<PAGE>
 
                                                                      EXHIBIT 10

                              PURCHASE AGREEMENT


                                by and between


                         SINCLAIR COMMUNICATIONS, INC.


                                      and


                           THE ACKERLEY GROUP, INC.


                        Dated as of September 25, 1998

<PAGE>
 
                               TABLE OF CONTENTS
 
                                                                            Page
 
Article 1.  Sale of Assets; Assumption of Liabilities.......................   1
     1.1   Assets to Be Acquired............................................   1
     1.2   Excluded Assets..................................................   3
     1.3   Assumption of Liabilities........................................   3
     1.4   Closing and Closing Date.........................................   4
     1.5   Additional Closing Deliveries....................................   4
                                                                             
Article 2.  Purchase Price..................................................   5
     2.1   Escrow Deposit...................................................   5
     2.2   Purchase Price; Payment..........................................   5
     2.3   Post-Closing Adjustment..........................................   6
     2.4   Security Escrow..................................................   8
     2.6   Investment of Escrow Amounts.....................................   8
     2.7   Allocation of the Purchase Price.................................   9
                                                                             
Article 3.  Representations and Warranties Relating to the Company..........  10
     3.1   Organization and Standing........................................  10
     3.2   Binding Agreement................................................  10
     3.3   Absence of Conflicting Agreements or Required Consents...........  10
     3.4   Equity Investments...............................................  10
     3.5   Financial Statements.............................................  11
     3.6   Title to Assets; Related Matters.................................  11
     3.7   Absence of Certain Changes, Events and Conditions................  11
     3.8   Litigation.......................................................  12
     3.9   Insurance........................................................  12
     3.10  Material Contracts...............................................  13
     3.11  Permits and Licenses; Compliance with Law........................  13
     3.12  FCC Licenses.....................................................  13
     3.13  Environmental Matters............................................  14
     3.14  Employee Benefit Matters.........................................  14
     3.15  Labor Relations..................................................  15
     3.16  Intellectual Property............................................  16
     3.17  Taxes............................................................  16
     3.18  Commissions......................................................  17
     3.19  Affiliate Transactions...........................................  17
     3.20  Accuracy and Completeness of Representations and                 
            Warranties......................................................  17
 
                                      -i-
<PAGE>
 
                                                                            Page
 
Article 4.  Representations and Warranties of Purchaser.....................  17
     4.1   Organization and Standing........................................  17
     4.2   Binding Agreement................................................  17
     4.3   Absence of Conflicting Agreements or Required Consents...........  18
     4.4   Litigation.......................................................  18
     4.5   Commissions......................................................  18
     4.6   Financing........................................................  18
     4.7   Purchaser's Qualification........................................  19
     4.8   Accuracy and Completeness of Representations and Warranties......  19
                                                                            
Article 5.  Covenants and Agreements........................................  19
     5.1   Conduct of the Business Prior to Closing; Access.................  19
     5.2   Post-Closing Covenants and Agreement, and Other Employee         
            Benefit Matters.................................................  22
     5.3   Cooperation......................................................  24
     5.4   Confidentiality..................................................  26
     5.5   Public Announcements.............................................  26
     5.6   No Solicitation..................................................  26
     5.7   No Additional Representations....................................  26
     5.8   Certain Payments.................................................  27
     5.9   Bulk Sales Laws..................................................  27
     5.10  Control of the Stations..........................................  27
     5.11  Use of Certain Names.............................................  28
                                                                            
Article 6.  Conditions to Obligations of Purchaser..........................  28
     6.1   Representations and Warranties...................................  28
     6.2   Performance by the Company.......................................  28
     6.3   Certificate......................................................  28
     6.4   Consents; No Objections..........................................  28
     6.5   No Proceedings or Litigation.....................................  29
     6.6   [Intentionally omitted]..........................................  29
     6.7   FCC Consent......................................................  29
     6.8   No Material Adverse Change.......................................  29
     6.9   Opinions of Counsel..............................................  29
     6.10  Good Standing Certificate........................................  29
     6.11  No Transmission Defects..........................................  29
     6.12  Closing on the Gannett Purchase Agreement........................  29
                                                                            
Article 7.  Conditions to Obligations of the Company........................  30
     7.1   Representations and Warranties...................................  30
     7.2   Performance by Purchaser.........................................  30
     7.3   Certificate......................................................  30
     7.4   Consents; No Objections..........................................  30
     7.5   No Proceedings or Litigation.....................................  30

                                     -ii-
<PAGE>
 
                                                                            Page
 
     7.6   FCC Consent......................................................  30
     7.7   Opinion of Counsel...............................................  30
     7.8   Good Standing Certificate........................................  30
     7.9.  Closing on Gannett Purchase Agreement............................  31
                                                                            
Article 8.  Indemnification.................................................  31
     8.1   Indemnification by the Company...................................  31
     8.2   Indemnification by Purchaser.....................................  31
     8.3   Limitations on Indemnification Claims and Liability;              
            Termination of Indemnification..................................  31
     8.4   Computation of Claims and Damages................................  32
     8.5   Notice of Claims.................................................  33
     8.6   Defense of Third Party Claims....................................  33
     8.7   Third Party Beneficiaries........................................  34
                                                                            
Article 9.  Definitions.....................................................  34
                                                                            
Article 10.  Miscellaneous Provisions.......................................  46
     10.1  Termination Rights...............................................  46
     10.2  Litigation Costs.................................................  47
     10.3  Expenses.........................................................  47
     10.4  Notices..........................................................  48
     10.5  Benefit and Assignment...........................................  49
     10.6  Waiver...........................................................  49
     10.7  Severability.....................................................  49
     10.8  Amendment........................................................  49
     10.9  Effect and Construction of this Agreement........................  49
     10.10 Transfer and Conveyance Taxes....................................  50
     10.11 Specific Performance.............................................  50
     10.12 Survival of Representations, Warranties and Covenants............  50
 
Article 11.  No Personal Liability for Representatives, Stockholders,
              Directors or Officers.........................................  50
 
                                     -iii-
<PAGE>
 
                                   Exhibits

Exhibit A      Bill of Sale, Assignment and Assumption Agreement
Exhibit B      Deposit Escrow Agreement
Exhibit C      Adjustment Escrow Agreement
Exhibit D      Security Escrow Agreement
Exhibit E-1    Opinion of Thomas & Libowitz, P.A.
Exhibit E-2    Opinion of Fisher, Wayland, Cooper, Leader & Zaragoza L.L.P.

                                     -iv-
<PAGE>
 
                                   Schedules

Section 1.1(d)      Real Property
Section 1.2.        Excluded Assets
Section 3.3.        Absence of Conflicting Agreements or Required Consents
Section 3.3.1.      Consents Required
                    Consents Required - Employment Agreement
                    Consents Required - Barter Programming
Section 3.5.        Financial Statements
Section 3.6.        Title to Assets; Related Matters
Section 3.7.        Absence of Certain Changes, Events and Conditions
Section 3.8.        Litigation
Section 3.9.        Insurance
Section 3.9.1.      Insurance Policies
Section 3.10.       Material Contracts
Section 3.10.1.     Material Contracts - Broadcasting
Section 3.10.2.     Affiliation Agreement
Section 3.10.3.     Program Licenses
Section 3.10.4.     Employment Agreements
Section 3.10.6.     Collective Bargaining Agreement
Section 3.10.7.A.   Real Property Leases
Section 3.10.7.B.   Equipment Leases and Intellectual Property
Section 3.10.8.     Income Leases
Section 3.10.10.    Loan Agreement
Section 3.11        Permits
Section 3.12        FCC
Section 3.13        Environmental Matters
Section 3.14        Employee Benefits
Section 3.14.1      Non-Corporate Employees (other than division heads)
Section 3.14.2      Severance and Retention Agreements - Division Heads
Section 3.14.3      Employee Benefit Plans/Contracts
Section 3.15        Labor Relations
Section 3.16        Intellectual Property
Section 3.16.1      Call Letters
Section 3.17        Taxes
Section 3.19        Affiliate Transactions
Section 4.3         Absence of Conflicting Agreements or Required Consents
Section 4.4         Litigation
Section 5.1         Covenants and Agreements
Section 5.2         Post-Closing Covenants and Agreements
Section 5.2.1       List of Names of Current Corporate Office Employees
Section 5.2.2       Fiduciary Liability Coverage Summary

                                      -v-
<PAGE>
 
Section 6.4         Material Consents Required as a Condition of the Purchaser's
                    Obligation to Close
Section 7.4         Material Consents Required as a Condition of Seller's
                    Obligation to Close
Section 9           Closing Statement Differences and Inconsistencies with GAAP

                                     -vi-
<PAGE>
 
                              PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of this
25th day of September, 1998, by and among SINCLAIR COMMUNICATIONS, INC., a
Maryland corporation (the "Company"), THE ACKERLEY GROUP, INC., a Delaware
corporation ("Purchaser").

     WHEREAS, the Company and Guy Gannett Communications ("Gannett") entered
into that certain Asset Purchase Agreement dated September 4, 1998 (the "Gannett
Purchase Agreement"), pursuant to which the Company agreed to purchase
substantially all of the assets of the Gannett Television Stations, one of which
is WOKR-TV, Channel 13, Rochester, New York (the "Station"); and

          WHEREAS, the Company desires to sell, assign and transfer to Purchaser
the assets and business of the Station as described below, and Purchaser desires
to purchase and acquire the assets and business of the Business as described
below, on the terms and subject to the conditions set forth in this Agreement;

          NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties, intending legally to be bound, agree as follows:

          [A list of defined terms is provided in Article 9 hereof]


          Article 1.  Sale of Assets; Assumption of Liabilities.

          1.1  Assets to Be Acquired.  Upon the terms and subject to the
satisfaction of the conditions set forth herein, at the Closing, the Company
shall sell, convey, assign, transfer and deliver to Purchaser, and Purchaser
shall purchase, acquire, accept and pay for, all of the Company's right, title
and interest in and to all of the real, personal and mixed properties, assets
and other rights, both tangible and intangible (other than the Excluded Assets),
owned or leased by, or licensed to or used or useful by, the Company on the
Closing Date in connection with the Business (collectively, the "Assets")
consisting of all of the Assets relating to the Station acquired by the Company
pursuant to the Gannett Purchase Agreement.

          Without limiting the generality of the foregoing, the Assets shall
include the following:

          (a)  the FCC Licenses;

          (b)  the Equipment;

          (c)  all translators, earth stations and other auxiliary facilities,
     and all applications therefor, acquired by the Company from Gannett
     pursuant to the Gannett Purchase Agreement and useful in connection with
     the Business;

<PAGE>
 
          (d)  the Real Property and Leased Property as set forth in Section
     1.1(d) of the Disclosure Schedule;

          (e)  all orders and agreements for the sale of advertising time on the
     Station for cash, and all trade, barter and similar agreements, excluding
     Program Contracts (which are provided for below), for the sale of
     advertising time on the Station for any property or services in lieu of or
     in addition to cash, and any other orders and agreements relating to the
     Station and entered into (other than in violation of this Agreement)
     between the date of the Gannett Purchase Agreement and the Closing Date;

          (f)  all film and program licenses and contracts under which the
     Company or Gannett has the right to broadcast film product or programs on
     the Station ("Program Contracts"), including all cash and non-cash (barter)
     program contracts and including, without limitation, the Program Contracts
     set forth in Section 3.10 of the Disclosure Schedule and any other Program
     Contracts relating to the Station and entered into (other than in violation
     of this Agreement) between the date of the Gannett Purchase Agreement and
     the Closing Date;

          (g)  all other contracts and agreements related to the Business,
     including, without limitation, network affiliation agreements, all
     employment contracts entered into with television talent and other Business
     Employees, all collective bargaining agreements with respect to any
     Business Employees, any time brokerage agreements and all national or local
     advertising representation agreements for the Station, without limitation,
     the contracts and agreements set forth in Section 3.10 of the Disclosure
     Schedule, and any other such contracts and agreements relating to the
     Station and entered into (other than in violation of this Agreement)
     between the date of the Gannett Purchase Agreement and the Closing Date;

          (h)  the Intellectual Property, including, without limitation, the
     Call Letters;

          (i)  all programs and programming materials acquired by the Company
     from Gannett pursuant to the Gannett Purchase Agreement and used in
     connection with the Business, whether recorded on tape or any other media
     or intended for live performance, and whether completed or in production,
     and all related common law and statutory copyrights owned by or licensed to
     the Company or acquired by the Company from Gannett pursuant to the Gannett
     Purchase Agreement and used in connection with the Business;

          (j)  all FCC logs and other records that relate to the operation of
     the Station as acquired by the Company from Gannett pursuant to the Gannett
     Purchase Agreement;

          (k)  except as set forth in Section 1.2(a) hereof, all files, books
     and other records acquired by the Company pursuant to the Gannett Purchase
     Agreement relating to the Business, including, without limitation, written
     technical information, data, specifications, research and development
     information, engineering, drawings, manuals, computer programs, tapes and
     software relating directly to the Business, other than duplicate copies of
     account books of original entry and duplicate copies of such files and
     records, if any, that are maintained at the corporate offices of the
     Company or Gannett for tax and

                                       2
<PAGE>
 
     accounting purposes;

          (l)  all of the Company's goodwill in, and "going concern" value of,
     the Business;

          (m)  all accounts, notes and accounts receivable of the Business
     relating to or arising out of the business and operations of the Station
     immediately preceding the Closing;

          (n)  all deposits, reserves and prepaid expenses of the Business
     (other than those relating to Excluded Assets or Liabilities that are not
     Assumed Liabilities);

          (o)  to the extent transferable under applicable law, all franchises,
     approvals, permits, licenses, orders, registrations, certificates,
     exemptions, variances and similar rights obtained from Governmental
     Authorities (other than the FCC License) in any jurisdiction that had
     issued or granted such items to the Company or the Company has acquired
     from Gannett pursuant to the Gannett Purchase Agreement, or that the
     Company otherwise owns or uses or the Company has acquired from Gannett
     pursuant to the Gannett Purchase Agreement, in each case relating to the
     Business, and all pending applications therefor;

          (p)  except as set forth in Section 1.2(h) hereof, all insurance
     proceeds claims arising out of or related to damage, destruction or loss of
     any property or asset used or useful in connection with the Business to the
     extent of any damage or destruction that remains unrepaired, or to the
     extent any property or asset remains unreplaced, at the Closing Date; and

          (q)  to the extent assignable, the Company's rights to enforce any
     non-competition provisions relating to the Business, the Business Employees
     or the Station contained in any other written agreement with a Corporate
     Office Employee, but only to the extent the Company acquires such rights
     from Gannett pursuant to the Gannett Purchase Agreement.

          1.2  Excluded Assets.  Notwithstanding anything to the contrary
herein, all of the assets listed on Schedule 1.2 or defined in the Gannett
Purchase Agreement as Excluded Assets (collectively, the "Excluded Assets")
shall be excluded from the Assets.

          1.3  Assumption of Liabilities.  On and after the Closing Date,
Purchaser will assume and agree to perform and fully discharge when due all
Liabilities of the Company or Gannett (i) solely related to or solely arising
from or in connection with the Assets or the Business and (ii) in the case of
any Liabilities related to or arising partly from or in connection with the
Assets or the Business and partly from any other assets or business of the
Company, to the extent such Liabilities relate to or arise from or in connection
with the Assets or the Business (in each case including, without limitation, any
Claims and Damages arising from the assignment to Purchaser of any contract or
other agreement pursuant to the terms of this Agreement), whether such
Liabilities specified in clause (i) or (ii) are incurred or arise prior to, on,
or after the Closing Date, including, without limitation, those obligations of
the Company relating to the Business to be assumed by Purchaser pursuant to
Section 5.2 hereof (collectively, the "Assumed Liabilities"). Except as set
forth in this Section 1.3 and except as otherwise expressly provided

                                       3

<PAGE>
 
in this Agreement, Purchaser will assume no other Liabilities of any kind of
description of the Company or any of the liabilities defined in the Gannett
Purchase Agreement as Retained Liabilities.

          1.4  Closing and Closing Date.  Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been terminated
pursuant to Section 10.1 hereof, the closing (the "Closing") of the transactions
herein contemplated shall take place at 10:00 a.m., New York City time, on a
date not later than ten days following the satisfaction or waiver of the
conditions set forth in Articles 6 and 7 hereof, or at such other time and date
as the Company and Purchaser shall agree; provided, however, that the Company
and Purchaser shall take such reasonable actions as may be necessary to hold the
Closing simultaneously with the Closing of the Gannett Purchase Agreement (such
time and date being referred to herein as the "Closing Date"), at the offices of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York, or at such
other place as the Company and Purchaser shall agree. At the Closing, each of
the parties hereto shall take, or cause to be taken, all such actions and
deliver, or cause to be delivered, all such documents, instruments, certificates
and other items as may be required under this Agreement or otherwise, in order
to perform or fulfill all covenants and agreements on its part to be performed
at or prior to the Closing. The Closing shall be effective as of 12:01 a.m., New
York City time, on the day of the Closing Date.

          1.5  Additional Closing Deliveries.  At the Closing:

          (a)  The Company shall deliver to Purchaser:

               (i)  a duly executed counterpart of the Bill of Sale, Assignment
          and Assumption Agreement substantially in the form set forth in
          Exhibit A hereto (the "Bill of Sale, Assignment and Assumption
          Agreement");

               (ii)  instruments of assignment with respect to all of the
          Company's rights and interests in real property leases and special
          warranty deeds (of a type equivalent to that known in New York as a
          "bargain and sale deed with covenants against grantor's actions") in
          recordable form sufficient to convey to Purchaser all of the Company's
          rights and interests or rights and interest in the Real Property
          acquired by the Company from Gannett pursuant to the Gannett Purchase
          Agreement;

               (iii)  a duly executed counterpart of the Adjustment Escrow
          Agreement and the Security Escrow Agreement;

               (iv)  all other instruments of conveyance and transfer sufficient
          to convey the Assets to Purchaser; and

               (v)  all other documents, instruments and writings consistent
          with the terms of this Agreement and required to be delivered by the
          Company at or prior to the Closing Date pursuant to this Agreement.

          (b)  Purchaser shall deliver to Company:

                                       4
<PAGE>
 
               (i)  the Purchase Price in accordance with Section 2.1 hereof;

               (ii)  a duly executed counterpart of the Bill of Sale, Assignment
          and Assumption Agreement; and

               (iii)  all other documents, instruments and writings required to
          be delivered by Purchaser at or prior to the Closing Date pursuant to
          this Agreement.

          Article 2.  Purchase Price.

          2.1  Escrow Deposit.  For and in partial consideration of the
execution and delivery of this Agreement and simultaneously with the execution
hereof, Buyers shall deposit with an escrow agent ("Escrow Agent") by wire
transfer in immediately available funds TWELVE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($12,500,000.00) (the "Escrow Deposit"), such Escrow Deposit to be dealt
with in accordance with the terms and provisions of the Deposit Escrow Agreement
attached hereto as Exhibit B.

          2.2  Purchase Price; Payment.  (a)  In consideration of the sale of
the Assets and the Business hereunder, Purchaser shall (i) pay the Company in
cash the aggregate amount of (x) $125,000,000, plus (if greater than or equal to
zero) or minus (if less than zero), as the case may be, (y) the amount of the
Net Financial Assets as of 11:59 p.m., New York City time, on the day
immediately preceding the Closing Date, subject to adjustment pursuant to
Section 2.3 hereof (the "Purchase Price") and (ii) assume the Assumed
Liabilities.

          (b)  On or before three Business Days prior to the Closing, the
Company shall deliver to Purchaser (i) a statement setting forth the amount
estimated in good faith by the Company to be the amount of the Net Financial
Assets as of the Closing Date (the "Estimated Net Financial Assets") and (ii) a
notice designating the accounts or accounts to which the payment to or on behalf
of the Company pursuant to clause (i) of Section 2.2(c) is to be made.

          (c)  At the Closing, Purchaser shall deliver

               (i)  the sum of (x) $120,564,800 plus (if the Estimated Net
          Financial Assets is greater than or equal to zero) or minus (if the
          Estimated Net Financial Assets is less than zero), as the case may be,
          (y) the Estimated Net Financial Assets, by wire transfer in
          immediately available funds to the account or accounts designated by
          the Company in accordance with Section 2.2(b);

               (ii)  $1,209,600 (the "Adjustment Escrow") by wire transfer in
          immediately available funds to the Adjustment Escrow Agent pursuant to
          the Adjustment Escrow Agreement; and

               (iii)  $3,225,600 by wire transfer in immediately available funds
           to the Security Escrow Agent pursuant to the Security Escrow
           Agreement.

                                       5
<PAGE>
 
          2.3  Post-Closing Adjustment.

          (a)  The parties agree that no later than 75 days after the Closing
     (or such later date on which such statement reasonably can be prepared and
     delivered in light of the compliance of Purchaser and the Company with
     their obligations set forth in next two succeeding sentences), the Company
     shall deliver to Purchaser, in the form received by the Company from
     Gannett (i) a statement of the actual Net Financial Assets as of 11:59
     p.m., New York City time, of the day immediately preceding the Closing Date
     (the "Closing Statement") certified by PriceWaterhouseCoopers L.L.P.,
     independent accountants for Gannett, to be prepared (except as otherwise
     provided in Section 9 of the Disclosure Schedule to the Gannett Purchase
     Agreement) in conformity with GAAP and on a basis consistent with the basis
     used in preparing the Unaudited Financial Statements as of, and for the
     year ended, December 27, 1997 referred to in Section 3.5 of the Gannett
     Purchase Agreement and (ii) a determination (the "Proposed Adjustment") of
     the amount by which the actual Net Financial Assets is less than or greater
     than the Estimated Net Financial Assets (the amount of such excess or
     shortfall is referred to herein as the "Adjustment"). Purchaser shall
     provide the Company and Gannett, and Gannett's independent accountants,
     access at all reasonable times to the relevant personnel, properties, books
     and records of the Business for such purposes and to assist the Company and
     Gannett, and Gannett's independent accountants, in preparing the Closing
     Statement. Purchaser's assistance shall include, without limitation, the
     closing of the Business's books as of the Closing, the preparation of
     schedules supporting the amounts set forth in the general ledger and other
     books and records of the Business, and such other assistance as the
     Company, Gannett or Gannett's independent accountants may reasonably
     request. During the 25-day period following the delivery by the Company of
     the Closing Statement and the Proposed Adjustment referred to in the first
     sentence of this Section 2.3(a), Purchaser and its independent accountants
     will be permitted to review the working papers of Gannett and its
     independent accountants relating to the preparation of the Closing
     Statement and the Proposed Adjustment to the same extent as such working
     papers have been made available to the Company by Gannett pursuant to the
     Gannett Purchase Agreement. If, within 25 days after delivery by the
     Company of the Closing Statement and the Proposed Adjustment, Purchaser
     notifies the Company that it disagrees with the Closing Statement and the
     Proposed Adjustment, the Company shall attempt to resolve the disagreement
     with Gannett. In the event the Company, Gannett and Purchaser cannot agree
     with respect to the Closing Statement and the Proposed Adjustment within
     five days of the notice of disagreement provided by Purchaser to the
     Company (a "WOKR Dispute"), then the Company shall seek an Accounting Firm
     Determination as defined in the Gannett Purchase Agreement. In the event
     that (whether expressly or by failure of Purchaser to provide notice of any
     disagreement within the applicable period) the Purchaser agrees to the
     amount of the Adjustment without submitting the matter for an Accounting
     Firm Determination (an "Adjustment Agreement"), the parties shall deliver a
     joint certificate to the Adjustment Escrow Agent setting forth the amount
     of the Adjustment Escrow to be paid to each of the Purchaser and the
     Company pursuant to this Section 2.3. In the event of an Accounting Firm
     Determination of a WOKR Dispute, the parties shall deliver a certificate to
     the Adjustment Escrow Agent setting forth the amount (if any) by which the
     Actual Net Financial Assets (as defined below) exceeds or is less than the
     Estimated Net Financial Assets. The amount of Net Financial Assets as of
     11:59 p.m., New York City time, on the day immediately preceding the
     Closing Date, as definitively determined pursuant to this Section 2.3(a) is
     referred to herein as the "Actual Net Financial Assets."

          (b)  At the Closing, the Company, Purchaser and such financial
     institution as shall have been agreed by the parties prior to the Closing
     Date (together with any successor jointly appointed by the Company and the
     Purchaser, the "Adjustment Escrow Agent")

                                       6
<PAGE>
 
     shall execute and deliver an escrow agreement substantially in the form set
     forth in Exhibit C to the Gannett Purchase Agreement, with such adjustments
     and revisions necessary to reflect the provisions of this Agreement (the
     "Adjustment Escrow Agreement'). From and after the Closing, the Adjustment
     Escrow Agent shall act as escrow agent, pursuant to the Adjustment Escrow
     Agreement, in effecting the payment of the amounts held in the Adjustment
     Escrow as set forth herein.

          (c)  As soon as practicable after the earlier of an Adjustment
     Agreement or an Accounting Firm Determination (but in any event within two
     Business Days after the Adjustment Agreement or the Accounting Firm
     Determination):

          (i)  if the Actual Net Financial Assets is equal to or greater than
     the Estimated Net Financial Assets, then:

               (A)  the Adjustment Escrow Agent shall pay to the Company from
          the Adjustment Escrow the full amount of the Adjustment Escrow, and

               (B)  Purchaser shall pay to the Company the amount by which the
          Actual Net Financial Assets exceeds the Estimated Net Financial
          Assets;

          (ii)  if the Actual Net Financial Assets is less than the Estimated
     Net Financial Assets but the amount of such shortfall does not exceed $3
     million, when aggregated with any such shortfall under the Gannett Purchase
     Agreement, then

               (A)  the Adjustment Escrow Agent shall pay to Purchaser from the
          Adjustment Escrow an amount equal to the amount by which the Estimated
          Net Financial Assets exceeded the Actual Net Financial Assets, and

               (B)  the Adjustment Escrow Agent shall pay to the Company from
          the Adjustment Escrow the remaining amount of the Adjustment Escrow
          (after giving effect to clause (A) above); and

          (iii)  if the Actual Net Financial Assets is less than the Estimated
     Net Financial Assets and the amount of such shortfall exceeds $3 million,
     when aggregated with any such shortfall under the Gannett Purchase
     Agreement, then

               (A)  the Adjustment Escrow Agent shall pay to Purchaser from the
          Adjustment Escrow the full amount of the Adjustment Escrow, and

               (B)  the Security Escrow Agent shall pay to the Purchaser from
          the Security Escrow an amount equal to the amount by which (x) the
          Estimated Net Financial Assets exceeds (y) the Actual Net Financial
          Assets plus $1,209,600.

          Each of Purchaser and the Company shall timely give all necessary
     instructions to the Adjustment Escrow Agent and the Security Agent so that
     the Adjustment Escrow and (if applicable) the Security Escrow are paid and
     distributed in accordance with this

                                       7
<PAGE>
 
     Section 2.3(c). All payments pursuant to this Section 2.3(c) shall be by
     wire transfer in immediately available funds to the account or accounts
     designated by the Company and/or Purchaser, as the case may be, no later
     than two Business Days prior to such payment.

          (d)  Any interest or other investment income earned for the period
     from the time that any portion of the Purchaser Price is delivered to the
     Adjustment Escrow Agent pursuant to this Agreement until all amounts held
     in the Adjustment Escrow have been distributed in accordance with the
     Adjustment Escrow Agreement while held by the Adjustment Escrow Agent shall
     be paid to the Company in addition to, and at the same time as, payment of
     the Adjustment Escrow in accordance with the terms of this Agreement;
     provided, however, that, to the extent that any portion of the Adjustment
     Escrow is paid to Purchaser pursuant to Section 2.3(c) hereof, a pro rata
     portion of such interest or other investment income (determined on the
     basis of the relative portions of the Adjustment Escrow to be paid to
     Purchaser and the Company, respectively, pursuant to Section 2.3(c) hereof)
     shall be instead paid to Purchaser. Any such interest or other investment
     income shall be deemed not to constitute Adjustment Escrow.

          (e)  The Company and Purchaser shall each be responsible for one-half
     of the fees and expenses of the Adjustment Escrow Agent.

          2.4  Security Escrow.

          (a)  At the Closing, the Company, Purchaser and such financial
     institution as shall have been agreed by the parties prior to the Closing
     Date (together with any successor jointly appointed by the Company and
     Purchaser, the "Security Escrow Agent") shall execute and deliver an escrow
     agreement substantially in the form set forth in Exhibit D to the Gannett
     Purchase Agreement, with such adjustments and revisions necessary to
     reflect the provision of this Agreement (the "Security Escrow Agreement").
     From and after the Closing, the Security Escrow Agent shall act as escrow
     agent, pursuant to the Security Escrow Agreement, in effecting the payment
     of the amounts held in the escrow account (the "Security Escrow") under the
     Security Escrow Agreement.

          (b)  Any interest or other investment income earned for the period
     from the time that any portion of the Purchase Price is delivered to the
     Security Escrow Agent pursuant to this Agreement until all amounts held in
     the Security Escrow have been distributed in accordance with the Security
     Escrow Agreement while held by the Security Escrow Agent shall be paid
     (beginning after the payment of any amount required to be paid out of the
     Security Escrow pursuant to Section 2.3(c)(iii)(B) hereof) monthly to the
     Company; provided, however, that the extent that any portion of the
     Security Escrow is paid to Purchaser pursuant to Section 2.3(c)(iii)(B)
     hereof, a pro rata portion of such interest or other investment income
     earned through the date of such payment (determined on the basis of the
     relative portions of the Security Escrow so paid and that not so paid)
     shall be instead paid to Purchaser. Any interest or other investment income
     earned on amounts held in the Security Escrow shall be deemed not to
     constitute Security Escrow.

          (c)  The Company and Purchaser shall each be responsible for one-half
     of the fees and expenses of the Security Escrow Agent.


          2.5  Investment of Escrow Amounts.  The Adjustment Escrow Agent and
the

                                       8
<PAGE>
 
Security Escrow Agent shall each be authorized to invest the portion of the
Purchase Price held by it, on receipt of instructions from the Company, in:

               (i)  Commercial paper of any corporation rated at least A-1 by
          S&P and P-1 by Moody's;

               (ii)  Negotiable certificates of deposit of United States banks
          having (A) a long-term senior debt rating of at least A by S&P and
          Moody's, (B) deposits in excess of $2,000,000,000 and (C) commercial
          paper rating designations of at least A-1 by S&P and P-1 by Moody's;

               (iii)  Repurchase agreements with any United States bank which
          are fully collateralized by direct obligations of the United States or
          obligations of agencies or sponsored agencies of the United States
          government, excluding in all cases collateralized mortgage obligations
          of any kind; and

               (iv)  Money market instruments rated at least A-1 by S&P and P-1
          by Moody's that are restricted to investments described in clause
          (iii);

provided that in no event shall any investment of the types described in clause
(i), (ii) or (iv) exceed ten percent of the net assets of the issuer thereof and
provided further that all investments shall have maturity dates on or before the
anticipated dates of the relevant payments hereunder.

          The Adjustment Escrow Agent and the Security Escrow Agent shall each
be authorized to register securities held by it in its name or in the name of a
nominee or in bearer form and may deposit any securities or other property in a
depository or a clearing corporation.

          2.7  Allocation of the Purchase Price.  Pursuant to the Gannett
Purchase Agreement, the Company shall engage a nationally recognized appraiser
to determine the proper allocation of the Purchase Price allocated to, and the
Assumed Liabilities relating to the Assets of the Station, in each case in
accordance with Section 1060 of the Code and the Treasury Regulations
promulgated thereunder (the "Allocation"). The Allocation shall be binding upon
Purchaser and the Company, and none of the parties hereto shall file, or cause
to be filed, any Tax Return, Internal Revenue Service Form 8594 or other form,
or take a position with any Tax authority or jurisdiction, that is inconsistent
with the Allocation without obtaining the prior written consent of the Company
or Purchaser, as the case may be. The fees and disbursements of appraiser
engaged in connection with the Allocation as to the Assets of the Station shall
be paid by Purchaser.

                                       9
<PAGE>
 
          Article 3.  Representations and Warranties Relating to the Company
          
          The Company represents and warrants to Purchaser as follows:


          3.1  Organization and Standing.  The Company is a corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Maryland. The Company and, to the Company's Knowledge, Gannett has all
requisite corporate power and authority to own, lease and operate their
respective properties and assets and to conduct its business as it is now being
conducted. The Company is and, to the Company's Knowledge, Gannett is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state in which the operation of its business or ownership of
its assets makes such qualification necessary, except where the failure to so
qualify or be in good standing would not reasonably be expected to have a
Material Adverse Effect.

          3.2  Binding Agreement.  The Company has all requisite corporate power
and authority to enter into this Agreement, to execute and deliver this
Agreement, the Bill of Sale, Assignment and Assumption Agreement, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement,
the Bill of Sale, Assignment and Assumption Agreement by the Company and the
consummation by the Company of its obligations hereunder and thereunder have
been duly and validly authorized by all necessary corporate and stockholder
action on the part of the Company. This Agreement has been, and on the Closing
Date the Bill of Sale, Assignment and Assumption Agreement will be, duly
executed and delivered on behalf of the Company and, assuming the due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of the Company enforceable in accordance with its terms,
subject to applicable bankruptcy and similar laws affecting the rights of
creditors generally and to general principles of equity (whether applied at law
or equity).

          3.3  Absence of Conflicting Agreements or Required Consents.  Except
as set forth in Section 3.3 of the Disclosure Schedule, the execution, delivery
and performance by the Company of this Agreement, the Bill of Sale, Assignment
and Assumption Agreement do not and will not (a) violate, conflict with or
result in the breach or default of any provision of the articles of
incorporation or by-laws of the Company, (b) conflict with or violate in any
material respect any material Law or material Governmental Order applicable to
the Company or any of its properties or assets, (c) except for (i) the
notification requirements of the HSR Act and (ii) such filings with, and orders
of, the FCC as may be required under the Communications Act and the FCC's rules
and regulations in connection with this Agreement and the transactions
contemplated hereby, require any material consent, approval, authorization or
other order of, action by, registration or filing with or declaration or
notification to any Governmental Authority, or (d) conflict with, result in any
violation or breach of, constitute a default (or event which with the giving of
notice, or lapse of time or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any Encumbrance on any of the Assets, or result in the imposition or
acceleration of any payment, time of payment, vesting or increase in the amount
of compensation or benefit payable, pursuant to any Material Contract.

          3.4  Equity Investments.  The Assets do not include any capital stock
of any corporation or any equity interest in any Person.

                                       10
<PAGE>
 
          3.5  Financial Statements.  The Company has furnished to Purchaser
statements of operations for the Station for the year ended December 31, 1997,
the six (6) months ended June 30, 1998, the seven (7) months ended July 1, 1998,
and August 31, 1998, which were supplied to the Company by Gannett.

          3.6  Title to Assets; Related Matters.  To the Company's Knowledge,
except for Permitted Exceptions or as disclosed in Section 3.6 of the Disclosure
Schedule (i) Gannett has good, valid and marketable title (as measured in the
context of their current uses) to, or, in the case of leased or subleased
assets, valid and subsisting leasehold interests (as measured in the context of
their current uses) in, or otherwise has the right to use, all of the Assets,
free and clear of all Encumbrances (except for any assets sold or otherwise
disposed of, or with respect to which the lease, sublease or other right to use
such Asset has expired or has been terminated, in each case after the date
hereof solely to the extent permitted under Section 5.1(a) hereof), (ii) each
lease or sublease pursuant to which any Leased Property is leased by Gannett is,
to the Company's Knowledge, legal, valid and binding on Gannett and the Company
(as the case may be) and, to the Company's Knowledge, the other parties thereto
and grants the leasehold interest it purports to grant, including, without
limitation, any rights to nondisturbance and peaceful and quiet enjoyment that
may be contained therein and, to the Company's Knowledge, Gannett and each other
party thereto is in compliance in all material respects with the provisions of
such leases and subleases, (iii) to the Company's Knowledge, the Assets,
together with the Excluded Assets, constitute all the assets and rights of
Gannett and its Affiliates used in or necessary for the operation of the
Business as currently conducted, (iv) to the Company's Knowledge, except for
Equipment scheduled to be replaced by Gannett's capital expenditure budget, the
Real Property, Leased Property and Equipment is, in all material respects, in
good operating condition and repair (ordinary wear and tear excepted) taking
into account the age thereof, (v) to the Company's Knowledge, there are no
contractual or legal restrictions to which Gannett or the Company is a party or
by which the Real Property is otherwise bound that preclude or restrict in any
material respect Gannett's ability to use the Real Property for the purposes for
which it is currently being used and (vi) no portion of the Real Property or
Leased Property is the subject of, or affected by, any condemnation, eminent
domain or inverse condemnation proceeding currently instituted or, to the
Company's Knowledge, threatened. On the Closing Date, the Company shall sell,
convey, assign, transfer and deliver to Purchaser all of the Company's right,
title and interest in and to all of the Assets, free and clear of all
Encumbrances other than Permitted Exceptions, Encumbrances disclosed in Section
3.6 of the Disclosure Schedule and Encumbrances arising from Purchaser's acts.
Schedule 1.1(d) contains a true and correct list of all Real Property owned by
Gannett used in the Business (other than the Excluded Assets), which is to be
acquired by the Company pursuant to the Gannett Purchase Agreement.

          3.7  Absence of Certain Changes, Events and Conditions.  To the
Company's Knowledge, since June 30, 1998, except as otherwise provided in or
contemplated by this Agreement or as disclosed in Section 3.7 of the Disclosure
Schedule:

          (a)  other than in the ordinary course of business consistent with
     past practice neither the Company nor Gannett has sold, transferred,
     leased, subleased, licensed or otherwise disposed of any material assets
     used in the Business, other than the sale of obsolete Equipment;

          (b)  (i)  neither the Company nor Gannett have granted any increase,
     or announced

                                       11
<PAGE>
 
     any increase, in the wages, salaries, compensation, bonuses,
     incentives, pension or other benefits payable to any of the Business
     Employees, including, without limitation, any increase or change pursuant
     to any Employee Benefit Plan, or (ii) established, increased or accelerated
     the payment or vesting of any benefits under any Employee Benefit Plan with
     respect to Business Employees, in either case except (A) as required by
     Law, (B) that involve only increases consistent with the past practices of
     Gannett or (C) as required under any existing agreement or arrangement;

          (c)  neither the Company nor Gannett have made any material change in
     any method of accounting or accounting practice or policy used by Gannett
     or the Company with respect to the Station, other than changes required by
     law or under GAAP;

          (d)  neither the Company nor Gannett have suffered any extraordinary
     casualty loss or damage with respect to any material assets used in the
     Business, whether or not covered by insurance;

          (e)  there has not been any Material Adverse Effect;

          (f)  except in connection with the transactions contemplated hereby,
     the Business has been conducted in all material respects only in the
     ordinary and usual course consistent with past practice;

          (g)  neither the Company nor Gannett have created, incurred, assumed
     or guaranteed any Indebtedness, except for net borrowings under existing
     lines of credit;

          (h)  other than in the ordinary course of business, neither the
     Company nor Gannett have compromised, settled, granted any waiver or
     release relating to, or otherwise adjusted any Action, material Liabilities
     or any other material claims or material rights of the Business; and

          (i)  neither the Company nor Gannett have entered into any agreement,
     contract, commitment or arrangement to do any of the foregoing.

          3.8  Litigation.  Except as disclosed in Section 3.8 of the Disclosure
Schedule, as of the date hereof, (i) there are no Actions against the Company
or, to the Company's Knowledge, Gannett relating to the Business or the Assets
pending, or, to the Company's Knowledge, threatened to be brought by or before
any Governmental Authority, (ii) neither the Company nor, to the Company's
Knowledge, Gannett is subject to any Governmental Orders (nor, are there any
such Governmental Orders threatened to be imposed by any Governmental Authority)
relating to the Business or the Assets and (iii) there is no Action pending or,
to the Company's Knowledge, threatened to be brought before any Governmental
Authority, that seeks to question, delay or prevent the consummation of the
transactions contemplated hereby.

          3.9  Insurance.  Section 3.9 of the Disclosure Schedule lists all
insurance policies as of the date hereof relating to the Assets or the Business
(the "Insurance Policies"). Except as set forth in either Section 3.9 or Section
3.14 of the Disclosure Schedule, (i) to the Company's Knowledge, all insurance
policies relating to the Assets or Business to which the Company or Gannett is a
party or under which the Assets or the Business is covered (or replacement
policies

                                       12
<PAGE>
 
therefor) are in full force and effect and, to the Company's Knowledge, all
premiums due have been paid and are not in default, (ii) to the Company's
Knowledge, no notice of cancellation or non-renewal with respect to, or
disallowance of any claim under, any such policy has been received by either the
Company or Gannett and (iii) to the Company's Knowledge, neither the Company nor
Gannett have been refused insurance with respect to the Business or Assets, nor,
to the Company's Knowledge, has coverage with respect to the Business or Assets
been previously canceled or limited by an insurer to which Gannett or the
Company has applied for such insurance or with which the Company or, to the
Company's Knowledge, Gannett has held insurance within the last three years.

          3.10  Material Contracts. Section 3.10 of the Disclosure Schedule sets
forth all Material Contracts relating to the Station, including, without
limitation, all amendments thereof, as of the date hereof. To the extent
received by the Company from Gannett, complete and accurate copies of all
written Material Contracts listed in Section 3.10 of the Disclosure Schedule and
accurate summaries of the material terms of all oral Material Contracts have
been delivered or made available to Purchaser (except as otherwise noted
therein). Except as set forth in Section 3.10 of the Disclosure Schedule, to the
Company's Knowledge, (1) each Material Contract and each other contract or
agreement that is material to the Business is legal, valid and binding on
Gannett and, to the Company's Knowledge, the other parties thereto, (2) to the
Company's Knowledge, neither the Company nor Gannett is in default under any
Material Contract or other contract or agreement that is material to the
Business and no event has occurred or failed to occur that, with or without the
giving of notice or the lapse of time or both, would result in such a default
and (3) to the Company's Knowledge, no other party to any Material Contract or
other contract or agreement that is material to the Business has breached or is
in default thereunder.

          3.11  Permits and Licenses; Compliance with Law.  Except as disclosed
in Section 3.11 of the Disclosure Schedule, (i) to the Company's Knowledge,
Gannett currently holds all the material permits, licenses, authorizations,
certificates, exemptions and approvals of Governmental Authorities or other
Persons including, without limitation, Environmental Permits, necessary for the
current operation and the conduct (as it is being conducted prior to the
Closing) of the Business, other than the FCC Licenses (which are provided for in
Section 3.12 hereof) (collectively, "Permits"), and all material Permits are in
full force and effect, (ii) to the Company's Knowledge, since November 1, 1996,
Gannett has not received any written notice from any Governmental Authority
revoking, canceling, rescinding, modifying or refusing to renew any material
Permit and, (iii) to the Company's Knowledge, Gannett is in material compliance
with the requirements of all material Permits.

          Except as disclosed in Section 3.11 of the Disclosure Schedule, to the
Company's Knowledge, (i) Gannett is in compliance in all material respects with
all Laws and Governmental Orders, other than the FCC Licenses, the
Communications Act and the rules and regulations of the FCC (which are provided
for in Section 3.12 hereof), applicable to the conduct of the Business as it is
being conducted prior to the Closing, and (ii) Gannett has not been charged,
since November 1, 1996, by any Governmental Authority with a violation of any
Law or any Governmental Order relating to the Station, which charge has not been
fully resolved and, to the extent required, accounted for.

          3.12  FCC Licenses.  Except as disclosed in Section 3.12 of the
Disclosure Schedule, (i) to the Company's Knowledge, Gannett holds, and
immediately prior to the Closing

                                       13
<PAGE>
 
the Company will hold, the FCC Licenses listed in Section 3.12 of the Disclosure
Schedule, which FCC Licenses expire on the respective dates set forth in Section
3.12 of the Disclosure Schedule; (ii) to the Company's Knowledge, Section 3.12
of the Disclosure Schedule sets forth a true and complete list of any and all
pending applications filed with the FCC by Gannett, true and complete copies of
which (to the extent received from Gannett by the Company) have been delivered
to Purchaser or made available for inspection by Purchaser; (iii) to the
Company's Knowledge, the FCC Licenses listed in Section 3.12 of the Disclosure
Schedule constitute all of the licenses and authorizations required under the
Communications Act and the current rules and regulations of the FCC in
connection with the operation of the Station as currently operated; (iv) to the
Company's Knowledge, the FCC Licenses are in full force and effect through the
dates set forth in Section 3.12 of the Disclosure Schedule, and there is not
pending or, to the Company's Knowledge, threatened any action by or before the
FCC to revoke, suspend, cancel, rescind, modify, or refuse to renew in the
ordinary course any of the FCC Licenses; (v) to the Company's Knowledge, the
Station is operating in compliance with the FCC Licenses and in compliance in
all material respects with the Communications Act and the current rules and
regulations of the FCC and have been assigned digital television frequencies;
and (vi) to the Company's Knowledge, there exist no facts, conditions or events
relating to Gannett or the Company that would reasonably be expected to cause
the revocation of FCC Licenses or denial by the FCC of the application for
consent to the assignment of the FCC Licenses as provided in this Agreement or
the Gannett Purchase Agreement. To the Company's Knowledge, Gannett has filed
all reports, forms and statements, including, without limitation, construction
permit applications for digital television channels required to be filed by
Gannett with the FCC and maintained in its public files in accordance with the
rules and regulations of the FCC.

          3.13  Environmental Matters.  Except as disclosed in Section 3.13 of
the Disclosure Schedule, to the Company's Knowledge, (i) Hazardous Materials
have not been Released on any Real Property except in material compliance with
applicable Law; (ii) there have been no events related to the Business or the
Real Property that would reasonably be expected to give rise to any material
liability under any Environmental Law; (iii) the Business, the Real Property and
the Leased Property is now, and for the past five years has been, in material
compliance with all applicable Environmental Laws and there are no extant
conditions that would reasonably be expected to constitute an impediment to such
compliance in the future; (iv) the Business has disposed of all wastes arising
from or otherwise relating to its business, including those wastes containing
Hazardous Materials, in material compliance with all applicable Environmental
Laws (including the filing of any required reports with respect thereto) and
Environmental Permits and (v) there are no pending or, to the Company's
Knowledge, threatened Environmental Claims against Gannett relating to the Real
Property.

          3.14  Employee Benefit Matters.  The Company has made available to
Purchaser copies of all material Employee Benefit Plans (including, without
limitation, all plans governed by ERISA, providing pension benefits or providing
health, life insurance or disability benefits) relating to the Station), which
plans are set forth in Section 3.14 of the Disclosure Schedule. To the Company's
Knowledge and except as set forth in Section 3.14 of the Disclosure Schedule,
all such Employee Benefit Plans are in compliance with the terms of the
applicable plan and the requirements prescribed by applicable law currently in
effect with respect thereto (including Sections 4980B and 5000 of the Code) and,
to the Company's Knowledge, Gannett has performed in all material respects all
obligations required to be performed by it under, and is not in default under or
in violation of, any of the terms of such Employee Benefit Plans where any

                                       14
<PAGE>
 
such noncompliance, nonperformance, default or violation would, individually or
in the aggregate, be reasonably expected to result in liability in excess of
$25,000. To the Company's Knowledge, Gannett has no post-retirement welfare
obligations with respect to the Business. To the Company's Knowledge, Gannett
has not incurred, and, to the Company's Knowledge, no event, transaction or
condition has occurred or exists which is reasonably expected to result in the
occurrence of any liability to the Pension Benefit Guaranty Corporation (other
than contributions to the plan and premiums to the Pension Benefit Guaranty
Corporation which, in either event, are not in default) or any "withdrawal
liability" within the meaning of Section 4201 of ERISA, or any other liability
pursuant to Title I or IV of ERISA or the penalty, excise tax or joint and
several liability provisions of the Code relating to employee benefit plans, in
any such case relating to any Employee Benefit Plan or any pension plan
maintained by any company that during the last five years was or currently would
be treated as a single employer with the Company or Gannett, as the case may be,
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA affiliate"),
where individually or in the aggregate, in any of such events, any such
liability would be in excess of $25,000. To the Company's Knowledge, except as
set forth in Section 3.14 of the Disclosure Schedule and except for such matters
that would not, individually or in the aggregate, reasonably be expected to
result in liability in excess of $25,000, each Employee Benefit Plan relating to
the Station intended to be "qualified" within the meaning of Section 401(a) of
the Code has received a favorable determination letter that such plan is so
qualified and the trusts maintained thereunder are exempt from taxation under
Section 501(a) of the Code and, to the Company's Knowledge, is so qualified, and
no such Employee Benefit Plan holds employer securities. To the Company's
Knowledge and except as set forth in Section 3.14 of the Disclosure Schedule,
neither Gannett nor any ERISA Affiliate has ever made or been obligated to make,
or reimbursed or been obligated to reimburse another employer for, contributions
to any multiemployer plan (as defined in ERISA Section 3(37)). To the Company's
Knowledge and except as set forth in Section 3.14 of the Disclosure Schedule,
the Employee Benefit Plans are not presently under audit or examination (and
have not received notice of a potential audit or examination) by any
governmental authority, and no matters are pending with respect to the Qualified
Plan under any governmental compliance programs. To the Company's Knowledge,
with respect to each Employee Benefit Plan of the Station, there have been no
violations of Code Section 4975 or ERISA Sections 404 or 406 as to which
successful claims would, individually or in the aggregate, result in liability
in excess of $25,000 for Gannett, the Company or any Person required to be
indemnified by either of them. To the Company's Knowledge, except as set forth
in Section 3.14 of the Disclosure Schedule, and except as expressly provided in
this Agreement, the consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or officer of the
Business to severance pay, unemployment compensation or other payment, or (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer. To the Company's Knowledge, there
are no pending or threatened or anticipated claims by or on behalf of any
Employee Benefit Plan relating to the Station, by any employee or beneficiary
covered under any such plan, or otherwise involving any such plan (other than
routine claims for benefits) where any such pending, threatened or anticipated
claims would, individually or in the aggregate, reasonably be expected to result
in liability in excess of $25,000. The $25,000 liability threshold in this
Section 3.14 is intended to apply only to this Section 3.14, and is in no way
intended to be used in defining materiality anywhere in this Agreement.

          3.15  Labor Relations.  To the Company's Knowledge, Section 3.15 of
the Disclosure Schedule sets forth a list of all labor organizations recognized
as representing the

                                       15
<PAGE>
 
employees of the Business. Complete and accurate copies of all collective
bargaining agreements and other labor union contracts relating to employees of
the Station and any such labor organizations (to the extent provided to the
Company by Gannett) have been delivered or made available to Purchaser. Except
as disclosed in Section 3.15 of the Disclosure Schedule, (i) the Company is not
and, to the Company's Knowledge, Gannett is not party to any collective
bargaining agreement or other labor union contract applicable to employees of
the Business, (ii) to the Company's Knowledge, there are no strikes, slowdowns
or work stoppages pending or, to the Company's Knowledge, threatened between
Gannett and any employees of the Business, and Gannett has not experienced any
such strike, slowdown, or work stoppage within the past two years, in each case,
as of the date of the Gannett Purchase Agreement, (iii) to the Company's
Knowledge, there are no unfair labor practice complaints pending or, to the
Company's Knowledge, threatened against the Business relating to employees of
the Business before the National Labor Relations Board or any other Governmental
Authority or, to the Company's Knowledge, any current union representation
questions involving employees of the Business and (iv) to the Company's
Knowledge, Gannett is in compliance in all material respects with its
obligations under all Laws and Governmental Orders governing its employment
practices with respect to employees of the Business, including, without
limitation, provisions relating to wages, hours and equal opportunity,
employment discrimination, workers' compensation, family and medical leave, the
Immigration Reform and Control Act, and occupational safety and health
requirements, (v) to the Company's Knowledge, all Persons classified by Gannett
as independent contractors with respect to the Business do satisfy the
requirements of law to be so classified, and, to the Company's Knowledge,
Gannett has fully and accurately reported their compensation on IRS Forms 1099
when required to do so, and (vi) to the Company's Knowledge, there is no charge
or compliance proceeding actually pending or, to the Company's Knowledge,
threatened against the Company or Gannett with respect to employees of the
Business before the Equal Employment Opportunity Commission or any state, local,
or foreign agency responsible for the prevention of unlawful employment
practices.

          3.16  Intellectual Property.  To the Company's Knowledge, Section 3.16
of the Disclosure Schedule includes a complete list of all call letters of the
Station (the "Call Letters"). Except as disclosed in Section 3.16 of the
Disclosure Schedule, to the Company's Knowledge, (i) the rights of Gannett, and
immediately prior to the Closing, the Company, in or to the Call Letters and, to
the Company's Knowledge, the other Intellectual Property do not conflict with or
infringe on the rights of any other Person, (ii) the Company has not and, to the
Company's Knowledge, Gannett has not received any claim from any Person that the
rights of Gannett or the Company in or to the Intellectual Property conflict
with or infringe on the rights of any other Person and, to the Company's
Knowledge, no such claim is threatened, (iii) to the Company's Knowledge,
Gannett owns (free and clear of any Encumbrances other than Permitted
Exceptions), is licensed or otherwise has the right to use all Intellectual
Property necessary for the conduct of the Business as currently conducted by
Gannett (free and clear of any Encumbrances other than Permitted Exceptions),
except where the failure to have such rights would not reasonably be expected to
impair the operations of the Business in any material respect and (iv) to the
Company's Knowledge, no other Person is infringing or diluting the rights of
Gannett with respect to the Intellectual Property.

          3.17  Taxes.  Except as disclosed in Section 3.17 of the Disclosure
Schedule and except relating exclusively to the Gannett Maine Media Business, to
the Company's Knowledge (a) all material Tax Returns required to be filed by
Gannett (or to the extent required to be filed

                                       16
<PAGE>
 
by the Company) relating to the Business have been timely filed and all such Tax
Returns are correct and complete in all material respects; (b) all Taxes
required to be paid by Gannett (or to the extent required to be paid by the
Company) relating to the Business, whether or not shown as due on such Tax
Returns, have been timely paid other than such Taxes, if any, as are described
in Section 3.17 of the Disclosure Schedule and are being contested in good
faith; (c) there is no action, suit, proceeding, investigation, audit or claim
pending or, to the Company's Knowledge, threatened with respect to Taxes of
Gannett or the Company relating to the Station or for which Gannett or the
Company may be liable, and no adjustment relating to such Taxes of Gannett or
the Company relating to the Station has been proposed in writing by any Tax
authority and remains unresolved; (d) there are, and immediately prior to the
Closing there will be, no Tax liens on any of the assets of the Business (other
than liens for Taxes that are not yet due and payable); and (e) all Taxes that
the Business is required to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper Tax
authority.

          3.18  Commissions.  There is no broker or finder or other Person who
has any valid claim against the Company, Purchaser, or any of their respective
Affiliates or any of their respective assets for a commission, finders' fee,
brokerage fee or other similar fee in connection with this Agreement, or the
transactions contemplated hereby, by virtue of any actions taken by on or behalf
of the Company, its stockholders or the Company's officers, employees or agents.

          3.19  Affiliate Transactions.  Except as set forth in Section 3.19 of
the Disclosure Schedule or as expressly otherwise provided or permitted in this
Agreement, to the Company's Knowledge, since December 27, 1997, Gannett has not
engaged in any transaction with any Affiliate thereof that was material to the
Business, and, to the Company's Knowledge, Gannett is not a party to any
material agreements or arrangements relating to the Station with any Affiliates
that will continue in effect after the Closing for the Purchaser that are not
immediately terminable by the Purchaser without payment of any penalty or
premium.

          3.20  Accuracy and Completeness of Representations and Warranties.  No
representation or warranty made by the Company in this Article 3, to the
Company's Knowledge, contains any untrue statement of a material fact or omits a
material fact necessary in order to make the representation or warranty not
misleading.

          Article 4.  Representations and Warranties of Purchaser.

          Purchaser represents and warrants to the Company as follows:

          4.1  Organization and Standing.  Purchaser is a corporation duly
incorporated, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to conduct its
business.

          4.2  Binding Agreement.  Purchaser has all requisite corporate power
and authority to enter into this Agreement, to execute and deliver this
Agreement and the Bill of Sale, Assignment and Assumption Agreement, to carry
out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Bill of Sale, Assignment and Assumption Agreement by

                                       17
<PAGE>
 
Purchaser and the consummation by Purchaser of its obligations hereunder and
thereunder have been duly and validly authorized by all necessary corporate and
stockholder action on the part of Purchaser. This Agreement has been and, on the
Closing Date, the Bill of Sale, Assignment and Assumption Agreement will be duly
executed and delivered on behalf of Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of Purchaser enforceable in accordance with its terms,
subject to applicable bankruptcy and similar laws affecting the rights of
creditors generally and to general principles of equity (whether applied at law
or equity).

          4.3  Absence of Conflicting Agreements or Required Consents.  Except
as set forth in Section 4.3 of the Disclosure Schedule, the execution, delivery
and performance by Purchaser of this Agreement and the Bill of Sale, Assignment
and Assumption Agreement do not and will not (a) violate, conflict with or
result in the breach or default of any provision of the certificate or articles
of incorporation or by-laws of Purchaser, (b) materially conflict with or
materially violate any material Law or material Governmental Order applicable to
Purchaser or any of its properties or assets, (c) except for (i) the
notification requirements of the HSR Act, (ii) such filings with, and orders of,
the FCC as may be required under the Communications Act and the FCC's rules and
regulations in connection with this Agreement and the transactions contemplated
hereby and (iii) such matters that would not reasonably be expected to
materially impair or delay the consummation of the transactions contemplated
hereby, require any consent, approval, authorization or other order of, action
by, registration or filing with or declaration or notification to any
Governmental Authority or any other Person or (d) except for such matters that
would not reasonably be expected to materially impair or delay the consummation
of the transaction contemplated hereby, conflict with, result in any violation
or breach of, constitute a default (or event which with the giving of notice, or
lapse of time or both, would become a default) under, require any consent under,
or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance on any of the Purchaser's assets pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license or permit,
or franchise to which Purchaser is a party or by which its assets are bound.

          4.4  Litigation.  Except as described in Section 4.4 of the Disclosure
Schedule, there are no Actions pending or, to Purchaser's knowledge, any Action
threatened to be brought by or before any Governmental Authority, against
Purchaser or any of its Affiliates that (i) seeks to question, delay or prevent
the consummation of the transactions contemplated hereby or (ii) would
reasonably be expected to affect adversely the ability of Purchaser to fulfill
its obligations hereunder, including without limitation, Purchaser's obligations
under Articles 1 and 2 hereof.

          4.5  Commissions.  There is no broker or finder or other Person who
has any valid claim against the Company, Purchaser, any of their respective
Affiliates or any of their respective assets for a commission, finders' fee,
brokerage fee or other similar fee in connection with this Agreement, or the
transactions contemplated hereby, by virtue of any actions taken by on or behalf
of Purchaser, or its officers, employees or agents.

          4.6  Financing.  Purchaser will at Closing have sufficient funds to
pay the Purchase Price pursuant to this Agreement and otherwise to satisfy its
obligations hereunder.

                                       18
<PAGE>
 
          4.7  Purchaser's Qualification.  Except as set forth in Section 4.7 of
the Disclosure Schedule, (i) Purchaser does not know of any fact or circumstance
that could reasonably be expected to result in a finding by the FCC that
Purchaser is not qualified legally, financially or otherwise to be the licensee
of the Stations as its operations are now being conducted and (ii) except for
the FCC's Duopoly Rule, a waiver of which will be requested by Purchaser,
Purchaser does not know of any policy, rule, regulation or ruling of the FCC
that could reasonably be expected to be violated by the acquisition of the
Stations by Purchaser.

          4.8  Accuracy and Completeness of Representations and Warranties.  No
representation or warranty made by Purchaser in this Article 4 contains any
untrue statement of a material fact or omits a material fact necessary in order
to make the representation or warranty not misleading.

          Article 5.  Covenants and Agreements.

          5.1  Conduct of the Business Prior to Closing; Access.  The Company
covenants as follows:

          (a)  Prior to Closing, the Company will not with respect to the
     Business:

               (i)  create, assume or subject any of the assets of the Business
          to any Encumbrance, other than Permitted Exceptions and Encumbrances
          that will be released at or prior to the Closing;

               (ii)  make any material changes in the operations of the
          Business;


               (iii)  other than, in each case, in the ordinary course of
          business consistent with past practice, sell, transfer, lease,
          sublease, license or otherwise dispose of any material assets of the
          Business, other than the sale of obsolete Equipment that has been or
          is replaced with Equipment of like kind;

               (iv)  (A) grant any increase, or announce any increase, in the
          wages, salaries, compensation, bonuses, incentives, pension or other
          benefits payable by the Company to any of the officers or key
          employees of the Business, including, without limitation, any increase
          or change pursuant to any Employee Benefit Plan, or (B) establish or
          increase or promise to increase or accelerate the payment or vesting
          of any benefits under any Employee Benefit Plan with respect to
          officers or employees of the Business, in the case of either (A) or
          (B) except (I) as required by Law, (II) that involve only increases
          consistent with the past practices of the Company or Gannett (or as
          otherwise required or allowed under the Gannett Purchase Agreement, as
          the case may be, but in no event more than 5%, (III) as required under
          any existing agreement or arrangement, (IV) that involve increases
          related to promotions to the extent such increases result in the
          compensation and benefits of the relevant employee being consistent
          with the compensation and benefits provided to the holder of such
          position in the past or

                                       19
<PAGE>
 
          (V) that relate to the supplemental executive retirement plans
          identified in Section 3.14 of the Disclosure Schedule;

               (v)  make any change in any method of accounting or accounting
          practice or policy used by the Company or Gannett in respect of the
          Business, other than as required by law or under GAAP;

               (vi)  fail to maintain in full force and effect all of its
          existing casualty, liability or other insurance relating to the
          Station through the Closing in amounts at least equal to those in
          effect on the date hereof;

               (vii)  make any capital expenditures relating to the Station in
          excess of $500,000 in the aggregate that are not contemplated in the
          capital improvements budgeted for 1998;

               (viii)  (A) amend the payment terms of any Program Contract to
          provide that payments that would otherwise be made prior to the
          Closing are made after the Closing or (B) acquire, enter into, modify,
          change or extend the term of (x) any Program Contract providing for
          payments in excess of $10,000 or with a term greater than one year or
          (y) Program Contracts not subject to clause (x) that in the aggregate
          provide for payments in excess of $200,000;

               (ix)  acquire, enter into, modify, change or extend the term of
          any Material Contract, provided that this clause (ix) will not apply
          to the acquisition or entering into of any new Material Contract not
          otherwise subject to clauses (i) to (viii) or clauses (x) to (xvi)
          hereof with respect to which all Liabilities of the Company thereunder
          relating to the Station will be fully satisfied, discharged and
          performed prior to the Closing with no adverse effect on Purchaser;

               (x)  compromise, settle, grant any waiver or release relating to,
          or otherwise adjust, any material Action, material Liabilities or any
          other material claims or material rights relating to the Station;

               (xi)  enter into any new agreement, contract, commitment or
          arrangement with any Affiliate of the Company that will be binding
          upon Purchaser, the Assets or the Station after the Closing;

               (xii)  apply to the FCC for any construction permit that would
          adversely affect the Station's present operations, or make any
          material change in the Station's buildings, leasehold improvements, or
          fixtures;

               (xiii)  except with respect to promotion during ratings sweep
          periods (which shall not be subject to this clause (xiii)), enter into
          any trade, barter or similar agreements (other than Program Contracts)
          for the sale of advertising time that would be binding on the Station
          after the Closing for any property or services in lieu of or in
          addition to cash that requires the provision of broadcast time having
          a value that exceeds $10,000 in any individual agreement or

                                       20
<PAGE>
 
          $200,000 in the aggregate;

               (xiv)  take any action, or refrain from taking any action, that
          would constitute a material breach of, constitute a default (or event
          which with the giving of notice, or lapse of time or both, would
          become a default) under, or give to others any rights of termination,
          amendment, acceleration, suspension, revocation or cancellation of,
          any Material Contract;

               (xv)  enter into or renew any time sales agreement except in the
          ordinary course of business for a term not exceeding 12 months; or

               (xvi)  enter into any agreement, contract, commitment or
          arrangement to do any of the foregoing.

          (b)  Pending the Closing, the Company shall:

               (1)  To the extent allowed by Gannett under the Gannett Purchase
          Agreement, give to Purchaser and its representatives reasonable access
          during normal business hours to all of the employees, properties,
          books and records of Gannett or the Company that relate to the Station
          and, to the extent available from, or allowed by, Gannett pursuant to
          the Gannett Purchase Agreement, furnish Purchaser and its
          representatives with such information concerning the Station as
          Purchaser may reasonably require, including such access and
          cooperation as may be necessary to allow Purchaser and its
          representatives to interview the employees, to examine the books and
          records of the Station, and to inspect the Real Property and Equipment
          (which right of access shall not be exercised in any way which would
          unreasonably interfere with the normal operations, business or
          activities of the Station);

               (2)  To the extent provided by Gannett pursuant to the Gannett
          Purchase Agreement, furnish to Purchaser within 20 days after the end
          of each month ending between the date of this Agreement and the
          Closing an unaudited statement of income and expense and a balance
          sheet for the Station for the month just ended; and

               (3)  To the extent provided by Gannett pursuant to the Gannett
          Purchase Agreement, from time to time, furnish to Purchaser such
          additional information (financial or otherwise) concerning the Station
          as Purchaser may reasonably request (which right to request
          information shall not be exercised in any way which would unreasonably
          interfere with the normal operations, business or activities of the
          Station).

          (c)  The Company will deliver to Purchaser, within ten Business Days
     after delivery or receipt, copies of any reports, applications or
     communications to or from the FCC or its staff related to the Station which
     are delivered or received between the date of the Gannett Purchase
     Agreement and the Closing Date.

                                       21
<PAGE>
 
          5.2  Post-Closing Covenants and Agreement, and Other Employee Benefit
     Matters.  (a)  Purchaser shall at all reasonable times after reasonable
     notice to Purchaser from and after the Closing, make available without
     cost, for inspection and/or copying by the Company and any Person that was
     a stockholder of Gannett during any of the tax years (or portions thereof)
     immediately preceding the closing under the Gannett Purchase Agreement for
     which the relevant statute of limitations (including any waiver thereof)
     has not expired, or their respective representatives, the books and records
     of the Business). Such books and records shall be preserved by Purchaser
     until the later of the closing by tax audit of, or the expiration of the
     relevant statute of limitations (including any waiver thereof) with respect
     to, all open tax periods of Gannett and such stockholders prior to and
     including the time immediately prior to the Closing. After the period set
     forth above, Purchaser may destroy the books and records in its possession
     unless, before expiration of such notice period the Company objects in
     writing to the destruction of any or all of such books and records, in
     which case, such books and records shall be delivered to the Company.
     Notwithstanding the foregoing, Purchaser shall continue to preserve and, at
     all reasonable times after the Closing, to make available without cost, for
     inspection and/or copying by any Person that was a trustee or other
     fiduciary under the Employee Benefit Plans identified in Section 5.2 of the
     Disclosure Schedule, the books and records of such Employee Benefit Plan
     and the books and records of the Business relating thereto.

          (b)  Effective as of the Closing, Purchaser shall offer employment to
     all then employees of the Business, on such terms and conditions as
     Purchaser shall establish (except that base cash compensation shall be
     comparable to their existing base cash compensation), subject to the terms
     of any collective bargaining agreement assumed by Purchaser under Section
     5.2(e) and any employment agreements with specific Business Employees, and
     shall assume responsibility for all inactive employees of the Business,
     subject to the terms of this Section 5.2 and the collective bargaining
     agreements assumed by Purchaser under Section 5.2(e); provided, however,
     that any employee of the Business who is not actively employed on the day
     of the Closing shall be offered employment by Purchaser following the end
     of any inactive period (whether on account of leave, layoff, injury or
     disability) but only to the extent that the Company would have been
     obligated to offer active employment to such person upon the end of such
     inactive period under the Gannett Purchase Agreement. Notwithstanding the
     foregoing, Purchaser shall not have any obligation to offer employment to
     any employees of the Corporate Office ("Corporate Office Employees"), as
     described in Section 5.2(b) of the Disclosure Schedule. Nothing in this
     Section 5.2(b) is intended to limit the ability of Purchaser to terminate
     the employment of any employee after the Closing.

          (c)  Subject to applicable law and the terms of any collective
     bargaining agreement assumed pursuant to this Agreement, if any, Purchaser
     shall establish and maintain for a period of one year after the Closing
     Date or the term of their employment by Purchaser, whichever is less, for
     employees of the Business as of the Closing Date, benefits that, in the
     aggregate, are no less favorable than the benefits maintained by the
     Purchaser for similarly situated employees of Purchaser, provided that the
     foregoing will not prohibit or in any manner restrict Purchaser from
     terminating or changing the individual terms of employment of any Business
     Employee or require Purchaser to maintain any specific benefits or Employee
     Benefit Plans. Purchaser shall give employees of the Business as of the
     Closing Date and former and inactive Business Employees credit for their
     service with the Company and Gannett or any of their Subsidiaries prior to
     the Closing, to the same extent that such service would have been credited
     by Purchaser (if they had been employed by Purchaser for such period of
     service), for all

                                       22
<PAGE>
 
purposes under all employee benefit plans or arrangements maintained by
Purchaser for current, former and inactive Business Employees (including any
waiting periods). In addition, Purchaser shall, if applicable, (i) cause any 
pre-existing condition limitation to be waived and (ii) give effect, in
determining any deductible and maximum out-of-pocket limitations, to claims
incurred and amounts paid by, and amounts reimbursed to current, former and
inactive Business Employees with respect to similar plans maintained by the
Company or Gannett prior to the Closing.

          (d)  Purchaser will assume and indemnify and hold harmless the Company
Indemnified Parties against all Liabilities with respect to severance benefits
arising in connection with or following the Closing pursuant to the agreements
set forth in Sections 3.14.1 and 3.14.2 of the Disclosure Schedule (subject to
the right of recovery set forth in Section 5.8(a)), or pursuant to any
collective bargaining agreement or other agreements with Business Employees
assumed either pursuant to this Agreement or by operation of law.  With respect
to all current and inactive Business Employees immediately prior to the Closing
not covered by the agreements referenced in the immediately preceding sentence,
(x) for a period ending not less than one year after the Closing, Purchaser will
provide such Business Employees with the same severance benefits as Purchaser
provides for similarly situated employees of Purchaser (which benefits, as of
the date hereof, are described in Section 5.2(d) of the Disclosure Schedule) and
(y) Purchaser will assume and indemnify and hold harmless the Company
Indemnified Parties against all Liabilities with respect to severance benefits
arising in connection with or following the Closing.

          (e)  From and after the Closing, Purchaser shall assume all of the
collective bargaining agreements (including, without limitation, pursuant to the
specified provisions of the collective bargaining agreements set forth in
Section 5.2 of the Disclosure Schedule) and other labor contracts with respect
to any Business Employees existing immediately prior to the Closing.

          (f)  From and after the Closing, Purchaser shall assume sponsorship of
the WOKR-TV Partners 401(k) Plan, and assume responsibilities of all Employee
Benefits Plans that provide post-retirement life insurance or health, or short-
term or long-term disability benefits and be responsible for any benefits under
such Employee Benefit Plans (i) to which any current, former or inactive
Business Employee, or a beneficiary or dependent of any current, former or
inactive Business Employee ("Beneficiary"), has already become entitled, (ii)
which commenced or (iii) to which any current, former or inactive Business
Employee has already become qualified by reason of age and years of service as
of the Closing, to the extent such persons are identified in Section 5.2(f) of
the Disclosure Schedule (which section shall be updated, if necessary, at
Closing).  From and after the Closing, Purchaser shall also pay to the Business
Employees and Corporate Office Employees listed in Section 5.2(f) of the
Disclosure Schedule the supplemental retirement benefits provided under the
applicable Gannett supplemental retirement plan.

          (g)  From and after the Closing, Purchaser shall assume and be
responsible for any workers' compensation benefits payable to a Business
Employee, Beneficiary or dependent of a Business Employee on or after the
Closing, including any such benefits that are attributable to any injury or
illness that occurred or existed prior to the Closing to the extent not covered
by the Company's workers' compensation insurance policy.

                                       23
<PAGE>
 
          (h)  For a period of 90 days after the Closing, Purchaser shall not
     implement any employment terminations, layoffs or hours reductions or take
     any other action which could result in a "plant closing" or "mass layoff,"
     as those terms are defined in the Worker Adjustment and Retraining
     Notification Act of 1988 ("WARN") or similar events under applicable state
     law, affecting in whole or in part any facility, site of employment or
     operating unit, or any employee employed by the Business, or which could
     require either Purchaser or the Company to give notice or take any other
     action required by WARN or applicable state law.

          (i)  From and after the Closing, Purchaser shall assume the Company's
     and Gannett's obligations and liabilities with respect to COBRA
     continuation coverage under Section 4980B of the Code and Section 601 of
     ERISA ("Continuation Coverage") with respect to Business Employees and
     shall provide Continuation Coverage to the Business Employees under
     Purchaser's health and medical plans (x) with respect to any Business
     Employees who remain employed with either the Company or Gannett through
     the Closing Date, for a period of eighteen months after the Closing or, if
     earlier, until becoming eligible for comparable coverage from another
     employer and (y) with respect to any Business Employees whose employment
     shall have terminated prior to the Closing, for remainder of the period
     with respect to which Continuation Coverage would otherwise have been
     available to them had the Company or Gannett, as the case may be, continued
     to maintain a group health plan.

          5.3  Cooperation.  Following the execution of this Agreement,
Purchaser and the Company agree as follows:


          (a)  The parties and their Affiliates shall each use their reasonable
     efforts, and shall cooperate fully with each other in preparing, filing,
     prosecuting, and taking any other actions with respect to, any filings
     (other than filings with the FCC, which are provided for in clause (b)
     below), applications, requests, or actions which are or may be necessary to
     obtain the consents, approvals, authorizations or other orders of any
     Governmental Authority which are or may be necessary in order to accomplish
     the transactions contemplated by this Agreement; and, without limiting the
     generality of the foregoing, the parties and their Affiliates shall use
     their respective reasonable efforts to prepare and file as promptly as
     practicable, but in any event no later than 15 Business Days after the date
     hereof, all of the information called for in the Notification and Report
     Form required under the HSR Act and to prepare and file any supplemental
     information, also in a timely fashion, which may be required by the United
     States Department of Justice or the Federal Trade Commission pursuant to
     such Notification and Report Form Filings, and otherwise to use their
     respective reasonable efforts to obtain the requisite clearances.

          (b)  The parties and their Affiliates shall cooperate fully with each
     other in preparing, filing, prosecuting, and taking any other actions with
     respect to filings with the FCC related to the transactions contemplated by
     this Agreement, including, without limitation, preparation of an
     application for the assignment of all of the FCC Licenses to Purchaser and
     any filings by Purchaser requesting temporary waivers for no more than nine
     months of the FCC's applicable ownership rules necessary to permit the
     parties to consummate the transactions contemplated by this Agreement.  As
     promptly as practicable, but in any event not later than September 25,
     1998, the Company and Purchaser shall jointly file the application with the
     FCC requesting the FCC Consent,

                                       24
<PAGE>
 
     including, without limitation, requesting, consenting to, and taking and
     otherwise seeking any action in connection with a conditional waiver of the
     FCC's Duopoly Rule. The Company and Purchaser shall use their respective
     reasonable best efforts, diligently take all necessary and proper actions
     and provide any additional information requested by the FCC in order to
     obtain promptly the FCC Consent. Notwithstanding the foregoing or any other
     provision of this Agreement, neither Purchaser nor its officers, directors
     or Affiliates shall request a permanent waiver of the FCC's applicable
     ownership rules or request, consent to, take or otherwise seek or pursue
     any action that is inconsistent with the transactions contemplated by this
     Agreement or that reasonably could be expected to materially impede or
     materially delay the FCC Consent or otherwise materially impede or
     materially delay the consummation of the transactions contemplated by this
     Agreement; and the receipt of any permanent waiver of the foregoing FCC
     rules shall not be a condition to the obligation of Purchaser to consummate
     the transactions contemplated hereby. Neither Purchaser nor any of its
     officers, directors or Affiliates will take any action that would result in
     any change in the matters set forth in Section 4.7 hereof that would
     reasonably be expected to materially delay or otherwise materially impair
     Purchaser's ability to consummate the transactions contemplated hereby.
     After the date hereof, Purchaser or its Affiliates may enter into
     transactions that implicate the FCC multiple ownership rules so long as
     such transactions would not reasonably be expected to materially impede or
     materially delay the Closing

          (c)  (i) If Purchaser (or its Affiliates) or the Company receives an
     administrative or other order or notification relating to any violation or
     claimed violation of the rules and regulations of the FCC, or of any
     Governmental Authority, that could affect Purchaser's or the Company's
     ability to consummate the transactions contemplated hereby, or (ii) should
     Purchaser (or its Affiliates) become aware of any fact (including any
     change in law or regulations (or any interpretation thereof by the FCC))
     relating to the qualifications of Purchaser (and its controlling persons)
     that reasonably could be expected to cause the FCC to withhold the FCC
     Consent, Purchaser (in the case of clauses (i) and (ii)) or the Company (in
     the case of clause (i)) shall promptly notify the other party or parties
     thereof and shall use its reasonable best efforts to take such steps as may
     be necessary to remove any such impediment to the transactions contemplated
     by this Agreement; and no such notification shall affect the
     representations or warranties of the parties or the conditions to their
     respective obligations hereunder.

          (d)  The parties shall each use their reasonable best efforts to
     obtain as promptly as reasonably practical all consents that may be
     required in connection with the assignment to the Purchaser at Closing of
     all the Company's right, title and interest in and to all Material
     Contracts as such are acquired by the Company pursuant to the Gannett
     Purchase Agreement and all other agreements of the Business to which the
     Company is a party, provided that neither the Company nor Purchaser shall
     be required to make any payment to any party to any such Material Contract
     or other agreement in order to obtain any such consent.

          (e)  To the extent that there are third-party insurance policies
     maintained by the Company covering any Claims or Damages relating to the
     assets, business, operations, conduct and employees (including, without
     limitation, former employees) of the Business arising out of or relating to
     occurrences prior to the Closing, the Company shall use all

                                       25
<PAGE>
 
     reasonable efforts to cause Purchaser to be named as an additional insured
     with respect to such policies.

          (f)  Subject to the terms and conditions of this Agreement, each of
     the parties agrees to use its reasonable efforts to take, or cause to be
     taken, all actions and to do, or cause to be done, all things necessary,
     proper or advisable to consummate and make effective the Closing and the
     other transactions contemplated hereby as soon as practicable.

          5.4  Confidentiality.

          (a)  Prior to the Closing.  The terms of the Confidentiality Agreement
     by and between Purchaser and Gannett are herewith incorporated by reference
     and shall continue in full force and effect as between Purchaser and
     Gannett until the Closing and shall remain in effect as between Purchaser
     and Gannett in accordance with its terms even if this Agreement is
     terminated.

          (b)  Financial and Tax Information.  Before and after the Closing,
     each of the parties shall maintain the confidentiality of the financial and
     tax information of the Persons other than the Company in the possession of
     the Company under terms similar to those set forth in the Confidentiality
     Agreement by and between Purchaser and Gannett with respect to "Evaluation
     Material" as though such terms continued after the Closing.

          5.5  Public Announcements.  Except as otherwise required by law or the
rules of any stock exchange, the form and substance of the initial public
announcement of this Agreement and the transactions contemplated hereby, and the
time of such announcement, shall be approved in advance by the parties and the
parties shall not issue any other report, statement or press release or
otherwise make any public announcement with respect to this Agreement and the
transactions contemplated hereby without prior consultation in good faith with
the other party hereto.

          5.6  No Solicitation.  The Company shall not, and shall cause its
officers, directors, representatives, affiliates and associates not to, (a)
initiate contact with, solicit, encourage or respond to any inquiries or
proposals by, or (b) enter into any discussions or negotiations with, or
disclose, directly or indirectly, any information concerning the Business to, or
afford any access to the Company's properties, books and records to, any Person
in connection with any possible proposal for the acquisition (directly or
indirectly, whether by purchase, merger, consolidation or otherwise) of all or
substantially all of the Business. The Company agrees to terminate immediately
any such discussions or negotiations.

          5.7  No Additional Representations.  Purchaser acknowledges that it
and its representatives have been permitted access to books and records,
facilities, equipment, tax returns, contracts and agreements, insurance policies
(or summaries thereof), and other properties and assets of the Station and that
they and their representatives have had an opportunity to meet with the officers
and employees of the Company and Gannett to discuss the Station and the
Business, properties and assets. PURCHASER ACKNOWLEDGES THAT NEITHER THE COMPANY
NOR ANY OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR
IMPLIED, AS TO THE ACCURACY OR COMPLETENESS

                                       26
<PAGE>
 
OF ANY INFORMATION REGARDING THE STATION OR THE BUSINESS FURNISHED OR MADE
AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT.

          5.8. Certain Payments.  (a)  Pursuant to the terms of the Gannett
Purchase Agreement, the Company has certain rights and obligations with respect
to the Severance Agreements listed in Sections 3.14.1 and 3.14.2 of the
Disclosure Schedule of the Gannett Purchase Agreement, which Severance
Agreements include those listed in Sections 3.14.1 and 3.14.2 of the Disclosure
Schedule hereto (the "WOKR Scheduled Severance Agreements"). Promptly, but in no
event later than five Business Days prior to any payment due under the WOKR
Scheduled Severance Agreements to any employee of the Station terminated by
Purchaser prior to 90 days after the Closing Date under the Gannett Purchase
Agreement, Purchaser shall notify the Company of the amount to be paid to such
employee, and the Company shall make the payment to such terminated employee as
provided by the WOKR Scheduled Severance Agreements (a "WOKR Severance
Payment"); provided that the maximum amount that the Company shall be required
to pay pursuant to this Section 5.8(a) shall be $342,720, in the aggregate, for
all Business Employees as defined hereunder. Within five (5) Business Days after
the Company makes a WOKR Severance Payment, Purchaser shall reimburse the
Company for 50% of the amount of such payment. In addition to any reimbursement
by Purchaser under this Section 5.8(a), to the extent provided by Section 5.8(a)
of the Gannett Purchase Agreement, the Company will be entitled to reimbursement
as provided by the Gannett Purchase Agreement, and nothing in this Agreement or
the Gannett Purchase Agreement shall be construed to give Purchaser any right of
recovery to Purchaser pursuant to Section 5.8(a) of the Gannett Purchase
Agreement.

          (a)  Pursuant to Section 5.8(b) of the Gannett Purchase Agreement,
     Gannett will cease operations and vacate the Gannett Corporate Offices, and
     the Company has agreed that it will pay, indemnify, and hold harmless the
     Company Indemnified Parties from and against 50% of all Claims and Damages
     (including, without limitation, all rent or other payments made under the
     Corporate Office Lease arising out of or relating to the Corporate Office
     Lease) to the extent such Claims and Damages arise out of or relate to (x)
     the termination of the Corporate Office Lease or (y) the post-closing
     period after the date in which the Corporate Office Employees cease using
     the Corporate Office, provided that the maximum amount that Purchaser shall
     be liable for under this Section 5.8(b) is $80,640. Such payments by the
     Company thereunder shall be made as the related Claims and Damages are
     incurred. To the extent the Company is required to make such payment,
     Purchaser shall reimburse and pay over to the Company 40.32% of all such
     payments made by the Company. Purchaser acknowledges and agrees that the
     Company may terminate the Corporate Office Lease on such terms as the
     Company shall determine and otherwise take such action as the Company
     determines in connection with its vacating the Corporate Office.

          5.9  Bulk Sales Laws.  The parties agree to waive compliance with the
provisions of the bulk sales law of any jurisdiction. The Company will indemnify
and hold harmless Purchaser from and against any and all Liabilities which may
be asserted by third parties against Purchaser as a result of such
noncompliance.

          5.10  Control of the Stations.  Prior to the Closing, control of the
Station (including, without limitation, control over their finances, personnel
and programming) shall

                                       27
<PAGE>
 
remain with the Company or Gannett, as the case may be. The Company and
Purchaser acknowledge and agree that neither Purchaser nor any of its employees,
agents or representatives, directly or indirectly, shall, or shall have any
right to, control, direct or otherwise supervise the Station, it being
understood that supervision of all programs, equipment, operations and other
activities of the Station shall be the sole responsibility of, and at all times
prior to the Closing remain under the complete control and direction of, the
Company or, if prior to the Closing under the Gannett Purchase Agreement,
Gannett.

          5.11  Use of Certain Names.  After the Closing, neither Purchaser nor
any of its Affiliates shall use "Sinclair," "Sinclair Broadcast," "Sinclair
Television," "Sinclair Communications," "Guy Gannett," "Gannett," or any name or
term confusingly similar to the "Sinclair" names in any corporate name or in
connection with the operation of any business.

          Article 6.  Conditions to Obligations of Purchaser.

          The obligations of Purchaser to consummate the transactions
contemplated by this Agreement to occur at the Closing are, at their option,
subject to satisfaction of each of the following conditions:

          6.1  Representations and Warranties.  The representations and
warranties of the Company contained herein shall be true and correct at and as
of the Closing Date as though each such representation and warranty were made at
and as of such time, other than such representations and warranties as are made
as of a specific date, in each case except for changes that are expressly
contemplated by this Agreement and except for such failures to be true and
correct that would not reasonably be expected to have a Material Adverse Effect.

          6.2  Performance by the Company.  All of the covenants and agreements
to be complied with and performed by the Company on or before the Closing Date
shall have been complied with or performed, except for such failures to comply
with or perform that would not reasonably be expected to have a Material Adverse
Effect.

          6.3  Certificate.  The Company shall have delivered to Purchaser a
certificate, dated as of the Closing Date, executed on behalf of the Company by
its duly authorized officers or representatives to the effect of Sections 6.1
and 6.2.

          6.4  Consents; No Objections.  (i)  The applicable waiting periods
under the HSR Act shall have expired or been terminated; and

               (ii)  The parties shall have received all the authorizations,
          consents, orders and approvals from Governmental Authorities and
          consents from third parties, in each case listed or described in
          Section 6.4 of the Disclosure Schedule.

               (iii)  The parties shall have received all authorizations,
          consents, orders and approvals from Governmental Authorities necessary
          to transfer the material Permits relating to the operation of the
          Station's tower, transmitter and television broadcasting studio as
          such facilities are operating on the date hereof, except in each case
          where the failure to receive such authorizations, consents, orders or
          approvals would not reasonably be expected to materially

                                       28
<PAGE>
 
adversely affect the operations of such facilities, or where such
authorizations, consents, orders or approvals are customarily obtained after the
Closing of a transaction of this nature.

          6.5  No Proceedings or Litigation.  No preliminary or permanent
injunction or other order or decree issued by any United States federal or state
Governmental Authority, nor any Law promulgated or enacted by any United States
federal or state Governmental Authority, that restrains, enjoins or otherwise
prohibits the transactions contemplated hereby or limits the ability in any
material respect of the rights of the Company to hold the Assets (excluding the
FCC Licenses) and conduct the Business as it is being conducted as of the
Closing Date, or imposes civil or criminal penalties on any stockholder,
director or officer of Purchaser if such transactions are consummated, shall be
in effect.

          6.6  [Intentionally omitted]

          6.7  FCC Consent.  The FCC Consent shall have been issued with respect
to the Station without any conditions that are materially adverse to Purchaser
notwithstanding that it may not have yet become a Final Order, provided that, if
one or more pre-grant objections shall have been filed with respect to the
applications required by Section 5.3(b) hereof, it shall be a condition
precedent that the FCC Consent shall have become a Final Order.

          6.8  No Material Adverse Change.  Since the date of this Agreement
through the Closing Date, there shall not have occurred any Material Adverse
Effect.

          6.9  Opinions of Counsel.  Purchaser shall have received (a) an
opinion of Thomas & Libowitz, P.A., dated the Closing Date, substantially in the
form of Exhibit E-1 hereto, and (b) an opinion of Fisher, Wayland, Cooper,
Leader & Zaragoza L.L.P., dated the Closing Date, substantially in the form of
Exhibit E-2 hereto.

          6.10  Good Standing Certificate.  Purchaser shall have received a
certificate as to the formation and good standing of the Company issued by the
Secretary of State of Maryland, dated not more than five days before the Closing
Date.

          6.11  No Transmission Defects.  There shall not exist any loss or
damage at the Station which has resulted in the regular broadcast transmission
of the Station (including its effective radiated power) to be diminished in any
material respect; provided, that if any such loss or damage does exist, then
either or both of the Company and Purchaser shall be entitled, by written notice
to the other, to postpone the Closing Date for a period of up to 60 days to
resume the Station's broadcast transmission.

          6.12  Closing on the Gannett Purchase Agreement.  The closing, as
defined in the Gannett Purchase Agreement, shall have occurred or occur
simultaneously with the Closing hereunder.

                                       29
<PAGE>
 
          Article 7.  Conditions to Obligations of the Company.

          The obligations of the Company to consummate the transactions
contemplated by this Agreement to occur at the Closing are, at its option,
subject to satisfaction of each of the following conditions:

          7.1  Representations and Warranties.  The representations and
warranties of Purchaser contained herein shall be true and correct in all
material respects at and as of the Closing Date as though each such
representation and warranty were made at and as of such time, other than such
representations and warranties as are made as of a specific date, in each case
except for changes that are expressly contemplated by this Agreement.

          7.2  Performance by Purchaser.  All of the covenants and agreements to
be complied with and performed by Purchaser on or prior to the Closing Date
shall have been complied with or performed, in all material respects, except for
such failures to comply with or perform that would not, individually or in the
aggregate, reasonably be expected to be materially adverse to the Company.

          7.3  Certificate.  Purchaser shall have delivered to the Company a
certificate, dated as of the Closing Date, executed on behalf of Purchaser by
its duly authorized officers or representatives to the effect of Sections 7.1
and 7.2.

          7.4  Consents; No Objections.  (i)  The applicable waiting periods
under the HSR Act shall have expired or been terminated; and

               (ii)  The parties shall have received all the authorizations,
          consents, orders and approvals from Governmental Authorities and
          consents from third parties, in each case listed or described on
          Section 7.4 to the Disclosure Schedule.

          7.5  No Proceedings or Litigation.  No preliminary or permanent
injunction or other order or decree issued by any United States federal or state
Governmental Authority, nor any Law promulgated or enacted by any United States
federal or state Governmental Authority, that restrains, enjoins or otherwise
prohibits the transactions contemplated hereby, or imposes civil or criminal
penalties on any stockholder, director or officer of the Company if such
transactions are consummated, shall be in effect.

          7.6  FCC Consent.  The FCC Consent shall have been issued with respect
to the Stations, notwithstanding that it may not have yet become a Final Order,
provided that, if one or more pre-grant objections shall have been filed with
respect to the applications required by Section 5.3(b) hereof, it shall be a
condition precedent that the FCC Consent shall have become a Final Order.

          7.7  Opinion of Counsel.  The Company shall have received an opinion
of Rubin, Winston, Diercks, Harris & Cooke, L.L.P., dated the Closing Date,
covering the same matters covered by the opinions delivered by the Company to
Gannett under the Gannett Purchase Agreement and in form and substance
reasonably satisfactory to the Company.

          7.8  Good Standing Certificate.  The Company shall have received a
certificate as to the formation and good standing of Purchaser issued by the
Secretary of State of Delaware,

                                       30
<PAGE>
 
dated not more than five days before the Closing Date.

          7.9. Closing on Gannett Purchase Agreement.  The closing, as defined
in the Gannett Purchase Agreement, shall have occurred or occur simultaneously
with the Closing hereunder.

          Article 8.  Indemnification.

          8.1  Indemnification by the Company.  Subject in all respects to the
provisions of this Article 8, the Company hereby agrees to indemnify and hold
harmless on and after the Closing Date, Purchaser and its stockholders and
Affiliates and their respective officers, directors, employees and agents, and
their respective and successors and permitted assigns (the "Purchaser
Indemnified Parties") from and against any Claims and Damages asserted against
or incurred by them, directly or indirectly, in connection with, arising out of
or relating to (i) any breach on the part of the Company of any representation
or warranty made by the Company in Article 3 hereof or in any certificate
delivered pursuant to Section 6.3 of this Agreement, and (ii) any breach on the
part of the Company of any covenant or agreement made by the Company in this
Agreement.

          8.2  Indemnification by Purchaser.  Subject in all respects to the
provisions of this Article 8, Purchaser hereby agrees to indemnify and hold
harmless on and after the Closing Date the Company and its stockholders and
Affiliates and their respective officers, directors, employees and agents, and
their respective successors and permitted assigns (collectively the "Company
Indemnified Parties"), from and against any Claims and Damages asserted against
or incurred by them, directly or indirectly, in connection with, arising out of
or relating to (i) any breach on the part of Purchaser of any representation or
warranty made by Purchaser in Article 4 hereof or in any certificate delivered
pursuant to Section 7.3 of this Agreement, (ii) any breach on the part of
Purchaser of any covenant or agreement made by the Purchaser in this Agreement
or (iii) any Assumed Liabilities.

          8.3  Limitations on Indemnification Claims and Liability; Termination
of Indemnification.  (a)  The obligations to indemnify and hold harmless a
Person pursuant to Sections 8.1(i) or 8.1(ii) shall terminate when the
applicable representation, warranty, covenant or agreement terminates pursuant
to Section 10.12, and the obligations to indemnify and hold harmless a Person
pursuant to Section 8.2(iii) shall not terminate; provided, however, that as to
clause (i) above the obligation to indemnify and hold harmless shall not
terminate with respect to any claim as to which the Person to be indemnified
shall have, before the termination of the applicable representation, warranty,
covenant or agreement, previously made a claim for indemnification by delivering
a notice to the indemnifying party in accordance with Section 8.5.

          (b)  The Company shall not be obligated to indemnify or hold harmless
     any Purchaser Indemnified Party under Sections 8.1(i) or 8.1(ii), unless
     and until all Claims and Damages when aggregated with the Claims and
     Damages under the Gannet Purchase Agreement, exceed in the aggregate
     $550,000, in which case the Company will (subject to the other provisions
     of this Article 8) only be obligated to indemnify and hold harmless the
     Purchaser Indemnified Parties for all of such Claims or Damages under
     Sections 8.1(i) or 8.1(ii) in the aggregate in excess of $275,000 (or such
     pro rata portion of $275,000 as is applicable when the

                                       31
<PAGE>
 
     Claims and Damages of the Company under the Gannett Purchase Agreement are
     taken into account), provided that the provisions of this Section 8.3(b)
     will not apply to any breach of any Post-Closing Agreements.

          (c)  Notwithstanding anything to the contrary in this Agreement and
     except for fraud, the sole and exclusive recourse, remedy and source of
     funds available to satisfy any claims for indemnification by the Purchaser
     Indemnified Parties pursuant to Sections 8.1(i) or 8.1(ii) shall be the
     amount of the Security Escrow then held on deposit with the Security Escrow
     Agent subject to the terms and conditions of the Security Escrow Agreement,
     and the Purchaser Indemnified Parties will have no recourse against the
     assets of the Company (other than the Security Escrow then held on deposit
     with the Security Escrow Agent) in respect of any such claim. Without
     limiting the foregoing, the maximum aggregate liability of the Company with
     respect to all claims for indemnification under Sections 8.1(i) or 8.1(ii)
     will be limited to the amount of the Security Escrow held on deposit from
     time to time with the Security Escrow Agent.

          (d)  Notwithstanding anything to the contrary in this Agreement, the
     indemnifications in Sections 8.1 and 8.2 hereof will be the sole and
     exclusive remedies available to Purchaser and the Company and their
     respective stockholders and Affiliates and all of their respective
     officers, directors, employees, agents, successors and assigns, after the
     Closing for any claims arising out of or relating to any breaches of any
     representations or warranties or any covenants or agreements contained in
     this Agreement, or any certificate delivered pursuant to this Agreement or
     otherwise in connection with this Agreement. Any claim for indemnification
     must be made as provided in Sections 8.5 and 8.6 hereof.

          8.4  Computation of Claims and Damages.  Whenever the Indemnitor is
required to indemnify and hold harmless the Indemnitee from and against and hold
the Indemnitee harmless from, or to reimburse the Indemnitee for, any item of
Claim or Damage, the Indemnitor will, subject to the provisions of this Article
8, pay the Indemnitee the amount of the Claim or Damage (i) reduced by any
amounts to which the Indemnitee is entitled from third parties in connection
with such Claim or Damage ("Reimbursements"), (ii) reduced by the Net Proceeds
of any insurance policy payable to the Indemnitee with respect to such Claim or
Damage and (iii) reduced appropriately to take into account any Tax Benefit to
the Indemnitee with respect to such Claim or Damage through and including the
tax year in which the indemnification payment is made, net of all income Taxes
resulting or that will result from the indemnification payment. For purposes of
this Section 8.4, (x) "Net Proceeds" shall mean the insurance proceeds payable,
less any deductibles, co-payments, premium increases, retroactive premiums or
other payment obligations (including attorneys' fees and other costs of
collection) that relates to or arises from the making of the claim for
indemnification and (y) "Tax Benefit" shall mean any benefit to be recognized by
the Indemnitee in connection with the Claim or Damage based upon the highest
blended (federal, state, local and foreign) marginal income Tax rate applicable
to the Indemnitee during the taxable year for which a return was most recently
filed with the Internal Revenue Service (based on the date of the claim for
indemnification). The Indemnitor shall use commercially reasonable efforts (the
expenses of which shall be considered Claims and Damages for purposes of the
relevant indemnity claim) to pursue Reimbursements or Net Proceeds that may
reduce or eliminate Claims and Damages. If any Indemnitee receives any
Reimbursement, Tax Benefit or Net Proceeds after an indemnification payment is
made which relates thereto or if any Indemnitee receives a Tax Benefit arising
after the tax year in which an indemnification

                                       32
<PAGE>
 
payment is made which relates thereto, the Indemnitee shall promptly repay to
the Indemnitor (or to the Security Escrow if such repayment is made by a
Purchaser Indemnified Party prior to the termination of the Security Escrow)
such amount of the indemnification payment as would not have been paid had the
Reimbursement, Tax Benefit or Net Proceeds reduced the original payment (any
such repayment shall be a credit against any applicable indemnification
threshold or limitation set forth in Section 8.3(b) hereof) at such time or
times as and to the extent that such Reimbursement, Tax Benefit or Net Proceeds
is actually received.

          8.5  Notice of Claims.  Upon obtaining knowledge of any Claim or
Damage which has given rise to, or could reasonably give rise to, a claim for
indemnification hereunder, the Person seeking indemnification (the "Indemnitee")
shall, as promptly as reasonably practicable (but in no event later than 30
days) following the date the Indemnitee has obtained such knowledge, give
written notice (a "Notice of Claim") of such claim to the other party (the
"Indemnitor"). The Indemnitee shall furnish to the Indemnitor in good faith and
in reasonable detail such information as the Indemnitee may have with respect to
such indemnification claim (including copies of any summons, complaint or other
pleading which may have been served on it and any written claim, demand,
invoice, billing or other document evidencing or asserting the same). No failure
or delay by the Indemnitee in the performance of the foregoing shall reduce or
otherwise affect the obligation of the Indemnitor to indemnify and hold the
Indemnitee harmless, except to the extent that such failure or delay shall have
adversely affected the Indemnitor's ability to defend against, settle or satisfy
any liability, damage, loss, claim or demand for which such Indemnitee is
entitled to indemnification hereunder. For purposes of this Section 8.5, a
Notice of Claim given in good faith must include a good faith estimate of the
amount of the claim to the extent it is reasonably practicable to determine such
estimate (and, if it is not practicable to determine such estimate and the claim
is made by a Purchaser Indemnified Party, the amount of the Security Escrow
proposed in good faith to be reserved with respect to such claim).

          8.6  Defense of Third Party Claims.  If any claim set forth in the
Notice of Claim given by an Indemnitee pursuant to Section 8.5 hereof is a claim
asserted by a third party, the Indemnitor shall have 30 days after the date that
the Notice of Claim is given by the Indemnitee to notify the Indemnitee in
writing of the Indemnitor's election to defend such third party claim on behalf
of the Indemnitee. If the Indemnitor elects to defend such third party claim,
the Indemnitee shall make available to the Indemnitor and its agents and
representatives all witnesses, pertinent records, materials and information in
the Indemnitee's possession or under the Indemnitee's control as is reasonably
required by the Indemnitor and shall otherwise cooperate with and assist the
Indemnitor in the defense of such third party claim, and so long as the
Indemnitor is defending such third party claim in good faith, the Indemnitee
shall not pay, settle or compromise such third party claim. If the Indemnitor
elects to defend such third party claim, the Indemnitee shall have the right to
participate in the defense of such third party claim, at the Indemnitee's own
expense. In the event, however, that the Indemnitee reasonably determines that
representation by counsel to the Indemnitor of both the Indemnitor and the
Indemnitee may present such counsel with a conflict of interest, then such
Indemnitee may employ separate counsel to represent or defend it in any such
action or proceeding and the Indemnitor will, subject to the provisions of this
Article 8, pay the reasonable fees and disbursements of such counsel. If the
Indemnitor does not elect to defend such third party claim or does not defend
such third party claim in good faith, the Indemnitee shall have the right, in
addition to any other right or remedy it may have hereunder, at the Indemnitor's
expense, to

                                       33
<PAGE>
 
defend such third party claim; provided, however, that such Indemnitee's defense
of or its participation in the defense of any such third party claim shall not
in any way diminish or lessen the indemnification obligations of the Indemnitor
under this Article 8. If the Indemnitor shall assume the defense of a third
party claim, it shall not settle such claim without the prior written consent of
the Indemnitee (i) unless such settlement includes as an unconditional term
thereof the giving by the claimant of a release of the Indemnitee from all
Liability with respect to such claim or (ii) if such settlement involves the
imposition of equitable remedies or the imposition of any obligations on such
Indemnitee other than financial obligations for which such Indemnitee will be
indemnified hereunder. If the Indemnitee is defending a third party claim it
will not settle such claim without prior written consent of the Indemnitor,
which will not be unreasonably withheld or delayed.

          8.7  Third Party Beneficiaries.

          (a)  Each of the Purchaser Indemnified Parties and the Company
Indemnified Parties shall be third party beneficiaries, and entitled to enforce
the provisions of, this Article 8.

          Article 9.  Definitions.

          Unless otherwise stated in this Agreement, the following capitalized
terms have the following meanings:

          Accounting Firm Determination has the meaning set forth in Section 2.2
     of the Gannett Purchase Agreement.

          Action means any action, suit, claim, arbitration, or proceeding or
     investigation (of which the Company has knowledge) commenced by or pending
     before any Governmental Authority.

          Actual Net Financial Assets has the meaning set forth in Section 2.3.

          Adjustment has the meaning set forth in Section 2.3 hereof.

          Adjustment Escrow has the meaning set forth in Section 2.2(ii) hereof.

          Adjustment Escrow Agent has the meaning set forth in Section 2.3
     hereof.

          Adjustment Escrow Agreement has the meaning set forth in Section 2.3
     hereof.

          Adjustment Agreement has the meaning set forth in Section 2.3 hereof.

          Affiliate means, with respect to any specified Person, any other
     Person that directly, or indirectly through one or more intermediaries,
     controls, is controlled by, or is under common control with such specified
     Person.

          Agreement or this Agreement means this Purchase Agreement dated as of
     the date first above written (including the Exhibits hereto and the
     Disclosure Schedule) and all

                                       34
<PAGE>
 
     amendments hereto made in accordance with the provisions of Section 10.8
     hereof.

          Allocation has the meaning set forth in Section 2.5 hereof.

          Assets has the meaning set forth in Section 1.1 hereof.

          Assumed Liabilities has the meaning set forth in Section 1.3 hereof.

          Audited Financial Statements has the meaning set forth in Section 3.5
     hereof.

          Beneficiary has the meaning set forth in Section 5.2 hereof.

          Bill of Sale, Assignment and Assumption Agreement has the meaning set
     forth in Section 1.7 hereof.

          Business means all of the Company's business, operations and
     activities of television broadcast station WOKR-TV, Channel 13, Rochester,
     New York, acquired by the Company from Gannett pursuant to the Gannett
     Purchase Agreement.

          Business Employees means all current, former and inactive employees of
     the Business.  For the avoidance of doubt, Corporate Office Employees will
     not be considered Business Employees.

          Business Day means any day that is not a Saturday, a Sunday or other
     day on which banks are required or authorized by law to be closed in the
     City of New York.

          Call Letters has the meaning set forth in Section 3.16 hereof.

          CERCLA means the Comprehensive Environmental Response, Compensation,
     and Liability Act of 1980, as amended.

          Claims and Damages means any and all losses, claims, demands,
     liabilities, obligations, actions, suits, orders, statutory or regulatory
     compliance requirements, or proceedings asserted by any Person (including,
     without limitation, Governmental Authorities), and all damages, costs,
     expenses, assessments, judgments, recoveries and deficiencies, including
     interest, penalties, investigatory expenses, consultants' fees, and
     reasonable attorneys' fees and costs (including, without limitation, costs
     incurred in enforcing the applicable indemnity), of every kind and
     description, contingent or otherwise, incurred by or awarded against a
     party, provided that "Claims and Damages" shall not include any indirect,
     consequential, incidental, exemplary or punitive damages or other special
     damages or lost profits (except to the extent payable to a third party as a
     result of a third party claim).

          Closing has the meaning set forth in Section 1.6 hereof.

          Closing Date has the meaning set forth in Section 1.6 hereof.

          Closing Statement has the meaning set forth in Section 2.2 hereof.

                                       35
<PAGE>
 
          Code means the Internal Revenue Code of 1986, as amended.

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

          Company has the meaning specified in the introductory paragraph to
     this Agreement.

          Company Indemnified Parties shall have the meaning set forth in
     Section 8.2.

          Continuation Coverage has the meaning set forth in Section 5.2 hereof.

          Control (including the terms "controlled by" and "under common control
     with"), with respect to the relationship between or among two or more
     Persons, means the possession, directly or indirectly, of the power to
     direct or to cause the direction of the affairs or management of a Person,
     whether through the ownership of voting securities, by contract or
     otherwise, including, without limitation, the ownership, directly or
     indirectly, of securities having the power to elect a majority of the board
     of directors or similar body governing the affairs of such Person.

          Corporate Office Employees has the meaning set forth in Section 5.2.

          Corporate Office Lease means the Lease dated as of February 16, 1989
     between the Company and One City Center Associates, and all addenda and
     amendments thereto and memoranda relating thereto.

          Defined Contribution Plan has the meaning set forth in Section 5.2
     hereof.

          Disclosure Schedule means the Disclosure Schedule, dated as of the
     date hereof, delivered to Purchaser by the Company in connection with this
     Agreement.

          Employee Benefit Plans means all "employee benefit plans" within the
     meaning of Section 3(3) of ERISA, all bonus, stock option, stock purchase,
     incentive, deferred compensation, supplemental retirement, severance and
     other employee benefit plans, programs, policies or arrangements,
     employment agreements, severance agreements, severance pay policies, plant
     closing benefits, executive compensation arrangements, sick leave, vacation
     pay, salary continuation for disability, consulting, or other compensation
     arrangements, worker's compensation, hospitalization, medical insurance,
     life insurance, tuition reimbursement or scholarship programs, employee
     discounts, employee loans, employee banking privileges, any plans subject
     to Section 125 of the Code, and any plans providing benefits or payments in
     the event of a change of control, change in ownership, or sale of a
     substantial portion (including all or substantially all) of the assets of
     any business or portion thereof, in each case with respect to any present
     or former employees, directors, or agents and without regard to whether the
     plan or arrangement was previously terminated (if potential liabilities
     remain) or compensation agreements, in each case for the benefit of, or
     relating to, any current employee or former employee of the Business.

          Encumbrance means any security interest, pledge, mortgage, lien
     (including,

                                       36
<PAGE>
 
     without limitation, tax liens), charge, encumbrance, easement, adverse
     claim, preferential arrangement, restriction or defect in title.

          Environmental Claims means any and all actions, suits, demands, demand
     letters, claims, liens, notices of non-compliance or violation,
     investigations, proceedings, consent orders or consent agreements relating
     in any way to any Environmental Law, any Environmental Permit, Hazardous
     Materials or arising from alleged injury or threat of injury to health,
     safety or the environment, including, without limitation (a) by
     Governmental Authorities for enforcement, cleanup, removal, response,
     remedial or other actions or damages and (b) by any Person for damages,
     contributions, indemnification, cost recovery, compensation or injunctive
     relief.

          Environmental Law means any Law relating to the environment, health,
     safety or Hazardous Materials, in force and effect on the date hereof or,
     in the case of the Company's certificate to be delivered in accordance with
     the provisions of Section 6.3 hereof, on the Closing Date (exclusive of any
     amendments or changes to such Law or any regulations promulgated thereunder
     or orders, decrees or judgments issued pursuant thereto which are enacted,
     promulgated or issued after the date hereof, or in the case of such
     certificate, on or after the Closing Date), including but not limited to
     CERCLA; the Resource Conservation and Recovery Act of 1986 and Hazardous
     and Solid Waste Amendments of 1984, 42 U.S.C. (S)(S)6901 et seq.; the
     Hazardous Materials Transportation Act, 49 U.S.C. (S)(S)6901 et seq.; the
     Clean Water Act, 33 U.S.C. (S)(S)1251 et seq.; the Toxic Substances Control
     Act of 1976, 15 U.S.C. (S)(S)2601 et seq.; the Clean Air Act of 1966, as
     amended, 42 U.S.C. (S)(S)7401 et seq.; the Safe Drinking Water Act, 42
     U.S.C. (S)(S)300f et seq.; the Atomic Energy Act, 42 U.S.C. (S)(S)2011 et
     seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
     (S)(S)136 et seq.; and the Emergency Planning and Community Right-to-Know
     Act of 1986, 42 U.S.C. (S)(S)1101 et seq.

          Environmental Permits means all permits, approvals, identification
     numbers, licenses and other authorizations required under any applicable
     Environmental Law.

          Equipment means all of the tangible personal property, machinery,
     equipment, vehicles, rolling stock, furniture, and fixtures of every kind
     and description in which the Company has an interest or which the Company
     acquires from Gannett pursuant to the Gannett Purchase Agreement by
     ownership or lease, and used or useful in connection with the Business,
     together with any replacements thereof or additions thereto, made in the
     ordinary course of business between the date of the Gannett Purchase
     Agreement and the Closing Date.

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

          Estimated Net Financial Assets has the meaning set forth in Section
     2.2(b).

          Excluded Assets has the meaning set forth in Section 1.2 hereof.

          Excluded Names has the meaning set forth in Section 5.11 hereof.

                                       37
<PAGE>
 
          FCC means the Federal Communications Commission.

          FCC Consent means a public notice of the FCC, or of the Chief, Mass
     Media Bureau or Video Services Division, acting under delegated authority,
     consenting to the assignment of the FCC Licenses to Purchaser.

          FCC Licenses means all licenses, permits and other authorizations
     issued by the FCC to the Company used for or in connection with the
     Station, and all applications therefor, together with any renewals,
     extensions or modifications thereof and additions thereto between the date
     of the Gannett Purchase Agreement and the Closing.

          Final Order means the FCC Consent as to which the time for filing a
     request for administrative or judicial review, or for instituting
     administrative review sua sponte, shall have expired without any such
     filing having been made or notice of such review having been issued; or, in
     the event of such filing or review sua sponte, as to which such filing or
     review shall have been disposed of favorably to the grantee and the time
     for seeking further relief with respect thereto shall have expired without
     any request for such further relief having been filed.

          Financial Statements has the meaning set forth in Section 3.5 hereof.

          GAAP means United States generally accepted accounting principles and
     practices as in effect from time to time and applied consistently
     throughout the periods involved.

          Gannett Corporate Office means the corporate office of Gannett located
     at One City Center, Portland, Maine, that provides certain support to
     Gannett and its business.

          Gannett FCC Licenses means all licenses, permits and other
     authorizations issued by the FCC to Gannett used for or in connection with
     the Gannett Television Stations and all applications therefor, together
     with any renewals, extensions, or modifications thereof and additions
     thereto between the date of the Gannett Purchase Agreement and the Closing.

          Gannett Maine Media Business means the newspaper publishing business
     which publishes the Portland Press Herald and Maine Sunday Telegram, the
     Kennebec Journal and the Central Maine Morning Sentinel, and certain
     related businesses in Maine (including, without limitation, the "New Media
     Development Group," an Internet-based media business; "Voice Information
     Services," a telephone information and marketing service; "Guy Gannett
     Direct," a direct marketing operation; a telephone directory business; an
     integrated marketing group; and the Coastal Journal, a controlled
     circulation weekly), and all assets, liabilities, operations and activities
     of, and all rights of, the Company in the operations of such businesses
     that are to be contributed to, or assumed by, Newco, all as more
     particularly described in the Contribution Agreement.  Notwithstanding
     anything to the contrary in this Agreement, the Maine Media Business does
     not include the WGME-TV television broadcasting station licensed to
     Portland, Maine ("WGME") or rights to WGME's news and information content
     provided via online or audiotext applications of the New Media Development
     Group or Voice

                                       38
<PAGE>
 
     Information Services.

          Gannett Purchase Agreement shall have the meaning set forth in the
     Recitals.

          Gannett Television Stations means the following television
     broadcasting station properties of the Company:  WOKR TV, Rochester, New
     York; WICS TV, Springfield, Illinois; WICD TV, Champaign, Illinois; WGGB
     TV, Springfield, Massachusetts; WGME TV, Portland, Maine, KGAN TV, Cedar
     Rapids, Iowa; and WTWC TV, Portland, Maine; KGAN TV, Cedar Rapids, Iowa;
     and WTWC TV, Tallahassee, Florida.

          Governmental Authority means any United States federal, state or local
     government or any foreign government, any governmental, regulatory,
     legislative, executive or administrative authority, agency or commission or
     any court, tribunal, or judicial body.

          Governmental Order means any order, writ, judgment, injunction,
     decree, stipulation, determination or award entered by or with any
     Governmental Authority.  Governmental Orders shall not include Permits.

          Hazardous Materials means wastes, substances, materials (whether
     solids, liquids or gases), petroleum and petroleum products, byproducts or
     breakdown products, radioactive materials, and any other chemicals that are
     deemed hazardous, toxic, pollutants or contaminants, or substances
     designated, classified or regulated as being "hazardous" or "toxic," or
     words of similar import, under any Environmental Law.

          HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of
     1976, as amended, and the rules and regulations promulgated thereunder.

          Indebtedness means obligations with regard to borrowed money and shall
     expressly not include either accounts payable or accrued liabilities that
     are incurred in the ordinary course of business or obligations under
     operating leases regardless of how such leases may be classified or
     accounted for on financial statements.

          Indemnitee has the meaning set forth in Section 8.5 hereof.

          Indemnitor has the meaning set forth in Section 8.5 hereof.

          Initial Transfer Amount has the meaning set forth in Section 5.2
     hereof.

          Initial Transfer Date has the meaning set forth in Section 5.2 hereof.

          Intellectual Property means all patents, trademarks, trade names,
     service marks, copyrights and other similar intangible assets, and
     applications, registrations, extensions and renewals for any of the
     foregoing, and other intellectual property owned, leased or used by the
     Company in the operation of the Station or acquired by the Company from
     Gannett under the Gannett Purchase Agreement and used in the Business,
     including, without limitation, Call Letters, computer software and
     programs, of the Company used in the Business or acquired by the Company
     from Gannett under the Gannett Purchase

                                       39
<PAGE>
 
     Agreement and used in the Business, whether owned or used by, or licensed
     to, the Company or acquired by the Company from Gannett under the Gannett
     Purchase Agreement.

          Knowledge with respect to the Company means the actual knowledge of
     the officers and employees of the Company regarding information relating to
     the Station disclosed by Gannett to the Company in the Gannett Purchase
     Agreement or any Schedule, Exhibit or documents delivered to the Company in
     connection therewith.

          Law means any federal, state, local or foreign statute, law,
     ordinance, regulation, rule, code, order or other requirement or rule of
     law including, without limitation zoning laws and housing, building, safety
     or fire ordinances or codes.

          Leased Property means all real property of every kind and description
     leased by the Company or rights to such leases or leased property acquired
     by the Company from Gannett pursuant to the Gannett Purchase Agreement and
     used in connection with the Business, together (to the extent leased by the
     Company or obtained from Gannett pursuant to the Gannett Purchase
     Agreement) with all buildings and other structures, towers, antennae,
     facilities or improvements currently or hereafter located thereon, all
     fixtures, systems, equipment and items of personal property of the Company
     or acquired by the Company from Gannett pursuant to the Gannett Purchase
     Agreement attached or appurtenant thereto and all easements, licenses,
     rights and appurtenances relating to the foregoing, including, without
     limitation, the leased property referred to in Section 1.1(c) of the
     Disclosure Schedule.

          Liabilities means as to any Person all debts, adverse claims,
     liabilities and obligations, whether accrued or fixed, absolute or
     contingent, matured or unmatured, determined or determinable, known or
     unknown, including, without limitation, those arising under any federal,
     state, local or foreign statute, law, ordinance, regulation, rule, code,
     order, writ, stipulation or other governmental requirement (including,
     without limitation, any environmental law), action, suit, arbitration,
     proceeding or investigation or governmental permit, license, authorization,
     certificate or approval and those arising under any contract, agreement,
     arrangement, commitment or undertaking.

          Material Adverse Effect means any circumstance, change in, or effect
     on the Company that has a material adverse effect on the business, results
     of operations or financial condition of the Station; provided, however,
     that Material Adverse Effect shall not include adverse effects resulting
     from (or, in the case of effects that have not yet occurred, reasonably
     likely to result from) (i) general economic or industry conditions that
     have a similar effect on other participants in the industry, (ii) regional
     economic or industry conditions that have a similar effect on other
     participants in the industry in such region, (iii) the failure of Purchaser
     to give any requested consent pursuant to Section 5.1(a) or (iv) any act of
     Purchaser.

          Material Contracts means the written agreements (including, without
     limitation, amendments thereto), contracts, policies, plans, mortgages,
     understandings, arrangements or commitments relating to the Business, to
     which Gannett is a party or by which its assets are bound as described
     below:

                                       40
<PAGE>
 
               (i)  any agreement or contract providing for payments to any
          Person in excess of $50,000 per year or $250,000 in the aggregate over
          the five-year period commencing on the date hereof;

               (ii)  all time brokerage agreements and affiliation agreements
          with television networks;

               (iii)  any license or contract pursuant to which Gannett is
          authorized to broadcast film or taped programming supplied by others
          in excess of $10,000 or having a term of more than one year;

               (iv)  any employment agreement, consulting agreement or similar
          contract providing for payments to any individual in excess of $50,000
          per year or $100,000 in the aggregate over the five-year period
          commencing on the date hereof;

               (v)  any retention or severance agreement or contract with
          respect to any Person who is to be employed by Purchaser following the
          Closing;

               (vi)  all collective bargaining agreements or other union
          contracts;

               (vii)  (A) any lease of Real Property or (B) any lease of
          Equipment or license with respect to Intellectual Property (other than
          licenses granted in connection with the purchase of equipment or other
          assets) by the Company from another Person providing for payments to
          another Person in excess of $25,000 per year or $75,000 in the
          aggregate over the five-year period commencing on the date hereof;

               (viii)  any lease of Equipment or Real Property or license with
          respect to Intellectual Property (other than licenses granted in
          connection with the purchase of equipment or other assets) by Gannett
          to another Person providing for payments to Gannett in excess of
          $20,000 per year or $50,000 in the aggregate over the five-year period
          commencing on the date hereof;

               (ix)  any joint venture, partnership or similar agreement or
          contract ;

               (x)  any agreement or contract under which Gannett has loaned any
          money in excess of $1,000,000 or issued or received any note, bond,
          indenture or other evidence of indebtedness in excess of $1,000,000 or
          directly or indirectly guaranteed indebtedness, liabilities or
          obligations of others in an amount in excess of $1,000,000;

               (xi)  any covenant not to compete or contract or agreement,
          understanding, arrangement or any restriction whatsoever limiting in
          any respect the ability of the Company to compete in any line of
          business or with any Person

                                       41
<PAGE>
 
          or in any area; and

               (xii)  any agreement or contract between the Company and any
          officer, director, stockholder or employee of the Business or any of
          their family members providing for payments in excess of $5,000 (other
          than agreements covered in clause (iv) (or that would have been
          covered in clause (iv) but for the monetary limits thereunder) or
          agreements or contracts containing terms substantially similar to
          terms available to employees generally).

     Material Contracts shall not include any and all (w) contracts, purchase
     orders, purchase commitments, leases and agreements entered into in the
     ordinary course of business and relating to the Company (other than those
     described in clauses (v), (vii), (viii) or (ix) above) that (A) are
     terminable at will without payment of premium or penalty by the Company or
     (B) are terminable on not more than 60 days' written notice without payment
     of premium or penalty and do not involve the obligation of the Company to
     make payments in excess of $10,000 during the 60-day period commencing on
     the Closing; (x) contracts with respect to time sales (or other promotion
     or sponsorship sales) to advertisers or advertising agencies (including,
     without limitation, "trade" or "barter" agreements), sales agency or
     advertising representation contracts, and barter obligations or commitments
     to suppliers of programming; and (y) contracts with respect to the sale of
     production time and/or production services relating to advertising or with
     respect to other services.

          Net Financial Assets means the result of (i) the aggregate amount of
     current assets of the Business to be assigned to Purchaser under this
     Agreement, excluding for purposes of this calculation, the current portion
     of program rights, less (ii) the aggregate amount of current liabilities of
     the Business to be assumed by Purchaser under this Agreement, excluding for
     purposes of this calculation the current portion of program obligations,
     less (iii) the aggregate amount of the Company's liability for supplemental
     retirement and deferred compensation under the Employee Benefit Plans
     relating to the Business Employees set forth in Section 9 of the Disclosure
     Schedule to the extent not paid by Gannett prior to the Closing and
     excluding the current portion of such liability, if any, to the extent such
     portion is included as a current liability in clause (ii), in each case as
     of the relevant date of calculation and calculated (except as otherwise
     provided in Section 9 of the Disclosure Schedule) in conformity with GAAP
     and on a basis consistent with the basis used in preparing the Unaudited
     Financial Statements as of, and for the year ended, December 27, 1997
     referred to in Section 3.5 of the Gannett Purchase Agreement.  Net
     Financial Assets expressly shall not include television program and film
     contract rights of the Business as either assets or liabilities; provided,
     however, that notwithstanding any prior practice or lack thereof relating
     thereto, the programming downpayments related to certain television
     programs made in advance of customary payment terms under television
     program rights contracts shall be expressly included in prepaid assets to
     the extent not amortized as of the relevant date of calculation as more
     fully described in the example set forth in Section 9 of the Disclosure
     Schedule of the Gannett Purchase Agreement.  Without limiting the
     generality of the foregoing and subject to the immediately preceding
     sentence, for purposes of determining the amount of Net Financial Assets,
     all revenues and all expenses arising from the operation of the Station,
     including, without limitation, tower rental, business and license fees,
     utility charges, real and

                                       42
<PAGE>
 
     personal property taxes and assessments levied against the Assets, property
     and equipment rentals, applicable copyright or other fees, sales and
     service charges, Taxes (except for taxes arising from the transfer of the
     Assets under this Agreement), employee compensation, including wages,
     salaries, commissions, music license fees and similar prepaid and deferred
     items, shall be prorated as of the relevant date of calculation in
     accordance with GAAP.

          Net Proceeds has the meaning set forth in Section 8.4 hereof.

          Notice of Claim has the meaning set forth in Section 8.5 hereof.

          Permits has the meaning set forth in Section 3.11 hereof.

          Permitted Exceptions means each of the following:

               (i)  mortgages, security interests or other Encumbrances
          described in Section 4.10 of the Disclosure Schedule;

               (ii)  liens for taxes, assessments and governmental charges or
          levies not yet due and payable or the validity of which is being
          contested in good faith by appropriate proceedings;

               (iii)  Encumbrances imposed by law, such as materialmen's,
          mechanics', carriers', workmen's and repairmen's liens and other
          similar liens, arising in the ordinary course of business;

               (iv)  pledges or deposits to secure obligations under workers'
          compensation laws or similar legislation or to secure public or
          statutory obligations;

               (v)  survey exceptions, rights of way, easements, reciprocal
          easement agreements and other Encumbrances on title to real property
          shown in the title insurance commitment dated May 21, 1998 (for the
          property referred to as parcels 90 and 91 in Section 1.1(d) of the
          Disclosure Schedule) or that do not, individually or in the aggregate,
          materially adversely affect the use of such property in the conduct of
          the Company's business as it is being conducted prior to the Closing;

               (vi)  zoning laws and other land use restrictions that do not in
          any material respect (a) detract from or impair the value or the use
          of the property subject thereto, or (b) impair the operation of the
          Station as it is being conducted prior to the Closing in accordance
          with the provisions of the Gannett Purchase Agreement;

               (vii)  security interests in favor of suppliers of goods for
          which payment has not been made in the ordinary course of business
          consistent with past practice;

                                       43
<PAGE>
 
               (viii)  Encumbrances on the interests of the lessors of
          properties used by the Station in which the Company or Gannett holds a
          leasehold interest; and

               (ix)  any and all other Encumbrances that do not materially
          detract from or materially impair the value or the use of the property
          subject thereto for the purposes currently utilized in the operation
          of the Station.

          Person means any individual, partnership, firm, corporation, limited
     liability company, association, trust, unincorporated organization or other
     entity, as well as any syndicate or group that would be deemed to be a
     person under Section 13(d)(3) of the Securities Exchange Act of 1934, as
     amended.

          Post-Closing Agreements means those covenants and agreements required
     by this Agreement to be performed after the Closing.

          Program Contracts has the meaning set forth in Section 1.1 hereof.

          Proposed NFA Adjustment has the meaning set forth in Section 2.2
     hereof.

          Purchaser has the meaning specified in the introductory paragraph to
     this Agreement.

          Purchaser Indemnified Parties has the meaning set forth in Section 8.1
      hereof.

          Purchase Price has the meaning set forth in Section 2.2.

          Purchaser Savings Plan has the meaning set forth in Section 5.2
     hereof.

          Real Property means all real property of every kind and description
     and related mineral rights owned by the Company or acquired by the Company
     from Gannett pursuant to the Gannett Purchase Agreement and used in
     connection with the Business, together with all buildings and other
     structures, towers, antennae, facilities or improvements currently or
     hereafter located thereon, all fixtures, systems, equipment and items of
     personal property of the Company or acquired by the Company from Gannett
     pursuant to the Gannett Purchase Agreement attached or appurtenant thereto
     and all easements, licenses, rights and appurtenances relating to the
     foregoing, including, without limitation, the owned property set forth in
     Section 1.1(d) of the Disclosure Schedule.

          Regulations means the Treasury Regulations (including Temporary
     Regulations) promulgated by the United States Department of Treasury with
     respect to the Code or other federal tax statutes.

          Reimbursements has the meaning set forth in Section 8.4 hereof.

          Release means disposing, discharging, injecting, spilling, leaking,
     leaching, dumping, emitting, escaping, emptying, seeping, placing and the
     like into or upon any land or water or air or otherwise entering into the
     environment.

                                       44
<PAGE>
 
          Resolution has the meaning set forth in Section 2.3(a) hereof.

          Security Escrow has the meaning set forth in Section 2.4 hereof.

          Security Escrow Agent has the meaning set forth in Section 2.4 hereof.

          Security Escrow Agreement has the meaning set forth in Section 2.4
     hereof.

          Station shall have the meaning set forth in the Recitals.

          Subsidiary of any Person means (i) any corporation more than 50% of
     whose stock of any class or classes having by the terms thereof ordinary
     voting power to elect a majority of the directors of such corporation is
     owned by such Person directly or indirectly, through Subsidiaries and (ii)
     any partnership, limited partnership, limited liability company,
     associates, joint venture or other entity in which such Person directly or
     indirectly through Subsidiaries has more than a 50% equity interest.

          Survival Date shall have the meaning set forth in Section 10.12.

          Tax or Taxes means any and all taxes, fees, withholdings, levies,
     duties, tariffs, imposts, and other charges of any kind (together with any
     and all interest, penalties, additions to tax and additional amounts
     imposed with respect thereto) imposed by any government or taxing
     authority, including, without limitation, taxes or other charges on or with
     respect to income, franchises, windfall or other profits, gross receipts,
     property, sales, use, capital stock, payroll, employment, social security,
     workers' compensation, unemployment compensation, or net worth, taxes or
     other charges in the nature of excise, withholding, ad valorem, stamp,
     transfer, value added or gains taxes, license, registration and
     documentation fees, and customs duties, tariffs and similar charges.

          Tax Benefit has the meaning set forth in Section 8.4 hereof.

          Tax Return means any report, return, document, declaration or other
     information or filing required to be supplied to any Tax authority or
     jurisdiction (foreign or domestic) with respect to Taxes, including,
     without limitation, information returns, any documents with respect to or
     accompanying payments of estimated Taxes, or with respect to or
     accompanying requests for the extension of time in which to file any such
     report, return, document, declaration or other information.

          Termination Date has the meaning set forth in Section 10.1 hereof.

          True-Up Amount has the meaning set forth in Section 5.2 hereof.

          True-Up Date has the meaning set forth in Section 5.2 hereof.

          Trust has the meaning set forth in Section 5.2 hereof.

          Unaudited Financial Statements has the meaning set forth in Section
     3.5 hereof.

                                       45
<PAGE>
 
          WOKR Dispute has the meaning set forth in Section 2.3(a).

          WOKR Severance Payment has the meaning set forth in Section 5.8(a).

          WOKR Scheduled Severance Agreement has the meaning set forth in
     Section 5.8(a).

          Article 10.  Miscellaneous Provisions.

          10.1  Termination Rights.  (a)  Grounds for Termination.  This
Agreement may be terminated:

               (i)  by mutual consent of the parties;

               (ii)  by either the Company or Purchaser, provided such party is
          not then in material default hereunder, upon written notice to the
          other party, if the Closing hereunder has not occurred on or before
          September 4, 1999 (the "Termination Date"), provided that if the FCC
          Consent is obtained during the 15 days prior to September 4, 1999, the
          Termination Date will not occur until the 15th day after receipt of
          the FCC Consent, provided further that if either or both of the
          Company and Purchaser shall have postponed the Closing Date pursuant
          to Section 6.11 hereof, the Termination Date will occur no earlier
          than the end of the period of such postponement, and provided further
          that if the Closing hereunder has not occurred on or before September
          4, 1999 due to a publicly announced federal governmental shutdown
          affecting, or any other publicly announced freeze on the processing of
          applications to transfer station licenses by, the FCC (collectively, a
          "FCC Shutdown"), the Termination Date will be extended by a period of
          time equal to the duration of the FCC Shutdown, but in no event shall
          the Termination Date be extended to a date any later than the earlier
          of (x) 60 days after the end of the FCC Shutdown or (y) December 4,
          1999.

               (iii)  by either the Company or Purchaser, upon written notice to
          the other party, if any Governmental Authority shall have issued a
          statute, rule, regulation, order, decree or injunction or taken any
          other action permanently restraining, enjoining or otherwise
          prohibiting the Closing hereunder or the closing under the Gannett
          Purchase Agreement and such statute, rule, regulation, order, decree
          or injunction or other action shall have become final and
          nonappealable, provided that this clause (iii) will not be applicable
          to actions of the FCC subject to clause (iv) below;

               (iv)  by either the Company or Purchaser, upon written notice to
          the other party, if (i) the FCC, or the Chief, Mass Media Bureau of
          the FCC, acting under delegated authority, shall have denied the
          application for assignment of the Gannett FCC Licenses to the Company,
          (ii) the FCC, or the Chief, Mass Media Bureau of the FCC, acting under
          delegated authority, shall have denied the application for assignment
          of the FCC Licenses to Purchaser, (iii) the parties' request for
          administrative or judicial review, or the FCC's administrative review
          sua sponte, shall not have been disposed of favorably

                                       46
<PAGE>
 
          to the parties and (iv) the parties have no further relief available
          to them;

               (v)  by Purchaser, by written notice to the Company, if there has
          been a material breach by the Company of any representation, warranty,
          covenant or agreement set forth in this Agreement such that the
          condition precedent set forth in Section 6.1 or 6.2 hereof would not
          be satisfied, which breach has not been cured within 20 Business Days
          following receipt by the breaching party of written notice of such
          breach; or

               (vi)  by the Company by written notice to Purchaser if there has
          been a material breach by Purchaser of any representation, warranty,
          covenant or agreement set forth in this Agreement such that the
          condition precedent set forth in Section 7.1 or 7.2 hereof would not
          be satisfied, which breach has not been cured within 20 Business Days
          following receipt by the breaching party of written notice of such
          breach;

               (vii)  by Purchaser by written notice to the Company, if the FCC
          has revoked the Company's or Gannett's FCC License for the Station; or

               (viii)  automatically without further action by the parties upon
          the termination of the Gannett Purchase Agreement in accordance with
          its terms.

          (b)  Post-Termination Liability.  If this Agreement is terminated
     pursuant to Subsection 10.1(a)(i), (ii), (iii), (iv), (v), (vii) or (viii)
     hereof, Purchaser shall receive the immediate return of the Escrow Deposit,
     and this Agreement shall thereupon become void and of no further effect
     whatsoever, and the parties shall be released and discharged of all
     obligations under this Agreement, except (i) to the extent of a party's
     liability for willful material breaches of this Agreement prior to the time
     of such termination, and (ii) the obligations of each party for its own
     expenses incurred in connection with the transactions contemplated by this
     Agreement as provided herein.

          (c) If this Agreement is terminated pursuant to Subsection 10.1(a)(vi)
     hereof, the Company's sole and exclusive remedy under this Agreement shall
     be to receive, and the Purchaser shall pay to the Company, the Escrow
     Deposit (without setoff deduction or counterclaim) as liquidated damages,
     and upon such payment, Purchaser shall be discharged from all further
     liability under this Agreement.

          10.2  Litigation Costs.  If any litigation with respect to the
obligations of the parties under this Agreement results in a final nonappealable
order of a court of competent jurisdiction that results in a final disposition
of such litigation, the prevailing party, as determined by the court ordering
such disposition, shall be entitled to reasonable attorneys' fees as shall be
determined by such court. Contingent or other percentage compensation
arrangements shall not be considered reasonable attorneys' fees.

          10.3  Expenses.  Except as otherwise specifically provided in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred, provided that the Company and Purchaser shall each be
responsible and pay 50% of the HSR Act filing fee and the filing fees payable to
the FCC in

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<PAGE>
 
connection with the filing of the application for assignment of the FCC
Licenses.

          10.4  Notices.  Any notice, demand, claim, notice of claim, request or
communication required or permitted to be given under the provisions of this
Agreement shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered in person, (ii) on the next Business Day after the
date of mailing if mailed by registered or certified mail, postage prepaid and
return receipt requested, (iii) on the next Business Day after the date of
delivery to a national overnight courier service, or (iv) upon transmission by
facsimile (if such transmission is confirmed by the addressee) if delivered
through such services to the following addresses, or to such other address as
any party may request by notifying in writing all of the other parties to this
Agreement in accordance with this Section 10.4.

          If to Purchaser:

                    The Ackerley Group, Inc.
                    1301 Fifth Avenue, Suite 4000
                    Seattle, Washington 98101
                    Attn:  Denis M. Curley,
                           Co-President and CFO
                    Fax:   (206) 623-7853

          with a copy to:

                    Rubin, Winston, Diercks, Harris & Cooke, L.L.P.
                    1333 New Hampshire Avenue, N.W., 10th Floor
                    Washington, D.C. 20036
                    Attn:  Eric M. Rubin, Esquire
                    Fax:   (202) 429-0657

          If to Company:

                    Sinclair Communications, Inc.
                    2000 West 41st Street
                    Baltimore, Maryland  21211-1420
                    Attn:  President
                    Fax:  (410) 467-5043

          with copy to:

                    Sinclair Communications, Inc.
                    2000 West 41st Street
                    Baltimore, Maryland  21211-1420
                    Attn:  General Counsel
                    Fax:  (410) 662-4707

          and

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<PAGE>
 
                    Thomas & Libowitz, P.A.
                    100 Light Street, Suite 1100
                    Baltimore, Maryland  21202-1053
                    Attn:  Steven A. Thomas, Esquire
                    Fax:  (410) 752-2046

          Any such notice shall be deemed to have been received on the date of
personal delivery, the date set forth on the Postal Service return receipt, or
the date of delivery shown on the records of the overnight courier, as
applicable.

          10.5  Benefit and Assignment.  This Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as provided in Section 8.7, there shall be no
assignment of any interest under this Agreement by any party except that
Purchaser may assign its rights hereunder to any wholly owned subsidiary of
Purchaser; provided, however, that no such assignment shall relieve the assignor
of its obligations under this Agreement. Except as expressly otherwise provided
in Article 8 hereof, nothing herein, express or implied, is intended to or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.

          10.6  Waiver.  Any party to this Agreement may (a) extend the time for
the performance of any of the obligations or other acts of any other party, (b)
waive any inaccuracies in the representations and warranties of any other party
contained herein or in any document delivered by any other party pursuant hereto
or (c) waive compliance with any of the agreements or conditions of any other
party contained herein. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party to be bound thereby. Any
waiver of any term or condition shall not be construed as a waiver of any
subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of any
such rights.

          10.7  Severability.  If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any Law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

          10.8  Amendment.  This Agreement may not be amended or modified except
(a) by an instrument in writing signed by, or on behalf of, the Company and
Purchaser or (b) by a waiver in accordance with Section 10.6 hereof.

          10.9  Effect and Construction of this Agreement.  This Agreement
embodies the entire agreement and understanding of the parties with respect to
the subject matter hereof and

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<PAGE>
 
supersedes any and all prior agreements, arrangements and understandings,
whether written or oral, relating to matters provided for herein. The language
used in this Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual agreement, and this Agreement shall not be deemed
to have been prepared by any single party hereto. Disclosure of any fact or item
in the Disclosure Schedule referenced by a particular paragraph or section in
this Agreement shall, should the existence of the fact or item or its contents
be relevant to any other paragraph or section, be deemed to be disclosed with
respect to that other paragraph or section whether or not a specific cross
reference appears, if the disclosure in respect of the one paragraph or section
is reasonably sufficient to inform the reader of the information required to be
disclosed in respect such other paragraph or section. Disclosure of any fact or
item in the Disclosure Schedule shall not necessarily mean that such item or
fact, individually or in the aggregate, is material to the business, results of
operations or financial condition of the Station. Time shall be of the essence
in enforcing and applying the covenants and conditions set forth in this
Agreement. The headings of the sections and subsections of this Agreement are
inserted as a matter of convenience and for reference purposes only and in no
respect define, limit or describe the scope of this Agreement or the intent of
any section or subsection. This Agreement may be executed in one or more
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. This Agreement and the
rights and duties of the parties hereunder shall be governed by, and construed
in accordance with, the laws of the State of New York.

          10.10  Transfer and Conveyance Taxes.  Purchaser and the Company shall
each be liable for and shall pay one-half of all applicable sales, transfer,
recording, deed, stamp and other similar non-income taxes, imposed in connection
with transfers and conveyances of the Assets, including, without limitation, any
real property transfer or gains taxes (if any), resulting from the consummation
of the transactions contemplated by this Agreement.

          10.11  Specific Performance.  Each of the parties hereto acknowledges
and agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (i) waive, in
any action for specific performance, the defense of adequacy of a remedy at law
and (ii) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court having jurisdiction
thereover.

          10.12  Survival of Representations, Warranties and Covenants.  The
respective representations and warranties of the Company and Purchaser contained
herein or in any certificate and any and all covenants and agreements herein or
therein (other than those covenants and agreements required by this Agreement to
be performed after the Closing) shall expire with, and be terminated and
extinguished one (1) calendar year after the Closing Date (the "Survival Date");
; provided, however, that unless Purchaser shall notify the Company of any Claim
or Damages ten (10) days prior to the Survival Date, the Company shall have no
obligation to indemnify Purchaser hereunder.

          Article 11.  No Personal Liability for Representatives, Stockholders,
Directors or Officers.  Purchaser understands, acknowledges and agrees that the
directors and officers and

                                       50
<PAGE>
 
consultants of the Company and Gannett and the trustees under the Employee
Benefit Plans have performed, or may perform, certain acts required or permitted
under this Agreement on behalf of the Company or Gannett to facilitate the
transactions among the parties to this Agreement contemplated herein.
Notwithstanding anything to the contrary contained herein, no stockholder,
director or officer of the Company, any such consultant, or any such trustee (or
any Affiliate of the foregoing) shall, under any circumstances, have, and the
Purchaser hereby absolves all such Persons from, any personal liability to the
Purchaser (and each of their its Affiliates) for such acts to the extent deemed
to be actions by or on behalf of the Company.

                    [REST OF PAGE LEFT INTENTIONALLY BLANK]

                                       51
<PAGE>
 
          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

 
                                            SINCLAIR COMMUNICATIONS, INC.


                                            THE ACKERLEY GROUP, INC.


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