Document:

Exhibit 10.1

 

ASSET
PURCHASE AGREEMENT

 

 

dated May 16,
2005

 

 

between

 

 

BLUESTONE
TELEVISION, INC.

 

and

 

SINCLAIR
PROPERTIES, LLC

 

 

TABLE OF
CONTENTS

 

	
  SECTION 1:

  	
  CERTAIN DEFINITIONS

  	
   

  
	
  1.1.

  	
  Terms Defined
  in this Section

  	
   

  
	
  1.2.

  	
  Terms
  Defined Elsewhere in this Agreement

  	
   

  
	
  1.3.

  	
  Rules of
  Construction

  	
   

  
	
  SECTION 2:

  	
  SALES AND
  TRANSFER OF ASSETS; ASSET VALUE

  	
   

  
	
  2.1.

  	
  Agreement
  to Sell and Transfer

  	
   

  
	
  2.2.

  	
  Excluded Assets

  	
   

  
	
  2.3.

  	
  Purchase Price
  Calculation

  	
   

  
	
  2.4.

  	
  Payment of Purchase
  Price

  	
   

  
	
  2.5.

  	
  Assumption
  of Liabilities and Obligations

  	
   

  
	
  SECTION 3:

  	
  REPRESENTATIONS
  AND WARRANTIES OF SELLER

  	
   

  
	
  3.1.

  	
  Organization
  and Authority of Seller

  	
   

  
	
  3.2.

  	
  Authorization
  and Binding Obligation

  	
   

  
	
  3.3.

  	
  Absence of
  Conflicting Agreements; Consents

  	
   

  
	
  3.4.

  	
  Governmental
  Licenses

  	
   

  
	
  3.5.

  	
  Real Property

  	
   

  
	
  3.6.

  	
  Tangible Personal
  Property

  	
   

  
	
  3.7.

  	
  Contracts

  	
   

  
	
  3.8.

  	
  Intangibles

  	
   

  
	
  3.9.

  	
  Title to Properties

  	
   

  
	
  3.10.

  	
  Financial Statements

  	
   

  
	
  3.11.

  	
  Taxes

  	
   

  
	
  3.12.

  	
  Insurance

  	
   

  
	
  3.13.

  	
  Reports

  	
   

  
	
  3.14.

  	
  Personnel
  and Employee Benefits

  	
   

  
	
  3.15.

  	
  Claims and
  Legal Actions

  	
   

  
	
  3.16.

  	
  Environmental
  Compliance

  	
   

  
	
  3.17.

  	
  Compliance with
  Laws

  	
   

  
	
  3.18.

  	
  Absence of Certain
  Changes or Events

  	
   

  

 

i

 

	
  3.19.

  	
  Broker

  	
   

  
	
  3.20.

  	
  Transactions with
  Affiliates

  	
   

  
	
  SECTION 4:

  	
  REPRESENTTIONS
  AND WARRANTIES OF BUYER

  	
   

  
	
  4.1.

  	
  Organization,
  Standing and Authority

  	
   

  
	
  4.2.

  	
  Authorization and
  Binding Obligation

  	
   

  
	
  4.3.

  	
  Absence of
  Conflicting Agreements and Required Consents

  	
   

  
	
  4.4.

  	
  Brokers

  	
   

  
	
  4.5.

  	
  WARN Act

  	
   

  
	
  4.6.

  	
  Buyer’s Defined
  Contribution Plan

  	
   

  
	
  SECTION 5:

  	
   

  	
   

  
	
  SECTION 6:

  	
  SPECIAL
  COVENANTS AND AGREEMENTS

  	
   

  
	
  6.1.

  	
  Confidentiality

  	
   

  
	
  6.2.

  	
  Cooperation

  	
   

  
	
  6.3.

  	
  Accounts Receivable

  	
   

  
	
  6.4.

  	
  Allocation of
  Purchase Price

  	
   

  
	
  6.5.

  	
  Access to Books and
  Records after Closing

  	
   

  
	
  6.6.

  	
  Employee Matters

  	
   

  
	
  6.7.

  	
  Public Announcements

  	
   

  
	
  6.8.

  	
  Bulk Sales Law

  	
   

  
	
  6.9.

  	
  Title Insurance

  	
   

  
	
  6.10.

  	
  Surveys

  	
   

  
	
  6.11.

  	
  Non-Solicitation

  	
   

  
	
  6.12.

  	
  Assignment of the
  Station Studio Lease

  	
   

  
	
  6.13

  	
  Control of the
  Station

  	
   

  
	
  6.14.

  	
  SBG Guaranty

  	
   

  
	
  6.15.

  	
  Network
  Discussions

  	
   

  
	
  6.16.

  	
  Deferred Consents

  	
   

  
	
  SECTION 7:

  	
  CONDITIONS
  TO OBLIGATIONS OF BUYER AND SELLER

  	
   

  
	
  7.1.

  	
  Conditions to
  Obligations of Buyer

  	
   

  
	
  7.2.

  	
  Conditions to
  Obligations of Seller

  	
   

  
	
  SECTION 8:

  	
  CLOSING
  AND CLOSING DELIVERIES

  	
   

  

 

ii

 

	
  8.1.

  	
  Closing

  	
   

  
	
  8.2.

  	
  Deliveries by Seller

  	
   

  
	
  8.3.

  	
  Deliveries by Buyer

  	
   

  
	
  SECTION 9:

  	
   

  	
   

  
	
  SECTION 10:

  	
  SURVIVAL
  OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES

  	
   

  
	
  10.1.

  	
  Survival Of
  Representations

  	
   

  
	
  10.2.

  	
  Indemnification by
  Seller

  	
   

  
	
  10.3

  	
  Indemnification by
  Buyer

  	
   

  
	
  10.4.

  	
  Procedure for
  Indemnification

  	
   

  
	
  10.5.

  	
  Certain
  Limitations

  	
   

  
	
  10.6.

  	
  Tax Treatment of
  Indemnity Payments

  	
   

  
	
  SECTION 11:

  	
  MISCELLANEOUS

  	
   

  
	
  11.1.

  	
  Fees and Expenses;
  Transfer Taxes

  	
   

  
	
  11.2.

  	
  Notices

  	
   

  
	
  11.3.

  	
  Benefit and
  Binding Effect

  	
   

  
	
  11.4.

  	
  Further Assurances

  	
   

  
	
  11.5.

  	
  GOVERNING LAW

  	
   

  
	
  11.6.

  	
  Entire Agreement

  	
   

  
	
  11.7.

  	
  Waiver of
  Compliance; Consents

  	
   

  
	
  11.8.

  	
  Headings

  	
   

  
	
  11.9.

  	
  Counterparts

  	
   

  

 

iii

 

ASSET PURCHASE
AGREEMENT

 

THIS
ASSET PURCHASE AGREEMENT (this “Agreement”), dated May 16,
2005, is made by and between BlueStone Television, Inc., a Pennsylvania
corporation (“Buyer”) and Sinclair Properties,
LLC, a Virginia limited liability company (“Seller”).

 

R E C I T
A L S:

 

WHEREAS,
Seller owns certain broadcasting assets used in connection with the operation
of analog television broadcast station WEMT (TV) and digital television
broadcast Station WEMT-DT, both serving Greenville, Tennessee (together, the “Station”), as described in more detail in Section 2 of
this Agreement; and

 

WHEREAS,
the parties hereto desire to enter into this Agreement to provide for the sale,
assignment, and transfer by Seller to Buyer of the Purchased Assets (defined
below), as provided by the terms and conditions of this Agreement; and

 

WHEREAS,
concurrently with the consummation of the transactions contemplated by this
Agreement, Seller and WEMT Licensee L.P. (“Licensee”) are entering into (i) an
asset purchase agreement (the “WEMT License Agreement”) with Aurora
Broadcasting, Inc. (“Aurora”) to sell, assign and transfer to Aurora, upon
approval of the FCC, the WEMT License Assets (defined below), and (ii) a
Joint Sales and Shared Services Agreement (“JSA”) with Appalachian Broadcasting
Corporation (“Appalachian”), an Affiliate of Buyer, pursuant to which
Appalachian will make certain of the Purchased Assets (which it will acquire
from Buyer) and certain services and personnel available to Licensee and Seller
for the day to day operation of the Station pending the close of the sale of
the WEMT License Assets to Aurora.

 

A G R E E
M E N T S:

 

In consideration of the
above recitals and of the mutual agreements and covenants contained in this
Agreement, the parties to this Agreement, intending to be bound legally, agree
as follows:

 

SECTION 1:  CERTAIN
DEFINITIONS

 

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

 

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

 

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

 

1

 

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

 

“Assumed
Contracts” means (a) all Contracts set forth on Schedule 3.7, (b) Contracts entered into in the
ordinary course of business by Seller prior to the date of this Agreement with
advertisers for the sale of advertising time or production services for cash at
rates consistent with past practices, (c) Contracts entered into in the
ordinary course of business by Seller prior to the date of this Agreement which
are not required to be included on Schedule 3.7
by reason of the exceptions to disclosure set forth in Section 3.7.  Assumed Contracts shall not include any of
the Excluded Contracts or the WEMT License Assets.

 

“Business
Licenses” means all licenses, permits,
construction permits and other authorizations issued by any Governmental
Authority to Seller currently in effect and used in connection with the conduct
of the business or operations of the Station, except for FCC Licenses.

 

“Closing”
means the consummation of the sale and acquisition of the Purchased Assets
pursuant to this Agreement on the Closing Date in accordance with the
provisions of Section 8.1.

 

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

 

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

 

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

 

“Contaminant”
shall mean and include any pollutant, contaminant, hazardous substance or
material (as defined in any of the Environmental Laws), toxic substances (as
defined in any of the Environmental Laws), asbestos or asbestos containing
material, urea formaldehyde, polychlorinated biphenyls, regulated substances
and wastes, radioactive materials, and petroleum or petroleum by-products,
including crude oil or any fraction thereof, except the term “Contaminant”
shall not include small quantities of maintenance, and cleaning customary for
the operation of television stations and maintained in compliance with all
Environmental Laws in the ordinary course of business.

 

“Contracts”
means all contracts, consulting agreements, employment agreements,
non-governmental licenses and other agreements, commitments or instruments
(including leases, subleases and licenses of personal or real property),
written or oral (including any amendments and other modifications thereto) to
which Seller is a party or that are binding upon Seller, that relate to or
affect the Purchased Assets, and that are in effect on the date of this
Agreement, including, without limitation, those listed on Schedule 3.7
hereto.

 

2

 

“Effective
Time” means 12:01 a.m., Eastern time, on the Closing Date.

 

“Environmental
Laws” shall mean and include, but not be limited to, any applicable
federal, state or local law, statute, charter, ordinance, rule or
regulation or any governmental agency interpretation, policy or guidance,
including without limitation applicable safety/environmental/health laws such
as but not limited to the Resource Conservation and Recovery Act of 1976,
Comprehensive Environmental Response Compensation and Liability Act, Federal
Emergency Planning and Community Right-to-Know Law, the Clean Air Act, the
Clean Water Act, and the Toxic Substance Control Act, as any of the foregoing
have been amended, and any permit, order, directive, court ruling or order or
consent decree applicable to or affecting the Real Property or any other
property (real or personal) used by or relating to the Station promulgated or
issued pursuant to any Environmental Laws which pertains to, governs, or
controls the generation, storage, disposal, remediation or removal of
Contaminants or otherwise regulates the protection of health and the
environment including, but not limited to, any of the following activities,
whether on site or off site if such could materially adversely affect the
site:  (i) the emission, discharge,
release, spilling or dumping of any Contaminant into the air, surface water,
ground water, soil or substrata; or (ii) the use, generation, processing,
sale, recycling, treatment, handling, storage, disposal, transportation,
labeling or any other management of any Contaminant.

 

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

 

“ERISA
Affiliate” means any entity which together with the Seller
would be deemed a single employer within the meaning of Sections 414(b), (c) or
(m) of the Code or Section 4001 of ERISA.

 

“Excluded
Contracts” shall have the meaning set forth in Section 2.2(j).

 

“Excluded
Tangible Personal Property” means (i) the Tangible Personal
Property listed on Schedule 3.6(a) under
the heading “Excluded Tangible Personal Property”, (ii) any tangible
personal property not located on or about the Real Property and used primarily
in the operation of any television broadcast station owned, operated or
programmed by Seller or any Affiliate of Seller, other than the Station, (iii) any
tangible personal property located at 2000 W. 41st Street, Baltimore, Maryland
21211 or 10706 Beaver Dam Road, Hunt Valley, Maryland 21030 in the ordinary
course, and (iv) the Tangible Personal Property included in the WEMT
License Assets.

 

“FCC”
means the Federal Communications Commission.

 

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

 

“GAAP”
means generally accepted accounting principals in the United States,
consistently applied in accordance with past practices.

 

“Governmental
Authority” shall mean any government, any governmental entity,
department, commission, board, agency or instrumentality and any court,
tribunal or judicial or arbitral body, whether state or local, but not federal.

 

3

 

“Intangibles”
means all copyrights, trademarks, trade names, domain names, service marks,
service names, licenses, patents, trade secrets, permits, jingles, proprietary
information, technical information and data, and other similar intangible
property rights and interests (and any goodwill associated with any of the
foregoing) applied for, issued to, or owned by Seller or under which Seller is
licensed or franchised and that are used in the business and operations of the
Station.

 

“Knowledge”
or any derivative thereof with respect to the Seller means, the actual
knowledge of the President and Chief Executive Officer or the Chief Financial
Officer of Seller or SBG, and any other employee of Seller or SBG designated as
a “vice president” or the General Manager, the Regional Controller assigned to
the Station or Chief Engineer of the Station.

 

“Laws”
means any federal, state, local, municipal, foreign, international, multi-national,
self-regulatory organization, or other administrative order, constitution, law,
ordinance, principle of common law, rule, regulation, statute, treaty, by-laws,
or the like.

 

“Leased Real
Property” means all real
property and all buildings and other improvements thereon and appurtenant
thereto leased or held by Seller and used in the business or operation of the
Station.

 

“Licenses”
means Business Licenses and FCC Licenses.

 

“Lien”
shall mean any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, conditional sales agreements, claim, charge, or other
lien of any kind, whether voluntarily incurred or arising by operation of law
or otherwise, affecting any assets or property.

 

“Loss”
means, with respect to any Person, any and all costs or expenses, obligations,
liabilities, demands, claims, settlement payments, awards, judgments, fines,
penalties, interest, deficiencies, causes of action, damages, and reasonable
out-of-pocket expenses, including court costs and reasonable attorneys’ fees,
whether or not arising out of a third party claim, suffered, paid or incurred
by such Person.

 

“Market Cable
Systems” shall mean all U.S. cable television systems located within
any particular Station’s market, as defined in Section 76.55 of the FCC
regulations.

 

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

 

“Owned Real
Property” means all real property and all buildings and other
improvements thereon and appurtenant thereto owned by Seller and used in the
business or operations of the Station.

 

“Permitted
Encumbrances” means (a) encumbrances of a landlord, or other
statutory lien not yet due and payable, or a landlord’s liens arising in the
ordinary course of business,

 

4

 

(b) encumbrances
arising in connection with equipment or maintenance financing or leasing under
the terms of the Contracts set forth on the Schedules, which Contracts have
been delivered  to Buyer, (c) encumbrances
for Taxes not yet delinquent or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on Seller’s books in accordance with generally accepted accounting
principles, or (d) encumbrances that do not materially detract from the
value of any of the Purchased Assets or materially interfere with the use
thereof as currently used.

 

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

 

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

 

“Real
Property” means all real
property and all buildings and other improvements thereon and appurtenant
thereto, whether or not owned, leased or held by Seller and used in the
business or operations of the Station.

 

“Real
Property Interests” means all interests in Owned Real Property and
Leased Real Property, including fee estates, leaseholds and subleaseholds,
purchase options, easements, licenses, rights to access, and rights of way, and
all buildings and other improvements thereon and appurtenant thereto, owned or
held by Seller that are used in the business or operations of the Station.

 

 “SBG” means
Sinclair Broadcast Group, Inc.

 

“Seller
Party” means Seller, SBG or any Affiliate of SBG, to the
extent such Person is a party to an Assumed Contract.

 

“Tangible
Personal Property” means all machinery, equipment, tools, vehicles,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts and other tangible personal property (together with any machinery and
equipment warranties) owned or held by Seller that is used in the conduct of
the business or operations of the Station and located on or about the Real
Property, but excluding the Excluded Tangible Personal Property.

 

“Tax”
means any federal, state, local, or foreign income, gross receipts, windfall
profits, severance, property, production, sales, use, license, excise,
franchise, capital, transfer, employment, withholding, or other tax or similar
governmental assessment or charge of any kind whatsoever (including any Tax
liability incurred or borne as a transferee or successor or by Contract, or
otherwise), together with any interest, additions, or penalties with respect
thereto and any interest in respect of such additions or penalties.

 

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

 

5

 

“WEMT License
Agreement” means the Asset Purchase Agreement dated as of the date
of this Agreement among Seller, Licensee and Aurora, relating to the sale of
the WEMT License Assets.

 

“WEMT License
Assets” means (a) the FCC Licenses, (b) Station
Affiliation Agreement between Fox Broadcasting Company, on behalf of itself,
Fox Children’s Network, Inc., and Fox News Network, L.L.C., and Licensee,
dated July 1, 2002, or any successor or renewal thereto, (c) the film
and programming agreements applicable to the Station’s programming, (d) any
other assets identified in the WEMT License Agreement, (e) all
Intangibles, (f) the lease for the Real Property where Seller’s tower is
located at Walker Mountain.

 

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

 

	
  Assumed Liabilities

  	
  Section 2.5

  
	
  Aurora

  	
  Recitals

  
	
  Balance Sheet Date

  	
  Section 3.9

  
	
  Benefit Arrangement

  	
  Section 3.14(a)(v)

  
	
  Benefit Plans

  	
  Section 3.14(a)(ii)

  
	
  Buyer

  	
  Preamble

  
	
  Buyer’s Plan

  	
  Section 4.6

  
	
  Claimant

  	
  Section 10.4

  
	
  Closing Date

  	
  Section 8.1(a)

  
	
  Collection Period

  	
  Section 6.3(a)

  
	
  Employees

  	
  Section 3.14(a)

  
	
  Excluded Assets

  	
  Section 2.2

  
	
  Financial Statements

  	
  Section 3.9

  
	
  Indemnity Cap

  	
  Section 10.5

  
	
  Indemnifying Party

  	
  Section 10.4

  
	
  Independent Auditor

  	
  Section 2.3(c)(iii)

  
	
  JSA

  	
  Recitals

  
	
  Licensee

  	
  Recitals

  
	
  Multiemployer Plan

  	
  Section 3.14(a)(ii)

  
	
  Pension Plan

  	
  Section 3.14(a)(iii)

  
	
  Purchase Price

  	
  Section 2.3(a)

  
	
  Retained Liabilities

  	
  Section 2.5

  

 

6

 

	
  Seller

  	
  Preamble

  
	
  Station

  	
  Recitals

  
	
  Threshold Amount

  	
  Section 10.5

  
	
  Title Commitment

  	
  Section 6.9

  
	
  Transferred Employees

  	
  Section 6.6

  
	
  Welfare Plan

  	
  Section 3.14(a)(i)

  

 

1.3.                              Rules of Construction.  Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender and any other number as the context requires.  As used in this Agreement, the word “including”
is not limiting and the word “or” is not exclusive.  Except as specifically otherwise provided in
this Agreement in a particular instance, a reference to a Section, Exhibit, or Schedule is
a reference to a Section of this Agreement, an Exhibit, or a Schedule hereto,
as the case may be, and the terms “hereof,” “herein,” and other like terms
refer to this Agreement as a whole, including the Schedules and Exhibits to
this Agreement, and not solely to any particular part of this Agreement.  The descriptive headings in this Agreement
are inserted for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.

 

SECTION 2:  SALE AND TRANSFER
OF ASSETS; ASSET VALUE

 

2.1.                              Agreement to Sell and Transfer.  Subject to the terms and conditions set forth
in this Agreement, Seller hereby agrees to transfer, convey, assign, and
deliver to Buyer on the Closing Date, and Buyer agrees to acquire, all of
Seller’s right, title, and interest in and to the tangible assets located on or
about the Real Property and all of the intangible assets, in either case owned
or used in connection with the conduct of the business or operations of the
Station, but excluding the WEMT License Assets and the Excluded Assets
described in Section 2.2, free and clear of any Liens (except for
Permitted Encumbrances), including Seller’s right, title and interest in and to
the following:

 

(a)                                  the Tangible
Personal Property;

 

(b)                                 the
Owned Real Property;

 

(c)                                  the
Assumed Contracts;

 

(d)                                 the
Business Licenses, if any;

 

(e)                                all
claims, causes of action, choses in action, rights of recovery, rights of
set-off or recoupment of or available to Seller relating to the Purchased
Assets to the extent they relate to the period after the Effective Time; and

 

(f)                                    all books of
account and other records relating to the Purchased Assets, including executed
copies (if available) of the Assumed Contracts, employment records (to the
extent permitted by applicable law), customer files, lists, plats, purchase and
sales records, advertising

 

7

 

records, creative materials, advertising and promotional
material, in each case to the extent relating to the business or the operation
of the Station, but excluding all records relating to the WEMT License Assets.

 

Buyer and Seller
acknowledge that, notwithstanding anything to the contrary herein, all WEMT
License Assets constituting assets owned or used in connection with the Seller’s
conduct of the business or the operation of the Station shall not be sold,
assigned or transferred to Buyer hereunder but rather shall be subject to the
sale, assignment or transfer to Aurora under the WEMT License Agreement in accordance
with the terms thereof.

 

2.2.                              Excluded Assets.  The Purchased Assets shall exclude the
following (collectively, the “Excluded Assets”),
as the same may exist at the Effective Time:

 

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

 

(b)                                 any
insurance policies, promissory notes, amounts due to Seller from employees,
bonds, letters of credit, certificates of deposit, or other similar items, and
any cash surrender value in regard thereto; provided, that in the event Seller
is obligated to assign to Buyer the proceeds of any such insurance policy at
the time the Closing occurs under Section 6.3, such proceeds shall be
included in the Purchased Assets;

 

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

 

(d)                                 all
Tax Returns and supporting materials, all original financial statements and
supporting materials, all books and records that Seller is required by law to
retain, all of Seller’s organizational documents, corporate books and records
(including minute books, operating agreements and partnership agreements) and
originals of account books of original entry, all records of Seller relating to
the sale of the Purchased Assets and all records and documents related to any
other Excluded Assets;

 

(e)                                  any
interest in and to any refunds of federal, state, or local franchise, income,
or other Taxes for periods (or portions thereof) ending on or prior to the
Closing Date;

 

(f)                                    all
Accounts Receivable;

 

(g)                                 all
rights and claims of Seller whether mature, contingent, or otherwise, whether
in tort, contract, or otherwise, against third parties relating to the
Purchased Assets or the operation of the Station arising prior to the Closing
Date; other than rights and claims against third parties relating to the
Purchased Assets which have as their basis loss, damage or impairment of or to
any of the Purchased Assets and which loss, damage or impairment has not been
restored or repaired prior to the Closing, or in the case of a lost Asset, that
would have been acquired but for such loss;

 

8

 

(h)                                 any Contracts which
are not Assumed Contracts, including those which are listed on Schedule 2.2(h) (the
“Excluded Contracts”);

 

(i)                                     Seller’s
deposits and prepaid expenses; provided, any deposits and prepaid expenses
shall be included in the Purchased Assets to the extent that Seller receives a
credit therefor in the proration of the Purchase Price pursuant to Section 2.3(b);

 

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

 

(k)                                  all
rights to the names Sinclair, Sinclair Broadcast Group, Sinclair Properties,
and any logo or variation thereof and goodwill associated therewith;

 

(l)                                     the Excluded
Tangible Personal Property;

 

(m)                               all
assets owned by the Seller which are used in connection with the operations of
television broadcast stations other than the Station and are not located on or
about the Real Property;

 

(n)                                 all
shares of capital stock, partnership interests, interests in limited liability
companies or other equity interest, including, but not limited to, any options,
warrants or voting trusts relating thereto which are owned by Seller; and

 

(o)                                 the WEMT License
Assets; and

 

(p)                                 the
assets listed on Schedule 2.2(p).

 

2.3.                              Purchase Price Calculation.

 

(a)                                  Purchase Price.  Subject to the adjustments and prorations as
provided by this Agreement, the purchase price of the Purchased Assets (the “Purchase Price”) shall be Five Million Six Hundred Thousand Dollars
($5,600,000.00).

 

(b)                                 Prorations.  The Purchase Price shall be increased or
decreased as required to effectuate the proration of revenues and expenses or
liabilities, as set forth below.  All
revenues and all expenses and liabilities of Seller arising from the operation
of the Station and related to the Purchased Assets, including tower rental,
License fees (to the extent the corresponding License is assignable), utility
charges, real property and personal property Taxes and assessments levied
against the Purchased Assets, property and equipment rentals, sales and service
charges, and subject to the provisions of Section 6.6, employee salaries,
wages and commissions payable to Transferred Employees (including bonuses,
vacation pay and personal leave pay), and employment-related Taxes on account
thereof, shall be prorated between Buyer and Seller in accordance with the
principle that Seller shall receive all revenues and shall be responsible for
all expenses, costs, and liabilities allocable to the operations of the Station
for the period prior to the Effective Time, and Buyer shall receive all
revenues and shall be responsible for all expenses, costs, and obligations
allocable to the operations of the Station for the period after the Effective
Time, subject to the following:

 

9

 

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

 

(ii)                                  An
adjustment and proration shall be made in favor of Seller for the amount, if
any, by which the fair market value of the goods or services to be received by
the Station under its trade or barter agreements as of the Effective Time
exceeds by more than Ten Thousand Dollars ($10,000.00) in the aggregate the
fair market value of any advertising time remaining to be run by the Station as
of the Effective Time.  An adjustment and
proration shall be made in favor of Buyer to the extent that the amount of any
advertising time remaining to be run by the Station under its trade or barter
agreements as of the Effective Time exceeds by more than Ten Thousand Dollars
($10,000.00) in the aggregate the fair market value of the goods or services to
be received by the Station as of the Effective Time.

 

(iii)                               An
adjustment and proration shall be made in favor of Seller for the amount, if
any, of prepaid expense, the benefit of which accrues to Buyer hereunder, and
other current assets acquired by Buyer hereunder which are paid by Seller to
the extent such prepaid expenses and other current assets relate to the period
after the Effective Time.

 

(iii)                               There
shall be no proration for any payment(s) made by Millennium to SBG or Seller in
connection with obtaining the right to serve as the national sales
representative of the Station.

 

(iv)                            All
prorations and adjustments shall be determined in a manner consistent with
GAAP.

 

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

 

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

 

10

 

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

 

(iii)                               Buyer
and Seller shall use good faith efforts to resolve any dispute involving the
determination of the Purchase Price paid by Buyer at the Closing.  If the parties are unable to resolve the
dispute within forty five (45) days following the delivery of all of Buyer’s
statements to be provided pursuant to Section 2.3(c)(ii) after the
Closing, Buyer and Seller shall jointly designate an independent certified
public accounting firm of national standing which has not regularly provided
services to either the Buyer or Seller in the last three (3) years (“Independent Accountants”), who shall be knowledgeable and
experienced in the operation of television broadcasting stations, to resolve
the dispute.  If the parties are unable
to agree on the designation of an independent certified public accounting firm,
the selection of the accounting firm to resolve the dispute shall be submitted
to arbitration to be held in Baltimore, Maryland, in accordance with the
commercial arbitration rules of the American Arbitration Association.  The accounting firm’s resolution of the
dispute shall be final and binding on the parties, and a judgment may be
entered thereon in any court of competent jurisdiction.  Any fees of the Independent Accountants, and,
if necessary, for arbitration to select such firm, shall be divided equally
between the parties.

 

(iv)                              Each
of Buyer and Seller shall permit the other and the other’s representatives
access to its internal accounting records used in connection with the
preparation of the settlement statement or Seller’s response thereto or any
calculations made pursuant to either of them.

 

2.4.                              Payment of Purchase Price.  The Purchase Price shall be paid by Buyer to
Seller at the Closing as follows:

 

(a)                                  Payment of Estimated Purchase Price At Closing.  The Purchase Price, adjusted by the estimated
adjustments pursuant to Section 2.3(b) as set forth in Seller’s
preliminary settlement statement pursuant to Section 2.3(c)(i), is
referred to as the “Estimated Purchase Price.”  At the
Closing, Buyer shall pay or cause to be paid to Seller the Estimated Purchase
Price for the Purchased Assets by federal wire transfer of same-day funds
pursuant to wire transfer instructions, which instructions shall be delivered
to Buyer by Seller prior to the Closing Date.

 

11

 

(b)                                 Payments to Reflect Adjustments.  The Purchase Price as finally determined
pursuant to Section 2.4(c) shall be paid as follows:

 

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

 

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

 

2.5.                              Assumption of Liabilities and Obligations.

 

(a)                                  As of the Closing
Date, subject to Section 2.5(b), Buyer shall assume and undertake to pay,
discharge, and perform all obligations and liabilities of Seller under the
Business Licenses, the Assumed Contracts, or as otherwise specifically provided
for herein, but only to the extent that either (i) the obligations and
liabilities on account thereof relate to the time after the Effective Time, or (ii) the
Purchase Price is reduced pursuant to Section 2.3(b) as a result of
the proration of such obligations and liabilities (the “Assumed Liabilities”).

 

(b)                                 Notwithstanding
Section 2.5(a), for the avoidance of doubt, Buyer shall not assume any
obligation or liability of Seller, and Seller shall retain all liabilities and
obligations of Seller, known or unknown, fixed or contingent, other than the
obligations and liabilities expressly assumed by Buyer under Section 2.5(a),
including without limitation, the following (the “Retained
Liabilities”):

 

(i)                                     all
liabilities and obligations relating to or arising from the Excluded Assets,
including any obligation or liability under any Contract not constituting an
Assumed Contract;

 

(ii)                                  all
liabilities for Taxes arising from the transfer of the Purchased Assets under
this Agreement or otherwise attributable to the business or operation of the
Station for any period prior to the Closing Date;

 

(iii)                               all
fees and expenses incurred by Seller in connection with the transactions
contemplated hereby, including legal, accounting, consulting, brokers,
investment banking and other professional fees and expenses;

 

(iv)                              the
dollar amount of all unpaid medical and health claims of Employees arising
prior to the Closing Date;

 

(v)                                 all
liabilities under any intercompany account;

 

12

 

(vi)                              all
liabilities and obligations arising under Assumed Contracts or Business
Licenses transferred by Seller to Buyer in accordance with this Agreement, to
the extent such liabilities and obligations have arisen or have accrued in
connection with any period prior to the Closing Date, except to the extent an
adjustment is made in favor of Buyer under Section 2.3(b);

 

(vii)                           all
liabilities and obligations accruing with respect to the business or the
operation of the Station prior to the Closing Date, except to the extent an
adjustment is made in favor of Buyer under Section 2.3(b);

 

(viii)                        all
liabilities and obligations arising out of any litigation, claim or proceeding
pending or threatened against Seller or relating to Seller’s ownership of the
Purchased Assets, or Seller’s conduct of the business or operation of the
Station;

 

(ix)                                all
liabilities and obligations under any employee pension, retirement or other
benefit plans covering Employees prior to the Closing Date;

 

(x)                                   all
liabilities and obligations for severance and all COBRA liabilities for any
Employees of the Sellers who do not become Transferred Employees; and

 

(xi)                                all
obligations and liabilities of Seller under this Agreement and any other
agreement entered into in connection herewith.

 

SECTION 3: 
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and
warrants to Buyer (except for representations and warranties that speak as of a
specific date or time, in which case, such representations and warranties shall
be true and complete as of such date or time) as follows:

 

3.1.                              Organization and Authority of Seller.  Seller is a limited liability company duly
organized, validly existing, and in good standing under the laws of the States
listed on Schedule 3.1.  Seller has the requisite power and authority
to own, lease, and operate its properties, to carry on its business in the places
where such properties are now owned, leased, or operated and such business is
now conducted, and to execute, deliver, and perform this Agreement and the
documents contemplated hereby according to their respective terms.  Seller is duly qualified and in good standing
in each jurisdiction listed on Schedule 3.1,
which are all jurisdictions in which such qualification is required.

 

3.2.                              Authorization and Binding Obligation.  The execution, delivery, and performance of
this Agreement by Seller has been duly authorized by all necessary limited
liability company or other required action on the part of Seller and its
equityholders, and no approval from or notice to any of the member of Seller is
required regarding the same that has not been obtained or given, as
applicable.  This Agreement has been duly
executed and delivered by Seller and constitutes its legal, valid, and binding
obligation, enforceable against it in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors’ rights generally and by judicial discretion
in the enforcement of equitable remedies.

 

13

 

3.3.                              Absence of Conflicting Agreements; Consents.  Subject to obtaining the Consents listed on Schedule 3.3, 3.5 and 3.7, the execution, delivery, and
performance by Seller of this Agreement and the documents contemplated hereby
(with or without the giving of notice, the lapse of time, or both): (a) do
not require the consent of any third party; (b) will not conflict with any
provision of the Articles of Organization, operating agreement, or other
organizational documents of Seller; (c) will not conflict with, result in
a breach of, or constitute a default under any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (d) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any  material agreement,
instrument, license, or permit to which Seller is a party or by which Seller
may be bound legally; and (e) will not create any claim, liability or Lien
of any nature whatsoever upon any of the Purchased Assets.  Except for the Consents described on Schedule 3.3, 3.5 or 3.7, no consent, approval, permit,
or authorization of, or declaration to, or filing with any Governmental
Authority or any other third party is required (a) to consummate this
Agreement and the transactions contemplated hereby, or (b) to permit
Seller to transfer and convey the Purchased Assets to Buyer.

 

3.4.                              Governmental Licenses.

 

(a)                                  Schedule 3.4 identifies and includes a complete list
of all  Licenses that are required to
conduct the business or operate the Station and the applicable expiration dates
thereof.  Each FCC License is in full
force and effect, and Seller or Licensee, as indicated, is the authorized
holder thereof.  None of the FCC Licenses
is subject to any restriction or condition that limits the operation of the
Station as currently operated other than (i) restrictions or conditions
listed on or generally applicable to such FCC Licenses, and (ii) restrictions
or conditions applicable to the Station and communication or broadcasting
facilities or FCC Licenses of the same type or service.  The FCC Licenses listed on Schedule 3.4 constitute all of the licenses and
authorizations issued by the FCC and required under the Communications Act and
the rules, regulations and published policies of the FCC for the lawful conduct
of the Station as operated by Seller and Licensee.

 

(b)                                 Except as set forth
on Schedule 3.4 and except for any
FCC investigations, rulemakings or other proceedings affecting the broadcasting
industry generally, as of the date of this Agreement, there is no pending or,
to the Knowledge of Seller and Licensee, threatened investigation or action by
or before the FCC, or any order to show cause, notice of violation, notice of
apparent liability, notice of forfeiture or material complaint by, before or
with the FCC with respect to the Station.

 

(c)                                  The Station is
operating in accordance with the specifications of the applicable FCC Licenses
and is in compliance in all material respects with the Communications Act and
the rules, regulations and published policies of the FCC.  Except as set forth in Schedule 3.4,
all material filings, reports and statements that Licensee or Seller is
required to file with the FCC or the Federal Aviation Administration during the
current applicable terms of such FCC Licenses have been timely filed and are
complete and accurate in all material respects.

 

14

 

(d)                                 The
information disclosed on Schedule 3.4(d) is
true, correct and complete in all material respects as of the date hereof and
includes the following:

 

(i)                                     a
list of all Market Cable Systems, if any, which are carrying the Station and
that have notified Seller, Licensee or the Station of such Market Cable System’s
intention to delete the Station from carriage or to change the channel position
of the Station on such cable system;

 

(ii)                                  a
list (with true, complete and accurate copies having been delivered by Seller
or Licensee to Buyer) of each notice, if any, received by the Station from the
Market Cable System alleging that the Station does not deliver an adequate
quality signal, as defined in Section 76.55(c)(3) of the FCC
regulations, to such Market Cable System’s principal headend (other than any
such notice as to which such failure has been remedied or been determined not
to exist), and all further material correspondence between the Station and any
such Market Cable System relating to such notice;

 

(iii)                               a
list of all pending petitions for special relief to modify the area in which
the Station is entitled to demand must-carriage pursuant to Sections 76.55(c) and
(e) of the FCC regulations; and

 

(iv)                              a
list of must-carry complaints, if any, filed on behalf of the Station.

 

(e)                                  Except
as disclosed on Schedule 3.4(e) hereto,
Seller is not aware of any reason why any of the FCC Licenses might not be
renewed in the ordinary course for a full term without material qualifications
or of any reason why any of the FCC Licenses might be revoked.  To Seller’s Knowledge, there are no facts
relating to Licensee which, under the Communications Act of 1934, as amended,
or the existing rules of the FCC, would disqualify Licensee from assigning
the FCC Licenses to Aurora.  An
appropriate public inspection file for the Station is maintained at the Station’s
studio in material accordance with FCC rules.

 

3.5.                              Real Property.  Schedule 3.5
contains a complete description of all Real Property Interests (including
street address, owner, and Seller’s use thereof).  The Real Property Interests listed on Schedule 3.5 comprise all interests in Real Property
owned or used to conduct the business and operations of the Station as now
conducted.  Except as described on Schedule 3.5, Seller has good, valid and insurable fee
simple title to all fee estates included in the Real Property Interests and
good title to all other Real Property Interests, in each case free and clear of
all Liens and all covenants, easements, restrictions, encroachments, leases,
charges, and other claims and encumbrances, except for Permitted
Encumbrances.  Each leasehold or
subleasehold interest included on Schedule 3.5
is legal, valid, binding, enforceable, and in full force and effect.  Neither Seller or, to Seller’s Knowledge, any
other party thereto, is in default, violation, or breach under any lease or
sublease, and no event has occurred and is continuing that constitutes (with
notice or passage of time or both) a default, violation, or breach thereunder.  Seller has not received any notice of a
default, offset, or counterclaim under any lease or sublease with respect to
any of the Real Property Interests. 
Seller enjoys peaceful and undisturbed possession of the leased Real
Property Interests; and so long as Seller fulfills its obligations under the
lease therefor, Seller has enforceable rights to nondisturbance and quiet
enjoyment against each lessor or sublessor and, to Seller’s Knowledge, except
as set forth on

 

15

 

Schedule 3.5,
no third party holds any interest in the fee underlying leased the premises
with the right to acquire or foreclose upon Seller’s leasehold or subleasehold
interest.  Seller has legal and practical
access to all of the Owned Real Property and Leased Real Property, as
applicable.  Except as otherwise
disclosed on Schedule 3.5, all towers, guy
anchors, ground radials, and buildings and other improvements included in
the  Purchased Assets are, to Seller’s
Knowledge, located entirely on the Owned Real Property or the Leased Real
Property, as applicable, listed on Schedule 3.5.  All Owned Real Property and Leased Real
Property (including the improvements thereon) (a) is in good condition and
repair consistent with its current use, (b) is available for immediate use
in the conduct of the business and operations of the Station, and (c) complies
in all material respects with all applicable building or zoning codes and the
regulations of any Governmental Authority having jurisdiction.  No eminent domain or condemnation proceedings
are pending or, to Seller’s Knowledge, threatened with respect to any Real
Property Interests.

 

3.6.                              Tangible Personal Property.  Schedule 3.6
sets forth the list of all material items of Tangible Personal Property owned
or used in the conduct of the business and the operations of the Station, other
than the “Excluded Tangible Personal Property” which is listed on Schedule 3.6(a). 
The Tangible Personal Property listed on Schedule 3.6
comprises all of the tangible personal property necessary to conduct the
business and operations of the Station as now conducted, except for those items
of Excluded Tangible Personal Property that will be transferred pursuant to the
WEMT License Agreement and listed on Schedule 3.6(a).  Except as described on Schedule 3.6,
Seller owns and has good title to each item of Tangible Personal Property and
none of the Tangible Personal Property owned by Seller is subject to any Lien,
except for Permitted Encumbrances.  With
allowance for normal repairs, maintenance, wear and obsolescence, each material
item of Tangible Personal Property is in good operating condition and repair
and is available for immediate use in the business and operations of the
Station.  All items of transmitting and
studio equipment included in the Tangible Personal Property (a) have been
maintained in a manner consistent with generally accepted standards of good
engineering practice, and (b) will permit the Station to operate in
accordance with the terms of the FCC Licenses and the rules and
regulations of the FCC and in all material respects with all other applicable
federal, state and local statutes, ordinances, rules and regulations.

 

3.7.                              Contracts.  Schedule 3.7
is a true and complete list of all Contracts relating to the conduct of the
business or operation of the Station, except: (i) Contracts for the sale
or production of broadcast or advertising time on the Station for cash
consistent with prior practices so long as such Contracts may be canceled
without penalty on not more than ninety (90) days notice; (ii) oral
employment Contracts terminable at will; (iii) miscellaneous service
Contracts that may be canceled without penalty on thirty (30) days or less
notice; (iv) the Excluded Contracts, and (v) other Contracts entered
into in the ordinary course of business not involving average annual payments
or receipts by the Station of greater than Twenty-five Thousand Dollars
($25,000) per Contract.  Seller has
delivered to Buyer true and complete copies of all written Assumed Contracts
and true and complete descriptions of all oral Assumed Contracts (including any
amendments and other modifications to such Contracts) except as set forth on Schedule 3.7.  Other than the Contracts listed on Schedule 3.5 and Schedule 3.7
and the Contracts listed on Schedule 3.7 of the WEMT License Agreement,
there is no contract, lease, or other agreement necessary to enable Seller to
carry on its business in all material respects as now conducted.  All of the Assumed Contracts are in full force
and effect and are valid, binding, and enforceable in accordance with their
terms except as the enforceability of such Contracts may be

 

16

 

affected by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally and by judicial
discretion in the enforcement of equitable remedies.  No Seller Party is, nor to Seller’s Knowledge
is any other party thereto, in material default, violation, or breach under any
material Assumed Contract and no event has occurred and is continuing that
constitutes (with notice or passage of time or both) any such default,
violation, or breach thereunder.  Except
as disclosed on Schedule 3.7, to Seller’s
Knowledge, no party to any material Assumed Contract has any intention to (a) terminate
such Contract or seek to amend any material terms thereof, (b) refuse to
renew such Contract upon expiration of its term, or (c) renew such
Contract upon expiration only on terms and conditions that are more onerous
than those now existing.  Except for the
need to obtain the Consents listed on Schedule 3.7,
the exchange and transfer of the Purchased Assets in accordance with this
Agreement will not affect the validity, enforceability, or continuation of any
of the Assumed Contracts or reduce the amounts payable to Buyer thereunder.

 

3.8.                              Intangibles.  Schedule 3.8
is a true and complete list of all Intangibles (exclusive of Licenses listed on
Schedule 3.4) that are required to conduct the business and operations of
the Station as now conducted.  Licensee
or Seller owns or has a valid license to use all of the Intangibles listed on Schedule 3.8. 
Other than with respect to matters generally affecting the television
broadcasting industry and not particular to Seller or Licensee, and, except as
set forth on Schedule 3.8, neither Seller
nor Licensee has received any notice or demand alleging that either party is
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, domain names, copyrights, patents, patent
applications, know-how, methods, or processes owned by any other Person, and
there is no claim or action pending or, to Seller’s or Licensee’s Knowledge,
threatened with respect thereto.  To
Seller’s or Licensee’s Knowledge, except as set forth on Schedule 3.8,
no other Person is infringing upon Seller’s or Licensee’s rights or ownership
interests in the Intangibles.  Except as
set forth on Schedule 3.8, neither Seller
nor Licensee is required to pay any royalty arising from the Intangibles.

 

3.9.                              Title to Properties.  Except as disclosed on Schedule 3.5
or 3.6, Seller has good and marketable
title to the Purchased Assets subject to no Liens or other charges or rights of
others of any kind or nature except for Permitted Encumbrances.

 

3.10.                        Financial Statements.  Seller has furnished Buyer with true and
complete copies of unaudited financial statements of the Station containing a
balance sheet and statement of income, as, at, and for the fiscal year ended March 31,
2005 (the “Balance Sheet Date”)
(collectively, the “Financial Statements”). 
The Financial Statements have been prepared from the books and records
of Seller and have been prepared in accordance with GAAP in a manner consistent
with the audited Financial Statements of SBG, except for the absence of
footnotes and certain year-end adjustments. 
Except as set forth on Schedule 3.10,
the Financial Statements accurately reflect the books, records, and accounts of
Seller, present fairly and accurately the financial condition of the Station as
of March 31, 2005 and the results of operations for the period then ended,
and the Financial Statements do not understate in any material respect the
normal and customary costs and expenses of conducting the business or
operations of the Station in any material respect as currently conducted by
Seller or otherwise materially inaccurately reflects the operations of the
Station.

 

17

 

3.11.                        Taxes.  Except as set forth on Schedule 3.11,
Seller has filed or caused to be filed all Tax Returns that are required to be
filed with respect to its ownership and operation of the Station and has paid
or caused to be paid all Taxes shown on those returns or on any Tax assessment
received by them to the extent that such Taxes have become due, or have set
aside on its books adequate reserves (segregated to the extent required by
generally accepted accounting principles) with respect thereto. All such Tax
Returns are true and complete in all material respects.  There are no legal, administrative, or other
Tax proceedings presently pending and, to Seller’s Knowledge, there are no
grounds existing pursuant to which Seller is or could be made liable for any
Taxes, the liability for which could extend to Buyer as transferee of the
business of the Station, and no event has occurred that could impose on Buyer
any transferred liability for any Taxes, penalties or interest due or to become
due from Seller.  No claim has ever been
made by a Tax authority with respect to the Station in a jurisdiction where
Seller does not file Tax Returns that such Seller is or may be subject to
taxation by that jurisdiction.

 

3.12.                        Insurance.  Schedule 3.12
is a true and complete list of all insurance policies of or covering the
Purchased Assets or the business or operations of the Station.  All policies of insurance listed on Schedule 3.12 are in full force and effect as of the
date hereof.  During the past three (3) years,
no insurance policy of Seller or the Station has been canceled by the insurer
and, except as set forth on Schedule 3.12,
no application of Seller for insurance has been rejected by any insurer.

 

3.13.                        Reports.  All material returns, reports, and statements
that the Station is currently required to file with the FCC or Federal Aviation
Administration have been filed, and all reporting requirements of the FCC and
Federal Aviation Administration have been complied with in all material
respects.  All of such returns, reports,
and statements, as filed, satisfy all applicable legal requirements.

 

3.14.                        Personnel and Employee Benefits.

 

(a)                                  Employees and Compensation.  Schedule 3.14
contains a true and complete list of all employees of Seller employed at the
Station as of the date hereof, whether full or part-time (the “Employees”), and
indicates the salary and bonus, if any, to which each such Employee is
currently entitled (limited in the case of Employees who are compensated on a
commission basis to a general description of the manner in which such
commissions are determined), dates of hire, titles and number of sick days remaining
in calendar year 2005.  Except as
indicated on Schedule 3.14, the employment
of all Employees is terminable at will.  Schedule 3.14 also includes all Employees who are on
leave and indicates whether such leave is paid or unpaid and when such leave
commenced.  Schedule 3.14
also contains a true and complete list of all employee benefit plans or
arrangements covering the Employees, including, with respect to the Employees,
any:

 

(i)                                     “Employee welfare benefit plan,” as
defined in Section 3(1) of ERISA, that is maintained or administered
by Seller or any ERISA Affiliate for the benefit of, or to which Seller or any
ERISA Affiliate contributes or is required to contribute (a “Welfare Plan”);

 

18

 

(ii)                                  “Multiemployer pension plan,” as defined
in Section 3(37) of ERISA, that is maintained or administered by Seller or
any ERISA Affiliate or to which Seller or any ERISA Affiliate contributes or is
required to contribute (a “Multiemployer Plan”
and, together with the Welfare Plans, the “Benefit Plans”);

 

(iii)                               “Employee pension benefit plan,” as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan), to which Seller or any ERISA Affiliate
contributes or is required to contribute (a “Pension Plan”);

 

(iv)                              Employee
plan that is maintained in connection with any trust described in Section 501(c)(9) of
the Internal Revenue Code of 1986, as amended; and

 

(v)                                 Employment,
severance, deferred compensation, bonus payment or other similar contract,
arrangement, or policy and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured arrangements), workers’
compensation, Section 125 or other flexible disability benefits,
supplemental unemployment benefits, vacation benefits, sick pay benefits,
personal leave benefits, or retirement benefits or arrangement for deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation
rights, stock purchases, or other forms of incentive compensation or
post-retirement insurance, compensation, or benefits that (A) is not a
Welfare Plan, Pension Plan, or Multiemployer Plan, and (B) is entered
into, maintained, contributed to, or required to be contributed to by Seller or
any ERISA Affiliate or under which Seller or any ERISA Affiliate has any
liability relating to Employees (collectively, “Benefit
Arrangements”).

 

(b)                                 Pension Plans.  Seller does not sponsor, maintain, or
contribute to any Pension Plan other than the Sinclair Broadcast Group 401(k)
Profit Sharing Plan.  Such Pension Plan
complies currently and has been maintained in substantial compliance with its
terms and, both as to form and in operation, with all material requirements
prescribed by any and all material statutes, orders, rules, and regulations
that are applicable to such plans, including ERISA and the Code, except where
the failure to do so will not have a Material Adverse Effect.

 

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

 

(d)                                 Benefit Arrangements.  Each Benefit Arrangement has been maintained
in substantial compliance with its terms and with the material requirements
prescribed by all statutes, orders, rules, and regulations that are applicable
to such Benefit Arrangement.  Seller has
no written or oral contract prohibiting the termination of any Employee without
prior notice or that imposes on Seller a liability for any penalty or
continuing obligation to such Employee upon any such termination.

 

19

 

(e)                                  Multiemployer Plans.  Except as disclosed on Schedule 3.14,
Seller has not at any time been a participant in any Multiemployer Plan.

 

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

 

(i)                                     each
Welfare Plan and Pension Plan (and, if applicable, related trust agreements)
and all amendments thereto and written descriptions thereof that have been
distributed to Employees, all annuity contracts, or other funding instruments;
and

 

(ii)                                  each
Benefit Arrangement and written descriptions thereof that have been distributed
to Employees and complete descriptions of any Benefit Arrangement that is not
in writing.

 

(g)                                 Labor Relations.  Except as set forth on Schedule 3.14(g),
Seller is not a party to or subject to any collective bargaining agreement or
written or oral employment agreement with any Employee, and Seller is not a
party to any oral or written consulting or other agreement with respect to the
personal services of any Person who would be an Employee but for the fact that
his status is that of an independent contractor.  With respect to the Employees, Seller has
complied in all material respects with all laws, rules, and regulations
relating to the employment of labor, including those related to wages, hours,
collective bargaining, occupational safety, discrimination, and the payment of
social security and other payroll related taxes, and has not received any notice
alleging that Seller has failed to comply with any such laws, rules, or
regulations.  To Seller’s Knowledge,
Seller is not engaged in any material unfair labor practice or other material
unlawful employment practice and there are no charges of any unfair labor
practice or other unlawful employment practice pending against Seller before
the National Labor Relations Board, the Equal Opportunity Commission, the
Occupational Safety and Health Review Commission, the Department of Labor or
any other Governmental Authority.  Except
as set forth on Schedule 3.14(g), no
proceedings are pending or, to Seller’s Knowledge, threatened, between Seller
and any Employee (singly or collectively). 
Except as set forth on Schedule 3.14(g),
no labor union or other collective bargaining unit represents or claims to
represent any of the Employees.  Except
as set forth on Schedule 3.14(g), to Seller’s
Knowledge, there is no union campaign being conducted to solicit cards from any
Employees to authorize a union to represent any of the employees of Seller or
to request a National Labor Relations Board certification election with respect
to any Employees.

 

3.15.                        Claims and Legal Actions.  Except as disclosed on Schedule 3.15
and except for any FCC rulemaking proceedings generally affecting the
television broadcasting industry and not particular to Seller, there is no
claim, legal action, counterclaim, suit, arbitration, or other legal,
administrative, or tax proceeding, nor any order, decree, or judgment, in
progress or pending or, to Seller’s Knowledge, threatened, against or relating
to the Purchased Assets or the business or operations of the Station, nor does
Seller know of any basis for the same. 
To Seller’s Knowledge, Seller is not subject to any judgment or court
order affecting the operation of Seller’s business except (i) for FCC and
other governmental orders, decrees and actions which apply to the television
broadcasting industry generally, or (ii) as set forth on Schedule 3.15 hereto.

 

20

 

3.16.                        Environmental Compliance.  Except as disclosed on Schedule 3.16
and to Seller’s Knowledge:

 

(a)                                  Seller holds and is
in material compliance with all permits, licenses and other authorizations
required under all Environmental Laws applicable to the conduct of the business
of the Seller as presently conducted;

 

(b)                                 Seller
has not received any written notice of any demand, claim or action by any
Person or governmental body alleging a violation of or liability under any
Environmental Laws arising from the ownership, lease, operation or occupation
of any Owned Real Property or Leased Real Property by the Seller or any of its
predecessors;

 

(c)                                  there
has been no release (as that term is defined under any Environmental Laws) of
any Contaminants in, on, under or emanating from any Owned Real Property or
Leased Real Property or in, on, under or emanating from any real property
previously owned, leased, occupied or operated by the Seller or any of its
predecessors, that is in violation of or is reasonably likely to lead to any
liability arising under any Environmental Laws;

 

(d)                                 Seller
has not transported or arranged for the treatment, storage or disposal of any
Contaminants to any off-site location that has resulted in a liability or is
reasonably likely to lead to any liability to the Seller under any
Environmental Laws;

 

(e)                                  none of the Owned
Real Property or Leased Real Property contains (i) asbestos or
asbestos-containing materials, (ii) polychlorinated biphenyls (PCBs) or
any PCB-contaminated soil or (iii) any underground storage tanks; and no
underground storage tank or associated piping and equipment disclosed on Schedule 3.16 has leaked and has not been fully
remediated in accordance with all Environmental Laws, and such tank is in
material compliance with all applicable Environmental Laws; and

 

(f)                                    Seller
has delivered to Buyer true, complete and correct copies of any and all
existing environmental site assessment and other environmental reports,
including but not limited to reports of subsurface investigation, concerning or
relating to the Owned Real Property and the Leased Real Property that Seller
possess.

 

3.17.                        Compliance with Laws. Seller has
complied in all material respects with the Licenses and all federal, state and
local laws, rules, regulations and ordinances applicable or relating to the
ownership and operation of the Purchased Assets, and Seller has not received
any notice of any material violation of federal, state and local laws,
regulations and ordinances applicable or relating to the ownership or operation
of the Purchased Assets, nor, to Seller’s Knowledge, has Seller received any
notice of any immaterial violation of federal, state and local laws,
regulations, and ordinances applicable or relating to the ownership or
operation of the Purchased Assets.

 

21

 

3.18.                        Absence of Certain Changes or Events.  Since the Balance Sheet Date, Seller has
conducted its business and operations in the ordinary course and, except as
disclosed on Schedule 3.18, has not:

 

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

 

(b)                                 made any sale,
assignment, lease, or other transfer of Purchased Assets owned or used in the
business having a fair market value in excess of Twenty-five Thousand Dollars
($25,000) in the aggregate for all such assets, except (A) as required under
existing Contracts in the ordinary course of business, (B) in connection
with the acquisition of similar or replacement Purchased Assets, (C) inventory
sold in the ordinary course of business, or (D) obsolete Purchased Assets;

 

(c)                                  incurred
any material loss of or to the Purchased Assets (whether or not covered by
insurance), or voluntarily waived any material rights or voluntarily cancelled
any debts or claims other than in settlement of claims or debts in the ordinary
course of business not exceeding Twenty-five Thousand Dollars ($25,000) in the
aggregate for all such rights, debts or claims so settled during such period;

 

(d)                                 made
any changes in Seller’s accounting practices;

 

(e)                                  suffered
any write-down of the value of any Purchased Assets or any material write-off
as uncollectable of any Accounts Receivable to the extent exceeding Twenty-five
Thousand Dollars ($25,000) in the aggregate for all such Purchased Assets and
Accounts Receivable during such period;

 

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

 

(g)                                 made
any amendment of any material term of, or terminated or failed to renew (in
accordance with its terms), any Assumed Contract or License; or

 

(h)                                 suffered any
Material Adverse Effect

 

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

 

3.20.                        Transactions with Affiliates.  Except as set forth in Schedule 3.20,
no Affiliate of Seller, directly or indirectly, has any interest in, uses or has
any options or rights of any kind in or to any of the Purchased Assets of
Seller owned or used in the business, and Seller directly or indirectly (i) does
not purchase any material property or receive any material services from

 

22

 

(other than services as a
corporate officer or director), or sell any material property to, any Affiliate
of Seller, and (ii) is not a party to any Contract with any Affiliate of
Seller applicable to the business.

 

SECTION 4:  REPRESENTATIONS
AND WARRANTIES OF BUYER

 

Buyer represents and
warrants to Seller as of the date hereof and as of the Closing Date (except for
representations and warranties that speak as of a specific date or time, in
which case, such representations and warranties shall be true and complete as
of such date and time) as follows:

 

4.1.                              Organization, Standing and Authority.  Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of Pennsylvania and has
the requisite corporate power and authority to execute, deliver, and perform
this Agreement and the documents contemplated hereby according to their
respective terms and to own the Purchased Assets.  Prior to the Closing Date, Buyer will be
qualified to do business in the State in which the Station is located.

 

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

 

4.3.                              Absence of Conflicting Agreements and Required
Consents.  Except as set
forth on Schedule 4.3, the execution,
delivery, and performance by Buyer of this Agreement and the documents
contemplated hereby (with or without the giving of notice, the lapse of time,
or both):  (a) do not require the
consent of any third party; (b) will not conflict with the Certificate of
Incorporation or Bylaws of Buyer; (c) will not conflict with, result in a
breach of, or constitute a default under, any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; and (d) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Buyer is a
party or by which Buyer may be bound. 
Except as set forth on Schedule 4.3,
no consent, approval, permit, or authorization of, or declaration to, or filing
with any governmental or regulatory authority or any other third party is
required (a) to consummate this Agreement and the transactions
contemplated hereby, or (b) to permit Buyer to acquire the Purchased
Assets from Seller or to assume the Assumed Liabilities of Seller in accordance
with Section 2.5.

 

4.4.                              Brokers.   Except as disclosed on Schedule 4.4,
neither Buyer nor any Person acting on its behalf has incurred any liability
for any finders’ or brokers’ fees or commissions in connection with the
transactions contemplated by this Agreement, and Seller shall have no liability
for any finders’ or brokers’ fees or commissions in connection with the
transactions contemplated by this Agreement for the broker listed on Schedule 4.4.

 

23

 

4.5.                              WARN Act.  Buyer is not planning or contemplating and
has not made or taken any decisions or actions concerning the employees of
Station after the Closing Date that would require the service of notice under
the Worker Adjustment and Retraining Notification Act of 1988, as amended, or
any similar state law.

 

4.6.                              Buyer’s Defined Contribution Plan.  Schedule 4.6
completely and accurately lists all Buyer’s defined contribution plan or plans
(the “Buyer’s Plan”) intended to be qualified under Section 401(a) and
401(k) of the Code in which the Transferred Employees will be eligible to
participate.  Buyer has a currently
applicable determination letter from the Internal Revenue Service for Buyer’s
Plan.

 

SECTION 5: 
INTENTIONALLY DELETED

 

SECTION 6:  SPECIAL
COVENANTS AND AGREEMENTS

 

6.1.                              Confidentiality. Except as
necessary for the consummation of the transactions contemplated by this
Agreement, including Buyer’s obtaining of financing related hereto, and except
as and to the extent required by law, each party will keep confidential any
information obtained from the other party in connection with the transactions
specifically contemplated by this Agreement. 
If this Agreement is terminated, each party will return to the other
party all information obtained by such party from the other party in connection
with the transactions contemplated by this Agreement.  Nothing shall be deemed to be confidential
information that: (i) is already in such party’s possession, provided
that such information is not known by such party to be subject to another
confidentiality agreement with or other obligation of secrecy to the other
party hereto or another party; (ii) becomes generally available to the
public other than as a result of a disclosure by such party or such party’s
officers, directors, stockholders, managers, members, employees, lenders,
advisors, attorneys or accountants in breach of this Section 6.1; (iii) becomes
available to such party on a nonconfidential basis from a source other than
another party hereto or its advisors, provided that such source is not
known by such party to be bound by a confidentiality agreement with or other
obligation of secrecy to the other party hereto or another party; or (iv) is
developed independently by either party without resort to the confidential
information of the other party. 
Notwithstanding anything herein to the contrary, if the transactions
contemplated in this Agreement are consummated then Buyer’s obligations
pursuant to this Section 6.1 shall terminate automatically on the Closing
Date, but Seller will continue to be bound hereby for a period of three (3) years
from the Closing Date.

 

6.2.                              Cooperation.  Buyer and Seller shall reasonably cooperate
with each other and their respective counsel and accountants in connection with
any actions required to be taken as part of their respective obligations under
this Agreement, and in connection with any litigation after the Closing Date
which relate to the Station for periods prior to the Effective Time, Buyer and
Seller shall execute such other documents as may be reasonably necessary and
desirable to the implementation and consummation of this Agreement and
otherwise use their commercially reasonable efforts to consummate the
transaction contemplated hereby and to fulfill their obligations under this
Agreement.  Notwithstanding the
foregoing, neither Buyer nor Seller shall have any obligation (a) to
expend funds to obtain any of the Consents, other than ministerial processing
fees, and out of pocket expenses to their respective attorney or other agents
incurred

 

24

 

in connection with
obtaining such Consents, or (b) to agree to any adverse change in any
License or Assumed Contract in order to obtain a Consent required with respect
thereto.

 

6.3.                              Accounts Receivable.

 

(a)                                  As soon as practicable after the Closing,
Seller shall deliver to Buyer a complete and detailed list of all the Accounts
Receivable.  During the period beginning
on the Closing Date and ending on the last day of the sixth (6th) full calendar
month after the Closing Date (the “Collection Period”), Buyer shall use
commercially reasonable efforts, as Seller’s agent, to collect the Accounts
Receivable in the usual and ordinary course of business, using the Station’s
credit, sales, and other appropriate personnel in accordance with customary
practices which may, at Buyer’s option, include referral to a collection
agency.  Notwithstanding the foregoing,
Buyer shall not be required to institute legal proceedings on Seller’s behalf
to enforce the collection of any Accounts Receivable.  Buyer shall not adjust any Accounts
Receivable or grant credit without Seller’s written consent, and Buyer shall
not pledge, secure, or otherwise encumber such Accounts Receivable or the
proceeds therefrom.  On or before the
twelfth (12th) business day after the end of each calendar month during the
Collection Period, Buyer shall remit to Seller collections received by Buyer
with respect to the Accounts Receivable, together with a report of all amounts
collected with respect to the Accounts Receivable during, as the case may be,
the period from the Closing or the beginning of such month through the end of
such month, less any sales commissions or collection costs incurred by Buyer
during the respective periods with respect to those Accounts Receivable.

 

(b)                                 Any
payments received by Buyer during the Collection Period from any Person that is
an account debtor with respect to any account disclosed in the list of Accounts
Receivable delivered by Seller to Buyer shall be applied first to the invoice
designated by the account debtor and, if none, such payment shall be applied to
the oldest account which is not disputed. 
Buyer shall incur no liability to Seller for any uncollected account,
other than as a result of Buyer’s breach of its obligations under this Section 6.3.  Prior to the end of the Collection Period,
Seller, or any agent of Seller, shall not make any direct solicitation of the
account debtors for payment.  After the
end of the Collection Period, Seller shall have the right, at its expense, to
assist and participate with Buyer in the collection of unpaid Accounts
Receivable, provided, however, Seller’s collection efforts shall be
commercially reasonable and consistent with its past practices and shall not
include the institution of legal proceedings without Buyer’s consent (not to be
unreasonably withheld) unless Buyer shall have instituted its own legal
proceedings against such account debtor.

 

(c)                                  At
the end of the Collection Period, Buyer shall provide Seller access and the
right to copy all files concerning the collection or attempts to collect the
Accounts Receivable, and Buyer’s responsibility for the collection of the
Accounts Receivable shall cease.

 

6.4.                              Allocation of Purchase Price. Buyer
and Seller shall mutually agree upon a statement (the “Allocation
Statement”) setting forth the value of the Purchased Assets, which
shall be used for the allocation of the Purchase Price (together with the
Assumed Liabilities) among the Purchased Assets.  Seller and Buyer agree to report an
allocation of such Purchase Price among the Purchased Assets in a manner
entirely consistent with the Allocation Statement and agree to act in
accordance with such Allocation Statement in the preparation of financial

 

25

 

statements and filing of
all Tax Returns (including, without limitation, filing Internal Revenue Service
Form 8594 with its federal income tax return for the taxable year that
includes the Closing Date) and in the course of any Tax audit, Tax review or
Tax litigation matter relating hereto. 
If Seller and Buyer are unable to agree on such allocation, Seller and
Buyer agree to retain a nationally recognized appraisal firm experienced in
valuing television broadcast properties to appraise the Purchased Assets.  The appraisal firm shall perform such
appraisal promptly.  Seller and Buyer
shall each pay one-half (1/2) of the costs of such appraisal.

 

6.5.                              Access to Books and Records after Closing.  From and after the Closing Date, to the
extent reasonably requested by Buyer, Seller shall provide Buyer access and the
right to copy any books and records relating to the Purchased Assets, but not
included in the Purchased Assets.  From
and after the Closing Date, to the extent reasonably requested by Seller, Buyer
shall provide Seller access and the right to copy any books and records
relating to the Purchased Assets that are included in the Purchased
Assets.  Buyer and Seller shall each
retain any such books and records for a period of three (3) years (or such
longer period as may be required by law or good business practice) following
the Closing Date All such copies shall be made at the expense of the requesting
party.

 

6.6.                              Employee Matters.

 

(a)                                  Upon
consummation of the Closing hereunder, Buyer shall offer employment as an
employee “at will” to each of the Employees of the Station (including those on
leave of absence, whether short-term, long-term, family, maternity, disability,
paid, unpaid or other), except for the General Manager of the Station and the
two employees to be employed by Licensee as listed on Schedule 6.6,
at a comparable salary or wage, position, and place of employment as held by
each such Employee immediately prior to the Closing Date (such Employees who
accept such offers of employment are referred to herein as the “Transferred Employees”).

 

(b)                                 Except
as provided otherwise in this Section 6.6, Seller shall pay, discharge,
and be responsible for (a) all salary, wages and commissions (including
bonuses, vacation pay and personal leave pay accruing to the Closing Date)
arising out of or relating to the employment of the Employees prior to the
Closing Date, and (b) any employee benefits arising under the Benefit
Plans or Benefit Arrangements of Seller and its Affiliates during the period
prior to such Closing Date.  From and
after the Closing Date, Buyer shall pay, discharge, and be responsible for all
salary, wages, and benefits (including bonuses, vacation pay and personal leave
pay accruing from and after the Closing Date) arising out of or relating to the
employment of the Transferred Employees by Buyer on and after the Closing
Date.  Buyer shall be responsible for all
severance liabilities and all COBRA liabilities for any Transferred Employees
of the Station terminated after the Closing Date.  Seller shall be responsible for all severance
liabilities, all COBRA liabilities, and any and all other liabilities for any
Employees of the Station who do not become Transferred Employees.

 

(c)                                  Buyer
shall cause all Transferred Employees as of the Closing Date to be eligible to
participate in its “employee welfare benefit plans” and “employee pension
benefit plans” (as defined in Section 3(1) and 3(2) of ERISA,
respectively) of Buyer in which similarly situated employees of Buyer are
generally eligible to participate; provided, however, that Buyer shall

 

26

 

credit each Transferred
Employee with the period of years of service with Seller, any Affiliate of
Seller or any prior owner of the Station in determining eligibility to
participate and vesting in such plans; and provided further that Buyer shall
waive any pre-existing condition limitation under Buyer’s “employee welfare
benefit plans” for any condition of a Transferred Employee (or eligible spouse
and dependents) except to the extent that any such limitation actually applied
to such Transferred Employees prior to the Closing Date.

 

(d)                                 For purposes of any
length of service requirements, waiting period, vesting periods, or
differential benefits based on length of service in any such plan for which a Transferred
Employee may be eligible after the Closing (but not for benefit accrual
purposes under any defined benefit plan), Buyer shall ensure that, to the
extent permitted by law and the terms of such plan, service by such Transferred
Employee with Seller, any Affiliate of Seller, or any prior owner of the
Station shall be deemed to have been service with the Buyer.  In addition, Buyer shall ensure that each
Transferred Employee receives credit under any welfare benefit plan of Buyer
for any deductibles or co-payments paid by such Transferred Employee and his or
her dependents for the current plan year under a plan maintained by Seller or
any Affiliate of Seller to the extent allowable under any such plan.  At the Closing, Seller shall deliver to Buyer Schedule 6.6
setting forth Seller’s good faith estimate of all accrued and unpaid bonuses
and all accrued but unused vacation time and personal leave time, and unused
sick time, of each Employee as of April 30, 2005. To the extent any claim with respect to accrued bonuses, vacation leave,
personal leave or sick leave is lodged against Seller with respect to any
Transferred Employee, Buyer shall indemnify, defend and hold harmless Seller
from and against any and all losses, directly or indirectly, as a result of or
based upon or arising from the same, provided, that in the case of accrued
bonuses, accrued vacation leave and accrued personal leave, such indemnity
shall apply only to the extent the Purchase Price was reduced pursuant to Section 2.3(b) as
a result of the proration of such liability.

 

(e)                                  As
soon as practicable following the Closing Date, Buyer shall cause its defined
contribution plan to accept any “eligible rollover distribution” (as such term
is defined in Section 401(a)(31) of the Code) from a Transferred Employee.

 

(f)                                    Nothing
in this Agreement shall be construed to provide employees of Seller with any
rights under this Agreement, and no Person, other than the parties hereto, is
or shall be entitled to bring any action to enforce any provision of this
Agreement against any of the parties hereto, and the covenants and agreements
set forth in this Agreement shall be solely for the benefit of, and shall only
be enforceable by, the parties hereto and their respective successors and
assigns as permitted hereunder.

 

6.7.                              Public Announcements.  Seller and Buyer shall consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
herein and shall not issue any such press release or make any such public
statement without the prior written consent of the other party, which shall not
be unreasonably withheld; provided, however, that a party may, without the
prior written consent of the other party, issue such press release or make such
public statement as may be required by Law or any listing agreement with a
national securities exchange to which SBG or Buyer is a party if it has used
all reasonable efforts to consult with the other party and to obtain such party’s
consent but has been unable to do so in a timely manner.

 

27

 

6.8.                              Bulk Sales Law.  Buyer hereby waives compliance by Seller, in
connection with the transactions contemplated hereby, with the provisions of
any applicable bulk transfer laws.

 

6.9.                              Title Insurance.  Seller shall cooperate with Buyer in
obtaining the commitment of a title insurance company reasonably satisfactory
to Buyer agreeing to issue to Buyer, at standard rates, ALTA [1992] Form extended
coverage title insurance policies, insuring Buyer’s interest in the Owned Real
Property (the “Title Commitment”).  The
costs of the Title Commitment and the policy to be issued pursuant to the Title
Commitment shall be paid by Buyer.

 

6.10.                        Surveys.  Seller shall cooperate with Buyer in
obtaining surveys performed by surveyors reasonably acceptable to Buyer, at
Buyer’s expense, sufficient to remove any “survey exception” from the title
insurance policies to be issued pursuant to the Title Commitments.

 

6.11.                        Non-Solicitation.  SBG and Seller shall not, and shall not
permit any of their Affiliates to, beginning on the Closing Date and continuing
for a period of two (2) years thereafter, without the prior written
approval of Buyer, directly or indirectly, hire, solicit, encourage, entice or
induce any Person who is a Transferred Employee to terminate his or her
employment with Buyer; provided, however, that this provision shall not prohibit Seller or
any Affiliate from making a general, public solicitation or a general,
industry-wide solicitation for employment, or from hiring any of Buyer’s
employees who respond to such a solicitation. 
SBG agrees that any remedy at law for any breach by it of this Section 6.11
would be inadequate, and Buyer would be entitled to injunctive relief in such a
case, in addition to any other remedies at law to which Buyer may be
entitled.  If it is ever held that the
restrictions placed on SBG by this Section 6.11 are too onerous and are
not necessary for the protection of Buyer, then the parties agree that any
court of competent jurisdiction may reduce the duration or scope hereof, or
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced.

 

6.12.                        Assignment of the Station Studio Lease.  Seller shall use commercially reasonable
efforts to obtain the consent of the landlord to assign the WEMT studio and
office lease to Buyer after Closing, except that Buyer must lease the STL tower
back to Seller, on substantially the same terms, until the Closing under the
WEMT License Agreement..  Seller shall
use commercially reasonable efforts to obtain the consent of the landlord to
assign the Tower Space Lease Agreement to Buyer, with the right to sublease a
portion of the premises back to Seller, on substantially the same terms, until
the Closing under the WEMT License Agreement. 
To the extent that Seller is not able to obtain any of the foregoing
consents, the provisions of Section 6.16 below shall apply.

 

6.13.                        Control of the Station.  Buyer shall not, directly or indirectly,
control, supervise or direct, or attempt to control, supervise or direct, the
operations of the Station; those operations, including complete control and
supervision of all of the Station’s programs, employees and policies, shall be
the sole responsibility of Seller.

 

6.14.                        SBG Guaranty  By its execution hereof with respect to
this Section 6.14 and Section 6.11, SBG irrevocably and
unconditionally guarantees to Buyer the full, complete and timely performance
by Seller of any and all obligations of Seller under this Agreement, including

 

28

 

without limitation, the
indemnification obligations of Seller under Section 10 hereof.  This guaranty shall remain in full force and
effect so long as Seller shall have any obligations or liabilities
hereunder.  This guaranty shall be deemed
a continuing guaranty and the waivers of SBG herein shall remain in full force
and effect until the satisfaction in full of all of Seller’s obligations
hereunder.  If any default shall occur by
Seller in its performance or satisfaction of any of its obligations hereunder,
then SBG will itself perform or satisfy, or cause to be performed or satisfied,
such obligations immediately upon notice from Buyer specifying in summary form
the default.  This guaranty is an
absolute, unconditional and continuing guaranty of payment and performance
which shall remain in full force and effect without respect to future changes
in conditions, including any change of law. 
SBG agrees that its obligations hereunder shall not be contingent upon
the exercise or enforcement by Buyer of whatever remedies it may have against
Seller.  To the maximum extent permitted
by law, SBG hereby waives: (i) notice of acceptance hereof; (ii) notice
of any adverse change in the financial condition of Seller or of any other fact
that might increase SBG’s risk hereunder; and (iii) presentment, protest,
demand, action or delinquency in respect of any of Seller’s obligations
hereunder.

 

6.15.                        Network Discussions.  SBG will keep Buyer apprised of the status of
its negotiations with Fox Broadcasting Company and its affiliates regarding the
Station’s network affiliation agreement. 
SBG will take such other actions as identified on Schedule 6.15.

 

6.16.                        Deferred Consents.  Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign or
transfer any Contract or any claim, right, or benefit arising thereunder or
resulting therefrom, if an attempted assignment or transfer thereof, without
the consent of a third party thereto would constitute a breach thereof or in
any way materially adversely affect the rights of the Buyer or Seller
thereunder.  If such consent (a “Deferred
Consent”) is not obtained, or if an attempted assignment or transfer thereof
would be ineffective or would materially adversely affect the rights or
benefits thereunder so that the Buyer would not receive all such rights and
benefits, then (i) Seller and Buyer will cooperate, in all reasonable
respects, to obtain such Deferred Consents as soon as practicable; provided
that neither Seller nor Buyer shall have any obligation (y) to expend funds to
obtain any Deferred Consent, other than ministerial processing fees, and  out-of-pocket expenses to their respective
attorney or other agents incurred in connection with obtaining any Deferred
Consent, or (z) to agree to any adverse change in any License or Assumed
Contract in order to obtain a Deferred Consent, and (ii) until such Deferred
Consent is obtained, Seller and Buyer will cooperate in all reasonable respects
to provide to the Buyer the benefits and rights under the Contract to which
such Deferred Consent relates (with the Buyer responsible for all the
liabilities and obligations thereunder to the extent relating to the period
after the Closing Date).  In particular,
in the event that any such Deferred Consent is not obtained prior to Closing,
then Buyer and Sellers shall enter into such arrangements (including subleasing
or subcontracting if permitted) to provide to the parties the economic and
operational equivalent of obtaining such Deferred Consent and assigning or
transferring such Contract, including enforcement for the benefit of the Buyer
of all claims or rights or benefits arising thereunder, and the performance by
the Buyer of the obligations thereunder on a prompt and punctual basis.

 

29

 

SECTION 7:  CONDITIONS
TO OBLIGATIONS OF BUYER AND SELLER

 

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

 

(a)                                  Representations and Warranties.  All representations and warranties of Seller
contained in this Agreement shall be true and complete at and as of the Closing
Date as though made at and as of that time (except for representations and
warranties that speak as of a specific date or time which need only be true and
complete as of such date or time), except where the failure to be true and
complete does not have a Material Adverse Effect.

 

(b)                                 Covenants and Conditions.  Seller shall have performed and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date, except where
the failure to have performed and complied does not have a Material Adverse
Effect.

 

(c)                                  Governmental Authorizations.  On the Closing Date, Licensee shall be the
holder of the FCC Licenses.

 

(d)                                 Deliveries.  Seller shall have made or stand willing to
make all the deliveries to Buyer described in Section 8.2.

 

(e)                                  Absence of Proceedings.  No injunction, restraining order or decree of
any nature of any Governmental Authority of competent jurisdiction shall be in
effect enjoining or preventing consummation of
the transactions contemplated by this Agreement.

 

(f)                                    WEMT License Agreement and JSA.  The WEMT License Agreement and JSA shall have
been executed and delivered by the parties thereto.

 

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

 

(a)                                  Representations and Warranties.  All representations and warranties of Buyer
contained in this Agreement shall be true and complete in all material respects
at and as of the Closing Date as though made at and as of that time (except for
representations and warranties that speak as of a specific date or time which
need only be true and complete as of such date or time).

 

(b)                                 Covenants and Conditions.  Buyer shall have performed and complied in
all material respects with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date.

 

(c)                                  WEMT License Agreement and JSA.  The WEMT License Agreement and JSA shall have
been executed and delivered by the parties thereto.

 

30

 

(d)                                 Tower Lease Agreement.  Buyer shall have executed the Tower Lease
Agreement leasing to Licensee and/or Seller space on the tower and in the
building located on the Owned Real Property in the form attached hereto as Exhibit A.

 

(e)                                  Deliveries.  Buyer shall have made or stand willing to
make all the deliveries described in Section 8.3.

 

SECTION 8:  CLOSING
AND CLOSING DELIVERIES

 

8.1.                              Closing.

 

(a)                                  Closing Date.  The Closing Date shall be May 16, 2005
(the “Closing Date”).  The parties
acknowledge and agree that they are executing this Agreement and Closing
simultaneously.

 

(b)                                 Closing Place. The Closing shall be
held at 10706 Beaver Dam Road, Hunt Valley, Maryland 21030, or any other place
that is mutually agreed upon by Buyer and Seller.

 

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

 

(a)                                  Conveyancing Documents.  Duly executed deeds in form and quality
equivalent to the deeds by which Seller obtained title, bills of sale, motor
vehicle titles, assignments, and other transfer documents that are sufficient
to vest good and marketable title to the Purchased Assets being transferred at
the Closing in the name of Buyer (or, in the case of any Owned Real Estate, in
the name of Appalachian as Buyer’s designee), free and clear of all Liens
except for Permitted Encumbrances, including the following:

 

(i)                                     Assignment
and Assumption of Contracts Agreement  in
the form attached hereto as Exhibit B;  and

 

(ii)                                  Bill
of Sale in the form of attached hereto as Exhibit C.

 

(b)                                 Officer’s Certificate.  A certificate, dated as of the Closing Date,
executed by an officer of Seller, certifying: 
(i) that the representations and warranties of Seller contained in
this Agreement are true and complete as of the Closing Date as though made on
and as of that date (except for representations and warranties that speak as of
a specific date or time, which need only be true and complete as of such date
or time), except to the extent that the failure of such representations and
warranties shall not have had a Material Adverse Effect, and (ii) that
Seller has in all respects performed and complied with all of its obligations,
covenants, and agreements in this Agreement to be performed and complied with
on or prior to such Closing Date, except to the extent that the failure to
perform such covenants shall not have had a Material Adverse Effect.

 

(c)                                  Secretary’s Certificate.  A certificate, dated as of the Closing Date,
executed by each of the Seller’s secretaries, members, partners, or designees,
as the case may be: (i) certifying that the resolutions, as attached to
such certificate, were duly adopted by Seller’s Board of Directors and shareholders
(if required) (or by the general partner in the case of a partnership or

 

31

 

by the members in the
case of a limited liability company), authorizing and approving the execution
of this Agreement and the consummation of the transaction contemplated hereby
and that such resolutions remain in full force and effect; and (ii) providing,
as attachments thereto, the Articles of Incorporation and Bylaws (or other
organizational documents) of Seller.

 

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

 

(e)                                  United States Real Property Interest Certificates.  Seller shall have executed and delivered to
Buyer certificates of non foreign status satisfying the requirements of
Treasury Regulations Section 1.1445-2(b).

 

(f)                                    Real Estate Documents.  Standard
documentation (including certain affidavits of Seller) that may be reasonably
requested of Seller by Buyer’s counsel in connection with Buyer obtaining title
insurance policies relating to the Owned Real Property.

 

(g)                                 JSA.  The JSA, duly executed by Seller.

 

(h)                                 Tower Lease Agreement.  The Tower Lease Agreement, duly executed by
Seller and/or Licensee.

 

(i)                                     Other Documents.  Such other documents reasonably requested by
Buyer or its counsel for complete implementation of this Agreement and
consummation of the transaction contemplated hereby, including any release of
Liens encumbering the Purchased Assets (other than Permitted Encumbrances).

 

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

 

(a)                                  Payment.  The payment of the Purchase Price as
described in Section 2.4(a).

 

(b)                                 Officer’s Certificate.  A certificate, dated as of the Closing Date,
executed on behalf of an officer of the Buyer, certifying (i) that the
representations and warranties of Buyer contained in this Agreement are true
and complete in all material respects as of the Closing Date as though made on
and as of that date, and (ii) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
in this Agreement to be performed and complied with, on, or prior to the
Closing Date.

 

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

 

32

 

(d)                                 Assumption Agreements.  Appropriate assumption agreements executed by
Buyer pursuant to which Buyer shall assume and undertake to perform Seller’s
obligations and liabilities to the extent provided under this Agreement,
including, without limitation, the Assignment and Assumption of Contracts in
the form attached hereto as Exhibit B.

 

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

 

(f)                                    JSA.  The JSA, duly executed by Appalachian and
Buyer.

 

(g)                                 Tower Lease Agreement. The Tower
Lease Agreement, duly executed by Buyer.

 

(h)                                 Other Documents.  Such other documents reasonably requested by
Seller or its counsel for complete implementation of this Agreement and
consummation of the transactions contemplated hereby.

 

SECTION 9: 
INTENTIONALLY DELETED

 

SECTION 10:  SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;

CERTAIN REMEDIES

 

10.1.                        Survival of Representations.  All representations and warranties,
covenants, and agreements of Seller and Buyer contained in or made pursuant to
this Agreement or in any certificate furnished pursuant hereto shall survive
the Closing Date and shall remain in full force and effect to the following
extent:  (a) representations and
warranties shall survive for a period of twelve (12) months after the Closing
Date; (b) except as otherwise provided herein, the covenants and
agreements which, by their terms, survive the Closing shall continue in full
force and effect until fully discharged; (c) Seller’s obligation to pay,
perform or discharge the Retained Liabilities shall survive the Closing until
such Retained Liabilities have been paid, performed or discharged in full by
Seller; and (d) any representation, warranty, covenant, or agreement that
is the subject of a claim which is asserted in a reasonably detailed writing
prior to the expiration of the survival period set forth in this Section 10.1
shall survive with respect to such claim or dispute until the final resolution
thereof; provided that the covenants and agreements set forth in Section 6.1
(Confidentiality), Section 6.2 (Cooperation), Section 6.3 (Accounts
Receivable), Section 6.4 (Purchase Price Allocation), Section 6.5
(Books and Records), Section 6.6 (Employees), Section 11.1 (Fees and
Expenses), Section 11.2 (Notices), and Section 11.3 (Benefit and
Binding Effect) shall survive the Closing for the period provided therein or,
if no period is specified, in perpetuity. 
Notwithstanding the foregoing, the representations and warranties with
respect to Sections 3.2, 3.9, 3.11 and 4.2 shall survive until expiration of
the applicable statute of limitations, and the representations and warranties
with respect to Section 3.16 shall survive for a period of two (2) years
after the Closing Date.

 

10.2.                        Indemnification by Seller.  After the Closing, but subject to Sections
10.1 and 10.5, Seller hereby agrees to indemnify and hold Buyer harmless from
and against and with respect to and shall reimburse Buyer for:

 

33

 

(a)                                  any
Loss arising out of or resulting from any untrue representation, breach of
warranty, or nonfulfillment of any covenant by Seller contained in this
Agreement or in any certificate, document, or instrument delivered to Buyer
under this Agreement;

 

(b)                                 any
and all obligations of Seller not assumed by Buyer pursuant to this Agreement,
including the Retained Liabilities;

 

(c)                                  any
Loss arising out of or resulting from the failure of the parties to comply with
the provisions of any bulk sales law applicable to the transfer of the Purchased
Assets; and

 

(d)                                 any
and all obligations or Loss arising out of or resulting from the operation or
ownership of the Station prior to the Closing (except any losses, liabilities,
or damages for which Buyer has received a reduction in the Purchase Price), including
any liabilities arising under the Business Licenses or the Assumed Contracts to
the extent that they relate to events occurring prior to the Closing Date.

 

10.3.                        Indemnification by Buyer.  After the Closing, but subject to Sections
10.1 and 10.5, Buyer hereby agrees to indemnify and hold Seller harmless
against and with respect to and shall reimburse Seller for:

 

(a)                                  any and all Loss
arising out of or resulting from any untrue representation, breach of warranty,
or nonfulfillment of any covenant by Buyer contained in this Agreement or in
any certificate, document, or instrument delivered to Seller under this
Agreement;

 

(b)                                 any
and all obligations of Seller assumed by Buyer pursuant to this Agreement;

 

(c)                                  any
and all Assumed Liabilities; and

 

(d)                                 any
and all obligations or Loss arising out of or resulting from the operation or
ownership of the Station after the Closing, except any losses, liabilities, or
damages for which Seller has received an adjustment in its favor.

 

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

 

(a)                                  The
party claiming indemnification (the “Claimant”) shall promptly give notice to
the party from which indemnification is claimed (the “Indemnifying Party”) of
any claim, whether between the parties or brought by a third party, specifying
in reasonable detail the factual basis for the claim (to the extent known or
reasonably available to the Claimant), the amount thereof, estimated in good
faith, all with reasonably particularity and containing a reference to the
provisions of this Agreement in respect of which such indemnification claim
shall have occurred.  If the claim
relates to an action, suit, or proceeding filed by a third party against Claimant,
such notice shall be given by Claimant within fifteen (15) business days after
written notice of such action, suit, or proceeding was given to Claimant,
provided, however, that the failure or delay of the Claimant to provide such
notice (or other required deliveries) shall not release the Indemnifying Party
from any of its obligations under this Section 10 unless (and then solely
to the extent) the Indemnifying Party is materially prejudiced thereby.

 

34

 

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

 

(c)                                  With
respect to any claim by a third party as to which the Claimant is entitled to
indemnification under this Agreement, the Indemnifying Party shall have the
right, at its own expense, to participate in or assume control of the defense
of such claim, and the Claimant shall cooperate fully with the Indemnifying
Party, subject to reimbursement for actual out-of-pocket expenses incurred by
the Claimant as the result of a request by the Indemnifying Party, provided,
however, that Indemnifying Party may not assume control of the defense unless
it affirms in writing its obligation to indemnify Claimant for any damages
incurred by Claimant with respect to such third-party claim.  If the Indemnifying Party elects to assume
control of the defense of any Third Party Claim, then (i) the Indemnifying
Party shall be required to conduct the defense of the Third Party Claim
diligently and in good faith, (ii) the Claimant shall have the right to
participate in the defense of such claim at its own expense and shall not
settle or compromise the Third Party Claim and (iii) the Indemnifying
Party shall have the power and authority to settle or consent to the entry of
judgment in respect of the Third Party Claim without the consent of the
Claimant if the judgment or settlement results only in the payment by the
Indemnifying Party of the full amount of money damages and includes a release
of the Claimant from any and all liability thereunder.  The Indemnifying Party may not settle any
claim that would reasonably be expected to have an adverse effect on the
Claimant without the Claimant’s written consent.  If the Indemnifying Party does not elect to
assume control or otherwise participate in the defense of any third-party
claim, it shall be bound by the results obtained in good faith by the Claimant
with respect to such claim.

 

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

 

(e)                                  The indemnification
rights provided in Section 10.2 and Section 10.3 shall extend to the
members, partners, shareholders, officers, directors, employees,
representatives, successors and assigns and affiliated entities of any Claimant
although for the purpose of the procedures set forth in this Section 10.4,
any indemnification claims by such parties shall be made by and through the
Claimant.

 

10.5.                        Certain Limitations.

 

(a)                                  Notwithstanding
anything in this Agreement to the contrary, in the absence of fraud, neither
party shall indemnify or otherwise be liable to the other party with respect to
any

 

35

 

claim for any breach of a representation or warranty, or
for the breach of any covenant contained in this Agreement, unless notice of
the claim is given within the relevant survival period specified in Section 10.1.

 

(b)                                 Notwithstanding anything in this
Agreement to the contrary, in the absence of fraud, and except with respect to
Buyer’s Loss attributable to matters described in Section 10.2(b), Seller
shall not be liable to Buyer in respect of any indemnification hereunder except
to the extent that (i) the aggregate amount of Buyer’s Loss (together with
any Loss suffered by Aurora under the WEMT License Agreement) exceeds Seventy
Five Thousand Dollars ($75,000.00) (the “Threshold Amount”) (and then only to
the extent such Loss exceeds the Threshold Amount); provided that all
materiality qualifications in the representations and warranties of an
Indemnifying Party with respect to which the other party as Claimant shall
claim Loss shall be disregarded solely for purposes of determining the
occurrence of any untrue representation or breach of warranty and the amount of
Loss to be counted towards the Threshold Amount; and provided, further,
that the foregoing shall not apply to any amounts owed in connection with the
Purchase Price or the proration adjustment thereof.

 

(c)                                  Notwithstanding anything in this
Agreement to the contrary, in the absence of fraud, and except with respect to
Buyer’s Loss attributable to matters described in Section 10.2(b), Seller
shall be liable to indemnify Buyer hereunder only to the extent the total
amount of Buyer’s Loss (together with any loss suffered by Aurora under the
WEMT License Agreement) in excess of the Threshold Amount is less (in the
aggregate) than One Million Dollars ($1,000,000.00) (the “Indemnity
Cap”).

 

(d)                                 Notwithstanding
any other provision of this Agreement to the contrary, in no event shall a
party be entitled to indemnification for such party’s incidental, special,
exemplary or punitive damages, regardless of the theory of recovery.  Each party hereto agrees to use reasonable
efforts to mitigate any losses, which form the basis for any claim for
indemnification hereunder.

 

(e)                                  Notwithstanding
any other provision of this Agreement to the contrary, in no event shall the
Threshold Amount or the Indemnity Cap apply to (i) breaches of Seller’s
representations and warranties contained in Sections 3.2 (Authorization and
Binding Obligation), 3.9 (Title to Properties), 3.11 (Taxes), and 3.19
(Broker); or (ii) Seller’s obligations with respect to any Excluded Assets
or Retained Liabilities.

 

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

 

(g)                                 Neither
Buyer nor Seller as Claimant shall be entitled to indemnity pursuant to
Sections 10.2 or 10.3, as the case may be, from the other party as Indemnifying
Party with respect to such Indemnifying Party’s breach of any of its
representations, warranties, covenants

 

36

 

or agreements contained
herein to the extent that the inaccuracy of any such representation, or the
breach of any such warranty, covenant or agreement is caused by any breach by
or failure of Claimant or its employees or agents in performing or complying
with Claimant’s obligations, covenants and agreements set forth in the JSA.

 

10.6.                        Tax Treatment of Indemnity Payments.  Buyer and Seller agree to treat any indemnity
payment made pursuant to this Agreement as an adjustment to the Purchase Price
for all Tax purposes, unless otherwise required by Law.

 

SECTION 11:  MISCELLANEOUS

 

11.1.                        Fees and Expenses; Transfer Taxes.  

 

(a)                                  Buyer
and Seller shall each pay one-half (1/2) of any filing fees, transfer taxes,
document stamps, or other charges levied by any governmental entity (other than
income, sale, use and transfer Taxes, which shall be the responsibility of
Seller) on account of the transfer of the Purchased Assets from Seller to
Buyer.

 

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

 

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

 

To
Buyer:

 

BlueStone
Television Inc.

8415
E. 21st Street N., Suite 120

Wichita,
KS 67206

Attn:  Sandy DiPasquale

Telephone:  (316) 315-0076

Facsimile:  (316) 315-0345

 

With
a required copy to:

 

Providence
Equity Partners, Inc.

50
Kennedy Plaza

Providence,
RI 02903

Attention:  Albert J. Dobron, Jr.

Telephone
No.:  401-751-1700

 

37

 

Facsimile
No.:  401-751-1790

 

Edwards &
Angell, LLP

2800
Financial Plaza

Providence,
RI  02903

Attn:  Christopher Graham

Telephone:  (401) 274-9200

Facsimile:  (401) 276-6625

 

To
Seller:

 

c/o
Sinclair Properties, LLC

10706
Beaver Dam Road

Hunt
Valley, MD  21030

Attn:  President

Telephone:  (410) 568-1506

Facsimile:  (410) 568-1533

 

With
a required copy to:

 

Sinclair
Broadcast Group, Inc.

10706
Beaver Dam Road

Hunt
Valley, MD  21030

Attn:  General Counsel

Telephone:  (410) 568-1524

Facsimile:  (410) 568-1537

 

or
to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.

 

11.3.                        Benefit and Binding Effect. 

 

(a)                                  Buyer
may not assign this Agreement to any other party without the consent of Seller,
which assignment, if consented to by the Seller, shall not relieve Buyer of its
obligations hereunder, provided that Buyer may assign its rights hereunder (but
not its obligations) to a wholly-owned subsidiary of Buyer and Buyer may assign
as collateral and grant a security interest in all of its right, title and
interest under this Agreement (but not its obligations) to its lenders
providing the financing hereof.  Seller
may assign, combine, merge, or consolidate with any Affiliate of Seller so long
as Seller or its successors and assigns are bound by the terms and conditions
of this Agreement in all respects as if such successors and assigns were
original parties hereto.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. 
No Person, other than the parties hereto, is or shall be entitled to
bring any action to enforce any provision of this Agreement against any of the
parties hereto, and the covenants and agreements set forth in this Agreement
shall be solely for the benefit of, and shall be enforceable only by, the
parties hereto or their respective successors and assigns as permitted
hereunder.

 

38

 

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

 

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

 

11.6.                        Entire Agreement.  This Agreement, the Schedules hereto, and all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively, represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter of this
Agreement.  This Agreement supersedes all
prior negotiations between the parties and cannot be amended, supplemented, or
changed except by an agreement in writing duly executed by each of the parties
hereto.

 

11.7.                        Waiver of Compliance; Consents.  Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.  Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 11.7.

 

11.8.                        Headings.  The headings of the sections and subsections
contained in this Agreement are inserted for convenience only and do not form a
part or affect the meaning, construction or scope thereof.

 

11.9.                        Counterparts.  This Agreement may be signed in two or more
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.  Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

[Signatures
Begin on Following Page]

 

39

 

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

 

 

	
   

  	
  BLUESTONE TELEVISION,
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Grossi

  	
   

  
	
   

  	
  Name:

  	
  John Grossi

  	
   

  
	
   

  	
  Title:

  	
  Vice President and
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SINCLAIR PROPERTIES,
  LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David B. Amy

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and Chief Financial Officer

  
										

 

 

The undersigned hereby
agrees to join as a Party to the foregoing Asset Purchase Agreement pursuant to
Section 6.14:

 

 

	
   

  	
  SINCLAIR BROADCAST
  GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
  Name:

  	
  David B. Amy

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice
  President and Chief Financial Officer

  
						

 

40

 

Pursuant to Item 601(b)(2) of Regulation S-K, we have omitted the following schedules.  We will furnish supplementally any omitted schedule to the Securities and Exchange Commission upon request.

 

	
  SCHEDULE 2.2 (h)

  	
   

  	
  Excluded Contracts

  
	
  SCHEDULE 2.2 (p)

  	
   

  	
  Excluded Assets

  
	
  SCHEDULE 3.1

  	
   

  	
  Organization and
  Authority of Sellers

  
	
  SCHEDULE 3.3

  	
   

  	
  Absence of Conflicting
  Agreements; Consents

  
	
  SCHEDULE 3.4

  	
   

  	
  Governmental Licenses

  
	
  SCHEDULE 3.5

  	
   

  	
  Real Property

  
	
  SCHEDULE 3.6

  	
   

  	
  Tangible Personal
  Property

  
	
  SCHEDULE 3.6 (a)

  	
   

  	
  Excluded Tangible
  Personal Property

  
	
  SCHEDULE 3.7

  	
   

  	
  Contracts

  
	
  SCHEDULE 3.8

  	
   

  	
  Intangibles

  
	
  SCHEDULE 3.10

  	
   

  	
  Financial Statements

  
	
  SCHEDULE 3.11

  	
   

  	
  Taxes

  
	
  SCHEDULE 3.12

  	
   

  	
  Insurance

  
	
  SCHEDULE 3.14

  	
   

  	
  Personnel and Employee
  Benefits

  
	
  SCHEDULE 3.14 (g)

  	
   

  	
  Labor Relations

  
	
  SCHEDULE 3.15

  	
   

  	
  Claims and Legal
  Actions

  
	
  SCHEDULE 3.16

  	
   

  	
  Environmental
  Compliance

  
	
  SCHEDULE 3.18

  	
   

  	
  Absence of Certain
  Changes or Events

  
	
  SCHEDULE 3.20

  	
   

  	
  Transactions with
  Affiliates

  
	
  SCHEDULE 6.6

  	
   

  	
  Employee Matters

  
	
  SCHEDULE 6.15

  	
   

  	
  Network Discussions

  

 

41Exhibit 10.2

 

ASSET
PURCHASE AGREEMENT

 

 

dated as
of May 16, 2005

 

 

among

 

 

AURORA
BROADCASTING, INC.,

 

SINCLAIR
PROPERTIES, LLC

 

and

 

WEMT
LICENSEE L.P.

 

 

TABLE OF
CONTENTS

 

	
  SECTION 1:

  	
  CERTAIN
  DEFINITIONS

  	
   

  
	
  1.1.

  	
  Terms Defined in this
  Section

  	
   

  
	
  1.2.

  	
  Terms Defined
  Elsewhere in this Agreement

  	
   

  
	
  1.3.

  	
  Rules of
  Construction

  	
   

  
	
  SECTION 2:

  	
  SALES
  AND TRANSFER OF ASSETS; ASSET VALUE

  	
   

  
	
  2.1.

  	
  Agreement to Sell and
  Transfer

  	
   

  
	
  2.2.

  	
  Excluded
  Assets

  	
   

  
	
  2.3.

  	
  Purchase Price

  	
   

  
	
  2.4.

  	
  Assumption of
  Liabilities and Obligations

  	
   

  
	
  SECTION 3:

  	
  REPRESENTATIONS
  AND WARRANTIES OF SELLERS

  	
   

  
	
  3.1.

  	
  Organization and
  Authority of Sellers

  	
   

  
	
  3.2.

  	
  Authorization and
  Binding Obligation

  	
   

  
	
  3.3.

  	
  Absence of
  Conflicting Agreements; Consents

  	
   

  
	
  3.4.

  	
  Governmental
  Licenses

  	
   

  
	
  3.5.

  	
  Real Property

  	
   

  
	
  3.6.

  	
  Tangible Personal Property

  	
   

  
	
  3.7.

  	
  Contracts

  	
   

  
	
  3.8.

  	
  Intangibles

  	
   

  
	
  3.9

  	
  Title
  to Properties

  	
   

  
	
  3.10.

  	
  Financial
  Statements

  	
   

  
	
  3.11.

  	
  Taxes

  	
   

  
	
  3.12.

  	
  Insurance

  	
   

  
	
  3.13.

  	
  Reports

  	
   

  
	
  3.14.

  	
  Personnel and Employee
  Benefits

  	
   

  
	
  3.15.

  	
  Claims and Legal Actions

  	
   

  
	
  3.16.

  	
  Environmental Compliance

  	
   

  
	
  3.17.

  	
  Compliance
  with Laws

  	
   

  
	
  3.18.

  	
  Absence of Certain
  Changes or Events

  	
   

  
	
  3.19.

  	
  Broker

  	
   

  
	
  3.20.

  	
  Transactions with
  Affiliates

  	
   

  

 

i

 

	
  SECTION 4:

  	
  REPRESENTATIONS
  AND WARRANTIES OF AURORA

  	
   

  
	
  4.1.

  	
  Organization,
  Standing and Authority

  	
   

  
	
  4.2.

  	
  Authorization and
  Binding Obligation

  	
   

  
	
  4.3.

  	
  Absence
  of Conflicting Agreements and Required Consents

  	
   

  
	
  4.4.

  	
  Brokers

  	
   

  
	
  4.5.

  	
  Availability of Funds

  	
   

  
	
  4.6.

  	
  Qualifications of Buyer

  	
   

  
	
  4.7.

  	
  WARN Act

  	
   

  
	
  4.8.

  	
  Defined Contribution Plan

  	
   

  
	
  SECTION 5:

  	
  OPERATION OF
  THE STATION PRIOR TO CLOSING

  	
   

  
	
  5.1.

  	
  Contracts

  	
   

  
	
  5.2.

  	
  Compensation

  	
   

  
	
  5.3.

  	
  Encumbrances

  	
   

  
	
  5.4.

  	
  Dispositions

  	
   

  
	
  5.5.

  	
  Access to Information

  	
   

  
	
  5.6.

  	
  Insurance

  	
   

  
	
  5.7.

  	
  FCC
  Licenses

  	
   

  
	
  5.8.

  	
  Obligations

  	
   

  
	
  5.9.

  	
  No Inconsistent Action

  	
   

  
	
  5.10.

  	
  Maintenance of WEMT
  License Assets

  	
   

  
	
  5.11.

  	
  Consents

  	
   

  
	
  5.12.

  	
  Books and Records

  	
   

  
	
  5.13.

  	
  Notification

  	
   

  
	
  5.14.

  	
  Compliance with Laws

  	
   

  
	
  5.15.

  	
  Preservation of Business

  	
   

  
	
  5.16.

  	
  Normal Operations

  	
   

  
	
  SECTION 6:

  	
  SPECIAL COVENANTS AND
  AGREEMENTS

  	
   

  
	
  6.1.

  	
  FCC
  Consent

  	
   

  
	
  6.2.

  	
  Risk
  of Loss

  	
   

  
	
  6.3.

  	
  Confidentiality

  	
   

  
	
  6.4.

  	
  Cooperation

  	
   

  

 

ii

 

	
  6.5.

  	
  Control of the Station

  	
   

  
	
  6.6.

  	
  Allocation of Purchase
  Price

  	
   

  
	
  6.7.

  	
  Access to
  Books and Records after Closing

  	
   

  
	
  6.8.

  	
  Employee Matters

  	
   

  
	
  6.9.

  	
  Public Announcements

  	
   

  
	
  6.10.

  	
  Schedules

  	
   

  
	
  6.11.

  	
  Bulk
  Sales Law

  	
   

  
	
  6.12.

  	
  Adverse Developments

  	
   

  
	
  6.13.

  	
   

  	
   

  
	
  6.14.

  	
   

  	
   

  
	
  6.15.

  	
  Non-Solicitation

  	
   

  
	
  6.16.

  	
  Network Discussions

  	
   

  
	
  6.17.

  	
  Special Purpose Entity

  	
   

  
	
  6.18.

  	
  SBG
  Guaranty

  	
   

  
	
  6.19.

  	
  BlueStone Guaranty

  	
   

  
	
  SECTION 7:

  	
  CONDITIONS TO
  OBLIGATIONS OF AURORA AND SELLERS

  	
   

  
	
  7.1.

  	
  Conditions to
  Obligations of Aurora

  	
   

  
	
  7.2.

  	
  Conditions to
  Obligations of Sellers

  	
   

  
	
  SECTION 8:

  	
  CLOSING AND CLOSING DELIVERIES

  	
   

  
	
  8.1.

  	
  Closing

  	
   

  
	
  8.2.

  	
  Deliveries by Sellers

  	
   

  
	
  8.3.

  	
  Deliveries by Aurora

  	
   

  
	
  SECTION 9:

  	
  TERMINATION

  	
   

  
	
  9.1.

  	
  Termination by Mutual
  Consent

  	
   

  
	
  9.2.

  	
  Termination by Seller

  	
   

  
	
  9.3.

  	
  Termination by Aurora

  	
   

  
	
  9.4.

  	
  Rights on Termination

  	
   

  
	
  9.5.

  	
  Attorney’s Fees

  	
   

  
	
  9.6.

  	
  Survival

  	
   

  
	
  SECTION 10:

  	
  SURVIVAL OF
  REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES

  	
   

  

 

iii

 

	
  10.1.

  	
  Survival of Representations

  	
   

  
	
  10.2.

  	
  Indemnification by Sellers

  	
   

  
	
  10.3.

  	
  Indemnification by Aurora

  	
   

  
	
  10.4.

  	
  Procedure for
  Indemnification

  	
   

  
	
  10.5.

  	
  Certain Limitations

  	
   

  
	
  10.6.

  	
  Tax Treatment of
  Indemnity Payments

  	
   

  
	
  SECTION 11:

  	
  MISCELLANEOUS

  	
   

  
	
  11.1.

  	
  Fees and Expenses;
  Transfer Taxes

  	
   

  
	
  11.2.

  	
  Notices

  	
   

  
	
  11.3.

  	
  Benefit and Binding Effect

  	
   

  
	
  11.4.

  	
  Further Assurances

  	
   

  
	
  11.5.

  	
  GOVERNING
  LAW

  	
   

  
	
  11.6.

  	
  Entire Agreement

  	
   

  
	
  11.7.

  	
  Waiver of Compliance;
  Consents

  	
   

  
	
  11.8.

  	
  Headings

  	
   

  
	
  11.9.

  	
  Counterparts

  	
   

  
	
  11.10.

  	
  Specific Performance

  	
   

  
	
  11.11.

  	
  Purchased Assets

  	
   

  

 

iv

 

ASSET PURCHASE
AGREEMENT

 

THIS
ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of May 16,
2005 (the “Effective Date”), between Aurora Broadcasting, Inc., a Delaware
corporation (“Aurora”), Sinclair Properties,
LLC, a Virginia limited liability company (“Sinclair”)
and WEMT Licensee L.P., a Virginia limited partnership (“Licensee”
and together with Sinclair, “Sellers”).

 

R E C I T
A L S:

 

WHEREAS,
Licensee owns the FCC Licenses (as defined below) of analog television
broadcast station WEMT (TV) and digital television broadcast Station WEMT-DT,
both serving Greenville, Tennessee (together, the “Station”)
and Sellers own certain assets described in more detail in Section 2 of
this Agreement used in connection with the operation of the Station; and

 

WHEREAS,
the parties hereto desire to enter into this Agreement to provide for the sale,
assignment, and transfer by Sellers to Aurora of the WEMT License Assets (as
defined below) as provided by the terms and conditions of this Agreement; and

 

WHEREAS,
concurrently with the consummation of the transactions contemplated by this
Agreement, (i) Sinclair is entering into an asset purchase agreement (the “BlueStone
Purchase Agreement”) with BlueStone Television, Inc. (“BlueStone”) to
sell, assign and transfer to BlueStone certain non-license assets of the
Station, and (ii) Sellers are entering into a Joint Sales and Shared
Services Agreement (“JSA”) with Appalachian Broadcasting Corporation (“Appalachian”),
an Affiliate of BlueStone, pursuant to which Appalachian will make certain of
the Purchased Assets (as defined below) which it will acquire from BlueStone,
and certain services and personnel, available to Sellers for the day to day
operation of the Station pending the Closing (as defined below).

 

A G R E E M E N T S:

 

In consideration of the
above recitals and of the mutual agreements and covenants contained in this
Agreement, the parties to this Agreement, intending to be bound legally, agree
as follows:

 

SECTION 1:  CERTAIN
DEFINITIONS

 

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

 

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

 

1

 

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

 

“Assignment
Applications” shall mean applications to be filed by Aurora and Licensee with the FCC requesting its consent to
the assignment of the FCC Licenses from Licensee to Aurora.

 

“Assumed
Contracts” means (a) all Contracts set forth on Schedule 3.7, (b) the Fox Affiliation Agreement, (c) the
Tower Space Lease Agreement,  (d) any
other Contracts entered into by Sellers between the date of this Agreement and
the Closing Date that Aurora agrees in writing to assume, and (e) other
Contracts entered into by Sellers between the date of this Agreement and the
Closing Date in compliance with Section 5, provided, however, that Assumed
Contracts shall not include any of the Excluded Contracts or any Contracts
assumed by BlueStone under the BlueStone Purchase Agreement.

 

“Closing”
means the consummation of the sale and acquisition of the WEMT License Assets
pursuant to this Agreement on the Closing Date in accordance with the
provisions of Section 8.1.

 

“Closing Date”
means the date on which the Closing occurs, as determined pursuant to Section 8.1.

 

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

 

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

 

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

 

“Contaminant”
shall mean and include any pollutant, contaminant, hazardous substance or
material (as defined in any of the Environmental Laws), toxic substances (as
defined in any of the Environmental Laws), asbestos or asbestos containing
material, urea formaldehyde, polychlorinated biphenyls, regulated substances
and wastes, radioactive materials, and petroleum or petroleum by-products,
including crude oil or any fraction thereof, except the term “Contaminant” shall
not include small quantities of maintenance, and cleaning customary for the
operation of television stations and maintained in compliance with all
Environmental Laws in the ordinary course of business.

 

2

 

“Contracts”
means all contracts, consulting agreements, employment agreements,
non-governmental licenses and other agreements, commitments or instruments
(including leases, subleases and licenses of personal or real property),
written or oral (including any amendments and other modifications thereto) to
which Sellers are a party or that are binding upon Sellers, that relate to or
affect the WEMT License Assets, and that either (a) are in effect on the
date of this Agreement, including, without limitation, those listed on Schedule 3.7 hereto, or (b) are entered into by
any Seller between the date of this Agreement and the Closing Date.

 

“Effective
Time” means 12:01 a.m., Eastern time, on the Closing Date.

 

“Environmental
Laws” shall mean and include, but not be limited to, any applicable
federal, state or local law, statute, charter, ordinance, rule or
regulation or any governmental agency interpretation, policy or guidance,
including without limitation applicable safety/environmental/health laws such
as but not limited to the Resource Conservation and Recovery Act of 1976,
Comprehensive Environmental Response Compensation and Liability Act, Federal
Emergency Planning and Community Right-to-Know Law, the Clean Air Act, the
Clean Water Act, and the Toxic Substance Control Act, as any of the foregoing
have been amended, and any permit, order, directive, court ruling or order or
consent decree applicable to or affecting the Real Property or any other
property (real or personal) used by or relating to the Station promulgated or
issued pursuant to any Environmental Laws which pertains to, governs, or
controls the generation, storage, disposal, remediation or removal of
Contaminants or otherwise regulates the protection of health and the
environment including, but not limited to, any of the following activities,
whether on site or off site if such could materially adversely affect the
site:  (i) the emission, discharge,
release, spilling or dumping of any Contaminant into the air, surface water,
ground water, soil or substrata; or (ii) the use, generation, processing,
sale, recycling, treatment, handling, storage, disposal, transportation,
labeling or any other management of any Contaminant.

 

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

 

“ERISA Affiliate”
means any entity which together with the Sellers would be deemed a single
employer within the meaning of Sections 414(b), (c) or (m) of the Code or Section 4001
of ERISA.

 

“Excluded
Contracts” shall have the meaning set forth in Section 2.2(i).

 

“Excluded
Tangible Personal Property” means (i) the Tangible Personal
Property listed on Schedule 3.6(b) under
the heading “Excluded Tangible Personal Property”, (ii) any tangible
personal property not located on or about the Real Property and used primarily
in the operation of any television broadcast station owned, operated or
programmed by Sellers or any Affiliate of Sellers, other than the Station, (iii) any
tangible personal property located at 2000 W. 41st Street, Baltimore, Maryland
21211 or 10706 Beaver Dam Road, Hunt Valley, Maryland 21030 in the ordinary
course, and (iv) the Purchased Assets.

 

“Final Action”
shall mean an action by the FCC upon the Station’s license renewal application,
which action has not been reversed, stayed, enjoined, set aside, annulled, or
suspended, and with respect to which action, no protest, petition to deny,
petition for rehearing or

 

3

 

reconsideration, appeal,
request for stay or other judicial administrative review is pending and as to
which action the time period for filing any such protest, petition, appeal,
request or review and the time period during which the FCC may reconsider or
review such action on its own authority have expired.

 

“Fox
Affiliation Agreement” means the Station Affiliation
Agreement between Fox Broadcasting Company, on behalf of itself, Fox Children’s
Network, Inc., and Fox News Network, L.L.C., and Licensee, dated July 1,
2002, as may be extended, revised, amended or superceded
as described on Schedule 6.16.

 

“FCC”
means the Federal Communications Commission.

 

“FCC Consent”
means action by the FCC granting its consent to the Assignment Applications
without imposing any materially adverse term or condition not imposed on
television license holders generally and not existing on the date hereof upon
the holder thereof, except conditions imposed on a party as the result of a
circumstance, the existence of which constitutes a breach by that party of any
of its representations, warranties or covenants hereunder.

 

“FCC Licenses”
means those Licenses issued by the FCC to the Sellers in connection with the
business and operations of the Station.

 

“Final Order”
shall mean an action by the FCC upon the Assignment Applications which action
has not been reversed, stayed, enjoined, set aside, annulled or suspended, and
with respect to which action, no protest, petition to deny, petition for
rehearing or reconsideration, appeal or request for stay is pending, and as to
which action the time for filing of any such protest, petition, appeal or
request and any normal period during which the FCC may reconsider or review
such action on its own authority has expired.

 

“GAAP”
means generally accepted accounting principals in the United States,
consistently applied in accordance with past practices.

 

“Governmental
Authority” shall mean any government, any governmental entity,
department, commission, board, agency or instrumentality and any court,
tribunal or judicial or arbitral body, whether federal, state or local,
including the FCC and the Federal Aviation Administration.

 

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

 

“Knowledge”
or any derivative thereof with respect to the Sellers means the actual knowledge
of the President and Chief Executive Officer or the Chief Financial Officer of
the

 

4

 

Sellers or SBG, and any
other employee of the Sellers or SBG designated as a “vice president” or the
General Manager, Business Manager or Chief Engineer of the Station.

 

“Laws”
means any federal, state, local, municipal, foreign, international,
multi-national, self-regulatory organization, or other administrative order,
constitution, law, ordinance, principle of common law, rule, regulation,
statute, treaty, by-laws, or the like.

 

“Leased Real
Property” means all real
property and all buildings and other improvements thereon and appurtenant
thereto leased or held by Sellers and used in the business or operation of the
Station.

 

“License
Renewal” means the application filed with the FCC with
respect to the FCC Licenses seeking renewal of the FCC Licenses has become a
Final Action.

 

“Licenses”
means all licenses, permits, construction permits and other authorizations
issued by any Governmental Authority to Sellers currently in effect and used in
connection with the conduct of the business or operations of the Station,
together with any additions (including, renewals or modifications of such
licenses, permits and authorizations and applications therefor) thereto between
the date of this Agreement and the Closing Date.

 

“Lien”
shall mean any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, conditional sales agreements, claim, charge, or other
lien of any kind, whether voluntarily incurred or arising by operation of law
or otherwise, affecting any assets or property.

 

“Loss”
means, with respect to any Person, any and all costs or expenses, obligations,
liabilities, demands, claims, settlement payments, awards, judgments, fines,
penalties, interest, deficiencies, causes of action, damages, and reasonable
out-of-pocket expenses, including court costs and reasonable attorneys’ fees,
whether or not arising out of a third party claim, suffered, paid or incurred
by such Person.

 

“Market Cable
Systems” shall mean all U.S. cable television systems located within
any particular Station’s market, as defined in Section 76.55 of the FCC
regulations.

 

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

 

“Owned Real
Property” means all real property and all buildings and other
improvements thereon and appurtenant thereto owned by Sellers and used in the
business or operations of the Station.

 

“Permitted
Encumbrances” means (a) encumbrances of a landlord, or other
statutory lien not yet due and payable, or a landlord’s liens arising in the
ordinary course of business, (b) encumbrances arising in connection with
equipment or maintenance financing or leasing under the terms of the Contracts
set forth on the Schedules, which Contracts have been delivered

 

5

 

to Aurora, (c) encumbrances
for Taxes not yet delinquent or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on Sellers’ books in accordance with generally accepted accounting
principles, or (d) encumbrances that do not materially detract from the
value of any of the WEMT License Assets or materially interfere with the use
thereof as currently used.

 

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

 

“Purchased
Assets” means the assets defined as the “Purchased Assets” under the
BlueStone Purchase Agreement.

 

“Real
Property” means all real
property and all buildings and other improvements thereon and appurtenant
thereto, whether or not owned, leased or held by Sellers and used in the
business or operations of the Station.

 

“Real
Property Interests” means all interests in Owned Real Property and
Leased Real Property, including fee estates, leaseholds and subleaseholds,
purchase options, easements, licenses, rights to access, and rights of way, and
all buildings and other improvements thereon and appurtenant thereto, owned or
held by Sellers that are used in the business or operations of the Station,
together with any additions, substitutions and replacements thereof and thereto
between the date of this Agreement and the Closing Date.

 

“SBG”
means Sinclair Broadcast Group, Inc.

 

“Seller Party”
means either of the Sellers, SBG or any Affiliate of SBG, to the extent such
Person is a party to an Assumed Contract.

 

“Tangible
Personal Property” means all property listed on Schedule 3.6(a),
together with any and all additions or improvements thereto, substitutions
therefor or replacements thereof acquired by Sellers between the date of this
Agreement and the Closing Date for which Sellers have been reimbursed under the
JSA.

 

“Tax”
means any federal, state, local, or foreign income, gross receipts, windfall
profits, severance, property, production, sales, use, license, excise,
franchise, capital, transfer, employment, withholding, or other tax or similar
governmental assessment or charge of any kind whatsoever (including any Tax
liability incurred or borne as a transferee or successor or by Contract, or
otherwise), together with any interest, additions, or penalties with respect
thereto and any interest in respect of such additions or penalties.

 

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

 

“Tower Space
Lease Agreement” means the Tower Space Lease Agreement, dated February 21,
1997, for the translator site located at Walker Mountain in Virginia, as
amended by Amendment No. 1 dated April 25, 2003.

 

6

 

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

 

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

 

	
  Assumed Liabilities

  	
  Section 2.4

  
	
  Aurora

  	
  Preamble

  
	
  Balance Sheet Date

  	
  Section 3.10

  
	
  Benefit Arrangement

  	
  Section 3.14
  (a)(v)

  
	
  Benefit Plans

  	
  Section 3.14(a)(ii)

  
	
  BlueStone Purchase
  Agreement

  	
  Preamble

  
	
  Claimant

  	
  Section 10.4

  
	
  Deferred Consent

  	
  Section 5.11(b)

  
	
  Employees

  	
  Section 3.14(a)

  
	
  Extension Payment

  	
  Section 9.2

  
	
  FCC Employees

  	
  Section 6.8(a)

  
	
  Financial Statements

  	
  Section 3.10

  
	
  Indemnity Cap

  	
  Section 10.5

  
	
  Indemnifying Party

  	
  Section 10.4

  
	
  JSA

  	
  Preamble

  
	
  Licensee

  	
  Preamble

  
	
  Multiemployer Plan

  	
  Section 3.14(a)(ii)

  
	
  Outside Date

  	
  Section 9.2

  
	
  Pension Plan

  	
  Section 3.14(a)(iii)

  
	
  Purchase Price

  	
  Section 2.3

  
	
  Retained Liabilities

  	
  Section 2.4

  
	
  Sellers

  	
  Preamble

  
	
  Sinclair

  	
  Preamble

  
	
  Station

  	
  Recitals

  
	
  Tenth Anniversary Date

  	
  Section 9.2

  
	
  Threshold Amount

  	
  Section 10.5

  
	
  Transferred Employees

  	
  Section 6.10

  
	
  Welfare Plan

  	
  Section 3.14(a)(i)

  

 

7

 

1.3.                              Rules of Construction.  Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender and any other number as the context requires.  Without limiting the generality of the
foregoing, it is hereby acknowledged and agreed that the terms “Seller” or “Sellers”
shall include and mean, as applicable, the applicable Seller or Sellers
individually and not just the Sellers collectively or as a group.  As used in this Agreement, the word “including”
is not limiting and the word “or” is not exclusive.  Except as specifically otherwise provided in
this Agreement in a particular instance, a reference to a Section, Exhibit, or Schedule is
a reference to a Section of this Agreement, an Exhibit, or a Schedule hereto,
as the case may be, and the terms “hereof,” “herein,” and other like terms
refer to this Agreement as a whole, including the Schedules and Exhibits to
this Agreement, and not solely to any particular part of this Agreement.  The descriptive headings in this Agreement
are inserted for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.

 

SECTION 2:  SALE AND TRANSFER OF ASSETS; ASSET VALUE

 

2.1.                              Agreement to Sell and Transfer.  Subject to the terms and conditions set forth
in this Agreement, Sellers hereby agree to transfer, convey, assign, and
deliver to Aurora on the Closing Date, and Aurora agrees to acquire, free and
clear of any Liens (except for Permitted Encumbrances), all of Sellers’ right,
title, and interest in and to the following:

 

(a)                                  the
Tangible Personal Property;

 

(b)                                 the
Tower Space Lease Agreement (if then in effect);

 

(c)                                  the
FCC Licenses;

 

(d)                                 the
Assumed Contracts;

 

(e)                                  the Intangibles,
including the goodwill of the Station, if any;

 

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

 

(g)                               all
claims, causes of action, choses in action, rights of recovery, rights of
set-off or recoupment of or available to Sellers relating to the WEMT License
Assets to the extent they relate to the period after the Effective Time; and

 

(h)                                 all
books of account and other records relating to the business or operations of
the WEMT License Assets, including executed copies (if available) of the
Assumed Contracts, programming information, employment records (to the extent
permitted by applicable law), customer files, lists, plats, purchase and sales
records, advertising records, creative materials, advertising and promotional
material, in each case to the extent relating to the business or the operation
of the WEMT License Assets, and all records required by the FCC to be kept by
the Station.

 

8

 

2.2.                              Excluded Assets.  The WEMT License Assets shall exclude the
following (collectively, the “Excluded Assets”),
as the same may exist at the Effective Time:

 

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

 

(b)                                 any
insurance policies, promissory notes, amounts due to Sellers from employees,
bonds, letters of credit, certificates of deposit, or other similar items, and
any cash surrender value in regard thereto; provided, that in the event Sellers
are obligated to assign to Aurora the proceeds of any such insurance policy at
the time the Closing occurs under Section 6.3, such proceeds shall be
included in the WEMT License Assets;

 

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

 

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

 

(e)                                  all
Tax Returns and supporting materials, all original financial statements and
supporting materials, all books and records that Sellers are required by law to
retain, all of Sellers’ organizational documents, corporate books and records
(including minute books, operating agreements and partnership agreements) and
originals of account books of original entry, all records of Sellers relating
to the sale of the WEMT License Assets or the Purchased Assets, and all records
and documents related to any other Excluded Assets;

 

(f)                                    any
interest in and to any refunds of federal, state, or local franchise, income,
or other Taxes for periods (or portions thereof) ending on or prior to the
Closing Date;

 

(g)                               Accounts
Receivable (which shall be subject to the JSA);

 

(h)                                 all
rights and claims of Sellers whether mature, contingent, or otherwise, whether
in tort, contract, or otherwise, against third parties relating to the WEMT
License Assets arising prior to the Closing Date; other than rights and claims
against third parties relating to the WEMT License Assets which have as their
basis loss, damage or impairment of or to any of the WEMT License Assets and
which loss, damage or impairment has not been restored or repaired prior to the
Closing, or in the case of a lost WEMT License Asset, that would have been
acquired but for such loss;

 

(i)                                     any Contracts which
are not Assumed Contracts, including those which are listed on Schedule 2.2(i) (the “Excluded Contracts”);

 

(j)                                     all
of each Sellers’ deposits and prepaid expenses;

 

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

 

9

 

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

 

(m)                               the Excluded
Tangible Personal Property;

 

(n)                                 all
assets owned by the Sellers and not located on or about the Real Property and
used in connection with the operations of television broadcast stations other
than the Station; and

 

(o)                                 all
shares of capital stock, partnership interests, interests in limited liability
companies or other equity interest, including, but not limited to, any options,
warrants or voting trusts relating thereto which are owned by Sellers; and

 

(p)                                 the
Purchased Assets.

 

2.3.                              Purchase Price.  The purchase price of the WEMT License Assets
(the “Purchase Price”) shall be One Million Four
Hundred Thousand Dollars ($1,400,000.00)
(less the Extension Payment, if paid by Aurora).  The Purchase Price shall be paid by Aurora to
Sellers at the Closing by wire transfer.

 

2.4.                              Assumption
of Liabilities and Obligations.

 

(a)                                  As of the Closing
Date, subject to Section 2.4(b), Aurora shall assume and undertake to pay,
discharge, and perform all obligations and liabilities of Sellers under the
Assumed Contracts, or as otherwise specifically provided for herein, but only
to the extent that the obligations and liabilities on account thereof relate to
the time after the Effective Time (the “Assumed Liabilities”).

 

(b)                                 Notwithstanding
Section 2.4(a), for the avoidance of doubt, Aurora shall not assume any
obligation or liability of Sellers, and Sellers shall retain all liabilities
and obligations of Sellers, known or unknown, fixed or contingent, other than
the obligations and liabilities expressly assumed by Aurora under Section 2.4(a),
including without limitation, the following (the “Retained
Liabilities”):

 

(i)                                  all
liabilities and obligations relating to or arising from the Excluded Assets,
including any obligation or liability under any Contract not constituting an
Assumed Contract;

 

(ii)                               all
liabilities for Taxes arising from the transfer of the WEMT License Assets
under this Agreement or otherwise attributable to the business or operation of
the Station for any period prior to the Closing Date;

 

(iii)                            all
fees and expenses incurred by Sellers in connection with the transactions
contemplated hereby, including legal, accounting, consulting, brokers,
investment banking and other professional fees and expenses;

 

(iv)                           the
dollar amount of all unpaid medical and health claims of Employees arising
prior to the Closing Date;

 

10

 

(v)                              all
liabilities under any intercompany account;

 

(vi)                           all
liabilities and obligations arising under Assumed Contracts or Licenses
transferred by Sellers to Aurora in accordance with this Agreement, to the
extent such liabilities and obligations have arisen or have accrued in
connection with any period prior to the Closing Date;

 

(vii)                        all
liabilities and obligations accruing with respect to the business or the
operation of the Station prior to the Closing Date;

 

(viii)                     all
liabilities and obligations arising out of any litigation, claim or proceeding
pending or threatened against Sellers or relating to Sellers’ ownership of the
WEMT License Assets, or Sellers’ conduct of the business or operation of the
Station;

 

(ix)                             all
liabilities and obligations under any employee pension, retirement or other
benefit plans covering Employees prior to the Closing Date;

 

(x)                                all
liabilities and obligations for severance and all COBRA liabilities for any FCC
Employees of the Sellers who do not become Transferred Employees; and

 

(xi)                             all
obligations and liabilities of Sellers under this Agreement and any other
agreement entered into in connection herewith.

 

SECTION 3:  REPRESENTATIONS AND WARRANTIES OF
SELLERS

 

Each Seller jointly and
severally represents and warrants to Aurora as the date hereof and as of the
Closing Date (except for representations and warranties that speak as of a
specific date or time, in which case, such representations and warranties shall
be true and complete as of such date or time) as follows:

 

3.1.                              Organization and Authority
of Sellers.  Each
Seller is a limited liability company or limited partnership, as the case may
be, and is duly organized, validly existing, and in good standing under the
laws of the State listed on Schedule 3.1.  Each Seller has the appropriate power and
authority based on the structure of such Seller to own, lease, and operate its properties,
to carry on its business in the places where such properties are now owned,
leased, or operated and such business is now conducted, and to execute,
deliver, and perform this Agreement and the documents contemplated hereby
according to their respective terms. 
Sellers are duly qualified and in good standing in each jurisdiction
listed on Schedule 3.1 which are all
jurisdictions in which such qualification is required.

 

3.2.                              Authorization and Binding
Obligation.  The
execution, delivery, and performance of this Agreement by Sellers have been
duly authorized by all necessary corporate or other required action on the part
of each Seller and its equityholders, and no approval from or notice to any of
the member or partner of Sellers is required regarding the same that has not
been obtained or given, as applicable. 
This Agreement has been duly executed and delivered by each Seller and
constitutes its legal, valid, and binding obligation, enforceable against it in
accordance with its terms except as the enforceability of this Agreement may be
affected by bankruptcy,

 

11

 

insolvency, or similar
laws affecting creditors’ rights generally and by judicial discretion in the
enforcement of equitable remedies.

 

3.3.                              Absence
of Conflicting Agreements; Consents.  Subject to obtaining the Consents listed on Schedule 3.3, 3.5 and 3.7 the execution, delivery, and
performance by each Seller of this Agreement and the documents contemplated
hereby (with or without the giving of notice, the lapse of time, or both): (a) do
not require the consent of any third party; (b) will not conflict with any
provision of the Articles of Incorporation, Bylaws, or other organizational
documents of Sellers; (c) will not conflict with, result in a breach of,
or constitute a default under any applicable law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; (d) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any  material agreement, instrument,
license, or permit to which any Seller is a party or by which any Seller may be
bound legally; and (e) will not create any claim, liability or Lien of any
nature whatsoever upon any of the WEMT License Assets.  Except for the FCC Consent provided for in Section 6.1
and the other Consents described on Schedule 3.3, 3.5 and
3.7, no consent, approval, permit, or authorization of, or
declaration to, or filing with any Governmental Authority or any other third
party is required (a) to consummate this Agreement and the transactions
contemplated hereby, or (b) to permit Sellers to transfer and convey
the  WEMT License Assets to Aurora.

 

3.4.                              Governmental Licenses.

 

(a)                                  Schedule 3.4 identifies and includes a complete list
of all FCC Licenses that are required to conduct the business or operate the
Station and the applicable expiration dates thereof.  Each FCC License is in full force and effect,
and the applicable Seller is the authorized holder thereof.  None of the FCC Licenses is subject to any
restriction or condition that limits the operation of the Station as currently
operated other than (i) restrictions or conditions listed on or generally
applicable to such FCC Licenses and (ii) restrictions or conditions
applicable to the Station and communication or broadcasting facilities or FCC
Licenses of the same type or service. 
The FCC Licenses listed on Schedule 3.4
constitute all of the licenses and authorizations issued by the FCC and
required under the Communications Act and the rules, regulations and published
policies of the FCC for the lawful conduct of the Station as operated by
Sellers.

 

(b)                                 Except
as set forth on Schedule 3.4 and except for
any FCC investigations, rulemakings or other proceedings affecting the
broadcasting industry generally, as of the date of this Agreement, there is no
pending or, to the Knowledge of Sellers, threatened investigation or action by
or before the FCC, or any order to show cause, notice of violation, notice of
apparent liability, notice of forfeiture or material complaint by, before or
with the FCC with respect to the Station.

 

(c)                                  The Station is
operating in accordance with the specifications of the applicable FCC Licenses
and is in compliance in all material respects with the Communications Act and
the rules, regulations and published policies of the FCC.  Except as set forth in Schedule 3.4,
all material filings, reports and statements that Sellers are required to file
with the FCC or the

 

12

 

Federal Aviation Administration during the current
applicable terms of such FCC Licenses have been timely filed and are complete
and accurate in all material respects.

 

(d)                                 The
information disclosed on Schedule 3.4(d) is
true, correct and complete in all material respects as of the date hereof and
includes the following:

 

(i)                                     a
list of all Market Cable Systems, if any, which are carrying the Station and
that have notified Sellers or the Station of such Market Cable System’s
intention to delete the Station from carriage or to change the channel position
of the Station on such cable system;

 

(ii)                                  a
list (with true, complete and accurate copies having been delivered by Sellers
to Aurora) of each notice, if any, received by the Station from the Market
Cable System alleging that the Station does not deliver an adequate quality
signal, as defined in Section 76.55(c)(3) of the FCC regulations, to
such Market Cable System’s principal headend (other than any such notice as to
which such failure has been remedied or been determined not to exist), and all
further material correspondence between the Station and any such Market Cable
System relating to such notice;

 

(iii)                               a
list of all pending petitions for special relief to modify the area in which
the Station is entitled to demand must-carriage pursuant to Sections 76.55(c) and
(e) of the FCC regulations; and

 

(iv)                              a
list of must-carry complaints, if any, filed on behalf of the Station.

 

(e)                                  Except
as disclosed on Schedule 3.4(e) hereto,
Sellers are not aware of any reason why any of the FCC Licenses might not be
renewed in the ordinary course for a full term without material qualifications
or of any reason why any of the FCC Licenses might be revoked.  To Sellers’ Knowledge, there are no facts
relating to Sellers which, under the Communications Act of 1934, as amended, or
the existing rules of the FCC, would disqualify Sellers from assigning the
FCC Licenses to Aurora License.  An
appropriate public inspection file for the Station is maintained at the Station’s
studio in material accordance with FCC rules.

 

3.5.                              Real Property.  Schedule 3.5
contains a complete description of all Real Property Interests (including
street address, owner, and Sellers’ use thereof).  The Real Property Interests listed on Schedule 3.5 comprise all interests in Real Property
owned or used to conduct the business and operations of the Station as now
conducted.  Except as described on Schedule 3.5, Sellers have good, valid and insurable
fee simple title to all fee estates included in the Real Property Interests and
good title to all other Real Property Interests, in each case free and clear of
all Liens and all covenants, easements, restrictions, encroachments, leases,
charges, and other claims and encumbrances, except for Permitted
Encumbrances.  Each leasehold or
subleasehold interest included on Schedule 3.5
is legal, valid, binding, enforceable, and in full force and effect.  Neither the Seller Party thereto or, to
Sellers’ Knowledge, any other party thereto, is in default, violation, or
breach under any lease or sublease, and no event has occurred and is continuing
that constitutes (with notice or passage of time or both) a default, violation,
or breach thereunder.  Sellers have not
received any notice of a default, offset, or counterclaim under any lease or
sublease with respect to any of the Real Property Interests.  Sellers enjoy peaceful and

 

13

 

undisturbed
possession of the leased Real Property Interests; and so long as Sellers
fulfill their obligations under the lease therefor, Sellers have enforceable
rights to nondisturbance and quiet enjoyment against each lessor or sublessor
and, to Sellers’ Knowledge, except as set forth on Schedule 3.5,
no third party holds any interest in the fee underlying leased the premises
with the right to acquire or foreclose upon Sellers’ leasehold or subleasehold
interest.  Sellers have legal and
practical access to all of the Leased Real Property.  Except as otherwise disclosed on Schedule 3.5, all towers, guy anchors, ground radials,
and buildings and other improvements included in the WEMT License Assets are,
to Sellers’ Knowledge, located entirely on the Leased Real Property listed on Schedule 3.5. 
All Leased Real Property (including the improvements thereon) (a) is
in good condition and repair consistent with its current use, (b) is
available for immediate use in the conduct of the business and operations of
the Station, and (c) complies in all material respects with all applicable
building or zoning codes and the regulations of any Governmental Authority
having jurisdiction.  No eminent domain
or condemnation proceedings are pending or, to Sellers’ Knowledge, threatened
with respect to any Real Property Interests.

 

3.6.                              Tangible Personal Property.  Schedule 3.6(a) sets
forth the list of all material items of Tangible Personal Property owned or
used in the conduct of the business and the operations of the Station, other
than the “Excluded Tangible Personal Property” listed on Schedule 3.6(b).  The tangible personal property listed on Schedules 3.6(a) and 3.6(b) comprises all of the
tangible personal property necessary to conduct the business and operations of
the Station as now conducted.  Except as
described on Schedule 3.6(a), Sellers own
and have good title to each item of Tangible Personal Property and none of the
Tangible Personal Property owned by Sellers is subject to any Lien, except for
Permitted Encumbrances.  With allowance
for normal repairs, maintenance, wear and obsolescence, each material item of
Tangible Personal Property is in good operating condition and repair and is
available for immediate use in the business and operations of the Station.  All items of transmitting and studio
equipment included in the Tangible Personal Property (a) have been
maintained in a manner consistent with generally accepted standards of good
engineering practice, and (b) will permit the Station to operate in
accordance with the terms of the FCC Licenses and the rules and
regulations of the FCC and in all material respects with all other applicable
federal, state and local statutes, ordinances, rules and regulations.

 

3.7.                              Contracts.  Schedule 3.7
is a true and complete list of all Contracts of the Station relating to the
WEMT License Assets, including all film and programming Contracts, true and
complete copies of which Contracts have been previously furnished to Aurora
prior to the date of this Agreement (except as noted thereon).  Other than the Contracts listed on Schedule 3.5 and Schedule 3.7, and
the Contracts listed on Schedule 3.7 of the BlueStone Purchase Agreement,
there is no contract, lease, or other agreement necessary to enable Sellers to
carry on their business in all material respects as now conducted.  All of the Assumed Contracts are in full
force and effect and are valid, binding, and enforceable in accordance with
their terms except as the enforceability of such Contracts may be affected by
bankruptcy, insolvency, or similar laws affecting creditors’ rights generally
and by judicial discretion in the enforcement of equitable remedies.  Neither the Sellers party thereto or, to
Sellers’ Knowledge, any other party thereto, is in material default, violation,
or breach under any material Assumed Contract and no event has occurred and is
continuing that constitutes (with notice or passage of time or both) any such
default, violation, or breach thereunder. 
Except as disclosed on Schedule 3.7,
to Sellers’ Knowledge, no party to any material Assumed Contract has any
intention to (a) terminate such

 

14

 

Contract or seek to amend
any material terms thereof, (b) refuse to renew such Contract upon
expiration of its term, or (c) renew such Contract upon expiration only on
terms and conditions that are more onerous than those now existing.  Except for the need to obtain the Consents
listed on Schedule 3.7, the exchange and
transfer of the WEMT License Assets in accordance with this Agreement will not
affect the validity, enforceability, or continuation of any of the Assumed
Contracts or reduce the amounts payable to Aurora thereunder.  The amounts set forth on Schedule 3.7A
regarding payments made pursuant to the Fox Affiliation Agreement are true and
correct in all material respects.  The
amounts set forth on Schedule 3.7A
for the respective film and programming Contracts are true and correct in all
material respects.

 

3.8.                              Intangibles.  Schedule 3.8
is a true and complete list of all Intangibles (exclusive of Licenses listed on
Schedule 3.4) that are required to
conduct the business and operations of the Station as now conducted.  Sellers own or have a valid license to use
all of the Intangibles listed on Schedule 3.8.  Other than with respect to matters generally
affecting the television broadcasting industry and not particular to Sellers
and, except as set forth on Schedule 3.8,
Sellers have not received any notice or demand alleging that Sellers are
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, domain names, copyrights, patents, patent
applications, know-how, methods, or processes owned by any other Person, and
there is no claim or action pending or, to Sellers’ Knowledge, threatened with
respect thereto.  To Sellers’ Knowledge,
except as set forth on Schedule 3.8,
no other Person is infringing upon Sellers’ rights or ownership interests in
the Intangibles.  Except as set forth on Schedule 3.8, Sellers are not required to pay any
royalty arising from the Intangibles.

 

3.9.                              Title to Properties.  Except as disclosed on Schedule 3.5
or 3.6, Sellers have good and marketable
title to the WEMT License Assets subject to no Liens or other charges or rights
of others of any kind or nature except for Permitted Encumbrances.

 

3.10.                        Financial Statements.  Seller has furnished Buyer with true and
complete copies of unaudited financial statements of the Station containing a
balance sheet and statement of income, as, at, and for the fiscal year ended March 31,
2005 (the “Balance Sheet Date”)
(collectively, the “Financial Statements”). 
The Financial Statements have been prepared from the books and records
of Seller and have been prepared in accordance with GAAP in a manner consistent
with the audited Financial Statements of SBG, except for the absence of
footnotes and certain year-end adjustments. 
Except as set forth on Schedule 3.10,
the Financial Statements accurately reflect the books, records, and accounts of
Seller, present fairly and accurately the financial condition of the Station as
of March 31, 2005 and the results of operations for the period then ended,
and the Financial Statements do not understate in any material respect the
normal and customary costs and expenses of conducting the business or
operations of the Station in any material respect as currently conducted by
Seller or otherwise materially inaccurately reflects the operations of the
Station.

 

3.11.                        Taxes. Except as set forth
on Schedule 3.11, Sellers have filed
or caused to be filed all Tax Returns that are required to be filed with
respect to their ownership and operation of the Station and have paid or caused
to be paid all Taxes shown on those returns or on any Tax assessment received
by them to the extent that such Taxes have become due, or have set aside on
their books adequate reserves (segregated to the extent required by generally
accepted accounting principles) with respect thereto. All such Tax Returns are
true and complete in all material

 

15

 

respects.  There are no legal, administrative, or other
Tax proceedings presently pending and, to Sellers’ Knowledge, there are no
grounds existing pursuant to which Sellers are or could be made liable for any
Taxes, the liability for which could extend to Aurora as transferee of the
business of the Station, and no event has occurred that could impose on Aurora
any transferred liability for any Taxes, penalties or interest due or to become
due from Sellers.  No claim has ever been
made by a Tax authority with respect to the Station in a jurisdiction where any
Seller does not file Tax Returns that such Seller is or may be subject to
taxation by that jurisdiction.

 

3.12.                        Insurance.  Schedule 3.12
is a true and complete list of all insurance policies of or covering the WEMT
License Assets or the business or operations of the Station.  All policies of insurance listed on Schedule 3.12 are in full force and effect as of the
date hereof.  During the past three (3) years,
no insurance policy of Sellers or the Station has been canceled by the insurer
and, except as set forth on Schedule 3.12,
no application of Sellers for insurance has been rejected by any insurer.  The representations contained in this Section 3.12
are accurate as of the Effective Date.

 

3.13.                        Reports.  All material returns, reports, and statements
that the Station is currently required to file with the FCC or Federal Aviation
Administration have been filed, and all reporting requirements of the FCC and
Federal Aviation Administration have been complied with in all material
respects.  All of such returns, reports,
and statements, as filed, satisfy all applicable legal requirements.

 

3.14.                        Personnel and Employee
Benefits. The representations contained in this Section 3.14
are accurate as of the Effective Date.

 

(a)                                  Employees and Compensation.  Schedule 3.14
contains a true and complete list of all employees of Sellers employed at the
Station as of the date hereof, whether full or part-time (the “Employees”), and
indicates the salary and bonus, if any, to which each such Employee is
currently entitled (limited in the case of Employees who are compensated on a
commission basis to a general description of the manner in which such commissions
are determined), dates of hire and titles. 
Except as indicated on Schedule 3.14,
the employment of all Employees is terminable at will.  Schedule 3.14
also includes all Employees who are on leave and indicates whether such leave
is paid or unpaid and when such leave commenced.  Schedule 3.14
also contains a true and complete list of all employee benefit plans or
arrangements covering the Employees, including, with respect to the Employees,
any:

 

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

 

(ii)                               “Multiemployer pension plan,” as defined
in Section 3(37) of ERISA, that is maintained or administered by Sellers
or any ERISA Affiliate or to which Sellers or any ERISA Affiliate contribute or
are required to contribute (a “Multiemployer Plan”
and, together with the Welfare Plans, the “Benefit Plans”);

 

16

 

(iii)                            “Employee pension benefit plan,” as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan), to which Sellers or any ERISA
Affiliate contribute or are required to contribute (a “Pension Plan”);

 

(iv)                           Employee
plan that is maintained in connection with any trust described in Section 501(c)(9) of
the Internal Revenue Code of 1986, as amended; and

 

(v)                              Employment,
severance, deferred compensation, bonus payment or other similar contract,
arrangement, or policy and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured arrangements), workers’
compensation, Section 125 or other flexible disability benefits,
supplemental unemployment benefits, vacation benefits, sick pay benefits,
personal leave benefits, or retirement benefits or arrangement for deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation
rights, stock purchases, or other forms of incentive compensation or
post-retirement insurance, compensation, or benefits that (A) is not a
Welfare Plan, Pension Plan, or Multiemployer Plan, and (B) is entered
into, maintained, contributed to, or required to be contributed to by any
Seller or any ERISA Affiliate or under which any Seller or any ERISA Affiliate
has any liability relating to Employees (collectively, “Benefit
Arrangements”).

 

(b)                                 Pension Plans.  Sellers do not sponsor, maintain, or
contribute to any Pension Plan other than the Sinclair Broadcast Group 401(k)
Profit Sharing Plan.  Such Pension Plan
complies currently and has been maintained in substantial compliance with its
terms and, both as to form and in operation, with all material requirements
prescribed by any and all material statutes, orders, rules, and regulations
that are applicable to such plans, including ERISA and the Code, except where
the failure to do so will not have a Material Adverse Effect.

 

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

 

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

 

(e)                                  Multiemployer Plans.  Except as disclosed on Schedule 3.14,
Sellers have not at any time been a participant in any Multiemployer Plan.

 

17

 

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

 

(i)                                     each
Welfare Plan and Pension Plan (and, if applicable, related trust agreements)
and all amendments thereto and written descriptions thereof that have been
distributed to Employees, all annuity contracts, or other funding instruments;
and

 

(ii)                                  each
Benefit Arrangement and written descriptions thereof that have been distributed
to Employees and complete descriptions of any Benefit Arrangement that is not
in writing.

 

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

 

3.15.                        Claims and Legal Actions.  Except as disclosed on Schedule 3.15
and except for any FCC rulemaking proceedings generally affecting the
television broadcasting industry and not particular to Sellers, there is no
claim, legal action, counterclaim, suit, arbitration, or other legal,
administrative, or tax proceeding, nor any order, decree, or judgment, in
progress or pending or, to Sellers’ Knowledge, threatened, against or relating
to the WEMT License Assets (or the business or operations of the Station as of
the Effective Date), nor do Sellers know of any basis for the same.  To Sellers’ Knowledge, neither Seller is
subject to any judgment or court order affecting the operation of the Station
except (i) for FCC and other governmental orders, decrees and actions
which apply to the television broadcasting industry generally, or (ii) as
set forth on Schedule 3.15 hereto.

 

18

 

3.16.                        Environmental Compliance.  The representations contained in this Section 3.16
are accurate as of the Effective Date. 
Except as disclosed on Schedule 3.16
and to Sellers’ Knowledge:

 

(a)                                  the Sellers hold
and are in material compliance with all permits, licenses and other
authorizations required under all Environmental Laws applicable to the conduct
of the business of the Sellers as presently conducted;

 

(b)                                 the
Sellers have not received any written notice of any demand, claim or action by
any Person or governmental body alleging a violation of or liability under any
Environmental Laws arising from the ownership, lease, operation or occupation
of any Leased Real Property by the Sellers or any of its predecessors;

 

(c)                                  there
has been no release (as that term is defined under any Environmental Laws) of
any Contaminants in, on, under or emanating from any Leased Real Property or
in, on, under or emanating from any real property previously owned, leased,
occupied or operated by the Sellers or any of its predecessors, that is in
violation of or is reasonably likely to lead to any liability arising under any
Environmental Laws;

 

(d)                                 neither
the Sellers have transported or arranged for the treatment, storage or disposal
of any Contaminants to any off-site location that has resulted in a liability
or is reasonably likely to lead to any liability to the Sellers under any
Environmental Laws;

 

(e)                                  none of the Owned
Real Property or Leased Real Property contains (i) asbestos or
asbestos-containing materials, (ii) polychlorinated biphenyls (PCBs) or
any PCB-contaminated soil or (iii) any underground storage tanks; and no
underground storage tank or associated piping and equipment disclosed on Schedule 3.16 has leaked and has not been fully
remediated in accordance with all Environmental Laws, and such tank is in
material compliance with all applicable Environmental Laws; and

 

(f)                                    Sellers have
delivered to Aurora true, complete and correct copies of any and all existing
environmental site assessment and other environmental reports, including but
not limited to reports of subsurface investigation, concerning or relating to
the Owned Real Property and the Leased Real Property that Sellers possess as of
the Effective Date.

 

3.17.                        Compliance with Laws.  The representations contained in this Section 3.17
are accurate as of the Effective Date. 
Sellers have complied in all material respects with the Licenses and all
federal, state and local laws, rules, regulations and ordinances applicable or
relating to the ownership and operation of the WEMT License Assets and the
Station, and Sellers have not received any notice of any material violation of
federal, state and local laws, regulations and ordinances applicable or
relating to the ownership or operation of the WEMT License Assets and the
Station nor, to Sellers’ Knowledge, have Sellers received any notice of any
immaterial violation of federal, state and local laws, regulations, and
ordinances applicable or relating to the ownership or operation of the WEMT
License Assets or the Station.

 

3.18.                        Absence of Certain Changes
or Events.  Since the
Balance Sheet Date (and in the case of actions referenced in clauses (g) and
(h) of this Section 3.18, for the period ending on

 

19

 

the Effective Date),
Sellers have conducted their business and operations in the ordinary course
and, except as disclosed on Schedule 3.18,
have not:

 

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

 

(b)                                 made any sale,
assignment, lease, or other transfer of WEMT License Assets owned or used in
the business having a fair market value in excess of Twenty-five Thousand
Dollars ($25,000) in the aggregate for all such WEMT License Assets, except (A) as
required under existing Contracts in the ordinary course of business, (B) in
connection with the acquisition of similar or replacement WEMT License Assets, (C) inventory
sold in the ordinary course of business, or (D) obsolete WEMT License
Assets or other WEMT License Assets not used in the business;

 

(c)                                  incurred
any material loss of or to the WEMT License Assets (whether or not covered by
insurance), or voluntarily waived any material rights or voluntarily cancelled
any debts or claims other than in settlement of claims or debts in the ordinary
course of business not exceeding Twenty-five Thousand Dollars ($25,000) in the
aggregate for all such rights, debts or claims so settled during such period;

 

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

 

(e)                                  suffered
any write-down of the value of any WEMT License Assets to the extent exceeding
Twenty-five Thousand Dollars ($25,000) in the aggregate during such period;

 

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

 

(g)                               made
any amendment of any material term of, or terminated or failed to renew (in
accordance with its terms), any Assumed Contract or License; or

 

(h)                                 suffered any
Material Adverse Effect.

 

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

 

3.20.                        Transactions with
Affiliates.  Except as
set forth in Schedule 3.20, no Affiliate
of any Seller, directly or indirectly, has any interest in, uses or has any
options or rights of any kind in or to any of the WEMT License Assets of any
Seller owned or used in the business, and no Seller directly or indirectly (i) purchases
any material property or receives any material services from (other than
services as a corporate officer or director), or sells any material

 

20

 

property to, any
Affiliate of any Seller (other than between or among Sellers), or (ii) is
a party to any Contract with any Affiliate of any Seller applicable to the
business.

 

SECTION 4:  REPRESENTATIONS AND WARRANTIES OF
AURORA

 

Aurora represents and
warrants to Sellers as of the date hereof and as of the Closing Date (except
for representations and warranties that speak as of a specific date or time, in
which case, such representations and warranties shall be true and complete as
of such date and time) as follows:

 

4.1.                              Organization, Standing and
Authority.  Aurora is
a corporation duly organized, validly existing, and in good standing under the
laws of Delaware and has the requisite corporate power and authority to
execute, deliver, and perform this Agreement and the documents contemplated
hereby according to their respective terms and to own the WEMT License Assets.  Prior to the Closing Date, Aurora will be
qualified to do business in the State in which the Station is located.

 

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

 

4.3.                              Absence of Conflicting
Agreements and Required Consents.  Subject to the receipt of the FCC Consent and
the Consents set forth on Schedule 4.3,
the execution, delivery, and performance by Aurora of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both):  (a) do not
require the consent of any third party; (b) will not conflict with the
Certificate of Incorporation or Bylaws of Aurora; (c) will not conflict
with, result in a breach of, or constitute a default under, any applicable law,
judgment, order, ordinance, injunction, decree, rule, regulation, or ruling of
any court or governmental instrumentality; and (d) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance required
by the terms of, any agreement, instrument, license, or permit to which Aurora
is a party or by which Aurora may be bound. 
Except for the FCC Consent provided for in Section 6.1, and the
other Consents described on Schedule 4.3,
no consent, approval, permit, or authorization of, or declaration to, or filing
with any governmental or regulatory authority or any other third party is
required (a) to consummate this Agreement and the transactions
contemplated hereby, or (b) to permit Aurora to acquire the WEMT License
Assets from Sellers or to assume the Assumed Liabilities of Sellers in
accordance with Section 2.5.

 

4.4                                 Brokers.   Except as disclosed on Schedule 4.4,
neither Aurora nor any Person acting on its behalf has incurred any liability
for any finders’ or brokers’ fees or commissions in connection with the
transactions contemplated by this Agreement, and Sellers shall have no
liability for any finders’ or brokers’ fees or commissions in connection with
the transactions contemplated by this Agreement for any broker listed on Schedule 4.4.

 

21

 

4.5.                              Availability of Funds.  Aurora will have available on the Closing
Date sufficient funds to enable it to consummate the transactions contemplated
hereby.

 

4.6.                              Qualifications
of Aurora.  Except
as disclosed on Schedule 4.6, Aurora is, and
pending Closing will remain legally, financially, and otherwise qualified under
the Communications Act and all rules, regulations, and policies of the FCC, and
any other governmental agency to acquire and operate the Station.  Except as disclosed on Schedule 4.6,
there are no facts or proceedings which would reasonably be expected to
disqualify Aurora under the Communications Act or otherwise from acquiring or
operating the Station or would cause the FCC not to approve the assignment of
the FCC Licenses to Aurora. Except as disclosed on Schedule 4.6,
Aurora has no knowledge of any fact or circumstance relating to Aurora or any
of Aurora’s Affiliates that would reasonably be expected to (a) cause the
filing of any objection to the assignment of the FCC Licenses to Aurora, or (b) lead
to a delay in the processing by the FCC of the applications for such
assignment.  Except as disclosed on Schedule 4.6, no waiver of any FCC rule or policy
is necessary to be obtained for the grant of the applications for the
assignment of the FCC Licenses to Aurora, nor will processing pursuant to any
exception or rule of general applicability be requested or required in
connection with the consummation of the transactions herein.

 

4.7.                              WARN Act.   Aurora is not planning or contemplating and
has not made or taken any decisions or actions concerning the employees of
Station after the Closing Date that would require the service of notice under
the Worker Adjustment and Retraining Notification Act of 1988, as amended, or
any similar state law.

 

4.8.                              Defined Contribution Plan.  Aurora represents that Transferred Employees
will be eligible to participate in a defined contribution plan or plans
intended to be qualified under Sections 401(a) and 401(k) of the Code.

 

SECTION 5:  OPERATION OF THE STATION PRIOR TO
CLOSING

 

Sellers covenant and agree that between the date hereof and the Closing
Date, except as the result of any action taken by BlueStone, Sellers will
operate the Station in the ordinary course, and, except as contemplated by this
Agreement, as a result of any action taken by BlueStone under the JSA, or with
the prior written consent of Aurora (such consent not to be unreasonably
withheld), Sellers will act in accordance with the following insofar as such
actions relate to the Station:

 

5.1.                              Contracts.

 

(a)                                Each
Seller Party shall comply in all material respects with the terms of the
Assumed Contracts.  No Seller Party
will  renew, extend, amend, terminate, or
waive any material right under any Assumed Contract or enter into any contract
or commitment or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness and obligations arising
from the amendment of any existing Contract) that will be assumed by or be
otherwise binding on Aurora after Closing, except for (i) contracts
(excluding film and programming Contracts, (ii) the Tower Space Lease
Agreement if Aurora has consented thereto (such consent not to be unreasonably
withheld)  entered into in the ordinary
course of

 

22

 

business consistent with
past practices of such Seller Party that do not involve consideration, in the
aggregate, in excess of Twenty-Five Thousand Dollars ($25,000.00) as measured
at Closing, and (iii) as set forth on Schedule 6.16.

 

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

 

(c)                                  Prior to the Closing Date, Sellers shall
deliver to Aurora a list of all Contracts entered into between the date of this
Agreement and the Closing Date which are material to the business and shall
make available to Aurora copies of such Contracts.

 

5.2.                              Compensation.  Sellers shall not materially increase the
compensation, bonuses, or other benefits payable or to be payable to the FCC
Employees (including any increase in vacation time) or effect any change in
personnel policies, except in accordance with past practices, as required by an
employment agreement or consulting agreement or in connection and commensurate
with the change in responsibility of any employee in the ordinary course.

 

5.3.                              Encumbrances.  Sellers will not create, assume, or permit to
exist any Lien affecting any of the WEMT License Assets, except for (a) liens
that will be removed prior to the Closing Date, and (b) Permitted
Encumbrances.

 

5.4.                              Dispositions.  Sellers will not sell, assign, lease, or
otherwise transfer or dispose of any of the WEMT License Assets except (a) assets
that are no longer used in the operations of the Station, and (b) assets
that are replaced with assets of comparable use and of at least equivalent kind
and value that are acquired after the date of this Agreement.

 

5.5.                              Access to Information.  Upon prior reasonable notice by Aurora,
Sellers will give to Aurora and its investors, lenders, counsel, accountants,
engineers, and other authorized representatives reasonable access to the
Station, its Station-level management employees, and all books, records, and
documents of Sellers which are material to the business and operation of the
Station, and will furnish or cause to be furnished to Aurora and its authorized
representatives all information relating to Sellers and the Station that they
reasonably request (including any financial reports and operations reports
produced with respect to the Station).

 

23

 

5.6.                              Insurance.  Sellers or their Affiliates shall maintain in
full force and effect policies of insurance of the same type, character, and
coverage as the policies currently carried with respect to the WEMT License
Assets.

 

5.7.                              FCC Licenses.  Sellers shall take all commercially
reasonable steps necessary to maintain in full force and effect, or renew when
required, all FCC Licenses relating to the Station, and shall not cause or
permit by any act or failure to act any of such FCC Licenses to expire or to be
revoked, suspended, or modified or take any action that could reasonably be
expected to cause the FCC to institute proceedings for the suspension,
revocation, or material adverse modification of any of such FCC Licenses.  Sellers shall provide to Aurora, reasonably
promptly after filing thereof, copies of all material reports to and other
filings with the FCC, and will notify Aurora in writing reasonably promptly
after learning of the institution or threat of any material action against
Sellers in any court, or any action against Sellers before the FCC or any other
Governmental Authority, and notify Aurora in writing promptly upon receipt of
any administrative or court order directed at Sellers relating to the
Station.  Sellers shall take all
commercially reasonable steps necessary to protect the Station’s broadcast
signals from objectionable interference from other stations, including, without
limitation, the filing of any and all necessary pleadings with the FCC to
prevent same from continuing once known. 
Except as may be reasonably required to operate the Station in accordance
with the usual and ordinary course of business consistent with past practice,
Sellers shall not permit any of the FCC Licenses to expire or to be
surrendered, voluntarily modified in a manner adverse to Sellers or take any
action that would reasonably be expected to cause the FCC to institute
proceedings for the suspension, revocation or limitation of rights under the
FCC Licenses, fail to prosecute with due diligence any pending applications to
the FCC, change the Station’s call letters, apply for any construction permits
with the FCC or make any material changes in the Station’s buildings, leasehold
improvements and other improvements and fixtures on the Real Estate except as
required hereunder.

 

5.8.                              Obligations.  Sellers shall pay all its obligations insofar
as they relate to the Station as they become due, consistent with past
practices.

 

5.9.                              No Inconsistent Action.  Neither SBG nor Sellers shall take any action
that is inconsistent with its obligations under this Agreement in any material
respect or that could reasonably be expected to hinder or delay the
consummation of the transactions contemplated by this Agreement.  Neither SBG nor Sellers nor any of their
respective representatives or agents shall, directly or indirectly, solicit,
initiate, or participate in any way in discussions or negotiations with, or
enter into any Contract with, or provide any confidential information to, any
Person (other than Aurora or any Affiliate or associate of Aurora and their
respective representatives and agents) concerning any possible disposition of
the Sellers’ equity, or the Station, or the sale of any material assets of the
Station, or any similar transaction.

 

5.10.                        Maintenance of WEMT
License Assets. 
Sellers shall preserve and maintain all of the WEMT License Assets in
good condition (ordinary wear, tear and unavoidable casualty excepted), shall
maintain, repair or replace Tangible Personal Property consistent with their
past practices, and shall use and operate all of the WEMT License Assets at all
times in a commercially reasonable manner. 
Sellers shall maintain inventories of spare parts and expendable
supplies at levels consistent with past practices.  If any insured or indemnified loss,

 

24

 

damage, impairment,
confiscation, or condemnation of or to any of the WEMT License Assets occurs,
Sellers shall repair, replace, or restore the WEMT License Assets to their
prior condition as represented in this Agreement as soon thereafter as
possible, and Sellers shall use the proceeds of any claim under any property
damage insurance policy or other recovery solely to repair, replace, or restore
any of the WEMT License Assets that are lost, damaged, impaired, or destroyed.

 

5.11.                        Consents.

 

(a)                                Subject to this Section 5.11
and Section 6.4 hereof, Sellers shall use their reasonable efforts to
obtain all Consents described in Section 3.3, Schedule 3.5
or Schedule 3.7 without any adverse change in the terms or
conditions of any Assumed Contract or License. 
Sellers shall not agree to any change in the terms or conditions of any
Assumed Contract or FCC License in the course of seeking any such Consent
without Aurora’s written consent, which shall not be unreasonably withheld or
delayed.  Sellers shall promptly advise
Aurora of any difficulties experienced in obtaining any of the Consents and of
any conditions proposed, considered, or requested for any of the Consents.

 

(b)                                 Anything
in this Agreement to the contrary notwithstanding, this Agreement shall not
constitute an agreement to assign or transfer any Contract or any claim, right,
or benefit arising thereunder or resulting therefrom, if an attempted
assignment or transfer thereof, without the consent of a third party thereto
would constitute a breach thereof or in any way adversely affect the rights of
the Aurora thereunder.  If such consent
(a “Deferred Consent”) is not obtained, or if an attempted assignment or
transfer thereof would be ineffective or would affect the rights or benefits
thereunder so that the Aurora would not receive all such rights and benefits,
then (i) Sellers and Aurora will cooperate, in all reasonable respects, to
obtain such Deferred Consents as soon as practicable; provided that neither
Sellers nor Aurora shall have any obligation (y) to expend funds to obtain any
Deferred Consent, other than ministerial processing fees, and  out-of-pocket expenses to their respective
attorney or other agents incurred in connection with obtaining any Deferred
Consent, or (z) to agree to any adverse change in any License or Assumed
Contract in order to obtain a Deferred Consent, and (ii) until such
Deferred Consent is obtained, Sellers and Aurora will cooperate in all
reasonable respects to provide to the Aurora the benefits and rights under the
Contract to which such Deferred Consent relates (with the Aurora responsible
for all the liabilities and obligations thereunder to the extent relating to
the period after the Closing Date).  In
particular, in the event that any such Deferred Consent is not obtained prior
to Closing, then Aurora and Sellers shall enter into such arrangements
(including subleasing or subcontracting if permitted) to provide to the parties
the economic and operational equivalent of obtaining such Deferred Consent and
assigning or transferring such Contract, including enforcement for the benefit
of the Aurora of all claims or rights or benefits arising thereunder, and the
performance by the Aurora of the obligations thereunder on a prompt and
punctual basis.

 

5.12.                        Books and Records.  Sellers shall maintain their books and
records in accordance with past practices.

 

5.13.                        Notification.  Sellers shall promptly notify Aurora in
writing of any material defaults or notice of material defaults under any
Assumed Contracts or FCC Licenses, or the

 

25

 

commencement of any
material proceeding or litigation at law or in equity or before the FCC or any
other Governmental Authority that involves the FCC Licenses, other than
proceedings or litigation of general applicability to the television
broadcasting industry.  Sellers and
Aurora shall promptly notify the other in writing upon becoming aware of any
order or decree or any complaint praying for an order or decree restraining,
enjoining or challenging the consummation of this Agreement or the transactions
contemplated hereunder (including challenges to the Assignment Applications),
or upon receiving any notice from any Governmental Authority of its intention
to institute an investigation into, or institute a suit or proceeding to
restrain or enjoin the consummation of this Agreement or the transactions
contemplated hereby.  Sellers and Aurora
will each use commercially reasonable efforts to contest, defend and resolve
any such suit, proceeding or injunction brought against it so as to permit the
prompt consummation of the transactions contemplated hereby.

 

5.14.                        Compliance with Laws.  Sellers shall comply in all material respects
with all Laws.

 

5.15.                        Preservation of Business.  Subject to the JSA, (a) Sellers shall use
commercially reasonable efforts consistent with past practices to preserve the
business and organization of the Station and to keep available to the Station
its present employees, and to preserve the audience and goodwill of the Station
and the Station’s present relationships with suppliers, advertisers, and others
having business relations with it; and (b) Sellers shall continue to
conduct the financial operations of the Station, including its credit and
collection policies, with the same effort, to the same extent and in the same
manner as in the prior conduct of the operations of the Station.

 

5.16.                        Normal Operations.
Subject to the JSA and the terms and conditions of this Agreement (including,
without limitation, Section 5.1), prior to the Closing Date, Sellers shall
carry on the business and activities of the Station, including, without
limitation, promotional activities, the sale of advertising time, entering into
other contracts and agreements, purchasing and scheduling programming,
performing research, and operating in all material respects in accordance with
existing budgets and past practice and will not enter into trade and barter
obligations except in the ordinary course of business consistent with past
practice.

 

SECTION 6:  SPECIAL
COVENANTS AND AGREEMENTS

 

6.1.                              FCC Consent.

 

(a)                                  The exchange and
transfer of the WEMT License Assets as contemplated by this Agreement is
subject to the prior FCC Consent.

 

(b)                                 Sellers and Aurora shall prepare and
within seven (7) days after the date
of this Agreement shall file with the FCC an appropriate application for FCC
Consent.  The parties shall thereafter
prosecute the application with all reasonable diligence and otherwise use their
respective best efforts to obtain a grant of the application as expeditiously
as practicable.    Each party agrees to
comply with any condition imposed on it by the FCC Consent, except that no
party shall be required to comply with a condition if (i) the condition
was imposed on it as the result of a circumstance, the existence of which does
not constitute a breach by that party of any of its representations,
warranties, or covenants hereunder, and (ii) compliance with the condition

 

26

 

would
have a materially adverse effect upon it. 
Aurora and Sellers shall oppose any petitions to deny or other
objections filed with respect to the application for the FCC Consent and any
requests for reconsideration or judicial review of the FCC Consent.

 

(c)                                  If the Closing shall not have occurred for
any reason within the original effective period of the FCC Consent and neither
party shall have terminated this Agreement under Section 9, the parties
shall jointly request an extension of the effective period of the FCC
Consent.  No extension of the effective
period of the FCC Consent shall limit the exercise by either party of its right
to terminate the Agreement under Section 9.

 

6.2                                 Risk of Loss.  The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the WEMT License Assets of Sellers for
any cause whatsoever shall be borne by Sellers at all times prior to the
Closing.  In the event of loss or damage
prior to the Closing Date, Sellers shall submit and prosecute insurance claims
in good faith and use commercially reasonable efforts to fix, restore, or
replace such loss, damage, impairment, confiscation, or condemnation to its
former operational condition.  If Sellers
have full replacement cost insurance (without deductible or co-insurance),
Aurora may elect to have Sellers assign such insurance proceeds to Aurora, in
which case, Aurora shall proceed with the Closing and receive at the Closing
the insurance proceeds or an assignment of the right to receive such insurance
proceeds, as applicable, to which Sellers otherwise would be entitled,
whereupon Sellers shall have no further liability to Aurora for such loss or
damage.

 

6.3.                              Confidentiality.
Except as necessary for the consummation of the transactions contemplated by
this Agreement, including Aurora’s obtaining of financing related hereto, and
except as and to the extent required by law, each party will keep confidential
any information obtained from the other party in connection with the
transactions specifically contemplated by this Agreement.  If this Agreement is terminated, each party
will return to the other party all information obtained by the such party from
the other party in connection with the transactions contemplated by this
Agreement.  Nothing shall be deemed to be
confidential information that: (i) is already in such party’s possession, provided
that such information is not known by such party to be subject to another
confidentiality agreement with or other obligation of secrecy to the other
party hereto or another party; (ii) becomes generally available to the
public other than as a result of a disclosure by such party or such party’s
officers, directors, stockholders, managers, members, employees, lenders,
advisors, attorneys or accountants in breach of this Section 6.3; (iii) becomes
available to such party on a nonconfidential basis from a source other than
another party hereto or its advisors, provided that such source is not
known by such party to be bound by a confidentiality agreement with or other
obligation of secrecy to the other party hereto or another party; or (iv) is
developed independently by either party without resort to the confidential
information of the other party. 
Notwithstanding anything herein to the contrary, if the transactions
contemplated in this Agreement are consummated then Aurora’s obligations
pursuant to this Section 6.4 shall terminate automatically on the Closing
Date, but Sellers will continue to be bound hereby for a period of three (3) years
from the Closing Date.

 

6.4.                              Cooperation.  Aurora and Sellers shall reasonably cooperate
with each other and their respective counsel and accountants in connection with
any actions required to be taken as part of their respective obligations under
this Agreement, and in connection with any litigation after the Closing Date
which relate to the Station for periods prior to the Effective Time, Aurora

 

27

 

and Sellers shall execute
such other documents as may be reasonably necessary and desirable to the
implementation and consummation of this Agreement and otherwise use their
commercially reasonable efforts to consummate the transaction contemplated
hereby and to fulfill their obligations under this Agreement.  Notwithstanding the foregoing, neither Aurora
nor Sellers shall have any obligation (a) to expend funds to obtain any of
the Consents, other than ministerial processing fees, and out of pocket
expenses to their respective attorney or other agents incurred in connection
with obtaining such Consents, or (b) to agree to any adverse change in any
License or Assumed Contract in order to obtain a Consent required with respect
thereto.

 

6.5.                              Control of the Station.  Prior to the Closing, Aurora shall not,
directly or indirectly, control, supervise or direct, or attempt to control,
supervise or direct, the operations of the Station; those operations, including
complete control and supervision of all the Station’s programs, employees and
policies, shall be the sole responsibility of Sellers.

 

6.6                                 Allocation of Purchase
Price.  Aurora and
Sellers shall mutually agree upon a statement (the “Allocation
Statement”) setting forth the value of the WEMT License Assets,
which shall be used for the allocation of the Purchase Price (together with the
Assumed Liabilities) among the WEMT License Assets.  Sellers and Aurora agree to report an
allocation of such Purchase Price among the WEMT License Assets in a manner
entirely consistent with the Allocation Statement and agree to act in
accordance with such Allocation Statement in the preparation of financial
statements and filing of all Tax Returns (including, without limitation, filing
Internal Revenue Service Form 8594 with its federal income tax return for
the taxable year that includes the Closing Date) and in the course of any Tax
audit, Tax review or Tax litigation matter relating hereto.  If Sellers and Aurora are unable to agree on
such allocation, Sellers and Aurora agree to retain a nationally recognized
appraisal firm experienced in valuing television broadcast properties to
appraise the WEMT License Assets.  The
appraisal firm shall perform such appraisal promptly.  Sellers and Aurora shall each pay one-half
(1/2) of the costs of such appraisal.

 

6.7.                              Access to Books and
Records after Closing.  From and after the Closing Date, to the
extent reasonably requested by Aurora, Sellers shall provide Aurora access and
the right to copy any books and records relating to the WEMT License Assets,
but not included in the WEMT License Assets. 
From and after the Closing Date, to the extent reasonably requested by
Sellers, Aurora shall provide Sellers access and the right to copy any books
and records relating to the WEMT License Assets that are included in the WEMT
License Assets.  Aurora and Sellers shall
each retain any such books and records for a period of three (3) years (or
such longer period as may be required by law or good business practice)
following the Closing Date All such copies shall be made at the expense of the
requesting party.

 

6.8.                              Employee Matters.

 

(a)                                  Upon
consummation of the Closing hereunder, Aurora shall offer employment as an
employee “at will” to each of the Employees of the Station listed on Schedule 6.8(a) (each, an “FCC Employee”) (or any
person who replaces any such FCC Employee) at a comparable salary or wage,
position, and place of employment as held by each such FCC Employee

 

28

 

immediately prior to the
Closing Date (such FCC Employee who accept such offers of employment are
referred to herein as the “Transferred Employees”).

 

(b)                                 Except
as provided otherwise in this Section 6.10, Sellers shall pay, discharge,
and be responsible for (a) all salary, wages and commissions (including
bonuses, vacation pay, and personal leave pay accruing to the Closing Date)
arising out of or relating to the employment of the FCC Employees prior to the
Closing Date, and (b) any employee benefits arising under the Benefit
Plans or Benefit Arrangements of Sellers and their Affiliates during the period
prior to such Closing Date.  From and
after the Closing Date, Aurora shall pay, discharge, and be responsible for all
salary, wages, and benefits (including bonuses, vacation pay and personal leave
pay accruing from and after the Closing Date) arising out of or relating to the
employment of the Transferred Employees by Aurora on and after the Closing
Date.  Aurora shall be responsible for
all severance liabilities and all COBRA liabilities for any Transferred
Employees of the Station terminated after the Closing Date.  Sellers shall be responsible for all
severance liabilities, all COBRA liabilities, and any and all other liabilities
for any FCC Employees of the Station who do not become Transferred Employees.

 

(c)                                  Aurora
shall cause all Transferred Employees as of the Closing Date to be eligible to
participate in its “employee welfare benefit plans” and “employee pension
benefit plans” (as defined in Section 3(1) and 3(2) of ERISA,
respectively) of Aurora in which similarly situated employees of Aurora are
generally eligible to participate; provided, however, that Aurora shall credit
each Transferred Employee with the period of years of service with Sellers, any
Affiliate of Sellers or any prior owner of the Station in determining
eligibility to participate and vesting in such plans; and provided further that
Aurora shall waive any pre-existing condition limitation under Aurora’s “employee
welfare benefit plans” for any condition of a Transferred Employee (or eligible
spouse and dependents) except to the extent that any such limitation actually
applied to such Transferred Employees prior to the Closing Date.

 

(d)                                 For purposes of any length of service
requirements, waiting period, vesting periods, or differential benefits based
on length of service in any such plan for which a Transferred Employee may be
eligible after the Closing (but not for benefit accrual purposes under any
defined benefit plan), Aurora shall ensure that, to the extent permitted by law
and the terms of such plan, service by such Transferred Employee with Sellers,
any Affiliate of Sellers, or any prior owner of the Station shall be deemed to
have been service with the Aurora.  In
addition, Aurora shall ensure that each Transferred Employee receives credit
under any welfare benefit plan of Aurora for any deductibles or co-payments
paid by such Transferred Employee and his or her dependents for the current
plan year under a plan maintained by Sellers or any Affiliate of Seller to the
extent allowable under any such plan.  At
the Closing, Sellers shall deliver to Aurora Schedule 6.6 setting forth
Sellers’ good faith estimate of all accrued and unpaid bonuses and all accrued
but unused vacation time and personal leave time, and unused sick time, of each
Transferred Employee as of the month ending immediately preceding the Closing.
To the extent any claim with respect to accrued bonuses, vacation leave,
personal leave or sick leave is lodged against Sellers with respect to any
Transferred Employee, Aurora shall indemnify, defend and hold harmless Sellers
from and against any and all losses, directly or indirectly, as a result of or
based upon or arising from the same, provided, that in the case of accrued
bonuses, accrued vacation leave and accrued personal leave, such indemnity
shall apply only to the extent the

 

29

 

Purchase
Price was reduced pursuant to Section 2.3(b) as a result of the
proration of such liability.

 

(e)                                  As
soon as practicable following the Closing Date, Aurora shall cause a defined
contribution plan to which Aurora employees may make contributions to accept
any “eligible rollover distribution” (as such term is defined in Section 401(a)(31)
of the Code) from a Transferred Employee.

 

(f)                                    Nothing
in this Agreement shall be construed to provide employees of Sellers with any
rights under this Agreement, and no Person, other than the parties hereto, is
or shall be entitled to bring any action to enforce any provision of this
Agreement against any of the parties hereto, and the covenants and agreements
set forth in this Agreement shall be solely for the benefit of, and shall only
be enforceable by, the parties hereto and their respective successors and
assigns as permitted hereunder.

 

6.9.                              Public Announcements.  Sellers and Aurora shall consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
herein and shall not issue any such press release or make any such public
statement without the prior written consent of the other party, which shall not
be unreasonably withheld; provided, however, that a party may, without the
prior written consent of the other party, issue such press release or make such
public statement as may be required by Law or any listing agreement with a
national securities exchange to which SBG or Aurora is a party if it has used
all reasonable efforts to consult with the other party and to obtain such party’s
consent but has been unable to do so in a timely manner.

 

6.10.                        Schedules.  Between the date of this Agreement and the
Closing Date, Sellers will promptly notify Aurora in writing if Sellers become
aware of any fact or condition that causes or constitutes a breach of any of
Sellers’ representations or warranties as of the date of this Agreement, or if
Sellers become aware of the occurrence after the date of this Agreement of any
fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a breach of any such representation or warranty
had such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. 
Should any such fact or condition require any change in the Schedules if
the Schedules were dated the date of the occurrence or discovery of any such
fact or condition, Sellers will promptly deliver to Aurora a supplement to the
Schedules specifying such change.  During
the same period, Sellers will promptly notify Aurora of the occurrence of any
breach of any covenant of Sellers in this Section 6.10 or of the
occurrence of any event that may make satisfaction of the conditions in Section 7.1
impossible or unlikely.  Aurora shall be
entitled to reject any of Sellers’ supplemental disclosures made pursuant to
this Section 6.10 for purposes of determining whether or not the condition
to Closing set forth in Section 7.1 has been satisfied.  If the Aurora does not reject any such
supplemental disclosure in writing within two (2) business days prior to
Closing, the supplemental disclosure shall be deemed accepted by the Aurora
solely for purposes of Section 7.1 and the condition to Closing set forth
in Section 7.1 shall be deemed satisfied; provided that no such
supplemental disclosure shall be deemed to modify or supplement any
representations or warranties of Sellers hereunder for purposes of Aurora’s
rights to indemnification under Section 10 hereof and any claim for
indemnification in connection with any indemnifiable item covered by such
supplemental disclosure shall be subject to the limitations thereof.  Notwithstanding the

 

30

 

foregoing, no update to
any Schedule is required for any representation that was only required to
be accurate as of the Effective Date.

 

6.11.                        Bulk Sales Law.  Aurora hereby waives compliance by Sellers,
in connection with the transactions contemplated hereby, with the provisions of
any applicable bulk transfer laws.

 

6,12,                        Adverse Developments.  Sellers shall promptly notify Aurora of any
unusual or materially adverse developments that occur prior to the Closing with
respect to the WEMT License Assets; provided, however, that Sellers’ compliance
with the disclosure requirements of this Section 6.14 shall not relieve
Sellers of any obligation with respect to any representation, warranty, or
covenant of Sellers in this Agreement or relieve Aurora of any obligation or
duty hereunder, waive any condition to Aurora’s obligations under this
Agreement, or expand or enhance any right of Aurora hereunder.

 

6.13                           Intentionally deleted.

 

6.14.                        Intentionally deleted.

 

6.15.                        Non-Solicitation.  SBG and Sellers shall not, and shall not
permit any of their Affiliates to, beginning on the Closing Date and continuing
for a period ending two (2) years after the Effective Date, without the
prior written approval of Aurora, directly or indirectly, hire, solicit, encourage,
entice or induce any Person who is a Transferred Employee to terminate his or
her employment with Aurora; provided, however, that this provision shall not prohibit Sellers or
any Affiliate from making a general, public solicitation or a general,
industry-wide solicitation for employment, or from hiring any of Aurora’s
employees who respond to such a solicitation. 
SBG agrees that any remedy at law for any breach by it of this Section 6.15
would be inadequate, and Aurora would be entitled to injunctive relief in such
a case, in addition to any other remedies at law to which Aurora may be
entitled.  If it is ever held that the
restrictions placed on the SBG by this Section 6.15 are too onerous and
are not necessary for the protection of Aurora, then the parties agree that any
court of competent jurisdiction may reduce the duration or scope hereof, or
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced.

 

6.16.                        Network Discussions.  SBG will keep Aurora apprised of the status
of Sellers’ negotiations of the Fox Affiliation Agreement.

 

6.17.                        Special Purpose Entity.  SBG agrees that it (i) will renew and
maintain the existence of Licensee as a direct or indirect wholly owned
subsidiary of SBG solely for the purpose of holding the WEMT License Assets, (ii) will
not cause or permit Licensee to conduct any operations or incur any liabilities
other than as holder of the WEMT License Assets; (iii) will not sell,
assign, transfer, pledge, hypothecate or encumber any of the capital securities
of Licensee, and (iv) will not cause or permit Licensee to sell, assign,
transfer, pledge, hypothecate or encumber any of Licensee’s assets, except in
each case with the prior written consent of Aurora.

 

6.18.                        SBG Guaranty.  By its execution hereof with respect to this Section 6.18,
SBG irrevocably and unconditionally guarantees to Aurora the full, complete and
timely performance

 

31

 

by Sellers of any and all
obligations of Sellers under this Agreement, including without limitation, the
indemnification obligations of Sellers under Section 10 hereof.  This guaranty shall remain in full force and
effect so long as Sellers shall have any obligations or liabilities hereunder.  This guaranty shall be deemed a continuing
guaranty and the waivers of SBG herein shall remain in full force and effect
until the satisfaction in full of all of Sellers’ obligations hereunder.  If any default shall occur by either Seller
in its performance or satisfaction of any of its obligations hereunder, then
SBG will itself perform or satisfy, or cause to be performed or satisfied, such
obligations immediately upon notice from Aurora specifying in summary form the
default.  This guaranty is an absolute,
unconditional and continuing guaranty of payment and performance which shall
remain in full force and effect without respect to future changes in
conditions, including any change of law. 
SBG agrees that its obligations hereunder shall not be contingent upon
the exercise or enforcement by Aurora of whatever remedies it may have against
Sellers.  To the maximum extent permitted
by law, SBG hereby waives: (i) notice of acceptance hereof; (ii) notice
of any adverse change in the financial condition of either Seller or of any
other fact that might increase SBG’s risk hereunder; and (iii) presentment,
protest, demand, action or delinquency in respect of any of Sellers’
obligations hereunder.

 

6.19                           BlueStone Guaranty.
By its execution hereof with respect to this Section 6.19, BlueStone
irrevocably and unconditionally guarantees to Sellers the full, complete and
timely performance by Aurora of any and all obligations of Aurora under this
Agreement, including without limitation, the obligation to pay the Purchase
Price under Section 2.3 hereof and the indemnification obligations of
Aurora under Section 10 hereof. 
This guaranty shall remain in full force and effect so long as Aurora
shall have any obligations or liabilities hereunder.  This guaranty shall be deemed a continuing
guaranty and the waivers of BlueStone herein shall remain in full force and
effect until the satisfaction in full of all of Aurora’ obligations
hereunder.  If any default shall occur by
Aurora in its performance or satisfaction of any of its obligations hereunder,
then BlueStone will itself perform or satisfy, or cause to be performed or
satisfied, such obligations immediately upon notice from Sellers specifying in
summary form the default.  This guaranty
is an absolute, unconditional and continuing guaranty of payment and
performance which shall remain in full force and effect without respect to
future changes in conditions, including any change of law.  BlueStone agrees that its obligations hereunder
shall not be contingent upon the exercise or enforcement by Sellers of whatever
remedies it may have against Aurora.  To
the maximum extent permitted by law, BlueStone hereby waives: (i) notice
of acceptance hereof; (ii) notice of any adverse change in the financial
condition of Aurora or of any other fact that might increase BlueStone’s risk
hereunder; and (iii) presentment, protest, demand, action or delinquency
in respect of any of Aurora’ obligations hereunder.

 

SECTION 7:  CONDITIONS TO OBLIGATIONS OF AURORA
AND SELLER

 

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

 

(a)                                  Representations and Warranties. The
representations and warranties of Sellers in Sections 3.1, 3.2, 3.3, 3.9, 3.11,
3.15 and 3.19 shall be true and complete (without any qualifications by
materiality) at and as of the Closing Date as though made at and as of that
time (except for representations and warranties that state that they are
accurate as of the Effective

 

32

 

Date or speak as of a
specific date or time which need only be true and complete as of such date or
time), except where the failure to be true and complete does not have a
Material Adverse Effect, or shall have been caused by Appalachian’s failure to
fulfill its obligations under the JSA; provided, however, that
the foregoing list of sections shall exclude Section 3.15 if the Closing
shall occur following the first anniversary of the Effective Date.

 

(b)                                 Covenants and Conditions.  Sellers shall have performed and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date, except where
the failure to have performed and complied does not have a Material Adverse
Effect, or shall have been caused by Appalachian’s failure to fulfill its
obligations under the JSA.

 

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

 

(d)                                 Governmental Authorizations.  On the Closing Date, the applicable Sellers
shall be the holders of the FCC Licenses. 
All of such FCC Licenses (i) shall be in full force and effect, and
(ii) shall contain no adverse modifications of the terms thereof in effect
on the date of this Agreement (other than modifications generally applicable to
such FCC Licenses of the same type or service). 
Except for proceedings that affect the broadcast television industry
generally, no proceedings shall be pending or overtly threatened by or before
the FCC against Sellers that are reasonably likely to result in the revocation,
cancellation, suspension or adverse modification or non-renewal of such FCC
Licenses.

 

(e)                                Consents.  The consents required under the Fox
Affiliation Agreement (subject to Schedule 6.15 of the BlueStone Purchase
Agreement)  shall have been obtained;
provided, that such consents shall be deemed to have been obtained if SBG has
achieved the results referenced in Schedule 6.15 to the BlueStone Purchase
Agreement, or, if such results have not been obtained, if the current Station
Affiliation Agreement with respect to the Station is renewed or extended with
Fox in the form of the then current standard form of Fox affiliation agreement,
and accompanied by all consents required under the Station Affiliation
Agreement, as so renewed or extended, to assign such agreement to Aurora.

 

(f)                                    Deliveries.  Sellers shall have made or stand willing to
make all the deliveries to Aurora described in Section 8.2.

 

(g)                                 Absence of Proceedings.  No injunction, restraining order or decree of
any nature of any Governmental Authority of competent jurisdiction shall be in
effect enjoining or preventing consummation of
the transactions contemplated by this Agreement.

 

33

 

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

 

(a)                                  Representations and Warranties.  All representations and warranties of Aurora
contained in this Agreement shall be true and complete in all material respects
at and as of the Closing Date as though made at and as of that time (except for
representations and warranties that speak as of a specific date or time which
need only be true and complete as of such date or time).

 

(b)                                 Covenants and Conditions.  Aurora shall have performed and complied in
all material respects with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date.

 

(c)                                  FCC Consent.  The FCC Consent shall have been granted.

 

(d)                                 Deliveries.  Aurora shall have made or stand willing to
make all the deliveries described in Section 8.3.

 

SECTION 8:  CLOSING
AND CLOSING DELIVERIES

 

8.1.                              Closing.

 

(a)                                  Closing Date.

 

(i)                                     Except
as provided below in this Section 8.1 or as otherwise agreed to by Aurora
and Sellers, the Closing hereunder shall be held on a date specified by Aurora
on at least five (5) days written notice that is not earlier than the
first business day after or later than ten (10) business days after the
date on which all of the conditions to Closing have been satisfied or waived.

 

(ii)                                  If any event occurs that prevents signal
transmission by the Station in the normal and usual manner and Sellers cannot
restore the normal and usual transmission before the date on which the Closing
would otherwise occur pursuant to this Section 8.1(a), and this Agreement
has not been terminated by Aurora under Section 9, Sellers shall
diligently take such action as reasonably necessary to restore such
transmission, and the Closing shall be postponed until a date within the
effective period of the FCC Consent (as it may be extended pursuant to Section 6.1(c))
to allow Sellers to restore the normal and usual transmission for the
Station.  If the Closing is postponed
pursuant to this paragraph, the date of the Closing shall be five (5) days
after notice by Sellers to Aurora that transmission has been restored.

 

(iii)                               If
there is in effect on the date on which the Closing would otherwise occur pursuant
to this Section 8.1(a) any judgment, decree, or order that would
prevent or make unlawful the Closing on that date, the Closing shall be
postponed until a date within the effective period of the FCC Consent (as it
may be extended pursuant to Section 6.1(c)), when such judgment, decree,
or order no longer prevents or makes unlawful such Closing.  If the Closing is postponed pursuant to this
paragraph, the date of the Closing shall be five (5) days after such
closing is no longer unlawful.

 

34

 

(b)                                 Closing Place. The Closing shall be
held at 10706 Beaver Dam Road, Hunt Valley, Maryland 21030, or any other place
that is mutually agreed upon by Aurora and Sellers.

 

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

 

(a)                                  Conveyancing Documents.  Duly executed deeds in form and quality
equivalent to the deeds by which Sellers obtained title, bills of sale,
assignments, and other transfer documents that are sufficient to vest good and
marketable title to the WEMT License Assets being transferred at the Closing in
the name of Aurora, free and clear of all Liens except for Permitted Encumbrances,
including the following:

 

(i)                                     Assignment
and Assumption of Contracts in the form attached hereto as Exhibit A;

 

(ii)                                  Assignment
and Assumption of Intangibles in the form attached hereto as Exhibit B;

 

(iii)                               Assignment
of FCC Licenses in the form attached hereto as Exhibit D.

 

(b)                                 Officer’s Certificate.  A certificate, dated as of the Closing Date,
executed by an officer of Sellers, certifying: 
(i) that the representations and warranties of Sellers contained in
this Agreement are true and complete as of the Closing Date as though made on
and as of that date (except for representations and warranties that state that
they are accurate as of the Effective Date or speak as of a specific date or
time, which need only be true and complete as of such date or time), except to
the extent that the failure of such representations and warranties shall not
have had a Material Adverse Effect, and (ii) that Sellers have in all
respects performed and complied with all of their obligations, covenants, and
agreements in this Agreement to be performed and complied with on or prior to
such Closing Date, except to the extent that the failure to perform such
covenants shall not have had a Material Adverse Effect.

 

(c)                                  Secretary’s Certificate.  A certificate, dated as of the Closing Date,
executed by each of the Sellers’ secretaries, members, partners, or designees,
as the case may be: (i) certifying that the resolutions, as attached to
such certificate, were duly adopted by Sellers’ Board of Directors and
shareholders (if required) (or by the general partner in the case of a
partnership or by the members in the case of a limited liability company),
authorizing and approving the execution of this Agreement and the consummation
of the transaction contemplated hereby and that such resolutions remain in full
force and effect; and (ii) providing, as attachments thereto, the Articles
of Incorporation and Bylaws (or other organizational documents) of Sellers.

 

(d)                                 Good Standing Certificates.  To the extent available from the applicable
jurisdictions and to the extent applicable to the Station, certificates as to
the formation and/or good standing of Sellers issued by the appropriate
Governmental Authorities in the states of organization and each jurisdiction in
which Sellers are qualified to do business, each such certificate (if
available) to be dated a date not more than a reasonable number of days to the
Closing Date.

 

35

 

(e)                                  United States Real Property Interest Certificates.  Sellers shall have executed and delivered to
Aurora certificates of non foreign status satisfying the requirements of
Treasury Regulations Section 1.1445-2(b).

 

(f)                                    Other Documents.  Such other documents reasonably requested by
Aurora or its counsel for complete implementation of this Agreement and
consummation of the transaction contemplated hereby, including a release of any
Liens encumbering the WEMT License Assets (other than Permitted Encumbrances).

 

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

 

(a)                                  Payment.  The payment of the Purchase Price as
described in Section 2.4.

 

(b)                                 Officer’s Certificate.  A certificate, dated as of the Closing Date,
executed on behalf of an officer of the Aurora, certifying (i) that the
representations and warranties of Aurora contained in this Agreement are true
and complete in all material respects as of the Closing Date as though made on
and as of that date, and (ii) that Aurora has in all material respects
performed and complied with all of its obligations, covenants, and agreements
in this Agreement to be performed and complied with, on, or prior to the
Closing Date.

 

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

 

(d)                                 Assumption Agreements.  Appropriate assumption agreements executed by
Aurora pursuant to which Aurora shall assume and undertake to perform Sellers’
obligations and liabilities to the extent provided under this Agreement,
including, without limitation, the following:

 

(i)                                     Assignment
and Assumption of Contracts in the form attached hereto as Exhibit A;

 

(ii)                                  Assignment
and Assumption of Intangibles in the form attached hereto as Exhibit B;

 

(iii)                               Assignment
of the Tower Space Lease Agreement in the form attached as Exhibit C;

 

(iv)                              Assignment
of FCC Licenses in the form attached hereto as Exhibit D.

 

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

 

36

 

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

 

(f)                                    Other Documents.  Such other documents reasonably requested by
Sellers or their counsel for complete implementation of this Agreement and
consummation of the transactions contemplated hereby.

 

SECTION 9:  TERMINATION

 

9.1.                              Termination by Mutual
Consent.  This
Agreement may be terminated at any time prior to Closing by the mutual consent
of the parties.

 

9.2.                              Termination by Sellers. 
On or after the third anniversary of the Effective Date (the “Outside
Date”), so long as Sellers are not in material default hereunder on the date of
any such termination, this Agreement may be terminated by Sellers and the sale
and transfer of the WEMT License Assets abandoned, unless prior to such third
anniversary Aurora shall have made a payment of $700,000 to Sellers (the “Extension
Payment”); provided, however, if the License Renewal shall not have been
granted and become a Final Action prior to such third anniversary, Sellers’
termination right under this Section 9.2 shall not become effective until
the 90th day after the License Renewal (unless prior to such 90th
day Aurora shall have made the Extension Payment to Sellers).

 

9.3.                              Termination by Aurora.  This Agreement may be terminated by Aurora
and the sale and transfer of the WEMT License Assets abandoned, so long as
Aurora is not then in material default hereunder, upon written notice to
Sellers:

 

(a)                                  if Sellers shall default in the
performance of their obligations under this Agreement in any material respect
and such default is not cured within sixty (60) days after written notice to
Sellers thereof (or within such longer period as may reasonably  be required to cure if such default is not
reasonably capable of being cured within such sixty (60) days and Sellers shall
have diligently begun working to cure such default within such sixty (60) say
period); or

 

(b)                                 upon ninety (90) days written notice to
Sellers, if on the Outside Date or at any time thereafter, the Closing has not
occurred and failure of Closing to have occurred is due to the failure to
obtain the License Renewal.

 

9.4                                 Rights on Termination.  If this Agreement is terminated by Aurora in
accordance with the provisions of Section 9.3 above, Aurora shall have all
rights and remedies available at law or equity, including its rights to
indemnification pursuant to Section 10 hereof and the remedy of specific
performance described in Section 11.10 below.  If this Agreement is terminated by Sellers in
accordance with provisions of Section 9.2 above, Sellers shall have all
rights and remedies available at law or equity, including their rights to
indemnification pursuant to Section 10 below.

 

9.5                                 Attorneys’ Fees.  In the event of a default by either party
that results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be

 

37

 

entitled to reimbursement
from the other party of its reasonable legal fees and expenses (whether
incurred in arbitration, at trial, or on appeal).

 

9.6                                 Survival.  Notwithstanding the termination of this
Agreement pursuant to this Section 9, the obligations of Aurora and
Sellers set forth in Sections 6.3, 6.4, Section 9, Section 10, and Section 11
shall survive such termination, and the parties hereto shall have any and all
rights and remedies to enforce such obligations provided at law or in equity or
otherwise (including, without limitation, specific performance).

 

SECTION 10:  SURVIVAL OF REPRESENTATIONS AND
WARRANTIES;

INDEMNIFICATION; CERTAIN REMEDIES

 

10.1.                        Survival of Representations.  All representations and warranties,
covenants, and agreements of Sellers and Aurora contained in or made pursuant
to this Agreement or in any certificate furnished pursuant hereto shall survive
the Closing Date and shall remain in full force and effect to the following
extent:  (a) representations made in
Sections 3.1, 3.3, 3.15, 3.19, 4.1, 4.3, 4.4 , 4.7 and 4.8 shall survive for a
period of twelve (12) months after the Closing Date (except Section 3.15
is excluded if the Closing shall occur following the first anniversary of the
Effective Date); (b) all other representations and warranties shall
survive for a period of twelve (12) months after the Effective Date; (c) except
as otherwise provided herein, the covenants and agreements which, by their
terms, survive the Closing shall continue in full force and effect until fully
discharged; (d) Sellers’ obligation to pay, perform or discharge the
Retained Liabilities shall survive the Closing until such Retained Liabilities
have been paid, performed or discharged in full by Sellers; and (e) any
representation, warranty, covenant, or agreement that is the subject of a claim
which is asserted in a reasonably detailed writing prior to the expiration of
the survival period set forth in this Section 10.1 shall survive with
respect to such claim or dispute until the final resolution thereof; provided
that the covenants and agreements set forth in Section 6.3
(Confidentiality), Section 6.4 (Cooperation), Section 6.6 (Purchase
Price Allocation), Section 6.7 (Books and Records), Section 6.8 (FCC
Employees), Section 11.1 (Fees and Expenses), Section 11.2 (Notices),
and Section 11.3 (Benefit and Binding Effect) shall survive the Closing
for the period provided therein or, if no period is specified, in
perpetuity.  Notwithstanding the
foregoing, the representations and warranties with respect to Section 3.2,
3.9, 3.11 and 4.2 shall survive until expiration of the applicable statute of
limitations and Section 3.16 shall survive for two (2) years
following the Effective Date.

 

10.2.                        Indemnification by Sellers.  After the Closing, but subject to Sections
10.1 and 10.5, Sellers hereby jointly and severally agree to indemnify and hold
Aurora harmless from and against and with respect to and shall reimburse Aurora
for:

 

(a)                                  any
Loss arising out of or resulting from any untrue representation, breach of
warranty, or nonfulfillment of any covenant by Sellers contained in this
Agreement or in any certificate, document, or instrument delivered to Aurora
under this Agreement (without giving effect to any update or supplement to the
Schedules pursuant to Section 6.11);

 

(b)                                 any
and all obligations of Sellers not assumed by Aurora pursuant to this
Agreement, including the Retained Liabilities;

 

38

 

(c)                                  any
Loss arising out of or resulting from the failure of the parties to comply with
the provisions of any bulk sales law applicable to the transfer of the WEMT
License Assets; and

 

(d)                                 any
and all obligations or Loss arising out of or resulting from the operation or
ownership of the Station prior to the Closing (except any losses, liabilities,
or damages that were caused or incurred by, or as a result of, BlueStone under
the JSA), including any liabilities arising under the FCC Licenses or the
Assumed Contracts to the extent that they relate to events occurring prior to
the Closing Date.

 

10.3.                        Indemnification by Aurora.  After the Closing, but subject to Sections
10.1 and 10.5, Aurora hereby agrees to indemnify and hold Sellers harmless
against and with respect to and shall reimburse Sellers for:

 

(a)                                  any and all Loss
arising out of or resulting from any untrue representation, breach of warranty,
or nonfulfillment of any covenant by Aurora contained in this Agreement or in
any certificate, document, or instrument delivered to Sellers under this
Agreement;

 

(b)                                 any
and all obligations of Sellers assumed by Aurora pursuant to this Agreement;

 

(c)                                  any
and all Assumed Liabilities; and

 

(d)                                 any
and all obligations or Loss arising out of or resulting from the operation or
ownership of the Station after the Closing.

 

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

 

(a)                                  The
party claiming indemnification (the “Claimant”) shall promptly give notice to
the party from which indemnification is claimed (the “Indemnifying Party”) of
any claim, whether between the parties or brought by a third party, specifying
in reasonable detail the factual basis for the claim (to the extent known or
reasonably available to the Claimant), the amount thereof, estimated in good
faith, all with reasonably particularity and containing a reference to the
provisions of this Agreement in respect of which such indemnification claim
shall have occurred.  If the claim
relates to an action, suit, or proceeding filed by a third party against
Claimant, such notice shall be given by Claimant within fifteen (15) business
days after written notice of such action, suit, or proceeding was given to
Claimant, provided, however, that the failure or delay of the Claimant to
provide such notice (or other required deliveries) shall not release the
Indemnifying Party from any of its obligations under this Section 10
unless (and then solely to the extent) the Indemnifying Party is materially
prejudiced thereby.

 

(b)                                 With
respect to claims solely between the parties, following receipt of notice from
the Claimant of a claim, the Indemnifying Party shall have thirty (30) days to
make such investigation of the claim as the Indemnifying Party deems necessary
or desirable.  For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information relied upon by the Claimant
to substantiate the claim.  If the Claimant
and the Indemnifying Party agree at or prior to the expiration of the thirty
(30) day period (or any mutually agreed upon extension thereof) to the validity
and amount of such claim, the Indemnifying Party shall immediately pay to the
Claimant the full amount of the

 

39

 

claim.  If the Claimant and the Indemnifying Party do
not agree within the thirty (30) day period (or any mutually agreed upon
extension thereof), the Claimant may seek appropriate remedy at law or equity.

 

(c)                                  With
respect to any claim by a third party as to which the Claimant is entitled to
indemnification under this Agreement, the Indemnifying Party shall have the
right, at its own expense, to participate in or assume control of the defense
of such claim, and the Claimant shall cooperate fully with the Indemnifying
Party, subject to reimbursement for actual out-of-pocket expenses incurred by
the Claimant as the result of a request by the Indemnifying Party, provided,
however, that Indemnifying Party may not assume control of the defense unless
it affirms in writing its obligation to indemnify Claimant for any damages
incurred by Claimant with respect to such third-party claim.  If the Indemnifying Party elects to assume
control of the defense of any Third Party Claim, then (i) the Indemnifying
Party shall be required to conduct the defense of the Third Party Claim
diligently and in good faith, (ii) the Claimant shall have the right to
participate in the defense of such claim at its own expense and shall not
settle or compromise the Third Party Claim and (iii) the Indemnifying
Party shall have the power and authority to settle or consent to the entry of
judgment in respect of the Third Party Claim without the consent of the
Claimant if the judgment or settlement results only in the payment by the
Indemnifying Party of the full amount of money damages and includes a release
of the Claimant from any and all liability thereunder.  The Indemnifying Party may not settle any
claim that would reasonably be expected to have an adverse effect on the
Claimant without the Claimant’s written consent.  If the Indemnifying Party does not elect to
assume control or otherwise participate in the defense of any third-party
claim, it shall be bound by the results obtained in good faith by the Claimant
with respect to such claim.

 

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

 

(e)                                  The indemnification
rights provided in Section 10.2 and Section 10.3 shall extend to the
members, partners, shareholders, officers, directors, employees,
representatives, successors and assigns and affiliated entities of any Claimant
although for the purpose of the procedures set forth in this Section 10.4,
any indemnification claims by such parties shall be made by and through the
Claimant.

 

10.5.                        Certain Limitations.

 

(a)                                  Notwithstanding
anything in this Agreement to the contrary, in the absence of fraud, neither
party shall indemnify or otherwise be liable to the other party with respect to
any claim for any breach of a representation or warranty, or for the breach of
any covenant contained in this Agreement, unless notice of the claim is given
within the relevant survival period specified in Section 10.1.

 

(b)                                 Notwithstanding
anything in this Agreement to the contrary, in the absence of fraud, and except
with respect to Aurora’s Loss attributable to matters described in Section 10.2(b),
Sellers shall not be liable to Aurora in respect of any indemnification
hereunder except to the extent that (i) the aggregate amount of Aurora’s
Loss (together with any Loss suffered by

 

40

 

BlueStone under the
BlueStone Purchase Agreement) exceeds Seventy Five Thousand Dollars
($75,000.00) (the “Threshold Amount”) (and then only to the extent such Loss
exceeds the Threshold Amount); provided that all materiality
qualifications in the representations and warranties of an Indemnifying Party
with respect to which the other party as Claimant shall claim Loss shall be
disregarded solely for purposes of determining the occurrence of any untrue
representation or breach of warranty and the amount of Loss to be counted towards
the Threshold Amount; and provided, further, that the foregoing
shall not apply to any amounts owed in connection with the Purchase Price.

 

(c)                                  Notwithstanding
anything in this Agreement to the contrary, in the absence of fraud, and except
with respect to Aurora’s Loss attributable to matters described in Section 10.2(b),
Sellers shall be liable to indemnify Aurora hereunder  only to the extent the aggregate amount of
Aurora’s Loss (together with any loss suffered by BlueStone under the BlueStone
Purchase Agreement) in excess of the Threshold Amount is less (in the
aggregate) than One Million Dollars ($1,000,000.00) (the “Indemnity Cap”).

 

(d)                                 Notwithstanding
any other provision of this Agreement to the contrary, in no event shall a
party be entitled to indemnification for such party’s incidental, special,
exemplary or punitive damages, regardless of the theory of recovery.  Each party hereto agrees to use reasonable
efforts to mitigate any losses, which form the basis for any claim for
indemnification hereunder.

 

(e)                                  Notwithstanding
any other provision of this Agreement to the contrary, in no event shall the
Threshold Amount or the Indemnity Cap apply to (i) breaches of Sellers’
representations and warranties contained in Sections 3.2 (Authorization and
Binding Obligation), 3.9 (Title to Properties), 3.11 (Taxes), and 3.19
(Broker); or (ii) Sellers’ obligations with respect to any Excluded Assets
or Retained Liabilities.

 

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

 

(g)                                 Neither
Aurora nor Sellers as Claimant shall be entitled to indemnity pursuant to
Sections 10.2 or 10.3, as the case may be, from the other party as Indemnifying
Party with respect to such Indemnifying Party’s breach of any of its
representations, warranties, covenants or agreements contained herein to the
extent that the inaccuracy of any such representation, or the breach of any
such warranty, covenant or agreement is caused by any breach by or failure of
Claimant or its employees or agents in performing or complying with Claimant’s
obligations, covenants and agreements set forth in the JSA.  Additionally, Aurora shall not be entitled to
indemnity with respect to any Loss caused by, or a result of the actions of,
BlueStone under the JSA.

 

41

 

10.6.                        Tax Treatment of Indemnity
Payments.  Aurora and
Sellers agree to treat any indemnity payment made pursuant to this Agreement as
an adjustment to the Purchase Price for all Tax purposes, unless otherwise
required by Law.

 

SECTION 11:  MISCELLANEOUS

 

11.1.                        Fees and Expenses;
Transfer Taxes.  

 

(a)                                  Aurora
and Sellers shall each pay one-half (1/2) of any fees charged by the FCC in
connection with obtaining the FCC Consent.

 

(b)                                 Aurora
and Sellers shall each pay one-half (1/2) of any filing fees, transfer taxes,
document stamps, or other charges levied by any governmental entity (other than
income, sale, use and transfer Taxes, which shall be the responsibility of
Sellers) on account of the transfer of the WEMT License Assets from Sellers to
Aurora.

 

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

 

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

 

To
Aurora:

 

Trumper
Communications

900
Oakmont Lane

Suite 210

Westmont,
IL 60559-1297

Attn:  Jeffrey Trumper

Telephone:  630-789-0090 x18

 

With
a required copy to:

 

Leventhal
Senter & Lerman  PLLC

2000
K Street, N.W.

Suite 600

Washington,
D.C. 20006-1809

Attn:  Sally A. Buckman

 

42

 

Telephone:                                    202.416.6762

Facsimile:                                            202.293.7783

 

With
a required copy to:

 

Edwards &
Angell, LLP

2800
Financial Plaza

Providence,
RI  02903

Attn:  Christopher Graham

Telephone:  (401) 274-9200

Facsimile:  (401) 276-6625

 

To
Sellers:

 

c/o
Sinclair Properties, LLC

10706
Beaver Dam Road

Hunt
Valley, MD  21030

Attn:  President

Telephone:  (410) 568-1506

Facsimile:  (410) 568-1533

 

c/o
WEMT Licensee, L.P.

10706
Beaver Dam Road

Hunt
Valley, MD  21030

Attn:  President

Telephone:  (410) 568-1506

Facsimile:  (410) 568-1533

 

With
a required copy to:

 

Sinclair
Broadcast Group, Inc.

10706
Beaver Dam Road

Hunt
Valley, MD  21030

Attn:  General Counsel

Telephone:  (410) 568-1524

Facsimile:  (410) 568-1537

 

or
to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.

 

11.3.                        Benefit and Binding Effect.  Aurora may not assign this Agreement to any
other party without the consent of Sellers, which assignment, if consented to
by the Sellers, shall not relieve Aurora of its obligations hereunder, provided
that Aurora may assign its rights hereunder (but not its obligations) to a
wholly-owned subsidiary of Aurora and Aurora may assign as collateral and grant
a security interest in all of its right, title and interest under this
Agreement

 

43

 

(but not its obligations)
to its lenders providing the financing hereof. 
Subject to Section 6.17, Sellers may assign, combine, merge, or
consolidate among themselves and any Affiliate of Sellers so long as Sellers or
their successors and assigns are bound by the terms and conditions of this
Agreement in all respects as if such successors and assigns were original
parties hereto, and such assignment, combination, merger, or consolidation does
not have an adverse affect on Aurora or the FCC Consents or delay Final Order.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.  No Person, other than
the parties hereto, is or shall be entitled to bring any action to enforce any
provision of this Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns as permitted hereunder.

 

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

 

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

 

11.6.                        Entire Agreement.  This Agreement, the Schedules hereto, and all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively, represent the entire understanding and agreement
between Aurora and Sellers with respect to the subject matter of this
Agreement.  This Agreement supersedes all
prior negotiations between the parties and cannot be amended, supplemented, or
changed except by an agreement in writing duly executed by each of the parties
hereto.

 

11.7.                        Waiver of Compliance;
Consents.  Except as
otherwise provided in this Agreement, any failure of any of the parties to
comply with any obligation, representation, warranty, covenant, agreement, or
condition herein may be waived by the party entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
representation, warranty, covenant, agreement, or condition shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other
failure.  Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 11.7.

 

11.8.                        Headings.  The headings of the sections and subsections
contained in this Agreement are inserted for convenience only and do not form a
part or affect the meaning, construction or scope thereof.

 

11.9.                        Counterparts.  This Agreement may be signed in two or more
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.  Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

44

 

11.10.                  Specific Performance.  Sellers and Aurora acknowledge that the WEMT
License Assets, including the FCC Licenses, are of a special, unique, and
extraordinary character, and that damages alone are an inadequate remedy for a
breach of this Agreement by Sellers. 
Accordingly, as an alternative to termination of this Agreement under Section 9.3,
if Aurora is not  in material default
hereunder, Aurora shall be entitled, in the event of Sellers’ breach, to
enforce this Agreement (subject to obtaining any required approval of the FCC)
by a decree of specific performance or injunctive relief requiring Sellers to
fulfill their obligations under this Agreement. 
Such right of specific performance or injunctive relief shall be in
addition to, and not in lieu of, Aurora’s right to recover damages and to
pursue any other remedies available to Aurora for Sellers’ breach.  In any action to enforce specifically Sellers’
obligation to close the transactions contemplated by this Agreement, Sellers
shall waive the defense that there is an adequate remedy at law or in equity
and any requirement that Aurora prove actual damages.

 

11.11.                  Purchased Assets.  Notwithstanding anything to the contrary
contained herein, no asset owned by Sellers shall be transferred hereunder if
said asset is transferred to BlueStone pursuant to the BlueStone Purchase
Agreement.

 

[Signatures
Begin on Following Page]

 

45

 

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

 

 

	
   

  	
  AURORA BROADCASTING,
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffery E. Trumper

  	
   

  
	
   

  	
  Name:

  	
  Jeffery E. Trumper

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SINCLAIR PROPERTIES,
  LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David B. Amy

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and 

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEMT LICENSEE L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Sinclair Properties II,
  LLC, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David B. Amy

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and 

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
									

 

 

The undersigned hereby
agrees to join as a Party to the foregoing Asset Purchase Agreement pursuant to
Section 6.18:

 

 

	
   

  	
  SINCLAIR BROADCAST
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B. Amy

  	
   

  
	
   

  	
  Name:

  	
  David B. Amy

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice
  President and 

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
						

 

46

 

The undersigned hereby
agrees to join as a Party to the foregoing Asset Purchase Agreement pursuant to
Section 6.19:

 

 

	
   

  	
  BLUESTONE TELEVISION,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Grossi

  	
   

  
	
   

  	
  Name:

  	
  John Grossi

  	
   

  
	
   

  	
  Title:

  	
  Vice President and

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
						

 

47

 

Pursuant to Item 601(b)(2) of Regulation S-K, we have omitted the following schedules.  We will furnish supplementally any omitted schedule to the Securities and Exchange Commission upon request.

 

	
  SCHEDULE 2.2 (i)

  	
   

  	
  Excluded Contracts

  
	
  SCHEDULE 3.1

  	
   

  	
  Organization and
  Authority of Sellers

  
	
  SCHEDULE 3.3

  	
   

  	
  Absence of Conflicting
  Agreements; Consents

  
	
  SCHEDULE 3.4

  	
   

  	
  Governmental Licenses

  
	
  SCHEDULE 3.4 (d)

  	
   

  	
  Market Cable Systems

  
	
  SCHEDULE 3.5

  	
   

  	
  Real Property

  
	
  SCHEDULE 3.6 (a)

  	
   

  	
  Tangible Personal
  Property

  
	
  SCHEDULE 3.6 (b)

  	
   

  	
  Excluded Tangible
  Personal Property

  
	
  SCHEDULE 3.7

  	
   

  	
  Contracts

  
	
  SCHEDULE 3.7A

  	
   

  	
  Contracts

  
	
  SCHEDULE 3.8

  	
   

  	
  Intangibles

  
	
  SCHEDULE 3.10

  	
   

  	
  Financial statements

  
	
  SCHEDULE 3.11

  	
   

  	
  Taxes

  
	
  SCHEDULE 3.12

  	
   

  	
  Insurance

  
	
  SCHEDULE 3.14

  	
   

  	
  Personnel and Employee
  Benefits

  
	
  SCHEDULE 3.14 (g)

  	
   

  	
  Labor Relations

  
	
  SCHEDULE 3.15

  	
   

  	
  Claims and Legal
  Actions

  
	
  SCHEDULE 3.16

  	
   

  	
  Environmental
  Compliance

  
	
  SCHEDULE 3.18

  	
   

  	
  Absence of Certain
  Changes or Events

  
	
  SCHEDULE 3.20

  	
   

  	
  Transactions with
  Affiliates

  
	
  SCHEDULE 6.8 (a)

  	
   

  	
  Employee Matters

  

 

48

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]