<PAGE>
 
                                                                    EXHIBIT 10.6


                         AGREEMENT AND PLAN OF MERGER

                                     AMONG

                      SULLIVAN BROADCAST HOLDINGS, INC.,

                        SINCLAIR BROADCAST GROUP, INC.,

                                      and

                              ABRY PARTNERS, INC.
                        (as Stockholder Representative)



                                EFFECTIVE AS OF

                               FEBRUARY 23, 1998
<PAGE>
 
                         AGREEMENT AND PLAN OF MERGER


          THIS AGREEMENT AND PLAN OF MERGER is entered into on March 16, 1998,
but is effective as of February 23, 1998, among Sullivan Broadcast Holdings,
Inc., a Delaware corporation ("Sullivan"), Sinclair Broadcast Group, Inc., a
                               --------                                     
Maryland corporation ("Sinclair"), on behalf of itself and a subsidiary to be
                       --------                                              
formed by it pursuant to Section 1.A below, and ABRY Partners, Inc., a Delaware
corporation ("ABRY Partners"), solely in its capacity as the Stockholder
              ---- --------                                             
Representative referred to in this Agreement.

          WHEREAS, the parties to this Agreement are among the parties to an
Agreement and Plan of Merger dated as of February 23, 1998 (the "Prior
                                                                 -----
Agreement"), and the parties to the Prior Agreement have agreed to restate the
---------                                                                     
Prior Agreement by entering into this Agreement and certain other agreements;

          NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows,
effective as of the date of the Prior Agreement:


                                   ARTICLE I

                           THE SPIN-OFF TRANSACTIONS

          1.A. Formation of Merger Sub. On or prior to March 20, 1998, Sinclair
               --------- -- ------ ---                                         
will form a wholly-owned Subsidiary which will be a Delaware corporation.  Such
Subsidiary will be the "Merger Sub" referred to in this Agreement.   Sinclair
will cause such Subsidiary to become a party to this Agreement, the Indemnity
Agreement, the Earnest Money Escrow Agreement, the Estimate Escrow Agreement and
the Indemnity Escrow Agreement by executing and delivering to Sullivan a
counterpart thereof.

          1.B. Sullivan Two Spin-Off.  At or prior to the time of the Closing,
               -------- --- --------                                          
so long as all required Consents of the FCC for the Sullivan Two Spin-Off are
then effective and any other required Consent for the Sullivan Two Spin-Off has
been obtained and is then effective, Sullivan will, and will cause its
Subsidiaries to, take such actions as may be required to (1) cause the capital
stock of Sullivan Two to be distributed to the holders of the Sullivan Common
Share Equivalents immediately prior to such distribution, with each such holder
receiving a number of shares of common stock which is equal to the number of
shares of common stock of Sullivan then held by such holders (on a fully-
diluted, as-exercised basis) and with such shares of common stock of Sullivan
Two having the same relative voting rights as such shares of common stock of
Sullivan which are then held by each of them (on a similar fully-diluted, as-
exercised basis), and (2) cause the FCC Authorizations relating to the Sullivan
Two Stations and the other assets described in the attached Exhibit A to be
                                                            ---------      
transferred to Sullivan Two in consideration for a promissory note of Sullivan
Two in a principal amount equal to the amount specified on the attached Exhibit
                                                                        -------
A.  The transactions described the preceding sentence are referred to as the
-                                                                           
"Sullivan Two Spin-Off."
--------- --- --------  

                                       1
<PAGE>
 
          1.C  Sullivan Three Spin-Off.  At or prior to the time of the Closing,
               -------- ----- --------                                          
so long as all required Consents of the FCC for the Sullivan Three Spin-Off are
then effective and any other required Consent for the Sullivan Three Spin-Off
has been obtained and is then effective, Sullivan will, and will cause its
Subsidiaries to, take such actions as may be required to (1) cause the capital
stock of Sullivan Three to be distributed to the holders of the Sullivan Common
Share Equivalents immediately prior to such distribution, with each such holder
receiving a number of shares of common stock which is equal to the number of
shares of common stock of Sullivan then held by such holders (on a fully-
diluted, as-exercised basis) and with such shares of common stock of Sullivan
Three having the same relative voting rights as such shares of common stock of
Sullivan which are then held by each of them (on a similar fully-diluted, as-
exercised basis), and (2) cause the FCC Authorizations relating to the Sullivan
Three Stations and the other assets described in the attached Exhibit B  to be
transferred to Sullivan Three in consideration for a promissory note of Sullivan
Three in a principal amount equal to the amount specified on the attached
Exhibit B. The transactions described in the preceding sentence are referred to
------- -                                                                      
as the "Sullivan Three Spin-Off," and each of the Sullivan Two Spin-Off and the
        -------- ----- --------                                                
Sullivan Three Spin-Off is referred to as a "Spin-Off."
                                             --------  

          1.D  Spin-Off Taxes.  Sullivan and its Subsidiaries will be
               -------- -----                                        
responsible for the payment of any Tax arising solely by reason of either Spin-
Off (a "Spin-Off Tax").  To the extent not paid at the Effective Time, the
        -------- ---                                                      
liability of Sullivan and its Subsidiaries (if any) for any Spin-Off Tax arising
by reason of the Sullivan Three Spin-Off (as determined in accordance with
Section 3.D(6)) will be reflected in the computation of the Current Liabilities.


                                  ARTICLE II

                                  THE MERGER

          2.A  General.  Upon and subject to the terms and conditions stated in
               -------                                                         
this Agreement, on the Closing Date, effective as of the Effective Time, the
Merger Sub will merge with and into Sullivan in accordance with the terms and
conditions of this Agreement.  Sullivan will be the corporation which survives
such merger  (the "Merger") and in such capacity is sometimes referred to in
                   ------                                                   
this Agreement as "Post-Merger Sullivan."
 
          2.B  Effect on Sullivan Share Equivalents.  Immediately after the
               ------ -- -------- ----- -----------                        
Closing, effective at the Effective Time, subject to the terms and conditions of
this Agreement (1) the Merger will be effected by the filing with the Secretary
of the State of Delaware of a Certificate of Merger; (2) each Sullivan Share
Equivalent outstanding at the Effective Time, by said occurrence and with no
further action on the part of the holder thereof, will be transformed and
converted into the right to receive the Merger Consideration for such Sullivan
Share Equivalent, without interest or any similar payment thereon or with
respect thereto, upon surrender of the certificate representing such Sullivan
Share Equivalent; (3) each share of common stock of the Merger Sub outstanding
immediately prior to the Effective Time will, by said occurrence and with no
further action on the part of the holder thereof, be transformed and converted
into one share of common stock of Post-Merger Sullivan, so that immediately
thereafter Sinclair will be the sole and exclusive owner of all equity
securities of Post-Merger Sullivan; and (4) Post-Merger Sullivan will be the
owner of the 

                                       2
<PAGE>
 
business, assets, rights, privileges, immunities, powers, franchises and other
attributes of Sullivan and the Merger Sub.

          2.C  Certificate of Incorporation.  Immediately after the Effective
               ----------- -- -------------                                  
Time, the certificate of incorporation of Post-Merger Sullivan will be the
certificate of incorporation of the Merger Sub as in effect immediately prior to
the Effective Time.

          2.D  Bylaws.  Immediately after the Effective Time, the bylaws of
               ------                                                      
Post-Merger Sullivan will be the bylaws of the Merger Sub as in effect
immediately prior to the Effective Time.

          2.E  Board of Directors and Officers.  The board of directors and
               ----- -- --------- --- --------                             
officers of the Merger Sub immediately prior to the Effective Time will be the
board of directors and the officers, respectively, of Post-Merger Sullivan
immediately after the Effective Time, and such individuals will serve in such
positions for the respective terms provided by applicable Legal Requirements or
in the bylaws of Post-Merger Sullivan until their respective successors are
elected and qualified.

          2.F  Name.  The name of Post-Merger Sullivan will be designated by
               ----                                                         
     Sinclair.

          2.G  Exchange Procedures.  At or after the Closing, each holder of
               -------- ----------                                          
record of Sullivan Share Equivalents will deliver to Post-Merger Sullivan for
cancellation the certificate(s) representing such Sullivan Share Equivalents
(the "Old Sullivan Certificates").  Upon surrender of any Old Sullivan
      --- -------- ------------                                       
Certificate for cancellation, subject to the provisions of this Agreement, (a)
the holder of such Old Sullivan Certificate will receive in exchange therefor
the Merger Consideration for the Sullivan Share Equivalents represented by such
Old Sullivan Certificate, and (b) such Old Sullivan Certificate will be
canceled.  Until surrendered as contemplated by this Section 2.G, each Old
Sullivan Certificate will, at and after the Effective Time, be deemed to
represent only the right to receive, upon surrender of such Old Sullivan
Certificate, the Merger Consideration for the Sullivan Share Equivalents
represented by such Old Sullivan Certificate.
 
          2.H  No Further Rights; Transfer of Sullivan Stock.  The Merger
               -- ------- ------- -------- -- -------- -----             
Consideration paid for any Sullivan Share Equivalent in accordance with the
terms of this Agreement will be deemed to have been paid in full satisfaction of
all rights pertaining to such Sullivan Share Equivalent.  At the Effective Time,
the stock transfer books of Sullivan will be closed and no transfer of Sullivan
Share Equivalents will thereafter be made.

                                       3
<PAGE>
 
                                  ARTICLE III

                       MERGER CONSIDERATION AND CLOSING


          3.A  Merger Consideration.
               ------ ------------- 

               (1) Amount for all Sullivan Share Equivalents in the Aggregate.
                   ------ --- --- -------- ----- ----------- -- --- --------- 
     The amount of the aggregate "Merger Consideration" for all Sullivan Share
     Equivalents will an amount equal to the result of:

               (a)  (i) the sum of (x) the product of the Cash Flow Multiplier
          and the Annualized Trailing Cash Flow plus (y) if the Cash Flow
          Multiplier is 12.00 and the Annualized Trailing Cash Flow is not less
          than the amount of the Target Cash Flow, then $2,620,000, plus (ii)
          the KOKH Amount, plus (iii) the Adjustment Amount (the amount
          described in this clause (a) being the "Base Merger Consideration")
                                                  ---- ------ -------------  
          plus

               (b)  an amount equal to the Sullivan Receivable Proceeds (the
                                                                            
          "Receivable Merger Consideration"), which amount will be payable as
          ----------- ------ -------------                                   
          provided in Section 3.G;

     provided that, if the Closing occurs on or prior to September 21, 1998,
     then the amount described in clauses (a)(i) above will not exceed
     $970,000,000.  Subject to Section 3.A(4), the "Cash Flow Multiplier" means
     (x) 12.00, if the Closing occurs on or prior to June 23, 1998; (y) 12.25,
     if the Closing occurs after June 23, 1998 and on or prior to September 21,
     1998; and (z) 12.5, if the Closing occurs after September 21, 1998.   The
     "Target Cash Flow" means $78,115,000 plus the amount of all discretionary
     ------- ---- ----                                                        
     contributions actually made by Sullivan and its Subsidiaries to the 401(k)
     Plan with respect to any period after December 31, 1997.

               (2) Amount for any Particular Sullivan Share Equivalent.  With
                   ------ --- --- ---------- -------- ----- ----------       
     respect to any particular Sullivan Share Equivalent, the "Merger
     Consideration" means the portion of the aggregate Merger Consideration for
     all Sullivan Share Equivalents which is equal to the amount that the holder
     of such Sullivan Share Equivalent would receive in respect of such Sullivan
     Share Equivalent if:

                   (a) all Sullivan Rights outstanding immediately prior to the
          Effective Time were converted into or exercised or exchanged for
          Sullivan Shares to the fullest extent permitted by the terms of such
          Sullivan Rights, immediately prior to the Effective Time,
 
                   (b) Sullivan (instead of the Old Sullivan Stockholders)
          received an amount equal to the aggregate Merger Consideration for all
          Sullivan Share Equivalents and applied a portion of such aggregate
          Merger Consideration to the redemption in full, in accordance with the
          provisions of its certificate of incorporation, of all preferred stock
          of Sullivan, if any, which is outstanding 

                                       4
<PAGE>
 
          immediately prior to the Effective Time, and

                    (c) Sullivan thereafter distributed to the holders of the
          Sullivan Shares outstanding immediately prior to the Effective Time
          (after giving effect to the conversions, exercises and exchanges
          referred to in clause (a) above and the redemption described in clause
          (b) above), in accordance with the provisions of its certificate of
          incorporation, an amount equal to the aggregate Merger Consideration
          for the Sullivan Share Equivalents reduced by the amount required to
          effect the redemption described in clause (b) above,

     reduced, in the case of any Sullivan Right, by the exercise price (if any)
     payable upon the exercise of such Sullivan Right as described in clause (a)
     above.  Sullivan will cause the holders of all Sullivan Rights to accept
     the Merger Consideration for such Sullivan Right in consideration for the
     cancellation of such Sullivan Right.

               (3)  Form of Merger Consideration.
                    ---- -- ------ ------------- 
 
                    (a) For Sullivan Preferred Stock.  Subject to the provisions
                        --- -------- --------- -----                            
          of Article II regarding the surrender of Old Sullivan Certificates,
          the amount of the aggregate Merger Consideration for the Sullivan
          Preferred Stock will be paid on behalf of  the holders of Sullivan
          Preferred Stock on the Closing Date in cash by wire transfer of
          immediately available funds to such bank account(s) as the Stockholder
          Representative may designate to the Merger Sub not less than two (2)
          Business Days prior to the Closing Date.

                    (b) For Other Sullivan Share Equivalents.  Subject to the
                        --- ----- -------- ------ ----------                 
          provisions of Article II regarding the surrender of Old Sullivan
          Certificates, the Receivable Merger Consideration will be paid as
          provided in Section 3.G, and:

                    (i) at the option of the Merger Sub, up to One Hundred
               Million Dollars ($100,000,000) of the aggregate amount of the
               estimated Base Merger Consideration for the Sullivan Share
               Equivalents which are not Sullivan Preferred Stock (the "Sullivan
                                                                        --------
               Common Share Equivalents") will be paid to the holders of
               ------ ----- -----------                                 
               Sullivan Common Share Equivalents on the Closing Date (the "Old
                                                                           ---
               Sullivan Common Stockholders") by the issuance of validly-issued,
               -------- ------ ------------                                     
               fully-paid and nonassessable shares of Sinclair Common Stock
               which have been registered under the Securities Act (and which
               therefore will be tradeable on the Nasdaq National Market upon
               receipt thereof), and
 
                    (ii) the remainder of the estimated amount of such aggregate
               Base Merger Consideration will be paid for the account of the Old
               Sullivan Common Stockholders on the Closing Date in cash by wire
               transfer of immediately available funds to such bank account(s)
               as the Stockholder Representative may designate to the Merger Sub
               not less than two (2) Business Days prior to the Closing Date.

                                       5
<PAGE>
 
          The portion of the Base Merger Consideration which is payable in
          respect of the Sullivan Common Share Equivalents is referred to as the
          "Sullivan Common Base Merger Consideration."  For purposes of this
           -------- ------ ---- ------ -------------                        
          Section 3.A(3)(b), shares of Sinclair Common Stock will be valued at
          the Average Trading Price.  Notwithstanding the foregoing, the entire
          amount of the Sullivan Common Base Merger Consideration will be
          payable in cash in the manner provided in clause (ii) above if on the
          Closing Date shares of Sinclair Common Stock are not registered under
          the Securities Exchange Act, the registration described in clause (i)
          above has not been effected, and/or shares of Sinclair Common Stock
          are not traded on the Nasdaq National Market or a domestic national
          securities exchange.  The respective portions of the Sullivan Common
          Base Merger Consideration which are payable in Sinclair Common Stock
          and cash will be allocated among the Old Sullivan Common Stockholders
          pro rata according to the respective amounts of the Sullivan Common
          Base Merger Consideration to be received by them, as determined in
          accordance with Section 3.A(2); provided that, in lieu of issuing a
                                          --------                           
          fractional share of Sinclair Common Stock to any Old Sullivan Common
          Stockholder, Sinclair or the Merger Sub will pay the Stockholder
          Representative as provided in clause (ii) above (for the account of
          such Old Sullivan Stockholder) an amount in cash equal to a
          corresponding fraction of the Average Trading Price.

                    (c) Share Certificates for ABRY Fund Partners.  Sinclair and
                        ----- ------------ --- ---- ---- --------               
          the Merger Sub acknowledge that at or after the time of the Closing
          the ABRY Fund will distribute to its partners (who may in turn
          distribute to their partners, and so on) any or all of the shares of
          the Sinclair Common Stock which may be issuable to the ABRY Fund as
          part of the Sullivan Common Base Merger Consideration.  At the request
          of the Stockholder Representative, the Merger Sub will cause to be
          issued and delivered to the Stockholder Representative (for the
          account of the ABRY Fund) certificates for any or all of such shares
          of Sinclair Common Stock, issued in such whole-number denominations
          and registered in such names or nominees, as the Stockholder
          Representative may request.  Such certificates will be issued in whole
          number of shares only, and in lieu of any fractional share Sinclair or
          the Merger Sub will pay the Stockholder Representative (for the
          account of the ABRY Fund) an amount in cash equal to a corresponding
          fraction of the Average Trading Price.
 
                    (d) Escrow Deposit Under Certain Circumstances.
                        ------ ------- ----- ------- ------------- 
          Notwithstanding the foregoing, if the Estimated Receivable Amount set
          forth in Sullivan's Estimate Report (as it may be revised by Sullivan
          as provided in the penultimate sentence of Section 3.E(2)) is less
          than $24,000,000, then an amount equal to the excess of $24,000,000
          over such Estimated Receivable Amount will be withheld from the cash
          portion of the Sullivan Common Base Merger Consideration to be  paid
          to the Stockholder Representative pursuant to Section 3.A(3)(b) and
          will instead be deposited with the Estimate Escrow Agent as the
          Estimate Fund.

                                       6
<PAGE>
 
               (4)  Effect of Delay.
                    ------ -- ----- 
 
                    (a) If Caused by Sullivan.  If the Closing is delayed (a
                        -- ------ -- --------                               
          "Delay") solely by reason of (i) a breach by Sullivan of its
          ------                                                      
          obligations under this Agreement, (ii) the failure of a Sullivan
          Consent to be obtained,  (iii) any loss, damage, impairment,
          condemnation, confiscation or interruption described in Section 7.L(1)
          or 7.L(2), and/or (iv) a delay in the Grant of any Required FCC
          Consent for a Spin-Off, or in the expiration of the applicable waiting
          period under the Hart-Scott-Rodino Act, solely as a result of actions
          taken by Sullivan or its Subsidiaries (items described in clauses (i),
          (ii), (iii), and (iv) being "Causes"), then for purposes of
                                       ------                        
          determining the Cash Flow Multiplier and the amount described in
          Section 3.D(1)(b), the Closing will be deemed to have occurred on the
          day upon which it would have occurred but for such breach, failure,
          loss, damage, impairment, condemnation, confiscation or interruption.
 
                    (b) If Caused by Gross Revenue Shortfall.  As part of  the
                        -- ------ -- ----- ------- ---------                  
          Cash Flow Report delivered pursuant to Section 7.C(1) for each of
          March, April and May of 1998, Sullivan will deliver to Sinclair its
          good faith determination of the amount of the Gross Revenues,
          determined as if the last day of the month in question were the
          Measurement Date (such amount being the "Estimated Gross Revenues" for
                                                   --------- ----- --------     
          such month).  If the Estimated Gross Revenues for each of March, April
          and May of 1998 set forth in the corresponding Cash Flow Reports is
          less than the corresponding amount set forth in Section 10.E and all
          conditions to the Closing set forth in Articles IX and X (other than
          Section 10.E) have been satisfied or waived in writing (or would be
          satisfied by the delivery of documents or taking of other actions to
          be delivered or taken at the Closing) on June 23, 1998, then for
          purposes of determining the Cash Flow Multiplier, the Closing will be
          deemed to have occurred prior to June 23, 1998, if the Closing
          actually occurs on or prior to the fifth (5th) Business Day after the
          delivery of the Monthly Cash Flow Report for June, 1998.
 
          3.B  Annualized Trailing Cash Flow.
               ---------- -------- ---- ---- 

               (1) Trailing Cash Flow -- Basic Definition.  Subject to Sections
                   -------- ---- ------------- ----------                      
     3.B(2), 3.B(3), 3.B(4), 3.B(5), 3.B(6), and 13.Q, the "Trailing Cash Flow"
                                                            -------- ---- ---- 
     means the amount of

               (a) the consolidated net operating income of Sullivan and its
          Subsidiaries for the period (the "Measurement Period") beginning on
                                            ----------- ------               
          January 1, 1998 and ending on the earlier of (i) the last day of the
          last full calendar month ended prior to the Closing Date and (ii)
          August 31, 1998 (such earlier date being the "Measurement Date"),
                                                        ----------- ----   

               (b) increased by the amount of all non-recurring items incurred
          other than in the ordinary course of business, corporate overhead
          (including management and consulting fees, reimbursements paid or
          payable to ABRY Partners and all 

                                       7
<PAGE>
 
          discretionary profit-sharing and 401(k) plan contributions), income
          taxes, interest expense, depreciation and amortization (including
          amortization in respect of Film Obligations) deducted in computing
          such net operating income,

               (c) reduced by the aggregate amount of all Film Obligations which
          were actually paid in cash pursuant to Program Contracts with respect
          to the Stations during such period and which became due after
          September 30, 1997 (determined under the terms and conditions of the
          related Program Contracts as in effect on December 31, 1997, or as
          initially entered into, if entered into after December 31, 1997), and

               (d) further reduced by the aggregate amount of all Film
          Obligations which were not paid in cash on or prior to the Measurement
          Date and which became due prior to the three-calendar-month-period
          ending on the Measurement Date (determined under the terms and
          conditions of the related Program Contracts as in effect on December
          31, 1997, or as initially entered into, if entered into after December
          31, 1997).

     For purposes of clause (b) above, except as provided in Section 3.B(3),
     "corporate overhead" is understood and agreed to include all expenses
     ---------- --------                                                  
     incurred in connection with the activities of the Corporate Personnel and
     (without duplication) all expenses which are not incurred for the benefit
     of a single Station (with an LMA Station and the Owned Station serving the
     same market being considered a single "Station" for purposes of this
     sentence) and which would not be incurred for the benefit of a single
     Station under customary industry practice.

               (2) Treatment of Barter-Related Items.  Notwithstanding GAAP to
                   --------- -- -------------- -----                          
     the extent GAAP are to the contrary, the Trailing Cash Flow will be
     determined exclusive of the value of any consideration received in barter
     for time on any Station pursuant to any Trade and expenses pertaining to
     air time provided in barter for products or services pursuant to any Trade.
 
               (3) Lobbying Expenses.  For purposes of determining the Trailing
                   -------- --------
     Cash Flow, and notwithstanding GAAP to the extent GAAP are to the contrary,
     50% (and only 50%) of the amounts paid or payable to Policy Communications,
     Inc. and which are attributable to the Measurement Period will be deemed to
     constitute a part of corporate overhead, and therefore will be added
     pursuant to clause (b) of Section 3.B(1).

               (4) Treatment of Certain Cascom Items.  For purposes of
                   --------- -- ------- ------ -----
     determining the Trailing Cash Flow, and notwithstanding GAAP to the extent
     GAAP are to the contrary, any payment or accrual in respect of the "Cascom
     Bonus" (as that term is defined in the Executive Employment Agreement dated
     as of December 9, 1996 among Sullivan, Sullivan Broadcasting and Victor
     Rumore ("Rumore")) (so long as, by its terms, such Cascom Bonus will not
              ------                                                         
     continue to accrue after the Closing Date), and any expense relating to or
     arising out of the issuance in February, 1998 of shares of Sullivan Common
     Stock to Rumore, will be disregarded.

                                       8
<PAGE>
 
               (5) Treatment of Certain LMA Payments.  For purposes of
                   --------- -- ------- --- --------                  
     determining the Trailing Cash Flow, and notwithstanding GAAP to the extent
     GAAP are to the contrary, a portion of the amount payable by Sullivan or a
     Subsidiary of Sullivan under an Existing LMA for any period which is equal
     to the amount of the interest expense of the Person to whom such amount is
     payable for such period, plus the amount of all repayments of the principal
     amount of indebtedness of such Person from the proceeds of any such payment
     by Sullivan or a Subsidiary of Sullivan, will be treated as if it were
     interest expense of Sullivan and its Subsidiaries.

               (6) Application of GAAP.  Except as otherwise provided in this
                   ----------- -- ----                                       
     Agreement, the Trailing Cash Flow will be determined in accordance with
     GAAP.

               (7) Annualized Trailing Cash Flow Defined.  The "Annualized
                   ---------- -------- ---- ---- -------                  
     Trailing Cash Flow" means the product of the Trailing Cash Flow multiplied
     by the amount (the "Annualization Factor") set forth below for the date
                         ------------- ------                               
     which is the Measurement Date:

 
                Measurement Date         Annualization Factor
                ----------- ----         ------------- ------
                March 31, 1998                 5.81419
                April 30, 1998                 3.87381
                May 31, 1998                   2.90996
                June 30, 1998                  2.34386
                July 31, 1998                  2.02835
                August 31, 1998                1.76026
                                        
         3.C    KOKH Amount.  The "KOKH Amount" means the result of:
                ---- ------        ---- ------
               (1) $30,066,000, plus a yield on such amount from January 30,
     1998 to the date of the Closing computed at the Yield Rate, plus
                                                                 ----

               (2) for each payment made by Sullivan or any of its Subsidiaries
     after January 30, 1998 in respect of the "Purchase Price" under the KOKH
     Purchase Agreement or any out-of-pocket expense incurred in connection with
     the transactions contemplated by the KOKH Purchase Agreement, the amount of
     such payment plus a yield on such amount from the date it was paid to the
     Closing Date (or, if earlier in the case of any such expense which is later
     reimbursed by Sinclair, the date it is reimbursed by Sinclair), computed at
     the Yield Rate, plus
                     ----

               (3) for each capital contribution, loan or advance to Sullivan
     Broadcasting of Oklahoma City, Inc., a Delaware corporation ("SBOC"), or
                                                                   ----      
     Sullivan Broadcasting License Holder, Inc., a Nevada corporation ("SBLH"),
                                                                        ----   
     by Sullivan or another Subsidiary of Sullivan after January 30, 1998 and
     prior to the Closing, to the extent the proceeds thereof were used in
     connection with the operations of Station KOKH, the amount of such capital
     contribution, loan or advance, plus a yield on such amount from the date of
     such capital contribution, loan or advance to the Closing Date (or, if
     earlier, the date upon which such capital contribution, 


                                       9
<PAGE>
 
     loan or advance is repaid) computed at the Yield Rate, less
                                                            ----
               (4) the amount of each payment made to Sullivan or any of its
     Subsidiaries after January 30, 1998 pursuant to the KOKH Purchase Agreement
     representing a reduction in the "Purchase Price" thereunder or a
     reimbursement of expenses incurred by SBOC or SBLH, and less
                                                         --- ----

               (5) the amount of any capital contribution, loan or advance
     described in clause (3) above which is repaid prior to the Adjustment Time.

The "Yield Rate" will be 7.125% per annum.
     ----- ----                           

          3.D  Adjustment Amount.
               ---------- ------ 

               (1) Basic Definition.  Subject to the provisions of Sections
                   ----- ----------                                        
     3.D(2) through 3.D(6), the "Adjustment Amount" means:
                                 ---------- ------        

                   (a) the result of the following, as of the Adjustment Time,
          for Sullivan and its Subsidiaries (including Sullivan Two and Sullivan
          Three, as if it each were a Subsidiary of Sullivan at the Adjustment
          Time), determined on a consolidated basis:

                       (i) the aggregate amount of all cash, cash equivalents,
               marketable securities, prepaid expenses, deposits (other than
               film deposits, if any) held by others and any current assets
               (including amounts receivable from employees and independent
               contractors and co-op receivables, and amounts payable to
               Sullivan or any of its Subsidiaries by reason of the termination
               of any interest rate hedging arrangement, assuming such
               arrangement were terminated immediately prior to the Adjustment
               Time) not otherwise described in this clause (i), other than the
               Sullivan Receivables (collectively, but excluding the Sullivan
               Receivables, the "Current Assets"), reduced (below zero, if
                                 ------- ------    ------- ------ ----- --
               necessary) by
               ---------- --

                       (ii) the aggregate principal amount of all outstanding
               Funded Indebtedness and the aggregate principal amount of the
               outstanding indebtedness guaranteed by Sullivan Broadcasting
               pursuant to the Mission Guarantees, in each case together with
               the amount of all unpaid accrued interest thereon, unpaid
               commitment fees and costs incurred in connection with the
               termination of any interest rate hedging arrangements, assuming
               such arrangement were terminated immediately prior to the
               Adjustment Time, but excluding any change of control, prepayment
               or other premium in respect of any such indebtedness, and
               excluding in all events the indebtedness of Sullivan Two and
               Sullivan Three represented by the promissory notes issued by them
               in connection with the Spin-Offs, and further reduced (below
                                                 --- ------- ------- ------
               zero, if necessary) by
               ----- -- ---------- --

                                      10
<PAGE>
 
                       (iii) without duplication of any amount reflected in
               clause (ii) above, all trade accounts payable, accrued expenses
               (including accrued vacation pay) and other current liabilities
               (collectively, the "Current Liabilities"), and further reduced
                                   ------- -----------    --- ------- -------
               (below zero, if necessary) by
               ------ ----- -- ---------- --
 
                       (iv) the aggregate amount of the proceeds (net of taxes
               and disposition costs) of all Designated Sales (as that term is
               defined in Section 7.A(5)(a)(y) consummated after the date of
               this Agreement and prior to the Adjustment Time; increased by
                                                                --------- --

                   (b) the applicable amount set forth below, if the Closing
          occurs on or after October 21, 1998

 
 
                      Closing Date                    Amount
                      ------------                    ------
 
               On or after October 21, 1998 but
                 prior to November 20, 1998         $10,000,000
 
               On or after November 20, 1998 but
                 prior to December 20, 1998         $20,000,000
 
               On or after December 20, 1998 but
                 prior to January 19, 1999          $30,000,000
 
               On or after January 19, 1999 but
                 prior to February 18, 1999         $40,000,000
 
               On or after February 18, 1999 but
                 prior to March 20, 1999            $50,000,000
 
               On or after March 20, 1999 but
                prior to April 19, 1998             $60,000,000
 
               On or after April 19, 1998           $70,000,000

          and reduced by
          --- ------- --

                   (c) the excess, if any, of (i) the product of $1,985,422 and
          a fraction, the numerator of which is the number of days during
          calendar year 1998 prior to the Closing Date and the denominator of
          which is 365, over (ii) the aggregate amount of the capital
          expenditures made by Sullivan and its Subsidiaries during calendar
          year 1998 and prior to the Adjustment Time.

               (2) Current Portion of Funded Indebtedness.  For purposes of
                   ------- ------- -- ------ ------------                  

                                       11
<PAGE>
 
     determining the Adjustment Amount, and notwithstanding GAAP to the extent
     GAAP are to the contrary, the "Current Liabilities" will not include the
     current portion of any Funded Indebtedness or any accrued interest thereon.
 
               (3) Transaction Expenses.  For purposes of determining the
                   ----------- --------                                  
     Adjustment Amount, and notwithstanding GAAP to the extent GAAP are to the
     contrary, the "Current Liabilities" will include (i) all amounts incurred
     by Sullivan or any of its Subsidiaries (including on behalf of any Old
     Sullivan Stockholder, and including the fees and disbursements of advisors
     to Sullivan, Sullivan Two, Sullivan Three, the Old Sullivan Stockholders
     and the Stockholder Representative), in connection with the negotiation of,
     the execution of, the performance of Sullivan's, Sullivan Two's and
     Sullivan Three's obligations under, and the consummation or preparation for
     consummation of the transactions contemplated by, this Agreement and not
     paid prior to the Adjustment Time (all of which amounts Sinclair and Post-
     Merger Sullivan will pay and satisfy, or cause to be paid and satisfied, in
     full), other than any item which this Agreement specifies is to be at any
     Acquiring Party's expense, (ii) all amounts required to be paid by, or
     other obligations of Sullivan, any of its Subsidiaries, Sullivan Two or
     Sullivan Three from and after the Adjustment Time pursuant to the various
     employment agreements among Sullivan, Sullivan Broadcasting and the
     Corporate Personnel (each of whom it is understood will resign or be
     terminated as of the Effective Time), and (iii) all amounts required to be
     paid by Sullivan, any of its Subsidiaries, Sullivan Two or Sullivan Three
     from and after the Adjustment Time in connection with the termination of
     employment by Sullivan and its Subsidiaries of the Corporate Personnel or
     any Non-Continuing Station Manager effective as of the Closing Date.

               (4) Trade-Out Items.  For purposes of determining the Adjustment
                   --------- -----                                             
     Amount, and notwithstanding GAAP to the extent GAAP are to the contrary,
     with respect to Trade-Out Receivables and Trade-Out Payables:

                   (a) the amount of Sullivan's or any of its Subsidiaries'
          obligations under, and the amount of the goods, services and other
          items to be received under, any Trade will be determined in accordance
          with standard industry valuation methods as of the date of this
          Agreement (provided that, in the case of goods, services and other
                     --------                                               
          items to be so received, no such item will be valued at an amount
          which is greater than the fair value of such item at the Adjustment
          Time);

                   (b) the "Current Assets" will not include Trade-Out
          Receivables with respect to any Station;

                   (c) the "Current Liabilities" will not include Trade-Out
          Payables with respect to any Station except to the extent (and only to
          the extent) that the aggregate amount of the Trade-Out Payables with
          respect to such Station as of the Adjustment Time exceeds the
          aggregate amount of the Trade-Out Receivables with respect to such
          Station as of the Adjustment Time by more than $50,000; and

                                       12
<PAGE>
 
                   (d) for purposes of this Agreement (including clause (c)
          above), each Station which is a television translator station will be
          considered together with the related Station which is a full-power
          television station and all other related television translator
          stations.

               (5) Program Payments.  For purposes of determining the Adjustment
                   ------- --------                                             
     Amount, and notwithstanding GAAP to the extent GAAP are to the contrary,
     "Current Assets" and "Current Liabilities" will not include any amounts in
     respect of Film Obligations, except that:
 
                   (a) the Current Liabilities will include the aggregate
          amount of all Film Obligations which become due prior to the first day
          of the calendar month which includes the Closing Date (determined
          under the terms and conditions of the related Program Contracts as
          then in effect) and which are not paid prior to the Adjustment Time;

                   (b) the Current Liabilities will include an amount equal to
          (i) the aggregate amount of all Film Obligations which are not paid
          prior to the Adjustment Time and which become due during the calendar
          month which includes the Closing Date (determined under the terms and
          conditions of the related Program Contracts as then in effect),
          multiplied by (ii) a fraction, the numerator of which is the number of
          days during such calendar month prior to, but not including, the
          Closing Date, and the denominator of which is the number of days
          during such calendar month;/1/

                   (c) the Current Assets will include an amount equal to (i)
          the aggregate amount of all Film Obligations which are paid prior to
          the Adjustment Time and which become due during the calendar month
          which includes the Closing Date (determined under the terms and
          conditions of the related Program Contracts as then in effect),
          multiplied by (ii) a fraction, the numerator of which is the number of
          days during such calendar month on and after, but not prior to, the
          Closing Date, and the denominator of which is the number of days
          during such calendar month;/2/ and

                   (d) the Current Assets will include an amount equal to the
          aggregate amount of all Film Obligations which become due after the
          final day of the calendar month which includes the Closing Date
          (determined under the terms and conditions of the related Program
          Contracts as then in effect) and which are paid prior to the
          Adjustment Time.
 
-----------------

 /1/ e.g., if the Closing occurs on June 20, 1998, then the fraction described
     in this clause (b) will be 19/30.

 /2/ e.g., if the Closing occurs on June 20, 1998, then the fraction described
     in this clause (c) will be 11/30.

                                       13
<PAGE>
 
               (6) Tax Matters. For purposes of determining the Adjustment
                   --- -------                                            
     Amount and notwithstanding GAAP to the extent GAAP are to the contrary:
 
                   (a) Closing of Books. The Tax liabilities for each Straddle
                       ------- -- -----                                       
          Period will be determined by closing the books and records of
          Sullivan, its Subsidiaries, Sullivan Two and Sullivan Three as of the
          Adjustment Time, and by treating the portion of such Straddle Period
          ending on (and including) the day prior to the Closing Date and the
          portion of the Straddle Period beginning on the Closing Date as if
          they were separate Tax periods, and by employing accounting methods
          which are consistent with those employed in preparing the Tax Returns
          for Sullivan, its Subsidiaries, Sullivan Two and Sullivan Three in
          prior periods except as otherwise required by applicable law, and
          which do not have the effect of distorting income or expenses (taking
          into account the transactions contemplated by this Agreement), except
          that Taxes based on items other than income or sales (for this
          purpose, a Tax imposed under alternative methods, at least one of
          which is based on income, will be considered an income Tax) will be
          computed for such Straddle Period by prorating on a time basis between
          the portion of the Straddle Period beginning on the first day of the
          applicable Straddle Period and ending on (and including) the day prior
          to the Closing Date and the period beginning on the Closing Date and
          ending on the last day of such Straddle Period; provided that (x) with
          respect to any Tax which is not in effect during the entire Straddle
          Period, the proration of such Tax will be based on the period during
          the Straddle Period that such Tax was in effect, and (y) for all such
          purposes, the Sullivan Two Spin-Off will be deemed to have occurred
          after the Adjustment Time and the Sullivan Three Spin-Off will be
          deemed to have occurred prior to the Adjustment Time, with the effect
          that any liability for Spin-Off Taxes relating to the Sullivan Three
          Spin-Off, but not Spin-Off Taxes relating to the Sullivan Two Spin-
          Off, will constitute Current Liabilities.
 
                   (b) Determination of Spin-Off Tax Liabilities.  The
                       ------------- -- -------- --- -----------      
          respective amounts of Sullivan's, its Subsidiaries', Sullivan Two's
          and Sullivan Three's aggregate liabilities for the Spin-Off Taxes
          arising from the Sullivan Two Spin-Off (the "Sullivan Two Spin-Off Tax
                                                       -------- --- -------- ---
          Liability") and the Sullivan Three Spin-Off (the "Sullivan Three Spin-
          ---------                                         -------- ----- ----
          Off Tax Liability") will be determined by applying all available net
          --- --- ---------                                                   
          operating losses and other items of deduction and credit
          (collectively, "Tax Benefits").  Those Tax Benefits which are
                          --- --------                                 
          permitted under the applicable Legal Requirements to be applied to
          reduce either the Sullivan Two Spin-Off Tax Liability or Sullivan
          Three Spin-Off Tax Liability (as distinct from those Tax Benefits
          which are only permitted to be applied to reduce one such Tax
          Liability but not the other) will be applied pro rata, based on the
          respective amounts of the Sullivan Two Spin-Off Tax Liability for the
          Tax in question and the Sullivan Three Spin-Off Tax Liability for the
          Tax in question determined prior to the application of such Tax
          Benefits.
 
               (7) Application of GAAP.  Except as otherwise provided in this
                   ----------- -- ----                                       
     Agreement, the Adjustment Amount will be determined in accordance with
     GAAP.

                                       14
<PAGE>
 
          3.E  Estimates of Annualized Trailing Cash Flow, KOKH Amount and
               --------- -- ---------- -------- ---- ----- ---- ------ ---
Adjustment Amount for Closing Purposes.
---------- ------ --- ------- -------- 
 
               (1) Estimates to be Given Effect.  For purposes of determining
                   --------- -- -- ----- ------                              
     the amount of Base Merger Consideration to be paid at the Closing, the
     Annualized Trailing Cash Flow, the KOKH Amount and the Adjustment Amount
     will be deemed to be equal to the Estimated Annualized Trailing Cash Flow,
     the Estimated KOKH Amount and the Estimated Adjustment Amount,
     respectively, determined under this Section 3.E. Notwithstanding this
     Section 3.E and Section 3.F, if the Annualized Trailing Cash Flow has been
     finally determined pursuant to Section 3.J, then the amount so finally
     determined will be used to determine the amount of the Sullivan Base Merger
     Consideration to be paid at the Closing and the ultimate amount of the
     Sullivan Common Base Merger Consideration, and the provisions of this
     Section 3.E and Section 3.F will apply only to the KOKH Amount and the
     Adjustment Amount and not the Annualized Trailing Cash Flow.  For purposes
     of determining the Estimated Adjustment Amount, the aggregate amount of the
     Current Liabilities will be assumed to be $5,600,000 (unless Sullivan
     proposes a larger amount in Sullivan's Estimate Report).
 
               (2) Sullivan's Estimate Report.  At least five Business Days
                   ---------- -------- ------                              
     prior to any date scheduled for the Closing pursuant to Section 3.H,
     Sullivan will prepare and deliver to Sinclair a written report ("Sullivan's
                                                                      ----------
     Estimate Report") setting forth in reasonable detail Sullivan's good faith
     -------- ------                                                           
     estimates of the Annualized Trailing Cash Flow, the KOKH Amount and the
     Adjustment Amount as of such scheduled Closing date and Sullivan's good
     faith estimate of the gross amount of all Sullivan Receivables for which
     the date of the underlying invoice is not earlier than the 120th day prior
     to the Closing Date (the amount of such latter estimate being the
     "Estimated Receivable Amount"). After delivery of Sullivan's Estimate
     ---------- ---------- --------                                       
     Report, Sullivan will (and will cause its Subsidiaries to) allow Sinclair
     and its legal and accounting representatives and advisors reasonable access
     to Sullivan's and its Subsidiaries' books and records to enable Sinclair to
     verify the accuracy of the estimated amounts set forth in Sullivan's
     Estimate Report.  Sullivan will, in good faith, consider and make revisions
     to such estimated amounts, but will not be obligated to make any adjustment
     with which, in good faith, it does not agree.  The estimates of the
     Annualized Trailing Cash Flow, the KOKH Amount and the Adjustment Amount
     set forth in Sullivan's Estimate Report," as they may be adjusted by
     Sullivan as described in the preceding sentence, will be the "Estimated
                                                                   ---------
     Annualized Trailing Cash Flow," the "Estimated KOKH Amount" and the
     ---------- -------- ---- ----        --------- ---- ------         
     "Estimated Adjustment Amount," respectively, for the scheduled Closing date
     ---------- ---------- ------                                               
     in question.

          3.F  Final Determination of Base Merger Consideration after the
               ----- ------------- -- ---- ------ ------------- ----- ---
Closing.
------- 
 
               (1) Post-Closing Report.  On or prior to the one hundred tenth
                   ------------ ------                                       
     (110th) day after the Closing Date, Post-Closing Sullivan will prepare and
     submit to the Stockholder Representative consolidated and consolidating
     statements of income for Sullivan and its Subsidiaries for the period
     beginning on January 1, 1998 and ending on the Measurement Date and
     consolidated and consolidating balance sheets for Sullivan and its
     Subsidiaries (including each of Sullivan Two and Sullivan Three, as if it
     were a Subsidiary 

                                       15
<PAGE>
 
     of Sullivan as of the Adjustment Time) as of the Adjustment Time, together
     with Post-Merger Sullivan's determination of the aggregate Base Merger
     Consideration (the "Post-Closing Report"); provided that, if the Annualized
                         ------------ ------    --------
     Trailing Cash Flow has been finally determined prior to the Closing
     pursuant to Section 3.J, then the Post-Closing Report need not contain such
     consolidated and consolidating statements of income. The Acquiring Parties
     will (and will cause their respective Subsidiaries to) allow the
     Stockholder Representative and its legal and accounting representatives and
     advisors reasonable access to Post-Merger Sullivan's and its Subsidiaries'
     books and records to enable the Stockholder Representative to timely review
     and dispute the contents of the Post-Closing Report. Post-Closing
     Sullivan's determination of the aggregate Sullivan Common Base Merger
     Consideration set forth in the Post-Closing Report will become final and
     binding upon the Parties and the Old Sullivan Common Stockholders on the
     thirtieth (30th) day after the Post-Closing Report is given to the
     Stockholder Representative unless, prior to such thirtieth (30th) day, the
     Stockholder Representative gives Post-Closing Sullivan written notice
     stating that the Stockholder Representative disagrees with such
     determination and stating in reasonable detail the nature, extent of, and
     basis for, the Stockholder Representative's disagreement and the
     Stockholder Representative's determination of the aggregate Sullivan Common
     Base Merger Consideration.

               (2) Good Faith Resolution.  If the Stockholder Representative
                   ---- ----- ----------                                    
     timely gives Post-Closing Sullivan such a dispute notice, then, during the
     thirty (30) days after the Stockholder Representative gives such dispute
     notice, the Stockholder Representative and Post-Merger Sullivan will
     attempt in good faith to resolve such disagreement, and any mutual
     determination of the amount of the aggregate Sullivan Common Base Merger
     Consideration by the Stockholder Representative and Post-Merger Sullivan
     will be final and binding upon the Parties and the Old Sullivan
     Stockholders on the date of such mutual determination.
 
               (3) Arbitration of Dispute.  If any such dispute cannot be
                   ----------- -- -------                                
     resolved by the Stockholder Representative and Post-Merger Sullivan on or
     prior to such thirtieth (30th) day, then such dispute will be referred to
     Ernst & Young, and such firm's determination of the aggregate Sullivan
     Common Base Merger Consideration will be final and binding upon the Parties
     and the Old Sullivan Common Stockholders on the date such firm's report of
     its determination of the aggregate Sullivan Common Base Merger
     Consideration has been delivered to Post-Merger Sullivan and the
     Stockholder Representative.

               (4) Computation and Entitlement to Payment after Resolution.  If
                   ----------- --- ----------- -- ------- ----- ----------     
     the amount of the aggregate Sullivan Common Base Merger Consideration
     finally determined in accordance with this Section 3.F exceeds the amount
     of the estimated Sullivan Common Base Merger Consideration paid to the
     Stockholder Representative for the account of the Old Sullivan Common
     Stockholders at the Closing (disregarding the amount, if any, deposited in
     the Estimate Fund pursuant to Section 3.A(3)(d)) (the "Estimated Sullivan
                                                            --------- --------
     Common Base Merger Consideration"), then (subject to the provisions of
     ------ ---- ------ -------------                                      
     Article II regarding the surrender of Old Sullivan Certificates) the Old
     Sullivan Common Stockholders will be entitled to receive the amount of such
     excess pursuant to Section 3.F(5).  If the Estimated Sullivan 

                                       16
<PAGE>
 
     Common Base Merger Consideration exceeds the amount of the aggregate
     Sullivan Common Base Merger Consideration finally determined in accordance
     with this Section 3.F, then (subject to the limitation set forth in Section
     3.F(5)) Post-Merger Sullivan will be entitled to receive the amount of such
     excess pursuant to Section 3.F(5). Any amount which becomes payable
     pursuant to this Section 3.F(4) (except to the extent paid to Post-Merger
     Sullivan from the Estimate Fund) will constitute an adjustment of the
     aggregate Sullivan Common Base Merger Consideration paid at the Closing.

               (5) Payment after Resolution.
                   ------- ----- ---------- 

                   (a) If Payable to the Old Sullivan Stockholders.  Any amount
                       -- ------- -- --- --- -------- ------------             
          which becomes payable to the Old Sullivan Common Stockholders pursuant
          to Section 3.F(4) will be paid to the Stockholder Representative, for
          distribution by the Stockholder Representative to the Old Sullivan
          Common Stockholders, pro rata according to the remaining amounts of
          the Sullivan Common Base Merger Consideration payable to them.  Any
          such amount will be paid to the Stockholder Representative from the
          amount (if any) deposited in the Estimate Fund pursuant to Section
          3.A(3)(d), to the extent of the amount so deposited.  If no such
          deposit is made, or if such deposit is made and the amount to be paid
          to the Old Sullivan Common Stockholders pursuant to Section 3.F(4)
          exceeds the amount so deposited, then the amount (or the remaining
          amount, as applicable) so payable (for the Old Sullivan Stockholders'
          benefit) will be paid by Post-Merger Sullivan.

                   (b)  If Payable to Post-Merger Sullivan.  Any amount which
                        -- ------- -- ----------- --------                   
          becomes payable to Post-Merger Sullivan pursuant to Section 3.F(4)
          will be paid from the amount (if any) deposited in the Estimate Fund
          pursuant to Section 3.A(3)(d), to the extent of the amount so
          deposited.  If no such deposit is made, or if such deposit is made and
          the amount to be paid to Post-Merger Sullivan pursuant to Section
          3.F(4) exceeds the amount so deposited, then the amount (or the
          remaining amount, as applicable) so payable to Post-Merger Sullivan
          may be recovered by Post-Merger Sullivan from either or both of (i)
          the proceeds of the Sullivan Receivables received by Sinclair and its
          Subsidiaries during the Collection Period as provided in Section
          3.G(4) and (ii) the amounts deposited in the Indemnity Fund, and no
          additional amount will be payable to Post-Merger Sullivan (the amount,
          if any, deposited in the Estimate Fund pursuant to Section 3.A(3)(d),
          the amount of such proceeds of the Sullivan Receivables, and the
          amounts deposited in the Indemnity Fund pursuant to Section 3.G(4)
          being Post-Merger Sullivan's sole source of payment of any amount
          which may be owing to Post-Merger Sullivan by reason of the estimated
          amount of the aggregate Sullivan Common Base Merger Consideration paid
          to the Stockholder Representative at the Closing being greater than
          the Sullivan Common Base Merger Consideration as finally determined
          pursuant to this Section 3.F).
 
                   (c) Interest on Certain Amounts.  Any amount payable by
                       -------- -- ------- -------                        
          Post-Merger Sullivan pursuant to this Section 3.F(5) will bear
          interest at the rate of 18% 
                                        
                                       17
<PAGE>
 
          per annum from the third (3rd) Business Day after the date upon which
          the aggregate Sullivan Common Base Merger Consideration is finally
          determined in accordance with this Section 3.F through and including
          the date upon which such amount and all such interest are paid in full
          (it being understood that in no event will interest be payable to any
          Old Sullivan Common Stockholder in respect of any period prior to the
          date upon which such Old Sullivan Common Stockholder surrenders the
          Old Sullivan Certificate representing the Sullivan Common Share
          Equivalent in question).

                   (d) Payment of Undisputed Amount.  To the extent the
                       ------- -- ---------- ------                    
          aggregate Sullivan Common Base Merger Consideration and the resulting
          amount of any payment which may be required pursuant to Section 3.F(4)
          are not in dispute, Post-Merger Sullivan may retain proceeds of
          Sullivan Receivables as provided in Section 3.G(4), Post-Merger
          Sullivan or the Stockholder Representative will be entitled to
          withdraw amounts from the Estimate Fund and/or the Indemnity Fund, and
          the Stockholder Representative will be entitled to receive payments
          from Post-Merger Sullivan (for the account of the Old Sullivan Common
          Stockholders) of the amounts payable to the Old Sullivan Common
          Stockholders, as the case may be./3/

                    (e) Payments from Escrow Funds.  All payments made from the
                        -------- ---- ------ -----                             
          Estimate Fund or the Indemnity Fund pursuant to this Section 3.F(5)
          will be requested and made in accordance with the terms of the
          Estimate Escrow Agreement or the Indemnity Escrow Agreement, as
          applicable.  Earnings on the amount (if any) deposited in the Estimate
          Fund or the Indemnity Fund will be paid to the Person(s) ultimately
          entitled to receive the amount so deposited, pro rata based on the
          respective portions of the amount deposited in such Fund to be paid to
          them.
 
               (6) Costs of Dispute Resolution.  The prevailing party in any
                   ----- -- ------- ----------                              
     determination pursuant to Section 3.F(3) will be entitled to recover from
     the non-prevailing party such prevailing party's reasonable attorneys' fees
     and disbursements in addition to any amount owing to it at the Closing, and
     the nonprevailing party also will be required to pay all other reasonable
     costs and expenses associated with such determination; provided that (a) if
                                                            --------            
     the independent public accounting firm which makes such determination is
     unable to determine that a party is the prevailing party, then such costs
     and expenses will be equitably 

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

 /3/ By way of illustration, assume that (a) the Estimated Adjustment Amount is
$20,000,000, (b) neither the amount of the Annualized Trailing Cash Flow nor the
KOKH Amount is in dispute, and (c) no amount is deposited in the Estimate Fund.
If the Post-Closing Report indicates that the Adjustment Amount is $18,500,000
and the Stockholder Representative disputes that determination and asserts that
the Adjustment Amount is $19,000,000, then only $500,000 is in dispute. In that
case, even prior to the resolution of such dispute, Post-Merger Sullivan will be
entitled to retain from the proceeds of the Sullivan Receivables as provided in
Section 3.G(4), or withdraw from the Indemnity Fund, $1,000,000 (along with a
proportionate share of the "Escrow Income" referred to in the Indemnity Escrow
Agreement, in the case of such a withdrawal from the Indemnity Fund).

                                       18
<PAGE>
 
allocated by such firm upon the basis of the outcome of such determination, and
(b) if such firm is unable to allocate such costs and expenses in such a manner,
then the costs and expenses of such arbitration will be paid one-half by Post-
Merger Sullivan and one-half by the Stockholder Representative (on behalf of the
Old Sullivan Stockholders), and each of them will pay the out-of-pocket expenses
incurred by it. Such independent accounting firm may designate the prevailing
party for purposes of this Section 3.F(6).

          3.G  Sullivan Receivables.
               -------- ----------- 

               (1) Defined.  The "Sullivan Receivables" means all trade and
                   -------        -------- -----------                     
     other accounts and notes receivable of Sullivan and its Subsidiaries
     (including each of Sullivan Two and Sullivan Three, for this purpose)
     arising from the sale of advertising time (including so-called
     "infomercials") and other paid programming time on the Stations, determined
     on a consolidated basis as of the Adjustment Time.

               (2) Collection and Application.  On, and during the 120 days
                   ---------- --- -----------                              
     after, the Closing Date (the "Collection Period"), Post-Merger Sullivan and
                                   ---------- ------                            
     Sinclair will, and will cause their respective Subsidiaries to, use
     reasonable efforts in accordance with their respective normal business
     practices (not including resorting to or threatening litigation) to collect
     the Sullivan Receivables, including issuing invoices for those Sullivan
     Receivables for which invoices have not been issued prior to the Closing
     Date. Collections from any Person which is a debtor with respect to any
     Sullivan Receivable (a "Sullivan Debtor") will be applied in the
                             -------- ------                         
     chronological order of the billings of Sullivan, Sullivan Two, Sullivan
     Three, Post-Merger Sullivan and their respective Subsidiaries, as
     applicable, to such Sullivan Debtor (i.e., to the oldest unpaid billing
     first) unless (i) such Sullivan Debtor disputes in writing its obligation
     to pay such billing, (ii) such Sullivan Debtor indicates in writing that
     such payment is to be applied in another, specified manner, or (iii) other
     facts or circumstances exist in light of which it would be reasonable to
     conclude that such Sullivan Debtor does not intend such payment to be
     applied in such a manner.
 
               (3) Efforts by Stockholder Representative or Old Sullivan
                   ------- -- ----------- -------------- -- --- --------
     Stockholders.  So long as Post-Merger Sullivan and Sinclair are in
     ------------                                                      
     compliance with this Section 3.G, neither the Stockholder Representative
     nor any Old Sullivan Stockholder will make any direct solicitation of any
     Sullivan Debtor for purposes of collecting any Sullivan Receivable during
     the Collection Period, except as may be agreed to by Post-Merger Sullivan
     and the Stockholder Representative and except with respect to those
     Sullivan Receivables which may be or become more than 180 days past due and
     those Sullivan Receivables with respect to which Post-Merger Sullivan,
     Sinclair or any of their respective Subsidiaries has received written
     notice of a dispute from the related Sullivan Debtor (a copy of which
     notice Post-Merger Sullivan will promptly forward to the Stockholder
     Representative).

               (4) Payment of Proceeds.  After the end of the Collection Period
                   ------- -- --------                                         
     and on or prior to the 150th day after the Closing Date, Post-Merger
     Sullivan will pay over an amount equal to the aggregate proceeds received
     by Sinclair and its Subsidiaries in respect of Sullivan Receivables during
     the Collection Period, plus interest thereon computed 

                                       19
<PAGE>
 
     as described below (collectively, the "Sullivan Receivable Proceeds"), as
                                            -------- ---------- --------  
     follows (without set-off in respect of any other liability or obligation of
     any Person, whether arising pursuant to this Agreement or otherwise except
     as expressly provided in this Section 3.G(4)):

               (a) the sum of (x) an amount equal to the aggregate amount of all
          Loss and Expense (as that term is defined in the Indemnity Agreement)
          asserted in writing pursuant to Section 2 of the Indemnity Agreement
          as recoverable under Section 3 of the Indemnity Agreement and (y) the
          amount which Post-Merger Sullivan asserts in good faith it will be
          owed pursuant to Section 3.F(4), if the amount of the aggregate
          Sullivan Common Base Merger Consideration has not been finally
          determined in accordance with Section 3.F (or, if less than such sum,
          the entire amount of the Sullivan Receivable Proceeds) will be paid to
          the Indemnity Escrow Agent and deposited in the Indemnity Fund, and

               (b) the remainder of the Sullivan Receivable Proceeds will be
          paid to the Stockholder Representative, for the account of the Old
          Sullivan Common Stockholders, as part of the Merger Consideration for
          the Sullivan Common Share Equivalents,

     in each case by wire transfer of immediately available funds to the account
     specified by the recipient thereof; provided that, from and after the time
                                         --------                              
     when the amount of the aggregate Sullivan Common Base Merger Consideration
     is finally determined in accordance with Section 3.F, if any amount is
     payable to Post-Merger Sullivan pursuant to Section 3.F(4) based on such
     determination, then Post-Merger Sullivan may retain from the aggregate
     proceeds received by Sinclair and its Subsidiaries in respect of the
     Sullivan Receivables during the Collection Period the amount so owed to it,
     and the Sullivan Receivable Proceeds will be reduced by such amount.  At
     the time of the payments described in clauses (a) and (b) above, Post-
     Merger Sullivan will deliver to the Stockholder Representative a report
     which specifies the application to the Sullivan Receivables and other
     accounts receivable of the collections received during the Collection
     Period.  Interest will be computed on the full amount of the Sullivan
     Receivable Proceeds (exclusive of interest which is part thereof) from and
     after the 74th day after the Closing to the date upon which the payments
     described in clauses (a) and (b) above are made), at the rate of 7.125% per
     annum.

               (5) Transfer after Collection Period.  Immediately following the
                   -------- ----- ---------- ------                            
     last day of the Collection Period, Post-Merger Sullivan and Sinclair will,
     and will cause their respective Subsidiaries to, transfer and assign to the
     Stockholder Representative (for the account of the Old Sullivan Common
     Stockholders) all rights with respect to the Sullivan Receivables to the
     extent they have not then been collected in full, together with all files
     concerning such Sullivan Receivables, and Post-Merger Sullivan, Sinclair
     and their respective Subsidiaries will have no further responsibilities
     pursuant to this Section 3.G with respect to any Sullivan Receivable except
     to remit to the Stockholder Representative (on behalf of the Old Sullivan
     Stockholders) as provided in Section 3.G(4) any Sullivan Receivable
     Proceeds received after the Collection Period.  Such transfer, assignment
     and remittance will constitute a part of the payment of the Sullivan Common
     Merger 

                                       20
<PAGE>
 
     Consideration.

               (6) Access to Information.  During and after the Collection
                   ------ -- -----------                                  
     Period, the Acquiring Parties will, and will cause their respective
     Subsidiaries to, furnish the Stockholder Representative and its agents,
     representatives and advisors with all information (including reasonable
     access to their respective books and records) which the Stockholder
     Representative reasonably requests in order to monitor, confirm or dispute
     the Acquiring Parties' compliance with this Section 3.G.

          3.H  Closing Time and Place.  Subject to Section 12.A, the
consummation of the Merger and the payment of the Base Merger Consideration for
Sullivan Share Equivalents to be paid at such time (the "Closing") will be held
                                                         -------               
in the offices of Kirkland & Ellis, in New York, New York, at 10:00 a.m., local
time, on the date determined pursuant to the following two sentences, or at such
other place and/or at such other time and date as the Merger Sub and Sullivan
may agree in writing.  The Closing will occur on a date designated by the Merger
Sub by written notice to Sullivan not less than ten Business Days in advance of
such date (which designated date will be not later than the Expiration Date).
Notwithstanding the foregoing, but subject to Section 12.A, if on a date for the
Closing described in the preceding sentence or specified pursuant to this
sentence any condition of the Merger Sub or Sullivan specified in Article IX or
X has not been satisfied (and will not be satisfied by the delivery of documents
at the Closing) or waived in writing, then the date for the Closing will be
extended to any date specified by the Merger Sub to Sullivan with not less than
10 Business Days' notice to the other (subject to the Merger Sub's and
Sullivan's respective conditions to the Closing set forth in Articles IX and X
being satisfied or waived in writing on such specified date); provided that any
                                                              --------         
such specified date will be on or prior to the Expiration Date.
 
          3.I  Deliveries at the Closing.  All actions on the Closing Date
(including those described in Sections 11.D and 11.E) will be deemed to occur
simultaneously, and no document or payment to be delivered or made on the
Closing Date will be deemed to be delivered or made until all such documents and
payments are delivered or made to the reasonable satisfaction of Sullivan, the
Merger Sub, the Stockholder Representative and their respective legal counsel.

               (1) Delivery of Earnest Money.  At the Closing, to the extent
                   -------- -- ------- -----                                
     then held by the Earnest Money Escrow Agent, the Earnest Money Fund
     (together with all Earnest Money Income, if any, received and held by the
     Earnest Money Escrow Agent and the right to receive all Earnest Money
     Income, if any, not yet received by the Earnest Money Escrow Agent) will be
     delivered to the Merger Sub.

               (2) Deliveries by Sullivan.  At the Closing, Sullivan will
                   ---------- -- --------                                
     deliver to the Merger Sub the following:
 
                   (a) the minute book, stock transfer book and other records
          relating to the internal corporate affairs of Sullivan and each
          Subsidiary of Sullivan (other than Sullivan Two and Sullivan Three)
          which are in Sullivan's and its Subsidiaries' possession, and
          resignations of the officers and directors of each of Sullivan and the
          Subsidiaries of Sullivan, which 

                                       21
<PAGE>
 
          resignations will be effective as of the Effective Time;

                   (b) all mortgage discharges or releases of Liens that, upon
          the repayment in full of all outstanding Funded Indebtedness and other
          obligations of Sullivan and its Subsidiaries (other than Sullivan Two
          and Sullivan Three) under the Sullivan Senior Debt Arrangements as
          described in Section 11.E and all other Funded Indebtedness of
          Sullivan and its Subsidiaries (other than Sullivan Two and Sullivan
          Three) and all related interest and other obligations, the release of
          the Mission Guarantees, any required execution and delivery thereof by
          Sullivan or a Subsidiary of Sullivan (other than Sullivan Two and
          Sullivan Three), and any requisite filing thereof, will be sufficient
          to cause the Station Assets held by Sullivan and its Subsidiaries
          (other than the assets and properties transferred in the Spin-Offs)
          and the capital stock of Sullivan's Subsidiaries (other than Sullivan
          Two and Sullivan Three) to be as described in the second sentence of
          Section 4.G(1) and in Sections 4.G(4) and 4.Q;

                   (c) a certificate of the President or Chief Executive
          Officer of Sullivan dated the Closing Date to the effect that, except
          as specified in such certificate, to the best of such officer's
          knowledge, the conditions set forth in Sections 10.A(1) and 10.A(2)
          have been fulfilled;

                   (d) a certificate of Sullivan dated the Closing Date to the
          effect that, except as specified in such certificate, the conditions
          set forth in Sections 10.A(1) and 10.A(2) have been fulfilled;

                   (e) a certified copy of the resolutions or action by written
          consent of the board of directors and stockholders of Sullivan
          authorizing the Merger and Sullivan's execution, delivery and
          performance of this Agreement;

                   (f) certificates as to the existence and/or good standing of
          Sullivan and each of its Subsidiaries (other than Sullivan Two and
          Sullivan Three), in each case issued by the Secretary of State or a
          comparable official of each jurisdiction specified for such
          corporation on the attached Schedule 4O and dated on or after the
          fifth Business Day prior to the Closing Date, certifying as to the
          existence and/or good standing of such corporation in such
          jurisdictions;

                   (g) one or more opinions of counsel or special counsel to
          Sullivan, each dated the Closing Date, as to the matters set forth in
          the attached Exhibit C; and
                       ------- -     

                   (h) such other documents, instruments and receipts as the
          Merger Sub may reasonably request in order to effectuate the Merger
          and the other transactions contemplated by this Agreement to be
          consummated at the Closing.

     Each of the foregoing will be reasonably satisfactory in form to the Merger
     Sub and its legal counsel.

                                       22
<PAGE>
 
               (3) Deliveries by the Merger Sub.  At the Closing, the Merger Sub
                   ---------- -- --- ------ ---                                 
     will deliver or cause to be delivered to the Stockholder Representative
     stock certificates for Sinclair Common Stock (if shares of Sinclair Common
     Stock are to be part of the Merger Consideration) and cash as described in
     Section 3.A representing the aggregate Base Merger Consideration in respect
     of the Sullivan Share Equivalents, determined based upon the Estimated
     Annualized Trailing Cash Flow (or the Annualized Trailing Cash Flow, if it
     has been finally determined pursuant to Section 3.J), the Estimated KOKH
     Amount and the Estimated Adjustment Amount (subject to the provisions of
     Article II), together with the following:

                   (a) a certificate of an officer or similar official of the
          Merger Sub dated the Closing Date to the effect that, except as
          specified in such certificate, to the best of such officer's or
          official's knowledge, the conditions set forth in Section 9.A(1) and
          9.A(2) have been fulfilled;

                   (b) a certificate of an officer or similar official of
          Sinclair dated the Closing Date to the effect that, except as
          specified in such certificate, to the best of such officer's or
          official's knowledge, the conditions set forth in Sections 9.A(1) and
          9.A(2) have been fulfilled;

                   (c) a certificate of the Merger Sub dated the Closing Date
          to the effect that, except as specified in such certificate, the
          conditions set forth in Sections 9.A(1) and 9.A(2) have been
          fulfilled;

                   (d) a certificate of Sinclair dated the Closing Date to the
          effect that, except as specified in such certificate, the conditions
          set forth in Sections 9.A(1) and 9.A(2) have been fulfilled;

                   (e) a certified copy of the resolutions or action by written
          consent of the board of directors and stockholders of the Merger Sub
          authorizing the Merger and the Merger Sub's execution, delivery and
          performance of this Agreement;

                   (f) a certified copy of the resolutions or action by written
          consent of the board of directors of Sinclair authorizing Sinclair's
          execution, delivery and performance of this Agreement;

                   (g) certificates as to the existence and/or good standing of
          Sinclair and the Merger Sub, in each case issued by the Secretary of
          State or a comparable official of such jurisdictions as Sullivan may
          reasonably request and dated on or after the fifth Business Day prior
          to the Closing Date, certifying as to the existence and/or good
          standing of such corporation in such jurisdictions;
 
                   (h) one or more opinions of counsel or special counsel to
          Sinclair and the Merger Sub, each dated the Closing Date, as to the
          matters set forth in the attached Exhibit D; and
                                            ------- -     

                                       23
<PAGE>
 
                   (i) such other documents, instruments and receipts as
          Sullivan may reasonably request in order to effectuate the Merger and
          the other transactions contemplated by this Agreement to be
          consummated at the Closing (including the registration and issuance of
          any Sinclair Common Stock which is part of the Merger Consideration).

     Each of the foregoing will be reasonably satisfactory in form to Sullivan
     and its legal counsel.

          3.J  Determination of Trailing Cash Flow and Gross Revenues.
               ------------- -- -------- ---- ---- --- ----- -------- 

               (1) Gross Revenues Defined.  The "Gross Revenues" for any period
                   ----- -------- -------        ----- --------                
     means the amount of the gross revenues of Sullivan and its Subsidiaries
     from all sources, determined in accordance with GAAP on a consolidated
     basis, but excluding revenues (other than from the sale of advertising or
     paid programming time on the Stations) of a non-recurring nature generated
     other than in the ordinary course of business.
 
               (2) Examination of Cash Flow Reports. Without limiting Section
                   ----------- -- ---- ---- -------                          
     7.C(2), Sullivan will (and will cause its Subsidiaries to) allow Sinclair
     and its legal and accounting representatives and advisors reasonable access
     to Sullivan's and its Subsidiaries' books and records to enable Sinclair to
     evaluate and dispute Sullivan's determination of the Trailing Cash Flow and
     the Gross Revenues set forth in each Cash Flow Report.  Sullivan's
     determination of the Trailing Cash Flow or the Gross Revenues set forth in
     any Cash Flow Report will become final and binding upon the parties to this
     Agreement  and the Old Sullivan Stockholders on the fifteenth (15th)
     Business Day after such Cash Flow Report is given to Sinclair unless, prior
     to such fifteenth (15th) Business Day, Sinclair gives Sullivan written
     notice stating that Sinclair disagrees with such determination and stating
     in reasonable detail the nature, extent of, and basis for, Sinclair's
     disagreement and Sinclair's determination of the Trailing Cash Flow or
     Gross Revenues, as the case may be, for the period in question.

               (3) Good Faith Resolution.  If Sinclair timely gives Sullivan
                   ---- ----- ----------                                    
     such a dispute notice, then, during the five (5) Business Days after
     Sinclair gives such dispute notice, Sullivan and Sinclair will attempt in
     good faith to resolve such disagreement, and any mutual determination of
     the amount of the Gross Revenues or the Trailing Cash Flow, as the case may
     be, for the period in question by Sullivan and Sinclair will be final and
     binding upon the parties to this Agreement and the Old Sullivan
     Stockholders on the date of such mutual determination.

               (4) Arbitration of Dispute.  If any such dispute cannot be
                   ----------- -- -------                                
     resolved by Sullivan and Sinclair on or prior to such fifth (5th) Business
     Day, then such dispute will be referred to Ernst & Young, and such firm's
     determination of the Gross Revenues or the Trailing Cash Flow, as the case
     may be, for the period in question will be final and binding upon the
     parties to this Agreement and the Old Sullivan Stockholders on the date
     such firm's 

                                       24
<PAGE>
 
     report of its determination of the Gross Revenues or the Trailing Cash
     Flow, as the case may be, for such period has been delivered to Sullivan
     and Sinclair.

               (5) Costs of Dispute Resolution.  The prevailing party in any
                   ----- -- ------- ----------
     determination pursuant to Section 3.J(4) will be entitled to recover from
     the non-prevailing party such prevailing party's reasonable attorneys' fees
     and disbursements, and the nonprevailing party also will be required to pay
     all other reasonable costs and expenses associated with such determination;
     provided that (a) if the independent public accounting firm which makes
     such determination is unable to determine that a party is the prevailing
     party, then such costs and expenses will be equitably allocated by such
     firm upon the basis of the outcome of such determination, and (b) if such
     firm is unable to allocate such costs and expenses in such a manner, then
     the costs and expenses of such arbitration will be paid one-half by
     Sullivan and one-half by Sinclair, and each of them will pay the out-of-
     pocket expenses incurred by it.  Such independent accounting firm may
     designate the prevailing party for purposes of this Section 3.J(5).

               (6) Outdated Determination.  If the Trailing Cash Flow or the
                   -------- -------------
     Gross Revenues for any period believed to be the Measurement Period are
     determined in accordance with this Section 3.J but such period is not the
     actual Measurement Period, then the Trailing Cash Flow or the Gross
     Revenues, as the case may be, will later be determined for the actual
     Measurement Period in accordance with this Section 3.J.

          3.K  Mandatory Payment to Sullivan.
               --------- ------- -- --------
 
               (1) When Mandatory Payment Becomes Owing and Due.  Except as
                   ---- --------- ------- ------- ----- --- ---
     provided in Section 12.B(4)(d), on the Approval Date a payment in the
     amount of Seventy Five Million Dollars ($75,000,000) will become owing to
     Sullivan by the Merger Sub.  Whether or not this Agreement is thereafter
     terminated pursuant to Section 12.A, such payment (the "Mandatory Payment")
                                                             --------- --------
     will be due and payable upon the termination of this Agreement pursuant to
     Section 12.A (or, if earlier, the later of June 23, 1998 and the fifth
     Business Day after the Approval Date), unless the Closing has occurred or
     the circumstances described in Section 12.B(4)(d) apply.  If the Merger Sub
     does not pay such amount on or prior to such later date, then Sullivan may
     seek payment of such amount from the Earnest Money Fund (including by means
     a drawing under the Earnest Money Letter of Credit), in accordance with the
     terms of the Earnest Money Escrow Agreement, unless the circumstances
     described in Section 12.B(4)(d) exist.

               (2) Return of Earnest Money Fund.  Upon the making of the
                   ------ -- ------- ----- ----
     Mandatory Payment, the Merger Sub will be entitled to a return of the
     Earnest Money Fund. Any such return to the Merger Sub of the Earnest Money
     Fund may be requested, and will be effected, in accordance with the terms
     of the Earnest Money Escrow Agreement.  After receipt of the Mandatory
     Payment by Sullivan, at the Merger Sub's request Sullivan will execute and
     deliver to the Merger Sub such joint written instructions to the Earnest
     Money Escrow Agent as the Merger Sub may reasonably request in order to
     effect the return of the Earnest Money Fund to the Merger Sub.

                                       25
<PAGE>
 
               (3) Treatment of Mandatory Payment.  The Parties intend that, if
                   --------- -- --------- -------                              
     the Mandatory Payment is required to be made, then the Mandatory Payment
     will become the property of Sullivan, for the benefit of its
     securityholders, and (whether or not the Closing occurs) will be required
     to be repaid by Sullivan only as expressly provided in Section 12.B(4)(d).
     If the Mandatory Payment is made, then the amount of the Mandatory Payment
     will constitute a prepayment of the portion of the aggregate Base Merger
     Consideration payable in respect of the Sullivan Share Equivalents and will
     be credited against the amount of such portion of the aggregate Base Merger
     Consideration to be paid at the Closing in cash.  If this Agreement is
     terminated pursuant to Section 12.A after the Mandatory Payment is made,
     then Sullivan may retain the Mandatory Payment except under the
     circumstances described in Section 12.B(4)(d).  If this Agreement is
     terminated pursuant to Section 12.A prior to the making of the Mandatory
     Payment, then the Mandatory Payment will thereupon become due and payable,
     except under the circumstances described in Section 12.A(4)(d), and the
     Earnest Money Fund will not be released (except to Sullivan) until the
     Mandatory Payment has been made.  Unless this Agreement has been terminated
     pursuant to Section 12.A and Sullivan is entitled to retain the Mandatory
     Payment, Sullivan will not distribute or loan the proceeds of the Mandatory
     Payment to its stockholders or their respective Affiliates (other than
     Sullivan's Subsidiaries), but may utilize all or a portion of such proceeds
     to repay Indebtedness of Sullivan and its Subsidiaries (so long as the
     amount repaid may be reborrowed, subject to the satisfaction of customary
     conditions for the purpose of repaying such amount to Sinclair as provided
     in Section 12.B(4)(d)) or for any other purpose not prohibited  hereunder.


                                  ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF SULLIVAN
                                        
          Subject to Section 13.Q, Sullivan makes the following representations
and warranties:

          4.A  Organization. Sullivan is a corporation which is duly organized,
               ------------                                                    
validly existing and in good standing under the laws of the State of Delaware
and is qualified to do business or has similar status under the laws of each
jurisdiction in which such qualification is required by applicable Legal
Requirements.  Sullivan has the power and authority to carry on the business
being conducted by it, to own and operate the Station Assets owned and operated
by it, and to enter into and consummate the transactions contemplated to be
consummated by it pursuant to this Agreement.

          4.B  Action. Each action necessary to be taken by or on the part of
               ------                                                        
Sullivan in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated to be consummated by Sullivan
pursuant to this Agreement and necessary to make the same effective will be duly
and validly taken by, and be effective at, the time by which such action is
required to be taken. This Agreement has been duly and validly authorized,
executed, and delivered by Sullivan and constitutes its valid and binding
agreement, enforceable against 

                                       26
<PAGE>
 
Sullivan in accordance with and subject to its terms, subject to the effect of
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
arrangement, moratorium or similar laws affecting the rights of creditors
generally and the availability of equitable remedies.

          4.C  Financial Statements.
               --------- ---------- 

               (1) Description of Statements.  Attached to this Agreement as
                   ----------- -- ----------                                
     Schedule 4C are copies of (a) the audited consolidated balance sheet of
     Sullivan as at December 31, 1996, and the related statements of operations
     and cash flows for the period from January 4, 1996 (the date upon which
     Sullivan acquired Act III) to December 31, 1996, and related notes, all
     reported on by Sullivan's independent certified public accountants
     (collectively, the "12/31/96 Financial Statements"), and (b) the internally
                         -------- --------- ----------                          
     prepared unaudited consolidated balance sheet of Sullivan as at September
     30, 1997 and the related statement of operations for the nine-month period
     ended September 30, 1997 (the "9/30/97 Financial Statements").

               (2) Representations as to 1996 Statements.  The 12/31/96
                   --------------- -- -- ---- ----------               
     Financial Statements are, in all material respects, (a) as of December 31,
     1996, correct, complete and in agreement with the books and records
     regularly maintained by Sullivan and its Subsidiaries, and (b) prepared in
     accordance with generally accepted accounting principles applied on a basis
     consistent with past practice throughout the year involved.  The 12/31/96
     Financial Statements present fairly, in all material respects, the
     financial position of Sullivan and its Subsidiaries as at December 31, 1996
     and the results of the operations and cash flow of Sullivan and its
     Subsidiaries for the period covered thereby.
 
               (3) Representations as to 1997 Statements.  When they are
                   --------------- -- -- ---- ----------                
     delivered as provided in Section 7.C, the 12/31/97 Financial Statements
     will be, in all material respects, (a) as of December 31, 1997, correct,
     complete and in agreement with the books and records regularly maintained
     by Sullivan and its Subsidiaries, and (b) prepared in accordance with
     generally accepted accounting principles applied on a basis consistent with
     past practice throughout the year involved, and will present fairly in all
     material respects, the financial position of Sullivan and its Subsidiaries
     as at December 31, 1997 and the results of the operations and cash flow of
     Sullivan and its Subsidiaries for the period covered thereby.

               (4) Representations as to Interim Statements.  Subject to the
                   --------------- -- -- ------- ----------                 
     effect of year-end adjustments which normally would arise in the course of
     an audit, the 9/30/97 Financial Statements are, as of September 30, 1997,
     in all material respects, correct, complete and in agreement with the books
     and records regularly maintained by Sullivan and its Subsidiaries, and,
     taken together, present fairly, in all material respects, the financial
     position of Sullivan and its Subsidiaries as at September 30, 1997 and the
     results of the operations of Sullivan and its Subsidiaries for the nine
     months then ended.

          4.D  Business Since September 30, 1997.  Since September 30, 1997,
               -------- ----- --------- --- ----                            
except to the extent required or permitted by this Agreement or as set forth on
the attached Schedule 4D, the
             -------- --  

                                       27
<PAGE>
 
business of the Stations has in all material respects been conducted in the
ordinary course of business and in the same manner as it had been conducted by
Sullivan and its Subsidiaries from January 4, 1996 (the date upon which Sullivan
acquired Act III) through December 31, 1996.

          4.E  FCC Authorizations.   As of the date of this Agreement, each
               --- --------------                                          
Person specified in the attached Schedule 4E as the holder of an FCC
                                 -------- --                        
Authorization has been authorized by the FCC to hold and is the holder of each
of the FCC Authorizations specified for such Person on the attached Schedule 4E.
                                                                    -------- --
Except as set forth on the attached Schedule 4E, (i) such FCC Authorizations
                                    -------- --                             
constitute all of the licenses and authorizations required under the
Communications Act, or the current rules, regulations, and policies of the FCC,
for the operation of the Stations as now conducted; (ii) such FCC Authorizations
are in full force and effect and are subject to or scheduled for renewal on the
respective dates specified on the attached Schedule 4E (unless theretofore
                                           -------- --                    
renewed after the date of this Agreement); (iii) such FCC Authorizations are
valid for the full respective terms thereof; (iv) none of Sullivan, its
Subsidiaries, Sullivan Two and Sullivan Three has any reason to believe that
such FCC Authorizations will not be renewed for a full and customary term in the
ordinary course with no materially adverse conditions (except with respect to
general rule-making and similar matters relating generally to television
broadcast stations); (v) there is not pending, or, to the knowledge of Sullivan
or any of its Subsidiaries, threatened, any action by or before the FCC to
revoke, cancel, rescind, modify, or refuse to renew in the ordinary course any
of the FCC Authorizations, and there is not now pending, or, to the knowledge of
any such Person, threatened, issued, or outstanding by or before the FCC, any
investigation, order to show cause, notice of violation, notice of apparent
liability, or notice of forfeiture or complaint against Sullivan, any of its
Subsidiaries, Sullivan Two or Sullivan Three with respect to any Station; (vi)
the Stations are operating in compliance, in all material respects, with the FCC
Authorizations, the Communications Act, and the current rules, regulations and
policies of the FCC; (vii) to the knowledge of Sullivan and its Subsidiaries, no
Station (other than any Station which is a low-power television station) is
short-spaced, on a grandfathered basis or otherwise, to any existing broadcast
television station, outstanding construction permit or pending application
therefor, domestic or international, or to any existing or proposed TV
allotment, domestic or international; (viii) neither Sullivan, any of its
Subsidiaries, Sullivan Two nor Sullivan Three has received any written notice to
the effect that it is causing objectionable interference to the transmissions of
any other television station or communications facility or has received any
written complaints with respect thereto; (ix) no other television station or
communications facility is causing objectionable interference to any Station's
transmissions or the public's reception of such transmissions; and (x) all
documents required by 47 C.F.R. Section 73.3526 to be kept in each Station's
public inspection file are in such file, and such file will be maintained in
proper order and complete up to and through the Closing Date.  Except with
respect to Market Cable Systems that are parties to retransmission agreements,
for each Station, there has been made a valid election of must carry with
respect to each Market Cable System. Except as set forth on Schedule 4.E, no
                                                            -------- ---    
Market Cable System has advised Sullivan, its Subsidiaries, Sullivan Two or
Sullivan Three of any signal quality deficiency or copyright indemnity or other
prerequisite to cable carriage of any Station's signal, and no Market Cable
System has declined or threatened to decline such carriage of such Station or
failed to respond to a request for carriage of such Station or sought any form
of relief from carriage of such Station from the FCC.  Sullivan, its
Subsidiaries, Sullivan Two and Sullivan Three have filed with the FCC, on a
timely basis, all material reports and other material

                                       28
<PAGE>
 
reports and other material filings required to be filed by them in connection
with the Stations pursuant to the Communications Act and the rules, regulations
and policies of the FCC.

          4.F  Condition of Assets.  Except as set forth on the attached
               --------- -- ------                                      
Schedule 4F, the material tangible assets of Sullivan and its Subsidiaries and
-------- --                                                                   
the improvements on the Realty which are used by them (a) are in all material
respects in good and technically sound operating condition (ordinary wear and
tear excepted) and are not in need of repair, (b) are in all material respects
in a condition which would be sufficient to permit the owner thereof to operate
or program the Stations (in the manner in which the Stations are operated or
programmed by Sullivan and its Subsidiaries as of the date of this Agreement) in
compliance with the terms of the FCC Authorizations, the Communications Act and
current FCC rules and regulations, and (c) have in all material respects been
maintained in a manner consistent with generally accepted standards of good
engineering practice and to the knowledge of Sullivan, all applicable federal,
state and local statutes, ordinances, rules and regulations, including, without
limitation, all applicable tower painting and lighting requirements.

          4.G  Title, Etc.
               ------ --- 

               (1) Realty.  The attached Schedule 4G contains a description of
                   ------                -------- ---                         
     all parcels of Realty owned by Sullivan, its Subsidiaries, Sullivan Two and
     Sullivan Three (collectively, the "Owned Realty"). The Person designated as
                                        ----- ------                            
     the "Titleholder" on the attached Schedule 4G has good and marketable fee
                                       -------- --                            
     title to such parcel, free and clear of all Liens, except for Permitted
     Encumbrances.  Included in the attached Schedule 4G is a copy of the policy
                                             -------- --                        
     (if any) insuring the Titleholder's title thereto as of the date of this
     Agreement.  Sullivan and its Subsidiaries have valid leasehold interests in
     all real property subject to the leases (the "Leases") described on the
                                                   ------                   
     attached Schedule 4G.  The attached Schedule 4G contains a description of
              -------- --                -------- --                          
     all the material Leases to which Sullivan, any Subsidiary of Sullivan,
     Sullivan Two or Sullivan Three is a party as a tenant (or subtenant) or
     landlord with respect to any Station as of the date of this Agreement,
     other than any lease pursuant to which Sullivan or a Subsidiary (as lessor)
     leases space on a tower on terms which were customary when such lease was
     entered into.  Neither Sullivan, any of its Subsidiaries, Sullivan Two nor
     Sullivan Three is in material default under any of the Leases, and
     Sullivan, any Sullivan Subsidiary, Sullivan Two or Sullivan Three is the
     holder of the leaseholds purported to be granted to it under the Leases
     under which it is a lessee.  Each of the Leases (x) is valid as to
     Sullivan, any Sullivan Subsidiary, Sullivan Two or Sullivan Three and, to
     the knowledge of Sullivan,  is valid as to any other party thereto, (y) is
     in full force and effect and constitutes a legal and binding obligation of,
     and is legally enforceable against, Sullivan, any Sullivan Subsidiary,
     Sullivan Two or Sullivan Three and, to Sullivan's knowledge, each other
     party thereto, subject to the effect of applicable bankruptcy, insolvency,
     reorganization, fraudulent conveyance, arrangement, moratorium or similar
     laws affecting the rights of creditors generally and the availability of
     equitable remedies, and (z) grants substantially the leasehold interest it
     purports to grant, including any rights to nondisturbance and peaceful and
     quiet enjoyment that may be contained therein.  To Sullivan's knowledge,
     each party other than Sullivan, any Sullivan Subsidiary, Sullivan Two or
     Sullivan Three is in compliance in all material respects with the
     provisions of the Leases.  The Owned Realty and the real property 

                                       29
<PAGE>
 
     subject to the Leases listed in the attached Schedule 4G constitute all of
                                                  -------- --
     the real property owned, leased or used by Sullivan, any Sullivan
     Subsidiary, Sullivan Two or Sullivan Three in the business and operations
     of the Stations which is material to the businesses and operations of the
     Stations.
 
               (2) Compliance.  The Owned Realty and its present uses comply in
                   ----------                                                  
     all material respects with all applicable zoning laws and ordinances and no
     material exemption or waiver thereunder will expire or be terminated by
     reason of the Merger. To the knowledge of Sullivan and its Subsidiaries,
     there exists no notice of any material uncorrected violations of housing,
     building, safety, or fire ordinances with respect to the Owned Realty or
     the real property leased by Sullivan or a Subsidiary pursuant to any Lease.
     Except as disclosed on the attached Schedule 4G, the Owned Realty is
                                         -------- --                     
     currently serviced by a community sewage system.

               (3) Condemnation or Disposition.  Neither Sullivan, any of its
                   ------------ -- -----------                               
     Subsidiaries, Sullivan Two nor Sullivan Three has received any notice of,
     and none of them has knowledge of, any pending, threatened, or contemplated
     condemnation proceeding affecting the Owned Realty or the real property
     leased by Sullivan or a Subsidiary pursuant to any Lease, or any part
     thereof, or of any sale or other disposition of the Owned Realty or any
     portion thereof in lieu of condemnation.

               (4) Non-Realty.  Taken together, Sullivan, its Subsidiaries,
                   ----------                                              
     Sullivan Two and Sullivan Three have good title to, or a valid leasehold
     in, the tangible assets (other than the Realty) and personal property
     included in the Station Assets, and all such assets and personal property
     will on the Closing Date (after the repayment in full of the Funded
     Indebtedness of Sullivan and its Subsidiaries and all related interest and
     other obligations and the release of all related Liens and the Mission
     Guarantees) be free and clear of all Liens other than Permitted
     Encumbrances.

          4.H  Call Letters, Trademarks, Etc.  Taken together, Sullivan, its
               ---- -------- ----------- ---                                
Subsidiaries, Sullivan Two and Sullivan Three possess  (and immediately after
the Merger, will possess) adequate rights, licenses, or other authority to use
the call letters presently used by the Stations and all trademarks and trade
names relating to the Stations which are required for the operation of the
Stations or which are material to the conduct of the business of the Stations,
in each case as presently conducted by Sullivan and its Subsidiaries, and have
good title to such call letters, trademarks and trade names which they purport
to own, and Sullivan's, its Subsidiaries', Sullivan Two's and Sullivan's Three's
respective rights thereto are free and clear of all Liens other than Permitted
Encumbrances.  None of Sullivan, its Subsidiaries, Sullivan Two and Sullivan
Three has received any written notice with respect to any alleged infringement
or unlawful or improper use of any copyright, trademark, trade name, or other
intangible property right owned or alleged to be owned by others and used in
connection with the Stations.

          4.I  Insurance.  The attached Schedule 4I is, in all material
               ---------                -------- --                    
respects, a correct and complete summary of the material terms of each material
policy of insurance which is in effect on the date of this Agreement insuring
Sullivan and its Subsidiaries against loss or damage to any 

                                       30
<PAGE>
 
Station Assets by fire, casualty and other hazards and risks relating to their
tangible assets, and each such policy of insurance is in full force and effect
in all material respects.

          4.J  Contracts.  The attached Schedule 4J contains a list of each of
               ---------                -------- --                           
the following to which any of Sullivan or its Subsidiaries is a party on the
date of this Agreement (other than any Contract (i) which does not require
Sullivan and its Subsidiaries to furnish consideration in an aggregate amount
for such Contract of more than $25,000, (ii) which is terminable by Sullivan or
any of its Subsidiaries without penalty upon advance notice of thirty (30) days
or less, (iii) which is a barter programming contract pursuant to which the
remaining telecasting term as of December 31, 1997 was twelve months or less, or
(iv) which is a Time Sale Contract):

               (1) television network affiliation agreements;
 
               (2) Trades which could require the furnishing of advertising time
     on any Station at any time after the Closing Date;

               (3) sales agency or advertising representation contracts;

               (4) employment contracts;

               (5) licenses or other contracts under which Sullivan or any of
     its Subsidiaries is authorized to broadcast on any Station filmed or taped
     programming supplied by others;

               (6) leases of personal property which have a term, including
     renewal options exercisable by any party thereto other than Sullivan or any
     of its Subsidiaries, ending more than one year after the date of this
     Agreement; and

               (7) any other contract which is material to the business and
     operation of the Stations.

Neither Sullivan, any of its Subsidiaries, Sullivan Two nor Sullivan Three is in
material breach of any contract or agreement described on the attached Schedule
                                                                       --------
4J, nor is there any fact or circumstance which, with the giving of notice or
--                                                                           
the passage of time, or both, would constitute such a breach.  Each material
Contract described on the attached Schedule 4J (other than any such Contract
                                   -------- --                              
which expires or is terminated in the ordinary course of business after the date
of this Agreement) is in all material respects in full force and effect, valid
and binding and enforceable as to Sullivan, its Subsidiaries, Sullivan Two
and/or Sullivan Three, as applicable, and, to Sullivan's knowledge, each other
party thereto (subject to the effect of applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, arrangement, moratorium or similar laws
affecting the rights of creditors generally and the availability of equitable
remedies).

          4.K  Employees.  The attached Schedule 4K lists all employees of
               ---------                -------- --                       
Sullivan or any of its Subsidiaries as of December 31, 1997 and their respective
current budgeted annual base salary and bonus or annualized wages as of such
date and their respective dates of hire.  Except as 

                                       31
<PAGE>
 
described on the attached Schedule 4J or the attached Schedule 4K, on the date
                          -------- --                 -------- --
of this Agreement (a) Sullivan and its Subsidiaries have no written or oral
contract of employment with any such employee (other than a Contract for
employment at the will of the employer), and (b) Sullivan and its Subsidiaries
are not a party to or subject to any collective bargaining agreement with
respect to any such employee or any contract with any labor union or other labor
organization with respect to the Stations. Sullivan and its Subsidiaries are not
parties to any pending labor dispute affecting the Stations, nor, to the
knowledge of Sullivan, is any such dispute threatened, on the date of this
Agreement and, on the Closing Date, no such pending or threatened dispute will
be material. With respect to employees of and service providers to Sullivan and
its Subsidiaries, Sullivan and the Subsidiaries are and have been in compliance
in all material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
including any such laws respecting employment discrimination, workers'
compensation, family and medical leave, the Immigration Reform and Control Act,
and occupational safety and health requirements, and have not and are not
engaged in any unfair labor practice. The persons classified by Sullivan and the
Subsidiaries as independent contractors do satisfy and have satisfied the
requirements of law to be so classified, and Sullivan and its Subsidiaries have
in all material respects fully and accurately reported their compensation on IRS
Forms 1099 when required to do so.

          4.L  Litigation.  Except as set forth on the attached Schedule 4L:
               ----------                                       -------- -- 
 
               (1) on the date of this Agreement, Sullivan and its Subsidiaries
     are not operating under or subject to or in default with respect to any
     order, writ, injunction, or decree of any court or federal, state,
     municipal, or other governmental department, commission, board, agency, or
     instrumentality arising out of a proceeding to which it is or was a party,
     and on the Closing Date, no such item will have or reasonably be expected
     to result in a Material Adverse Change; and

               (2) on the date of this Agreement, there is no litigation pending
     by or against, or to the knowledge of Sullivan threatened against, Sullivan
     or any of its Subsidiaries which interferes with, or could reasonably be
     expected to interfere with, (a) the operations of the Stations as presently
     conducted or (b) the ability of Sullivan to carry out the transactions
     contemplated to be carried out by it pursuant to this Agreement, and on the
     Closing Date, no such pending or threatened litigation will have or will
     reasonably be expected to result in a Material Adverse Change.

There are no attachments, executions, or assignments for the benefit of
creditors or voluntary or involuntary proceedings in bankruptcy initiated or
contemplated by, or, to the knowledge of Sullivan, threatened or pending
against, Sullivan or any of its Subsidiaries.

          4.M  Compliance with Laws.  Other than with respect to matters
               ---------- ---- ----                                     
disclosed in the attached Schedule 4E or the attached Schedule 4L, subject to
                          -------- --                 -------- --            
obtaining all applicable Consents: (a) Sullivan and its Subsidiaries, with
respect to the Station Assets, are in compliance in all material respects with
all applicable Legal Requirements, and (b) the present uses by Sullivan and its
Subsidiaries of the Station Assets which they own do not in any material respect
violate any such 

                                       32
<PAGE>
 
Legal Requirements.

          4.N  No Defaults.  Except for (w) any item described on the attached
               -- --------                                                    
Schedule 4N, (x) the requisite approval of the FCC, (y) compliance with the
-------- --                                                                
requirements of the Hart-Scott-Rodino Act, and (z) any Consent which may be
required under any Contract, on the Closing Date (after giving effect to all
Consents which have been obtained) neither the execution and delivery by
Sullivan of this Agreement, nor the consummation by Sullivan of the Merger or
the other transactions contemplated by this Agreement to be consummated by
Sullivan, requires any Consent under, will constitute, or, with the giving of
notice or the passage of time or both, would constitute, a material violation of
or would conflict in any material respect with or result in any material breach
of or any material default under, or will result in the creation of any Lien
(other than any Permitted Encumbrance or any Lien in favor of one or more of the
Acquiring Parties) under, any of the terms, conditions, or provisions of any
Legal Requirement to which Sullivan or any of its Subsidiaries is subject, or of
the certificate of incorporation or by-laws of Sullivan or any of its
Subsidiaries.   No Lease for the main studio site of any Station, no lease
pursuant to which Sullivan, any of its Subsidiaries, Sullivan Two or Sullivan
Three leases (as lessee) space on a transmission tower for the location of any
transmission equipment of any Station, and neither Existing LMA, contains any
provision which expressly requires a Consent by reason of a merger or change of
control or ownership of Sullivan.

          4.O  Subsidiaries.
               ------------ 

               (1) Subsidiaries' Stock.  All of the issued and outstanding
                   ------------- -----                                    
     capital stock of each of the corporations named on the attached Schedule 4O
                                                                     -------- --
     (other than Sullivan, and other than Sullivan Two and Sullivan Three, as of
     the Closing Date) is owned of record (directly or indirectly through one or
     more of its Subsidiaries) by Sullivan free and clear of all Liens other
     than Permitted Encumbrances.  All such capital stock has been validly
     issued and is fully paid and nonassessable, there is not outstanding any
     right to acquire any capital stock or other equity securities of any
     Subsidiary of Sullivan (by exercise of any right or by conversion, exchange
     or otherwise), and such capital stock is not subject to any option,
     warrant, voting trust, outstanding proxy, registration rights agreement or
     other agreement regarding voting rights, other than any Permitted
     Encumbrance.
 
               (2) Subsidiaries' Status.  Each of Sullivan's Subsidiaries named
                   ------------- ------                                        
     on the attached Schedule 4O is a corporation duly organized, validly
                     -------- --                                         
     existing and in good standing (or having comparable active status) under
     the laws of the jurisdiction indicated on such Schedule under the heading
     "Organization" and has the power and authority to carry on the business
     conducted by it and own the properties owned by it under the laws of such
     jurisdiction and each other jurisdiction in which it is required to have
     such authority.  A true and correct copy of the certificate or articles of
     incorporation and by-laws of each of such Subsidiary has been provided to
     the Merger Sub.  On the Closing Date, neither Sullivan nor any other
     corporation named on the attached Schedule 4O will own any shares of stock
                                       -------- --                             
     or other equity or debt securities of or any interest in any Person other
     than another Person named on the attached Schedule 4O, Sullivan Two or
                                               -------- --                 
     Sullivan Three.

                                       33
<PAGE>
 
          4.P  Tax Matters.
               --- ------- 

               (1) Tax Returns.  Except as set forth on the attached Schedule 4P
                   --- -------                                       -------- --
     or as has not caused and is not reasonably expected to cause a Material
     Adverse Change: (a) all federal, state, local and foreign tax returns and
     tax reports required to be filed by Sullivan or any of its Subsidiaries
     have been timely filed (taking into account any extensions of which
     Sullivan or any of its Subsidiaries may have availed itself) with the
     appropriate governmental agencies in all jurisdictions in which such
     returns and reports are required to be filed, and all of the foregoing
     (including any summary balance sheets included therein) are true, correct,
     and complete; (b) all federal, state, local and foreign income, profits,
     franchise, sales, use, occupation, property, excise, and other taxes
     (including interest and penalties) due and payable by Sullivan and its
     Subsidiaries have been fully paid; (c) no issues have been raised in
     writing (or, to Sullivan's knowledge, orally) and are currently pending by
     the Internal Revenue Service or any other taxing authority in connection
     with any of such returns and reports; (d) no waivers of statutes of
     limitations as to tax matters have been given or requested with respect to
     Sullivan and its Subsidiaries; (e) the federal, state, local, and foreign
     income tax and franchise tax returns of or with respect to Sullivan and its
     Subsidiaries have not been examined by the Internal Revenue Service or by
     appropriate state, provincial, or departmental tax authorities; (f) no
     issue has been raised in writing (or, to Sullivan's knowledge, orally) with
     Sullivan or any of its Subsidiaries by any taxing authority which can
     reasonably be expected to result in a deficiency for any fiscal year or all
     deficiencies asserted or assessments (including interest and penalties)
     made as a result of any examinations have been fully paid, and no proposed
     (but unassessed) additional taxes, interest, or penalties have been
     asserted; (g) neither Sullivan nor any of its Subsidiaries is (or has ever
     been) a party to any Tax sharing agreement with any Person who was not a
     member of an affiliated group of corporations (as that term is defined in
     Section 1504(a) of the Tax Code, or any analogous combined, consolidated or
     unitary group defined under state, local or foreign Tax law) consisting in
     whole or in part of the parties to such agreement, and neither Sullivan nor
     any of its Subsidiaries has any liability for the Taxes of any other Person
     (other than Sullivan and its Subsidiaries) pursuant to Reg. Section 1.1502-
     6 under the Tax Code (or any similar provision of state, local or foreign
     Tax law) or as a transferee or successor or by contract; and (h) Sullivan
     has provided Sinclair with copies of all federal and state income or
     franchise tax returns that have been filed with respect to Sullivan or any
     of its Subsidiaries since January 4, 1996.

               (2) Tax Elections and Special Tax Status.  Except as set forth on
                   --- --------- --- ------- --- ------                         
     the attached Schedule 4P:  (a) neither Sullivan nor any of its Subsidiaries
                  -------- --                                                   
     is or has been a United States real property holding corporation within the
     meaning of Section 897(c)(2) of the Tax Code during the applicable period
     specified in Section 897(c)(1)(A)(ii) of the Tax Code, and Sinclair is not
     required to withhold tax in respect of the Merger Consideration for the
     Sullivan Share Equivalents by reason of Section 1445 of the Tax Code; (b)
     neither Sullivan nor any of its Subsidiaries has made any election or filed
     any consent pursuant to Section 341(f) of the Tax Code relating to
     collapsible corporations; (c) neither Sullivan nor any of its Subsidiaries
     has entered into any compensatory agreements with respect to the
     performance of services which payment thereunder would result in a
     nondeductible expense 

                                       34
<PAGE>
 
     to Sullivan or any of its Subsidiaries pursuant to Section 280G of the Tax
     Code or an excise tax to the recipient of such payment pursuant to Section
     4999 of the Tax Code; and (d) Sullivan has not agreed to make, nor is it
     required to make, any adjustment under Section 481(a) of the Tax Code by
     reason of a change in accounting method or otherwise.

          4.Q  Capital Stock.  As of the date of this Agreement, Sullivan has
               ------- -----                                                 
authorized capital stock consisting of 90,000,000 shares of capital stock, of
which (a) 25,000,000 shares are designated Class A Common Stock, par value
$0.001 per share, of which no shares are issued and outstanding, (b) 25,000,000
shares are designated Class B-1 Common Stock, par value $0.001 per share, of
which 1,201,577 shares are issued and outstanding, (c) 25,000,000 shares are
designated Class B-2 Common Stock, par value $0.001 per share, of which
6,158,211 shares are issued and outstanding, (d) 5,000,000 shares are designated
Class C Common Stock, par value $0.001 per share, of which 1,021,872 shares are
issued and outstanding, and (e) 10,000,000 shares are designated Preferred
Stock, $0.001 par value per share, of which 1,150,000 shares are issued and
outstanding.  All of the issued and outstanding capital stock of Sullivan is
duly authorized and validly issued, fully paid and nonassessable, and there are
no preemptive rights in respect thereof in favor of any Person (other than any
Person which holds Sullivan Share Equivalents). Except for warrants which are
presently exercisable for 2,406,307 shares of Class B-1 Common Stock, there are
no outstanding options, warrants or other rights to subscribe for or purchase
from Sullivan, no contracts or commitments providing for the issuance of, or the
granting of rights to acquire, and no securities convertible into or
exchangeable for, any shares of capital stock or any other ownership interest of
Sullivan.
 
          4.R  Books and Records. The minute books of each of Sullivan and its
               ----- --- -------                                              
Subsidiaries contain records which are complete and accurate in all material
respects of all meetings and other corporate actions of its stockholders, its
board of directors and all committees, if any, appointed by its board of
directors.  The books of accounts, ledgers, order books, records and documents
of each of Sullivan and its Subsidiaries, in all material respects, accurately
and completely reflect information relating to its business, the nature,
acquisitions, maintenance and location of its assets and the transactions giving
rise to its obligations and accounts receivable.

          4.S  Absence of Significant Undisclosed Liabilities. Neither Sullivan
               ------- -- ----------- ----------- -----------                  
nor its Subsidiaries has any debt, liability or obligation of any kind, whether
accrued, absolute, contingent or otherwise, including any liability or
obligation on account of Taxes or any governmental charges or penalty, interest
or fines, which would be required to be reflected in Sullivan's consolidated
balance sheet prepared in accordance with GAAP and which would have, or which in
the case of contingent or inchoate liabilities, would have if accrued or
absolute, a material adverse effect on the financial condition of Sullivan and
its Subsidiaries, other than any liability or obligation (a) reflected in any
Financial Statement, (b) identified with particularity in any attached Schedule
or arising since September 30, 1997 under any Contract which is described, or
which is not required to be described, on any attached Schedule, (c) incurred in
the ordinary course of business since September 30, 1997, or (d) incurred in
connection with the transactions contemplated by this Agreement.  Each of
Sullivan and Sullivan Broadcasting has filed with the Securities and Exchange
Commission all material documents required by the Securities Act or the
Securities Exchange Act to be filed by it since January 4, 1996 (the "Sullivan
                                                                      --------
SEC Reports"). Neither Sullivan nor Sullivan Broadcasting has 
--- -------

                                       35
<PAGE>
 
any liability by reason of any Sullivan SEC Report not complying in all material
respects at the time of the filing thereof with the requirements of the
Securities Act, and the rules and regulations thereunder, or the Securities
Exchange Act, and the rules and regulations thereunder, as the case may be, or
containing any untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

          4.T  Employee Benefit Plans.  Except as set forth on the attached
               -------- ------- -----                                      
Schedule 4T, neither Sullivan nor its Subsidiaries maintains or is a party to or
-------- --                                                                     
makes contributions to any of the following:  (a) any "employee pension benefit
plan," (as such term is defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974 ("ERISA")); or (b) any "employee welfare benefit
                              -----                                         
plan" (as such term is defined in Section 3(a) of ERISA), whether written or
oral. All employee benefit plans and other Benefit Arrangements now or formerly
maintained by Sullivan or its Subsidiaries or to which Sullivan or its
Subsidiaries is obligated to contribute, are, and have in the past been, in all
material respects maintained, funded and administered in compliance with ERISA,
and other applicable law.  No such employee benefit plan holds any securities
issued by Sullivan.  Neither Sullivan  nor any of its ERISA Affiliates has ever
sponsored or maintained, had any obligation to sponsor or maintain, or had any
liability (whether actual or contingent, with respect to any of its assets or
otherwise) with respect to any employee pension benefit plan subject to Section
302 of ERISA or Section 412 of the Tax Code or Title IV of ERISA (including any
multiemployer plan).  Excluding routine claims for benefits, there are no
pending claims or lawsuits by, against, or relating to any employee benefit
plans or other Benefit Arrangements that would, if successful, result in
liability of Sullivan or any of its Subsidiaries.  Neither Sullivan nor any
Subsidiary has maintained or contributed to any plan intended to qualify under
Section 401(a) of the Tax Code since January 4, 1996, other than the Sullivan
Broadcasting Company 401(k) Plan (the "401(k) Plan").  The 401(k) Plan has
always qualified in all material respects in form and operation under Section
401(a) of the Tax Code and has a currently applicable determination letter from
the Internal Revenue Service, and its trust has always been exempt under Section
501 of the Tax Code, and nothing has occurred with respect to such plan and
trust that could cause the loss of such qualification or exemption or the
imposition of any liability, lien, penalty, or tax under ERISA or the Tax Code.
The employee benefit plans and Benefit Arrangements maintained by Sullivan are
not presently under audit or examination (and have not received notice of
potential audit or examination) by any governmental authority, and no matters
are pending with respect to the 401(k) Plan under any governmental compliance
programs.  No employee benefit plan or Benefit Arrangement contains any
provision or is subject to any law that would give rise to any vesting of
benefits, severance, termination, or other payments or liabilities as a result
of the transactions this Agreement contemplates, and Sullivan has not declared
or paid any bonus or other incentive compensation or established any severance
plan, program, or arrangement in contemplation of the transactions contemplated
by this Agreement, in each case other than those which have been paid or which
will be included as part of the Current Liabilities.  Sullivan has made or has
recorded proper accruals for all required contributions to its employee benefit
plans as of the last day of each plan's most recent fiscal year, and all
benefits accrued under any unfunded Sullivan employee benefit plan or Benefit
Arrangement will have been paid, accrued, or otherwise adequately reserved in
accordance with GAAP.  All group health plans of Sullivan and its ERISA
Affiliates have been operated in material compliance with the requirements of
Section 4980B (and its predecessor) and 

                                       36
<PAGE>
 
5000 of the Code. No employee or former employee of Sullivan or its
Subsidiaries, and no beneficiary of any such employee or former employee, is, by
reason of such employee's or former employee's employment by Sullivan or such
ERISA Affiliate, entitled to receive any benefits, including death or medical
benefits (whether or not insured) beyond retirement or other termination of
employment as described in Statement of Financial Accounting Standards No. 106,
other than continuation coverage mandated under Section 4980B of the Tax Code or
comparable state law.

          4.U  Brokers. There is no broker or finder or other Person who would
               -------                                                        
have any valid claim against Sullivan, any Subsidiary thereof, or any Acquiring
Party for a commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby as a result of any agreement or understanding
of or action taken by Sullivan or any of its Affiliates.

          4.V  Disclosure. To the knowledge of Sullivan, no statement of a
               ----------                                                 
material fact set forth in this Article IV contains any statement of any
material fact which is untrue in any material respect or omits to state a
material fact which is necessary in order to make the statements set forth in
this Article IV not misleading in any material respect.
 
          4.W  Environmental.   All of the operations of Sullivan and its
               -------------                                              
Subsidiaries at or from any Realty comply in all material respects with
applicable Environmental Laws. Neither Sullivan nor its Subsidiaries has engaged
in or permitted any operations or activities upon any of the Realty for the
purpose of or involving the treatment, storage, use, generation, release,
discharge, emission, or disposal of any Hazardous Materials at the Realty,
except in substantial compliance with applicable Environmental Laws.  To the
knowledge of Sullivan, there are no conditions existing at the Realty that
require, or which with the giving of notice or the passage of time or both would
likely require remedial or corrective action, removal or closure pursuant to the
Environmental Laws.  To the knowledge of Sullivan, Sullivan and its Subsidiaries
have all the material permits, authorizations, licenses, consents and approvals
necessary for the current operation of the Stations and for the operations on,
in or at the Realty which are required under applicable Environmental Laws and
are in substantial compliance with the terms and conditions of all such permits,
authorizations, licenses, consents and approvals.


                                   ARTICLE V

                       REPRESENTATIONS AND WARRANTIES OF
                          SINCLAIR AND THE MERGER SUB

          Sinclair and the Merger Sub, jointly and severally, represent and
warrant as follows:

          5.A  Incorporation.  Sinclair is a corporation duly organized, validly
               -------------                                                    
existing, and in good standing (or has comparable active status) under the laws
of the State of Maryland, and Sinclair has the corporate power and authority to
enter into and consummate the transactions contemplated to be consummated by it
pursuant to this Agreement.  From and after the time it is formed, the Merger
Sub will be a corporation duly organized, validly existing, and in good standing
(or has comparable active status) under the laws of the State of Delaware and
will have the corporate 

                                       37
<PAGE>
 
power and authority to enter into and consummate the transactions contemplated
to be consummated by it pursuant to this Agreement.

          5.B  Corporate Action.  Each action necessary to be taken by or on the
               --------- ------                                                 
part of either Sinclair or the Merger Sub in connection with the execution and
delivery of this Agreement and the consummation of transactions contemplated
hereby to be consummated by it and necessary to make the same effective duly and
validly taken by, and be effective at, the time by which such action is required
to be taken.  This Agreement has been duly and validly authorized, executed, and
delivered by each of Sinclair and the Merger Sub and constitutes a valid and
binding agreement, enforceable against each of them  in accordance with and
subject to its terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, arrangement, moratorium or
similar laws affecting the rights of creditors generally and the availability of
equitable remedies.

          5.C  No Defaults.  Except as set forth on the attached Schedule 4H,
               -- --------                                       -------- -- 
the requisite approval of the FCC and compliance with the requirements of the
Hart-Scott-Rodino Act, on the Closing Date (after giving effect to all approvals
and consents which have been obtained), neither the execution and delivery by
Sinclair or the Merger Sub of this Agreement, nor the consummation by Sinclair
or the Merger Sub of the Merger and the other transactions contemplated by this
Agreement to be consummated by it, will constitute, or, with the giving of
notice or the passage of time or both, would constitute, a material violation of
or would conflict in any material respect with or result in any material breach
of or any material default under, any of the terms, conditions, or provisions of
any Legal Requirement to which Sinclair or the Merger Sub is subject, or of
Sinclair's or the Merger Sub's certificate of incorporation or by-laws or
similar organizational documents, or of any material contract, agreement, or
instrument to which Sinclair or the Merger Sub is a party or by which Sinclair
or the Merger Sub is bound.

          5.D  Brokers.  There is no broker or finder or other Person who would
               -------                                                         
have any valid claim against Sullivan (except after the Effective Time) or any
Old Sullivan Stockholder for a commission or brokerage fee in connection with
this Agreement or the transactions contemplated hereby as a result of any
agreement or understanding of or action taken by Sinclair, the Merger Sub or any
Affiliate of any of them.
 
          5.E  Litigation.  There is no litigation pending by or against, or to
               ----------                                                      
Sinclair's or the Merger Sub's knowledge (after due inquiry) threatened against,
Sinclair or the Merger Sub related to or affecting Sinclair's or the Merger
Sub's ability fully to carry out the transactions contemplated to be consummated
by them pursuant to this Agreement.  There are no attachments, executions, or
assignments for the benefit of creditors or voluntary or involuntary proceedings
in bankruptcy contemplated by, or, to Sinclair's or the Merger Sub's knowledge,
threatened or pending against, Sinclair or the Merger Sub.

          5.F  Sinclair Common Stock.  The Sinclair Common Stock, if any, issued
               -------- ------ -----                                            
as part of the Merger Consideration will be duly authorized, validly issued,
fully-paid and nonassessable and will, upon issuance and registration under the
Securities Act, be tradeable on the NASDAQ National Market without further
registration under the Securities Act or any other federal or state 

                                       38
<PAGE>
 
securities law. Sinclair has filed with the Securities and Exchange Commission
all material documents required by the Securities Act or the Securities Exchange
Act to be filed by it since January 1, 1996 (the "Sinclair SEC Reports"). As of
                                                  -------- --- -------          
their respective filing dates, the Sinclair SEC Reports complied in all material
respects with the requirements of the Securities Act, and the rules and
regulations thereunder, or the Securities Exchange Act, and the rules and
regulations thereunder, as the case may be, and at the time filed with the SEC
none of the SEC Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.  The Parties acknowledge that no representation or
warranty will be deemed to be made pursuant to this Section 5.F if no Sinclair
Common Stock is issued as part of the Merger Consideration.

          5.G  Disclosure.  To Sinclair's and the Merger Sub's knowledge, no
               ----------                                                   
statement of a material fact set forth in this Article V contains a statement of
any material fact which is untrue in any material respect or omits to state a
material fact which is necessary in order to make the statements set forth in
this Article V not misleading in any material respect.


                                  ARTICLE VI

                     APPLICATIONS FOR REQUIRED FCC CONSENT

          6.A  For Spin-Offs.  On or prior to March 2, 1998, Sullivan will, and
               --- ---------                                                   
will cause its Subsidiaries to, complete the portions of the applications for
the Required FCC Consents and will file such applications with the FCC.
Sullivan will, and will cause its Subsidiaries to, diligently take or cooperate
in the taking of all steps which are reasonably within its ability to take and
which are necessary, proper, or desirable to expedite the prosecution of such
applications and to cause the Required FCC Consents expeditiously to be Granted
and expeditiously to become Final Orders, and will refrain from making any
filing or announcement or taking (or causing or assisting any other Person to
take) any other action which reasonably could be expected to delay in any
respect such Required FCC Consents being Granted or becoming Final Orders
without Sinclair's prior written consent.  Sullivan will promptly provide
Sinclair with a copy of any pleading, order, or other document served on
Sullivan or any of its Subsidiaries relating to such applications (other than
any of the same which is addressed to or states that it is to be served upon or
delivered to Sinclair or its communications counsel).


                                  ARTICLE VII

                             COVENANTS OF SULLIVAN

          7.A  Maintenance of Business until the Closing.
               ----------- -- -------- ----- --- ------- 

               (1) Operation in Ordinary Course.  Until the Closing, Sullivan
                   --------- -- -------- ------                               
     will, and will cause its Subsidiaries to, (a) with respect to the Station
     Assets, continue to carry on 

                                       39
<PAGE>
 
     the business and operations of the Stations, keep the books of account,
     records, and files of Sullivan and its Subsidiaries, realize upon the
     accounts receivable of Sullivan and its Subsidiaries, and satisfy their
     accounts payable, all of which will be carried on by Sullivan and its
     Subsidiaries in the ordinary and usual course, in a manner which is
     consistent with their respective past practices, (b) without limiting the
     generality of the foregoing, not utilize Sullivan's and its Subsidiaries'
     rights under any Program Contract in a manner which will render exhibitions
     of programming thereunder unavailable to Post-Merger Sullivan and its
     Subsidiaries after the Adjustment Time, except in accordance with their
     past practices, (c) promptly execute and timely file any applications
     reasonably required for renewal of the FCC Authorizations, (d) timely file
     (taking into account any extensions of which Sullivan or any of its
     Subsidiaries may avail itself) true, correct and complete federal, state,
     local and foreign tax returns and tax reports required to be filed by
     Sullivan or any of its Subsidiaries, (e) fully pay all federal, state,
     local and foreign income, profits, franchise, sales, use, occupation,
     property, excise and other taxes (including interest and penalties) due and
     payable by Sullivan and its Subsidiaries, and (f) sell advertising time on
     the Stations only in the ordinary and usual course in a manner consistent
     with their respective past practices, and (g) to the extent necessary to
     the conduct of its business, use reasonable efforts to (i) perform its
     obligations under all Station Contracts to which it is a party, (ii)
     preserve the Station Assets held by it, and (iii) maintain in full force
     and effect the FCC Authorizations.

               (2) Maintenance of Insurance.  Sullivan will, and will cause its
                   ----------- -- ---------                                    
     Subsidiaries to, maintain in full force and effect through the Closing
     property damage insurance with respect to the Station Assets which is not
     materially less comprehensive, and in amounts which are not materially less
     than, the insurance coverage described on the attached Schedule 4I,
     including timely paying the premiums associated therewith.

               (3) Additional Program Contracts.  Until the Closing, Sullivan
                   ---------- ------- ---------                              
     may, and may cause or permit its Subsidiaries to, enter into any Program
     Contract, or effect any such amendment, termination or modification, which
     is material only with the prior consent of Sinclair, which consent may be
     withheld in Sinclair's sole discretion and will be deemed given if not
     denied by written notice by Sinclair to Sullivan within five (5) Business
     Days after it is requested in writing; provided that such notice and
                                            --------                     
     consent will not be required as to the entry into any such Program
     Contracts so long as (x) the aggregate amount of the cash payment
     obligations under such Program Contracts as to which such consent is not
     given and not deemed given does not exceed $50,000 for any Station, and (y)
     if Sullivan or any of its Subsidiaries is required to provide advertising
     time in consideration for the use of any programming covered by such
     Program Contract, then the term during which such advertising time may be
     required to be provided commences prior to May 31, 1999 and does not exceed
     one (1) year in duration.
 
               (4) Other Contracts.  From the date of this Agreement to and
                   ----- ---------                                         
     including the Closing, Sullivan will be entitled to, and will be entitled
     to cause or permit its Subsidiaries to, renew or extend the term of any
     Time Sale Contract or any other Contract which, by its terms, has expired
     at the time of such renewal or extension or which would expire prior to the
     sixtieth day after the effective date of such renewal or extension, and, in

                                       40
<PAGE>
 
     connection therewith, to agree to increase the amounts payable or other
     obligations thereunder during any such renewal or extended term in
     accordance with Sullivan's and its Subsidiaries' past practice in the
     operation of the Stations, and to enter into any new Contract (other than a
     Program Contract or except as prohibited by Section 7.A(5)) in the ordinary
     course of its business or which is reasonably required in order to enable
     it to comply with its obligations under this Agreement

               (5) Restrictions.  Prior to the Closing, except (i) as otherwise
                   ------------                                                
     permitted by Section 7.A(3) or 7.A(4), (ii) as required as part of a Spin-
     Off, (iii) the transfer of the Headquarters Assets to ABRY Partners or an
     Affiliate thereof for value and/or to one or more of the Corporate
     Personnel as compensation, or (iv) as disclosed on the attached Schedule
     4F, Sullivan will not, and will not cause or permit any of its Subsidiaries
     to, without the prior written consent of Sinclair (to the extent the
     following restrictions are permitted by the FCC and all other applicable
     Legal Requirements):

                   (a)   other than in the ordinary course of business, sell,
          lease (as lessor), transfer, or agree to sell, lease (as lessor), or
          transfer, or agree to sell, lease (as lessor) or transfer, any Station
          Assets

                         (x) which are required for the operation of any
               Station, or

                         (y) which have individually or in the aggregate
               (together with all other Station Assets transferred by Sullivan
               or any of its Subsidiaries since the date of this Agreement other
               than in the ordinary course of business and not replaced with
               functionally equivalent or superior assets of substantially equal
               or greater value) a replacement cost in excess of $130,000 (it
               being understood that sales, leases and/or transfers of Station
               Assets described in this clause (y) and having an aggregate
               replacement cost of $130,000 or less ("Designated Sales") will
                                                      ---------- -----       
               not be prohibited by this Agreement)

          without replacement thereof with a functionally equivalent or superior
          asset of substantially equal or greater value;
 
                   (b)   enter into any contract of employment  (other than (x)
          any contract for employment at the will of the employer, (y) any
          contract for employment entered into in the ordinary course of
          business and providing for consideration payable upon or after
          termination which is consistent with that payable under employment
          contracts for present or former employees of Sullivan and its
          Subsidiaries having similar seniority or responsibilities, or (z) any
          contract or Benefit Arrangement not described in clause (y) with
          respect to the employment of any Person whose employment will be
          terminated at the time of the Closing, it being understood that the
          costs of severance and other payments to be made under any contract or
          Benefit Arrangement described in this clause (z) in connection with or
          after such termination will be reflected in the Current Liabilities)
          or collective 

                                       41
<PAGE>
 
          bargaining agreement which will be binding on Post-Merger Sullivan
          after the Merger, or permit any increases in the compensation of the
          employees of Sullivan or any of its Subsidiaries with respect to the
          Stations (but excluding the Corporate Personnel), in each case except
          to the extent consistent with Sullivan's and its Subsidiaries' past
          practices; provided that Sullivan and its Subsidiaries may pay bonuses
                     --------
          to any of their employees, grant raises in salary and wages which do
          not represent, in the aggregate, an increase in the employees'
          aggregate annualized base compensation of more than 4% of the
          employees' present annualized base compensation, and enter into any
          employment agreement with on-air talent under which the annual salary
          payable does not exceed $50,000 during any twelve-month period;

                   (c)   enter into any new Trade arrangement which will
          involves the furnishing of advertising time in exchange for services
          or merchandise after the Adjustment Time on any Station, other than
          any Trade arrangement which (i) does not involve goods and services
          having an aggregate fair value in excess of $25,000, (ii) together
          with all other Trade arrangements for such Station entered into after
          the date of this Agreement by Sullivan and its Subsidiaries does not
          involve goods and services having an aggregate fair value in excess of
          $50,000, and (iii) does not have a duration in excess of twelve months
          (it being understood that Sullivan and its Subsidiaries may perform
          their obligations and exercise their rights under such Trade
          arrangements and all Trade arrangements in effect on the date of this
          Agreement);

                   (d)   apply to the FCC for any construction permit that would
          materially restrict any Station's present operations or make any
          material adverse change in the buildings or leasehold improvements
          which constitute Station Assets;

                   (e)   merge or consolidate, or agree to merge or consolidate,
          with or into any other Person, other than Sullivan or a Subsidiary of
          Sullivan;

                   (f)   enter into any Contract with any of its Affiliates
          (other than Sullivan or any of its Subsidiaries) which will not be
          performed in its entirety or by its terms terminate at or prior to the
          time of the Closing;

                   (g)   cause any of its assets or properties to become subject
          to any Lien, other than any Permitted Encumbrance;

                   (h)   commit any material breach of any Contract which is
          described on the attached Schedule 4J or any material Contract entered
          into by it after the date of this Agreement; or
 
                   (i)   change any material tax election, or make any material
          change in accounting practice or policy, if such change could
          reasonably be expected to have an adverse effect on Post-Merger
          Sullivan, except to the extent required by any Legal Requirement, any
          Contract or GAAP.

                                       42
<PAGE>
 
               (6) Efforts to Pursue Certain Remedies.  Without limiting the
                   ------- -- ------ ------- --------                       
     foregoing, prior to the Closing, Sullivan will (and will cause its
     Subsidiaries to), use reasonable efforts to assert and prosecute any
     claims, and resolve any unresolved claims, for indemnity or other payment
     which they may have pursuant to the Act III Purchase Agreement and, upon
     request, will keep Sinclair reasonably informed of the status of any such
     claim.

          7.B  Organization/Goodwill. Prior to the Closing, Sullivan will, and
               ---------------------                                          
will cause its Subsidiaries to, use reasonable efforts  to preserve the business
organization of the Stations and preserve the goodwill of the Stations'
suppliers, customers, and others having business relations with Sullivan and its
Subsidiaries.  This Section 7.B will not apply to the Corporate Personnel or any
Non-Continuing Station Manager, with respect to continued service by them after
the Closing (it being understood that the Corporate Personnel intend to resign
their respective positions with Sullivan  and its Subsidiaries effective as of
the Effective Time).

          7.C  Reports; Access to Facilities, Files, and Records.
               -------- ------ -- ----------- ------ --- ------- 

               (1) Interim Reports.  On or prior to March __, 1998, Sullivan
                   ---------------                                          
     will provide to Sinclair copies of the audited consolidated balance sheet
     of Sullivan and its Subsidiaries as of December 31, 1997 and the related
     audited statements of income and cash flows for the twelve-month period
     then ended (the "12/31/97 Financial Statements)". In addition, prior to the
                      -------- --------- ----------                             
     Closing, Sullivan will provide to Sinclair (x) within twenty (20) days
     after the end of each calendar month, (i) an income statement for such
     month, substantially in the form in which Sullivan and its Subsidiaries
     have prepared such statements for internal purposes prior to the date of
     this Agreement, and (ii) in the case of the months of March, April, May,
     June, July and August 1998, a report setting forth in reasonable detail
     Sullivan's good faith determination of the Trailing Cash Flow and the Gross
     Revenues, each determined as if the last day of the applicable month were
     the Measurement Date (the "Cash Flow Report" for such month), and (z) on or
                                ---- ---- ------                                
     prior to the Wednesday of each week, a pacing report for the prior week,
     substantially in the form furnished to Sinclair by Sullivan prior to the
     date of this Agreement.    The statements and reports described in the
     preceding sentence will be prepared in good faith consistent with past
     practices but will be furnished to the Acquiring Parties without
     representation or warranty as to their contents or otherwise.
 
               (2) Access Generally.  From time to time at the request of any
                   ------ ---------                                          
     Acquiring Party, Sullivan will give or cause to be given to the officers,
     employees, accountants, counsel, and representatives of each Acquiring
     Party

                   (a)   access (in the presence of any representative
          designated by Sullivan, at Sullivan's option), upon reasonable prior
          notice, during normal business hours, to all facilities, property,
          accounts, books, deeds, title papers, insurance policies, licenses,
          agreements, contracts, commitments, records, equipment, machinery,
          fixtures, furniture, vehicles, accounts payable and receivable, and
          inventories of Sullivan and its Subsidiaries (but, in any event, not
          personnel, unless Sullivan otherwise consents) related to the
          Stations, including for purposes of 

                                       43
<PAGE>
 
          permitting the Acquiring Parties to perform "Phase One" (and, after
          consulting with Sullivan as to the scope thereof, "Phase Two")
          environmental surveys with respect to the Station Assets,

                   (b)   Sullivan will use its commercially reasonable efforts
          to obtain the consent of its auditors to permit inclusion of the
          Financial Statements in applicable securities filings of Sinclair and,
          if Sinclair requests, it shall have the right to have the access
          provided by Section 7.C(2)(a) to conduct an audit of each Station's
          financial information, and, subject to the foregoing, Sullivan shall
          cooperate with Sinclair's reasonable requests in connection with such
          audit, including giving all reasonable consents in connection
          therewith; and
 
                   (c)   all such other information in Sullivan's and its
          Subsidiaries' possession concerning the affairs of the Stations as
          such Acquiring Party may reasonably request,

     in each case at the Acquiring Parties' expense; provided that the foregoing
                                                     --------                   
     does not disrupt or interfere with the business and operations of Sullivan,
     its Subsidiaries or any Station in any material respect ("materiality," for
     purposes of this proviso, being determined by reference to Sullivan, each
     of its Subsidiaries and each Station individually, and not taken as a
     whole).

          7.D  Hart-Scott-Rodino Matters.  As soon as practicable, but in any
               ----------------- -------                                     
event not later than March 20, 1998, Sullivan will complete all documents
required to be filed with the Federal Trade Commission (the "FTC") and the
                                                             ---          
United States Department of Justice (the "DOJ") with respect to itself and/or
                                          ---                                
its Affiliate(s) and concerning the Merger in order to comply with the Hart-
Scott-Rodino Act and together with Sinclair and/or the appropriate Affiliate(s)
of Sinclair who are required to join in such filings, will file the same with
the FTC and the DOJ.  Sullivan will reimburse Sinclair for one-half of the
filing fees associated with all such filings.  Sullivan will promptly furnish
all materials thereafter required by the FTC, the DOJ or any other governmental
entity having jurisdiction over such filings, and will take all reasonable
actions and will file and use reasonable efforts to have declared effective or
approved all documents and notifications with any such governmental entity, as
may be required under the Hart-Scott-Rodino Act or other federal antitrust laws
for the consummation of the Merger.
 
          7.E  Consents.  Except as provided in Sections 6.A and 7.D, it is
               --------                                                    
agreed that (1) as between Sullivan and the Acquiring Parties, it will be the
sole responsibility of the Acquiring Parties to timely obtain all Acquiring
Party Consents, including with respect to the Stations' network affiliations and
Program Contracts and with respect to the Sullivan Indentures, (2) so long as
Sullivan complies with its obligations pursuant to the following sentence and
Sections 6.A and 7.D, Sullivan, the Old Sullivan Stockholders and the
Stockholder Representative will not be liable to any Person for any failure to
obtain or other absence of any effective Acquiring Party Consent, and (3) except
as provided in Sections 10.C and 10.D, the absence of any effective Consent will
not excuse any Acquiring Party from consummating the Merger. Sullivan will send
notices requesting all Consents required under Program Contracts, and will use
reasonable efforts (without being 

                                       44
<PAGE>
 
required to make any payment not specifically required by the terms of any
licenses, leases, and other contracts), including executing any related
agreement or undertaking which does not take effect until the Effective Time, to
obtain the Sullivan Consents and to assist the Acquiring Parties (at the
Acquiring Parties' request and expense) to (a) timely obtain prior all Acquiring
Party Consents or, in the absence of any Acquiring Party Consent (where
applicable), one or more replacement agreements, and (b) cause each Consent or
replacement agreement to become effective as of the time of the Sullivan Two
Spin-Off, the time of Sullivan Three Spin-Off or the Effective Time as
applicable.

          7.F  Notice of Proceedings.  Prior to the Closing, Sullivan will
               ------ -- -----------                                      
promptly notify Sinclair in writing upon becoming aware of any order or decree
or any complaint praying for an order or decree restraining or enjoining the
consummation of either Spin-Off, the Merger or any other transaction
contemplated by this Agreement, or upon receiving any notice from any
governmental department, court, agency, or commission of its intention to
institute an investigation into or institute a suit or proceeding to restrain or
enjoin the consummation of either Spin-Off, the Merger or any such other
transaction, or to nullify or render ineffective this Agreement, either Spin-
Off, the Merger or any such other transaction if consummated.

          7.G  Confidential Information.  If for any reason the transactions
               ------------ -----------                                     
contemplated in this Agreement are not consummated, Sullivan will not use or
disclose to any Person (except to its agents, representatives and advisors, to
its lenders and security holders and their respective agents, representatives
and advisors, or as may be required by any Legal Requirement) any confidential
information received from any Acquiring Party or any of their respective agents,
representatives and advisors (each a "disclosing party" for purposes of this
Section 7.G) in the course of investigating, negotiating, and completing the
transactions contemplated by this Agreement.  Nothing will be deemed to be
confidential information for purposes of this Section 7.G that:  (a) is or was
known to any Sullivan-Related Entity at the time of its initial disclosure by a
disclosing party to any Sullivan-Related Entity; (b) has become or becomes
publicly known or available other than through disclosure by any Sullivan-
Related Entity; (c) is or was rightfully received by any Sullivan-Related Entity
from any Person unrelated to any Sullivan-Related Entity (other than any Person
engaged by any Sullivan-Related Entity in connection with the transactions
contemplated by this Agreement); or (d) is or was independently developed by any
Sullivan-Related Entity.
 
          7.H  Efforts to Consummate.  Subject to the provisions of Article IX
               ------- -- ----------                                          
and Section 12.A, Sullivan will use reasonable efforts to fulfill and perform
all conditions and obligations on its part to be fulfilled and performed under
this Agreement and to cause the conditions set forth in Articles IX and X to be
fulfilled and cause the Spin-Offs, the Merger and the other transactions
contemplated by this Agreement in connection with the Merger to be fully carried
out.  Without limiting the foregoing, Sullivan will use, and will cause its
Subsidiaries to use, reasonable efforts to consummate the Merger in a manner to
avoid the increase in the Cash Flow Multiplier caused by any delay in the
Closing and the increase in the element of the Adjustment Amount described in
Section 3.D(1)(b).  In addition, promptly after Sullivan becomes aware prior to
the Closing of a breach of any fact or circumstance which constitutes or would
constitute a breach of any other Party's representation or warranty set forth in
this Agreement, Sullivan will give such Party notice thereof so that such Party
may attempt to cure the same.

                                       45
<PAGE>
 
          7.I  Notice of Certain Developments.  Sullivan will give prompt
               ------ -- ------- ------------                            
written notice to Sinclair if, prior to the Closing: (1) Sullivan or any of its
Subsidiaries receives a National Labor Relations Board union election petition
relating to employees of any Station, (2) Sullivan or any of its Subsidiaries
receives notice from any Market Cable System currently carrying a Station's
signal of such Market Cable System's intention to delete such Station from
carriage or change such Station's channel position on such Market Cable System,
or (3) Sullivan becomes aware of any breach of any representation or warranty of
Sullivan set forth in Article IV.

          7.J  Updated Information.  Sullivan agrees to provide to Sinclair and
               ------- -----------                                             
the Merger Sub at or prior to the Closing, for informational purposes only,
copies of all Contracts in existence at the time of the Closing which would have
been required to be described on the attached Schedule 4J if such Contracts had
existed on the date of this Agreement and which are not so disclosed.

          7.K  Non-Solicitation.  From the date of this Agreement until the
               ----------------                                             
Closing or the earlier termination of this Agreement, each of ABRY Partners and
Sullivan will not, and each of them will not cause (and will use reasonable
efforts not to permit) any of its Subsidiaries, affiliates, directors, officers,
employees, representatives or agents to, directly or indirectly solicit, or
initiate, entertain or enter into any discussions or transactions with, or
encourage or provide any information to, any Person (other than any Person
described in Section 7.C(2)), concerning any sale of any of the assets of
Sullivan or its Subsidiaries (other than any sale which is not prohibited by
Section 7.A(5)) or any merger, stock acquisition or similar transaction
involving Sullivan or its Subsidiaries (other than an issuance of capital stock
or capital stock equivalents by Sullivan and the Spin-Offs); provided that
                                                             --------     
nothing in this Section 7.K will prohibit ABRY Partners or Sullivan from
furnishing, or causing or permitting any other Person to furnish, information
concerning Sullivan or its Subsidiaries to any governmental authority or court
of competent jurisdiction or any other Person as may be required by any Legal
Requirement.

          7.L  Interruption of Broadcast Transmission.
               ------------ -- --------- ------------ 

               (1) Notice of Loss or Damage.  In the event of any loss, damage,
                   ------ -- ---- -- ------                                    
     impairment, confiscation or condemnation of any of the Station Assets prior
     to the Approval Date that interferes with the normal operations of the
     Stations, Sullivan will notify Sinclair of the same in writing promptly
     after Sullivan becomes aware thereof, specifying with reasonable
     particularity the loss, damage or impairment, confiscation or condemnation
     incurred, the cause thereof, if known or reasonably ascertainable, and any
     applicable insurance coverage.  To the extent thereof, Sullivan will apply
     the proceeds of any insurance policy, judgment or award with respect
     thereto as necessary to repair, replace or restore such Station Assets to
     their prior condition as soon as practicable after such loss, damage,
     impairment, confiscation or condemnation.
 
               (2) Interruption of Transmission.  If before the Approval Date,
                   ------------ -- ------------                               
     due to damage or destruction of the assets of any Station, the regular
     broadcast transmission of one (1) or more of the Stations in the normal and
     usual manner is interrupted for a period of twelve (12) continuous hours or
     more, Sullivan will give prompt written notice thereof to 

                                       46
<PAGE>
 
     Sinclair. If prior to the Approval Date, due to damage or destruction of
     the assets of one (1) or more of the Stations, the regular broadcast
     transmission of one (1) or more Stations in the normal and usual manner is
     interrupted such that the regular broadcast signal of any such Station
     (including its effective radiated power) is diminished in any material
     respect, then (i) Sullivan will give written notice to Sinclair promptly
     after Sullivan becomes aware thereof, and (ii) Sinclair shall have the
     right, by giving prompt written notice to Sullivan to postpone the Closing
     for a period up to sixty (60) days.

               (3) Failure to Resume Transmission.  In the event any one (1) or
                   ------- -- ------ ------------                              
     more Stations' normal and usual transmission has not been substantially
     resumed by the date scheduled for the Closing, as postponed pursuant to
     Section 7.L(2) above, Sinclair may, pursuant to Section 12.A(2)(c),
     terminate this Agreement by written notice to Sullivan.  Notwithstanding
     the foregoing, however, Sinclair may, at its option, proceed to complete
     the Merger and complete the restoration and replacement of any damaged
     assets of the Station in question after the Closing Date, in which event:
     (a) all insurance or other proceeds received in connection therewith, to
     the extent such proceeds are received by Sullivan and have not therefore
     been used in the restoration or replacement of such assets, will be
     excluded from the Current Assets, and (b) the lesser of $5,000,000 and the
     excess (if any) of the reasonable cost to complete such restoration or
     replacement over  the amount of such proceeds will be included in the
     computation of the Current Liabilities (the exclusion of such proceeds and
     the inclusion of such cost being in lieu and to the exclusion of any remedy
     pursuant to the Indemnity Agreement in respect of the failure of such
     restoration or replacement to be completed).

               (4) Interruption Notice/Termination.  If before the Approval
                   ------------ ------------------                         
     Date, due to damage or destruction of the Station Assets, the regular
     broadcast transmission of any Station in the normal and usual manner is
     interrupted for a period of seven (7) continuous days or more, Sullivan
     shall give prompt written notice thereof (the "Interruption Notice") to
                                                    ------------ ------     
     Sinclair.  During the two (2) Business Days after the receipt of the
     Interruption Notice, Sinclair shall have the right, in its sole and
     absolute discretion, by giving written notice thereof to Sullivan to
     terminate this Agreement pursuant to Section 12.A(2)(c).

          7.M  No Premature Assumption of Control.  Nothing contained in this
               -- --------- ---------- -- -------                            
Agreement will give any Acquiring Party any right to control the programming,
operations, or any other matter relating to the Stations, and the respective
licensees thereof, will have complete control of the programming, operations,
and all other matters relating to the Stations (it being agreed that in any
event Sinclair will have the right to withhold its Consent to any Program
Contract to the extent provided in Section 7.A(3), if not deemed granted as
provided therein).


                                 ARTICLE VIII

                   COVENANTS OF SINCLAIR AND THE MERGER SUB

          8.A  Hart-Scott-Rodino Matters.  On or prior to March 20, 1998,
               ----------------- -------                                 
Sinclair will 

                                       47
<PAGE>
 
complete all documents required to be filed with the FTC and the DOJ with
respect to itself and/or its Affiliate(s) and concerning the Merger in order to
comply with the Hart-Scott-Rodino Act and together with Sullivan and/or the
appropriate Affiliate(s) of Sullivan who are required to join in such filings,
will file the same with the FTC and the DOJ. Sinclair will pay the filing fees
associated with all such filings (subject to partial reimbursement by Sullivan
as provided in Section 7.D). Sinclair and the Merger Sub will promptly furnish
all materials thereafter required by the FTC, the DOJ or any other governmental
entity having jurisdiction over such filings, and will take all reasonable
actions and will file and use reasonable efforts to have declared effective or
approved all documents and notifications with any such governmental entity, as
may be required under the Hart-Scott-Rodino Act or other federal antitrust laws
for the consummation of the Merger.

          8.B  Confidential Information. If for any reason the transactions
               ------------ -----------                                    
contemplated in this Agreement are not consummated, each of Sinclair and the
Merger Sub will not use or disclose to any Person (except to its agents,
representatives and advisors, to its lenders and their respective agents,
representatives and advisors, or as may be required by any Legal Requirement)
any confidential information received from Sullivan, any of its Subsidiaries,
Sullivan Two or Sullivan Three or any of their respective agents,
representatives and advisors (each a "disclosing party" for purposes of this
Section 8.B) in the course of investigating, negotiating, and completing the
transactions contemplated by this Agreement.  Nothing will be deemed to be
confidential information for purposes of this Section 8.B that:  (a) is or was
known to any Sinclair-Related Entity at the time of its initial disclosure by a
disclosing party to any Sinclair-Related Entity; (b) has become or becomes
publicly known or available other than through disclosure by any Sinclair-
Related Entity; (c) is or was rightfully received by any Sinclair-Related Entity
from any Person unrelated to any Sinclair-Related Entity (other than any Person
engaged by any Sinclair-Related Entity in connection with the transactions
contemplated by this Agreement); or (d) is or was independently developed by any
Sinclair-Related Entity. In addition, the Merger Sub agrees to be bound by the
same obligations as Sinclair is bound pursuant to the confidentiality agreement
dated as of November 20, 1997 between Sinclair and Sullivan Broadcasting, which
confidentiality agreement will survive the execution and delivery of this
Agreement and will survive the execution and termination of this Agreement, and
no provision of this Section 8.B will be deemed to supersede or in any way limit
any obligation or right under such confidentiality agreement.

          8.C  Efforts to Consummate.  Subject to the provisions of Article X
               ------- -- ----------                                         
and Section 12.A, each of Sinclair and the Merger Sub will use reasonable
efforts to fulfill and perform all conditions and obligations on its part to be
fulfilled and performed under this Agreement and to cause the conditions set
forth in Articles IX and X to be fulfilled and cause each Spin-Off, the Merger
and the transactions contemplated by this Agreement in connection with the
Merger to be fully carried out. In addition, promptly after Sinclair or the
Merger Sub becomes aware prior to the Closing of a breach of any fact or
circumstance which constitutes or would constitute a breach of any
representation or warranty of Sullivan set forth in this Agreement, Sinclair
will give Sullivan notice thereof so that Sullivan may attempt to cure the same.

          8.D  Notice of Proceedings.  Each of Sinclair and the Merger Sub will
               ------ -- -----------                                           
promptly notify Sullivan (prior to the Closing) or the Stockholder
Representative (after the Closing) in writing upon becoming aware of any order
or decree or any complaint praying for an order or decree 

                                       48
<PAGE>
 
restraining or enjoining the consummation of either Spin-Off, the Merger or any
other transaction contemplated by this Agreement, or upon receiving any notice
from any governmental department, court, agency, or commission of its intention
to institute an investigation into or institute a suit or proceeding to restrain
or enjoin the consummation of either Spin-Off, the Merger or any such other
transaction, or to nullify or render ineffective this Agreement, either Spin-
Off, the Merger or any such other transaction, if consummated. Sinclair will
give the Stockholder Representative prompt written notice if any Acquiring Party
becomes aware of any breach of any representation or warranty of any Acquiring
Party set forth in Article V.
 
          8.E  Continued Employment.
               --------- ---------- 
 
               (1) Generally.  Except as provided in Section 8.E(2), the Merger
                   ---------                                                   
     Sub, in its capacity as Post-Merger Sullivan after the Effective Time,
     agrees to employ after the Closing, directly or indirectly through one or
     more of its Subsidiaries, all of those Persons who are common law employees
     of Sullivan and its Subsidiaries at the time of the Closing at the same
     rates of base pay and the other terms and conditions applicable to such
     employment at such time, and Sinclair and the Merger Sub agree to indemnify
     and hold harmless the Old Sullivan Stockholders, the Stockholder
     Representative and the present and former officers, directors, employees
     and agents of each of the Old Sullivan Stockholders, the Stockholder
     Representative, Sullivan and their respective Subsidiaries in respect of
     any loss, liability, cost, damage, claim or expense which may be incurred
     by or asserted against any of them arising out of or relating to any
     failure or refusal to so employ any such Person (including any change in
     any term or condition of such employment), or the termination of the
     employment of any such Person, at or after the Closing.  Without limiting
     the foregoing indemnity, it is acknowledged that except as provided in any
     agreement referred to on the attached Schedule 4J, such employees will
     continue to be at-will employees, and the respective employers may
     terminate their employment or change their terms of employment at will,
     and/or Post-Merger Sullivan or its Subsidiaries may cover such employees
     under existing or new benefit plans, programs, and arrangements, and may
     amend or terminate the terms of any such plans, programs, or arrangements
     at any time (in each case, without reducing the indemnity obligation set
     forth in the preceding sentence).  No employee or beneficiary of Post-
     Merger Sullivan or its Subsidiaries may sue to enforce the terms of this
     Agreement, including specifically this Section 8.E, and no such employee or
     beneficiary shall be treated as a third party beneficiary of this
     Agreement.

               (2) Excluded Employees.  The provisions of Section 8.E(1) will
                   -------- ---------                                        
     not apply to the Corporate Personnel, the Non-Continuing Station Managers
     or any Person employed by Sullivan or any of its Subsidiaries pursuant to
     an agreement of a type described in clause (z) of Section 7.A(5)(b).
     Sullivan will cause the employment of each Non-Continuing Manager and the
     Corporate Personnel to be terminated, effective as of the time of the
     Closing.  The liabilities of Sullivan and its Subsidiaries for amounts
     required to be paid in connection with or after the termination of any such
     excluded Person whose employment is terminated prior to or at the time of
     the Closing will be reflected in the computation of the Current
     Liabilities.

                                       49
<PAGE>
 
          8.F  Section 338 Election.  Without the Stockholder Representative's
               ------- --- --------                                           
prior written consent, Sinclair will not, and will not cause or permit any of
its Subsidiaries to, make an election under Section 338 of the Tax Code, or
under any analogous provision of any other Legal Requirements relating to Taxes,
with respect to the Merger.


                                  ARTICLE IX

            CONDITIONS TO THE OBLIGATIONS OF SULLIVANAT THE CLOSING
                                        
          The obligation of Sullivan to consummate the Merger is, at Sullivan's
option, subject to the fulfillment of the following conditions at the time of
the Closing (Sullivan expressly acknowledging that the effectiveness of the
Sullivan Consents is not a condition to such obligation):

          9.A  Representations, Warranties, Covenants.
               ---------------- ----------- --------- 

               (1) Each of the representations and warranties of the Acquiring
     Parties set forth in Article V, considered without regard to any
     materiality qualifiers contained therein, will be deemed to be made again
     at and as of the time of the Closing (other than any such representation or
     warranty which is expressly made with reference to a time prior to the time
     of the Closing, which will be deemed remade as of such time only), and
     taken as a whole such representations and warranties, as so remade, will
     have been true and accurate in all material respects, except to the extent
     of deviations therefrom permitted or contemplated by this Agreement; and
 
               (2) each Acquiring Party will in all material respects have
     performed and complied with the covenants and agreements required by this
     Agreement to be performed or complied with by it prior to or at the time of
     the Closing, taken as a whole (other than the delivery of the Merger
     Consideration for the Sullivan Share Equivalents, which the Merger Sub will
     have established to Sullivan's reasonable satisfaction that it is prepared
     to deliver).

          9.B  Proceedings.
               ----------- 

               (1) No action or proceeding will have been instituted and be
     pending before any court or governmental body to restrain or prohibit, or
     to obtain a material amount of damages in respect of, the consummation of
     the transactions contemplated by this Agreement that, in the reasonable
     opinion of Sullivan, may reasonably be expected to result in a preliminary
     or permanent injunction against such consummation or, if the transactions
     contemplated hereby were consummated, an order to nullify or render
     ineffective this Agreement or such transactions or for the recovery against
     any Sullivan-Related Entity or any officer, director or stockholder of any
     Sullivan-Related Entity of a material amount of damages; and

               (2) no Party will have received written notice from any
     governmental body of (a) such governmental body's intention to institute
     any action or proceeding to 

                                       50
<PAGE>
 
     restrain or enjoin or nullify this Agreement or the transactions
     contemplated hereby, or to commence any investigation (other than a routine
     letter of inquiry, including, without limitation, a routine Civil
     Investigative Demand) into the consummation of the transactions
     contemplated by this Agreement, or (b) the actual commencement of such an
     investigation, in each case unless the same has been withdrawn, resolved,
     concluded or abandoned.

          9.C  Hart-Scott-Rodino.  The requisite waiting period under the Hart-
               -----------------                                              
Scott-Rodino Act for the consummation of the Merger will have expired or been
terminated.

          9.D  Spin-Offs.  The Required FCC Consent for each Spin-Off will have
               ---------                                                       
been Granted and be in full force and effect and all Acquiring Party Consents
for the Spin-Offs will have been obtained and be in full force and effect;
provided that the Grant and effectiveness of such Required FCC Consent and the
--------                                                                      
effectiveness of such Acquiring Party Consents will not be conditions to
Sullivan's obligation to consummate the Merger so long as any Sullivan Consent
for the Spin-Offs is not in effect.

          9.E  Sufficient Funds to Satisfy Obligations.  Sullivan will have
               ---------------------------------------                     
received evidence which is reasonably satisfactory to Sullivan to the effect
that the Merger Sub and Post-Merger Sullivan and/or its Subsidiaries have or
will have the funds described in Section 11.E.
 
          9.F  Sinclair Common Stock.  If the Merger Sub has elected to pay part
               ---------------------                                            
of the Merger Consideration for the Sullivan Share Equivalents in the form of
shares of Sinclair Common Stock as provided in Section 3.A(3), then Sinclair
will have taken such actions as may be required, or are reasonably requested by
the Stockholder Representative, in order that the Sinclair Common Stock be
registered and tradeable as described in Section 3.C(3), including any
registration, notice of issuance or other action or notice to or by NASDAQ,
Nasdaq National Market or any relevant securities exchange in order that such
shares of Sinclair Common Stock be tradeable thereon.

          9.G  Other.  The Merger Sub will have delivered, or will stand ready
               -----                                                          
to deliver, to Sullivan such instruments, documents, and certificates as are
contemplated by Section 3.I(3).


                                   ARTICLE X

                        CONDITIONS TO THE OBLIGATIONS OF
                         THE MERGER SUB AT THE CLOSING

          The obligations of the Merger Sub to pay the Merger Consideration for
the Sullivan Share Equivalents and consummate the Merger on the Closing Date
are, at the Merger Sub's option, subject to the fulfillment of the following
conditions at the time of the Closing (Sinclair and the Merger Sub expressly
acknowledging that neither the availability to the Merger Sub of funds
sufficient to pay such Merger Consideration and to fulfill the obligations under
Section 11.E, nor the effectiveness of the Acquiring Party Consents, is a
condition to such obligations):


                                      51
<PAGE>
 
          10.A Representations, Warranties, Covenants.
               -------------------------------------- 

               (1) Each of the representations and warranties of Sullivan and
     set forth in Article IV (other than any representation or warranty which
     speaks as of a time after the Closing), considered without regard to any
     materiality qualifiers contained therein, will be deemed to be made again
     at and as of the time of the Closing (other than any such representation or
     warranty which is expressly made with reference to a time prior to the time
     of the Closing, which will be deemed remade as of such time only), and
     taken as a whole such representations and warranties, as so remade, will
     have been true and accurate, except to the extent of deviations therefrom
     which are permitted or contemplated by this Agreement or which, in the
     aggregate, do not constitute and have not caused a Material Adverse Change;
     and

               (2) Sullivan will in all material respects have performed and
     complied with the covenants and agreements required by this Agreement to be
     performed or complied with by it prior to or at the time of the Closing,
     taken as a whole.

          10.B Proceedings.
               ----------- 
 
               (1) No action or proceeding will have been instituted and be
     pending before any court or governmental body to restrain or prohibit, or
     to obtain a material amount of damages in respect of, the consummation of
     the transactions contemplated by this Agreement that, in the reasonable
     opinion of Sinclair, may reasonably be expected to result in a preliminary
     or permanent injunction against such consummation or, if the transactions
     contemplated hereby were consummated, an order to nullify or render
     ineffective this Agreement or such transactions or for the recovery against
     any Sinclair-Related Entity or any officer, director or stockholder of any
     Sinclair-Related Entity of a material amount of damages; and

               (2) no Party will have received written notice from any
     governmental body of (a) such governmental body's intention to institute
     any action or proceeding to restrain or enjoin or nullify this Agreement or
     the transactions contemplated hereby, or to commence any investigation
     (other than a routine letter of inquiry, including, without limitation, a
     routine Civil Investigative Demand) into the consummation of the
     transactions contemplated by this Agreement, or (b) the actual commencement
     of such an investigation, in each case unless the same has been withdrawn,
     resolved, concluded or abandoned.

          10.C Hart-Scott-Rodino and Other Consents.  The requisite waiting
               ------------------------------------                        
period under the Hart-Scott-Rodino Act for the consummation of the Merger will
have expired or been terminated and all Sullivan Consents will have been
obtained and be effective. If the representation and warranty set forth in the
final sentence of Section 4.N is untrue, then each Consent of a type described
therein will have been obtained and be effective.
 
          10.D Spin-Offs.  The Required FCC Consents for the Spin-Offs will have
               ---------                                                        
been Granted and be in full force and effect and Sullivan will stand ready to
effect, or will have effected, 


                                      52
<PAGE>
 
the Spin-Offs, and each of Sullivan Two and Sullivan Three will have entered
into the New LMA applicable to it; provided that the foregoing will not be
                                   --------
conditions to the Merger Sub's obligation to consummate the Merger so long as
any Acquiring Party Consent to a Spin-Off or the Merger is not in effect.

          10.E Minimum Gross Revenues.  The amount of the Gross Revenues for the
               ----------------------                                           
Measurement Period will have been determined in accordance with Section 3.J and
will be not less than the amount set forth below:

                 Last Day of
                 Measurement Period       Gross Revenues
                 ------------------       --------------

                 March 31, 1998           $32,042,000
                 April 30, 1998           $44,913,000
                 May 31, 1998             $58,693,000
                 June 30, 1998            $71,630,000
                 July 31, 1998            $82,729,000
                 August 31, 1998          $94,391,000

          10.F Limit on Dissenters. The holders of Sullivan Common Stock who
               -------------------
have demanded appraisal pursuant to Section 262 of the Delaware General
Corporation Act and who have not subsequently withdrawn or waived (or been
deemed to have withdrawn or waived) or who are not otherwise barred from
requiring any such appraisal, if there are any such holders at the time of the
Closing, will not hold Sullivan Common Stock which (absent such right of
appraisal) would be entitled to receive in excess of 6% of the aggregate Merger
Consideration for the Sullivan Share Equivalents (determined based on the
Estimated Annualized Trailing Cash Flow, or the Annualized Trailing Cash Flow,
if it has been finally determined in accordance with Section 3.J, and the
Estimated KOKH Amount and the Estimated Adjustment Amount determined pursuant to
Section 3.E) if the Merger were consummated.

          10.G Other Instruments.  Sullivan will have delivered, or will stand
               -----------------                                              
ready to deliver, to the Merger Sub such instruments, documents, and
certificates as are contemplated by Section 3.I(2).


                                   ARTICLE XI

                              POST-CLOSING MATTERS

          11.A Survival.  The representations, warranties and certifications of
               --------                                                        
the Parties contained in or made pursuant to this Agreement (including any
certification contained in any certificate to be delivered pursuant to Section
3.I) will survive the execution of this Agreement and the Closing only to the
extent expressly provided in the Indemnity Agreement.  The covenants and
agreements of the Parties set forth in this Agreement will survive until
performed and discharged 


                                      53
<PAGE>
 
in full.

          11.B Limitation of Recourse.  Except as provided in the Indemnity
               ----------------------                                      
Agreement, after the Closing, no claim may be brought or maintained against any
Party or  any Old Sullivan Stockholder or any of their respective present or
former officers, directors, employees or other affiliates by any Party or Old
Sullivan Stockholder or any of its successors or assigns, and no recourse may be
sought or granted against any Person, by virtue of or based upon any alleged
misstatement, omission, inaccuracy in, or breach of any representation, warranty
or certification of any Party set forth in or made pursuant to this Agreement,
and in no event will Sinclair or Post-Merger Sullivan be entitled to claim or
seek any rescission of the Merger or any of the other transactions consummated
pursuant to the Transaction Documents, any such right of rescission or rights to
damages which any such Party might otherwise have being hereby expressly waived
and any claims or judgments being limited accordingly; provided that nothing in
                                                       --------                
this Agreement will constitute a waiver of or limit any Old Sullivan
Stockholder's recourse or remedy pursuant to any federal or state securities
laws arising out of or relating to the offering or issuance of Sinclair Common
Stock hereunder.

          11.C Acknowledgment by the Acquiring Parties.  Each of the Acquiring
               ---------------------------------------                        
Parties has conducted, to its satisfaction, an independent investigation and
verification of Sullivan, its Subsidiaries, the Stations and the Station Assets
and the financial condition, results of operations, assets, liabilities,
properties and projected operations of Sullivan, its Subsidiaries, the Stations
and the Station Assets.  In determining to enter into this Agreement and proceed
with the transactions contemplated by this Agreement, each Acquiring Person has
relied on the covenants of Sullivan, the results of such independent
investigation and verification and the representations and warranties of
Sullivan (in conjunction with the Schedules hereto) set forth in this Agreement
(including the certifications to be made in any certificate to be delivered
pursuant to Section 3.I), all of which each Acquiring Party acknowledges and
agrees will survive for a limited duration. SUCH REPRESENTATIONS, WARRANTIES AND
CERTIFICATIONS CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS,  WARRANTIES
AND CERTIFICATIONS WITH RESPECT TO SULLIVAN, ITS SUBSIDIARIES, THE STATIONS AND
THE STATION ASSETS TO THE ACQUIRING PARTIES IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY, AND EACH ACQUIRING PARTY UNDERSTANDS, ACKNOWLEDGES AND
AGREES THAT ALL OTHER REPRESENTATIONS, WARRANTIES AND CERTIFICATIONS OF ANY KIND
OR NATURE AND WHETHER ORAL OR CONTAINED IN ANY WRITING OTHER THAN THIS AGREEMENT
OR ANY SUCH CERTIFICATE (INCLUDING WITHOUT LIMITATION, ANY REPRESENTATION,
WARRANTY OR CERTIFICATION RELATING TO THE PROJECTED, FUTURE OR HISTORICAL
FINANCIAL CONDITION, RESULTS OR OPERATIONS, ASSETS OR LIABILITIES RELATING TO
THE STATIONS) ARE SPECIFICALLY DISCLAIMED BY SULLIVAN, THE STOCKHOLDER
REPRESENTATIVE, THE OFFICERS OF SULLIVAN AND ITS SUBSIDIARIES AND THE OLD
SULLIVAN STOCKHOLDERS.

          11.D Corporate Names.  After the Merger (but on the Closing Date),
               ---------------                                              
Post-Merger Sullivan will take and will cause its Subsidiaries to take such
action as is necessary to change its 


                                      54
<PAGE>
 
corporate name in its certificate or articles of incorporation filed with the
Secretary of State or similar official of the jurisdiction of its incorporation
to a name which does not include, and is not confusingly similar to, the name
"Sullivan" and will cease the use of all Sullivan Broadcasting logos or any
similar mark. Notwithstanding anything in this Agreement to the contrary, Post-
Merger Sullivan and its Subsidiaries will be entitled to continue to use its
present corporate name until such time as such name change is effective and to
the extent necessary to accomplish such name change, and may endorse checks and
other instruments in such name.

          11.E Satisfaction of Certain Obligations.  On the Closing Date,
               -----------------------------------                       
immediately after the Effective Time, the Merger Sub will, and Sinclair will
cause Post-Merger Sullivan and each of Post-Merger Sullivan's Subsidiaries to,
pay in full all Funded Indebtedness of Sullivan and its Subsidiaries pursuant
to, and otherwise satisfy all obligations of Sullivan and its Subsidiaries
under, the Sullivan Senior Debt Arrangements and the Mission Guarantees (other
than Funded Indebtedness incurred pursuant to any Sullivan Indenture, to the
extent any Consent necessary to permit the same to remain outstanding after the
Closing) .  Without limiting the foregoing, Sinclair will cause Post-Merger
Sullivan and/or one or more of its Subsidiaries to have on the Closing Date
funds which are sufficient to permit Post-Merger Sullivan and/or its
Subsidiaries to take the actions contemplated by this Section 11.E and will
cause the Merger Sub to have funds necessary to permit the Merger Sub to pay the
Merger Consideration for the Sullivan Share Equivalents and make the deposit (if
any) in the Estimate Fund pursuant to Section 3.A(3)(d).


                                  ARTICLE XII

                                  TERMINATION

          12.A Termination of Agreement Prior to Closing.  Subject to Section
               -----------------------------------------                     
12.A(3), this Agreement may be terminated at any time prior to the Closing as
follows:

               (1) By Sullivan.  By Sullivan, by written notice (a "Sullivan
                   -----------                                      --------
     Termination Notice") to Sinclair:
     ------------------               

                   (a)   at any time when any material breach by any Acquiring
          Party of its obligations pursuant to this Agreement has occurred and
          is continuing, if both

                         (i)  such breach materially and adversely affects the
               likelihood that any of the conditions set forth in any of Article
               IX or Article X which has not been satisfied or waived will be
               satisfied or materially and adversely affects any Party's ability
               to comply with its obligations pursuant to this Agreement, and

                         (ii) at least thirty days have elapsed since Sullivan
               gave Sinclair written notice requesting that such Acquiring Party
               cure such breach,

          unless prior to the giving of the Sullivan Termination Notice each
          such breaching 


                                      55
<PAGE>
 
          Acquiring Party has cured such breach;
 
                    (b) at any time after the Merger Sub has failed to make the
          Mandatory Payment when required by Section 3.K(1), if the Merger Sub
          has not made the Mandatory Payment prior to the giving of such
          Sullivan Termination Notice (in which event the termination of this
          Agreement pursuant to the delivery of such Sullivan Termination Notice
          will be effective at 5:00 p.m., Boston, Massachusetts, time, on the
          second Business Day after such Notice is given, unless the Mandatory
          Payment is made prior to such time);

                    (c) at any time after the Expiration Dat, if

                        (i)   as of the Expiration Date, each of Sullivan's and
               the Merger Sub's conditions to closing set forth in Articles IX
               and X was satisfied or waived in writing,

                        (ii)  as of the Expiration Date,  (x) each of Sullivan's
               and the Merger Sub's conditions to closing set forth in Articles
               IX and X (other than any set forth in Sections 9.D and 10.D) was
               satisfied or waived in writing, (y) the Required FCC Consent has
               been Granted and each Sullivan Consent for the Spin-Offs had been
               obtained, and (z) any Acquiring Party Consent for a Spin-Off was
               not obtained,

                        (iii) the absence of satisfaction of each of Sullivan's
               and the Merger Sub's conditions to closing set forth in Articles
               IX and X which was not waived in writing or satisfied as of the
               Expiration Date was caused by a breach by one or more of the
               Acquiring Parties of any of its or their representations,
               warranties and/or obligations under this Agreement and/or the
               failure of any Acquiring Party Consent to have been obtained,
 
                        (iv)  the Approval Date had not occurred on or prior to
               the Expiration Date as a result of any breach by one or more of
               the Acquiring Parties of any provision of this Agreement, or

                        (v)   one or more of the Acquiring Parties and the
               Affiliates thereof refused, failed or declined to take any action
               (other than divesting itself of a broadcast television or radio
               station of which it or one of its Subsidiaries is the licensee or
               terminating any time brokerage or similar arrangement) which the
               FCC, the FTC, the DOJ or the staff of any of them indicates to
               any Acquiring Party or agent thereof is a condition to the grant
               of the Required FCC Consent or the expiration or termination of
               the requisite waiting period under the Hart-Scott-Rodino Act for
               the Merger; or

                    (d) at any time after the Expiration Date, in any
          circumstance 


                                      56
<PAGE>
 
          which is not described in Section 12.A(1)(c), unless the absence of
          satisfaction of each of Sullivan's and the Merger Sub's closing
          conditions set forth in Articles IX and X which has not been satisfied
          or waived in writing has been caused by a breach by Sullivan of its
          obligations under this Agreement.
 
               (2) By Sinclair.  By Sinclair, by written notice (a "Sinclair
                   -----------                                      --------
     Termination Notice") to Sullivan:
     ------------------               
 
                   (a)  at any time when any material breach by Sullivan of its
          obligations pursuant to this Agreement has occurred and is continuing,
          if both

                        (i)  such breach materially and adversely affects the
               likelihood that any of the conditions set forth in Article IX or
               Article X will be satisfied or materially and adversely affects
               any Party's ability to comply with its obligations pursuant to
               this Agreement and

                        (ii) at least thirty days have elapsed since Sinclair
               gave Sullivan written notice requesting that Sullivan cure such
               breach,

          unless prior to the giving of such Sinclair Termination Notice
          Sullivan has cured such breach;

                   (b)  at any time on or prior to the fifth (5th) Business Day
          after Sullivan delivers to Sinclair any amendment and restatement or
          modification of any attached Schedule pursuant to Section 13.P, if
          such amendment and restatement or modification reflects any fact or
          circumstance which (alone or in the aggregate with all other facts and
          circumstances reflected in the attached Schedules as so amended and
          restated or modified and not reflected in the attached Schedules as
          initially attached to this Agreement) represents or has caused a
          Material Adverse Change;

                   (c)  (i) at any time when there has occurred a Material
          Adverse Change and at least 30 days have elapsed since Sinclair gave
          Sullivan notice of the occurrence of such Material Adverse Change,
          unless the facts or circumstances causing or constituting such
          Material Adverse Change have been cured or otherwise no longer exist,
          or (ii) under the circumstances described in Section 7.L(3) or 7.L(4);

                   (d)  at any time during the five (5) Business Days after the
          amount of the Gross Revenues (as if the Measurement Date were June 30,
          1998) is finally determined pursuant to Section 3.J, if such amount is
          less than $71,630,000;

                   (e)  at any time after the Expiration Date, under any
          circumstances described in Section 12.A(1)(c); or

                   (f)  at any time after the Expiration Date, in any case not
          described in Section 12.A(2)(e).


                                      57
<PAGE>
 
          (3)  When Termination Not Permitted.  Sullivan may not terminate this
               ------------------------------                                  
     Agreement pursuant to Section 12.A(1) at any time when Sullivan is in
     material breach of a material obligation under this Agreement.  Sinclair
     may not terminate this Agreement pursuant to Section 12.A(2) (other than
     pursuant to Section 12.A(2)(e)) at any time when any Acquiring Party is in
     material breach of a material obligation under this Agreement.
 
          12.B Survival of Certain Provisions; Remedies.
               ---------------------------------------- 

               (1) General.  No Party will have any liability to any other Party
                   -------                                                      
     for costs, expenses, damages (consequential or otherwise), loss of
     anticipated profits, or otherwise as a result of a termination pursuant to
     Section 12.A, except as provided in Section 12.B(2), 12.B(3) or 12.B(4).
     The Parties agree that time is of the essence with respect to the
     provisions of Sections 3.H., 3.K and 12.A.  Sections 7.G and 7.B, this
     Article XII and Article XIII will survive the termination of this Agreement
     pursuant to Section 12.A.

               (2) Disposition of Earnest Money Fund and Income.  If this
                   --------------------------------------------          
     Agreement is terminated pursuant to any of Sections 12.A(1)(a), 12.A(1)(b),
     12.A(1)(c) or 12.A(2)(e), then the Earnest Money Fund will be paid to
     Sullivan (unless the Mandatory Payment has theretofore been made to
     Sullivan), and all Earnest Money Income will be paid to Sinclair. If this
     Agreement is terminated pursuant to any of Sections 12.A(1)(d), 12.A(2)(a),
     12.A(2)(b), 12.A(2)(c), 12.A(2)(d) or 12.A(2)(f), then the Earnest Money
     Fund and all Earnest Money Income will be paid to Sinclair (unless the
     Mandatory Payment is due and payable and has not been paid, in which case
     the Mandatory Payment will be made from the Earnest Money Fund and the
     Earnest Money Income, and the remainder thereof will be paid to Sinclair).
     Any payment to be made pursuant to this Section 12.B(2) may be requested,
     and will be made, in accordance with the Earnest Money Escrow Agreement.
 
               (3) For Sullivan.  Sullivan's sole and exclusive remedy for any
                   ------------                                               
     termination of this Agreement or any failure of performance or compliance
     by any Acquiring Party with any covenant or agreement contained in this
     Agreement prior to the Closing will be Sullivan's right (if any) to receive
     the Earnest Money Fund as provided in the Earnest Money Escrow Agreement
     (or its right, if any, to receive or retain the Mandatory Payment, unless
     otherwise expressly provided in Section 12.B(4)(d), as liquidated damages
     and not as a penalty).

               (4) For the Acquiring Parties.  The Acquiring Parties' sole and
                   -------------------------                                  
     exclusive remedies for the termination of this Agreement or any failure of
     performance or compliance by Sullivan with any covenant or agreement
     contained in this Agreement prior to the Closing will be

                   (a)  in the case of any such termination pursuant to Section
          12.A, Sinclair's right (if any) to receive the Earnest Money Fund and
          the Earnest Money Income (including the right to any Earnest Money
          Income not yet received by the Earnest Money Escrow Agent) as provided
          in Section 12.B(2) and the Earnest


                                      58
<PAGE>
 
          Money Escrow Agreement;

                   (b)  in the case of any such failure, their respective rights
          (if any) under applicable law or equitable principles to seek damages
          in respect of their direct out-of-pocket losses or expenses (but not
          any damages in respect of lost profits or other similar or
          consequential or incidental damages) occasioned by and as a
          consequence of such breach;

                   (c)  their respective rights (if any) under applicable law or
          equitable principles to seek specific enforcement of this Agreement
          against Sullivan, including specific enforecement of Sullivan's
          obligation to consummate the Merger (subject to FCC approval and other
          required Consents being obtained), it being acknowledged by Sullivan
          that the Acquiring Parties would not have an adequate remedy at law in
          the event of any such failure, provided that no Acquiring Party will
                                         --------                             
          be entitled to such specific performance unless (i) each Acquiring
          Party has complied in all material respects with its material
          obligations under this Agreement and (ii) either (A) each condition to
          closing of Sullivan set forth in Article IX has been satisfied or
          waived in writing or (B) the absence of satisfaction of each such
          condition to closing which has not been satisfied or waived in writing
          is caused solely by a breach by Sullivan of its obligations under this
          Agreement;
 
                   (d)  in the case of any such failure after the Approval Date,
          the release of the Merger Sub from the obligation to pay, or the
          return of, as the case may be, the Mandatory Payment, if (i) Sinclair
          has terminated this Agreement pursuant to Section 12.A(2)(a) or
          Section 12.A(2)(d), (ii) each Acquiring Party complied in all material
          respects with its material obligations under this Agreement prior to
          such termination, and (iii) if Sinclair terminated this Agreement
          pursuant to Section 12.A(2)(a), then either (A) each condition to
          closing set forth in Articles IX was satisfied or waived in writing as
          of the Expiration Date or (B) the absence of satisfaction of each such
          condition which was not satisfied or waived in writing as of the
          Expiration Date was caused solely by a breach by Sullivan of its
          obligations under this Agreement (it being agreed that, except as
          expressly provided in this Section 12.B(4)(d), if the Approval Date
          occurs and this Agreement is terminated prior to the Closing, then the
          Merger Sub will nonetheless be required to make the Mandatory Payment
          and, if the Mandatory Payment has been made prior to such termination,
          then Sullivan will be entitled to retain the Mandatory Payment); and

                   (e)  if (i) Sinclair has terminated this Agreement pursuant
          to Section 12.A(2)(a) based on a willful breach of this Agreement by
          Sullivan, (ii) the circumstances described in clauses (ii) and (iii)
          of Section 12.B(4)(d) apply, and (iii) Sinclair has disclaimed in
          writing its right to seek specific performance as described in Section
          12.B(4)(c) or Sinclair has asserted such right and such remedy has
          been denied in a final, nonappealable judgment on the grounds that the
          obligation of Sullivan to consummate the Merger hereunder is not of a
          type for which specific enforcement is an available remedy, then in
          addition to Sinclair's right to receive the


                                      59
<PAGE>
 
          Earnest Money Fund as the Earnest Money Income as provided in Section
          12.B(4)(a), upon the occurrence of the event described in clause (iii)
          above, Sullivan will pay to Sinclair the amount of Seventy Five
          Million Dollars ($75,000,000) in cash as liquidated damages.


                                  ARTICLE XIII

                                 MISCELLANEOUS

          13.A  Expenses.  Except as otherwise expressly provided in this
                --------                                                 
Agreement, Sullivan will bear all of the expenses incurred prior to the Closing
by Sullivan and the Stockholder Representative in connection with the
transactions contemplated by this Agreemen, and each of the Acquiring Parties
will bear all of its expenses incurred in connection with the transactions
contemplated by this Agreement, in each case including, without limitation,
accounting and legal fees incurred in connection herewith.

          13.B  Assignments.
                ----------- 

                (1) By Sullivan.  This Agreement may not be assigned by Sullivan
                    -----------                                                 
     without the prior written consent of the Acquiring Parties.
 
                (2) By Sinclair or the Merger Sub.  Prior to the Closing, this
                    -----------------------------                             
     Agreement may be assigned by Sinclair or the Merger Sub (or the Merger Sub
     may cease to be a wholly-owned Subsidiary of Sinclair prior to the Closing)
     only with the prior written consent of Sullivan, except that at any time
     Sinclair or the Merger Sub may assign its rights and interests hereunder
     absolutely to one or more directly or indirectly wholly-owned Subsidiaries
     of Sinclair without obtaining such consent; provided in each case, that the
                                                 --------                       
     assigning Person gives Sullivan, prior to the Closing, or the Stockholder
     Representative, after the Closing, prior written notice of such assignment
     and that such assignment will not delay the satisfaction of any condition
     to closing set forth in this Agreement, and provided further that any such
                                             --------------------              
     assignment will not relieve the assigning Person of any of its obligations
     or liabilities hereunder.

                (3) Exceptions.  Notwithstanding the foregoing, any Party may
                    ----------                                               
     assign its rights under this Agreement for collateral purposes only to any
     lender to it, or any agent for any such lender(s), without the consent of
     any other Party, and any such lender or agent may transfer such rights
     pursuant to the exercise of remedies with respect to such collateral
     security to any other Person (it being understood that any such lender or
     agent will be a third-party beneficiary of the agreement constituted by
     this Section 13.B(3)).

                (4) General Rules.  Any attempt to assign this Agreement or any
                    -------------                                              
     rights or obligations hereunder without first obtaining any consent which
     is required by this Section 13.B will be void.  This Agreement will be
     binding upon and inure to the benefit of the parties hereto and their
     respective successors and permitted assigns.  Each Old Sullivan 


                                      60
<PAGE>
 
     Stockholder is an express third-party beneficiary of this Agreement.

          13.C Further Assurances.  From time to time prior to, at, and after
               ------------------                                            
the Closing, each Party will execute all such instruments and take all such
actions as any other of them, being advised by counsel, may reasonably request
in connection with carrying out and effectuating the intent and purpose hereof,
and all transactions and things contemplated by this Agreement, including the
execution and delivery of any and all consents, confirmatory and other
instruments, in addition to those to be delivered at the Closing, and any and
all actions which may reasonably be necessary to complete the transactions
contemplated hereby.

          13.D Notices.  All notices, demands, and other communications which
               -------                                                       
may or are required to be given under or with respect to this Agreement will be
in writing, will be delivered personally or sent by nationally recognized
overnight delivery service, charges prepaid, or by registered or certified mail,
return-receipt requested, and will be deemed to have been given or made when
personally delivered, or on the next Business Day after delivery to such
overnight delivery service, or on the fifth day after it is deposited in the
mail, registered or certified, first class postage prepaid, as the case may be,
if addressed as follows:
 
               (1) If to Sullivan (prior to the Closing) or the Stockholder
                   --------------------------------------------------------
                   Representative:
                   -------------- 

               c/o ABRY Partners, Inc.
               18 Newbury Street
               Boston, Massachusetts 02116
               Attn: Royce Yudkoff, President

               with a copy (which will not constitute notice to Sullivan or the
               Stockholder Representative) to:

                   John L. Kuehn, Esq.
                   Kirkland & Ellis
                   153 E. 53rd Street
                   New York, New York 10022

          or to such other address and/or with such other copies as the Person
          to whom such notice is to be given may from time to time designate by
          notice to the Acquiring Parties given in accordance with this Section
          13.D.

               (2) If to Sinclair, the Merger Sub or  Post-Merger Sullivan:
                   ------------------------------------------------------- 

               Sinclair Broadcast Group, Inc.
               2000 W. 41st Street
               Baltimore, Maryland  21211
               Attn:     David D. Smith, President

               with a copy (which will not constitute notice to Sinclair, the
               Merger Sub or 

                                      61
<PAGE>
 
              Post-Merger Sullivan) to:

                    Steven A. Thomas, Esq.
                    Thomas & Libowitz, P.A.
                    100 Light Street, Suite 1100
                    Baltimore, Maryland  21202
 
                    and
                    ---
 
                    Sinclair Communications, Inc.
                    2000 W. 41st Street
                    Baltimore, Maryland 21211
                    Attn:  General Counsel
 
                    and
                    ---
 
                    George Stamas, Esq.
                    Wilmer, Cutler & Pickering
                    100 Light Street
                    Baltimore, Maryland  21202
 
          or to such other address and/or with such other copies as the Person
          to whom such notice is to be given may from time to time designate by
          notice to Sullivan (if prior to the Closing) and the Stockholder
          Representative given in accordance with this Section 13.D.
 
          13.E Captions.  The captions of Articles and Sections of this
               --------                                                
Agreement are for convenience only, and will not control or affect the meaning
or construction of any of the provisions of this Agreement.

          13.F Law Governing.  THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED,
               -------------                                                 
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCES TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF NEW YORK,
EXCEPT TO THE EXTENT THAT THE FEDERAL LAW OF THE UNITED STATES GOVERNS THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
          13.G Waiver of Provisions.  The terms, covenants, representations,
               --------------------                                         
warranties, and conditions of this Agreement may be waived as to any Party only
by a written instrument executed by such Party.  The terms, covenants,
representations, warranties, and conditions of this Agreement may be waived as
to any Old Sullivan Stockholder only by a written instrument executed by
Sullivan, prior to the Closing, or the Stockholder Representative, after the
Closing. The failure of any Party or any Old Sullivan Stockholder at any time or
times to require performance of any provision of this Agreement will in no
manner affect the right at a later date to enforce the same.  No waiver by or on
behalf of any Party to this Agreement or any Old Sullivan Stockholder of any
condition or the breach of any provision, term, covenant, representation, or
warranty contained in 


                                      62
<PAGE>
 
this Agreement, whether by conduct or otherwise, in any one or more instances,
will be deemed to be or construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.

          13.H Counterparts.  This Agreement may be executed in two (2) or more
                -----------                                                    
counterparts, and all counterparts so executed will constitute one (1) agreement
binding on all of the parties hereto, notwithstanding that all the parties
hereto are not signatory to the same counterpart.

          13.I Entire Agreement.  This Agreement (including the Schedules and
               ----------------                                              
Exhibits hereto) and the confidentiality agreement referred to in Section 8.C
(including the Acquiring Parties' obligations with respect thereto, as provided
in Section 8.C), constitute the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersede any and all prior
agreements, understandings, negotiations, and discussions, whether oral or
written, between them relating to the subject matter hereof.

          13.J Access to Books and Records.
               --------------------------- 
 
               (1) Post-Merger Sullivan will, and will cause its Subsidiaries
     to, preserve for not less than five (5) years after the Closing Date all
     books and records included in the Station Assets.  After such five-year
     period, Post-Merger Sullivan will not, and will not  cause or permit its
     Subsidiaries to, destroy any books or records relating to the conduct of
     business of the Stations prior to the Effective Time unless Post-Merger
     Sullivan first offers to transfer such books and records to the Stockholder
     Representative at no cost to the Stockholder Representative, and if  Post-
     Merger Sullivan is requested to do so, Post-Merger Sullivan will transfer,
     or cause a Subsidiary of Post-Merger Sullivan to transfer, such books or
     records to the Stockholder Representative.

               (2) At the request of the Stockholder Representative, Post-Merger
     Sullivan will, and will cause each of its Subsidiaries to, permit the
     Stockholder Representative (including its officers, employees, accountants,
     and counsel) any access, upon reasonable prior written notice during normal
     business hours, to all of its property, accounts, books, contracts,
     records, accounts payable and receivable, records of employees, FCC logs
     and other information concerning the affairs or operation of the Stations
     as the Stockholder Representative may reasonably request for any reasonable
     purpose relating to the transactions contemplated by this Agreement or the
     ownership or operation of any Station prior to the Effective Time, and to
     make extracts or copies from the foregoing at the Stockholder
     Representative's expense.  At Post-Merger Sullivan's request, prior to
     receiving any such requested information, the Stockholder Representative
     will execute a confidentiality agreement with respect thereto which is
     reasonably acceptable to Post-Merger Sullivan.

          13.K Public Announcements.  Prior to the Closing, no Party will,
               --------------------                                       
except by mutual agreement of Sullivan and Sinclair (including agreement as to
content, text and method of distribution or release), make any press release or
other public announcement or disclosure concerning the transactions contemplated
by this Agreement, except as may be required by any Legal 

                                      63
<PAGE>
 
Requirement (including filings and reports required to be made with or pursuant
to the rules of the Securities and Exchange Commission); provided that, prior to
                                                         --------
making any such announcement or disclosure required by any Legal Requirement, to
the extent practicable, the disclosing Party gives each Person named above prior
written notice of the context, text and content of, the method of distribution
or release of, and all other material facts concerning, such disclosure.
 
          13.L Disclosure.  If and to the extent that any information required
               ----------                                                     
to be furnished by Sullivan in any attached Schedule is contained in this
Agreement or in any attached Schedule, such information will be deemed to have
been included in each other attached Schedule in which such information is
required to be included to the extent its relevance to such latter Schedule is
reasonably apparent.  By including any information in any attached Schedule,
Sullivan will not be deemed to have admitted or acknowledged that such
information is material to or outside the ordinary course of the business of
Sullivan or any Station.

          13.M Definitional Provisions.
               ----------------------- 

               (1) Terms Defined in Appendix.  Each capitalized term which is
                   -------------------------                                 
     used and not otherwise defined in this Agreement or any attached Schedule
     has the meaning which is specified for such term in the Appendix which is
     attached to this Agreement.

               (2) Materiality.  For purposes of Sections 9.A(2), and 10.A(2),
                   -----------                                                
     materiality (as embodied in the phrase "in all material respects" will be
     measured by reference to the business or operations of the Stations, taken
     as a whole, the value of the Station Assets, taken as a whole, or the
     ability of Sullivan or Sinclair and the Merger Sub, taken as a whole, as
     the case may be, to perform or carry out the transactions contemplated by
     this Agreement, as the context requires.

               (3) Knowledge.  As used in this Agreement, the term "knowledge"
                   ---------                                                  
     of Sullivan will refer only to the actual knowledge, without any particular
     inquiry (except as specified in this Agreement), of the Corporate
     Personnel, Andrew Banks and Royce Yudkoff, after inquiry of the general
     managers of the Stations; and the "knowledge" of Sinclair or the Merger Sub
     will refer only to the actual knowledge, without any particular inquiry
     (except as specified in this Agreement) of David Smith and David Amy.
 
               (4) Interpretation.  Words used in this Agreement, regardless of
                   --------------                                              
     the gender and number specifically used, will be deemed and construed to
     include any other gender, masculine, feminine or neuter, and any other
     number, singular or plural, as the context requires.  Whether or not used
     in conjunction with the words "without limitation" or words of similar
     import, the term "including" as used in this Agreement imports that the
     items referred to are illustrative only and do not purport to be a complete
     listing of the items of the type in question.  The wording of the
     provisions of this Agreement is the result of arms-length negotiations
     among the parties to this Agreement and was selected by them to reflect
     their mutual intentions; therefore, no party will be deemed the "drafter"
     of this Agreement and no rule of strict construction will be applied
     against or in favor of any party to this Agreement.

                                      64
<PAGE>
 
          13.N Arbitration.
               ----------- 

               (1) Generally.  Except as expressly provided in the Estimate
                   ---------                                               
     Escrow Agreement or the Indemnity Escrow Agreement or for purposes of
     pursuing any remedy pursuant to Section 12.B(3)(b), the arbitration
     procedures described in this Section 13.N will be the sole and exclusive
     method of resolving and remedying claims arising under this Agreement and
     the other Transaction Documents ("Disputes"); provided that nothing in this
                                       --------    --------                     
     Section 13.N will prohibit a Party from instituting litigation to enforce
     any Final Arbitration Award.  Except as otherwise provided in the
     Commercial Arbitration Rules of the American Arbitration Association as in
     effect from time to time (the "AAA Rules"), the arbitration procedures
                                    ---------                              
     described in this Section 13.N and any Final Arbitration Award will be
     governed by, and will be enforceable pursuant to, the Uniform Arbitration
     Act as in effect in the State of New York from time to time.  No Person
     will be entitled to claim or recover punitive damages in any such
     proceeding.

               (2) Notice of Arbitration.  If a Party asserts that there exists
                   ---------------------                                       
     a Dispute, then such Person (the "Disputing Person") will give each other
                                       ----------------                       
     Person involved in such Dispute a written notice setting forth the nature
     of the asserted Dispute.  If all such Persons do not resolve any such
     asserted Dispute prior to the tenth Business Day after such notice is
     given, then the Disputing Person may commence arbitration pursuant to this
     Section 13.N by giving each other Person involved in such Dispute a written
     notice to that effect (an "Arbitration Notice"), setting forth any matters
                                ------------------                             
     which are required to be set forth therein in accordance with the AAA
     Rules.  Unless otherwise notified, the Acquiring Parties are entitled to
     assume that the Stockholder Representative is authorized to act on behalf
     of each Old Sullivan Stockholder with respect to any Dispute.

               (3) Selection of Arbitrator.  The Persons involved in such
                   -----------------------                               
     Dispute will attempt to select a single arbitrator by mutual agreement.  If
     no such arbitrator is selected prior to the twentieth Business Day after
     the related Arbitration Notice is given, then an arbitrator which is
     experienced in matters of the type which are the subject matter of the
     Dispute will be selected in accordance with the AAA Rules.

               (4) Conduct of Arbitration.  The arbitration will be conducted
                   ----------------------                                    
     under the AAA Rules, as modified by any written agreement among the Persons
     involved in such Dispute.  The arbitrator will conduct the arbitration in a
     manner so that the final result, determination, finding, judgment or award
     determined by the arbitrator (the "Final Arbitration Award") is made or
                                        -----------------------             
     rendered as soon as practicable, and the Persons involved in such Dispute
     will use reasonable efforts to cause a Final Arbitration Award to occur not
     later than the sixtieth day after the arbitrator is selected.  Any Final
     Arbitration Award will be final and binding upon the Persons involved in
     such Dispute, and there will be no appeal from or reexamination of any
     Final Arbitration Award, except as provided in the Uniform Arbitration Act,
     as in effect in the State of New York from time to time.
 
               (5) Enforcement.  A Final Arbitration Award may be enforced in
                   -----------                                               
     any state or federal court having jurisdiction over the subject matter of
     the related Dispute.

                                      65
<PAGE>
 
               (6) Expenses.  The prevailing Person(s) in any arbitration
                   --------                                              
     proceeding in connection with this Agreement will be entitled to recover
     from the non-prevailing Person(s) their reasonable attorneys' fees and
     disbursements in addition to any damages or other remedies awarded to such
     prevailing Person(s), and the non-prevailing Person(s) will be required to
     pay all other costs and expenses associated with the arbitration; provided
                                                                       --------
     that (i) if an arbitrator is unable to determine that a Person is a
     prevailing Person in any such arbitration proceeding, then such costs and
     expenses will be equitably allocated by such arbitrator upon the basis of
     the outcome of such arbitration proceeding, and (ii) if such arbitrator is
     unable to allocate such costs and expenses in such a manner, then the costs
     and expenses of such arbitration will be paid one-half by Sullivan and one-
     half by Sinclair, and each Party will pay the out-of-pocket expenses
     incurred by it.  As part of any Final Arbitration Award, the arbitrator may
     designate the prevailing Person(s) for purposes of this Section 13.N(6).
     Except as provided in the preceding sentences, each Person involved in a
     Dispute will bear its own costs and expenses (including legal fees and
     disbursements) in connection with any such proceeding or submission.
 
          13.O Stockholder Representative.
               -------------------------- 

               (1) Appointment; Authority Generally.  On behalf of the Old
                   --------------------------------                       
     Sullivan Stockholders, Sullivan hereby appoints ABRY Partners as the
     initial Stockholder Representative under this Agreement, to serve in
     accordance with the terms, conditions and provisions of this Agreement, and
     ABRY Partners, by its execution of this Agreement, hereby agrees to act as
     such, upon the terms, conditions and provisions of this Agreement.  From
     and after the Closing, the Stockholder Representative will be authorized to
     act on behalf of the Old Sullivan Stockholders in accordance with this
     Agreement.

               (2) Authorization.  The Stockholder Representative, in such
                   -------------                                          
     capacity, will be entitled to take all actions on behalf of the holders of
     Sullivan Shares or the Old Sullivan Stockholders, as the case may be, with
     respect to this Agreement and the other agreements contemplated hereby, and
     omit to take any action, each as directed by

                   (a) prior to the Effective Time, the holders of capital
          stock of Sullivan having a majority of the voting power represented by
          the outstanding capital stock of Sullivan at the time in question, and

                   (b) after the Effective Time, Persons who immediately prior
          to the Effective Time held Sullivan Shares which represented a
          majority of the voting power of the Sullivan Shares,

     (in either case, the "Majority Sullivan Stockholders").  The Stockholder
                           ------------------------------                    
     Representative may be removed and replaced from time to time as the
     representative of the holders of the Sullivan Shares or the Old Sullivan
     Stockholders by written notice given by the Majority Sullivan Stockholders
     to Sullivan (prior to the Effective Time) and the Acquiring Parties.

               (3) Responsibility.  The Stockholder Representative will have no
                   --------------                                              
     duties 

                                      66
<PAGE>
 
     or responsibilities except those expressly set forth in this Agreement or
     any other agreement which may be entered into by it hereunder. The
     Stockholder Representative will have no responsibility for the validity of
     this Agreement or any agreement referred to in this Agreement or for the
     performance of any such agreements by any party thereto or for the
     interpretation of any of the provisions of any such agreements. The
     Stockholder Representative's liability in fulfilling its duties will be
     limited to bad faith, willful misconduct or gross negligence on its part.
     The Stockholder Representative will be protected in acting upon any
     certificate, notice or other instrument whatsoever received by the
     Stockholder Representative as to its due execution, the validity and
     effectiveness of its provisions, and the truth and accuracy of any
     information therein contained that the Stockholder Representative in good
     faith believes to be genuine and to have been signed or presented by a
     proper Person or Persons. The Stockholder Representative may, in its sole
     discretion, consult with and obtain advice from legal counsel and any other
     Person in the event of any question as to any of the provisions of this
     Agreement, any other agreement entered into in connection herewith or its
     duties hereunder or thereunder. The reasonable cost of such services, to
     the extent not borne by Sullivan, will be borne among the Old Sullivan
     Stockholders who held Sullivan Shares immediately prior to the Merger
     Effective Time, pro rata in accordance with the respective amounts of the
     Merger Consideration to be received by them in respect of the Sullivan
     Shares.

               (4) Resignation; Replacement.  The Stockholder Representative
                   ------------------------                                 
     will have the right, in its sole discretion, to resign as the Stockholder
     Representative (in its capacity as the representative of the holders of
     Sullivan Shares or the Old Sullivan Stockholders) at any time by giving at
     least 30 days prior written notice to Sullivan (prior to the Effective
     Time) and the Acquiring Parties.  In such event, Sullivan (prior to the
     Effective Time) or the Majority Sullivan Stockholders (after the Effective
     Time) will promptly appoint another Stockholder Representative to represent
     the holders of Sullivan Shares and the Old Sullivan Stockholders and give
     notice of such selection to the Acquiring Parties and the Old Sullivan
     Stockholders (after the Effective Time).  Such resignation of the
     Stockholder Representative will be effective upon such notice being given
     and such new Stockholder Representative's acceptance of such appointment
     and will relieve the resigning Stockholder Representative of all duties and
     responsibilities of the Stockholder Representative in such capacity
     thereafter arising.

          13.P Completion of Sullivan's Schedules.  The Acquiring Parties
               ----------------------------------                        
acknowledge that Sullivan has executed this Agreement without having the
opportunity to request of personnel of the Stations information which may be
material to the preparation of the attached Schedules referred to in Article IV
(and that, therefore, some or all of such attached Schedules may not be correct
and complete and, as a result, some or all of the representations and warranties
set forth in Article IV which refer to such attached Schedules may not be true
and correct).  On or prior to March 9, 1998, Sullivan may deliver to Sinclair an
amendment and restatement of any such attached Schedule, or any portion thereof,
or a supplement to any such attached Schedule or any portion thereof, which may
be required in order to accurately depict facts and circumstances which exist on
the date of this Agreement (or any other applicable date referred to in any such
representation or warranty), and the attached Schedule or portion thereof in
question will be deemed to have been so 


                                      67
<PAGE>
 
amended and restated or modified, as the case may be, as of the time of the
execution and delivery of this Agreement. The Acquiring Parties' sole and
exclusive remedy under this Agreement with respect to any matter which may be
disclosed by any such amendment and restatement or supplement will be Sinclair's
right (if any) to terminate this Agreement as described in Section 12.A(2)(b).

          13.Q Treatment of Station KOKH. Each Acquiring Party acknowledges
               -------------------------                                   
that, notwithstanding any language to the contrary in this Agreement, Sullivan
has not made and will not make any representation, warranty or certification of
any kind with respect to Station KOKH (including with respect to the assets,
liabilities and operations related to Station KOKH), and no representation or
warranty set forth in Article IV, and no certification relating thereto
delivered pursuant to Sections 3.I, will be deemed to apply to Station KOKH
(including to any related asset, liability or operations).  The Annualized
Trailing Cash Flow, the Gross Revenues, the Current Assets, the Current
Liabilities and the Sullivan Receivables will be determined without regard to
the results of operations and assets of Station KOKH.


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                                      68
<PAGE>
 
          IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of
Merger to be duly executed by their duly authorized officers, all as of the day
and year first above written.


                                SULLIVAN BROADCAST HOLDINGS, INC.


                                By:
                                   -----------------------------------------

                                Its:
                                    ----------------------------------------


                                SINCLAIR BROADCAST GROUP, INC.,
                                in its own right and on behalf of a Subsidiary
                                to be formed by it


                                By:
                                   -----------------------------------------

                                Its:
                                    ----------------------------------------


                                ABRY PARTNERS, INC.

 
                                By:
                                   -----------------------------------------
                                Its:
                                    ----------------------------------------


                                      69
<PAGE>
 
                              APPENDIX


          Additional Defined Terms.  The following capitalized terms have the
          ---------- ------- -----                                           
following meanings when used in this Agreement and the Schedules attached to
this Agreement:

          "ABRY Fund" means ABRY Broadcast Partners II, L.P., a Delaware limited
           ---- ----                                                            
     partnership and a stockholder of Sullivan.

          "Acquiring Parties" means Sinclair, the Merger Sub and Post-Merger
           --------- -------                                                
     Sullivan.

          "Acquiring Party Consents" means all Consents other than the Required
           --------- ----- --------                                            
     FCC Consent, any Consent required under the Hart-Scott-Rodino Act, or any
     Sullivan Consent.

          "Act III" means Act III Broadcasting, Inc., a predecessor by merger to
           --- ---                                                              
     Sullivan Broadcasting.

          "Act III Purchase Agreement" means the Stock Purchase Agreement dated
           --- --- -------- ---------                                          
     as of June 19, 1995, among A-3 Acquisition, Inc., Act III and certain of
     the stockholders of Act III, as amended and in effect from time to time.

          "Adjustment Time" means, with respect to each Station, 12:01 a.m.,
           ---------- ----                                                  
     local time, on the Closing Date.

          "Affiliate" of any Person means any other Person which is controlled
           ---------                                                          
     by, controls, or is under common control with, such first Person.

          "Affiliated Group" means an affiliated group of corporations, as that
           ---------- -----                                                    
     term is defined in Section 1504(a) of the Tax Code (or in any analogous
     combined, consolidated or unitary group defined under state, local or
     foreign income Tax law).

          "Approval Date" means the first day upon which the Required FCC
           -------- ----                                                 
     Consent has been Granted and the requisite waiting period under the Hart-
     Scott-Rodino Act for the consummation of such Merger has expired or been
     terminated.

          "Average Trading Price" means the average of the Closing Trading
           ------- ------- -----                                          
     Prices for the third Business Day prior to the Closing Date and the nine
     (9) preceding Business Days.  The "Closing Trading Price" for any day means
                                        ------- ------- -----                   
     the closing price of Sinclair Common Stock on the Nasdaq National Market as
     of 4:00 P.M., New York time, on such day.
 
          "Benefit Arrangement" means any benefit arrangement, obligation,
           ------- -----------                                            
     custom, or practice to provide benefits, other than salary, as compensation
     for services rendered, to present or former directors, employees, agents,
     or independent contractors (other than any obligation, arrangement, custom
     or practice that is an employee benefit plan under ERISA), 

                                       70
<PAGE>
 
     including employment agreements, severance agreements, executive
     compensation arrangements, stock options, restricted stock rights and
     performance unit awards, incentive programs or arrangements, sick leave,
     vacation pay, severance pay policies, plant closing benefits, salary
     continuation for disability, consulting, or other compensation
     arrangements, workers' compensation, retirement, deferred compensation,
     bonus, stock purchase, hospitalization, medical insurance, life insurance,
     tuition reimbursement or scholarship programs, employee discounts, employee
     loans, employee banking privileges, any plans subject to Section 125 of the
     Tax Code, and any plans providing benefits or payments in the event of a
     change of control, change in ownership, or sale of a substantial portion
     (including all or substantially all) of the assets of any business or
     portion thereof, in each case with respect to any present or former
     employees, directors, or agents.
 
          A "Business Day" means any day other than a Saturday, a Sunday or
             -------- ---                                                  
     another day upon which banks in New York, New York generally are not open
     for business.
 
          "Closing Date" means the date upon which the Closing occurs.
           ------- ----                                               

          "Communications Act" means the Communications Act of 1934, as amended
           -------------- ---                                                  
     and as in effect from time to time.

          "Consent" means any consent, order, approval, authorization or other
           -------                                                            
     action of, or any filing with or notice to or other action by or with
     respect to, any Person which is required for any of the execution, delivery
     or performance of this Agreement, the consummation of either Spin-Off, the
     Merger, or the conduct of the business of Sullivan Two, Sullivan Three or
     Post-Merger Sullivan or any of its Subsidiaries or the holding or
     utilization of any Station Asset thereafter, whether such requirement
     arises pursuant to any Legal Requirement, Contract, a Person's
     organizational documents or otherwise, including any of the foregoing which
     is required in order to prevent a breach of or a default under or a
     termination or modification of any Contract.

          "Contract" means any agreement, lease, arrangement, commitment, or
           --------                                                         
     understanding to which Sullivan or any of its Subsidiaries, with respect to
     the Stations, is a party.

          "Corporate Personnel" means J. Daniel Sullivan, David Pulido, Patrick
           --------- ---------                                                 
     Bratton, Richard Montgomery, Barry Charbonneau and any successor to any of
     them in his capacity as an employee of Sullivan and its Subsidiaries,
     Sullivan Two or Sullivan Three.

          "Earnest Money Escrow Agent" means the "Escrow Agent" to which the
           ------- ----- ------ -----                                       
     Earnest Money Escrow Agreement refers.

          "Earnest Money Escrow Agreement" means the Escrow Agreement entered
           ------- ----- ------ ---------                                    
     into among Sullivan, Sinclair (on behalf of the Merger Sub) and The Chase
     Manhattan Bank (as Escrow Agent) dated as of the date of this Agreement, as
     such agreement is in effect from time to time.

                                       71
<PAGE>
 
          "Earnest Money Fund" means the "Escrow Fund" to which the Earnest
           ------- ----- ----                                              
     Money Escrow Agreement refers.

          "Earnest Money Income" means the "Escrow Income" to which the Earnest
           ------- ----- ------                                                
     Money Escrow Agreement refers.

          "Earnest Money Letter of Credit" means a stand-by letter of credit
           ------- ----- ------ -- ------                                   
     delivered to the Earnest Money Escrow Agent on the date of this Agreement
     issued by The Chase Manhattan Bank in the face amount of $75,000,000 and
     otherwise substantially in the form of the attached Exhibit E, or any
                                                         ------- -        
     replacement stand-by letter of credit delivered to the Earnest Money Escrow
     Agent in accordance with the Earnest Money Escrow Agreement.
 
          "Environmental Laws" means the rules and regulations of the FCC, the
           ------------- ----                                                 
     United States Environmental Protection Agency and any other federal, state
     or local government authority pertaining to human exposure to RF radiation
     and all applicable rules and regulations of federal, state and local laws,
     including statutes, regulations, ordinances, codes, and rules, as amended,
     relating to the discharge of air pollutants, water pollutants or process
     waste water or hazardous or toxic substances, including the Federal Solid
     Waste Disposal Act, the Federal Clean Air Act, the Federal Clean Water Act,
     the Federal Resource Conservation and Recovery Act of 1976, the Federal
     Comprehensive Environmental Response, Compensation and Liability Act of
     1980, the Occupational Safety and Health Act of 1970, each as amended,
     regulations of the Occupational Safety and Health Administration and
     regulations of any state department of natural resources or state
     environmental protection agency now in effect.

          "Effective Time" means the time of the filing of the Certificate of
           --------- ----                                                    
     Merger described in Article II.

          "ERISA Affiliate" means any Person that, together with Sullivan, would
           ----- ---------                                                      
     be or was at any time treated as a single employer under Section 414 of the
     Code or 4001 of ERISA and any general partnership of which Sullivan or any
     Subsidiary of Sullivan is or has been a general partner.
 
          "Estimate Escrow Agent" means the "Escrow Agent" to which the Estimate
           -------- ------ -----                                                
     Escrow Agreement refers.

          "Estimate Escrow Agreement" means the Estimate Escrow Agreement
           -------- ------ ---------                                     
     entered into among the Stockholder Representative, Sinclair (on behalf of
     the Merger Sub) and The Chase Manhattan Bank (as Escrow Agent) dated as of
     the date of this Agreement, as such agreement is in effect from time to
     time.

          "Estimate Fund" means the "Escrow Fund" to which the Estimate Escrow
           -------- ----                                                      
     Agreement refers.
 
          "Existing LMAs" means the time brokerage and local marketing
           -------- ----                                              
     agreements 

                                       72
<PAGE>
 
     pursuant to which Sullivan and its Subsidiaries conduct their operations
     with respect to the LMA Stations.

          "Expiration Date" means May 16, 1999.
           ---------- ----                     

          "FCC" means the Federal Communications Commission or any successor
           ---                                                              
     thereto.

          "FCC Authorizations" means the authorizations issued by the FCC and
           --- --------------                                                
     described on the attached Schedule 4E.

          "Film Obligations" means all cash payment obligations of Sullivan or
           ---- -----------                                                   
     any of its Subsidiaries under any Program Contract.

          A "Final Order" means the Required FCC Consent if (a) the Required FCC
             ----- -----                                                        
     Consent has been Granted and has not been reversed, stayed, set aside,
     enjoined, annulled or suspended (whether under Section 402 or 405 of the
     Communications Act or otherwise) and (b) (i) no request has been filed for
     administrative or judicial review, reconsideration, appeal, certiorari or
     stay and the time for filing any such request and for the FCC to review the
     Required FCC Consent on its own motion has expired, or (2) if such a
     review, reconsideration or appeal has occurred, such review,
     reconsideration or appeal has been denied and the time for further review,
     reconsideration or appeal has expired.
 
          "Funded Indebtedness" means the indebtedness for borrowed money of
           ------ ------------                                              
     Sullivan and its Subsidiaries under the Sullivan Senior Debt Arrangements,
     the indebtedness for borrowed money of Sullivan and its Subsidiaries
     represented by the Sullivan Notes, and all other indebtedness of Sullivan
     and its Subsidiaries for money borrowed by them.  As used herein, the term
     "money borrowed" does not refer to the receipt or benefit of trade credit
     for the purchase of goods or services.

          "GAAP" means United States generally accepted accounting principles,
           ----                                                               
     as in effect from time to time, as applied by Sullivan and its Subsidiaries
     from time to time.

          The Required FCC Consent is "Granted" on the effective date, as
                                       -------                           
     determined under the FCC's rules, regulations and policies, of the grant
     thereof by the FCC or its staff.

          "Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
           ----------------- ---                                       
     Improvements Act of 1976, as in effect from time to time.

          "Hazardous Material" means any substance or waste containing any
           --------- --------                                             
     hazardous substance, pollutant or contaminant, as those terms are defined,
     in the Comprehensive Environmental Response, Compensation and Liability Act
     of 1980, as amended, 42 U.S.C. (S)9601 et seq., and any other substance
     similarly defined or identified in any applicable Environmental Laws,
     including toxic materials or harmful physical agents, as defined in the
     Occupational Safety and Health Act of 1979, as amended, 29 U.S.C. (S)651 et
     seq. "Hazardous Materials" includes asbestos, asbestos-containing
     materials, petroleum and 

                                       73
<PAGE>
 
     petroleum-based products, polycholorinated biphenyls (PCBs), infectious
     wastes and radioactive materials and wastes.

          "Headquarters Assets" means the assets of Sullivan and its
           ------------ ------                                      
     Subsidiaries located in the offices of Sullivan and its Subsidiaries
     located in Franklin, Tennessee, and Boston, Massachusetts, and any so-
     called "personal seat license" or other right of Sullivan or any of its
     Subsidiaries to subscribe for tickets to events at the stadium presently
     being constructed or proposed to be constructed in the Nashville,
     Tennessee, metropolitan area.

          "Indemnity Agreement" means the Indemnity Agreement entered into among
           --------- ---------                                                  
     Sullivan, Sinclair and certain other Persons dated as of the date of this
     Agreement, as such agreement is in effect from time to time.
 
          "Indemnity Escrow Agent" means the "Escrow Agent" to which the
           --------- ------ -----                                       
     Indemnity Escrow Agreement refers.

          "Indemnity Escrow Agreement" means the Escrow Agreement entered into
           --------- ------ ---------                                         
     among the Stockholder Representative, Sinclair and certain other Persons
     and The Chase Manhattan Bank (as Escrow Agent) dated as of the date of this
     Agreement, as such agreement is in effect from time to time.
 
          "Indemnity Fund" means the "Escrow Fund" to which the Indemnity Escrow
           --------- ----                                                       
     Agreement refers.

          "KOKH Purchase Agreement" means the Asset Purchase Agreement dated as
           ---- -------- ---------                                             
     of January 6, 1998 among Sinclair, SBOC and SBLH, as in effect from time to
     time.

          "Legal Requirements" means the Communications Act, the rules,
           ----- ------------                                          
     regulations and published policies of the FCC, and all other federal, state
     and local laws, rules, regulations, ordinances, judgments, orders and
     decrees.

          "Lien" means any mortgage, pledge, hypothecation, encumbrance, lien
           ----                                                              
     (statutory or otherwise), preference, priority or other security agreement
     of any kind or nature whatsoever (including any conditional sale or other
     title retention agreement and any lease having substantially the same
     effect as any of the foregoing and any assignment or deposit arrangement in
     the nature of a security device).

          "LMA Stations" means broadcast television station WUXP, Nashville,
           --- --------                                                     
     Tennessee; and broadcast television station WUPN-TV, Greensboro, North
     Carolina; in each case together with all related translator stations (if
     any).

          "Market Cable System" means, with respect to any Station, any cable
           ------ ----- ------                                               
     television system located within such Station's television market, as that
     term is defined in Section 76.55(e) of the rules of the FCC.

                                       74
<PAGE>
 
          "Material Adverse Change" means a material adverse change after the
           -------- ------- ------                                           
     date of this Agreement in the operations, business, financial condition or
     results of operations of the Stations, taken as a whole, or in the
     condition of the Station Assets, taken as a whole (as compared with the
     operations, business, financial condition and results of operations of the
     Stations, taken as a whole,  and the condition of the Station Assets, taken
     as a whole, on the date of this Agreement) which occurs on or prior to the
     Approval Date; provided that none of the following (or any combination
                    --------                                               
     thereof) will be a Material Adverse Change:  (i) a change in the financial
     performance of the Stations; (ii) any change caused in whole or in part by
     (A) any change in employees, suppliers or customers of the Stations, (B) a
     change in general economic, financial or capital market conditions on a
     national, state, regional or local basis, (C) a change in conditions
     (including legislation, regulations or competitive activities) applicable
     to the broadcast television industry generally on a national, state,
     regional or local basis, (D) any matter disclosed on the attached Schedules
     to this Agreement, (E) the establishment of a union or collective
     bargaining arrangement, or actual or threatened union organizing activity,
     involving employees of Sullivan, any of its Subsidiaries, Sullivan Two or
     Sullivan Three, (F) the departure of any employees of Sullivan, any of its
     Subsidiaries, Sullivan Two or Sullivan Three after the date of this
     Agreement, whether or not in anticipation of the Merger, or (G) the loss of
     cable system carriage of any Station.

          "Mission Guarantees" means the (i) Guaranty of Sullivan dated as of
           ------- ----------                                                
     July 11, 1996 in favor of NationsBank of Texas, N.A., and any other lenders
     referred to therein relating to certain indebtedness of Mission
     Broadcasting I, Inc., a Delaware corporation, and (ii) the Guaranty of
     Sullivan dated as of July 29, 1996 in favor of NationsBank of Texas, N.A.,
     and any other lenders referred to therein relating to certain indebtedness
     of Mission Broadcasting II, Inc., a Delaware corporation, in each case as
     in effect from time to time.

          "9-5/8% Indenture" means the Indenture dated as of December 15, 1993
           ------ ---------                                                   
     among Sullivan Broadcasting (as the successor by merger to Act III), its
     Subsidiaries and The State Street Bank and Trust Company, as successor
     trustee, as in effect from time to time.

          "9-5/8% Notes" means the 9-5/8% Notes due 2003 of Sullivan
           ------ -----                                             
     Broadcasting (as the successor by merger to Act III) issued pursuant to the
     9-5/8% Indenture, as such Notes are in effect from time to time.

          "New LMAs" means the Sullivan Two LMA and the Sullivan Three LMA.
           --- ----                                                        


          "Non-Continuing Station Manager" means any general manager or general
           -------------- ------- -------                                      
     sales manager of a Station, if Sinclair notifies Sullivan in writing not
     fewer than 10 days prior to the Closing Date that Sinclair desires that the
     employment of such general manager or general sales manager be terminated
     effective as of the Closing Date and Sinclair does not withdraw such notice
     by contrary written notice to Sullivan on or prior to the Closing Date.

          "Old Sullivan Stockholder" means any holder of record of any Sullivan
           --- -------- -----------                                            
     Share Equivalent immediately prior to the Effective Time.

                                       75
<PAGE>
 
          "ordinary course of business" means the ordinary course of the conduct
           -------- ------ -- --------                                          
     of business by Sullivan and is Subsidiaries, substantially consistent with
     their respective past practices.

          "Owned Stations" means broadcast television station WZTV, Nashville,
           ----- --------                                                     
     TN; broadcast television station WUTV, Buffalo, New York; broadcast
     television station WXLV-TV, Winston-Salem, North Carolina; broadcast
     television station WRGT-TV, Dayton, Ohio; broadcast television station
     WRLH-TV, Richmond, Virginia; broadcast television station WVAH-TV,
     Charleston, West Virginia; broadcast television station WUHF, Rochester,
     New York; broadcast television station WTAT-TV, Charleston, South Carolina;
     broadcast television station WFXV, Utica, New York; low-power television
     station WPNY-LP, Rome, New York; broadcast television station WMSN-TV,
     Madison, Wisconsin; and Station KOKH; in each case together with all
     associated translator stations (if any) owned by Sullivan or any of its
     Subsidiaries immediately prior to the Spin-Offs.

          "Parties" means the parties to this Agreement.
           -------                                      
 
          "Permitted Encumbrances" means (i) Liens arising by operation of law
           --------- ------------                                             
     and securing the payment of Taxes which are not yet due and payable, (ii)
     with respect to any property leased by Sullivan, any of its Subsidiaries,
     Sullivan Two or Sullivan Three as lessee, the interest of the lessor in
     such property, (iii) easements, rights-of-way, reservations of rights,
     conditions or covenants, zoning, building or similar restrictions or other
     non-monetary Liens or defects that do not, individually or in the
     aggregate, materially interfere with the use of the affected property in
     the operation of the Stations as currently conducted or as presently
     proposed by Sullivan and its Subsidiaries to be conducted, (iv)
     restrictions on transfer imposed under state or federal securities laws or
     pursuant to the Communications Act or the FCC Regulations, (v) Liens
     disclosed on the attached Schedule 4G, including those described in the
     title policies which are a part of such Schedule, and (vi) Liens securing
     indebtedness under the Sullivan Senior Debt Arrangements, other Funded
     Indebtedness and the Mission Guarantees.

          A "Person" means any individual, partnership, limited liability
             ------                                                      
     company, joint venture, corporation, trust, unincorporated association or
     government or department thereof.

          "Program Contracts" means all program licenses and other Contracts
           ------- ---------                                                
     which authorize the broadcast of film product or programs on any Station,
     including those described under the heading "Program Contracts" on the
     attached Schedule 4J and any of the same entered into after the date of
     this Agreement and prior to the Closing in accordance with this Agreement,
     and any of the same which are not required to be described on any Schedule
     to this Agreement by reason of the dollar-amount or term thresholds set
     forth in Section 4.J, in each case to the extent existing and as in effect
     from time to time.

          "Realty" means all real property interests described on the attached
           ------                                                             
     Schedule 4G.

          "Required FCC Consent" means the action(s) or order(s) by the FCC
           -------- --- -------                                            
     granting its Consent to the transfer of the FCC Authorizations in the Spin-
     Offs, in each case without any 

                                       76
<PAGE>
 
     condition which in the reasonable judgment of Sullivan and the Acquiring
     Parties is adverse to such Person (or, in Sullivan's or the Stockholder
     Representative's reasonable judgment, adverse to any of the Old Sullivan
     Stockholders or the stockholders of Sullivan Two or Sullivan Three), as the
     case may be, in any material respect.

          "Sale of Sullivan" means any transfer, or transfer of control, of all
           ---- -- --------                                                    
     or substantially all of the assets of Sullivan, its Subsidiaries, Sullivan
     Two and Sullivan Three, taken as a whole, whether by means of a sale of
     assets, merger, stock acquisition or similar transaction, other than to the
     ABRY Fund or an Affiliate of the ABRY Fund.

          "Securities Act" means the Securities Act of 1933, as amended and in
           ---------- ---                                                     
     effect from time to time.
 
          "Securities Exchange Act" means the Securities Exchange Act of 1934,
           ---------- -------- ---                                            
     as amended and in effect from time to time.

          "Sinclair Common Stock" means the Class A Common Stock of Sinclair,
           -------- ------ -----                                             
     par value $0.01 per share.

          "Sinclair-Related Entity" means Sinclair, the Merger Sub, any direct
           ---------------- ------                                            
     or indirect assignee or proposed assignee (by operation of law or
     otherwise) of any of the rights of any of them pursuant to this Agreement
     or any other agreement contemplated hereby, any direct or indirect
     successor or proposed successor to Post-Merger Sullivan's and its
     Subsidiaries' or Sullivan Two's business or operation with respect to any
     Station, or any Affiliate or any of them.

          "Station Assets" means all of Sullivan's and its Subsidiaries' rights
           ------- ------                                                      
     in, to and under the assets and properties of the Stations, real and
     personal, tangible and intangible, of every kind and description which are
     owned and used by Sullivan or its Subsidiaries in connection with the
     business and operations of the Stations, including rights under con  tracts
     and leases, real and personal property, plant and equipment, inventories,
     intangibles, licenses and goodwill, and all other assets and properties of
     Sullivan and its Subsidiaries used solely in connection with the operation
     of any Station; provided that the Station Assets will not include the
                     --------                                             
     Headquarters Assets.

          "Station KOKH" means broadcast television station KOKH-TV, Oklahoma
           ------- ----                                                      
     City, Oklahoma, together with all related translator stations (if any)
     owned by Sullivan and its Subsidiaries immediately prior to the Spin-Offs.

          "Stations" means the Owned Stations and the LMA Stations.
           --------                                                

          "Stockholder Representative" means ABRY Partners, Inc., a Delaware
           ----------- --------------                                       
     corporation, or any successor thereto as the Stockholder Representative
     designated pursuant to Section 13.O.

                                       77
<PAGE>
 
          "Straddle Period" means any Taxable period beginning before and ending
           -------- ------                                                      
     on or after the Closing Date.
 
          With respect to any Person, a "Subsidiary" means any corporation,
                                         ----------                        
     partnership, limited liability company, association or other business
     entity of which, at the time of such reference, (i) if a corporation, a
     majority of the total voting power of shares of stock entitled (without
     regard to the occurrence of any contingency) to vote in the election of
     directors, managers or trustees thereof, or a majority economic interest,
     is at the time owned or controlled, directly or indirectly, by that Person
     or one or more of the other Subsidiaries of that Person or a combination
     thereof, or (ii) if a partnership, limited liability company, association
     or other business entity, a majority of the partnership or other similar
     ownership interest thereof is at the time owned or controlled, directly or
     indirectly, by any Person or one or more Subsidiaries of that Person or a
     combination thereof.  For purposes hereof, a Person or Persons will be
     deemed to have a majority ownership interest in a partnership, limited
     liability company, association or other business entity if such Person or
     Persons will be allocated a majority of partnership, company, association
     or other business entity gains or losses or will be or control the managing
     director or general partner of such partnership, company, association or
     other business entity.

          "Sullivan Broadcasting" means Sullivan Broadcasting Company, Inc., a
           -------- ------------                                              
     Delaware corporation.

          "Sullivan Common Stock" means Sullivan Shares which are common stock.
           -------- ------ -----                                               

          "Sullivan Consents" means all Consents of the board of directors or
           -------- --------                                                 
     stockholders of Sullivan or any of its Subsidiaries and all Consents (if
     any) for a Spin-Off required under any lease under which Sullivan or a
     Subsidiary (as lessee) leases space on a tower for the location of any
     assets described on the attached Exhibit A or the attached Exhibit B.
                                      ------- -                 ------- - 

          "Sullivan Indentures" means  the 9-5/8% Indenture, the 10-1/4%
           -------- ----------                                          
     Indenture and the 13-1/4% Indenture.

          "Sullivan Notes" means the 9-5/8% Notes, the 10-1/4% Notes and the 13-
           -------- -----                                                      
     1/4% Notes.

          "Sullivan Preferred Stock" means the Series A Preferred Stock of
           -------- --------- -----                                       
     Sullivan, par value $0.001 per share.

          "Sullivan-Related Entity" means any Affiliate of ABRY Partners Inc. or
           ---------------- ------                                              
     ABRY Broadcast Partners II, L.P., including Sullivan and each of its
     Subsidiaries, prior to the Effective Time.

          "Sullivan Right" means any security or right issued by Sullivan which
           -------- -----                                                      
     is not a Sullivan Share, which is outstanding immediately prior to the
     Effective Time and which is directly or indirectly convertible into or
     exercisable or exchangeable for any capital stock of 

                                       78
<PAGE>
 
     Sullivan at such time.
 
          "Sullivan Senior Debt Arrangements" means the Credit Agreement dated
           -------- ------ -----------------
     as of January 4, 1996 among Sullivan, Sullivan Broadcasting, the various
     Agents and co-Agents referred to therein, and the several Lenders from time
     to time parties thereto, together with all "Loan Documents" and other
     documents and instruments relating to the "Obligations" referred to
     therein, in each case as in effect from time to time.

          "Sullivan Share" means any share of capital stock of Sullivan which is
           -------- -----
     outstanding immediately prior to the Effective Time.

          "Sullivan Share Equivalent" means any Sullivan Right or Sullivan
           -------- ----- ----------
     Share.

          "Sullivan Three" means Sullivan Broadcasting Company III, Inc., a
           -------- -----
     Delaware corporation.

          "Sullivan Three LMA" means a local marketing or time brokerage
           -------- ---------
     agreement to be entered into at the time of the Closing pursuant to which
     Sinclair or a Subsidiary of Sinclair will have the right to sell all or
     substantially all of the advertising time on the Sullivan Three Stations
     and having such other terms and conditions as Sinclair may propose and
     which are reasonably acceptable to Sullivan Three.

          "Sullivan Three Stations" means broadcast television station WRGT-TV,
           -------- --------------
     Dayton, Ohio; broadcast television station WVAH-TV, Charleston, West
     Virginia; broadcast television station WTAT-TV, Charleston, South Carolina;
     broadcast television station WFXV-TV, Utica, New York; low-power television
     station WPNY-LP, Rome, New York; and Station KOKH; in each case together
     with all associated translator stations (if any) owned by Sullivan or any
     of its Subsidiaries immediately prior to the Spin-Offs.

          "Sullivan Two" means Sullivan Broadcasting Company II, Inc., a
           -------- ---
     Delaware corporation.

          "Sullivan Two LMA" means a local marketing or time brokerage agreement
           -------- --- ---
     to be entered into at the time of the Closing pursuant to which Sinclair or
     a Subsidiary of Sinclair will have the right to sell all or substantially
     all of the advertising time on the Sullivan Two Stations and having such
     other terms and conditions as Sinclair may propose and which are reasonably
     acceptable to Sullivan Two.

          "Sullivan Two Stations" means the Stations which are not Sullivan
           -------- --- --------
     Three Stations.

          "Tax" (and, with correlative meaning, "Taxes", "Taxable" and "Taxing")
           ---                                                                  
     means any (A) federal, state, local or foreign income, gross receipts,
     franchise, estimated, alternative minimum, add-on minimum, sales, use,
     transfer, registration, value added, excise, natural resources, severance,
     stamp, occupation, premium, windfall profits, environmental (including
     under Section 59A of the Tax Code), customs, duties, real property, real
     property gains, 

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<PAGE>
 
     personal property, capital stock, social security, unemployment,
     disability, payroll, license, employee or other withholding, or other tax
     of any kind whatsoever, including any interest, penalties or additions to
     tax or additional amounts in respect of the foregoing; (B) liability of any
     corporation for the payment of any amounts of the type described in clause
     (A) arising as a result of being (or ceasing to be) a member of any
     Affiliated Group (or being included in any Tax Return relating thereto);
     and (C) liability for the payment of any amounts of the type described in
     clause (A) or (B) as a result of any express or implied obligation to
     indemnify or otherwise assume or succeed to the liability of any other
     Person.

          "Tax Code" means the Internal Revenue Code of 1986, as amended
           --- ----
     (including, where applicable, the Internal Revenue Code of 1954, as
     amended).

          "10-1/4% Indenture" means the Indenture dated as of December 21, 1995
           ------- ---------
     among Sullivan Broadcasting, its Subsidiaries and The State Street Bank and
     Trust Company, as trustee, as in effect from time to time.

          "10-1/4% Notes" means the 10-1/4% Senior Subordinated Notes due 2005
           ------- -----
     of Sullivan Broadcasting issued pursuant to the 10-1/4%Indenture, as such
     Notes are in effect from time to time.

          "13-1/4% Indenture" means the Indenture dated as of December 21, 1995
           ------- ---------
     among Sullivan and the Bank of New York, as trustee, as in effect from time
     to time.

          "13-1/4% Notes" means the 13-1/4% Senior Accrual Debentures due 2006
           ------- -----
     of Sullivan issued pursuant to the 13-1/4% Indenture, as such Debentures
     are in effect from time to time.
 
          "Time Sale Contracts" means all orders, agreements and other Contracts
           ---- ---- ---------
     existing on the date of this Agreement, or entered into in the ordinary
     course of business of any Stations, or as otherwise permitted by this
     Agreement, between the date of this Agreement and the Closing, for the sale
     of advertising time (other than any Trades) on any Station; provided that
     any so-called barter Program Contract will be deemed to constitute a
     "Program Contract," and not a "Time Sale Contract," for purposes of this
     Agreement.

          "Trade" means any trade, barter or similar arrangement for the sale of
           -----                                                                
     advertising time other than for cash (other than any film or program barter
     arrangements and radio barter arrangements) on any Station; provided that
     any so-called barter Program Contract will be deemed to constitute a
     "Program Contract," and not a "Trade," for purposes of this Agreement.

          "Trade-Out Payables" means all obligations of Sullivan or any of its
           --------- --------
     Subsidiaries to provide advertising time arising under any Trade
     arrangement, whenever made.

          "Trade-Out Receivables" means all current assets of Sullivan or any of
           --------- -----------
     its Subsidiaries which are goods or services receivable by Sullivan or any
     of its Subsidiaries 

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<PAGE>
 
     arising under any Trade arrangement, whenever made, and all other accounts
     receivable of Sullivan or any of its Subsidiaries which at the option of
     the obligor thereof may be satisfied or discharged other than in money.

          "Transaction Documents" means this Agreement and all agreements
           ----------- ---------
     between or among any or all of the Sullivan-Related Entities and the
     Sinclair-Related Entities relating thereto, in each case as in effect from
     time to time.

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<PAGE>
 
                               LIST OF SCHEDULES


Schedule 4C              Financial Statements
Schedule 4D              Certain Developments
Schedule 4E              FCC Matters
Schedule 4F              Certain Asset-Related Matters
Schedule 4G              Ownership and Other Matters
Schedule 4I              Insurance
Schedule 4J              Contracts
Schedule 4K              Employees
Schedule 4L              Litigation
Schedule 4N              Conflicts
Schedule 4O              Subsidiaries, Organization and Qualification
Schedule 4P              Tax Matters
Schedule 4T              Employee Benefit Matters
Schedule 5E              Sinclair's FCC-Related Disclosures



                               LIST OF EXHIBITS


Exhibit A                Sullivan Two Spin-Off Assets                      
Exhibit B                Sullivan Three Spin-Off Assets                    
Exhibit C                Opinions of Sullivan's Counsel                    
Exhibit D                Opinions of Sinclair's and the Merger Sub's Counsel
Exhibit E                Form of Earnest Money Letter of Credit             

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