with such covenants
shall not have had a Material Adverse Effect or shall have been caused by
Buyer’s failure to fulfill its obligations under the JSA; provided, however,
that the foregoing list of sections shall exclude Section 3.15 if the License
Closing shall occur following the first anniversary of the First Closing Date.

 

(c)           Secretary’s Certificate.  A certificate, dated as of the License
Closing Date, executed by each Seller’s Secretary certifying that the
resolutions, as attached to such certificate, were duly adopted by such Seller’s
Board of Directors and shareholders (if required), authorizing and approving the
execution of this Agreement and the consummation of the transaction contemplated
hereby and that such resolutions remain in full force and effect.

 

(d)           Good Standing Certificates.  To the extent available from the
applicable jurisdictions, certificates as to the formation and/or good standing
of each Seller issued by the appropriate governmental authorities in the state
of organization and each jurisdiction in which such Seller is qualified to do
business, each such certificate (if available) to be dated a date not more than
a reasonable number of days prior to the License Closing Date.

 

(e)           Opinions of Counsel.  Opinion of Sellers’ counsel and
communications counsel dated as of the License Closing Date, substantially in
the form of Schedule 7.4(e) hereto.

 

(f)            Consents.  Execution copies of any instrument evidencing receipt
of any Consent which has been received by Sellers.

 

7.5.          Deliveries by Buyer at License Closing.  Prior to or on the
License Closing Date, Buyer shall deliver to Sellers the following, in form and
substance reasonably satisfactory to Sellers and their counsel:

 

(a)           Closing Payment.  The payment described in Section 2.4(b).

 

40

--------------------------------------------------------------------------------

 

(b)           Officer’s Certificate.  A certificate, dated as of the License
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying:
(i) that the representations and warranties of Buyer in Sections 4.1, 4.2, 4.3,
4.4, 4.6 and 4.7 are true and complete in all material respects at and as of the
License Closing Date as though made at and as of that time (except for
representations and warranties that speak as of a specific date or time which
need only be true and complete as of such date or time), and (ii) that Buyer
shall have performed and complied with in all material respects all obligations,
covenants and agreements required by this Agreement to be performed and complied
with by Buyer prior to or on the License Closing Date, except to the extent that
the failure of such representations and warranties to be true and correct and
the failure to perform or comply with such covenants shall have been caused by
either Seller’s failure to fulfill its obligations under the JSA.

 

(c)           Secretary’s Certificate.  A certificate, dated as of the License
Closing Date, executed by Buyer’s Secretary, certifying that the resolutions, as
attached to such certificate, were duly adopted by Buyer’s Board of Directors,
authorizing and approving the execution of this Agreement and the consummation
of the transaction contemplated hereby and that such resolutions remain in full
force and effect.

 

(d)           Assumption Agreements.  Appropriate assumption agreements pursuant
to which Buyer shall assume and undertake to perform Seller’s obligations under
the Licenses and the LC Assumed Contracts.

 

(e)           Good Standing Certificates.  To the extent available from the
applicable jurisdictions, certificates as to the formation and/or good standing
of Buyer issued by the appropriate governmental authorities in the states of
organization and each jurisdiction in which Buyer needs to be qualified in order
to operate the Station, each such certificate (if available) to be dated a date
not more than a reasonable number of days prior to the License Closing Date.

 

(f)            Opinion of Counsel.  An opinion of Buyer’s counsel dated as of
the License Closing Date substantially in the form of Schedule 7.5(f) hereto.

 

SECTION 8
TERMINATION

 

8.1.          Termination by Seller.  This Agreement may be terminated by
Sellers and the purchase and sale of the Station abandoned if Sellers are not
then in material default hereunder upon written notice to Buyer if the License
Closing shall not have occurred on or prior to the fifth (5th) anniversary of
the date hereof, provided, however, that on or prior to the fifth (5th)
anniversary of the date hereof, Buyer may, at its option, extend such
termination date to the tenth (10th) anniversary of the date hereof by paying or
causing to be paid to the License Seller the amount of Three Million Three
Hundred Fifty Thousand Dollars ($3,350,000) by wire transfer of same-day funds
pursuant to wire transfer instructions furnished by License Seller to Buyer
(which instructions shall be provided by License Seller to Buyer in writing
within two Business Days of Buyer’s written notice to License Seller requesting
such instructions).

 

41

--------------------------------------------------------------------------------

 

8.2.          Termination by Buyer.  This Agreement may be terminated by Buyer
and the purchase and sale of the Station abandoned if Buyer is not then in
material default with respect to its obligations hereunder upon written notice
to Sellers upon the occurrence of any of the following:

 

(a)           Failure to Obtain FCC Consent.  If the License Closing shall not
have occurred on or prior to the fifth (5th) anniversary of the date hereof,
subject to extension to the tenth (10th) anniversary of the date hereof pursuant
to Section 8.1.

 

(b)           Sellers’ Default.  If, following the First Closing, Sellers shall
be in material default with respect to their obligations hereunder and such
default shall not have been cured within thirty (30) days following written
notice from Buyer of such default (or within such longer period as may
reasonably be required to cure such default if not reasonably capable of being
cured within such thirty (30) days and Sellers shall have diligently begun
working to cure such default within such thirty (30) day period).

 

8.3.          Rights on Termination.  If this Agreement is terminated by Buyer
in accordance with the provisions of Section 8.2 above, Buyer shall have all
rights and remedies available at law or equity, including its rights to
indemnification pursuant to Section 9 hereof and the remedy of specific
performance described in Section 8.4 below.  If this Agreement is terminated by
Sellers in accordance with the provisions of Section 8.1 above, Sellers shall
have all rights and remedies available at law or equity, including their rights
to indemnification pursuant to Section 9 hereof.

 

8.4.          Specific Performance.  The parties recognize that if Sellers
breach this Agreement and refuse to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury.  Buyer shall therefor be entitled, in addition to any other remedies
that may be available, to obtain specific performance of the terms of this
Agreement.  If any action is brought by Buyer to enforce this Agreement, Sellers
shall waive the defense that there is an adequate remedy at law.

 

SECTION 9
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES

 

9.1.          Survival.  Without prejudice to representations and warranties in
other agreements delivered hereunder, all representations and warranties of
Buyer and Sellers herein shall be deemed continuing representations and
warranties and shall survive the First Closing or the License Closing, as set
forth below, and shall remain in full force and effect for the applicable
survival period set forth below (or until the final resolution of any claim or
dispute which is asserted in reasonably detailed writing prior to the expiration
of such period):

 

42

--------------------------------------------------------------------------------

 

 

 

Representation and Warranties
in Sections:

 

Made as of the following
Closing:

 

Shall survive for the
following period after
the date of such
Closing:

A

 

3 and 4 (excluding those in
categories B and C)

 

First Closing

 

One (1) Year

B

 

3.16

 

First Closing

 

Two (2) Years

C

 

3.2, 3.9, 3.11, 4.2

 

First Closing

 

Applicable Statute of
Limitations

D

 

3.1, 3.3, 3.15, 3.20, 4.1, 4.3, 4.4,
4.6, 4.7 (provided, 3.15 shall be
excluded if the License Closing
shall occur following the first
anniversary of the First Closing)

 

License Closing

 

One (1) Year

E

 

3.2, 3.9, 3.11, 4.2

 

License Closing

 

Applicable Statute of
Limitations

 

9.2.          Indemnification by Sellers.  After the First Closing, subject to
Section 9.5, Sellers hereby agree to indemnify and hold Buyer harmless against
and with respect to and shall reimburse Buyer for any and all losses,
liabilities, costs, expenses, claims, or damages, including reasonable legal
fees and expenses (collectively “Damages”), arising out of or resulting from:

 

(a)           any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Sellers contained in this Agreement or in any certificate,
document, or instrument delivered by Buyer under this Agreement;

 

(b)           any obligations or liabilities of Sellers not assumed by Buyer
pursuant to the terms of Section 2.5 hereof;

 

(c)           any failure of the parties to comply with the provisions of any
bulk sales law applicable to the transfer of the Assets;

 

(d)           the operation or ownership of the Station and the Assets prior to
the First Closing;

 

(e)           any action, suit, proceeding, claim, demand, assessment, or
judgment incident to the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof or in enforcing this
indemnity.

 

9.3.          Indemnification by Buyer.  After the First Closing, but subject to
Section 9.5, Buyer hereby agrees to indemnify and hold Sellers harmless against
and with respect to, and shall reimburse Sellers for any and all Damages arising
out of or resulting from:

 

43

--------------------------------------------------------------------------------

 

(a)           any untrue representation, breach of warranty, or nonfulfillment
of any covenant by Buyer contained in this Agreement or in any certificate,
document, or instrument delivered to Sellers under this Agreement;

 

(b)           any obligations or liabilities of Sellers assumed by Buyer
pursuant to the terms of Section 2.5 hereof;

 

(c)           the operation or ownership of the Station and the Assets after the
License Closing;

 

(d)           any violations of the so-called WARN Act resulting solely from
Buyer’s actions in connection with the transactions contemplated by this
Agreement; and

 

(e)           any action, suit, proceeding, claim, demand, assessment, or
judgment incident to the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof or in enforcing this
indemnity.

 

9.4.          Procedure for Indemnification.  The procedure for indemnification
shall be as follows:

 

(a)           The party claiming indemnification (the “Claimant”) shall promptly
give notice to the party from which indemnification is claimed (the
“Indemnifying Party”) of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim. 
If the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five (5)
business days after written notice of such action, suit, or proceeding was given
to Claimant.

 

(b)           With respect to claims solely between the parties, following
receipt of notice from the Claimant of a claim, the Indemnifying Party shall
have thirty (30) days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable.  For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information relied upon by the Claimant
to substantiate the claim.  If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty (30) day period (or any mutually agreed
upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim.  If the Claimant and the Indemnifying Party do not agree within the
thirty (30) day period (or any mutually agreed upon extension thereof), the
Claimant may seek appropriate remedy at law or equity.

 

(c)           With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party, provided, however, that the Indemnifying Party may not assume control of
the defense unless it affirms in writing its obligation to indemnify Claimant
for any damages incurred by

 

44

--------------------------------------------------------------------------------

 

Claimant with respect to such third-party claim.  If the Indemnifying Party
elects to assume control of the defense of any third-party claim, the Claimant
shall have the right to participate in the defense of such claim at its own
expense.  So long as the Indemnifying Party is defending in good faith any
third-party claim, the Claimant shall not settle or compromise such claim.  If
the Indemnifying Party does not elect to assume control or otherwise participate
in the defense of any third-party claim, it shall be bound by the results
obtained in good faith by the Claimant with respect to such claim.

 

(d)           If a claim, whether between the parties or by a third party,
requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.

 

(e)           The indemnification rights provided in Section 9.2 and Section 9.3
shall extend to the members, partners, shareholders, officers, directors,
employees, representatives, and affiliated entities of any Claimant; although
for the purpose of the procedures set forth in this Section 9.4, any
indemnification claims by such parties shall be made by and through the
Claimant.

 

9.5.          Certain Limitations.  Notwithstanding anything in this Agreement
to the contrary:

 

(a)           Neither Sellers nor Buyer, as Indemnifying Party, shall be liable
to the other party as Claimant with respect to any indemnification hereunder
except to the extent that the aggregate amount of Damages of such party as
Claimant exceeds One Hundred Thousand Dollars ($100,000.00) (the “Threshold
Amount”) (and then only to the extent such Damages exceed the Threshold Amount);
provided that all materiality qualifications in the representations and
warranties of an Indemnifying Party with respect to which the other party as
Claimant shall claim Damages shall be disregarded solely for purposes of
determining the occurrence of an untrue representation or breach of warranty and
the amount of Damages to be counted towards the Threshold Amount; and provided,
further, that the foregoing shall not apply to any amounts owed in connection
with the Purchase Price or the proration adjustment thereof.

 

(b)           Sellers shall be liable to indemnify Buyer hereunder only for
Damages up to an aggregate amount of Five Million Dollars ($5,000,000.00);
provided, however, that the foregoing limitation shall not apply but shall be
replaced by a limitation in the aggregate amount of all payments that shall have
been made by Buyer to Sellers pursuant to Sections 2.4 and 8.1, with respect to
the aggregate amount of Damages for which Buyer shall be entitled to indemnity
from Sellers pursuant to Section 9.2 arising out of or relating to any loss or
impairment of the FCC Licenses.

 

(c)           Subject to subsection (d) below, in no event shall a Claimant be
entitled to indemnification from the Indemnifying Party for incidental,
consequential, or punitive damages regardless of the theory of recovery.  Each
party hereto agrees to use reasonable efforts to mitigate any Damages which form
the basis for any claim for indemnification hereunder.

 

45

--------------------------------------------------------------------------------

 

(d)           In the event that Buyer, as Indemnifying Party, shall be obligated
to pay any Damages hereunder with respect to any indemnity claim by Sellers, as
Claimant, and Buyer shall be obligated to pay or shall have paid a Performance
Penalty pursuant to the JSA (and as defined therein) with respect to the events
giving rise to such Damages, then the amount of such Damages payable by Buyer
shall be reduced by and to the extent of the amount of the Performance Penalty
paid to Sellers less any separate damages payable to Sellers with respect to
such events pursuant to the JSA.

 

(e)           Neither Buyer nor Sellers as Claimant shall be entitled to
indemnity pursuant to Section 9.2 or 9.3, as the case may be, from the other
party as Indemnifying Party with respect to such Indemnifying Party’s breach of
any of its representations, warranties, covenants or agreements contained herein
to the extent that the inaccuracy of any such representation, or the breach of
any such warranty, covenant or agreement is caused by any breach by or failure
of Claimant or its employees or agents in performing or complying with
Claimant’s obligations, covenants and agreements set forth in the JSA.

 

SECTION 10
MISCELLANEOUS

 

10.1.        Fees and Expenses.

 

(a)           Buyer and Sellers shall each pay one-half (1/2) of (i) any fees
charged by the FCC in connection with the filing of the application for FCC
Consent contemplated by Section 5.1(a), and (ii) any filing fees, transfer
taxes, document stamps, or other charges levied by any governmental entity on
account of the transfer of the Assets from Sellers to Buyer; provided, however,
that any fees charged by the FCC in the event Buyer resubmits its application as
provided by Section 5.1(d) shall be Buyer’s sole responsibility; and provided,
further, that Sellers shall use its commercially reasonable efforts to attempt
to obtain from the state tax authorities in Missouri and Kansas promptly after
the date hereof (and thereafter to provide to Buyer) a certificate indicating
that Sellers have no outstanding sales and use tax liability with respect to the
consummation of the transactions contemplated hereby.

 

(b)           Except as otherwise provided in this Agreement, each party shall
pay its own expenses incurred in connection with the authorization, preparation,
execution and performance of this Agreement, including all fees and expenses of
counsel, accountants, agents and representatives, and each party shall be
responsible for all fees or commissions payable to any finder, broker, advisor,
or similar person retained by or on behalf of such party.

 

10.2.        Notices.  All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be (i) in writing; (ii)
sent by telecopy (with receipt personally confirmed by telephone), delivered by
personal delivery, or sent by commercial delivery service or certified mail,
return-receipt requested; (iii) deemed to have been given on the date telecopied
with receipt confirmed, the date of personal delivery, or the date set forth in
the records of the delivery service or on the return-receipt; and (iv) addressed
as follows:

 

46

--------------------------------------------------------------------------------

 

To Buyer:

Meredith Corporation

 

1716 Locust Street

 

Des Moines, IA 50309-3203

 

Attn: John S. Zieser, Esquire, Vice President,

 

 

General Counsel & Secretary

 

Telecopy: (515) 284-3933

 

Telephone: (515) 284-2895

 

 

With a copy (which shall not constitute notice) to:

Dow, Lohnes & Albertson PLLC

 

1200 New Hampshire Avenue

 

Washington, DC 20036-6802

 

Attn: John R. Feore, Esquire

 

Telecopy: (202) 776-2222

 

Telephone: (202) 776-2000

 

 

To Sellers:

KSMO, Inc. and KSMO Licensee, Inc.

 

c/o Sinclair Television Group

 

10706 Beaver Dam Road

 

Cockeysville, Maryland 21030

 

Attn: David D. Smith

 

Telecopy: (410) 568-1533

 

Telephone: (410) 568-1507

 

 

With a copy (which shall not constitute notice) to:

Sinclair Broadcast Group, Inc.

 

10706 Beaver Dam Road

 

Cockeysville, Maryland 21030

 

Attn: General Counsel

 

Telecopy: (410) 568-1537

 

Telephone: (410) 568-1524

 

 

With a copy (which shall not constitute notice) to:

Steven A. Thomas, Esquire

 

Thomas & Libowitz, P.A.

 

100 Light Street, Suite 1100

 

Baltimore, Maryland 21202

 

Telecopy: (410) 752-2046

 

Telephone: (410) 752-2468

 

or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 10.2.

 

10.3.        Benefit and Binding Effect.  No party hereto may assign this
Agreement without the prior written consent of the other parties hereto;
provided, such consent shall not be required in the event Buyer desires to
assign its rights hereunder to a wholly-owned subsidiary of Buyer, or solely
with respect to the acquisition of the License Assets, to any other Person;
provided further, Buyer may, without the consent of Sellers, collaterally assign
its rights hereunder to its lenders; provided finally, no such assignment to any
subsidiary, other Person or lender shall

 

47

--------------------------------------------------------------------------------

 

relieve Buyer of any of its obligations hereunder.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

 

10.4.        Further Assurances.  The parties shall take any actions and execute
any other documents that may be necessary or desirable to the implementation and
consummation of this Agreement.

 

10.5.        GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).

 

10.6.        Entire Agreement.  This Agreement, the Schedules hereto, and all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto collectively represent the entire understanding and agreement
between Buyer and Sellers with respect to the subject matter of this Agreement. 
This Agreement supersedes all prior negotiations between the parties and cannot
be amended, supplemented, or changed except by an agreement in writing that
makes specific reference to this Agreement and that is signed by the party
against which enforcement of any such amendment, supplement, or modification is
sought.

 

10.7.        Waiver of Compliance; Consents.  Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver of failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of or estoppel with
respect to any subsequent or other failure.  Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 10.7.

 

10.8.        Counterparts.  This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.

 

10.9.        Severability.  In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to 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
provision of this Agreement or any other instrument, and this Agreement shall be
construed in a manner that, as nearly as possible, reflects the original intent
of the parties.

 

[REST OF PAGE LEFT INTENTIONALLY BLANK

— SIGNATURES ON FOLLOWING PAGE]

 

48

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IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized
officers of Buyer and Sellers as of the date first written above.

 

 

WITNESS/ATTEST:

 

KSMO, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Rachel Castranova

 

By:

 

/s/ David B. Amy

(SEAL)

 

 

Name:

David B. Amy

 

 

 

Title:

Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KSMO LICENSEE, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Rachel Castranova

 

By:

 

/s/ David B. Amy

(SEAL)

 

 

Name:

David B. Amy

 

 

 

Title:

Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MEREDITH CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Vicki J. Glenn

 

By:

/s/ Suku V. Radia

(SEAL)

 

 

Name:

Suku V. Radia

 

 

 

Title:

VP - CFO

 

 

 

Joinder as a Party with respect to Sections 5.15 and 5.16:

 

 

 

SINCLAIR BROADCAST GROUP, INC.

 

 

 

 

 

 

/s/ Rachel Castranova

 

By:

/s/ David B. Amy

(SEAL)

 

 

Name:

David B. Amy

 

 

 

Title:

Executive Vice President

 

 

49

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

SECTION 1 CERTAIN DEFINITIONS [a05-1743_1ex10d48.htm#Section1_202404]

 

 

 

1.1. Terms Defined in this Section.
[a05-1743_1ex10d48.htm#TermsDefinedInThis_164644]

 

 

 

1.2. Terms Defined Elsewhere in this Agreement.
[a05-1743_1ex10d48.htm#TermsDefinedElsewhereInThis_164701]

 

 

 

1.3. Rules of Construction. [a05-1743_1ex10d48.htm#RulesOfConstruction_164712]

 

 

 

SECTION 2 PURCHASE AND SALE OF ASSETS [a05-1743_1ex10d48.htm#Section2_164848]

 

 

 

2.1. Agreement to Purchase and Sell.
[a05-1743_1ex10d48.htm#AgreementToPurchase_164853]

 

 

 

2.2. Excluded Assets. [a05-1743_1ex10d48.htm#ExcludedAssets_164901]

 

 

 

2.3. Purchase Price. [a05-1743_1ex10d48.htm#PurchasePrice_164908]

 

 

 

(a) Prorations. [a05-1743_1ex10d48.htm#Prorations_164914]

 

 

 

(b) Manner of Determining Adjustments.
[a05-1743_1ex10d48.htm#MannerOfDeterminingAdjustments_164923]

 

 

 

2.4. Payment of Purchase Price. [a05-1743_1ex10d48.htm#PaymentOfPurchase_164930]

 

 

 

(a) Payment of Estimated Purchase Price at First Closing.
[a05-1743_1ex10d48.htm#PaymentOfEstimatedPurchase_164936]

 

 

 

(b) Payments of Purchase Price with Respect to License Assets.
[a05-1743_1ex10d48.htm#PaymentsOfPurchasePrice_164942]

 

 

 

(c) Payments to Reflect Adjustments.
[a05-1743_1ex10d48.htm#PaymentsToReflect_164949]

 

 

 

2.5. Assumption of Liabilities and Obligations.
[a05-1743_1ex10d48.htm#AssumptionOfLiabilities_164954]

 

 

 

SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS
[a05-1743_1ex10d48.htm#Section3_165003]

 

 

 

3.1. Organization and Authority of Sellers.
[a05-1743_1ex10d48.htm#OrganizationAndAuthority_165010]

 

 

 

3.2. Authorization and Binding Obligation.
[a05-1743_1ex10d48.htm#AuthorizationAndBinding_165017]

 

 

 

3.3. Absence of Conflicting Agreements; Consents.
[a05-1743_1ex10d48.htm#AbsenceOfConflicting_165023]

 

 

 

3.4. Governmental Licenses. [a05-1743_1ex10d48.htm#GovernmentalLicenses_165028]

 

 

 

3.5. Real Property. [a05-1743_1ex10d48.htm#RealProperty_165040]

 

 

 

3.6. Tangible Personal Property.
[a05-1743_1ex10d48.htm#TangiblePersonalProperty_165048]

 

 

 

3.7. Contracts. [a05-1743_1ex10d48.htm#Contracts_165052]

 

 

 

3.8. Intangibles. [a05-1743_1ex10d48.htm#Intangibles_165112]

 

 

 

3.9. Title to Properties. [a05-1743_1ex10d48.htm#TitleToProperties_165117]

 

 

 

3.10. Financial Statements. [a05-1743_1ex10d48.htm#FinancialStatements_165122]

 

 

 

3.11. Taxes. [a05-1743_1ex10d48.htm#Taxes_165129]

 

 

 

3.12. Insurance. [a05-1743_1ex10d48.htm#Insurance_165134]

 

 

 

3.13. Reports. [a05-1743_1ex10d48.htm#Reports_165141]

 

 

 

3.14. Personal and Employee Benefits.
[a05-1743_1ex10d48.htm#PersonalAndEmployee_165145]

 

 

i

--------------------------------------------------------------------------------

 

(a) Employees and Compensation.
[a05-1743_1ex10d48.htm#EmployeesAndCompensation_165157]

 

 

 

(b) Pension Plans. [a05-1743_1ex10d48.htm#PensionPlans_165212]

 

 

 

(c) Welfare Plans. [a05-1743_1ex10d48.htm#WelfarePlans_165217]

 

 

 

(d) Compliance. [a05-1743_1ex10d48.htm#Compliance_165223]

 

 

 

(e) Benefit Arrangements. [a05-1743_1ex10d48.htm#BenefitArrangements_165232]

 

 

 

(f) Multiemployer Plans. [a05-1743_1ex10d48.htm#MultiemployerPlans_165237]

 

 

 

(g) Delivery of Copies of Relevant Documents and Other Information.
[a05-1743_1ex10d48.htm#DeliveryOfCopiesOfRelevantDocumen_165243]

 

 

 

(h) Labor Relations. [a05-1743_1ex10d48.htm#LaborRelations_165258]

 

 

 

3.15. Claims and Legal Actions.
[a05-1743_1ex10d48.htm#ClaimsAndLegalActions_165310]

 

 

 

3.16. Environmental Matters. [a05-1743_1ex10d48.htm#EnvironmentalMatters_165317]

 

 

 

3.17. Compliance with Laws. [a05-1743_1ex10d48.htm#ComplianceWithLaws_165329]

 

 

 

3.18. Conduct of Business in Ordinary Course.
[a05-1743_1ex10d48.htm#ConductOfBusinessInOrdinary_165336]

 

 

 

3.19. Transactions with Affiliates.
[a05-1743_1ex10d48.htm#TransactionsWithAffiliates_165348]

 

 

 

3.20. Broker. [a05-1743_1ex10d48.htm#Broker_165354]

 

 

 

SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
[a05-1743_1ex10d48.htm#Section4_165401]

 

 

 

4.1. Organization, Standing, and Authority.
[a05-1743_1ex10d48.htm#Organization_165414]

 

 

 

4.2. Authorization and Binding Obligation.
[a05-1743_1ex10d48.htm#AuthorizationAndBinding_165424]

 

 

 

4.3. Absence of Conflicting Agreements and Required Consents.
[a05-1743_1ex10d48.htm#AbsenceOfConflictingAgreements_165432]

 

 

 

4.4. Brokers. [a05-1743_1ex10d48.htm#Brokers_165439]

 

 

 

4.5. Qualifications of Buyer.
[a05-1743_1ex10d48.htm#QualificationsOfBuyer_165445]

 

 

 

4.6. Compliance with Laws. [a05-1743_1ex10d48.htm#ComplianceWithLaws_165451]

 

 

 

4.7. Claims and Legal Actions.
[a05-1743_1ex10d48.htm#ClaimsAndLegalActions_165458]

 

 

 

SECTION 5 SPECIAL COVENANTS AND AGREEMENTS
[a05-1743_1ex10d48.htm#Section5_165504]

 

 

 

5.1. FCC Consent. [a05-1743_1ex10d48.htm#FccConsent_165511]

 

 

 

5.2. Covenants of Sellers. [a05-1743_1ex10d48.htm#CovenantsOfSellers_165522]

 

 

 

(a) Commercially Reasonable Efforts.
[a05-1743_1ex10d48.htm#CommerciallyReasonable_165529]

 

 

 

(b) Ordinary Course. [a05-1743_1ex10d48.htm#OrdinaryCourse_165535]

 

 

 

(c) Compliance with Laws. [a05-1743_1ex10d48.htm#ComplianceWithLaws_165544]

 

 

 

(d) Access. [a05-1743_1ex10d48.htm#Access_165549]

 

 

 

(e) No Inconsistent Action. [a05-1743_1ex10d48.htm#NoInconsistentAction_165557]

 

 

ii

--------------------------------------------------------------------------------

 

(f) Update of Sellers’ Schedules. [a05-1743_1ex10d48.htm#UpdateOfSellers_165610]

 

 

 

(g) Contracts.

 

 

 

(h) Copies of Notices regarding Contracts.

 

 

 

(i) Licenses.

 

 

 

(j) Reports.

 

 

 

(k) Notice of Legal Actions.

 

 

 

(l) Transactions with Affiliates.

 

 

 

5.3.Confidentiality.

 

 

 

5.4. Cooperation.

 

 

 

5.5. Allocation of Purchase Price.

 

 

 

5.6. Access to Books and Records.

 

 

 

5.7. Employee Matters.

 

 

 

5.8. Joint Sales Agreement.

 

 

 

5.9. Consents.

 

 

 

5.10. Lease Agreement.

 

 

 

5.11. No Control.

 

 

 

5.12. Insurance.

 

 

 

5.13. Compliance with the JSA.

 

 

 

5.14 Update of Buyer’s Schedules.

 

 

 

5.15 SBG Guaranty.

 

 

 

5.16 Nonsolicitation Covenant.

 

 

 

SECTION 6 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER

 

 

 

6.1. Conditions to Obligations of Buyer at the First Closing.

 

 

 

(a) Obligations, Covenants and Agreements.

 

 

 

(b) Governmental Licenses.

 

 

 

(c) Legal Proceedings.

 

 

 

(d) Deliveries.

 

 

 

6.2. Conditions to Obligations of Sellers at the First Closing.

 

 

 

(a) Obligations, Covenants and Agreements.

 

 

 

(b) Legal Proceedings.

 

 

iii

--------------------------------------------------------------------------------

 

(c) Deliveries.

 

 

 

6.3. Conditions to Obligation of Buyer at the License Closing.

 

 

 

(a) Representations and Warranties.

 

 

 

(b) Obligations, Covenants and Agreements.

 

 

 

(c) FCC Consent.

 

 

 

(d) Governmental Licenses.

 

 

 

(e) Required Consents.

 

 

 

(f) Deliveries.

 

 

 

6.4. Conditions to Obligations of Sellers at the License Closing.

 

 

 

(a) Representations and Warranties.

 

 

 

(b) Obligations, Covenants and Agreements.

 

 

 

(c) FCC Consent.

 

 

 

(d) Deliveries.

 

 

 

SECTION 7 CLOSING AND CLOSING DELIVERIES

 

 

 

7.1. Closings.

 

 

 

(a) First Closing Date.

 

 

 

(b) License Closing Date.

 

 

 

(c) Postponement of Closing.

 

 

 

(d) Closing Place.

 

 

 

7.2. Deliveries by Sellers at First Closing.

 

 

 

(a) Conveyancing Documents.

 

 

 

(b) Officer’s Certificate.

 

 

 

(c) Secretary’s Certificate.

 

 

 

(d) Good Standing Certificates.

 

 

 

(e) Opinions of Counsel.

 

 

 

(f) JSA.

 

 

 

(g) Lease.

 

 

 

7.3. Deliveries by Buyer at First Closing.

 

 

 

(a) Closing Payment.

 

 

 

(b) Officer’s Certificate.

 

 

iv

--------------------------------------------------------------------------------

 

(c) Secretary’s Certificate.

 

 

 

(d) Assumption Agreements.

 

 

 

(e) Good Standing Certificates.

 

 

 

(f) Opinion of Counsel.

 

 

 

(g) JSA.

 

 

 

(h) Lease.

 

 

 

7.4. Deliveries by Sellers at License Closing.

 

 

 

(a) Conveyancing Documents.

 

 

 

(b) Officer’s Certificate.

 

 

 

(c) Secretary’s Certificate.

 

 

 

(d) Good Standing Certificates.

 

 

 

(e) Opinions of Counsel.

 

 

 

(f) Consents.

 

 

 

7.5. Deliveries by Buyer at License Closing.

 

 

 

(a) Closing Payment.

 

 

 

(b) Officer’s Certificate.

 

 

 

(c) Secretary’s Certificate.

 

 

 

(d) Assumption Agreements.

 

 

 

(e) Good Standing Certificates.

 

 

 

(f) Opinion of Counsel.

 

 

 

SECTION 8 TERMINATION

 

 

 

8.1. Termination by Seller.

 

 

 

8.2. Termination by Buyer.

 

 

 

(a) Failure to Obtain FCC Consent.

 

 

 

(b) Sellers’ Default.

 

 

 

8.3. Rights on Termination.

 

 

 

8.4. Specific Performance.

 

 

 

SECTION 9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN
REMEDIES

 

 

 

9.1. Survival.

 

 

v

--------------------------------------------------------------------------------

 

9.2. Indemnification by Sellers.

 

 

 

9.3. Indemnification by Buyer.

 

 

 

9.4. Procedure for Indemnification.

 

 

 

9.5. Certain Limitations.

 

 

 

SECTION 10 MISCELLANEOUS

 

 

 

10.1. Fees and Expenses.

 

 

 

10.2. Notices.

 

 

 

10.3. Benefit and Binding Effect.

 

 

 

10.4. Further Assurances.

 

 

 

10.5. GOVERNING LAW.

 

 

 

10.6. Entire Agreement.

 

 

 

10.7. Waiver of Compliance; Consents.

 

 

 

10.8. Counterparts.

 

 

 

10.9. Severability.

 

 

vi

--------------------------------------------------------------------------------

 

SELLERS’ SCHEDULES

 

 

Schedule 2.2(m)

–

 

Excluded Assets

 

 

 

 

 

 

Schedule 3.1

–

 

Organization and Authority of Sellers

 

 

 

 

 

 

Schedule 3.3

–

 

Conflicts

 

 

 

 

 

 

Schedule 3.4(a)

–

 

Governmental Licenses

 

 

 

 

 

 

Schedule 3.4(b)

–

 

Disclosures re Governmental Licenses

 

 

 

 

 

 

Schedule 3.5

–

 

Real Property

 

 

 

 

 

 

Schedule 3.6

–

 

Tangible Personal Property

 

 

 

 

 

 

Schedule 3.7

–

 

Contracts

 

 

 

 

 

 

Schedule 3.8

–

 

Intangibles

 

 

 

 

 

 

Schedule 3.10

–

 

Disclosures re Financial Statements

 

 

 

 

 

 

Schedule 3.11

–

 

Taxes

 

 

 

 

 

 

Schedule 3.12

–

 

Insurance

 

 

 

 

 

 

Schedule 3.14

–

 

Personnel and Employee Benefits

 

 

 

 

 

 

Schedule 3.15

–

 

Claims and Legal Actions

 

 

 

 

 

 

Schedule 3.18

–

 

Conduct of Business in the Ordinary Course

 

 

 

 

 

 

Schedule 5.7

–

 

Retained Employees

 

BUYER’S SCHEDULES

 

 

Schedule 4.5

–

 

FCC Qualifications of Buyer

 

 

 

 

 

 

Schedule 4.6

–

 

Buyer’s Compliance with Laws

 

 

 

 

 

 

Schedule 4.7

–

 

Claims and Legal Actions re Buyer

 

JOINT SCHEDULES

 

 

Schedule 5.8

–

 

Form of Joint Sales Agreement

 

 

 

 

 

 

Schedule 5.10

–

 

Form of Lease Agreement

 

 

 

 

 

 

Schedule 7.2(e)

–

 

Opinion of Sellers’ Counsels at First Closing

 

 

 

 

 

 

Schedule 7.3(f)

–

 

Opinion of Buyer’s Counsel at First Closing

 

 

 

 

 

 

Schedule 7.4(e)

–

 

Opinion of Sellers’ Counsels at License Closing

 

 

 

 

 

 

Schedule 7.5(f)

–

 

Opinion of Buyer’s Counsel at License Closing

 

vii

--------------------------------------------------------------------------------