Exhibit
10.49


 


JOINT
SALES AND SHARED SERVICES AGREEMENT


 


This JOINT SALES AND SHARED SERVICES AGREEMENT
(this “Agreement”) is dated as of November 12, 2004, by and among KSMO
Licensee, Inc., a Delaware corporation (“Licensee”), KSMO, Inc., a
Maryland corporation (“KSMO-Sub”), and Meredith Corporation, an Iowa
corporation (“Sales Agent”).


 


RECITALS


 


A.                                   Licensee
and KSMO-Sub (collectively, the “KSMO Parties”) have entered into an
Asset Purchase Agreement dated as of November 12, 2004, by and among the
KSMO Parties (as sellers) and Sales Agent (as buyer) (the “Purchase
Agreement”) pursuant to which, subject to the consent of the Federal
Communications Commission (“FCC”) and the terms and conditions of the
Purchase Agreement, Sales Agent intends to acquire the assets and licenses of,
and to own and operate, Television Station KSMO(TV), Kansas City, Missouri,
including the digital television facilities authorized for the operation of KSMO-DT
(collectively referred to as the “Station”);


 


B.                                     Sales
Agent owns and operates Television Station KCTV(TV),
Kansas City, Missouri (“KCTV”), pursuant to licenses, permits, and
authorizations issued by the FCC;


 


C.                                     The
KSMO Parties currently broadcast on the Station a combination of programming
supplied by The WB Television Network (“The WB”) and syndicated
programming;


 


D.                                    In
order to support and promote the economic viability and development of the
Station, the KSMO Parties desire to retain Sales Agent to sell advertising on
the Station and to provide related sales and other services to the KSMO Parties
with respect to the operation of the Station, to utilize certain facilities of
Sales Agent and to provide to the KSMO Parties certain news and public interest
programming for broadcast on the Station, in each case in conformity with all
rules, regulations, and policies of the FCC; and


 


E.                                      It
is the parties’ expectation that Sales Agent, with its experience and operating
infrastructure, will improve the overall efficiency of the Station’s sales and
operating processes and reduce costs, thereby helping to ensure that the
Station remains a viable alternative for both television viewers and
advertisers.


 


AGREEMENTS


 


In
consideration of the above recitals and of the mutual agreements and covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
Licensee, KSMO-Sub and Sales Agent, intending to be bound legally, agree as
follows:


 





















 


SECTION 1.  DEFINITIONS


 


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


 


“Affiliate” means, with respect to any
Person, (a) any other Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
such Person, or (b) an officer or director of such Person or of an Affiliate of
such Person within the meaning of clause (a) of this definition.  For purposes of clause (a) of this
definition, (i) a Person shall be deemed to control another Person if such
Person (A) has sufficient power to enable such Person to elect a majority of
the board of directors of such Person, or (B) owns a majority of the beneficial
interests in income and capital of such Person, and (ii) a Person shall be
deemed to control any partnership of which such Person is a general partner.


 


“Base Date” means November 12,
2004.


 


“Communications
Act” means the Communications Act of 1934, as amended, together with the
rules, regulations, and policies promulgated thereunder by the FCC, as in
effect from time to time.


 


“Market” means the Kansas City,
Missouri, Designated Market Area.


 


“Person”
includes natural persons, corporations, business trusts, associations,
companies, joint ventures, and partnerships.


 


“To the
best of Sales Agent’s knowledge” or any similar formulation thereof means
the actual knowledge of the Executive Vice President of the Meredith Broadcast
Group or the General Counsel of Sales Agent, after reasonable inquiry by each
such person within his area of responsibility.


 


“To the
best of the KSMO Parties’ knowledge” or any similar formulation thereof
means the actual knowledge of the President, the Chief Financial Officer or the
General Counsel of Sinclair Broadcast Group, Inc., or the general manager or
main engineer of the Station, after reasonable inquiry by each such person
within his area of responsibility.


 


1.2  Additional
Defined Terms.  In addition to the
defined terms in the preamble, recitals and Section 1.1 hereof, the
following is a list of terms used in this Agreement and a reference to the section or
schedule hereof in which such term is defined:


 




	
  Term

  	
   

  	
  Section/Schedule

  
	
  Advertisements

  	
   

  	
  Section 4.1

  
	
  Automatic Increase

  	
   

  	
  Schedule 3.1

  
	
  Broadcast Material

  	
   

  	
  Section 4.5

  
	
  Cash Flow Payment Date

  	
   

  	
  Schedule 3.1

  
	
  Delivered Programming

  	
   

  	
  Section 4.2

  
	
  Disclosure Statement

  	
   

  	
  Section 5.2(c)

  
	
  Excluded Services

  	
   

  	
  Section 4.4

  
	
  Independent Accounting Firm

  	
   

  	
  Schedule 3.1

  
	
  Initial Term

  	
   

  	
  Section 2.1(a)

  
	
  JSA Fee

  	
   

  	
  Schedule 3.1

  






 


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  Term

  	
   

  	
  Section/Schedule

  
	
  Katz

  	
   

  	
  Schedule 3.1

  
	
  Katz Rep Agreement

  	
   

  	
  Schedule 3.1

  
	
  Licensee Accounts Receivable

  	
   

  	
  Section 4.8

  
	
  Licensee Revenue Share

  	
   

  	
  Schedule 3.1

  
	
  Licensee’s Expense Schedule

  	
   

  	
  Schedule 3.1

  
	
  Lost Revenue

  	
   

  	
  Schedule 3.1

  
	
  Net Sales Revenue

  	
   

  	
  Schedule 3.1

  
	
  Objection Notice

  	
   

  	
  Schedule 3.1

  
	
  Performance Penalty

  	
   

  	
  Section 2.3(a)

  
	
  Policy Statement

  	
   

  	
  Section 4.5

  
	
  Premises

  	
   

  	
  Section 5.4

  
	
  PSAs

  	
   

  	
  Section 4.6

  
	
  Ratings Agencies

  	
   

  	
  Section 5.1(l)

  
	
  Reimbursable Station Expenses

  	
   

  	
  Schedule 3.1

  
	
  Sinclair

  	
   

  	
  Section 5.1(g)

  
	
  Station Broadcast Cash Flow

  	
   

  	
  Schedule 3.1

  
	
  Studio Building

  	
   

  	
  Section 4.3(a)(i)

  
	
  Trade Agreements

  	
   

  	
  Section 4.7

  
	
  Uncured Material Breach

  	
   

  	
  Section 2.3(a)

  






 


SECTION 2.  TERM


 


2.1  Term.


 


(a)  Initial Term.  The initial term of this Agreement shall be from
the date hereof until the date that is five (5) years after the Base Date (the “Initial
Term”), unless terminated in accordance with Section 2.2 below.


 


(b)  Renewal Term.  This Agreement shall be renewed automatically
for an additional term of five (5) years commencing on the day following the
expiration of the Initial Term if Sales Agent shall have paid to Licensee Three
Million Three Hundred Fifty Thousand Dollars ($3,350,000) in accordance with
the proviso in Section 8.1 of the Purchase Agreement.


 


2.2  Termination.


 


(a)  Mutual
Agreement.  This Agreement may be
terminated at any time by mutual agreement of the parties.  This Agreement shall terminate upon the
consummation of any assignment or transfer of control of the FCC licenses for
the Station to Sales Agent or any Affiliate of Sales Agent, subject to the
payment by Sales Agent and the KSMO Parties of all payments owed to the other
as of the consummation date of such assignment or transfer.


 


(b)  Termination
by Licensee or Sales Agent.  This
Agreement may be terminated by Licensee or Sales Agent, by written notice to
the other, upon the occurrence of any of the following events:


 


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(i) 
this Agreement has been declared invalid or illegal in whole or
substantial part by an order or decree of an administrative agency or court of
competent jurisdiction which is not subject to appeal or further administrative
or judicial review, and the parties, acting in good faith, are unable to agree
upon a reform of the Agreement so as to cause the Agreement to comply with
applicable law; or


 


(ii) 
there has been a change in the Communications Act that causes this
Agreement in its entirety to be in violation thereof and the applicability of
such change is not subject to appeal or further administrative review; and the parties,
acting in good faith, are unable to agree upon a reform of the Agreement so as
to cause the Agreement to comply with applicable law.


 


(c)  Termination by Sales Agent.  This Agreement may be terminated by Sales
Agent, by written notice to Licensee, upon the occurrence of any of the
following events:


 


(i) 
if Sales Agent is not then in material breach and the KSMO Parties are in
material breach under this Agreement and the KSMO Parties have failed to cure
such breach within thirty (30) days after receiving written notice of breach
from Sales Agent; or


 


(ii)  if the KSMO Parties or any
Affiliate of the KSMO Parties makes a general assignment for the benefit of
creditors, files, or has filed against it a petition for bankruptcy,
reorganization or an arrangement for the benefit of creditors, or for the
appointment of a receiver, trustee, or similar creditor’s representative for
the property or assets of the KSMO Parties or any Affiliate of the KSMO Parties
under any federal or state insolvency law which, if filed against KSMO Parties
or any Affiliate of the KSMO Parties, has not been dismissed within thirty (30)
days thereof.


 


(d)  Termination by Licensee.  This Agreement may be terminated by Licensee,
by written notice to Sales Agent,


 


(i)  if
Sales Agent breaches its obligations hereunder and such breach reasonably could
be expected to result in the revocation or non-renewal of the Station’s FCC
licenses; or


 


(ii)  if Sales Agent or any
Affiliate of Sales Agent makes a general assignment for the benefit of
creditors, files, or has filed against it a petition for bankruptcy,
reorganization or an arrangement for the benefit of creditors, or for the
appointment of a receiver, trustee, or similar creditor’s representative for
the property or assets of Sales Agent or any Affiliate of Sales Agent under any
federal or state insolvency law which, if filed against Sales Agent or any
Affiliate of Sales Agent, has not been dismissed within thirty (30) days
thereof.


 


2.3  Performance Penalty.


 


(a)  If Sales Agent is in material breach of its
obligations under either the Purchase Agreement or this Agreement and the KSMO
Parties are not then in material default under the Purchase Agreement or this
Agreement, and such default by Sales Agent shall not have been cured within twenty-five
(25) days following written notice from the KSMO Parties of such default (or
within such longer period as may reasonably be required to cure such default if
not reasonably


 


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capable of
being cured within twenty-five (25) days and Sales Agent shall have diligently
begun working to cure such default within such twenty-five (25) day period) (an
“Uncured Material Breach”), in lieu of any right by Licensee to
terminate the Purchase Agreement or this Agreement as a result of an Uncured
Material Breach, Sales Agent shall owe to the KSMO Parties a performance
penalty calculated as follows (the “Performance Penalty”):


 


(i)  If an Uncured Material
Breach exists on a day Sales Agent is required to pay Licensee the Licensee
Revenue Share as provided in Schedule 3.1, the Performance Penalty
shall be the amount of the monthly JSA Fee (which shall be paid in addition to
the Licensee Revenue Share).


 


(ii)  If such Uncured Material
Breach continues to exist on the next succeeding day Sales Agent is required to
pay Licensee the Licensee Revenue Share as provided in Schedule 3.1,
the Performance Penalty shall be two times the amount of the JSA Fee and the
Performance Penalty shall be increased in such manner for each succeeding month
that the Uncured Material Breach remains uncured as of the day Sales Agent is
required to pay Licensee the Licensee Revenue Share as provided in Schedule 3.1.


 


(b)  In the event that Sales Agent shall be
obligated to pay any damages hereunder with respect to any indemnity claim by
the KSMO Parties (other than with respect to a claim concerning a failure to
pay the Licensee Revenue Share in accordance with Schedule 3.1) and
Sales Agent shall be obligated to pay or shall have paid a Performance Penalty
with respect to the events giving rise to such damages, then the amount of such
damages payable by Sales Agent shall be reduced by, and to the extent of, the
amount of the Performance Penalty paid to the KSMO Parties less any separate
damages payable to the KSMO Parties with respect to such events pursuant to the
Purchase Agreement.


 


2.4  Certain
Matters Upon Termination.  If this
Agreement is terminated by either party under Section 2.2, no expiration
or termination of this Agreement shall terminate the obligations of either
party hereto, including, without limitation, to indemnify the other for claims of
third parties under Section 8 of this Agreement, or limit or impair any
party’s rights to receive payments due and owing hereunder on or before the
effective date of such termination.


 


SECTION 3.  CONSIDERATION


 


As
consideration for the right of Sales Agent to market and sell air time made
available under this Agreement, Licensee shall be entitled to receive from the
Station’s revenue the amounts set forth in Schedule 3.1 hereto, and
Sales Agent shall provide services to the KSMO Parties as set forth in this
Agreement.


 


SECTION 4.  SCOPE OF
SERVICES


 


4.1  Sales and Related Services.  Except as expressly provided to the contrary
herein, the KSMO Parties retain Sales Agent on an exclusive basis for the
Initial Term and each succeeding renewal term of this Agreement to market and
sell all forms of regional, and local spot advertising, sponsorships, direct
response advertising, paid programming, including infomercials, and all
long-form advertising broadcast on the Station and all advertising on any
Internet site maintained by or on behalf of the Station during the Initial Term
and any renewal term (the “Advertisements”).


 


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Subject to the
terms of Schedule 3.1, national spot advertising broadcast on the
Station shall continue to be sold by the Station’s existing national rep
firm.  The KSMO Parties shall promptly
provide to Sales Agent and its employees such information as Sales Agent may
request to support the marketing and sale of the Advertisements and the
collection of accounts receivable with respect thereto.  Sales Agent also shall be responsible for the
promotion of the Station and for the Station’s traffic, billing and collection
functions for the Advertisements.  Sales
Agent shall designate an adequate number of its personnel to perform such
services for the Station. Sales Agent shall conduct the sales, traffic and
promotion functions for the Station in accordance with standard practice in the
industry.  Sales Agent and the KSMO
Parties shall periodically review the personnel needs and job functions of the
persons designated by Sales Agent to perform its obligations under this
Agreement and implement such changes as they mutually agree are
appropriate.  Revenues from the sale of
the Advertisements shall be allocated between Sales Agent and Licensee as set
forth in Schedule 3.1.  Sales
Agent may sell the Advertisements in combination with any other broadcast
stations of its choosing, including KCTV; provided, however, that under no
circumstances will advertisers be required to purchase time on the Station and KCTV
together.  Subject to Section 4.5, the
placement, duration and rates of the Advertisements shall be determined by
Sales Agent.  The value of commercial
time bartered in exchange for programming shall be excluded from the definition
of Net Sales Revenue.


 


4.2  Delivered
Programming.  Commencing on the Base
Date, Sales Agent shall provide to Licensee for broadcast, simulcast or
rebroadcast on the Station, as applicable, local news and other programming as
described more particularly in Schedule 4.2 hereof (the “Delivered
Programming”).  The total duration of
all Delivered Programming supplied by Sales Agent for broadcast on the Station
shall in no event exceed the lesser of 25 hours per week or 15% of the Station’s
broadcast hours for any week.  Sales
Agent shall be responsible for obtaining the rights to broadcast the Delivered
Programming on the Station and for paying all costs incurred in obtaining such
rights.  To the extent permission is
required to rebroadcast any Delivered Programming under Section 325 of the
Communications Act, Sales Agent hereby grants Licensee such permission.  The Delivered Programming shall be subject to
Sales Agent’s editorial judgment and the requirements of Section 4.5,
including but not limited to the Licensee’s right of rejection or preemption.  All Delivered Programming shall be in
conformity in all material respects with standards established by Licensee and consistent
with similar programming broadcast on Sales Agent’s own television broadcast
stations.  Apart from its obligation to
provide the Delivered Programming as set forth herein, Sales Agent shall have
no involvement with respect to the programming to be aired on the Station, the
selection of which shall be entirely within the discretion of Licensee.  Sales Agent shall retain all revenue from the
sale of Advertisements that are adjacent to or in the Delivered Programming.


 


4.3  Shared
Services.  Sales Agent agrees to
provide to the KSMO Parties the following additional facilities, equipment and
services to support the operation of the Station, subject to the KSMO Parties’ right
to modify, upon reasonable prior notice to Sales Agent, any such service, provided that no such modification shall
expand in any material respect the obligations of Sales Agent, or require Sales
Agent to incur any material additional obligation or liability, hereunder:


 


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(a)                                  Office
and Studio Space.


 


(i)                                     If and to the
extent Sales Agent elects, in its sole discretion, to provide some or all of
the services to be provided by Sales Agent hereunder from the studio facility
used by Sales Agent for KCTV (the “Studio Building”), Sales Agent shall
provide to the KSMO Parties’ employees and agents the right to access and use
sufficient office space, including furnishings and office equipment for the
Station’s main studio operations, including sufficient space to permit Licensee
to maintain and make available to the public the Station’s public inspection
file in accordance with applicable requirements of the Communications Act, at
such locations in or near the Studio Building, in each case as may be mutually
acceptable to Licensee and Sales Agent and as Licensee reasonably requires for
the conduct of the business of the Station as contemplated by the terms hereof
and in accordance with applicable requirements of the FCC, so long as the
provision of such space and the use of such equipment do not unreasonably
interfere with the conduct of Sales Agent’s business or operations.


 


(ii)                                  Sales Agent shall
give Licensee and its agents a nonexclusive and unrestricted right of access to
the Studio Building at all times, subject only to Sales Agent’s reasonable
security procedures applicable to its own employees, for the purpose of
fulfilling Licensee’s obligations as an FCC licensee.  The right granted under this Section shall
include the incidental benefit and reasonable right of use of utilities (heat,
water, electricity) provided for purposes of Sales Agent’s own operations.  Sales Agent shall provide separate, lockable
office facilities for use by Licensee’s general manager or other managerial
employee(s) and shall permit Licensee to install appropriate signs on the
inside and outside of the Studio Building (consistent with applicable local
requirements or agreements, if any, governing such signage and with the overall
appearance of the Studio Building) identifying Licensee as the owner and
licensee of the Station.


 


(iii)                               If, at the time of
termination of this Agreement, some or all of the Station’s operations are
co-located in the Studio Building as contemplated by Section 4.3(a)(i)
hereof, Licensee shall be given a transition period of not less than six (6)
months following such termination in which to relocate such operations.  During such transition period, Licensee shall
have access to the Studio Building in the same manner as during the term of
this Agreement.  Such transition period
may be lengthened upon such terms and conditions as may be mutually agreeable
to the parties.


 


(b)                                 Technical
Services.


 


(i)                                     Beginning as soon
as reasonably practicable following the Base Date, Sales Agent shall perform
monitoring and maintenance of the Station’s technical equipment and facilities
and, upon Licensee’s request, shall assist Licensee with the installation,
repair, maintenance and replacement of the Station’s equipment and facilities; provided, however, subject to reimbursement
to the extent provided in Schedule 3.1, Licensee shall be
responsible for all Station capital and equipment replacement expenditures.


 


(ii)                                  Beginning as soon as
reasonably practicable following the Base Date, Sales Agent shall make
available to Licensee, on an independent contractor basis, a staff


 


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engineer employed
by Sales Agent to assist the Licensee’s Chief Operator for the Station in
fulfilling his duties as specified by the rules and regulations of the FCC.


 


4.4  Excluded
Services.  (a) Licensee retains
all rights with respect to the sale of supplementary or ancillary non-broadcast
services on the Station not included within the definition of “Advertisements”
in Section 4.1 hereof (collectively, “Excluded Services”), and (b)
the commercial inventory and marketing and advertising rights with respect to
Excluded Services are not conveyed to Sales Agent under this Agreement, provided that the Excluded Services shall
not reduce or limit the number or duration of the Advertisements made available
to Sales Agent under this Agreement.


 


4.5  Content Policies.  All material furnished by Sales Agent for
broadcast on the Station (“Broadcast Material”) shall comply with
applicable federal, state and local regulations and policies, including
commercial limits in children’s programming. 
Licensee shall have the right to preempt any Broadcast Material to
present program material of greater local or national importance.  Licensee may reject any Broadcast Material if
Licensee reasonably determines that the broadcast of such material would
violate applicable laws or would otherwise be contrary to the public
interest.  Licensee shall promptly notify
Sales Agent of any such rejection, preemption, or rescheduling and shall
cooperate with Sales Agent in efforts to fulfill commitments to advertisers and
syndicators.  Licensee is familiar with
the operating standards followed by Sales Agent in the operation of KCTV, which
standards are consistent with those employed by Licensee in the operation of
the Station.  Schedule 4.5
sets forth Licensee’s statement of policy (the “Policy Statement”) with
regard to the Delivered Programming and the Advertisements.  Sales Agent shall ensure that the
Advertisements and Delivered Programming are in accordance with this Agreement
and Licensee’s Policy Statement.


 


4.6  Public
Service Announcements.  Sales Agent
acknowledges that Licensee has in the past provided time on the Station for the
promotion of public service organizations in the form of public service
announcements (“PSAs”), and agrees that it will release spot time to
Licensee for the broadcast of PSAs at times and in amounts consistent with
Licensee’s past practices and consistent with Sales Agent’s operating policies
applicable to the broadcast of PSAs on KCTV. 
Licensee and Sales Agent shall cooperate in good faith concerning the
placement of the PSAs to be broadcast on the Station; provided, however, that Licensee shall be
ultimately responsible for selecting and obtaining PSAs for broadcast on the
Station.


 


4.7  Trade and Barter Spots.  To the best of the KSMO Parties’ knowledge, Schedule 4.7
hereto is an accurate and complete list in all material respects as of November 8,
2004, of all Station contracts for the sale of advertising time on the Station
for non-cash consideration that are in effect as of and will extend beyond the Base
Date (“Trade Agreements”).  Sales
Agent shall comply with and honor all such Trade Agreements, if and to the
extent that Trade Agreement spots may be broadcast on a preemptible basis.  The dollar value of advertising time on the
Station provided to advertisers pursuant to Trade Agreements shall not be
included in the computation and determination of Net Sales Revenue for purposes
of this Agreement.  After the Base Date,
Sales Agent and the KSMO Parties shall have the right to enter into new
contracts for the sale of Advertisements for non-cash consideration, provided that both parties agree to each
such Trade Agreement and provided further
that the dollar value of such advertising time on the Station for such Trade
Agreements is not included in the computation and determination of Net Sales 


 


8





















 


Revenue for purposes of this Agreement.  The parties shall mutually agree as to the
use of the non-cash consideration received for each new Trade Agreement.  For purposes of this Section 4.7, the
term Trade Agreement applies only to the bartering of advertising in return for
goods and services other than programming.


 


4.8  Accounts Receivable.  The KSMO Parties or their agent shall retain
all revenues from advertising broadcast by the Station prior to the Base Date (“Licensee
Accounts Receivable”).  All revenues
from the Advertisements broadcast by the Station on or after the Base Date,
including revenues derived from advertising sold by the KSMO Parties or their
agent prior to the Base Date that has not been aired as of the Base Date, shall be allocated between Sales Agent and Licensee as
set forth in Schedule 3.1. 
Licensee shall use its best efforts to deliver to Sales Agent a schedule of
Licensee Accounts Receivable, within seven (7) days of the Base Date.  For a period of 120 days following the Base Date,
Sales Agent shall issue invoices in accordance with the Station’s standard
billing procedures for time sold and provided by the Station prior to the Base
Date and not invoiced prior to the Base Date and remit to Licensee all amounts
collected during the period in respect of the Licensee Accounts Receivable as
follows: (a) on or before the eighteenth (18th) day of the second complete
calendar month after the Base Date, pay all amounts collected up to the end of
the prior month; and (b) on or before the eighteenth (18th) day of each
succeeding month, remit all amounts collected during the month prior thereto.  With each remittance, Sales Agent shall
furnish a statement of the amounts collected and the persons from whom such
amounts were collected.  Sales Agent
shall, unless the remittance or an account receivable debtor specified
otherwise, apply all amounts it receives from or for the benefit of any account
receivable debtor first to pay the oldest undisputed Licensee Accounts
Receivable of such debtor before applying any of such amounts to pay any
obligation of such debtor to Sales Agent arising during, or otherwise
attributable to, the period after the Base Date.  Licensee Accounts Receivable shall not be
included in Net Sales Revenue.  Sales Agent
shall collect Licensee Accounts Receivable using commercially reasonable
efforts that are consistent in all material respects with the efforts Sales
Agent uses to collect accounts receivable from the sale of advertising on KCTV;
provided, however, Sales Agent
shall not be required to refer any Licensee Accounts Receivable to an attorney
for collection, institute legal proceedings or take other extraordinary
measures to collect any Licensee Accounts Receivable.


 


4.9  Monthly
Reports; Books and Records.  The
following obligations shall begin on the first day of the first full calendar
month beginning after the Base Date:


 


(a)  On or before the twentieth day of each
calendar month during the Initial Term and any renewal term of this Agreement,
Sales Agent shall furnish Licensee with a report regarding Sales Agent’s sales
by advertiser of the Advertisements, other than Advertisements in or adjacent
to Delivered Programming, for the previous calendar month.  Licensee shall have the right to review only
those books and records of Sales Agent that pertain to the revenues from the
sale of such Advertisements.


 


(b)  On or before the twentieth day of each
calendar month during the Initial Term and any renewal term of this Agreement, the
KSMO Parties shall furnish Sales Agent with such financial statements and
reports as the KSMO Parties prepare in the ordinary course of business as of
the Base Date that reflect the costs and expenses incurred by the KSMO Parties in
operating and maintaining the Station. 
Sales Agent shall have the right to review only those books and records


 


9





















 


of the KSMO
Parties that pertain to the costs and expenses of the Station, including any
administrative charges, fees, or other amounts payable to any Affiliate of the
KSMO Parties.


 


4.10 
Control. 
Notwithstanding anything to the contrary in this Agreement, the KSMO
Parties and Sales Agent acknowledge and agree that during the Initial Term and
any renewal term of this Agreement, Licensee will maintain ultimate control and
authority over the facilities of the Station, including specifically control
and authority over the Station’s operations, including finances, personnel, and
programming.  Without limiting the
generality of the foregoing, Licensee shall retain sole responsibility for the
selection, development, and acquisition of any and all programming to be
broadcast over the Station, as well as the payment therefor, other than those
payments associated with the Delivered Programming, subject to the KSMO Parties’
right to reimbursement in accordance with the terms of Schedule 3.1.  To that end, Licensee shall (a) have
exclusive authority for the negotiation, preparation, execution and
implementation of any and all programming agreements for the Station, and (b)
retain and hire or utilize whatever employees Licensee reasonably deems
appropriate or necessary to fulfill those programming functions.  Sales Agent shall not represent, warrant or
hold itself out as the Station’s licensee, and all sales material prepared by
Sales Agent for the sale of advertising time on the Station shall identify
Licensee as the licensee of the Station using mutually agreeable wording and
references.  Sales Agent shall sell
advertising time and enter into all agreements for the sale of time on the Station
and for the Delivered Programming in its own name.


 


SECTION 5.  OTHER
OBLIGATIONS OF THE PARTIES


 


5.1  Responsibilities
of the KSMO Parties.  The KSMO
Parties, at their expense and subject to reimbursement to the extent provided
by Schedule 3.1, shall be responsible for and perform the following
obligations with respect to the business and operations of the Station during
the Initial Term and any renewal term of this Agreement, in accordance with and
subject to the following:


 


(a) 
Licensee shall bear all responsibility for the Station’s compliance with
all applicable provisions of the Communications Act and all other applicable
laws.  Licensee shall file in a timely
and complete manner all reports and applications required to be filed with the
FCC or any other governmental body.  All
programming aired on the Station that is produced in whole or in part by the
KSMO Parties or any Affiliate of the KSMO Parties shall comply in all material
respects with Licensee’s Policy Statement.


 


(b)  The
KSMO Parties shall maintain in effect policies of insurance insuring the assets
and the business of the Station in accordance with good industry practices and,
at the least consistent with the coverage provided under such policies as were
in existence on the day prior to the Base Date.


 


(c)  The
KSMO Parties shall cause each Station transmitting facility to be maintained at
all times in accordance with good engineering practice and with all engineering
requirements set forth in the Station’s FCC authorizations (except at such time
where reduction of power is required for routine or emergency maintenance) and
in accordance with the Communications Act. 
The KSMO Parties shall use, operate, and maintain all of the assets of
the Station in a reasonable manner.  If
any loss, damage, impairment, confiscation or condemnation of


 


10





















 


any of such assets occurs, the KSMO Parties
shall repair, replace, or restore the assets to their prior condition as soon
thereafter as possible, and the KSMO Parties shall use the proceeds of any
claim under any insurance policy to repair, replace or restore any of the
assets that are lost, damaged, impaired or destroyed.


 


(d)  The
KSMO Parties shall be solely responsible for and shall pay in a timely manner
all operating costs of the Station (excluding those costs to be borne by Sales
Agent in accordance with Section 5.2 or in connection with these shared
services to be provided by Sales Agent to the KSMO Parties pursuant to Section 4.3),
including the cost of electricity, other utilities and rental or other payments
with respect to real property leased by the KSMO Parties, taxes, and the
salaries, insurance, and other costs for all personnel employed by the KSMO
Parties.


 


(e)  The KSMO Parties shall promptly pay when due,
all music rights payments (including, without limitation, music performance
rights, synchronization rights, and master use rights), if any, in connection
with the broadcast and/or transmission of all announcements, including the
Advertisements, and programming on the Station, other than the Delivered
Programming.


 


(f)  The KSMO Parties shall, consistent with their
past practice, make any and all capital expenditures necessary to
(i) maintain the Station’s current level of technical operation, which
shall in no event be lower than generally accepted industry standards and
(ii) complete the construction of the Station’s digital television
facilities in accordance with all FCC rules and policies concerning such construction


 


(g)  The KSMO Parties shall be solely responsible
for all costs and expenditures associated with the procuring of programming to
be aired on the Station, other than those associated with the Delivered
Programming.  The KSMO Parties shall pay
over to Sales Agent all funds received by the KSMO Parties each year from The WB
and any other program syndicator or supplier for promotion of The WB and other
programming on other stations or media, and Sales Agent shall use all such
funds solely for their intended purposes; provided,
however, that the KSMO Parties shall retain any network compensation
paid to the KSMO Parties after the Base Date by The WB solely in return for the
agreement entered into on July 4, 1997, by Sinclair Broadcast Group, Inc.
(“Sinclair”) and The WB pursuant to which Sinclair agreed to affiliate the
Station and certain of Sinclair’s other television broadcast stations with The
WB.  The KSMO Parties shall cooperate
with Sales Agent in filing any necessary forms or reports required to obtain
co-op reimbursement or other funds to which Sales Agent is entitled under this Section 5.1(g).  For the purposes of Schedule 3.1
hereof, Sales Agent’s receipt of promotional or co-op payments identified in
this Section 5.1(g) shall not be considered a part of Net Sales Revenue
and its expenditures of such promotional or co-op payments shall not be
considered an expense for purposes of calculating Station Broadcast Cash Flow.  To the extent that any network or program
service agreement of the KSMO Parties provides that, in exchange for cash
payment, additional spot time that otherwise would be used by such network or
program service may be released for local sales by the Station, the KSMO
Parties, upon request by the Sales Agent, will obtain the release of such
commercial spot inventory for the placement of Advertisements by the Sales
Agent, subject to Sales Agent paying to the KSMO Parties the cash amount
required for such release.


 


11





















 


(h)  The KSMO Parties shall have the right to
supplement the promotional efforts undertaken by Sales Agent, but subject to
coordinating such efforts with Sales Agent in order to maintain image
consistency with Sales Agent’s promotional efforts.


 


(i)  Subject to the provisions of any network
affiliation or other programming agreement, Licensee shall consult and
cooperate with Sales Agent in the negotiation, maintenance, and enforcement of
retransmission consent agreements with cable, satellite and other multichannel
video providers.  Licensee, in
consultation with Sales Agent, shall exercise Licensee’s rights to mandatory
carriage and retransmission consent for cable television and other multichannel
video providers in a manner that ensures the maximum possible distribution of
the Station’s signal on cable, direct-broadcast-satellite, and other
multichannel video programming distributors serving communities located in the
Market.


 


(j)  Except as otherwise permitted by this
Agreement, the KSMO Parties shall not take any action or unreasonably omit to
take any action which results in or causes a (i) revocation, non-renewal or
material impairment of the Station’s FCC licenses, (ii) material adverse effect
upon the Station’s transmitter, antenna and other material assets included in
the Station’s transmission facility, (iii) material breach or default under the
terms of the Lease Agreement dated as of July 5, 2001, between American
Tower L.P. and Sinclair Communications, Inc.


 


(k)  The KSMO Parties shall list Sales Agent as
the exclusive sales representative for the Advertisements in all applicable
trade listings and advertising and promotional material if and when such
listings and material are published by the KSMO Parties.


 


(l)  To the extent permitted under the terms of
any applicable agreement, the KSMO Parties shall provide to Sales Agent such
routine ratings information and ratings reports with respect to the Station as
are customarily prepared or obtained by the KSMO Parties in the ordinary course
of business.  Except as otherwise agreed
by the KSMO Parties and Sales Agent, the KSMO Parties shall maintain (including
timely payment of all fees) any agreements with A.C. Nielsen Company or its
affiliates or other ratings information providers customarily used by the KSMO
Parties as a source of local station research information for the Station (collectively,
the “Ratings Agencies”).  At Sales
Agent’s request, the KSMO Parties shall use their commercially reasonable
efforts to assist Sales Agent in obtaining from the Ratings Agencies permission
to use the Station’s ratings information and reports in connection with the
sale of the Advertisements.


 


5.2  Responsibilities
of Sales Agent.  Sales Agent, at its
expense and subject to the provisions of Schedule 3.1, shall be
responsible for and perform the following obligations with respect to the
marketing and sale of the Advertisements during the Initial Term and any
renewal term of this Agreement in accordance with and subject to the following
provisions:


 


(a) 
Sales Agent shall be solely responsible for (i) all commissions to
employees, agencies or representatives and other expenses incurred in its
marketing and sale of the Advertisements; (ii) all expenses incurred in its
performance of traffic, billing, and collections functions with respect to the
Advertisements;  (iii) any publicity or
promotional expenses and other fees it incurred in performing its obligations
under this Agreement; and (iv) all fees related to the software used for sales,
traffic, billing and similar functions including any fees charged by the


 


12





















 


provider to make Sales Agent’s software
interface in the most efficient manner with Licensee’s master control
equipment.


 


(b) 
Sales Agent shall be solely responsible for the salaries, taxes, and
related costs for all personnel employed by Sales Agent who are used by Sales
Agent in the sale of the Advertisements and the collection of accounts
receivable (including salespeople, billing personnel and traffic personnel).


 


(c)  Sales Agent shall cooperate with Licensee to
assist Licensee in complying with the provisions of the Communications Act
regarding political advertising, including compliance with Licensee’s statement
disclosing political advertising rates and practices for purchasers of
political advertising consistent with applicable FCC rules and policies (“Disclosure
Statement”).  Sales Agent shall
supply such information promptly to Licensee as may be necessary to comply with
the public inspection file, lowest unit rate, equal opportunities, and
reasonable access requirements of the Communications Act.  If the Station fails to meet its political
time obligations under the Communications Act based on the advertising sold by
Sales Agent, then to the extent reasonably necessary to enable Licensee to cause
the Station to comply with its political time obligations, Sales Agent shall
release advertising availabilities to Licensee; provided, however, that all revenues realized by Licensee
from the sale of such advertising time shall be immediately paid to Sales Agent
and shall be considered a part of its Net Sales Revenue.


 


(d)  Sales agent shall assist Licensee with the
negotiation, maintenance, and enforcement of retransmission consent agreements
with cable, satellite, and other multichannel video providers.


 


5.3  Delivery
of Material for Broadcast.  All
Broadcast Material shall be delivered to the Station in a format to be agreed
upon by Sales Agent and Licensee, in a form ready for broadcast on the Station’s
existing playback equipment, and with quality suitable for broadcast.  The KSMO Parties shall not be required to
provide production services or to copy, reformat, or otherwise manipulate
material furnished by Sales Agent other than inserting tape cartridges or
similar broadcast-ready media into machinery or computers for broadcast.


 


5.4  Provision
of Office Space.  The KSMO Parties shall
provide to employees and agents of Sales Agent and its affiliates the right to
access and use space designated by the KSMO Parties for Sales Agent’s use in the KSMO Parties’ studio building (the “Premises”)
as reasonably necessary for Sales Agent’s performance of its obligations under
this Agreement, so long as the provision of such space does not unreasonably
interfere with the conduct of the KSMO Parties’ business or
operations.  When on the Premises, Sales Agent’s
personnel shall be subject to the reasonable direction and control of Licensee’s
management personnel.  The KSMO Parties
shall make available to Sales Agent for use without fee or charge all
facilities and equipment of the Station.


 


5.5  Access
to Information.  In order to ensure compliance
with the Communications Act and other applicable laws, Licensee shall be
entitled to review at its reasonable discretion from time to time any
Advertisement or Delivered Programming that Licensee may reasonably request.  Sales Agent also shall maintain and deliver
to the Station such records and information required by the FCC to be placed in
the public inspection file of each Station pertaining
to the sale of political


 


13





















 


programming
and advertisements, in accordance with the provisions of Sections 73.1940 and
73.3526 of the FCC’s rules, and to the sale of sponsored programming addressing
political issues or controversial issues of public importance, in accordance with
the provisions of Section 73.1212 of the FCC’s rules.  Sales Agent shall furnish to Licensee upon
request any other information that is reasonably necessary to enable Licensee
to prepare any records or reports required by the FCC or other governmental
entities.  Nothing in this section shall
entitle Licensee to review the internal corporate or financial records of Sales
Agent.  The KSMO Parties shall keep
confidential any information obtained from Sales Agent in connection with this
Agreement, except as and to the extent required by law.  If this Agreement is terminated, the KSMO
Parties shall return to Sales Agent all information obtained by the KSMO
Parties from Sales Agent in connection with this Agreement.


 


5.6  Noncompete.  SBG covenants and agrees, on behalf of itself
and its Affiliates, including the KSMO Parties, that during the Initial Term
and any renewal term hereof, neither it nor any Affiliate will, without prior
written consent of Sales Agent, directly or indirectly, own, manage, operate, control,
or engage or participate in the ownership, management, operation, or control
of, or be connected as a shareholder, partner, or joint venturer with, any
business or organization which engages in the business of television
broadcasting within the Grade B contour of the analog broadcast signal of the
Station or the 42 dBu noise-limited contour of the DTV signal of the
Station.  Notwithstanding the foregoing,
the ownership of an equity interest of five percent (5%) or less of a publicly
traded company that does not otherwise constitute control over such company
shall not be prohibited.


 


SECTION 6.  REPRESENTATIONS
AND WARRANTIES OF THE KSMO PARTIES


 


The KSMO Parties represent and warrant to
Sales Agent as follows:


 


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


 


6.2  Absence
of Conflicting Agreements or Consents. 
The execution, delivery, and performance by the KSMO Parties of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (a) do not require the consent of any
governmental or regulatory authority or any other Person; (b) will not conflict
with the organizational documents of the KSMO Parties; (c) to the best of the
KSMO Parties’ knowledge, does not conflict with, result in a breach of, or
constitute a default under any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to the KSMO Parties; (d) does not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of any agreement, instrument, license, or permit to which
either Licensee or KSMO-Sub is a party or by which either of Licensee or
KSMO-Sub


 


14





















 


is
bound; and (e) will not create any claim, lien, charge, or encumbrance upon any
of the assets of the Station.


 


6.3  Authorizations.  On and after the Base Date, Licensee will
hold all material licenses, permits, and other authorizations required by the
FCC for the lawful operation of the Station and the conduct of the business of
the Station in the manner and to the full extent it is currently
conducted.  All such licenses, permits,
and other authorizations have been validly issued and are in full force and
effect, and none of the licenses, permits, and other authorizations is subject
to any restriction or condition that would limit the operations of the Station
as they are currently conducted.  Except
as set forth in Schedule 6.3, there is not now pending, or to the
best of the KSMO Parties’ knowledge, threatened, any action by the FCC or by
any other Person to revoke, cancel, suspend, refuse to renew, or modify any of
those licenses, permits, and other authorizations.  Licensee is in compliance in all material
respects with the FCC licenses and the Communications Act.  Notwithstanding any other provision of this
Agreement, Sales Agent acknowledges the obligation of Licensee to complete the
construction of the digital facilities of the Station in accordance with the
Communications Act and Licensee agrees, subject to reimbursement to the extent
provided by Schedule 3.1, to complete such construction within the
time periods provided by the FCC’s rules.


 


SECTION 7. 
REPRESENTATIONS AND WARRANTIES OF SALES AGENT


 


Sales Agent represents and warrants to the
KSMO Parties as follows:


 


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


 


7.2  Absence
of Conflicting Agreements and Required Consents.  The execution, delivery, and performance by
Sales Agent of this Agreement and the documents contemplated hereby (with or
without the giving of notice, the lapse of time, or both):  (a) do not require the consent of any
governmental or regulatory authority or any other Person; (b) will not conflict
with the Certificate of Incorporation or By-Laws of Sales Agent; (c) to the
best of Sales Agent’s knowledge, does not conflict with, result in a breach of,
or constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to Sales Agent; and (d) does not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license or permit to which
Sales Agent is a party or by which Sales Agent is bound.


 


SECTION 8.  INDEMNIFICATION
AND REMEDIES


 


8.1  Representations
and Warranties.  Any investigations
by or on behalf of any party hereto shall not constitute a waiver as to
enforcement of any representation, warranty, or covenant


 


15





















 


contained herein.  No notice or information delivered by the
KSMO Parties shall affect Sales Agent’s right to rely on any representation or
warranty made by the KSMO Parties or relieve the KSMO Parties of any
obligations hereunder as the result of a breach of any of its representations
and warranties.


 


8.2  By
Sales Agent.  Sales Agent shall
indemnify and hold the KSMO Parties and their officers, directors, stockholders,
agents and employees harmless against any and all liability for libel, slander,
illegal competition or trade practice, infringement of trademarks, trade names,
or program titles, violation of rights of privacy, and infringement of
copyrights and proprietary rights resulting from or relating to the
Advertisements, the Delivered Programming, or other material furnished by Sales
Agent for broadcast on the Station, along with any fine or forfeiture imposed
by the FCC because of the content of such material, and for the actions of
Sales Agent’s employees and representatives in performing their duties under
this Agreement.


 


8.3  By the
KSMO Parties.  The KSMO Parties shall
indemnify and hold Sales Agent and its officers, directors, stockholders,
agents and employees harmless against any and all liability for libel, slander,
illegal competition or trade practice, infringement of trademarks, trade names,
or program titles, violation of rights of privacy, and infringement of
copyrights and proprietary rights resulting from or relating to all material
broadcast on the Station that is produced in whole or in part by the KSMO
Parties or any Affiliate of the KSMO Parties, along with any fine or forfeiture
imposed by the FCC because of the content of such material, and for the actions
of the KSMO Parties’ employees and representatives in performing their duties
under this Agreement.  If Sales Agent
incurs any liability as a result of programming broadcast on the Station that
is not furnished by Sales Agent and for which Sales Agent does not have
recourse against the KSMO Parties under this Section 8.3, the KSMO Parties
shall cooperate with Sales Agent and take such actions as Sales Agent shall
reasonably request to enable Sales Agent to pursue, at Sales Agent’s sole expense,
such claims as may be available to Sales Agent against the supplier of such programming;
provided, however, that Sales
Agent acknowledges that the KSMO Parties make no representation or warranty
regarding the availability of any such claim.


 


8.4  General.  Indemnification shall include all liability,
costs and expenses, including counsel fees (at trial and on appeal).  The indemnification obligations under this Section shall
survive any termination of this Agreement. 
The obligation of each party to indemnify is conditioned on the receipt
of notice from the party making the claim for indemnification in time to allow
the defending party to timely defend against the claim and upon the reasonable
cooperation of the claiming party in defending against the claim.  The party responsible for indemnification
shall select counsel and control the defense, subject to the indemnified party’s
reasonable approval; provided, however,
that no claim may be settled by an indemnifying party without the consent of
the indemnified party, and provided further
that, if an indemnifying party and a claimant agree on a settlement and the
indemnified party rejects the settlement unreasonably, the indemnifying party’s
liability will be limited to the amount the claimant agreed to accept in
settlement.


 


8.5  Services
and Facilities Unique.  The parties
hereto agree that the services to be provided by each party to the other under
this Agreement are unique and that substitutes therefor cannot be purchased or
acquired in the open market.  For that
reason, either party would be irreparably damaged in the event of a material
breach of this Agreement by the other party.


 


16





















 


Accordingly,
to the extent permitted by the Communications Act and the rules, regulations
and policies of the FCC then in effect, either party may request that a decree
of specific performance be issued by a court of competent jurisdiction,
enjoining the other party to observe and to perform such other party’s
covenants, conditions, agreements and obligations hereunder, and each party
hereby agrees neither to oppose nor to resist the issuance of such a decree on
the grounds that there may exist an adequate remedy at law for any material
breach of this Agreement.


 


8.6  Attorneys’
Fees.  In the event of a default by
either party, which results in a lawsuit, or other proceeding for any remedy
available under this Agreement, the prevailing party shall be entitled to
reimbursement from the other party of its reasonable legal fees and expenses.


 


SECTION 9.  MISCELLANEOUS


 


9.1  No
Partnership or Joint Venture.  This
Agreement is not intended to be, and shall not be construed as, an agreement to
form a partnership or a joint venture between the parties.  Except as otherwise specifically provided in
this Agreement, neither party shall be authorized to act as an agent of or
otherwise to represent the other party.


 


9.2  Confidentiality.  Each party hereto agrees that it will not at
any time during or after the termination of this Agreement disclose to others
or use, except as duly authorized in connection with the conduct of the
business or the rendering of services hereunder, any secret or confidential
information of the other party.  To the
extent required by the Communications Act, each party shall place a copy of
this Agreement in its public inspection file and shall consult with and agree
upon the confidential and proprietary information herein that shall be redacted
from such copy.


 


9.3  Assignment;
Benefit; Binding Effect.  Neither
party may assign this Agreement or delegate its obligations under this
Agreement without the prior written consent of the other, except that Sales
Agent may assign its rights and obligations under this Agreement to any
successor in interest as the operator or licensee of television station KCTV(TV),
Kansas City, Missouri, or to any party to whom Sales Agent assigns its rights
and interests under the Purchase Agreement in accordance with Section 10.3
of the Purchase Agreement (a “Sales Agent Assignee”), upon written notice to
Licensee.  In the event that Sales Agent
assigns its rights and interests under the Purchase Agreement to a Sales Agent
Assignee, the KSMO Parties shall, at Sales Agent’s request, assign their rights
and interests under this Agreement to such Sales Agent Assignee, effective upon
the consummation of the assignment of the FCC licenses for the Station to such Sales
Agent Assignee, subject to the payment by Sales Agent of all payments owed to the
KSMO Parties as of the consummation date of such assignment  This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.


 


9.4  Force
Majeure.  Any delay or interruption
in the broadcast operation of the Licensee Station, in whole or in part, due to
Acts of God, strikes, lockouts, material or labor restrictions, governmental
action, riots, natural disasters or any other cause not reasonably within the
control of either party shall not constitute a breach of this Agreement, and
neither party shall be liable to the other for any liability or obligation with
respect thereto.


 


17





















 


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


 


9.6  Press Release.  Neither party shall publish any press
release, make any other public announcement or otherwise communicate with any
news media concerning this Agreement or the transactions contemplated hereby
without the prior written consent of the other party; provided, however, that nothing contained
herein shall prevent either party from promptly making all filings with
governmental authorities as may, in its judgment, be required or advisable in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.


 


9.7  Unenforceability.  If one or more provisions of this Agreement
or the application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law,
except that, if such invalidity or unenforceability should change the basic
economic positions of the parties, they shall negotiate in good faith such
changes in other terms as shall be practicable in order to restore them to
their prior positions.  In the event that
the FCC alters or modifies its rules or policies in a fashion which would raise
substantial and material questions as to the validity of any provision of this
Agreement, the parties shall negotiate in good faith to revise any such
provision of this Agreement in an effort to comply with all applicable FCC
rules and policies while attempting to preserve the intent of the parties as
embodied in the provisions of this Agreement. 
The parties hereto agree that, upon the request of either of them, they
will join in requesting the view of the staff of the FCC, to the extent
necessary, with respect to the revision of any provision of this Agreement in
accordance with the foregoing.


 


9.8  Notices.  All notices, demands, and requests required
or permitted to be given under the provisions of this Agreement shall be
(a) in writing, (b) delivered by personal delivery, or sent by
commercial delivery service or registered or certified mail, return receipt
requested, (c) deemed to have been given on the date of personal delivery
or the date set forth in the records of the delivery service or on the return
receipt, and (d) addressed as follows:


 


	
  If to the KSMO Parties:

  	
  c/o Sinclair Television Group

  
	
   

  	
  10706 Beaver Dam Road

  
	
   

  	
  Cockeysville, MD 21030

  
	
   

  	
  Attn: David D. Smith

  
	
   

  	
  Phone:

  	
  410-568-1507

  
	
   

  	
  Fax:

  	
  410-568-1533

  



 


18





















 


	
   

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

  
	
   

  
	
   

  	
  Sinclair Broadcast Group, Inc.

  
	
   

  	
  10706 Beaver Dam Road

  
	
   

  	
  Cockeysville, MD 21030

  
	
   

  	
  Attn: General Counsel

  
	
   

  	
  Phone:

  	
  410-568-1524

  
	
   

  	
  Fax:

  	
  410-568-1537

  
	
   

  	
   

  
	
   

  	
  -and-

  
	
   

  	
   

  
	
   

  	
  Steven A. Thomas, Esquire

  
	
   

  	
  Thomas & Libowitz, P.A.

  
	
   

  	
  100 Light Street, Suite 1100

  
	
   

  	
  Baltimore, MD 21202

  
	
   

  	
  Phone:

  	
  410-752-2046

  
	
   

  	
  Fax:

  	
  410-752-2468

  
	
   

  	
   

  
	
  If to Sales Agent:

  	
  Meredith Corporation

  
	
   

  	
  1716 Locust Street

  
	
   

  	
  Des Moines, IA 50309-3203

  
	
   

  	
  Attn:

  	
  John S. Zieser, Esquire,

  
	
   

  	
   

  	
   Vice President, General Counsel & Secretary

  
	
   

  	
  Phone:

  	
  515-284-2895

  
	
   

  	
  Fax:

  	
  515-284-3933

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  John R. Feore, Esquire

  
	
   

  	
  Dow, Lohnes & Albertson, PLLC

  
	
   

  	
  1200 New Hampshire Avenue, N.W.

  
	
   

  	
  Suite 800

  
	
   

  	
  Washington, DC 20036

  
	
   

  	
  Phone:

  	
  202-776-2768

  
	
   

  	
  Fax:

  	
  202-776-2222

  
						



 


9.9  Governing Law.  This Agreement shall be construed and
governed in accordance with the laws of New York without reference to the conflict
of laws principles thereof.


 


9.10  Captions.  The captions in this Agreement are for
convenience only and shall not be considered a part of, or effect the
construction or interpretation of any provision of, this Agreement.


 


9.11 
Gender and Number.  Words
used herein, regardless of the gender and number specifically used, shall be
deemed and construed to include any other gender, masculine, feminine, or
neuter, and any other number, singular or plural, as the context requires.


 


19





















 


9.12  Counterparts and Facsimile Signatures.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.  This Agreement shall be legally binding and
effective upon delivery of facsimile signatures.


 


9.13 
Entire Agreement.  This
Agreement and the attachments and schedules hereto collectively represent the
entire understanding and agreement among the parties hereto with respect to the
subject matter hereof.  No term or
provisions hereof may be changed, modified, terminated or discharged (other
than in accordance with its terms), in whole or in part, except by a writing
which is dated and signed by all parties hereto.  No waiver of any of the provisions or
conditions of this Agreement or of any of the rights, powers or privileges of a
party hereto shall be effective or binding unless in writing and signed by the
party claimed to have given or consented to such waiver.


 


9.14 
Guaranty.  By its execution
hereof with respect to this Section 9.14, Sinclair irrevocably and unconditionally
guarantees to Sales Agent the full, complete and timely performance by the KSMO
Parties of any and all obligations of the KSMO Parties under this
Agreement.  This guaranty shall remain in
full force and effect so long as the KSMO Parties shall have any obligations or
liabilities hereunder.  This guaranty
shall be deemed a continuing guaranty, and the waivers of Sinclair herein shall
remain in full force and effect until the satisfaction in full of all of the
KSMO Parties’ obligations hereunder.  If
any default shall occur by either Licensee or the KSMO-Sub in its performance
or satisfaction of any of its obligations hereunder, then Sinclair will itself
perform or satisfy, or cause to be performed or satisfied, such obligations
immediately upon notice from Sales Agent specifying in summary form the
default.  This guaranty is an absolute,
unconditional and continuing guaranty of payment and performance which shall
remain in full force and effect without respect to future changes in
conditions, including any change of law. 
Sinclair agrees that its obligations hereunder shall not be contingent
upon the exercise or enforcement by Sales Agent of whatever remedies it may
have against the KSMO Parties.  To the
maximum extent permitted by law, Sinclair hereby waives: (i) notice of
acceptance hereof; (ii) notice of any adverse change in the financial
condition of either Licensee or KSMO-Sub or of any other fact that might
increase Sinclair’s risk hereunder; and (iii) presentment, protest,
demand, action or delinquency in respect of any of the KSMO Parties’
obligations hereunder.


 


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20





















 


IN WITNESS WHEREOF,
this Agreement has been executed by Licensee, KSMO-Sub and Sales Agent
effective as of the date first written above.


 


 


	
   

  	
  LICENSEE:

  
	
   

  	
   

  
	
   

  	
  KSMO LICENSEE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
   

  	
  Name: 
  David B. Amy

  
	
   

  	
   

  	
  Title: 
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KSMO-SUB:

  
	
   

  	
   

  
	
   

  	
  KSMO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
   

  	
  Name: 
  David B. Amy

  
	
   

  	
   

  	
  Title: 
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SALES AGENT:

  
	
   

  	
   

  
	
   

  	
  MEREDITH CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Suku V. Radia

  	
   

  
	
   

  	
   

  	
  Name: 
  Suku V. Radia

  
	
   

  	
   

  	
  Title: 
  VP - CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JOINDER AS A PARTY WITH

  RESPECT TO SECTIONS 5.6 AND 9.14:

  
	
   

  	
   

  
	
   

  	
  SINCLAIR BROADCAST GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
   

  	
  Name: 
  David B. Amy

  
	
   

  	
   

  	
  Title: 
  Executive Vice President

  



 


21





















 


SCHEDULE 3.1


 


1.                                      Definitions.  The following terms, as used in this Schedule 3.1,
shall have the meanings set forth in this section:


 


(a)                                  “Net Sales Revenue”
means all gross revenue received by Sales Agent or the KSMO Parties for the
Advertisements, other than Advertisements that are adjacent to or in the
Delivered Programming, less agency, buying service or other sales commissions
paid to or withheld by an advertiser, agency or service, as the case may be,
but excluding any network compensation paid to the KSMO Parties following the
Base Date by The WB solely in return for the agreement entered into on July 4,
1997, by Sinclair and The WB pursuant to which Sinclair agreed to affiliate the
Station and certain of its other television broadcast stations with The WB.


 


(b)                                 “Reimbursable
Station Expenses” means the out-of-pocket costs and expenses actually
incurred by the KSMO Parties during the period following the Base Date in
operating the Station and performing its obligations under this Agreement.  Without limiting the generality of the
foregoing, Reimbursable Station Expenses shall include, to the extent not otherwise
included in Licensee’s Expense Schedule:


 


(i)  the entire out of pocket costs and expenses
actually incurred by the KSMO Parties in order to complete the construction of
the digital facilities of the Station in accordance with the Communication Act;


 


(ii)  reasonable capital and operating expenses
actually incurred by the KSMO Parties that are necessary to enable the Station
to continue broadcast operations in accordance with the terms of the Station’s
FCC licenses and the Communications Act;


 


(iii)  reasonable operating expenses actually
incurred by the KSMO Parties that are necessary to enable the KSMO Parties to
conduct the business and operations of the Station in accordance with the terms
of this Agreement and the Purchase Agreement (including, without limitation,
any liability incurred as a result of any programming broadcast on the Station,
other than programming produced in whole or in part by the KSMO Parties or any
Affiliate of the KSMO Parties, subject to the rights of Sales Agent set forth
in Section 8 below);


 


(iv)  any reasonable operating expense actually
incurred by the KSMO Parties that conforms in character to an expense line item
or category expressly set forth in the Licensee’s Expense Schedule,
notwithstanding that the amount of such expense exceeds the applicable amount
specified for such line item or category in the Licensee’s Expense Schedule, if
the amount of such excess is reasonable and the sole reason for such excess is
an increase in a cost or expense owed by the KSMO Parties to a third party that
occurs following the adoption of the applicable Licensee’s Expense Schedule;
and


 


(v)  any costs or expenses actually incurred by
the KSMO Parties as a result of complying with the obligation to broadcast the
Delivered Programming.


 





















 


(c)                                  “JSA Fee”
means Forty-Four Thousand Six Hundred Sixty-Six Dollars ($44,666) per month,
payable by Sales Agent to the KSMO Parties in consideration for the right to
sell the Advertisements.


 


(d)                                 “Licensee’s Expense
Schedule” means the out-of-pocket costs and expenses the KSMO Parties expects
to incur in operating the Station and performing its obligations under this
Agreement, a copy of which is attached as Exhibit A hereto.  Licensee’s Expense Schedule shall cover
the period commencing on the Base Date and ending on December 31, 2005.


 


(e)                                  “Station Broadcast
Cash Flow” means broadcast operating income of the Station, determined in
accordance with generally accepted accounting principles consistently applied,
adjusted as follows:


 


(1)                                  plus
the sum of (i) depreciation and amortization (including film amortization and
amortization of deferred and stock based compensation) relating to the Station
(to the extent such depreciation and amortization were deducted in calculating
operating income of the Station), and (ii) any trade/barter expenses; and


 


(2)                                  less
the sum of (i) any amounts paid by Sales Agent to Licensee pursuant to Section 2(a)
below; (ii) cash payments made or scheduled to be made for program contract
rights relating to the Station; (iii) payments made by Sales Agent to the KSMO
Parties to the extent not otherwise taken into account in calculating operating
income; (iv) any rental income earned by Sales Agent from real property leased
to the extent taken into account in calculating broadcast operating income; (v)
any rent paid with respect to any capital leases of the Station; (vi) the
allocable portion, to the extent taken into account in calculating operating
income, of any fees received by any Affiliate of Licensee for entering into any
arrangement with a third party that relates to the Station and any other
television station owned and/or programmed by Licensee or any Affiliate; (vii)
any trade/barter revenue; (viii) any income attributable to any “group deals”
which include the Station and any other television station owned and operated
by any Affiliate of Licensee, to the extent taken into account in calculating
broadcast operating income and (ix) any revenue attributable to Delivered
Programming.


 


(f)                                    “Licensee
Revenue Share” means the payment to be made to Licensee each month from Net
Sales Revenue in accordance with Section 2(a) below.


 


2.                                      Allocation
of Revenue.  Beginning on the
Base Date, Net Sales Revenue shall be allocated and paid on a monthly basis as
follows:


 


(a)                                  For each calendar
month during the period following the Base Date, Licensee shall receive from
Net Sales Revenue a payment equal to the sum of (i) Reimbursable Station
Expenses for such month to the extent such Reimbursable Station Expenses are
consistent, in character and amount, with Licensee’s Expense Schedule, (ii) the
JSA Fee, and (iii) 25% of Station Broadcast Cash Flow for such month; provided that no amount shall be due under
this clause (iii) of Section 2(a) unless and until the cumulative
Broadcast Cash Flow for the period commencing on the Base Date exceeds $2,000,000,
and provided further, however, that


 


2





















 


the percentage of Station Broadcast Cash Flow payable to Licensee
pursuant to this clause (iii) of Section 2(a) shall be reduced from 25% to
10% for the excess, in any month, of Broadcast Cash Flow over $2,500,000.  The foregoing notwithstanding, Licensee shall
not be entitled to receive any amount pursuant to clause (iii) of this Section 2(a)
if, at the time such amount is due (the “Cash Flow Payment Date”), the aggregate
amount of Net Sales Revenue during the period from the Base Date until the Cash
Flow Payment Date is less than the sum of the Reimbursable Station Expenses and
JSA Fees paid to the KSMO Parties during the period from the Base Date until
the Cash Flow Payment Date.


 


(b)                                 For each calendar
month during the period following the Base Date, Sales Agent shall receive from
Net Sales Revenue an amount equal to the Net Sales Revenue for such month less
the Licensee Revenue Share for such month.


 


3.                                      Payment
of Licensee Revenue Share.


 


(a)                                  On or before the fifth
business day of each calendar month during the Initial Term, Licensee shall
deliver to Sales Agent a statement setting forth in reasonable detail the
amount of Reimbursable Station Expenses paid by Licensee and KSMO-Sub during
the prior calendar month.  The statement
shall include invoice copies and other documentation reasonably satisfactory to
Sales Agent evidencing Licensee’s and KSMO-Sub’s payment of such Reimbursable
Station Expenses.  Licensee shall deliver
promptly to Sales Agent such additional documentation concerning the amounts
shown on Licensee’s statement as Sales Agent shall reasonably request.


 


(b)                                 On or before the tenth
business day of each calendar month during the Initial Term, Sales Agent shall
pay to Licensee the Licensee Revenue Share for such month.


 


(c)                                  If Licensee elects to
preempt any previously scheduled commercial programming in favor of replacement
commercial programming from which Licensee will receive revenue or non-cash
consideration, then, to the extent that Sales Agent suffers a loss of revenue (“Lost
Revenue”) from its inability to broadcast advertising spots that were sold
for broadcast on such preempted programming, a cash amount equal to the amount
of the Lost Revenue shall be deducted from the payment of Licensee Revenue
Share.  This provision shall not apply to
the reasonable, good faith exercise by Licensee of its rights under Section 4.5
to preempt Broadcast Material (i) to present alternative program material of
greater local or national importance or (ii) that Licensee determines to
violate applicable laws or to be contrary to the public interest or the terms
of this Agreement.  Licensee represents
and covenants that preemption pursuant to Section 4.5 shall only occur to
the extent that Licensee deems such action necessary to carry out its
obligations as an FCC licensee, and expressly agrees that such right of
preemption shall not be exercised in an arbitrary manner or for the commercial
advantage of Licensee or others.


 


(d)                                 Any payment made
hereunder that covers a partial calendar month shall be prorated on the basis
of the actual number of days in such month to which such payment applies.


 


3





















 


4.                                      Rights
of Audit and Objection.


 


(a)                                  Rights of Audit.  At all times during the Initial Term and for
six (6) months following the termination of this Agreement, each party, shall
have the right, at its own expense and upon prior written request to the other
party, to review and audit the books and records of such party relating to Net
Sales Revenue, Reimbursable Station Expenses and Station Broadcast Cash
Flow.  Any such review must take place
during normal business hours Monday through Friday.


 


(b)                                 Right of Objection.  On or prior to the 30th day after Licensee’s
receipt of a Licensee Revenue Share payment, Licensee may give Sales Agent a
written notice (an “Objection Notice”) indicating its objections to the
applicable payment.  If Licensee fails to
deliver an Objection Notice within such thirty (30) day period, then the
applicable Licensee Revenue Share payment will be conclusive and binding upon
the parties hereto.  If Licensee gives a
timely Objection Notice, Licensee and Sales Agent will negotiate in good faith
to resolve their disputes regarding the disputed Licensee Revenue Share
payment.  If the Parties are unable to
resolve all disputes regarding such Licensee Revenue Share payment on or prior
to the thirtieth (30th) day after an Objection Notice is given, the Parties
shall retain a qualified accounting firm (either by mutual agreement or by random
choice after eliminating any such firm which is conflicted or otherwise unable
to participate) (the “Independent Accounting Firm”) to resolve the
dispute as soon as practicable, and in any event within thirty (30) days.  The Licensee Revenue Share payment for the
applicable period determined by the Independent Accounting Firm will be
conclusive and binding upon the parties hereto and will constitute the Licensee
Revenue Share payment for such applicable period for all purposes of this Schedule 3.1.  The fees and expenses of the Independent
Accounting Firm in connection with its review of any Licensee Revenue Share
payment shall be paid one-half (1/2) by Sales Agent and one-half (1/2) by the
KSMO Parties.


 


5.                                      National Rep Contract.  Except as provided in this Section 5,
national spot advertising broadcast on the Station shall be sold by Katz
Millennium Sales and Marketing, Inc. (“Katz”) pursuant to the terms of
the Representation Agreement dated August 13, 2001 between Katz and KSMO,
Inc. (the “Katz Rep Agreement”). 
All proceeds from the sale of such advertising shall be considered Net
Sales Revenue for purposes of this Agreement and any commissions payable to
Katz pursuant to the Katz Rep Agreement applicable to the period following the
Base Date shall be Reimbursable Station Expenses.  Notwithstanding the foregoing, Sales Agent
may, at its option and expense, obtain a termination of the Katz Rep Agreement
and enter into a representation agreement with such other national rep firm as
Sales Agent may select and such other firm shall have the right to sell the
Station’s national spot advertising.


 


6.                                      Licensee
Expenditures.  Nothing in this Schedule 3.1
shall restrict Licensee or KSMO-Sub from entering into any contract or
commitment or incurring any obligation or liability in connection with the
acquisition of programming for broadcast on the Station or the employment of
such personnel as Licensee or KSMO-Sub deems to be necessary or appropriate for
the operation of the Station.


 


4





















 


7.                                      Changes
to Licensee’s Expense Schedule.  If
and to the extent that the KSMO Parties assign to Sales Agent one or more Assumed
Contracts (as defined in the Purchase Agreement) in accordance with the terms
of the Purchase Agreement or this Agreement, Sales Agent and Licensee shall
cooperate in good faith and use commercially reasonable efforts to agree upon
such changes to the Licensee’s Expense Schedule as are necessary to give
effect to such assignment.  Commencing in
2005 and annually thereafter during the Initial Term, Licensee and Sales Agent
shall cooperate in good faith to agree upon in writing no later than October 1
of the applicable year such changes, if any, to the Licensee’s Expense Schedule as
are reasonably required to accurately reflect actual Reimbursable Station
Expenses incurred during such year (or, in the case of Licensee’s Expense Schedule attached
hereto as Exhibit A, during the period commencing on the Base Date and ending
on December 31, 2005).  In the event
that Licensee and Sales Agent are unable to resolve any dispute regarding any
proposed changes to a Licensee’s Expense Schedule by October 1 of any
year, either party may notify the other party in writing of its objection to
Licensee’s Expense Schedule for the prior year.  In the event such a notice is provided, until
such time as the parties agree upon a new Licensee’s Expense Schedule in
writing, this Agreement shall remain in full force and effect in accordance
with its terms, except that the Licensee’s Expense Schedule for the
succeeding year shall be the Licensee’s Expense Schedule for the prior
year subject to an automatic increase of each expense item set forth in the
Licensee’s Expense Schedule for such prior year in an amount equal to the
greater of five percent (5%) or the increase in the U.S. Department of Labor,
Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers
(CPI-U) for the U.S. City Average for All Items, 1982-84=100 (the “Automatic
Increase”).  If neither party has
provided to the other a written notification of a dispute regarding changes to
a Licensee’s Expense Schedule prior to October 1 of the applicable
year, the Licensee’s Expense Schedule for the succeeding year shall be the
Licensee’s Expense Schedule for the prior year subject to the Automatic
Increase.


 


8.                                       Programming Liability Claims.  If the KSMO Parties have the right under Section 1(b)(iii)
of this Schedule 3.1 to seek reimbursement from Sales Agent for any
liability that may be incurred by the KSMO Parties as a result of programming
broadcast on the Station, the KSMO Parties shall not settle any claim regarding
any such liability without Sales Agent’s consent (such consent not to be
unreasonably withheld), and Sales Agent shall have the right to participate (at
Sales Agent’s cost) in the of defense of any action involving a claim for any
such liability.


 


5





















 


SCHEDULE 4.2


 


SCHEDULE OF DELIVERED
PROGRAMMING


 


Commencing on the Base Date, Sales Agent
shall be permitted to provide Delivered Programming constituting in the
aggregate up to 22 hours and 12 minutes of the weekly programming time on the
Station, but in no event shall the aggregate duration of such programming
exceed 15% of the Station’s broadcast hours for any week.  Notwithstanding anything herein to the
contrary, the obligations of Licensee set forth in this Schedule 4.2
shall be subject to Licensee’s rights under Sections 4.2, 4.5 and 4.10 of this
Agreement.


 


At any time and from time to time following
the Base Date, Sales Agent may designate by written notice to Licensee the days
and times during which Licensee shall broadcast Delivered Programming on the
Station, and Licensee shall commence the broadcast of such Delivered
Programming no later than 14 days following its receipt of such notice, so long
as (i) the duration of such Delivered Programming, together with the duration
of all other Delivered Programming broadcast on the Station, does not exceed
15% of the Station’s weekly broadcast schedule and (ii) the broadcast of
such Delivered Programming during the days and times specified by Sales Agent
shall not conflict with the contractual obligations of the KSMO Parties.


 


At any time and from time to time following
the Base Date, Sales Agent may designate by written notice to Licensee existing
programming broadcast on the Station by Licensee that, effective upon Licensee’s
receipt of such notice, shall constitute Delivered Programming for all purposes
under this Agreement (any existing programming so designated by Sales Agent is “Converted
Programming”).  At Sales Agent’s
election, such notice may specify changes to the days and times during which
Licensee shall broadcast such Converted Programming on the Station, and
Licensee shall broadcast such Converted Programming during the days and times specified
by Sales Agent no later than 14 days following its receipt of such notice, so
long as (i) the duration of such Converted Programming, together with the
duration of all other Delivered Programming broadcast on the Station, does not
exceed 15% of the Station’s weekly broadcast schedule and (ii) the
broadcast of such Converted Programming during the days and times specified by
Sales Agent shall not conflict with the contractual obligations of the KSMO
Parties.  Subject to receipt of any
required consent, the KSMO Parties shall assign to Sales Agent as promptly as
practicable following receipt of Sales Agent’s written notice their rights and
interests in the Converted Programming in accordance with the terms and
conditions set forth in the Purchase Agreement that are applicable to Assumed
Contracts.


 


If the FCC changes its rules or policies in a
manner that allows Sales Agent to provide Delivered Programming that exceeds
15% of the Station’s broadcast hours for any week, at the request of Sales
Agent, Licensee shall cooperate in good faith with Sales Agent to agree upon
one or more additional time periods during which Sales Agent shall be permitted
to provide additional Delivered Programming for broadcast on the Station, but
in no event shall the aggregate duration of all Delivered Programming,
including such additional time periods, exceed the total amount of Delivered
Programming as may be permitted by the FCC after giving effect to such change
in the FCC’s rules or policies.


 





















 


Upon no less than 14 days prior written
notice from Sales Agent to Licensee, Sales Agent may change the date and times
that the Delivered Programming shall be broadcast on the Station and Licensee
agrees to broadcast the Delivered Programming in accordance with such revised
schedule.


 





















 


SCHEDULE 4.5


 


POLICY
STATEMENT FOR BROADCAST MATERIAL


 


Sales Agent
agrees to cooperate with Licensee in the broadcasting of programs of high
quality and, for this purpose, to observe the following policies in the
preparation, writing and production of Broadcast Material.


 


1.               CONTROVERSIAL
ISSUE.  Any discussion of
controversial issues of public importance shall be reasonably balanced with the
presentation of contrasting viewpoints in the course of overall programming; no
attacks on the honesty, integrity, or like personal qualities of any person or
group of persons shall be made; and Station programs (other than public forum
or talk features) are not to be used as a forum for editorializing about
individual candidates.  If such events
occur, Licensee may require that responsive programming be aired.


 


2.               NO
PLUGOLA OR PAYOLA.  The
mention of any business activity or “plug” for any commercial, professional, or
other related endeavor, except where contained in an actual commercial message
of a sponsor, is prohibited.


 


3.               ELECTION
PROCEDURES.  At least ninety
(90) days before the start of any primary or regular election campaign, Sales
Agent will clear with the Licensee the rate Sales Agent will charge for the
time to be sold to candidates for public office and/or their supporters to make
certain that the rate charged is in conformance with the applicable law and the
Licensee’s policy.


 


4.               PROGRAMMING
PROHIBITIONS.  Sales Agent
shall not knowingly broadcast any of the following programs or announcements:


 


(a)   False Claims.  False or unwarranted claims for any product
or service.


 


(b)   Unfair Imitation.  Infringements of another advertiser’s rights
through plagiarism or unfair imitation of either program idea or copy, or any
other unfair competition.


 


(c)   Commercial Disparagement.  Any unlawful disparagement of competitors or
competitive goods.


 


(d)   Obscenity/Indecency/Profanity.  Any programs or announcements that are
obscene or indecent, as those terms are interpreted and applied by the
FCC.  Any programs or announcements that
are slanderous, obscene, profane, vulgar, repulsive or offensive, either in
theme or treatment.


 


(e)   Price Disclosure.  Any price mentions except as permitted by
Licensee’s policies current at the time.


 





















 


(f)   Unauthorized
Testimonials.  Any testimonials which
cannot be authenticated.


 


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


 


(h)   Conflict Advertising.  Any advertising matter or announcement which
may, in the reasonable opinion of Licensee, be injurious or prejudicial to the
interest of the public, the Station, or honest advertising and reputable
business in general.


 


(i)   Fraudulent or Misleading
Advertisement.  Any advertisement
matter, announcement, or claim which Sales Agent knows to be fraudulent,
misleading, or untrue.


 


5.               LOTTERIES.  Announcements giving any information about
lotteries or games prohibited by federal or state law or regulation are
prohibited.


 


6.               RELIGIOUS
PROGRAMMING RESTRICTIONS.  The
subject of religion and references to particular faiths, tenants, and customs
shall be treated with respect at all times. 
Broadcast Material shall not be used as medium for attack on any faith,
denomination, or sect or upon any individual or organization.


 


7.               CREDIT
TERMS ADVERTISING.  Any
advertising of credit terms shall be made over the Station in accordance with
all applicable federal and state laws or regulations.


 


8.               NO
ILLEGAL ANNOUNCEMENTS.  No
announcements or promotion prohibited by federal or state law or regulation
shall be made over the Station.  At
Licensee’s request, any game, contest, or promotion relating to or to be
presented over the Station must be fully stated and explained in advance to
Licensee, which reserves the right in its sole discretion to reject any game,
contest, or promotion.


 


9.               LICENSEE
DISCRETION PARAMOUNT.  In
accordance with the Licensee’s responsibility under the Communications Act of
1934, as amended, and the rules and regulations of the FCC, Licensee reserves
the right to reject or terminate any Broadcast Material proposed to be
presented or being presented over the Station which is in conflict with the
Licensee’s policy or which in the reasonable judgment of Licensee would not
serve the public interest.


 


10.         PROGRAMMING
IN WHICH SALES AGENT HAS A FINANCIAL INTEREST.  Sales Agent shall advise Licensee with
respect to any Broadcast Material concerning goods or services in which Sales
Agent has a material financial interest.  Any announcements for such goods and services
for which Sales Agent charges less than its regular rate shall clearly identify
Sales Agent’s financial interest.


 


2





















 


11.         MISCELLANEOUS.


 


(a)  Waiver.  To the extent legally permissible, the
parties may jointly waive any of the foregoing policies in specific instances
if, in their opinion, good broadcasting in the public interest is served.


 


(b)  Prior Consent.  In any case where questions of policy or
interpretation arise, Sales Agent will attempt in good faith to submit the same
to Licensee for decision before making any commitments in connection therewith.


 


3





















 


SCHEDULE 4.7


 


BARTER SCHEDULE


 





















 


SCHEDULE 6.3


 


In November 2003,
Sinclair filed applications with the FCC to acquire the license assets of five
television stations, WRGT-TV, Dayton, Ohio, WTAT-TV, Charleston, South
Carolina, WVAH-TV, Charleston, West Virginia, WNUV-TV, Baltimore, Maryland, and
WTTE-TV, Columbus, Ohio.  The
Rainbow/PUSH Coalition filed a petition to deny these five applications and in
this context asked the FCC to revoke all of Sinclair’s FCC licenses.  The Chief of the Media Bureau of the FCC
denied Rainbow’s request, and Rainbow filed a petition for reconsideration,
which is pending.


 


The KSMO
Parties are aware of threats that have been made publicly that various entities
may file actions at the FCC against Sinclair Broadcast Group, Inc., which could
include a filing against the Station. 
None of these threats relate specifically to the Station except insofar
as the Station acted in a manner consistent with a number of other Sinclair
television stations.  On November 1,
2004, an organization calling itself “Free Press” filed a petition to deny the
license renewal applications of six Sinclair stations (WXLV-TV, Winston-Salem,
North Carolina, WUPN-TV, Greensboro, North Carolina, WLFL(TV), Raleigh, North
Carolina, WRDC(TV), Durham, North Carolina, WLOS(TV), Asheville, North
Carolina, and WMMP(TV), Charleston, South Carolina) and two Cunningham
Broadcasting Corporation stations (WBSC-TV, Anderson, South Carolina and
WTAT-TV, Charleston, South Carolina), which are programmed by Sinclair pursuant
to LMAs.