Exhibit 10.1

 

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AMENDED AND RESTATED

 

CREDIT AGREEMENT

 

dated as of

 

June 11, 2004

 

among

 

LBI MEDIA, INC.,

 

THE GUARANTORS PARTY HERETO,

 

THE LENDERS PARTY HERETO,

 

and

 

CREDIT SUISSE FIRST BOSTON,

as Administrative Agent and Lead Arranger

 

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TABLE OF CONTENTS

 

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ARTICLE 1

 

DEFINITIONS

   1

        1.1

 

Defined Terms

   1

        1.2

 

Classification of Loans and Borrowings

   42

        1.3

 

Terms Generally

   42

        1.4

 

Accounting Terms; GAAP

   43

ARTICLE 2

 

THE CREDITS

   43

        2.1

 

Revolving Credit Commitments

   43

        2.2

 

Loans and Borrowings

   46

        2.3

 

Requests for Borrowings

   46

        2.4

 

Letters of Credit

   48

        2.5

 

Funding of Borrowings

   52

        2.6

 

Interest Elections

   53

        2.7

 

Termination and Reduction of Commitments

   54

        2.8

 

Swing Loan Facility

   55

        2.9

 

Mitigation Obligations; Replacement of Lenders

   58

        2.10

 

Repayment of Loans; Evidence of Debt

   59

        2.11

 

Prepayment of Loans

   60

        2.12

 

Fees

   64

        2.13

 

Interest

   66

        2.14

 

Alternate Rate of Interest

   67

        2.15

 

Increased Costs

   68

        2.16

 

Break Funding Payments

   69

        2.17

 

Taxes

   70

        2.18

 

Payments Generally: Pro Rata Treatment; Sharing of Set-Offs

   71

ARTICLE 3

 

GUARANTEE BY GUARANTORS

   74

        3.1

 

The Guarantee

   74

        3.2

 

Obligations Unconditional

   74

        3.3

 

Reinstatement

   75

        3.4

 

Subrogation

   75

 

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TABLE OF CONTENTS

 

(continued)

 

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        3.5  

Remedies

   75         3.6  

Continuing Guarantee

   75         3.7  

Rights of Contribution

   76         3.8  

General Limitation on Guarantee Obligations

   76         3.9  

Waivers

   76 ARTICLE 4  

REPRESENTATIONS AND WARRANTIES

   77         4.1   Organization; Powers    77         4.2  

Authorization; Enforceability

   77         4.3  

Governmental Approvals; No Conflicts

   78         4.4  

Financial Condition; No Material Adverse Change

   78         4.5  

Properties

   79         4.6  

Litigation and Environmental Matters

   80         4.7  

Compliance with Laws and Agreements

   80         4.8  

Investment and Holding Company Status

   81         4.9  

Taxes

   81         4.10  

ERISA

   81         4.11  

Disclosure

   81         4.12  

Ownership and Capitalization

   81         4.13  

Subsidiaries

   82         4.14  

Material Indebtedness, Liens and Agreements

   82         4.15  

Permits and Licenses

   83         4.16  

Federal Reserve Regulations

   84         4.17  

Burdensome Restrictions

   84         4.18  

Force Majeure

   84         4.19  

Labor and Employment Matters.

   84         4.20  

Subchapter S Election and QSSS Election

   85         4.21  

Senior Indebtedness

   85         4.22  

Patriot Act

   85 ARTICLE 5  

CONDITIONS

   85

 

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TABLE OF CONTENTS

 

(continued)

 

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    5.1   Effective Time    85     5.2  

Each Extension of Credit

   90

ARTICLE 6 AFFIRMATIVE COVENANTS

   90     6.1  

Financial Statements and Other Information

   90     6.2  

Notices of Material Events

   92     6.3  

Existence; Conduct of Business

   93     6.4  

Payment of Obligations

   93     6.5  

Maintenance of Properties; Insurance

   93     6.6  

Books and Records; Inspection Rights

   94     6.7  

Fiscal Year

   94     6.8  

Compliance with Laws, Maintenance of FCC Licenses

   94     6.9  

Use of Proceeds

   95     6.10  

Certain Obligations Respecting Guarantors and Collateral Security

   95     6.11  

ERISA

   96     6.12  

Environmental Matters; Reporting

   96     6.13  

Conforming Leasehold Interests; Matters Relating to Real Property Collateral

   97     6.14  

Hedging Agreements

   99     6.15  

Post-Closing Obligations

   99     6.16  

Employment Agreements

   101

ARTICLE 7 NEGATIVE COVENANTS

   101     7.1  

Indebtedness

   101     7.2  

Liens

   102     7.3  

Contingent Liabilities

   104     7.4  

Fundamental Changes; Asset Sales

   105     7.5  

Investments; Hedging Agreements

   109     7.6  

Restricted Junior Payments

   112     7.7  

Transactions with Affiliates

   114     7.8  

Restrictive Agreements

   114

 

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TABLE OF CONTENTS

 

(continued)

 

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        7.9  

Sale-Leaseback Transactions

   115         7.10  

Certain Financial Covenants

   115         7.11  

Lines of Business; Restrictions on the Borrower

   116         7.12  

Subordinated Indebtedness

   117         7.13  

Modifications of Certain Documents

   117         7.14  

Empire Burbank

   117         7.15  

Holding Company Restrictions

   118         7.16  

License Subsidiaries

   120 ARTICLE 8  

EVENTS OF DEFAULT

   121         8.1  

Events of Default

   121 ARTICLE 9  

THE ADMINISTRATIVE AGENT

   125         9.1  

Appointment and Authorization

   125         9.2  

Administrative Agent’s Rights as Lender

   125         9.3  

Duties As Expressly Stated

   125         9.4  

Reliance By Administrative Agent

   126         9.5  

Action Through Sub-Agents

   126         9.6  

Resignation of Administrative Agent and Appointment of Successor Administrative
Agent

   127         9.7  

Lenders’ Independent Decisions

   127         9.8  

Indemnification

   127         9.9  

Consents Under Other Loan Documents

   128 ARTICLE 10  

MISCELLANEOUS

   128         10.1  

Notices

   128         10.2  

Waivers; Amendments

   129         10.3  

Expenses; Indemnity; Damage Waiver

   130         10.4  

Successors and Assigns

   132         10.5  

Survival

   135         10.6  

Counterparts; Integration; References to Agreement; Effectiveness

   136         10.7  

Severability

   136

 

-iv-

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TABLE OF CONTENTS

 

(continued)

 

         Page

10.8

 

Right of Setoff

   136

10.9

 

Governing Law; Jurisdiction; Consent to Service of Process

   136

10.10

 

WAIVER OF JURY TRIAL

   137

10.11

 

Headings

   137

10.12

 

Release of Collateral and Guarantees

   138

10.13

 

Confidentiality

   138

10.14

 

Continued Effectiveness; No Novation

   138

10.15

 

USA Patriot Act

   139

 

-v-

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SCHEDULES & EXHIBITS

 

Schedule 2.1    List of Lenders and Revolving Credit Commitments Schedule 4.3   
Governmental Approvals Schedule 4.4    Financial Condition; No Material Adverse
Change Schedule 4.5    Properties Schedule 4.6    Litigation and Environmental
Matters Schedule 4.7    Compliance with Laws and Agreements Schedule 4.9   
Taxes Schedule 4.11    Management Structure Schedule 4.12    Organization;
Capitalization; Subsidiaries Schedule 4.14    Material Indebtedness, Liens and
Agreements Schedule 4.15    FCC Licenses Schedule 4.19    Labor and Employment
Matters Schedule 5.1(e)(ii)    Lien Searches Schedule 5.1(e)(iii)    Accounts
Subject to Control Agreements Schedule 7.2(b)    Permitted Liens Schedule 7.5   
Investments Schedule 7.7    Transactions with Affiliates Schedule 7.8   
Restrictive Agreements Exhibit A    Form of Revolving Credit Note Exhibit B   
Form of Swing Loan Note Exhibit C    Form of Omnibus Confirmation Agreement
Exhibit D-1    Form of Borrowing Request Exhibit D-2    Form of Interest
Election Request Exhibit E    Form of Lender Joinder Agreement Exhibit F    Form
of Opinion of O’Melveny & Myers LLP for Holdings Merger Exhibit G    Forms of
Solvency Certificate Exhibit H    Form of Mortgage and Security Agreement
Exhibit I    Form of Leasehold Mortgage Exhibit J-1    Form of Landlord Waiver
and Consent Exhibit J-2    Form of Licensor Consent Exhibit K-1    Form of
Opinion of O’Melveny & Myers LLP Exhibit K-2    Form of Opinion of Piper Rudnick
LLP Exhibit K-3    Form of Opinion of Strasburger & Price Exhibit L    Form of
Opinion of FCC Counsel Exhibit M    Form of Assignment and Acceptance Exhibit N
   Form of Compliance Certificate Exhibit O    Form of Second Confirmation of
Subordination Agreements Exhibit P    Form of Control Agreement Exhibit Q-1   
Form of Existing Mortgage Amendment – Owned Property Exhibit Q-2    Form of
Existing Mortgage Amendment – Leased Property Exhibit R    Form of Assumption
Agreement Exhibit S    Form of Holdings Merger Agreement

 

-vi-

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AMENDED AND RESTATED CREDIT AGREEMENT

 

AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 11, 2004 (this
“Agreement”), among LBI MEDIA, INC., THE GUARANTORS PARTY HERETO, THE LENDERS
PARTY HERETO, and CREDIT SUISSE FIRST BOSTON, as Administrative Agent and Lead
Arranger. This Agreement amends, restates and supersedes, in its entirety, the
Amended and Restated Credit Agreement dated July 9, 2002, among the Borrower,
the guarantors party thereto, the lenders party thereto, Fleet, as
administrative agent, Fleet Securities, Inc., as sole lead arranger, General
Electric Capital Corporation and U.S. Bank, N.A., as co-syndication agents, and
CIT Lending Services Corporation and SunTrust Bank, as co-documentation agents,
as amended by that certain First Amendment to Amended and Restated Credit
Agreement dated April 15, 2003, that certain Second Amendment to Amended and
Restated Credit Agreement dated October 10, 2003, and as further amended prior
to the date hereof (as so amended, the “Existing Credit Agreement”), which
collectively amended and restated that certain Credit Agreement dated as of
March 20, 2001 among the Borrower, the guarantors party thereto, the lenders
party thereto, Fleet, as administrative agent, and Union Bank of California,
N.A., as syndication agent, and CIT Lending Services Corporation and General
Electric Capital Corporation, as co-documentation agents (as amended prior to
July 9, 2002, the “Original Credit Agreement”).

 

RECITALS

 

WHEREAS, each of the parties to the Existing Credit Agreement desires to amend
and restate the Existing Credit Agreement;

 

WHEREAS, it is the intention of the parties hereof that this amendment and
restatement of the Existing Credit Agreement shall not constitute a refinancing
of the loans outstanding under the Existing Credit Agreement on the Closing
Date, and all obligations hereunder and under the other Loan Documents shall
continue to be secured by the grant to the Administrative Agent, on behalf of
the Lenders, of a Lien on the Collateral, and the Credit Parties shall execute
and deliver a Omnibus Confirmation Agreement evidencing such intention.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

 

ARTICLE 1

 

Definitions

 

1.1 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

 

“Acquisition” means any transaction, or any series of related transactions,
consummated prior to or after the date hereof, by which (i) any Credit Party
acquires the business of, or all or substantially all of the assets of, any firm
or corporation which is not a Credit Party, or any

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division or station of such firm or corporation, located in a specific
geographic area or areas, whether through purchase of assets, purchase of stock,
merger or otherwise or (ii) any Person that was not theretofore a Subsidiary of
a Credit Party becomes a Subsidiary of a Credit Party. Notwithstanding anything
herein to the contrary, no Relocation shall be deemed to be an Acquisition.

 

“Additional Mortgage” has the meaning assigned to such term in Section
6.13(b)(i).

 

“Additional Mortgage Policies” has the meaning assigned to such term in Section
6.13(b)(vi).

 

“Additional Mortgaged Property” has the meaning assigned to such term in Section
6.13(b).

 

“Adjusted Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day, and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the Adjusted Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.

 

“Adjusted LIBO Rate” means, with respect to any LIBOR Borrowing for any Interest
Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means CSFB, in its capacity as administrative agent for
the Lenders hereunder and any successors appointed pursuant to Section 9.6.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that
Controls or is Controlled by or is under common Control with the Person
specified. Notwithstanding the foregoing, (a) no individual shall be an
Affiliate solely by reason of his or her being a director, officer or employee
of any Credit Party and (b) none of the Credit Parties shall be Affiliates of
each other.

 

“Alta” means Alta Communications VIII, L.P., Alta-Comm VIII S by S, LLC, Alta
Communications VIII-B, L.P., Alta VIII Associates, LLC, California State
Teachers’ Retirement System, UnionBanCalequities, Inc. and BancBoston
Investments Inc., and their respective successors and assigns.

 

“Alta Notes” means those certain amended promissory notes issued by Holdings to
Alta pursuant to the Holdings Securities Purchase Agreement, as amended by the
Holdings Amendment and the Holdings Second Amendment.

 

“Alta Repayment” means the repayment in full of all of the Alta Notes, the
cashless exercise of the Alta Warrants, and the conversion of the Class B Common
Stock issued to Alta in connection therewith into Class A Common Stock and the
discharge and termination of all of the

 

2

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parties’ obligations under the Holdings Securities Purchase Documents pursuant
to the Termination Agreement (subject to the limitations set forth therein).

 

“Alta Repayment Date” means the date on which the Alta Repayment is consummated.

 

“Alta Subordination Agreement” means the Subordination and Intercreditor
Agreement dated as of the Original Closing Date among Holdings, Alta and Fleet,
as predecessor administrative agent, as amended by the Holdings Amendment and
the Holdings Second Amendment and confirmed by the Confirmation of Subordination
Agreements and the Second Confirmation of Subordination Agreements, as amended,
supplemented or otherwise modified from time to time.

 

“Alta Warrants” means those certain amended warrants issued by Holdings to Alta
pursuant to the Holdings Securities Purchase Agreement and that certain Warrant
Agreement dated as of March 20, 2001 between Holdings and Alta, as amended by
the Holdings Amendment and the Holdings Second Amendment.

 

“Applicable Margin” means, for any Type of Loans (i) for the Initial Payment
Period (as defined below):

 

Applicable Margin (% per annum)

Loans

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Base Rate Loans

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LIBOR Loans

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Loans

  1.250%   2.500%

 

and

 

(ii) for any Payment Period (as defined below) (or any portion thereof), other
than the Initial Payment Period, the respective rates indicated below for Loans
of such Type opposite the applicable Total Leverage Ratio indicated below:

 

Applicable Margin (% per annum)

 

     Loans

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Total Leverage Ratio

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Base Rate

Loans

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LIBOR

Loans

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Greater than or equal to 7.00 to 1

   1.750 %   3.000 %

Less than 7.00 to 1 and greater than or equal to 6.50 to 1

   1.500 %   2.750 %

Less than 6.50 to 1 and greater than or equal to 6.00 to 1

   1.250 %   2.500 %

 

3

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     Loans

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Total Leverage Ratio

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Base Rate

Loans

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LIBOR

Loans

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Less than 6.00 to 1 and greater than or equal to 5.50 to 1

   1.000 %   2.250 %

Less than 5.50 to 1 and greater than or equal to 5.00 to 1

   0.750 %   2.000 %

Less than 5.00 to 1 and greater than or equal to 4.50 to 1

   0.500 %   1.750 %

Less than 4.50 to 1

   0.250 %   1.500 %

 

Notwithstanding the foregoing, “Applicable Margin” means for any Type of Loan
for any Payment Period or portion thereof after the Qualifying IPO Closing Date,
the respective rates indicated above for Loans during the Initial Payment Period
or during any Payment Period thereafter for Loans of such Type opposite the
applicable Total Leverage Ratio indicated above (as the case may be) minus
0.25%.

 

For purposes hereof, a “Payment Period” means (i) initially, the period
commencing on the Closing Date to and including the third Business Day after the
date of delivery of the quarterly financial statements required by Section
6.1(b) for the fiscal quarter of the Borrower ended June 30, 2004 (the “Initial
Payment Period”) and (ii) thereafter, the period commencing on the day
immediately succeeding the last day of the prior Payment Period to but not
including the third Business Day after the earlier of (x) the due date of the
next Compliance Certificate required to be delivered by the Borrower to the
Administrative Agent pursuant to Section 6.1(c) concurrently with the delivery
by the Borrower of the annual or any of the four quarterly financial statements
required by Sections 6.1(a) or 6.1(b), respectively, or (y) the date of the
actual receipt by the Administrative Agent of such Compliance Certificate. The
Applicable Margin shall be effective for each Payment Period whether or not such
Payment Period coincides with an Interest Period for LIBOR Borrowing.

 

The Total Leverage Ratio for any Payment Period except the Initial Payment
Period shall be determined on the basis of the Compliance Certificate required
to be delivered to the Administrative Agent pursuant to Section 6.1(c)
concurrently with the delivery by the Borrower of the annual or quarterly
financial statements required by Sections 6.1(a) or 6.1(b), respectively,
setting forth, among other things, a calculation of the Total Leverage Ratio as
at the last day of the fiscal quarter immediately preceding such Payment Period
(i.e. the Total Leverage Ratio set forth in the Compliance Certificate delivered
pursuant to Section 6.1(c) that is delivered together with the financial
statements for the fiscal quarter ended June 30, 2004 shall be used to determine
the Applicable Margin with respect to the first Payment Period that follows the
Initial Payment Period, the Total Leverage Ratio set forth in the Compliance
Certificate that is delivered together with the financial statements for the
fiscal quarter ended September 30, 2004 shall be used to determine the
Applicable Margin with respect to the second Payment Period that follows the
Initial Payment Period, and so forth); provided that upon delivery by the
Borrower of

 

4

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the Compliance Certificate concurrently with the delivery of the annual
financial statements required by Section 6.1(a), the Applicable Margin shall be
adjusted retroactively, as of the first day of the then current Payment Period,
based on the calculation of the Total Leverage Ratio pursuant to such
certificate and financial statements to the extent that the Total Leverage Ratio
so calculated differs from the Total Leverage Ratio calculated based on the
Compliance Certificate delivered concurrently with the quarterly financial
statements for the fourth fiscal quarter of the preceding fiscal year required
by Section 6.1(b). In the event of a retroactive adjustment in the determination
of the Applicable Margin in favor of the Borrower, the amount of interest
thereby refundable to the Borrower shall be applied on the date of such
retroactive adjustment, to prepay interest payable on the Loans on a pro rata
basis, thus permitting the Borrower to deduct such amount from their next
interest payment. If the retroactive adjustment is in favor of the Lenders, the
amount of interest due to the Lenders shall be paid in full to the
Administrative Agent within five (5) days after written notice of such
adjustment is provided to the Borrower. Notwithstanding the foregoing, the
Borrower shall include a request for any downward adjustment of the Applicable
Margin with, or as part of, the Compliance Certificate concurrently with the
delivery by the Borrower of the annual financial statements required by Section
6.1(a) and, in any event, the Administrative Agent and the Lenders shall not be
required to make any downward adjustment until a request of the Borrower shall
have been received and unless such request is received within three months after
the date of delivery of such Compliance Certificate.

 

“Applicable Percentage” means (a) with respect to any Revolving Credit Lender
for purposes of the definition of LC Exposure and of Section 2.4 or 2.8, the
percentage of the total Revolving Credit Commitments represented by such
Lender’s Revolving Credit Commitment, and (b) with respect to any Lender in
respect of any indemnity claim under Section 10.3 arising out of an action or
omission of the Administrative Agent under this Agreement, the percentage of the
total Commitments or, in the event the Commitments are terminated, Loans
hereunder represented by the aggregate amount of such Lender’s Commitment or, in
the event the Commitments are terminated, Loans hereunder.

 

“Applicable Recipient” has the meaning set forth in Section 2.18.

 

“Approved Fund” means, with respect to any Lender that is a fund that invests in
commercial loans, any other fund that invests in commercial loans and is managed
or advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.4), and accepted by the Administrative Agent, in the form of
Exhibit M.

 

“Assumption Agreement” means the Assumption Agreement by and between LBI
Holdings I, Inc. and Liberman Broadcasting, Inc., a Delaware corporation,
substantially in the form of Exhibit R annexed hereto, to be executed in
connection with the IPO, as such agreement may be amended, supplemented or
otherwise modified from time to time.

 

5

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“Astor Acquisition” means the acquisition on May 15, 2003 by LBCI and LBI Radio
License Corp. from the Astor Sellers of the assets of radio station KEBN-FM
(formerly KMXN-FM).

 

“Astor Acquisition Documents” means the Asset Purchase Agreement dated as of
December 19, 2002 and all related instruments, agreements and other documents
entered into by any Credit Party and the sellers party thereto in connection
with the purchase of KEBN-FM (formerly KMXN-FM).

 

“Astor Sellers” means Aries Communications, Inc., a California corporation, and
Orange Broadcasting Corp., a California corporation.

 

“Base Rate” when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted Base Rate.

 

“Basic Documents” means the Loan Documents, and the documents related thereto.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Borrower” means LBI Media, Inc., a California corporation.

 

“Borrower’s knowledge” or any “Credit Party’s knowledge” or any similar phrase
or words when used in connection with a statement, representation or warranty
means to the actual knowledge of Jose or Lenard Liberman, the Chief Financial
Officer of the Borrower or such Credit Party, as applicable, or any responsible
executive officer (as defined in Rule 3b-7 promulgated under the Securities
Exchange Act of 1934, as amended), of the Borrower or such Credit Party, as
applicable, after reasonable good faith inquiry made to ascertain the accuracy
of the statement, representation or warranty.

 

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of LIBOR Loans, as to which a single Interest Period
is in effect.

 

“Borrowing Request” means a request for a Borrowing satisfying the requirements
of Section 2.3 and substantially in the form of Exhibit D-1 annexed hereto.

 

“Broadcast Stations” has the meaning assigned to such term in Section 4.15(b).

 

“Burbank Office Property” means that certain real property located at 1845
Empire Avenue, Burbank, California 91504.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Los Angeles, California or New York City are
authorized or required by law to remain closed; provided that, when used in
connection with a LIBOR Loan, the term “Business Day” shall also exclude any day
on which banks are not open for dealings in U.S. dollar deposits in the London
interbank market.

 

6

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“California Taxable Income” shall mean the taxable income of Holdings for any
taxable year computed pursuant to Section 23802 (or any successor provisions) of
the California Revenue and Tax Code but calculated as if the taxable year of
Holdings ended on the date with respect to which such taxable income calculation
is made, reduced, but not below zero, by the amount of any Suspended Losses
which are treated as incurred by Holdings in, and allowed as deductions on the
tax returns of Holdings’ stockholders for, such taxable year.

 

“Capital Expenditures” means, for any period, the sum for the Credit Parties
(determined on a consolidated basis without duplication in accordance with GAAP)
of the aggregate amount of expenditures (including the aggregate amount of
Capital Lease Obligations incurred during such period) made to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding expenditures for repairs that do not extend the
useful life of the asset) during such period computed in accordance with GAAP;
provided that such term shall not include (i) any such expenditures in
connection with any replacement or repair of Property affected by a Casualty
Event, (ii) any such expenditures in connection with a Relocation with the
exception of cash expenditures not subject to the reimbursement obligations of a
Person other than a Credit Party, (iii) for each broadcast station received in
any Voluntary Relocation, up to $4,000,000 in such expenditures but only to the
extent paid from the cash proceeds received in such Voluntary Relocation which
are used to upgrade or improve such broadcast station, (iv) for each broadcast
station received in any Involuntary Relocation, any such expenditures paid from
the cash proceeds received in such Involuntary Relocation which are used to
upgrade or improve such broadcast station or (v) the purchase price, any
broker’s fees payable and any transaction costs incurred in connection with the
KNOR Acquisition or any Acquisition permitted under the Original Credit
Agreement, the Existing Credit Agreement or hereunder.

 

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
Notwithstanding anything herein to the contrary, any obligations under the
Empire Burbank Lease shall not be Capital Lease Obligations.

 

“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government, (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor’s (“S&P”) or Moody’s Investors Service,
Inc. (“Moody’s”); (iii) commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates
of deposit or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of

 

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Columbia that (1) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator) and (2) has Tier 1 capital
(as defined in such regulations) of not less than $100,000,000; and (v) shares
of any money market mutual fund that (1) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (2) has net assets of not less than $500,000,000, and (3) has the highest
rating obtainable from either S&P or Moody’s, or (c) other cash equivalent
investments agreed to from time to time between the Borrower and the
Administrative Agent.

 

“Casualty Event” means, with respect to any Property of any Person, any loss of
or damage to, or any condemnation or other taking of, such Property for which
such Person or any of its Subsidiaries receives insurance proceeds, or proceeds
of a condemnation award or other compensation; provided that an Involuntary
Relocation shall not be a Casualty Event.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender or the Issuing Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Lender’s holding company, if any) with any request,
guideline, order, decree or directive (whether or not having the force of law)
of any Governmental Authority or the National Association of Insurance
Commissioners made or issued after the Closing Date.

 

“Change of Control” means

 

(a) Media Holdings shall cease to own, directly or indirectly, 100% of the
Borrower’s outstanding capital stock and Total Voting Power,

 

(b) Holdings shall cease to own, directly or indirectly, 100% of Media Holdings’
outstanding capital stock and Total Voting Power,

 

(c) Jose and Lenard Liberman (together with their spouses, lineal descendants or
heirs and devisees and any trusts controlled by them and, after the Qualifying
IPO Closing Date, all other Class B Permitted Transferees (as defined in the
Restated Certificate of Incorporation of Holdings) but excluding Holdings) shall
cease to collectively own, directly or indirectly, more than (i) prior to the
Qualifying IPO Closing Date, 50% or thereafter, 30%, of the economic interests
in the outstanding equity securities of Holdings or (ii) 50% of the Total Voting
Power of Holdings,

 

(d) a majority of the seats (other than vacant seats) on the board of directors
of Holdings shall be occupied by Persons who were not (i) nominated by the board
of directors of Holdings or by one or more of the stockholders described in
clause (c) above nor (ii) appointed or elected by a majority of the members of
the board of directors of Holdings who are described in any of subclauses (i),
(ii) or (iii) of this clause (d) nor (iii) appointed or elected by a vote of the
stockholders of Holdings in which Jose or Lenard Liberman or either of their
respective spouses (or any trust controlled by any of them) voted to approve the
appointment or election of such Person or in which a majority of the Total
Voting Power of the stockholders described in clause (c) above voted in favor of
the appointment or election of such Person;

 

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(e) the Borrower no longer owns and controls, directly or indirectly, 100% of
the capital stock of each of LBCI, Liberman Television Inc., Liberman Television
of Houston, Inc., Liberman Broadcasting of Houston, Inc., Liberman Broadcasting
of Dallas, Inc., Liberman Television of Dallas, Inc., and any License
Subsidiary, unless one hundred percent (100%) or any portion of such entity’s
capital stock is transferred in accordance with the terms and conditions of this
Agreement,

 

(f) any Holding Company or the Borrower sells, leases, conveys, transfers,
exchanges or otherwise disposes of, in a single transaction or through a series
of related transactions, all of the FCC Licenses owned by such Holding Company,
the Borrower and the other Credit Parties to any Person other than any of the
Credit Parties; or

 

(g) the occurrence of any “Change of Control” as defined in any of the Senior
Subordinated Note Indenture, the Media Holdings Discount Notes Indenture, or
prior to the Alta Repayment Date, the Holdings Securities Purchase Documents or
the occurrence of a “Change of Control” or any term describing a substantially
similar event as provided in any documents governing any Holding Company Debt
incurred in accordance with Section 7.15(a)(iv).

 

“Class A Common Stock” means the Class A common stock, par value $0.001 per
share, of Holdings.

 

“Class B Common Stock” means the Class B common stock, par value $0.001 per
share, of Holdings.

 

“Closing Date” means the date during which the Effective Time shall occur.

 

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

 

“Collateral” means, collectively, all of the Property (including capital stock
and other equity interests) in which Liens are purported to be granted pursuant
to the Collateral Documents as security for all obligations of the Credit
Parties hereunder.

 

“Collateral Documents” means the Security Agreement, the Pledge Agreement, the
Alta Subordination Agreement, the Investor Subordination Agreement, the
Mortgages, the Existing Mortgage Amendments, the Liberman Subordination
Agreements, the Control Agreements and all other agreements, instruments or
documents delivered by any Credit Party or any shareholder of a Credit Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to the Administrative Agent, on behalf of the Lenders, a Lien on any real,
personal or mixed property of that Credit Party as security for any of the
obligations of the Credit Parties hereunder.

 

“Commitments” means the Revolving Credit Commitments and the Swing Loan
Commitments (a subcommitment of the Revolving Credit Commitment).

 

“Commitment Fee Rate” has the meaning specified in Section 2.12.

 

“Commitment Utilization Percentage” means, for any day, the ratio of (a) the sum
of (i) the principal amount of the Loans outstanding on such day plus (ii) the
face amount of Letters of

 

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Credit outstanding on such day to (b) the aggregate amount of Revolving Credit
Commitments for such day, expressed as a percentage.

 

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

 

“Compliance Certificate” means a certificate duly executed by a Financial
Officer of the Borrower (required to be delivered pursuant to Section 6.1(c),
7.4(d)(ii), 7.5(a)(ix)(2) or 7.6(c)), in substantially the form of Exhibit N
hereto, (i) certifying as to whether a Default has occurred and, if a Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Section 7.10 (including, in each case
if applicable, a statement of the Total Leverage Ratio for purposes of the
definition of Applicable Margin and, for any Compliance Certificate delivered
with the financial statements required by Section 6.1(a), a request by the
Borrower for a retroactive adjustment to the Applicable Margin), and, if such
certificate is accompanying the annual financial statements required to be
delivered pursuant to Section 6.1(a), commencing with the delivery of the annual
financial statements for the fiscal year ending December 31, 2004, setting forth
a detailed calculation reasonably satisfactory to the Administrative Agent of
the amount of Excess Cash Flow for the Credit Parties’ most recently completed
fiscal year for the purpose of Sections 7.5 and 7.6 and (iii) stating whether
there has occurred since the date of the audited financial statements referred
to in Section 4.4 any change in GAAP or in the application thereof which has or
could have an effect on the financial statements accompanying such certificate
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate.

 

“Confirmation of Pledge Agreement” means the Confirmation of Pledge Agreement
dated as of the Existing Credit Agreement Closing Date among the Administrative
Agent and the Credit Parties.

 

“Confirmation of Subordination Agreements” means the Confirmation of
Subordination Agreements dated as of the Existing Credit Agreement Closing Date
among Alta, Holdings, the Credit Parties and Fleet as predecessor administrative
agent.

 

“Conforming Leasehold Interest” means any leasehold interest as to which the
lessor has agreed in writing for the benefit of the Administrative Agent (which
writing has been delivered to the Administrative Agent), whether under terms of
the applicable lease or under the terms of a Landlord Waiver and Consent, to the
matters described in the “Landlord Waiver and Consent” attached hereto as
Exhibit J-1, which interest, if a subleasehold interest or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.

 

“Control” means the possession, directly or indirectly, through one or more
intermediaries, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise voting power,
by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.

 

“Control Agreement” means, with respect to any bank account of any Credit Party
except a bank account maintained with the Administrative Agent, a Control
Agreement, substantially in the form of Exhibit P, or such other form that is
satisfactory to the Administrative Agent in its

 

10

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reasonable discretion, executed and delivered by such Credit Party, the
depository institution at which such account is maintained and the
Administrative Agent at the Original Closing Date or from time to time
thereafter, as any such agreement may be amended, supplemented or otherwise
modified from time to time.

 

“Conversion Elections” means those certain Elections to Convert to be executed
by the applicable holders of the Alta Warrants in connection with the IPO,
substantially in the form delivered to the Administrative Agent.

 

“Credit Parties” means the Borrower and the Guarantors (except that Empire
Burbank will be a Guarantor but will not be deemed a Credit Party hereunder).

 

“CSFB” means Credit Suisse First Boston, a bank organized under the laws of
Switzerland acting through its Cayman Islands Branch.

 

“Debt Service” means, for any period, the sum, for the Credit Parties
(determined on a consolidated basis without duplication in accordance with GAAP,
including without duplication of previous payments), of the following: (a) all
regularly scheduled cash principal payments, as such amounts may be adjusted
from time to time by reason of any prepayments, of any Total Debt (including the
principal component of any payments in respect of Capital Lease Obligations, but
excluding any prepayments of the Loans) made during such period plus (b) all
Interest Expense for such period.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.6.

 

“Disposition” means any sale, sale-leaseback, assignment, conveyance, exchange,
long-term lease accorded sales treatment under GAAP, transfer or other
disposition (including by means of a merger, consolidation, amalgamation, joint
venture or other substantive combination) of any assets, business or property
(whether now owned or hereafter acquired) by any Credit Party to any Person
other than a Credit Party, including any Relocation but excluding (a) the
granting of Liens permitted hereunder and (b) any sale, assignment, transfer or
other disposition of (i) any property sold or disposed of in the ordinary course
of business and on ordinary business terms, (ii) any property no longer used or
useful in the business of the Credit Parties and (iii) any Collateral under and
as defined in the Collateral Documents pursuant to an exercise of remedies by
the Administrative Agent thereunder, (c) leasing of any property in the ordinary
course of business, (d) the sale of marketable securities, including “margin
stock” within the meaning of Regulation U, liquid investments and other
financial instruments in connection with the ordinary course cash management of
the Credit Parties, (e) forgiveness or cancellation by any Credit Party of any
loan by such Credit Party to any of its Affiliates and (f) other sale,
assignment, transfer or other disposition in the ordinary course of business.

 

“Disposition Investment” means, with respect to any Disposition, any promissory
notes or other evidences of Indebtedness or Investments received by any Credit
Party in connection with such Disposition.

 

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“Dividend Limitation” shall mean, with respect to Holdings, the sum of: (i) the
product of the Maximum Effective California Rate times Holdings’ California
Taxable Income except that the product in this clause (i) shall be zero (0) in
the event Holdings does not qualify (or subsequently elects not) to be treated
as an S Corporation for California income tax purposes, or Media Holdings or the
Borrower does not qualify (or subsequently elects not) to be treated as a
qualified subchapter S subsidiary; plus, (ii) the product of the Maximum Federal
Rate and Holdings’ Federal Taxable Income.

 

“EBITDA” means, for any period of four consecutive fiscal quarters, Net Income
of the Credit Parties during such period, plus (to the extent deducted in
computing Net Income) (a) the sum of (i) Interest Expense during such period
(including in connection with the LBI Media Intercompany Note) and any interest
expense accrued during such period pursuant to the Holdings Securities Purchase
Documents, the Media Holdings Discount Notes Indenture, the Media Holdings
Discount Notes and the Holding Company Debt incurred in accordance with Section
7.15(a)(iv), (ii) depreciation and amortization expense during such period
(including without limitation charges under SFAS 142 for broadcast licenses,
goodwill or other indefinite lived intangible assets), (iii) the aggregate
amount paid, required to be paid or accrued (without duplication) in respect of
income, franchise, real estate and other like taxes during such period, (iv)
extraordinary losses during such period, (v) other non cash charges during such
period, (vi) (x) Relocation costs, expenses and other amounts set forth in
clauses (ii)(A) and (B), and subclauses (a)(i), (a)(v), (a)(vi) and (a)(vii) and
(b) of clause (ii)(C) of the definition of Net Cash Payments and (y) Transaction
Costs, in each case, incurred or paid during such period, (vii) for the period
commencing on May 20, 2002 and ending on the date of the closing of the El
Dorado Acquisitions, payments required to be made by any of the Credit Parties
to the El Dorado Sellers pursuant to the local marketing agreements in respect
of the stations not in excess of $150,000 for any calendar month and for a
period of not more than twelve (12) calendar months, (viii) Extraordinary
Expenses for such period, (ix) Permitted Shareholder Tax Distributions and
Permitted Holdings Tax Distributions during such period, (x) any non-compete
payments made in cash during such period to sellers in connection with any
Permitted Acquisition in an aggregate amount not to exceed 20% of the aggregate
consideration paid or payable by the Credit Parties in connection with such
Permitted Acquisition, (xi) the aggregate amount of any payments made in cash
during such period with respect to any portion of the “Incentive Bonus” which
may become payable pursuant to the employment agreements of Winter Horton dated
December 18, 2002, Andrew Mars dated November 15, 1998, Xavier Ortiz dated
September 1, 1999, Eduardo Leon dated December 1, 1999 and, subject to Section
6.16, Miguel Banojian that may be entered into after the Closing Date, in each
case as amended from time to time (including the aggregate amount of any
payments made in cash during such period with respect to any notes issued with
respect thereto), (xii) forgiveness or cancellation of the loan to Lenard
Liberman described in Item 5 of Schedule 7.5 annexed hereto plus accrued
interest thereon, (xiii) forgiveness or cancellation of the loans to Jose and
Lenard Liberman described in Schedule 7.5 annexed hereto (excluding Item 5) in
an aggregate amount not in excess of $500,000 plus accrued interest thereon, and
(xiv) for the period commencing January 1, 2003 and ending on the date of the
closing of the Astor Acquisition, payments required to be made by any of the
Credit Parties to the Astor Sellers pursuant to the local marketing agreement in
respect of the radio station to be acquired by the Credit Parties in such
acquisition not in excess of $200,000 for any calendar month and for a period of
not more than eight (8) calendar months minus (to the extent not deducted in
computing Net Income) (b) the sum of (i) extraordinary gains during such

 

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period, and (ii) cash Program Obligations Payments actually made during such
period (or, with respect to Program Obligations Payments for which the proviso
in the definition thereof is applicable, Program Obligations Payments amortized
during such period) and (iii) any cash interest paid during such period in
respect of the Liberman Subordinated Debt; provided that (1) for purposes of
determining EBITDA for any period during which a Disposition (other than any
Relocation) is consummated, EBITDA shall be adjusted in a manner reasonably
satisfactory to the Administrative Agent to give effect to the consummation of
the Disposition (other than any Relocation) on a pro-forma basis, as if the
Disposition (other than any Relocation) occurred on the first day of such
period; (2) for any period for which EBITDA is determined and in which period an
Acquisition permitted to be made hereunder is consummated, EBITDA shall be
adjusted in a manner reasonably satisfactory to the Administrative Agent (a) to
give effect to the consummation of such Acquisition on a pro-forma basis, as if
such Acquisition occurred on the first day of such period and (b) to reflect
certain expense deductions in connection with such Acquisition reasonably
acceptable to the Administrative Agent (except that for purposes of determining
EBITDA for the fiscal quarter in which the KMPX Acquisition or the KNOR
Acquisition is consummated, EBITDA shall be determined without inclusion of the
operating results of KMPX-TV or KNOR-FM, respectively, for such fiscal quarter),
and (3) for purposes of determining EBITDA for the four consecutive fiscal
quarter periods ending at the end of the first, second and third full fiscal
quarters ending immediately subsequent to the closing of the KMPX Acquisition or
the KNOR Acquisition (for example, if the closing date of the KMPX Acquisition
is January 20, 2004, the four consecutive fiscal quarter period ending at the
end of the first full fiscal quarter ending immediately subsequent to such
closing date would be the four consecutive fiscal quarter period ending on June
30, 2004), the EBITDA attributable to the station and other assets acquired in
connection with the KMPX Acquisition or the KNOR Acquisition, in each case,
shall be calculated as follows: for the four fiscal quarter periods ending on
each of the three consecutive full fiscal quarter periods ending immediately
subsequent to such Acquisition, the EBITDA attributable to such station and
other assets as of the end of the first full fiscal quarter ending immediately
subsequent to such Acquisition shall be based on the EBITDA attributable to such
station and other assets for such first full fiscal quarter times 4 (if such
EBITDA is greater than zero) or times 1 (if such EBITDA is less than zero), the
EBITDA attributable to such station and other assets as of the end of the second
full fiscal quarter ending immediately subsequent to such Acquisition shall be
based on the EBITDA attributable to such station and other assets for the two
full fiscal quarters then ending times 2 (if such EBITDA is greater than zero)
or times 1 (if such EBITDA is less than zero), and the EBITDA attributable to
such station and other assets as of the end of the third full fiscal quarter
ending immediately subsequent to such Acquisition shall be based on the EBITDA
attributable to such station and other assets for the three full fiscal quarters
then ending times 1 and 1/3 (if such EBITDA is greater than zero) or times 1 (if
such EBITDA is less than zero), respectively.

 

“Effective Time” means the time when the conditions specified in Section 5.1 are
satisfied (or waived in accordance with Section 10.2).

 

“El Dorado Acquisitions” means the acquisitions on October 11, 2002 and April
22, 2003, respectively, by Liberman Broadcasting of Houston, Inc. and Liberman
Broadcasting of Houston License Corp. from the El Dorado Sellers of the assets
of KQQK-FM and KEYH-AM.

 

13

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“El Dorado Acquisitions Documents” means (a) the AM Asset Purchase Agreement
dated April 5, 2002, and (b) the FM Asset Purchase Agreement dated April 5,
2002, and all related instruments, agreements and other documents entered into
by any Credit Party and any El Dorado Seller in connection with each such asset
purchase agreement, in each case, as amended, supplemented or modified prior to
the date hereof.

 

“El Dorado Sellers” means El Dorado Communications, Inc., El Dorado 108, Inc.
and KXTJ License, Inc.

 

“Election[s] to Purchase” means those certain Elections to Purchase to be
executed by the applicable holders of the Alta Warrants in connection with the
IPO, substantially in the form delivered to the Administrative Agent.

 

“Eligible Assignee” means (a) any Lender, any Affiliate of any Lender and any
Approved Fund of any Lender; and (b) (i) any commercial bank organized under the
laws of the United States or any state thereof; (ii) any savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) any commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (1) such bank is
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity that is an “accredited investor” (as defined
in Regulation D under the Securities Act of 1933, as amended) that extends
credit or buys loans as one of its businesses including insurance companies,
mutual funds, financing companies and lease financing companies; provided that
no Credit Party or any Affiliate of any Credit Party shall be an Eligible
Assignee.

 

“Empire Burbank” means Empire Burbank Studios, Inc, a California corporation and
a Wholly-Owned Subsidiary of the Borrower.

 

“Empire Burbank Lease” means that certain Lease dated as of July 15, 1999
between Empire Burbank, as lessor, and LBCI, as lessee, relating to occupancy of
the Burbank Office Property, (or a replacement lease in substantially the same
form except that the Borrower is the lessee and the term thereof is extended
(which replacement lease shall be deemed to be permitted under Section 7.14)),
in each case as such lease may be amended or modified in accordance with Section
7.14.

 

“Empire Burbank Loan” means a loan in the original principal amount of
$3,250,000 made by City National Bank to Empire Burbank pursuant to the Empire
Burbank Loan Documents and any Permitted Refinancing.

 

“Empire Burbank Loan Documents” means the Empire Burbank Mortgage and the other
documents evidencing the Empire Burbank Loan and described on Schedule 4.14, or
any replacement documents evidencing a Permitted Refinancing, as such documents
or replacement documents may be amended or modified in accordance with Section
7.14.

 

“Empire Burbank Mortgage” means that certain deed of trust encumbering the
Burbank Office Property, executed by Empire Burbank in favor of City National
Bank securing the Empire Burbank Loan, or any replacement deed of trust
evidencing a Permitted Refinancing, as

 

14

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such deed of trust or replacement deed of trust may be amended or modified in
accordance with Section 7.14.

 

“Empire Burbank Sublease” means that certain Sublease Agreement between LBCI, as
sublessor, and Empire Burbank, as sublessee, (or a replacement sublease in
substantially the same form except that the Borrower is the sublessor and the
term thereof is extended (which replacement sublease shall be deemed to be
permitted under Section 7.14)), in each case relating to occupancy of certain
portions of the Burbank Office Property by Empire Burbank, as such sublease may
be amended or modified from time to time.

 

“Environmental Laws” means all applicable laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Credit Party directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“Equity Rights” means, with respect to any Person, any subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including
any stockholders’ or voting trust agreements) for the issuance or sale of, or
securities convertible into, any additional shares of capital stock of any
class, or partnership or other ownership interests of any type in, such Person.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer within the
meaning of Section 414(b), (c), (m) or (o) of the Code. Notwithstanding the
foregoing, for purposes of any liability related to a Multiemployer Plan under
Title IV of ERISA, the term “ERISA Affiliate” means any trade or business that
together with the Borrower is treated as a single employer within the meaning of
Section 4001(b) of ERISA.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to any Pension Plan, (b)
the existence with respect to any Pension Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Pension Plan, (d) the incurrence by the Borrower

 

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or any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Pension Plan, (e) the receipt by the Borrower
or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Pension Plan or Pension Plans or to
appoint a trustee to administer any Pension Plan or (f) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

 

“Event of Default” has the meaning assigned to such term in Section 8.1.

 

“Excess Cash Flow” means, for each fiscal year, (a) EBITDA for such period minus
(b) (to the extent not deducted in computing EBITDA) the sum of (i) the
aggregate amount of all Capital Expenditures made during such period to the
extent paid in cash during such period (excluding payment of Capital Lease
Obligations to the extent included in Debt Service for such period and all
Capital Expenditures made by the reinvestment of Net Cash Payments made in
accordance with Section 2.11(b)), (ii) Debt Service for such period, (iii) the
aggregate amount paid in cash or withheld (and not deducted in the calculation
of Excess Cash Flow in any prior fiscal year) by the Credit Parties in respect
of income, real estate, franchise, and other like taxes for such period, (iv)
Transaction Costs incurred during such period (other than Transaction Costs
relating to the IPO), (v) Extraordinary Expenses incurred during such period,
(vi) the Net Cash Payments of Dispositions made during such period to the extent
such proceeds (A) are included in EBITDA and (B) have been used to prepay the
Loans or are reinvested, in each case, pursuant to Section 2.11(b), (vii) loans
or Restricted Junior Payments made during such period as permitted by Sections
7.5(a)(ix)(1) or 7.6(a), as applicable, and (viii) except to the extent
reimbursed, Relocation costs, expenses and other amounts set forth in clauses
(ii)(A) and (B), and subclauses (a)(i), (a)(v), (a)(vi), (a)(vii) and (b) of
clause (ii)(C) of the definition of Net Cash Payments incurred or paid during
such period plus (c) the amount of any payment or prepayment during such period
of loans made pursuant to Section 7.5(a)(ix)(1).

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Lender or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income, net worth or
franchise taxes imposed on (or measured by) its net income or net worth by the
United States of America, or by a jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located or in
which it is taxable solely on account of some connection other than the
execution, delivery or performance of this Agreement or the receipt of income
hereunder, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.9(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or is attributable to such Foreign
Lender’s failure or inability to comply with Section 2.17(e), except to the
extent that such Foreign Lender’s assignor (if any) was entitled, at

 

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the time of assignment, to receive additional amounts from the Borrower pursuant
to Section 2.17(a).

 

“Existing Credit Agreement” has the meaning assigned to such term in the
preamble hereof.

 

“Existing Credit Agreement Closing Date” means July 9, 2002.

 

“Existing Debt” means Indebtedness described in (a) Schedule 4.14 and denoted
“to be repaid on the Closing Date” and (b) Schedule 4.14 and denoted “to remain
outstanding after the Closing Date”.

 

“Existing Mortgage Amendment” means, with respect to any Existing Mortgaged
Property, an amendment to and assignment of the Existing Mortgage for such
property, substantially in the form of Exhibit Q-1, for owned property and
Exhibit Q-2 for leased property or in such other form as may be approved by the
Administrative Agent in its sole and reasonable discretion.

 

“Existing Mortgaged Property” has the meaning assigned to such term in Section
5.1(f).

 

“Existing Mortgages” means the Mortgages listed on Schedule 4.5(c).

 

“Existing Title Policies” means the title policies insuring liens of certain of
the Existing Mortgages, as listed on Schedule 4.5(c).

 

“Existing Title Policy Endorsement” has the meaning assigned to such term in
Section 5.1(f)(iv).

 

“Extraordinary Expenses” means those certain non-recurring, extraordinary fees
and expenses incurred by Holdings, Media Holdings, the Borrower or any of its
Subsidiaries in connection with proposed radio or television acquisitions not to
exceed $250,000, individually, or $500,000 in the aggregate.

 

“FCC” means the Federal Communications Commission or any governmental authority
succeeding to any of its functions.

 

“FCC Licenses” means all radio, broadcast and or other licenses, permits,
certificates of compliance, franchises, approvals or authorizations granted or
issued by the FCC to any Credit Party. Each reference to “Material FCC Licenses”
shall be deemed to include the main station FCC License for each broadcast
station but shall be deemed not to include (i) any auxiliary services licenses
held by any Credit Party in connection with such broadcast station, and (ii) any
other FCC License which contributes less than 5% of the EBITDA of the Credit
Parties for the immediately preceding fiscal year as stated in the Compliance
Certificate required to be delivered for such fiscal year pursuant to Section
6.1(c) or until the first Compliance Certificate is delivered hereunder, as
stated in the Compliance Certificate most recently delivered pursuant to the
Existing Credit Agreement.

 

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“FCC Regulations” means the Communications Act, and all regulations and written
policies promulgated from time to time by the FCC under or in connection with or
pertaining to the Communications Act.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Federal Taxable Income” shall mean the taxable income of Holdings for any
taxable year computed pursuant to Section 1363(b) (or any successor provision)
of the Code but calculated as if the taxable year of Holdings ended on the date
with respect to which such taxable income calculation is made, reduced, but not
below zero, by the amount of any Suspended Losses treated as incurred by
Holdings in, and allowed as deductions on the tax returns of Holdings’
stockholders for, such taxable year.

 

“Financial Officer” means the chief executive officer, the president, the
executive vice president, chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.

 

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is the most
senior Lien (other than Liens permitted pursuant to Section 7.2) to which such
Collateral is subject.

 

“Fixed Charge Ratio” means, as at any date, the ratio of (a) the sum of (i)
EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date plus (ii) cash and Cash Equivalents held by
the Credit Parties on such date in excess of $2,000,000, to (b) the sum for the
Credit Parties (determined on a consolidated basis without duplication in
accordance with GAAP), of (i) all amounts included in Debt Service for such
period; (ii) the aggregate amount of all Capital Expenditures made during such
period to the extent paid in cash during such period (excluding payment of
Capital Lease Obligations to the extent included in Debt Service for such
period), (iii) the aggregate amount paid, or required to be paid (without
duplication), in cash by the Credit Parties in respect of income, franchise,
real estate and other like taxes for such period, (iv) Permitted Shareholder Tax
Distributions and Permitted Holdings Tax Distributions made during such period,
(v) the aggregate amount of any payments made in cash during such period with
respect to any portion of the “Incentive Bonus” which may become payable
pursuant to the employment agreements of Winter Horton dated December 18, 2002,
Andrew Mars dated November 15, 1998, Xavier Ortiz dated September 1, 1999,
Eduardo Leon dated December 1, 1999 and, subject to Section 6.16, Miguel
Banojian that may be entered into after the Closing Date, in each case as
amended from time to time (including the aggregate amount of any payments made
in cash during such period with respect to any notes issued with respect
thereto), and (vi) the amount of non-compete payments made in cash during such
period to sellers in connection with Permitted Acquisitions in an aggregate
amount not to

 

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exceed 20% of the aggregate consideration paid or payable by the Credit Parties
in connection with such Acquisitions, to the extent such non-compete payments
are added back in the calculation of EBITDA for such period.

 

“Fleet” means Fleet National Bank, a national bank, in its capacity as the
predecessor administrative agent and issuing lender under the Existing Credit
Agreement and/or as administrative agent and issuing lender under the Original
Credit Agreement.

 

“Flood Hazard Property” means a Mortgaged Property located in an area designated
by the Federal Emergency Management Agency as having special flood or mud slide
hazards.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government and the
National Association of Insurance Commissioners.

 

“Guarantee” means a guarantee, an endorsement, a contingent agreement to
purchase or to furnish funds for the payment or maintenance of, or otherwise to
be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor’s
obligations or an agreement to assure a creditor against loss, and including
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder). The terms “Guarantee” and “Guaranteed” used as a verb shall have a
correlative meaning.

 

“Guaranteed Obligations” has the meaning assigned to such term in Section 3.1.

 

“Guarantors” means all Subsidiaries of the Borrower.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas,

 

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infectious or medical wastes and all other substances or wastes of any nature in
each case regulated or subject to regulation pursuant to any Environmental Law.

 

“Hazardous Materials Indemnity Agreement” means that certain Hazardous Materials
Indemnity Agreement dated as of the Original Closing Date among Fleet as
predecessor administrative agent and the Credit Parties, as confirmed and
amended by the Amendment and Confirmation of Hazardous Materials Indemnity
Agreement dated as of the Existing Credit Agreement Closing Date and the Omnibus
Confirmation Agreement, as such agreement may be further amended, supplemented
or otherwise modified from time to time.

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

 

“Holding Company” means each of (i) Holdings, (ii) Media Holdings, and (iii) any
other holding company formed after the Closing Date which directly or indirectly
owns all the equity interest of the Borrower and all of whose equity interests
is directly or indirectly owned by Holdings.

 

“Holding Company Debt” means any Indebtedness of Holdings in respect of the
Holdings Securities Purchase Documents and any Indebtedness of Media Holdings in
respect of the Media Holdings Discount Notes Indenture and any other
Indebtedness of any Holding Company incurred in compliance with Section
7.15(a)(iv).

 

“Holdings” means, prior to the effective time of the Holdings Merger, LBI
Holdings I, Inc., a California corporation and the sole shareholder of Media
Holdings, and thereafter Liberman Broadcasting, Inc, a Delaware corporation, and
the sole shareholder of Media Holdings immediately after the Holdings Merger.

 

“Holdings Amendment” means the First Amendment to Securities Purchase Agreement,
Warrant Agreement and Subordination and Intercreditor Agreements dated as of the
Existing Credit Agreement Closing Date among Holdings, Alta, Fleet as
predecessor administrative agent and the other parties thereto.

 

“Holdings Merger” means the merger of LBI Holdings I, Inc, a California
Corporation, with and into Liberman Broadcasting, Inc., a Delaware corporation,
as the surviving corporation.

 

“Holdings Merger Agreement” means that certain Agreement and Plan of Merger
between Liberman Broadcasting Inc., a Delaware corporation, and LBI Holdings I,
Inc. to be executed and delivered with respect to the Holdings Merger,
substantially in the form of Exhibit S annexed hereto.

 

“Holdings Second Amendment” means the Second Amendment to Securities Purchase
Agreement, Warrant Agreement and Subordination and Intercreditor Agreement dated
as of October 10, 2003 among Holdings, Alta and Fleet as predecessor
administrative agent.

 

“Holdings Securities Purchase Agreement” means the Securities Purchase Agreement
dated as of the Original Closing Date among the purchasers named therein and
Holdings as

 

20

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amended by the Holdings Amendment and the Holdings Second Amendment, and as
further amended, supplemented or modified in accordance with the restrictions of
Section 7.15, pursuant to which Holdings issued to Alta the Alta Notes and the
Alta Warrants.

 

“Holdings Securities Purchase Documents” means (a) the Holdings Securities
Purchase Agreement, (b) the Alta Notes, (c) the Alta Warrants and (d) all
related instruments, agreements and other documents entered into by Holdings and
Alta in connection therewith (including to the extent executed and delivered the
Irrevocable Instructions, the Election[s] to Purchase, the Conversion Election,
the Assumption Agreement and the Termination Agreement), in each case, as
amended by the Holdings Amendment and the Holdings Second Amendment and as
further amended, supplemented or modified in accordance with the restrictions of
Section 7.15.

 

“Indebtedness” means, for any Person, without duplication: (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
advance, the issuance and sale of debt securities or the sale of Property to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business so
long as such trade accounts are payable within 180 days after the date of the
respective goods are delivered or the respective services are rendered or
otherwise are payable in accordance with customary practices; (c) Capital Lease
Obligations of such Person; (d) obligations of such Person in respect of letters
of credit or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person; (e) Indebtedness of others secured
by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; and (f) Indebtedness of
others Guaranteed by such Person. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor. Notwithstanding anything herein to the contrary,
(x) the obligations of any Credit Party to pay Relocation Profits (including any
Relocation Tax Benefits (as defined in the Shop At Home Acquisition Documents))
to the Shop At Home Sellers under the Shop At Home Acquisition Documents shall
not be Indebtedness until such time as such obligations are overdue and payable
and not being contested in good faith or represented by a separate instrument,
(y) any obligations under the Empire Burbank Lease shall not be Indebtedness and
(z) any obligations with respect to non-compete payments in connection with any
Permitted Acquisition shall not constitute Indebtedness so long as (i) the
aggregate amount of all non-compete payments with respect to such Permitted
Acquisition do not exceed 20% of the aggregate consideration paid or payable in
connection with such Permitted Acquisition and (ii) such non-compete payments do
not have an interest or similar component.

 

“Indemnified Taxes” means all Taxes other than (a) Excluded Taxes and Other
Taxes and (b) amounts constituting penalties or interest imposed with respect to
Excluded Taxes or Other Taxes.

 

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“Interest Coverage Ratio” means as at any date, the ratio of (a) EBITDA for the
period of four consecutive quarters ending on or most recently ended prior to
such date, to (b) Interest Expense for such period.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.6 substantially in the form of
Exhibit D-2 annexed hereto.

 

“Interest Expense” means, for any period, the sum, for the Credit Parties
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following: (a) interest in respect of Total Debt accrued during
such period (whether or not actually paid during such period) plus (b) the net
amounts payable (or minus the net amounts receivable) under Hedging Agreements
accrued during such period (whether or not actually paid or received during such
period), with fees and costs attributable to such period being calculated
assuming such fees and costs are amortized equally over the term of such Hedging
Agreement, but excluding (i) reimbursement of legal fees and other similar
transaction costs of the Transactions and (ii) any non-cash amortization of fees
and expenses of the Transactions plus (c) all letter of credit fees and expenses
incurred after the Effective Time plus (d) any payments in respect of liquidated
damages paid in cash during such period pursuant to any registration rights
agreement entered into in connection with any Indebtedness; provided that (i)
interest in respect of Indebtedness which is not paid in cash but which is
instead “paid-in-kind” through the issuance of additional notes or other
instruments and (ii) any premium paid in connection with the redemptions
described in clauses (a), (e) and (g) of the definition of Qualifying IPO
Funding Transactions, in each case, shall not be included in “Interest Expense.”

 

“Interest Payment Date” means (a) with respect to any Base Rate Loan, each
Quarterly Date and (b) with respect to any LIBOR Loan, the last Business Day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a LIBOR Borrowing with an Interest Period of more than three
months’ duration, each Business Day prior to the last day of such Interest
Period that would have been the last day of the Interest Period for such LIBOR
Loan had successive three month Interest Periods been applicable to such LIBOR
Loan.

 

“Interest Period” means with respect to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of the Administrative Agent and provided such periods are
available from all Lenders, nine or twelve months) thereafter, as the Borrower
may elect; provided, that (i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
Notwithstanding the foregoing,

 

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(x) if any Interest Period for any Revolving Credit Borrowing would otherwise
end after the Revolving Credit Maturity Date, such Interest Period shall end on
the Revolving Credit Maturity Date, and

 

(y) notwithstanding the foregoing clause (x), no Interest Period shall have a
duration of less than one month and, if the Interest Period for any LIBOR Loan
would otherwise be a shorter period, such Loan shall not be available hereunder
as a LIBOR Loan for such period.

 

“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any “short
sale” or any sale of any securities at a time when such securities are not owned
by the Person entering into such short sale) or (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding 180 days representing the purchase price of goods or
services sold by such Person in the ordinary course of business or otherwise are
payable in accordance with customary practices). Notwithstanding the foregoing,
Capital Expenditures, Acquisitions and Relocations (other than promissory notes
or debt or equity securities acquired in connection with any Relocation) shall
not be deemed “Investments” for purposes hereof.

 

“Investor Subordination Agreement” means the Investor Subordination Agreement
dated as of the Original Closing Date between Alta and Fleet as predecessor
administrative agent as amended by the Holdings Amendment and as confirmed by
the Confirmation of Subordination Agreements and the Second Confirmation of
Subordination Agreements and as such agreement may hereafter be further amended,
supplemented or otherwise modified from time to time.

 

“Involuntary Relocation” means with respect to any television Broadcast Station,
any Relocation described in clause (2) of the definition of the term Relocation.
Without limiting the generality of the foregoing, the term Involuntary
Relocation shall include any “Specified Involuntary Relocation” as defined in
the Shop At Home Acquisition Documents as in effect on March 20, 2001.

 

“IP Collateral” means, collectively, any Collateral which is intellectual
property of a Credit Party.

 

“IPO” means the initial public offering of the Class A Common Stock pursuant to
the Registration Statement.

 

“IPO Proceeds” means the proceeds received by Holdings in connection with the
consummation of a Qualifying IPO minus any underwriting discount.

 

“Irrevocable Instructions” means those certain Irrevocable Instruction and
Agreements by and between LBI Holdings I, Inc., Liberman Broadcasting, Inc., a
Delaware corporation, and the applicable holders of the Alta Warrants to be
executed in connection with the IPO, as such

 

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agreements may be amended, supplemented or otherwise modified from time to time,
substantially in the form delivered to the Administrative Agent.

 

“Issuing Lender” means CSFB, in its capacity as an issuer of Letters of Credit
hereunder.

 

“KMPX Acquisition” means the acquisition on or about January 12, 2004 by certain
Credit Parties of the assets of television station KMPX-TV, Decatur, Texas.

 

“KMPX Acquisition Documents” means the asset purchase agreement and all related
instruments, agreements and other documents entered into by any Credit Party and
the sellers party thereto in connection with the purchase of KMPX-TV.

 

“KNOR Acquisition” means the acquisition by Liberman Broadcasting of Dallas,
Inc. and Liberman Broadcasting of Dallas License Corp. from the KNOR Sellers of
the assets of station KNOR-FM (93.7 FM, Krum, Texas) for cash consideration not
in excess of $15,500,000.

 

“KNOR Acquisition Documents” means the Asset Purchase Agreement dated March 18,
2004, entered into by any Credit Party and the KNOR Sellers and all related
instruments, agreements, and other documents in connection with the KNOR
Acquisition, as amended, supplemented or otherwise modified from time to time.

 

“KNOR Sellers” means A.M. & P.M. Broadcasters, LLC.

 

“Landlord Waiver and Consent” means, with respect to any Leasehold Property, a
letter, certificate or other instrument in writing from the lessor under the
related lease, in substantially the form of Exhibit J-1 or in such other form
reasonably approved by the Administrative Agent.

 

“LBCI” means Liberman Broadcasting, Inc., a California corporation, which,
subject to the delivery of the notices required to be delivered under the Loan
Documents, will change its name to Liberman Broadcasting of California, Inc. on
or about the Qualifying IPO Closing Date.

 

“LBI Media Intercompany Note” means that certain Promissory Note that may be
issued on the Qualifying IPO Closing Date by the Borrower to the order of Media
Holdings in an aggregate principal amount equal to the amount necessary to
complete the redemption described in clause (g) of the definition of Qualifying
IPO Funding Transactions, substantially in the form delivered to the
Administrative Agent, as such promissory note may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.13.

 

“LC Disbursement” means a payment made by the Issuing Lender pursuant to a
Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Revolving Credit Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.

 

“Lead Arranger” means CSFB, in its capacity as lead arranger hereunder.

 

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“Leasehold Property” means any leasehold interest of any Credit Party as lessee
under any lease of real property, other than any such leasehold interest not
material to the business and operations of the Credit Parties as reasonably
designated from time to time by Administrative Agent, as not being required to
be included in the Collateral.

 

“Lender Joinder Agreement” means the Lender Joinder Agreement attached hereto as
Exhibit E pursuant to which a New Lender shall become a party to this Agreement.

 

“Lenders” means the Persons listed on Part II of Schedule 2.1 (including the
Issuing Lender and the Swing Loan Lender) and any other Person that shall have
become a party hereto pursuant to (a) an Assignment and Acceptance, other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance or (b) a Lender Joinder Agreement.

 

“Letter of Credit” means any letter of credit issued on a standby basis or in
support of trade obligations of any Credit Party pursuant to this Agreement.

 

“Liberman Subordinated Debt” means the Indebtedness incurred pursuant to Section
7.1(f).

 

“Liberman Subordination Agreements” means the subordination agreements, if any,
entered into pursuant to Section 7.1(f), as such agreements may be amended or
modified in accordance with the terms hereof; and which agreements shall in form
and substance reasonably satisfactory to the Administrative Agent; provided that
any such agreements that are substantially the same as those certain Liberman
Subordination Agreements dated as of the Original Closing Date among the
Borrower, Fleet and each of Jose and Lenard Liberman shall be deemed to be
satisfactory to the Administrative Agent.

 

“LIBOR” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.

 

“LIBO Rate” means, with respect to any LIBOR Borrowing for any Interest Period,
the rate per annum determined by the Administrative Agent at approximately 11:00
a.m. (London time) on the date that is two Business Days prior to the beginning
of the relevant Interest Period by reference to the British Bankers’ Association
Interest Settlement Rates for deposits in Dollars (as set forth by the Bloomberg
Information Service or any successor thereto or any other service selected by
the Administrative Agent which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period; provided that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the “LIBOR” shall be the interest rate per annum
determined by the Administrative Agent to be the average of the rates per annum
at which deposits in Dollars are offered for such relevant Interest Period to
major banks in the London interbank market in London, England by the
Administrative Agent at approximately 11:00 a.m. (London time) on the date that
is two Business Days prior to the beginning of such Interest Period.

 

“License Subsidiary” means any Wholly-Owned Subsidiary of the Borrower (or of a
Subsidiary of the Borrower) formed solely for the purpose of holding FCC
Licenses.

 

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“Licensor Consent” means, with respect to any Material Property License, a
letter, certificate or other instrument in writing from the lessor under the
related lease, in substantially the form of Exhibit J-2 or in such other form
reasonably approved by the Administrative Agent.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (other than an operating
lease) (or any financing lease having substantially the same economic effect as
any of the foregoing) relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to such
securities.

 

“Loan Documents” means this Agreement, any promissory notes evidencing Revolving
Credit Loans and the Swing Loans hereunder, the Collateral Documents and any
other instruments or documents delivered or to be delivered from time to time
pursuant to this Agreement, as the same may be supplemented and amended from
time to time in accordance with their respective terms.

 

“Loans” means the Revolving Credit Loans and the Swing Loans.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or financial condition of the Credit Parties taken as a
whole, (b) the ability of any Credit Party to perform any of its respective
material obligations under this Agreement or the other Loan Documents or (c) the
material rights of or material benefits available to the Lenders under this
Agreement and the other Loan Documents.

 

“Material Indebtedness” means (a) the Senior Subordinated Notes and (b)(i)
Indebtedness (other than the Loans or Letters of Credit or the Empire Burbank
Loan), or (ii) obligations in respect of one or more Hedging Agreements, of any
one or more of the Credit Parties in each case of clause (i) and clause (ii) in
an aggregate principal amount exceeding $10,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of any Person
in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Person would be
required to pay if such Hedging Agreement were terminated at such time.

 

“Material Leasehold Property” means a Leasehold Property reasonably determined
by the Administrative Agent in good faith consultation with the Borrower to be
of material value as Collateral or of material importance to the operations of
the Credit Parties, taken as a whole.

 

“Material Property License” means a license to use real or mixed property
(excluding FCC Licenses) reasonably determined by the Administrative Agent in
good faith consultation with the Borrower to be of material value as Collateral
or of material importance to the operations of the Credit Parties, taken as a
whole.

 

“Maximum Effective California Rate” shall mean the product of: (i) the maximum
California personal income tax rate imposed on individuals pursuant to Section
17041(a) and (c) (or any successor provisions) of the California Revenue and Tax
Code; times (ii) the difference between one (1) and the Maximum Federal Rate
expressed as a decimal.

 

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“Maximum Federal Rate” shall mean the maximum Federal income tax rate imposed on
individuals pursuant to Section 1(a)-(d) (or any successor provisions) of the
Code, as adjusted pursuant to Section 15 (or any successor provision) of the
Code, if applicable.

 

“Media Holdings” means LBI Media Holdings, Inc, a Delaware corporation, which is
the sole shareholder of the Borrower and a Wholly-Owned Subsidiary of Holdings.

 

“Media Holdings Discount Notes” means Media Holdings’ unsecured 11% Senior
Discount Notes due 2013, including any Additional Notes and Exchange Notes (as
each such term is defined in the Media Holdings Discount Notes Indenture), in
each case, as amended, supplemented or otherwise modified in accordance with the
restrictions of Section 7.15, and as issued pursuant to the Media Holdings
Discount Notes Indenture with aggregate gross cash proceeds not in excess of the
sum of (a) $50,000,000 (excluding the amounts referred to in clause (b) of this
definition) plus (b) the amount of any increase in the outstanding principal
amount of such notes as a consequence of such notes being issued at a discount
(i. e. accreted value).

 

“Media Holdings Discount Notes Indenture” means the Indenture dated as of
October 10, 2003 between Media Holdings and U.S. Bank, N.A., as trustee,
pursuant to which the Media Holdings Discount Notes were issued, as amended,
supplemented or otherwise modified in accordance with the restrictions of
Section 7.15.

 

“Mortgage” means (i) a security instrument (whether designated as a deed of
trust or a mortgage, leasehold mortgage, assignment of leases and rents or by
any similar title) executed and delivered by any Credit Party in substantially
the form of Exhibits H and I or in such other form as may be approved by the
Administrative Agent in its sole and reasonable discretion, in each case with
such changes thereto as may be recommended by Administrative Agent’s local
counsel based on local laws or customary local practices, (ii) or at
Administrative Agent’s option, in the case of an Additional Mortgaged Property,
an amendment to an existing Mortgage, in form satisfactory to Administrative
Agent, adding such Additional Mortgaged Property to the Real Property Assets
encumbered by such existing Mortgage, in either case as such security instrument
or amendment may be amended, supplemented or otherwise modified from time to
time. “Mortgages” means all such instruments, including the Existing Mortgages
as amended by the applicable Existing Mortgage Amendments and any Additional
Mortgages, collectively.

 

“Mortgaged Property” means the Existing Mortgaged Property or an Additional
Mortgaged Property.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

 

“Net Cash Payments” means,

 

(i) with respect to any Casualty Event, the aggregate amount of cash proceeds of
insurance, cash condemnation awards and other cash compensation received by the
Credit Parties in respect of such Casualty Event net of (A) legal, title,
transfer and recording tax expenses, commissions, and fees and expenses directly
related to such casualty event (including legal, accounting, brokerage, outside
consultant and advisor, advertising and closing costs) incurred by the Credit
Parties in connection therewith and

 

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(B) contractually required repayments of Indebtedness to the extent secured by a
Lien on such property, (C) any Federal, state and local income, transfer or
other taxes paid or estimated to be payable by Holdings, Media Holdings or any
of the Credit Parties in respect of such Casualty Event and (D) any Permitted
Shareholder Tax Distributions and Permitted Holdings Tax Distributions relating
to taxes paid or estimated to be payable as a result of such Casualty Event; and

 

(ii) with respect to any Disposition, the aggregate amount of all cash payments
received by any of the Credit Parties in connection with such Disposition
directly or indirectly, whether at the time of such Disposition or after such
Disposition under deferred payment arrangements or Investments entered into or
received in connection with such Disposition (including Disposition
Investments); provided that

 

(A) Net Cash Payments shall be net of (I) the amount of any legal, title,
transfer and recording tax expenses, commissions and other fees and expenses
(including legal, accounting, brokerage, outside consultant and advisor,
advertising and closing costs) paid or payable by Holdings, Media Holdings or
any of the Credit Parties in connection with such Disposition and (II) any
Federal, state and local income, transfer or other taxes paid or reasonably
estimated to be payable by any of the Credit Parties as a result of such
Disposition, but only to the extent that such estimated taxes are in fact paid
to the relevant Federal, state or local governmental authority within twelve
months after the end of the calendar year in which the date of such Disposition
occurs and (III) to the extent not included in the foregoing, any Permitted
Holdings Tax Distributions and Permitted Shareholder Tax Distributions related
to taxes paid or estimated to be payable as a result of such Disposition; and

 

(B) Net Cash Payments shall be net of any repayments by any of the Credit
Parties of Indebtedness to the extent that (I) such Indebtedness is secured by a
Lien on the property that is the subject of such Disposition and (II) the
transferee of (or holder of a Lien on) such property requires that such
Indebtedness be repaid as a condition to the purchase of such property.

 

(C) In addition to but without duplicating any amounts required to be deducted
from Net Cash Payments under clauses (A) and (B) above, Net Cash Payments in
connection with any Disposition involving a Relocation shall be net of (a) all
reasonable costs (as determined by Borrower (or its successor or assign) in its
reasonable discretion) directly related to such Relocation including, without
limitation, (i) transaction expenses (including professional advisor’s or
broker’s fees and costs and financing and related fees, commissions and
expenses, including lender waiver fees), (ii) engineering, construction,
equipment and moving costs, (iii) marketing costs, (iv) the estimated aggregate
amount of all obligations of any Credit Party (or its successor or its assign)
after such Relocation under leases with respect to which it is the lessee
immediately prior to such Relocation, (v) any penalties or liabilities incurred
(or estimated to be incurred) by any Credit Party (or its success or assign)
under contracts which cannot be terminated by such Credit Party (or its
successor or assign) prior to such

 

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Relocation but which cannot be performed or are no longer necessary (in the sole
but reasonable discretion of the Borrower (or its successor or assign)) by any
Credit Party (or its successor or assign) following such Relocation, (vi) costs
incurred in seeking governmental consents and permits required as part of such
Relocation and (vii) costs incurred in seeking FCC consent to move such replaced
station’s digital operations to the site of such replacement station’s analog
operations (including all expenses of a type set forth in other clauses of this
definition) and (b) any Relocation Profits (as defined in the Shop At Home
Acquisition Documents), including any Relocation Tax Benefits (as defined in the
Shop At Home Acquisition Documents), that are paid or payable to the Shop At
Home Sellers or their assignees pursuant to the terms of the Shop At Home
Acquisition Documents. Any estimated amounts under this clause (C) shall be
based on good faith estimates of the Borrower on the date of the consummation of
any Relocation which were reasonable when made but such estimates shall be
subject to adjustment within 90 days thereafter;

 

“Net Income” means net income of the Credit Parties on a consolidated basis
determined in accordance with GAAP.

 

“New Lender” has the meaning assigned to such term in Section 2.1(b)(ii).

 

“Omnibus Confirmation Agreement” means the Omnibus Confirmation Agreement dated
as of the date hereof among the Administrative Agent and the Credit Parties,
substantially in the form of Exhibit C, amending and confirming the Credit
Parties’ obligations under the Pledge Agreement, the Security Agreement, the
Hazardous Materials Indemnity Agreement and any related agreements, as the same
may be amended, supplemented or otherwise modified from time to time.

 

“Original Closing Date” means March 20, 2001.

 

“Original Credit Agreement” has the meaning assigned to such term in the
preamble hereof.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement and the other Loan Documents, provided
that there shall be excluded from “Other Taxes” all Excluded Taxes.

 

“Participant” has the meaning assigned to such term in Section 10.4(f).

 

“Pension Plan” means any Plan that is a defined benefit pension plan subject to
the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA.

 

“Permitted Acquisition” has the meaning set forth in Section 7.4.

 

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“Permitted Dividend Amount” shall mean, for any taxable period, the amount by
which the Dividend Limitation for the taxable year exceeds the aggregate
Permitted Shareholder Tax Distributions paid by the Borrower for such year
pursuant to Section 7.5(a)(ix)(1) or 7.6(a) hereof, including distributions paid
or loans made by the Borrower within 105 days after the end of the taxable year
for which a distribution is paid or loan is made; provided, that:

 

(a) if, at the end of any taxable year of the Borrower, the Dividend Limitation
for such year exceeds the aggregate Permitted Shareholder Tax Distributions paid
by the Borrower for such year pursuant to Section 7.5(a)(ix)(1) or 7.6(a)
hereof, such excess shall be ignored for purposes of computing the Permitted
Dividend Amount for any subsequent period;

 

(b) if, at the end of any taxable year of the Borrower, the aggregate Permitted
Shareholder Tax Distributions paid by the Borrower for such year pursuant to
Section 7.5(a)(ix)(1) or Section 7.6(a) hereof exceed the Dividend Limitation,
the Permitted Dividend Amount shall be zero (0) and such excess shall be
included in the calculation of the aggregate Permitted Shareholder Tax
Distributions paid by the Borrower for the following taxable year(s); and

 

(c) if Holdings’ S Corporation election made pursuant to Code Section 1362 (or
any successor provision) shall be determined to be invalid, or is revoked or
terminated, or the QSSS Election shall cease to be in effect for the Borrower,
the Permitted Dividend Amount for the Borrower shall be zero (0) from and after
the date of such invalidity, revocation, or termination.

 

“Permitted Holdings Tax Distributions” means cash distributions and/or loans (to
be computed by the Tax Accountant) from the Borrower to Media Holdings or
Holdings and/or from Media Holdings to Holdings, in respect of any taxable year
to permit Holdings to pay its estimated and final state income tax liabilities
which are attributable to the taxable income of Media Holdings and/or the
Borrower for such taxable year calculated as though Media Holdings and the
Borrower were S Corporations. If in any year Holdings or Media Holdings required
to pay additional taxes with respect to a prior year’s tax return which are
attributable to the taxable income of Media Holdings and/or the Borrower
calculated as though Media Holdings and the Borrower were S Corporations
(whether because of an audit by a taxing authority, an amended return the filing
of which is required in the reasonable judgment of Holdings, Media Holdings or
otherwise), the amount of Permitted Holdings Tax Distributions which may be paid
or loaned in such year shall be increased by the amount of such additional
taxes.

 

“Permitted Investments” means:

 

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

 

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from Standard and Poor’s Ratings Service or from Moody’s
Investors Service, Inc.;

 

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(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;

 

(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;

 

(e) investments in money market mutual funds that are rated AAA by Standard &
Poor’s Rating Service; and

 

(f) Cash Equivalents.

 

“Permitted Liens” has the meaning set forth in Section 7.2.

 

“Permitted Lines of Business” means the television and radio broadcast business,
television and radio program production, rental of television, radio and related
facilities and properties, outdoor advertising, the leasing or licensing of
property or tower space, and general business services related to any of the
foregoing and any business incident thereto.

 

“Permitted Refinancing” means a refinancing of the Empire Burbank Loan (other
than with the Loans); provided that (i) the terms of the Empire Burbank Loan
Documents evidencing such refinancing shall be substantially similar to the
terms of the Empire Burbank Loan Documents existing on March 20, 2001, with such
changes as do not materially adversely affect the Administrative Agent or the
Lenders (it being understood that (a) no change to those provisions of the
Empire Burbank Loan Documents referred to in Section 7.14(a)(i) shall be
permitted without the prior written consent of the Administrative Agent and (b)
replacement of the lessee under the Empire Burbank Lease of LBCI with the
Borrower, replacement of the sublessor under the Empire Burbank Sublease of LBCI
with the Borrower and lengthening the term of either shall not be considered to
materially adversely affect the Administrative Agent or any Lender) or with such
other terms as shall be approved by the prior written consent of the
Administrative Agent; provided that the aggregate principal amount of the Empire
Burbank Loan shall not exceed $3,250,000, (ii) no additional property shall be
encumbered by the Empire Burbank Mortgage executed in connection with such
refinancing and (iii) prior to consummation of such refinancing, the Borrower
shall deliver to the Administrative Agent copies of all loan documents relating
thereto, certified by the Borrower to be true and correct copies thereof and to
be all loan documents executed in connection with such refinancing.

 

“Permitted Shareholder Tax Distributions” means cash distributions and/or loans
made by the Borrower to Media Holdings, Holdings or the shareholders of Holdings
and/or by Media Holdings to Holdings or such shareholders to permit the
shareholders of Holdings to pay their estimated and final federal and state
income tax liabilities attributable to the income of Media Holdings and/or the
Borrower calculated as though Media Holdings and/or the Borrower were an S
Corporation. Permitted Shareholder Tax Distributions may be made not more
frequently than quarterly with respect to each period for which an installment
of estimated tax would be required

 

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to be paid by the shareholders of Holdings, provided, however, that the amount
of such distributions or loans shall not exceed the Permitted Dividend Amount.
For purposes of computing the amount of aggregate Permitted Shareholder Tax
Distributions for any taxable year, amounts paid in such taxable year by Media
Holdings and/or the Borrower to the State of California on behalf of nonresident
shareholders as estimated taxes or as withholding taxes pursuant to the
California Revenue and Taxation Code shall be treated as Permitted Shareholder
Tax Distributions. If nonresident shareholders recontribute to Media Holdings
and/or the Borrower any such amounts paid on their behalf, however, the amounts
contributed shall be subtracted from the amount of aggregate Permitted
Shareholder Tax Distributions for the taxable year in which the contributions
are made. If in any year Holdings’ shareholders are required to pay additional
taxes with respect to a prior year’s tax return which are attributable to the
taxable income of Media Holdings and/or the Borrower calculated as though Media
Holdings and/or the Borrower were S Corporations (whether because of an audit by
a taxing authority, an amended return the filing of which is required in the
reasonable judgment of Holdings, or otherwise), the amount of Permitted
Shareholder Tax Distributions which may be paid in such year shall be increased
by the amount of such additional taxes as determined by a Tax Accountant.
Notwithstanding any other provision in this Agreement to the contrary, in the
event that in any future tax period Holdings fails to qualify as an S
Corporation for California and/or other state tax purposes or otherwise fails to
receive the benefits of S Corporation tax treatments, but continues to maintain
its S Corporation status for federal income tax purposes, the amount that can be
distributed or loaned under this paragraph or any other provisions of this
Agreement shall include and shall be increased by the amount of California
and/or other state taxes imposed on such distributions and loans (including the
additional distributions and loans under this sentence). For the avoidance of
doubt, in determining the amounts that can be distributed to pay the tax
liabilities of the shareholders of Holdings or any of its Subsidiaries under
this definition and other provisions of this Agreement, if there are multiple
distributions and/or loans (e.g., an amount from the Borrower to Media Holdings
and the same amount from Media Holdings to Holdings), such a series of
distributions and/or loans shall be only counted once.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA in which the Borrower or any ERISA Affiliate is an “employer” as defined
in Section 3(5) of ERISA including but not limited to any Pension Plan or
Multiemployer Plan.

 

“Pledge Agreement” means the Pledge Agreement dated as of the Original Closing
Date between the Credit Parties and the Administrative Agent, as confirmed and
amended by the Confirmation of Pledge Agreement and the Omnibus Confirmation
Agreement, as such agreement may be further amended, supplemented or otherwise
modified from time to time, including the addition of new Credit Parties in
accordance with Section 6.10.

 

“Post-Default Rate” means, for Base Rate Loans, a rate per annum equal to the
Adjusted Base Rate plus the Applicable Margin plus 2%, and, for LIBOR Loans, a
rate per annum equal to the Adjusted LIBO Rate plus the Applicable Margin plus
2%.

 

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“Prime Rate” means the rate of interest per annum announced from time to time by
CSFB, as its prime rate in effect at its principal office in New York, New York;
each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.

 

“Program Obligations” means all obligations, whether fixed or contingent, of the
Credit Parties in respect of the purchase, use, license or acquisition of
programs, programming materials, films and similar assets used in connection
with the television broadcast business and operations of the Credit Parties.

 

“Program Obligations Payments” means, for any period, the sum (determined on a
consolidated basis and without duplication) of all payments by the Credit
Parties made or scheduled to be made during such period in respect of Program
Obligations; provided that, with respect to any contract for Program Obligations
which requires that the consideration therefor be paid by a Credit Party in one
lump-sum payment, or in unequal payments over the term of such contract, such
payment (or payments) shall be amortized over the period during which such
programming is available under such contract.

 

“Property” means any interest of any kind in property or assets, whether real,
personal or mixed, and whether tangible or intangible.

 

“Proprietary Rights” has the meaning assigned to such term in Section 4.5(b).

 

“PTO” means the United States Patent and Trademark Office or any successor or
substitute office in which filings are necessary or, in the reasonable opinion
of the Administrative Agent, desirable in order to create or perfect Liens on
any IP Collateral.

 

“QSSS Election” means the election to treat any Person as a qualified Subchapter
S subsidiary pursuant to Code Section 1361(b)(3) (or any successor provision).

 

“Qualifying IPO” means the consummation by Holdings, on or before December 31,
2004, of an initial public offering of common stock with gross proceeds to
Holdings (without deduction of commissions) of $100 million or more.

 

“Qualifying IPO Closing Date” means the date on which all the following
conditions have been satisfied: (a) a Qualifying IPO has been consummated and
(b) the Administrative Agent has received (i) copies of the Holdings Merger
Agreement and the Assumption Agreement, executed by each of the parties thereto,
(ii) a copy of the file stamped certificate of merger with respect to the
Holdings Merger as filed with the Secretary of State of the State of California
(or, if such file stamped certificate is unavailable, a certificate of the
Borrower certifying that a pre-cleared certificate of merger with respect to the
Holdings Merger was submitted to the Secretary of State of the State of
California), (iii) a copy of the file stamped certificate of merger with respect
to the Holdings Merger as filed with the Secretary of State of the State of
Delaware, (iv) an opinion of O’Melveny & Myers LLP, substantially in the form of
Exhibit F annexed hereto, (v) the Borrower shall have mailed or cause to be
mailed, within one Business Day after such date, an irrevocable notice of
redemption pursuant to the Senior Subordinated Notes Indenture in order to
consummate the optional redemption described in clause (e) of the definition of
Qualifying IPO Funding Transactions pursuant to the terms of the

 

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Senior Subordinated Notes Indenture no later than 60 days after the Qualifying
IPO Funding Date, (vi) Media Holdings shall have mailed or cause to be mailed,
within one Business Day after such date, an irrevocable notice of redemption
pursuant to the Media Holdings Discount Notes Indenture in order to consummate
the optional redemption described in clause (g) of the definition of Qualifying
IPO Funding Transactions pursuant to the terms of the Media Holdings Discount
Notes Indenture no later than 60 days after the Qualifying IPO Funding Date and
(vii) a certificate of a Financial Officer of the Borrower to the effect that
the conditions set forth in clauses (a) and (b)(i)-(vi) above have been
satisfied.

 

“Qualifying IPO Funding Transactions” means the following payments and
transactions to occur in connection with a Qualifying IPO:

 

(a) on the Qualifying IPO Closing Date or within one Business Day thereafter,
Holdings shall make the Alta Repayment;

 

(b) on the Qualifying IPO Closing Date or within one Business Day thereafter,
Holdings shall contribute all of the IPO Proceeds (other than the amount
required for the Alta Repayment and for the payment of certain Transaction
Costs) to Media Holdings;

 

(c) on the Qualifying IPO Closing Date or within one Business Day thereafter,
Media Holdings shall (i) loan pursuant to the LBI Media Intercompany Note not
less than the amount that Media Holdings will require to redeem the Media
Holdings Discount Notes and pay the premiums and other amount as described in
clause (g) below and (ii) contribute the remaining amount of the contribution
Media Holdings received from Holdings as described in clause (b) above (other
than amount required for the payment of certain Transaction Costs) to the
Borrower;

 

(d) on the Qualifying IPO Closing Date or within one Business Day thereafter,
the Borrower shall apply the proceeds of loan and contribution described in
clause (c) above (other than amount required to pay certain Transaction Costs)
to prepay the Loans in accordance with Section 2.11(b)(vi);

 

(e) no later than 90 days after the Qualifying IPO Closing Date, the Borrower
shall redeem approximately 35% in aggregate principal amount of the outstanding
Senior Subordinated Notes at a redemption price of 110.125% and pay all accrued
and unpaid interest and liquidated damages, if any, thereon;

 

(f) the Borrower shall repay, on or prior to the date of the redemption
described in (g) below, all of the LBI Media Intercompany Note; and

 

(g) no later than 90 days after the Qualifying IPO Closing Date, Media Holdings
shall redeem approximately 40% of the Media Holdings Discount Notes at a
redemption price of 111.000% of the Accreted Value thereof (as defined in the
Media Holdings Discount Notes Indenture) at the redemption date and pay all
accrued and unpaid interest and liquidated damages, if any, thereon.

 

“Quarterly Dates” means the last day of each fiscal quarter of the Credit
Parties, the first of which shall be June 30, 2004.

 

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“Reaffirmation Agreement” means that certain Reaffirmation Agreement between the
Borrower and each of its Subsidiaries.

 

“Real Property Asset” means, at any time of determination, any fee ownership or
leasehold interest then owned by any Credit Party in any real property.

 

“Recorded Leasehold Interest” means a Leasehold Property with respect to which a
Recorded Document (as hereinafter defined) has been recorded in all places
necessary or desirable, in the Administrative Agent’s reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term “Recorded Document” means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to the Administrative Agent.

 

“Refinancing Indebtedness” means any Indebtedness incurred under Section 7.15(a)
that is applied to the extension, renewal, refunding or replacement of other
Indebtedness permitted under such Section 7.15(a) and that (i) the covenants,
events of default and mandatory prepayment requirements (whether by sinking fund
payments, mandatory redemptions or repurchases or otherwise), of such
Indebtedness are not more restrictive in any material respect on the Borrower
and its Subsidiaries than the covenants, events of default and mandatory
prepayment requirements in the Loan Documents, (ii) has a maturity date
occurring no earlier than the Holding Company Debt being extended, renewed,
refunded or replaced and (iii) has a weighted average life to maturity greater
than the Holding Company Debt being extended, renewed, refunded or replaced.

 

“Refunded Swing Loans” has the meaning assigned to such term in Section 2.8.

 

“Register” has the meaning assigned to such term in Section 10.4.

 

“Registered Rights” has the meaning assigned to such term in Section 4.5(b).

 

“Registration Statement” means the Registration Statement on Form S-1, filed on
February 12, 2004 by Holdings with the Securities and Exchange Commission, as
amended from time to time.

 

“Reimbursement Obligation” has the meaning assigned to such term in Section
2.4(e).

 

“Reinvestment Date” has the meaning specified in Section 2.11(b).

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

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“Relocation” means with respect to any television Broadcast Station, (1) any
transaction in which a 700 MHz Holder (or any other Person) offers consideration
(which consideration consists of a different frequency or frequencies and/or
other cash or non-cash consideration) to any Credit Party for the cessation of
broadcasting on any of the existing analogue and/or digital frequencies of such
Broadcast Station in order to accommodate the spectrum needs of such 700 MHz
Holder, including the prevention of interference with such 700 MHz Holder’s
operations, and such Credit Party is not ordered or directly or indirectly
required by the FCC or any other Governmental Authority to enter into such
transaction, or (2) any transaction in which FCC or any other Governmental
Authority orders or otherwise directly or indirectly requires any Credit Party
to cease broadcasting on any of its existing analogue and/or digital frequencies
in order to accommodate the spectrum needs of any 700 MHz Holder, including the
prevention of interference with such 700 MHz Holder’s operations, with or
without any consideration. Without limiting the generality of the foregoing, the
term Relocation shall include any “Relocation” as defined in the Shop At Home
Acquisition Documents as in effect on March 20, 2001. As used herein, “700 MHz
Holder” means a holder of a 700 MHz license or construction permit.

 

“Relocation Profits” has the meaning given such term in the Shop At Home
Acquisition Documents.

 

“Required Lenders” means Lenders having Loans, LC Exposure and unused
Commitments representing in excess of 50% of the sum of the total Loans, LC
Exposure and unused Commitments.

 

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of, or other equity
interests in, any Credit Party now or hereafter outstanding, except a dividend
payable solely in shares of stock or interests of the same class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of, or other equity interests in, any Credit Party now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of, or
other equity interests in, any Credit Party now or hereafter outstanding, (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption purchase, retirement, defeasance (including economic or legal
defeasance), sinking fund or similar payment or liquidated damages with respect
to, any Subordinated Indebtedness, Holding Company Debt or other Indebtedness of
any Holding Company (other than any intercompany loans from any of the Credit
Parties), (v) any payment made to any Affiliates of any Credit Party or prior to
the Qualifying IPO Closing Date, Alta Communications, in respect of management,
consulting or other similar services provided to any Credit Party, and (vi) any
portion of “Incentive Bonus” which may become payable pursuant to the employment
agreement with Eduardo Leon referred to in Section 5.1(h). Notwithstanding the
foregoing, the following shall not be deemed to be Restricted Junior Payments:
(a) any payment to any director, officer or employee of any Credit Party
consisting of salary, other compensation (except to the extent described in
clause (vi) above) or reimbursement of expenses and (b) any payments made in
respect of the transactions permitted pursuant to Section 7.7. The cancellation
or forgiveness of any loan made by any Credit Party with no cash payment by a
Credit Party at the time of such forgiveness or cancellation to any of its
Affiliates shall not be deemed to be a Restricted Junior Payment.

 

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“Revolving Credit Availability Period” means the period from and including the
Effective Time to but excluding the earlier of (a) the Revolving Credit Maturity
Date and (b) the date of termination of the Revolving Credit Commitments.

 

“Revolving Credit Commitment” means, with respect to each Lender, the commitment
of such Lender to make Revolving Credit Loans and to acquire participations in
Letters of Credit hereunder, as such commitment may be (a) reduced from time to
time pursuant to Sections 2.7 and 2.11, (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 10.4 or
(c) adjusted from time to time pursuant to Section 2.1(b). The initial maximum
amount of each Lender’s Revolving Credit Commitment is set forth on Part II of
Schedule 2.1, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Revolving Credit Commitment, as applicable. The aggregate
original amount of the Revolving Credit Commitments is equal to $175,000,000.00.

 

“Revolving Credit Commitment Increase” has the meaning assigned to such term in
Section 2.1(b)(i).

 

“Revolving Credit Commitment Increase Date” has the meaning assigned to such
term in Section 2.1(b)(iii).

 

“Revolving Credit Exposure” means, with respect to any Revolving Credit Lender
at any time, the sum of the outstanding principal amount of such Lender’s
Revolving Credit Loans and its LC Exposure at such time and in the case of the
Swing Loan Lender, the aggregate outstanding principal amount of all Swing Loans
which have not been refunded pursuant to Section 2.8(d).

 

“Revolving Credit Lender” means (a) initially, a Lender that has a Revolving
Credit Commitment set forth opposite its name on Part II of Schedule 2.1 and (b)
thereafter, the Lenders from time to time holding Revolving Credit Loans and
Revolving Credit Commitments, after (i) giving effect to any assignments thereof
permitted by Section 10.4 or (ii) becoming a New Lender in accordance with
Section 2.1(b).

 

“Revolving Credit Loan” means a Loan made pursuant to Section 2.1(a) that
utilizes the Revolving Credit Commitment.

 

“Revolving Credit Maturity Date” means September 30, 2010.

 

“Revolving Credit Maximum Amount” means $225,000,000.00.

 

“Revolving Credit Notes” means the amended and restated promissory notes,
substantially in the form of Exhibit A, issued by the Borrower in favor of the
Revolving Credit Lenders.

 

“S Corporation” means a small business corporation within the meaning of Code
Section 1361 (or any successor provision) for which an election is in effect
under Code Section 1362(a) (or any successor provision).

 

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“Second Confirmation of Subordination Agreements” means the Second Confirmation
of Subordination Agreements dated as of the date hereof among Alta, Holdings and
the Administrative Agent, substantially in the form of Exhibit O annexed hereto.

 

“Security Agreement” means the Amended and Restated Security Agreement dated as
of the Existing Credit Agreement Closing Date between the Administrative Agent
and the Credit Parties, as confirmed and amended by the Omnibus Confirmation
Agreement and thereafter in accordance with Section 6.10, as such agreement may
be amended, supplemented or otherwise modified from time to time.

 

“Senior Debt” means the Total Debt, excluding (i) any Subordinated Indebtedness
and (ii) obligations of Credit Parties to pay any liquidated damages under any
registration rights agreement entered into in connection with Indebtedness to
the extent such liquidated damages remain unpaid after the applicable due date
under such registration rights agreement.

 

“Senior Leverage Ratio” means, as at any date of determination thereof, the
ratio of (a) Senior Debt to (b) EBITDA for the period of four consecutive fiscal
quarters ending on or most recently ended prior to such date.

 

“Senior Subordinated Notes” means the Borrower’s 10 1/8% Senior Subordinated
Notes due 2012, including any Additional Notes and Exchange Notes (as each such
term is defined in the Senior Subordinated Note Indenture), in each case as
issued pursuant to the Senior Subordinated Note Indenture in an aggregate
principal amount not in excess of $200,000,000, as amended, supplemented or
otherwise modified in accordance with the restrictions of Section 7.13.

 

“Senior Subordinated Note Indenture” means the Indenture dated as of July 9,
2002, among the Borrower, the Guarantors and U.S. Bank, N.A., as trustee,
pursuant to which the Senior Subordinated Notes were issued, as amended,
supplemented or otherwise modified in accordance with the restrictions of
Section 7.13.

 

“Shop at Home Acquisition” means the acquisition on March 20, 2001 by Liberman
Television of Houston, Inc. and KZJL License Corp. from the Shop at Home Sellers
of the Broadcast Station KZJL-TV in Houston, Texas.

 

“Shop At Home Acquisition Documents” means the Asset Purchase Agreement, dated
November 10, 2000, among the Borrower, Liberman Television of Houston, Inc. and
KZJL License Corp. and the Shop At Home Sellers, as amended by First Amendment
to Asset Purchase Agreement dated as of December 22, 2000, the Second Amendment
to Asset Purchase Agreement dated as of February 27, 2001 and the Third
Amendment to Asset Purchase Agreement dated as of March 15, 2001 and all related
instruments, agreements and other documents entered into by any Credit Party and
any Shop At Home Seller in connection therewith, in each case, as amended,
supplemented or modified in accordance with the restrictions of Section 7.13.

 

“Shop At Home Sellers” means Shop At Home, Inc., SAH – Houston Corporation,
SAH-Houston License Corp. and SAH License, Inc.

 

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“Special Counsel” means Palmer & Dodge LLP, in its capacity as special counsel
to CSFB, as Administrative Agent and Lead Arranger.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

 

“Stockholder Voting Agreement” means the Voting Agreement by and between Lenard
Liberman and Jose Liberman to be executed in connection with the IPO,
substantially in the form delivered to the Administrative Agent, as such
agreement may be amended, supplemented or otherwise modified from time to time.

 

“Subordinated Indebtedness” means (a) the Senior Subordinated Notes, (b) the
Liberman Subordinated Debt, and (c) any Indebtedness of any Credit Party,
incurred after the Effective Time with the prior written consent of the Required
Lenders, which matures in its entirety later than the Loans and by its terms (or
by the terms of the instrument under which it is outstanding and to which
appropriate reference is made in the instrument evidencing such Subordinated
Indebtedness) is made subordinate and junior in right of payment to the Loans
and to all of the Borrower’s other obligations to the Lenders hereunder by
provisions satisfactory in form and substance to the Required Lenders.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent. References herein to “Subsidiaries” shall, unless
the context requires otherwise, be deemed to be references to Subsidiaries of
the Borrower.

 

“Suspended Losses” means the aggregate amount of losses and deductions of
Holdings which have been taken into account by the shareholders of Holdings and
disallowed under Code section 1366(d) (or successor provisions) in a prior
taxable year.

 

“Swing Loan” has the meaning specified in Section 2.8.

 

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“Swing Loan Commitment” means the commitment of the Swing Loan Lender to make
Swing Loans, as such commitment may be (a) reduced from time to time pursuant to
Sections 2.7 and 2.11 and (b) reduced or increased from time to time pursuant to
assignments by the Swing Loan Lender pursuant to Section 10.4.

 

“Swing Loan Lender” means CSFB, in its capacity as the Swing Loan Lender.

 

“Swing Loan Note” means the promissory note, substantially in the form of
Exhibit B, issued by the Borrower in favor of the Swing Loan Lender to evidence
the Swing Loans.

 

“Swing Loan Request” has the meaning assigned to such term in Section 2.8.

 

“Swing Loan Commitment” means a sublimit of the Revolving Credit Commitment
equal to $5,000,000.

 

“Tax Accountant” means any one of the five largest nationally recognized
independent accounting firms, or any other independent accounting firm jointly
approved by the Administrative Agent and the Borrower.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Termination Agreement” means the Termination Agreement among LBI Holdings I,
Inc., Liberman Broadcasting, Inc., a Delaware corporation, and Alta to be
executed in connection with the IPO, substantially in the form delivered to the
Administrative Agent.

 

“Title Company” means one or more other title insurance companies reasonably
satisfactory to the Administrative Agent with, LandAmerica Title Insurance
Company and Commonwealth Land Title Company being satisfactory to the
Administrative Agent.

 

“Total Debt” means, as of any date of determination thereof, the Indebtedness of
the Credit Parties (determined on a consolidated basis without duplication in
accordance with GAAP) excluding (i) intercompany loans among the Credit Parties,
(ii) Indebtedness under the Holdings Securities Purchase Documents and under the
Media Holdings Discount Notes Indenture and documents related thereto and other
Holding Company Debt incurred in accordance with Section 7.15(a)(iv), in each
case, if and to the extent no Credit Party is obligated with respect to such
Indebtedness, (iii) the Liberman Subordinated Debt, (iv) the Empire Burbank Loan
and (v) so long as the LBI Media Intercompany Note is no longer outstanding on
the date occurring 90 days after the Qualifying IPO Closing Date, the LBI Media
Intercompany Note.

 

“Total Leverage Ratio” means, as of any date of determination thereof, the ratio
of (a) the Total Debt to (b) EBITDA for the period of four consecutive fiscal
quarters ending on or most recently ended prior to such date.

 

“Total Voting Power” means, with respect to any Person, the total number of
votes which holders of securities or other ownership interests having the
ordinary power to vote, in the absence of contingencies but after giving effect
to the exercise and/or conversion of all

 

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outstanding options, warrants, and other securities which by their terms are
convertible into voting securities, are entitled to cast in the election of
directors, general partners or managers of such Person.

 

“Transaction Costs” means, for any period, nonrecurring out-of-pocket costs,
fees and expenses (including attorneys’ fees) which are incurred by Holdings and
its Subsidiaries in connection with (a) the negotiation, preparation and
consummation of the transactions contemplated under this Agreement and the Basic
Documents and the Basic Documents (as defined in the Original Credit Agreement
and/or the Existing Credit Agreement), and (ii) obtaining all regulatory
approvals, consents, filings or other matters required in connection with the
transactions described herein and therein, including, any filing, registration
or recording fees and charges and including costs, fees and expenses incurred
after the Original Closing Date, the Existing Credit Agreement Closing Date or
the Closing Date, as applicable; provided that the amounts described in this
clause (a) with respect to this Agreement, shall not exceed $3,000,000 in the
aggregate for all such amounts incurred since the Original Closing Date, (b)
financing agreements and proposed financing agreements related to this Agreement
and the Basic Documents and the Basic Documents (as defined in the Original
Credit Agreement and/or the Existing Credit Agreement) (including without
limitation all fees and expenses paid to the agents thereunder and their
respective counsel and like amounts paid in respect of the Existing Credit
Agreement and obligations described in clause (a) of the definition of Existing
Debt and refinancing thereof), (c) the negotiation, preparation and consummation
of the transactions contemplated and/or in connection with a Qualifying IPO,
including, without limitation, whether or not a Qualifying IPO occurs, the
nonrecurring out-of-pocket costs, fees and expenses incurred by Holdings and its
Subsidiaries in connection with (i) the negotiation, preparation and/or
consummation of the Holdings Merger, a Qualifying IPO (including the payment of
the underwriting discounts in connection therewith but excluding any periodic
reports required by the Securities Exchange Act of 1934, as amended), and the
Qualifying IPO Funding Transactions (including the fees, costs, expenses and
premiums paid in connection with the Alta Repayment and the partial redemptions
of the Senior Subordinated Notes and the Media Holdings Discount Notes) and (d)
the negotiation and consummation of the transactions under the El Dorado
Acquisitions Documents, the Astor Acquisition Documents, the Guajillo
Acquisition Documents (as defined in the Existing Credit Agreement) and the KMPX
Acquisition Documents and contemplated under the KNOR Acquisition Documents,
including any due diligence, engineering, consulting, environmental, travel and
accommodation, appraisal or other similar costs and expenses; provided that the
amounts described in this clause (d), excluding the costs and expenses related
to any financing agreements and proposed financing agreements and any financing
fees and expenses related thereto, shall not exceed $4,000,000 in the aggregate
for all such amounts incurred since the Existing Credit Agreement Closing Date.
The term “Transaction Costs” shall include the initial and the routine periodic
rating agency fees related to the issuance of the Senior Subordinated Notes, the
Media Holdings Discount Notes and the maintenance of the rating(s) thereon but
excluding any rating agency fees related to subsequent transactions unrelated to
the Senior Subordinated Notes, the Media Holdings Discount Notes and excluding
any rating agency fees payable in connection with an Acquisition.

 

“Transactions” means with respect to each Credit Party and Holding Company, (i)
the execution, delivery and performance by the Borrower or such other Credit
Party of the Loan Documents, and the documents related thereto, the borrowing of
Loans and the use of the

 

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proceeds thereof, the issuance of Letters of Credit hereunder, and (ii) all
transactions contemplated by the foregoing.

 

“Type” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Adjusted Base Rate.

 

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

 

“U.S. Dollars” or “$” refers to lawful money of the United States of America.

 

“Voluntary Relocation” means with respect to any television Broadcast Station,
any Relocation described in clause (1) of the definition of the term Relocation.
Without limiting the generality of the foregoing, the term Voluntary Relocation
shall include any “Voluntary Relocation” as defined in the Shop At Home
Acquisition Documents as in effect on March 20, 2001.

 

“Wholly Owned Subsidiary” means, with respect to any Person at any date, any
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing 100% of the equity
or ordinary voting power (other than directors’ qualifying shares) or, in the
case of a partnership, 100% of the general partnership interests are, as of such
date, directly or indirectly owned, controlled or held by such Person or one or
more Wholly Owned Subsidiaries of such Person or by such Person and one or more
Wholly Owned Subsidiaries of such Person.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

1.2 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Type (e.g., a “Base Rate Loan” or a
“LIBOR Loan”). In similar fashion, Borrowings may be classified and referred to
by Type.

 

1.3 Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and

 

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(e) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights. References
in Articles 6 and 7 in respect of the affirmative and negative covenants to be
performed by the Credit Parties shall be interpreted to mean, with respect to
Article 6, that the Borrower will, and will cause each of the other Credit
Parties to, comply with such covenant, and, with respect to Article 7, that the
Borrower will not, and will not permit any of the other Credit Parties to,
violate such covenant.

 

1.4 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time; provided that, if the Borrower notifies
the Administrative Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), the
Administrative Agent and the Borrower shall negotiate in good faith to amend any
such provision to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided, further,
however, regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

 

ARTICLE 2

 

The Credits

 

2.1 Revolving Credit Commitments.

 

(a) Revolving Credit Loans. Subject to the terms and conditions set forth
herein, each Revolving Credit Lender agrees to make Revolving Credit Loans to
the Borrower from time to time during the Revolving Credit Availability Period
in an aggregate principal amount that will not result in such Lender’s Revolving
Credit Loans exceeding such Lender’s maximum Revolving Credit Commitment;
provided that the total Revolving Credit Exposure (after giving effect to any
requested Revolving Credit Borrowing and any repayment of Swing Loans effected
by any requested Revolving Credit Borrowing) shall not at any time exceed the
total Revolving Credit Commitments. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Credit Loans. The amount of each Lender’s Revolving Credit
Commitment under the Existing Credit Agreement (which were defined as “Lender”,
“Revolving Credit Commitment” and “Revolving Credit Loan”, respectively,
thereunder) immediately prior to the Effective Time are set forth opposite its
name on Part I of Schedule 2.1 annexed hereto and the aggregate amount of the
Revolving Credit Commitments (which was defined as “Revolving Credit
Commitments” thereunder) at such time was $170,000,000. The amount of each
Lender’s Revolving Credit Commitment in effect on the Closing Date are set forth
opposite its name on Part II of Schedule 2.1 and the aggregate amount of the
Revolving Credit Commitments in effect on the Closing Date is $175,000,000. For
the avoidance of doubt, (i) all “Revolving Credit Loans” made under

 

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the Existing Credit Agreement and outstanding immediately prior to the Effective
Time shall continue to be maintained as Revolving Credit Loans under and
governed by this Agreement and (ii) the parties hereto further agree that on the
Closing Date, all unpaid Obligations under the Existing Credit Agreement
(including without limitation all unpaid interest, fees and expenses)
outstanding as of the Closing Date shall be deemed to be owing under and
governed by this Agreement.

 

(b) Revolving Credit Commitment Increases.

 

(i) In the event that the aggregate amount of the Revolving Credit Commitments
as of the Closing Date is less than the Revolving Credit Maximum Amount, the
Borrower shall have the right, at any time and from time to time during the
Revolving Credit Availability Period, by delivering written notice to the
Administrative Agent, to request that the Revolving Credit Commitments be
increased by an amount (an “Revolving Credit Commitment Increase”) up to but not
exceeding the difference between (x) the Revolving Credit Maximum Amount and (y)
the aggregate amount of the Revolving Credit Commitments as of the date of such
request for an Revolving Credit Commitment Increase.

 

(ii) Upon receipt of a written request from the Borrower, the Administrative
Agent and the Lead Arranger shall attempt to arrange and syndicate such
Revolving Credit Commitment Increase, by contacting one or more new lenders (the
“New Lenders”) or one or more existing Lenders to determine whether such New
Lenders desire to enter into Revolving Credit Commitments, and/or whether any
such existing Lender, in its sole discretion, desires to increase the aggregate
amount of its Revolving Credit Commitments. Each such Revolving Credit
Commitment Increase shall be arranged and syndicated by the Administrative Agent
and the Lead Arranger, and any New Lenders shall be selected by the
Administrative Agent and the Lead Arranger in consultation with the Borrower.
The Administrative Agent’s and the Lead Arranger’s agreements to arrange and
syndicate any such Revolving Credit Commitment Increase shall not be deemed to
constitute a commitment, or an offer, to provide, such Revolving Credit
Commitment Increase or a representation, direct or implied, that such
arrangement and syndication will be successful. The Borrower shall pay to the
Administrative Agent and the Lead Arranger such fees and expenses in connection
with arranging and syndicating each such Revolving Credit Commitment Increase,
as may be agreed by the Borrower, the Administrative Agent and the Lead
Arranger, to achieve a successful syndication of such Revolving Credit
Commitment Increase, and no portion of such fees shall be allocable to any
persons other than the Administrative Agent, the Lead Arranger, a Lender
increasing the aggregate amount of its Revolving Credit Commitments or the New
Lenders, unless otherwise agreed by the Administrative Agent and the Lead
Arranger. The Administrative Agent and the Lead Arranger shall have no liability
to the Borrower or the Lenders if the Administrative Agent and the Lead Arranger
are unable to successfully arrange and syndicate any requested Revolving Credit
Commitment Increase. The Borrower may request Revolving Credit Commitment
Increases on any number of occasions, subject to the conditions and provisions
set forth herein. No Lender shall have any obligation to increase its Revolving
Credit Commitment.

 

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(iii) If the Administrative Agent and the Lead Arranger are able to successfully
arrange and syndicate any requested Revolving Credit Commitment Increase, such
Revolving Credit Commitment Increase shall become effective on the date
specified by the Administrative Agent (each such date being referred to a
“Revolving Credit Commitment Increase Date”) provided that (x) no Default shall
exist on the Revolving Credit Commitment Increase Date both before and after
giving effect to such proposed Revolving Credit Commitment Increase; (y) the
Borrower shall have paid all fees and expenses in connection with the
arrangement and syndication of such Revolving Credit Commitment Increase; and
(z) the Borrower shall have delivered or caused to be delivered to the
Administrative Agent any certificates or other documents reasonably requested by
the Administrative Agent in connection with such Revolving Credit Commitment
Increase including amendments to Mortgages and endorsements to title insurance
policies or new title insurance policies (if and to the extent it is determined
that new title policies are necessary to insure the lien of the Mortgages with
respect to the Revolving Credit Commitment Increase). In the event the
Administrative Agent and the Lead Arranger shall be unable to successfully
arrange and syndicate any requested Revolving Credit Commitment Increase within
thirty days of the date of any written request by the Borrower for such
Revolving Credit Commitment Increase, such request by the Borrower shall be
deemed to have expired and the Administrative Agent and the Lead Arranger shall
have no further obligation to continue such arrangement and syndication efforts;
provided that the expiration of such thirty-day period shall not limit the
Borrower’s right to make one or more additional requests for an Revolving Credit
Commitment Increase.

 

(iv) On each Revolving Credit Commitment Increase Date, subject to the
satisfaction of the foregoing terms and conditions, and subject to the
limitations set forth in clause (v) of this Section 2.1(b): (w) each New Lender
shall enter into one or more Lender Joinder Agreements or other documents in
form and substance reasonably satisfactory to the Administrative Agent, and upon
execution of such Lender Joinder Agreements or other documents, such New Lender
shall be deemed to be a “Lender” under this Agreement and the other Loan
Documents; (x) the Revolving Credit Commitments shall be adjusted to take into
account the Revolving Credit Commitments of the New Lenders and the increases,
if any, of the Revolving Credit Commitments of the existing Lenders, and (y)
each existing Lender who is increasing their Revolving Credit Commitments shall
have returned to the Administrative Agent for cancellation its Revolving Credit
Note, and the Borrower shall have executed and delivered to the Administrative
Agent for the benefit of each New Lender and each existing Lender who is
increasing its Revolving Credit Commitments a new Revolving Credit Note, in each
case, in the aggregate principal amount of such Lender’s Revolving Credit
Commitment after giving effect to the Revolving Credit Commitment Increase. Each
of the Lenders hereby authorizes the Administrative Agent to revise Part II of
Schedule 2.1 on each Revolving Credit Commitment Increase Date to reflect such
increase without an amendment to this Agreement.

 

(v) Notwithstanding anything to the contrary set forth in this Section 2.1(b),
in no event shall any Revolving Credit Commitment Increase result in (1) any
increase or decrease in the amount of any Lender’s Revolving Credit Commitment

 

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without such Lender’s prior written consent, or (2) the aggregate amount of the
Revolving Credit Commitments exceeding the Revolving Credit Maximum Amount.

 

2.2 Loans and Borrowings.

 

(a) Each Loan shall be made as part of a Borrowing consisting of Loans made by
the Lenders ratably in accordance with their respective Commitments. The failure
of any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s
failure to make Loans as required.

 

(b) Subject to Section 2.14 and except with respect to Swing Loans, each
Borrowing shall be comprised entirely of Base Rate Loans or LIBOR Loans as the
Borrower may request in accordance herewith. Each Lender at its option may make
any LIBOR Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.

 

(c) At the commencement of each Interest Period for a LIBOR Borrowing, such
Borrowing shall be in an aggregate amount at least equal to $500,000 or any
greater multiple of $100,000. At the time that each Base Rate Borrowing (other
than a Swing Loan) is made, such Borrowing shall be in an aggregate amount that
is at least equal to $100,000 or any greater multiple of $100,000; provided that
(i) a Base Rate Borrowing of Revolving Credit Loans may be in an aggregate
amount that is equal to the entire unused balance of the total Revolving Credit
Commitments, and (ii) a Base Rate Borrowing of Revolving Credit Loans may be in
an amount that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.4(e). Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of ten LIBOR Borrowings outstanding.

 

2.3 Requests for Borrowings.

 

(a) To request a Borrowing (except requests for Swing Loan Borrowings which are
subject to Section 2.8(b)), the Borrower shall notify the Administrative Agent
of such request by telephone (i) in the case of a LIBOR Borrowing, not later
than 1:00 p.m., New York time, three Business Days before the date of the
proposed Borrowing; provided that LIBOR Borrowings shall not be available on the
Closing Date unless otherwise consented to by the Administrative Agent in
writing, or (ii) in the case of a Base Rate Borrowing not later than 1:00 p.m.,
New York time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of a Base Rate Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.4(e) may be
given not later than 1:00 p.m., New York time, on the date of the proposed
Borrowing; provided further that the Borrower shall use Swing Loan Borrowings to
finance the reimbursement of an LC Disbursement except to the extent that such
Borrowings would cause the aggregate principal balance of all Swing Loans
outstanding to exceed the Swing Loan Commitment, in which case the Borrower may
use Base Rate Revolving Credit Borrowings to finance such reimbursement, but
only to the extent of such excess. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed

 

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promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower.

 

(b) Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.2:

 

(i) the aggregate amount of such Borrowing;

 

(ii) the effective date of such Borrowing, which shall be a Business Day;

 

(iii) whether such Borrowing is to be a Base Rate Borrowing or a LIBOR
Borrowing;

 

(iv) in the case of a LIBOR Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”;

 

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.5;

 

(vi) a detailed calculation of the Senior Leverage Ratio and the Total Leverage
Ratio, in each case based on the Senior Debt or the Total Debt (in each case,
after giving effect to such Borrowing), as applicable, and EBITDA of the Credit
Parties for the period of four consecutive fiscal quarters reported in the
Compliance Certificate most recently delivered to the Administrative Agent
demonstrating that the Senior Leverage Ratio (after giving effect to such
Borrowing) shall not exceed the maximum Senior Leverage Ratio permitted under
Section 7.10(b) for the fiscal quarter most recently ended and that the Total
Leverage Ratio (after giving effect to such Borrowing) shall not exceed the
maximum Total Leverage Ratio permitted under Section 7.10(a) for the fiscal
quarter most recently ended; provided that for purposes of calculating such
ratios (x) prior to the delivery of the first Compliance Certificate required to
be delivered hereunder, the Credit Parties shall use EBITDA reported in the last
Compliance Certificate provided under the Existing Credit Agreement and (y) for
Loans being requested in connection with an Acquisition such ratios shall be
calculated giving pro forma effect to the Acquisition as if such Acquisition has
occurred at the beginning of the applicable period and after reflecting certain
expense deductions in connection with such Acquisition reasonably acceptable to
the Administrative Agent; and

 

(vii) at any time when the outstanding Loans exceed $150,000,000 minus the
aggregate amount of all “Net Proceeds” of “Asset Sales” and “Relocations”
applied by the Borrower or any of its “Restricted Subsidiaries” after the
Closing Date to repay any term “Indebtedness” under any “Credit Facility” or to
repay any revolving credit “Indebtedness” under any “Credit Facility” and effect
a corresponding commitment reduction under a “Credit Facility” pursuant to
Section 4.10 of the Senior Subordinated Note Indenture (all of the foregoing
terms in quotation marks are used as defined in the Senior Subordinated Note
Indenture), (A) a certification that the Loans, after giving effect to such
Borrowing Request, are not incurred in violation of the Senior

 

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Subordinated Note Indenture, including a detailed calculation of the Leverage
Ratio (as defined in the Senior Subordinated Note Indenture) demonstrating that
such Leverage Ratio does not exceed 7.0 to 1 after giving effect to the
Borrowing Request and (B) the Borrowing Request therefor must be in writing (and
no telephonic Borrowing Requests shall be permitted).

 

(c) If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Base Rate Borrowing. If no Interest Period is specified
with respect to any requested LIBOR Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Promptly following
receipt of a Borrowing Request in accordance with this Section 2.3, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

2.4 Letters of Credit.

 

(a) General. Subject to the terms and conditions set forth herein, in addition
to the Revolving Credit Loans provided for in Section 2.1(a) and the Swing Loans
provided for in Section 2.8(a), the Borrower may request the issuance of Letters
of Credit for its own account or for the account of any of its Subsidiaries
which is a Guarantor by an Issuing Lender, in a form reasonably acceptable to
such Issuing Lender, at any time and from time to time during the Revolving
Credit Availability Period. In addition to such form, at the time of such
request, the Borrower shall also deliver to the Administrative Agent the
information required to be delivered pursuant to Section 2.3(b)(vi) (assuming,
for the calculation of the Senior Leverage Ratio and the Total Leverage Ratio,
the issuance of the requested Letter of Credit) and, if applicable, Section
2.3(b)(vii). Letters of Credit issued hereunder shall constitute utilization of
the Revolving Credit Commitments. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, an Issuing Lender relating to any Letter
of Credit, the terms and conditions of this Agreement shall control.

 

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or send by telephonic facsimile (fax) (or transmit by electronic communication,
if arrangements for doing so have been approved by such Issuing Lender) to an
Issuing Lender and the Administrative Agent (two Business Days before the date
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section 2.4), the amount of such
Letter of Credit, the name and address of the beneficiary thereof, whether such
Letter of Credit is a documentary or trade Letter of Credit or a standby Letter
of Credit, and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. If requested by such Issuing Lender, the
Borrower also shall submit a letter of credit application on such Issuing
Lender’s standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to

 

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represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the aggregate LC Exposure of the Issuing Lender
(determined for these purposes without giving effect to the participations
therein of the Revolving Credit Lenders pursuant to paragraph (d) of this
Section 2.4) shall not exceed $5,000,000 and (ii) the total Revolving Credit
Exposure shall not exceed the total Revolving Credit Commitments. If the Issuing
Lender is not the Administrative Agent, the Issuing Lender shall notify the
Administrative Agent promptly in writing of the issuance, amendment, renewal or
extension of any Letter of Credit, with a summary of the pertinent terms thereof
and shall provide the Administrative Agent with a copy of such Letter of Credit
and related application and any other documentation related thereto. The
Administrative Agent shall forward to each Lender a copy of each notice
delivered by the Borrower under this Section 2.1(b).

 

(c) Expiration Date. Each Letter of Credit shall expire (without giving effect
to any extension thereof by reason of an interruption of business) at or prior
to the close of business on the earlier of (i) the date 365 days, in the case of
standby Letters of Credit, or 180 days, in the case of documentary or trade
Letters of Credit, after the date of the issuance of such Letter of Credit (or,
in the case of any renewal or extension thereof, 365 days or 180 days, as
applicable, after such renewal or extension) provided that any such Letter of
Credit may provide for automatic extensions thereof to a date not later than 365
days, in the case of standby Letters of Credit, or 180 days, in the case of
documentary or trade Letters of Credit, beyond its current expiration date, and
(ii) the date that is five Business Days prior to the Revolving Credit Maturity
Date. No Letter of Credit may be extended beyond the date that is five Business
Days prior to the Revolving Credit Maturity Date.

 

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) by an Issuing Lender, and
without any further action on the part of such Issuing Lender, such Issuing
Lender hereby grants to each Revolving Credit Lender, and each Revolving Lender
hereby acquires from such Issuing Lender, a participation in such Letter of
Credit equal to such Revolving Credit Lender’s Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of such Issuing Lender, such Revolving Credit Lender’s
Applicable Percentage of each LC Disbursement made by such Issuing Lender and
not reimbursed by the Borrower on the date due as provided in paragraph (e) of
this Section 2.4, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Revolving Credit Lender acknowledges and agrees
that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment to
the Administrative Agent, for the account of such Issuing Lender shall be made
without any offset, abatement, withholding or reduction whatsoever.

 

(e) Reimbursement. If an Issuing Lender shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse (each a
“Reimbursement Obligation”) such Issuing Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., New York time, on (i) the

 

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Business Day that the Borrower receives notice of such LC Disbursement, if such
notice is received prior to 11:00 a.m., New York time; or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time, provided that the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.3 that such payment be financed with a Revolving Credit Base Rate
Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the
resulting Revolving Credit Base Rate Borrowing.

 

If the Borrower fails to make such payment when due, the Administrative Agent
shall notify each Revolving Credit Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Revolving Credit
Lender’s Applicable Percentage thereof. Promptly following receipt of such
notice, each Revolving Credit Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.5 with respect to Revolving Credit Loans made by
such Lender (and Section 2.5 shall apply to the payment obligations of the
Revolving Credit Lenders, treating each such payment as a Loan for this
purpose), and the Administrative Agent shall promptly pay to the applicable
Issuing Lender the amounts so received by it from the Revolving Credit Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the applicable Issuing Lender or, to the extent that the
Revolving Credit Lenders have made payments pursuant to this paragraph to
reimburse such Issuing Lender, then to such Lenders and such Issuing Lender as
their interests may appear. Any payment made by a Revolving Credit Lender
pursuant to this paragraph to reimburse an Issuing Lender for any LC
Disbursement shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such LC Disbursement.

 

(f) Obligations Absolute.

 

(i) The Borrower’s obligation to reimburse LC Disbursements as provided in
paragraph (e) of this Section 2.4 shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(A) any lack of validity or enforceability of any Letter of Credit, or any term
or provision therein, (B) any draft or other document presented under a Letter
of Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (C) payment by the
Issuing Lender under a Letter of Credit against presentation of a draft or other
document that does not comply strictly with the terms of such Letter of Credit
and (D) any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of the Borrower’s obligations
hereunder.

 

(ii) Neither the Administrative Agent, any Lender nor Issuing Lender, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit by the
Issuing Lender or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in clause (f)(i) above),
or any error, omission, interruption, loss

 

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or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Lender;
provided that nothing in this Section 2.4 shall be construed to excuse the
Issuing Lender from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Lender’s gross
negligence or willful misconduct when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof.
Subject in all respects to the foregoing, the parties hereto expressly agree
that:

 

(A) the Issuing Lender may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit without
responsibility for further investigation, regardless of any notice or
information to the contrary, and may make payment upon presentation of documents
that appear on their face to be in substantial compliance with the terms of such
Letter of Credit;

 

(B) the Issuing Lender shall have the right, in its sole discretion, to decline
to accept such documents and to decline to make such payment if such documents
are not in strict compliance with the terms of such Letter of Credit; and

 

(C) this clause (f)(ii) shall establish the standard of care to be exercised by
the Issuing Lender when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof (and the parties hereto
hereby waive, to the extent permitted by applicable law, any standard of care
inconsistent with the foregoing).

 

(g) Disbursement Procedures. The Issuing Lender shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under any Letter of Credit. The Issuing Lender shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Lender has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Lender and the Revolving Credit Lenders with respect to any such LC
Disbursement.

 

(h) Interim Interest. If the Issuing Lender shall make any LC Disbursement in
respect of any Letter of Credit, then, unless the Borrower shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to
Revolving Credit Base Rate Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section 2.4, then interest calculated in accordance with Section 2.13(c) shall
accrue on the unpaid amount thereof. Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Lender, except that interest

 

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accrued on and after the date of payment by any Revolving Credit Lender pursuant
to paragraph (e) of this Section 2.4 to reimburse the Issuing Lender shall be
for the account of such Lender to the extent of such payment.

 

(i) Cash Collateralization. If either (i) an Event of Default shall occur and be
continuing and the Borrower receives notice from the Administrative Agent or the
Required Lenders demanding the deposit of cash collateral pursuant to this
paragraph, or (ii) the Borrower shall be required to provide cover for LC
Exposure pursuant to Section 2.10(a) or 2.11(b), the Borrower shall immediately
deposit with the Issuing Lender an amount in cash equal to, in the case of an
Event of Default, the LC Exposure as of such date plus any accrued and unpaid
interest thereon and, in the case of cover pursuant to Section 2.10(a) or
2.11(b), the amount required under Section 2.10(a) or 2.11(b), as the case may
be; provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default described in clause (g) or (h) of Section 8.1. Such deposit
shall be held by the Administrative Agent as collateral in the first instance
for the LC Exposure under this Agreement and thereafter for the payment of any
other obligations of the Credit Parties hereunder.

 

2.5 Funding of Borrowings.

 

(a) Each Lender shall make each Loan (other than a Swing Loan) to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York time to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans (other than Swing Loans) available to
the Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower designated by the Borrower in the applicable Borrowing
Request; provided that (i) Revolving Credit Base Rate Loans made to finance the
reimbursement of an LC Disbursement under any Letter of Credit as provided in
Section 2.4(e) shall be remitted by the Administrative Agent to the Issuing
Lender and (ii) Revolving Credit Base Rate Loans made to finance the refunding
of Swing Loans as provided in Section 2.8(d)(i) shall be remitted by the
Administrative Agent to the Swing Loan Lender.

 

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing (other than a Swing Loan Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with paragraph
(a) of this Section 2.5 and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender (and if the applicable Lender
fails to pay immediately upon demand, the Borrower) agrees to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at the Federal Funds Effective Rate. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing. Nothing in this Section 2.5 shall be deemed to
relieve any Lender from its obligation

 

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to fulfill its Commitments to the extent required by this Agreement or to
prejudice any rights that the Borrower may have against any Lender as a result
of any default by such Lender hereunder.

 

2.6 Interest Elections.

 

(a) Each Borrowing (other than a Swing Loan Borrowing) initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a LIBOR
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a LIBOR
Borrowing, may elect Interest Periods therefor, all as provided in this Section
2.6; provided however, that notwithstanding any other provision of this Section
2.6, no Swing Loan shall be converted from a Base Rate Borrowing to a LIBOR
Borrowing. The Borrower may elect different options for continuations and
conversions with respect to different portions of the affected Borrowing, in
which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.

 

(b) To make an election pursuant to this Section 2.6, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.3(a) if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request
signed by the Borrower.

 

(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.2:

 

(i) the Borrowing to which such Interest Election Request applies and, if
different options for continuations or conversions are being elected with
respect to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);

 

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

 

(iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a LIBOR
Borrowing; and

 

(iv) if the resulting Borrowing is a LIBOR Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a LIBOR Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration.

 

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(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each affected Lender of the details thereof
and of such Lender’s portion of each resulting Borrowing.

 

(e) If the Borrower fails to deliver a timely Interest Election Request with
respect to a LIBOR Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to a Base Rate Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Borrowing may be converted to or continued as a
LIBOR Borrowing and (ii) unless repaid, each LIBOR Borrowing shall be converted
to a Base Rate Borrowing at the end of the Interest Period applicable thereto.

 

(f) The Borrower shall not be obligated to deliver a Borrowing Request in
connection with any election to convert any Borrowing to a different Type or to
continue any Borrowing or, in the case of a LIBOR Borrowing, any election of an
Interest Period therefor pursuant this Section 2.6.

 

2.7 Termination and Reduction of Commitments.

 

(a) Unless previously terminated in accordance with the terms hereof, the
Revolving Credit Commitments shall terminate at the close of business on the
Revolving Credit Maturity Date.

 

(b) The Borrower may at any time or from time to time reduce the Revolving
Credit Commitments or the Swing Loan Commitment; provided that (i) each
reduction of the Revolving Credit Commitments or the Swing Loan Commitment shall
be in an amount that is at least equal to $500,000 or any greater multiple of
$100,000, and (ii) the Borrower shall not terminate or reduce (A) the Revolving
Credit Commitments if, after giving effect to any concurrent repayment in
accordance with Section 2.10 or prepayment in accordance with Section 2.11 of
the Loans, the total Revolving Credit Exposure would exceed the total Revolving
Credit Commitments or (B) the Swing Loan Commitment if, after giving effect to
any concurrent repayment of the Swing Loans in accordance with Section 2.10 or
prepayment of the Loans in accordance with Section 2.11, the aggregate principal
amount of outstanding Swing Loans would exceed the Swing Loan Commitment, after
giving effect to such termination or reduction.

 

(c) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Revolving Credit Commitments or the Swing Loan
Commitment under paragraph (b) of this Section 2.7 at least three Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section 2.7
shall be irrevocable; provided that a notice of termination of any Commitments
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied.

 

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Any termination or reduction of Revolving Credit Commitments and/or Swing Loan
Commitment shall be permanent. Each reduction of Revolving Credit Commitments
shall be made ratably among the Revolving Credit Lenders in accordance with
their respective Revolving Credit Commitments.

 

2.8 Swing Loan Facility.

 

(a) The Swing Loan. Subject to the terms and conditions hereinafter set forth,
upon notice by the Borrower made to the Swing Loan Lender in accordance with
Section 2.8(b)(i), the Swing Loan Lender hereby agrees to make Swing Loans to
the Borrower from time to time on any Business Day during the period between the
Closing Date and the Business Day immediately prior to the expiration of the
Revolving Credit Availability Period in an aggregate principal amount not to
exceed the Swing Loan Commitment. The Swing Loans shall be payable with interest
accrued thereon on the Business Day immediately prior to the expiration of the
Revolving Credit Availability Period. Amounts borrowed by the Borrower under
this Section 2.8 may be repaid and reborrowed, subject to the conditions hereof.
At the time that each Swing Loan Borrowing is made, such Borrowing shall be in
an aggregate amount that is at least equal to $100,000 or any greater multiple
of $100,000. Notwithstanding any other provisions of this Agreement and in
addition to the Swing Loan Commitment limitation set forth above at no time
shall the sum of (i) the aggregate principal amount of all outstanding Swing
Loans (after giving effect to all amounts requested and the application of the
proceeds thereof) plus (ii) the aggregate principal amount of all outstanding
Revolving Credit Loans (after giving effect to all amounts requested and the
application of the proceeds thereof), plus (iii) the aggregate LC Exposure,
exceed the aggregate amount of the Revolving Credit Commitments of all the
Lenders; provided, however, that subject to the limitations set forth in this
Section 2.8(a) from time to time the ratio of (x) the sum of the aggregate
Revolving Credit Exposure of the Swing Loan Lender (both in its capacity as the
Swing Loan Lender and in its capacity as a Revolving Credit Lender) to (y) the
sum of the aggregate Revolving Credit Exposure of all Lenders (including the
Swing Loan Lender both in its capacity as the Swing Loan Lender and in its
capacity as a Revolving Credit Lender) may exceed its Applicable Percentage.

 

(b) Requests for Swing Loans.

 

(i) When the Borrower desires the Swing Loan Lender to make a Swing Loan, it
shall send to the Administrative Agent and the Swing Loan Lender a written
request (or telephonic notice, if thereafter promptly confirmed in writing) (a
“Swing Loan Request”), which request shall set forth (x) the principal amount of
the proposed Swing Loan, and (y) the proposed date of Borrowing of such Swing
Loan (which date shall be a Business Day). Each such Swing Loan Request must be
received by the Swing Loan Lender not later than 1:00 p.m. (New York time) on
the proposed date of Borrowing of the Swing Loan being requested. Each Swing
Loan Request shall be irrevocable and binding on the Borrower and shall obligate
the Borrower to borrow the Swing Loan from the Swing Loan Lender on the proposed
date of Borrowing.

 

(ii) Upon satisfaction of the applicable conditions set forth in this Agreement,
at or before the close of business on the proposed date of Borrowing, the Swing
Loan Lender shall make the Swing Loan available to the Borrower by crediting

 

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the amount of the Swing Loan to an account designated by the Borrower to the
Swing Loan Lender; provided that Swing Loans made to finance the reimbursement
of an LC Disbursement under any Letter of Credit as provided in Section 2.4(e)
shall be remitted by the Administrative Agent to the Issuing Lender.

 

(iii) Notwithstanding the foregoing, the Swing Loan Lender shall not advance any
Swing Loans after it has received notice from any Lender or any Credit Party
that a Default has occurred and is continuing and stating that no new Swing
Loans are to be made until such Default has been cured or waived in accordance
with the provisions of this Agreement.

 

(c) Interest on Swing Loans. Each Swing Loan shall be a Base Rate Loan and shall
bear interest for the account of the Swing Loan Lender thereof until repaid in
full at the rate per annum equal to the Base Rate plus the Applicable Margin for
Base Rate Loans. The Borrower promises to pay interest on the Swing Loans in
arrears on each Interest Payment Date with respect thereto. All such interest
payable with respect to the Swing Loans shall be payable for the account of the
Swing Loan Lender.

 

(d) Refundings of Swing Loans; Participations in Swing Loans.

 

(i) The Swing Loan Lender, at any time in its sole and absolute discretion, may,
on behalf of the Borrower (which hereby irrevocably directs the Swing Loan
Lender to act on its behalf) request each Revolving Credit Lender, including the
Swing Loan Lender, in its capacity as a Revolving Credit Lender, to make a
Revolving Credit Loan in an amount equal to such Revolving Credit Lender’s
Applicable Percentage of the amount of the Swing Loans (the “Refunded Swing
Loans”) outstanding on the date such notice is given. Upon such request, unless
any of the Events of Default described in Section 8.1 (g) or (h) shall have
occurred (in which event the procedures of Section 2.8(d)(ii) shall apply), each
Revolving Credit Lender shall make the proceeds of its Revolving Credit Loan
available to the Administrative Agent, for the account of the Swing Loan Lender,
at the Administrative Agent’s office prior to 11:00 a.m. New York time in funds
immediately available on the Business Day next succeeding the date such notice
is given. The proceeds of such Revolving Credit Loans shall be immediately
applied to repay the Refunded Swing Loans.

 

(ii) If, prior to the making of a Revolving Credit Loan pursuant to Section
2.8(d)(i), an Event of Default described in Section 8.1 (g) or (h) shall have
occurred, each Revolving Credit Lender will, on the date such Revolving Credit
Loan was to have been made, purchase an undivided participation interest in the
Refunded Swing Loan in an amount equal to its Applicable Percentage of such
Refunded Swing Loan. Each Revolving Credit Lender will immediately transfer to
the Swing Loan Lender, in immediately available funds, the amount of its
participation in such Refunded Swing Loan.

 

(iii) Whenever, at any time after the Swing Loan Lender has received from any
Revolving Credit Lender such Revolving Credit Lender’s participation interest in
a Refunded Swing Loan pursuant to Section 2.8(d)(ii) above, the Swing Loan
Lender

 

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receives any payment on account thereof, the Swing Loan Lender will distribute
to such Revolving Credit Lender its participation interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Revolving Credit Lender’s participation interest was
outstanding and funded); provided, however, that in the event that such payment
received by the Swing Loan Lender is required to be returned, such Revolving
Credit Lender will return to the Swing Loan Lender any portion thereof
previously distributed by the Swing Loan Lender to it as such payment is
required to be returned by the Swing Loan Lender.

 

(iv) If any Revolving Credit Lender does not make available to the Swing Loan
Lender any amounts for the purpose of refunding a Swing Loan pursuant to Section
2.8(d)(i) above or to purchase a participation interest in a Swing Loan pursuant
to Section 2.8(d)(ii) above (any such amounts payable by any Revolving Credit
Lender being referred to herein as “Refunding or Participation Amounts”) on the
applicable due date with respect thereto, then the applicable Revolving Credit
Lender shall pay to the Swing Loan Lender forthwith on demand such Refunding or
Participation Amounts with interest thereon for each day from and including the
date such amount is made available to the Swing Loan Lender but excluding the
date of payment to the Swing Loan Lender, at the Federal Funds Effective Rate.
If such Lender pays such amount to the Swing Loan Lender, then such amount shall
constitute such Revolving Credit Lender’s Loan included in such refunding
Borrowing or the consideration for the purchase of such participation interest,
as the case may be.

 

(v) The failure or refusal of any Revolving Credit Lender to make available to
the Swing Loan Lender at the aforesaid time and place the amount of its
Refunding or Participation Amounts (x) shall not relieve any other Revolving
Credit Lender from its several obligations hereunder to make available to the
Swing Loan Lender the amount of such other Revolving Credit Lender’s Refunding
or Participation Amounts and (y) shall not impose upon such other Revolving
Credit Lender any liability with respect to such failure or refusal or otherwise
increase the Revolving Credit Commitment of such other Revolving Credit Lender.

 

(vi) Each Revolving Credit Lender severally agrees that its obligation to make
available to the Swing Loan Lender its Refunding or Participation Amount as
described above shall (except to the extent expressly set forth in Section
2.8(d)(iv)) be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Credit Lender may have against the Swing Loan
Lender, the Borrower or any other Person for any reason whatsoever, (B) the
occurrence or continuance of any Default, the termination of the Revolving
Credit Commitments or any other condition precedent whatsoever, (C) any adverse
change in the condition (financial or otherwise) of any Credit Party or any
other Person, (D) any breach of any of the Loan Documents by any of the Credit
Parties or any other Lender, or (E) any other circumstance, happening or event,
whether or not similar to any of the foregoing; provided, however, that the
obligation of each Revolving Credit Lender to make available to the Swing Loan
Lender its Refunding or Participation Amount in respect of any Swing Loan is
subject to the condition that the Swing Loan Lender believes in good faith that
all conditions under Section 5.2 were

 

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satisfied at the time such Swing Loan was made; provided further that the Swing
Loan Lender shall have been deemed to have believed in good faith that such
conditions were satisfied unless, prior to the making of such Swing Loan, either
(1) the Swing Loan Lender shall have received notice from any other Lender or
any Credit Party that a Default existed as such time, or (2) the most recent
Compliance Certificate received from the Borrower indicating that a Default has
occurred and is continuing and, in either case, such Default had not been cured
or waived at the time of the making of such Swing Loan.

 

2.9 Mitigation Obligations; Replacement of Lenders.

 

(a) If any Lender or the Issuing Lender requests compensation under Section
2.15, or if the Borrower is required to pay any additional amount to any Lender
or the Issuing Lender or any Governmental Authority for the account of any
Lender or the Issuing Lender pursuant to Section 2.17, then such Lender or the
Issuing Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans or Letters of Credit hereunder, or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the judgment of such Lender or the Issuing Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender or the Issuing Lender to any material unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or the Issuing
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender or the Issuing Lender in connection with any such
designation or assignment.

 

(b) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.4), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, the Issuing Lender), which
consents shall not unreasonably be withheld or delayed, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans (and participations in LC Disbursements), accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.15 or
payments required to be made pursuant to Section 2.17, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

 

(c) If a Lender refuses to consent to an amendment, modification or waiver of
this Agreement that, pursuant to Section 10.2, requires consent of 100% of the
Lenders (any such

 

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Lender, a “Subject Lender”), so long as (i) no Event of Default shall have
occurred and be continuing and the Borrower has obtained a written commitment
from another Lender or an Eligible Assignee to purchase at par (plus accrued
interest, fees and other amounts payable to the Subject Lender hereunder) the
Subject Lender’s Loans and assume the Subject Lender’s Commitments and all other
obligations of the Subject Lender hereunder, (ii) such Lender is not an Issuing
Lender with respect to any Letters of Credit outstanding (unless all such
Letters of Credit are terminated or arrangements satisfactory to such Issuing
Lender (such as a “back-to-back” letter of credit) are made), (iii) Lenders
having Loans, LC Exposure and unused Commitments of at least 66-2/3% of the
total Loans, LC Exposure and unused Commitments of all Lenders have so consented
and (iv) if applicable, the Subject Lender is unwilling to withdraw its refusal
to consent within 2 Business Days after receipt by the Subject Lender and
Administrative Agent of a written request to do so from the Borrower, the
Borrower may require the Subject Lender to assign all of its Loans and
Commitments to such other Lender, Lenders, Eligible Assignee or Eligible
Assignees pursuant to the provisions of Section 10.4, provided that, prior to or
concurrently with such replacement, (1) the Borrower has paid to the Subject
Lender all amounts required to be paid to such Lender under this Agreement
through the effective date of the assignment, (2) the processing fee required to
be paid by Section 10.4(b)(iv) shall have been paid by the Borrower or the
Assignee to Administrative Agent, (3) all of the requirements for such
assignment contained in Section 10.4, including the consent of Administrative
Agent (if required) and the receipt by Administrative Agent of an executed
Assignment and Acceptance Agreement (which each Subject Lender shall be
obligated to provide with respect to its interest in the Loans in connection
with the Borrower’s exercise of its rights under this subsection) and other
supporting documents, have been fulfilled and (4) each assignee shall consent,
at the time of such assignment, to each matter in respect of which such Subject
Lender refused to consent. Notwithstanding the foregoing no Subject Lender shall
be obligated to assign its Loans unless such Subject Lender receives payment of
the purchase price and all other amounts described in clause (i) above as a
condition to such assignment.

 

2.10 Repayment of Loans; Evidence of Debt.

 

(a) The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Revolving Credit Lender the then unpaid principal
amount of such Lender’s Revolving Credit Loans on the Revolving Credit Maturity
Date. In addition, if following any reduction in the Revolving Credit
Commitments or at any other time the aggregate principal amount of the Revolving
Credit Exposure shall exceed the aggregate Revolving Credit Commitments, the
Borrower shall first, to repay the Swing Loans, second, to repay the Revolving
Credit Loans, and third, to provide cover for LC Exposure as specified in
Section 2.4(i), in an aggregate amount equal to such excess. If at any time the
aggregate principal amount of Swing Loans outstanding exceeds the Swing Loan
Commitment, then the Borrower shall forthwith repay Swing Loans then outstanding
in an amount equal to such excess, together with accrued interest.

 

(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

 

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(c) The Administrative Agent (or in the case of the Swing Loans, the Swing Loan
Lender ) shall maintain accounts in which it shall record (i) the amount of each
Loan made hereunder, the Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender’s share thereof.

 

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section 2.10 shall be prima facie evidence of the existence and amounts
of the obligations recorded therein absent manifest error; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

 

(e) Prior to the Closing Date or if any Lender enters into a Commitment after
the Closing Date on the date of such Commitment, the Borrower shall prepare,
execute and deliver to each Revolving Credit Lender, a Revolving Credit Note in
the principal amount of such Lender’s Revolving Credit Commitment. Thereafter,
the Loans of each Lender evidenced by each such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 10.4)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns) unless, in connection with an assignment
of all or any portion of a promissory note and interest thereon, the assignee
informs the Administrative Agent in writing that it does not wish that its Loans
be evidenced by promissory notes. Prior to the Closing Date, the Borrower shall
prepare, execute and deliver to the Swing Loan Lender the Swing Loan Note in the
principal amount of the Swing Loan Commitment.

 

2.11 Prepayment of Loans.

 

(a) Optional Prepayments. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing (including any Swing Loan Borrowing) in
whole or in part, without premium or penalty (other than LIBOR Loan breakage
costs as provided in Section 2.16), subject to prior notice in accordance with
paragraph (d) of this Section 2.11 and provided that each such prepayment shall
be in an amount that is at least equal to $500,000 or any greater multiple of
$100,000 or any lesser amount remaining outstanding. Each prepayment of Loans
shall be applied in accordance with paragraph (c) of this Section 2.11.

 

(b) Mandatory Prepayments. The Borrower shall make prepayments of the Revolving
Credit Loans hereunder (and reduce the Revolving Credit Commitments hereunder to
the extent provided below in clauses (i) and (ii)) as follows:

 

(i) Sale of Assets. Without limiting the obligation of the Borrower to obtain
the consent of the Required Lenders to any Disposition not otherwise permitted
hereunder, the Borrower agrees, on or prior to the occurrence of any Disposition
or series of Dispositions by any Credit Party with aggregate Net Cash Payments
in excess of $3,500,000 in any fiscal year, to deliver to the Administrative
Agent a statement certified by a Financial Officer of the Borrower, in form and
detail reasonably satisfactory to the

 

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Administrative Agent, of the estimated amount of the Net Cash Payments of such
Disposition that will (on the date of such Disposition) be received by any
Credit Party in cash, indicating on such certificate, whether the Borrower
intends to reinvest such Net Cash Payments or will be prepaying the Loans, as
hereinafter provided, and the Borrower will be obligated to either (A) reinvest
such Net Cash Payments within 170 days after receipt into assets used in a
Permitted Line of Business pursuant to one or more Capital Expenditures
permitted hereunder or Acquisitions permitted hereunder; provided that no
reinvestment of Net Cash Payments shall be permitted under this clause (A): (x)
for the acquisition of fee interests in real property (excluding any real
property received or acquired in any Acquisition or Relocation) in excess of
$5,000,000 made in the aggregate after the Closing Date or (y) if and to the
extent that such Net Cash Payments would be required to be used to repay any
Subordinated Indebtedness or Holding Company Debt or purchase or repurchase any
notes issued thereunder or (B) prepay the Loans hereunder (and provide cover for
LC Exposure as specified in Section 2.4(i)), and the Revolving Credit
Commitments hereunder shall be subject to automatic reduction, as follows:

 

(x) within one Business Day after the date of such Disposition, or on the date
(the “Reinvestment Date”) which is 170 days after such date if the Borrower had
indicated on the certificate delivered as hereinabove required that it intended
to reinvest the Net Cash Payments of such Disposition, in an aggregate amount
equal to 100% of such estimated or non-reinvested (as applicable) amount of such
Net Cash Payments, to the extent received (and not reinvested as provided above)
by any Credit Party in cash on the date of such Disposition or, if applicable,
the Reinvestment Date; and

 

(y) thereafter, quarterly, on the date of the delivery by the Borrower to the
Administrative Agent pursuant to Section 6.1 of the financial statements for any
quarterly fiscal period or fiscal year, to the extent any Credit Party shall
receive Net Cash Payments during the quarterly fiscal period ending on the date
of such financial statements in cash under deferred payment arrangements or
Disposition Investments entered into or received in connection with any
Disposition, an amount equal to (A) 100% of the aggregate amount of such Net
Cash Payments minus (B) any transaction expenses associated with Dispositions
and not previously deducted in the determination of Net Cash Payments plus (or
minus, as the case may be) (C) any other adjustment received or paid by any
Credit Party pursuant to the respective agreements giving rise to Dispositions
and not previously taken into account in the determination of the Net Cash
Payments.

 

(ii) Proceeds of Casualty Events. Upon the date 180 days following the receipt
by any Credit Party of the proceeds of insurance, condemnation awards or other
compensation in respect of any Casualty Event affecting any property of any
Credit Party (or upon such earlier date as such Credit Party, as the case may
be, shall have determined not to repair or replace the property affected by such
Casualty Event), to the extent of Net Cash Payments in excess of $250,000 per
occurrence and $500,000 for all

 

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occurrences after the Closing Date (except that such exclusions shall not apply
after the occurrence and during the continuation of an Event of Default) the
Borrower shall prepay the Loans (and provide cover for LC Exposure as specified
in Section 2.4(i)), and, if applicable, the Revolving Credit Commitments shall
be subject to automatic reduction, in an aggregate amount, if any, equal to 100%
of the Net Cash Payments from such Casualty Event not theretofore applied or
committed to be applied to the repair or replacement of such property (it being
understood that if Net Cash Payments committed to be applied are not in fact
applied within 360 days after receipt thereof, then such Net Cash Payments shall
be applied to the prepayment of Loans, cover for LC Exposure and, reduction of
Revolving Credit Commitments as provided in this clause (ii) at the expiration
of such 360-day period), such prepayment and reduction to be effected in each
case in the manner and to the extent specified in paragraph (c) of this Section
2.11.

 

(iii) Asset Sale Proceeds Otherwise Required to Pay Subordinated Debt.
Notwithstanding anything herein to the contrary, (A) in the event any radio or
television station owned by any Credit Party is sold, as permitted by paragraph
(f) of Section 7.4, during the continuance of any Event of Default, all Net Cash
Payments shall be applied in the manner specified in paragraph (c) of this
Section 2.11, and (B) in the event that any of the Credit Parties shall have
consummated (I) any “Asset Sale” (as defined in the Senior Subordinated Note
Indenture), (II) any “Asset Sale” (as defined in the Media Holdings Discount
Notes Indenture), (III) prior to the Alta Repayment Date, any “Sale of the
Company” (as defined in the Holdings Securities Purchase Documents) or (IV) any
asset sale or similar term as defined in the documents governing any Holding
Company Debt incurred in accordance with Section 7.15(a)(iv) that, in any case,
would not be deemed a Disposition requiring a prepayment under this Section
2.11(b), in any such case, the Credit Parties shall nonetheless prepay the Loans
to the extent that the Senior Subordinated Note Indenture, the Media Holdings
Discount Notes Indenture, prior to the Alta Repayment Date, the Holdings
Securities Purchase Documents or the documents governing such other Holding
Company Debt would require any prepayment or redemption of the Senior
Subordinated Notes or any Holding Company Debt or warrants issued by any Holding
Company pursuant to the Media Holdings Discount Notes Indenture, the Holdings
Securities Purchase Documents or the documents governing such other Holding
Company Debt, respectively. Prepayments of Loans (and cover for LC Exposure) and
reductions of Revolving Credit Commitments shall be effected in each case in the
manner and to the extent specified in paragraph (c) of this Section 2.11.

 

(iv) Proceeds of Senior Subordinated Notes. On the date of the incurrence by the
Borrower of any Indebtedness under the proviso to Section 7.1(k), the Borrower
shall deliver to the Administrative Agent a statement certified by a Financial
Officer, in form and detail reasonably satisfactory to the Administrative Agent,
of the estimated amount of the net cash proceeds (net of all legal, underwriting
and other fees, costs and expenses incurred in connection with the incurrence of
such Indebtedness) from such incurrence of such Indebtedness that will (on the
date of such incurrence of Indebtedness) be received by the Borrower and the
Borrower will, prepay the Loans hereunder (and provide cover for LC Exposure as
specified in Section 2.4(i)), with no reduction of the Commitments hereunder, on
the date of such incurrence of Indebtedness,

 

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in an aggregate amount equal to the lesser of (A) 100% of the net cash proceeds
(net of all legal, underwriting and other fees, costs and expenses incurred in
connection with the incurrence of such Indebtedness) from such incurrence of
Indebtedness received by the Borrower and (B) the sum of the aggregate amount of
Loans outstanding plus LC Exposure then in effect, and such prepayment (other
than the amount provided to cover LC Exposure) shall be shared and applied
ratably among the Revolving Credit Lenders in proportion to their respective
Revolving Credit Commitments (with no reduction to the Commitments).

 

(v) Proceeds of Media Holdings Discount Notes. On the date of the incurrence by
Media Holdings of any Indebtedness under the Media Holdings Discount Notes, the
Borrower shall deliver to the Administrative Agent a statement certified by a
financial officer of the Borrower, in form and detail reasonably satisfactory to
the Administrative Agent, of the estimated amount of the net cash proceeds (net
of all legal, underwriting and other fees, costs and expenses incurred in
connection with the incurrence of such Indebtedness) from such incurrence of
such Indebtedness that will (on the date of such incurrence of Indebtedness) be
received by Media Holdings and the Borrower will prepay the Loans hereunder (and
provide cover for LC Exposure as specified in Section 2.4(i)), with no reduction
of the Commitments hereunder, on the date of such incurrence of Indebtedness, in
an aggregate amount equal to the lesser of (A) 100% of the net cash proceeds
(net of all legal, underwriting and other fees, costs and expenses incurred in
connection with the incurrence of such Indebtedness) from such incurrence of
Indebtedness received by Media Holdings or (B) the sum of the aggregate amount
of Loans outstanding plus LC Exposure then in effect, and such prepayment (other
than the amount provided to cover LC Exposure) shall be shared and applied
ratably among the Revolving Credit Lenders in proportion to their respective
Revolving Credit Commitments (with no reduction to the Commitments).

 

(vi) Qualifying IPO Prepayment. On the Qualifying IPO Closing Date or within one
Business Day thereafter, the Borrower will prepay the Loans hereunder (and
provide cover for LC Exposure as specified in Section 2.4(i)), with no reduction
of the Commitments hereunder, in an aggregate amount equal to the lesser of (A)
the amount described in clause (d) of the definition of Qualifying IPO Funding
Transactions or (B) the sum of the aggregate amount of Loans outstanding plus LC
Exposure then in effect, and such prepayment (other than the amount provided to
cover LC Exposure or to prepay the Swing Loans) shall be shared and applied
ratably among the Revolving Credit Lenders in proportion to their respective
Revolving Credit Commitments (with no reduction to the Commitments).

 

(c) Application. The Borrower shall have the right at any time to cause
voluntary prepayments pursuant to subsection (a) of this Section to be applied
to prepay the Loans, and such prepayment shall be applied ratably among the
Lenders in clauses (i) through (iii) below in proportion to their respective
Commitments (with no reduction to the Commitments). Subject to the preceding
sentence and subject to the prepayment made pursuant to the subsections (b)(iv),
(v) and (vi) of this Section being applied in accordance with such subsections
(with no reduction to the Commitments), in the event of any optional prepayment
of

 

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Borrowings pursuant to subsection (a) of this Section, or any mandatory
prepayment of Loans pursuant to subsection (b) of this Section, the proceeds
shall be applied as follows:

 

(i) first, to the extent that a repayment of Swing Loans shall at such time be
required pursuant to the last sentence of Section 2.10(a), to the repayment of
Swing Loans, but only to such extent (with no reduction in the Commitments);

 

(ii) second, to the extent that Revolving Credit Exposure shall at such time
exceed the total Revolving Credit Commitments, such prepayment shall be applied
to the repayment of Revolving Credit Loans to be shared and applied ratably
among the Revolving Credit Lenders in proportion to their respective Revolving
Credit Commitments (with no reduction to the Commitments); and

 

(iii) third, (A) the amount of any optional prepayment shall be applied first,
to the repayment of Swing Loans and, second, to the repayment of Revolving
Credit Loans, and (B) the amount of any mandatory prepayment shall be applied
first, to the repayment of Swing Loans and, second, to the repayment of
Revolving Credit Loans and, third, to provide cover for LC Exposure, and, in the
case of clause (B), to the simultaneous permanent reduction of the Revolving
Credit Commitments, in each case to be shared and applied ratably among the
Revolving Credit Lenders in proportion to their respective Revolving Credit
Commitments.

 

(d) Notification of Prepayments. The Borrower shall notify the Administrative
Agent by telephone (confirmed by telecopy) of any prepayment under Sections
2.11(a) or 2.11(b) not later than 1:00 p.m., New York time, three Business Days
before the date of prepayment, except that prepayments of Base Rate Loans
pursuant to Section 2.11(a) may be made upon one Business Day’s notice. The
Borrower shall notify the Administrative Agent by telephone (confirmed by
telecopy) of any prepayment of Swing Loans under Sections 2.11(a) or 2.11(b) not
later than 1:00 p.m., New York time, on the date of such prepayment, which date
shall be a Business Day. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of Revolving Credit
Commitments as contemplated by Section 2.7(c), then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.7. Promptly following receipt of any such notice relating to a
Borrowing (other than a Swing Loan Borrowing), the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing under paragraph (a) of this Section 2.11 (other than a Swing Loan
Borrowing) shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.2.

 

(e) Prepayments Accompanied by Interest. Prepayments shall be accompanied by
accrued interest to the extent required by Sections 2.8(b) or 2.13.

 

2.12 Fees.

 

(a) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee, which shall accrue at a rate per annum equal to
the percentage

 

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set forth below opposite the Commitment Utilization Percentage with respect to
each day (the “Commitment Fee Rate”) of the daily unused amount of the
respective Revolving Credit Commitment of such Lender (excluding with respect to
the Swing Loan Lender the amount of any Swing Loans) during the period from and
including the date on which the Effective Time shall occur to but excluding the
date on which such Revolving Credit Commitment terminates:

 

Commitment Utilization Percentage

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   Commitment Fee Rate

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Less than 50%

   0.500%

Greater than or equal to 50%

   0.375%

 

provided, however, that if the Applicable Margin for LIBOR Loans on any date
would be 1.500% per annum (or 1.250% per annum after the Qualifying IPO Closing
Date), as determined in accordance with the definition of “Applicable Margin”,
then the Commitment Fee Rate for such day shall be 0.375% notwithstanding the
amount of the Commitment Utilization Percentage; provided further that if the
Commitment Fee Rate is determined by the operation of the immediately preceding
proviso then upon delivery by the Borrower of the Compliance Certificate
concurrently with the delivery of the annual financial statements required by
Section 6.1(a), the Commitment Fee Rate shall be adjusted retroactively, as and
when the Applicable Margin is so adjusted, based on the calculation of the Total
Leverage Ratio pursuant to such certificate and financial statements to the
extent that the Total Leverage Ratio so calculated differs from the Total
Leverage Ratio calculated based on the Compliance Certificate delivered
concurrently with the quarterly financial statements for the fourth fiscal
quarter of the preceding fiscal year required by Section 6.1(b). In the event of
a retroactive adjustment in the determination of the Commitment Fee Rate in
favor of the Borrower, the amount of commitment fee thereby refundable to the
Borrower shall be applied on the date of such retroactive adjustment, to prepay
the commitment fee payable on the Revolving Credit Loans on a pro rata basis,
thus permitting the Borrower to deduct such amount from its next commitment fee
payment. If the retroactive adjustment is in favor of the Lenders, the amount of
commitment fee due to the Lenders shall be paid in full to the Administrative
Agent within five (5) days after written notice of such adjustment is provided
to the Borrower. Notwithstanding the foregoing, the Borrower shall include a
request for any downward adjustment of the Commitment Fee Rate with, or as part
of, the Compliance Certificate concurrently with the delivery by the Borrower of
the annual financial statements required by Section 6.1(a) and, in any event,
the Administrative Agent and the Lenders shall not be required to make any
downward adjustment until a request of the Borrower shall have been received and
unless such request is received within three months after the date of delivery
of such Compliance Certificate. Except as set forth above, the Commitment Fee
Rate shall be calculated on each Quarterly Date for each day occurring during
the fiscal quarter then ending.

 

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(b) Accrued commitment fees shall be payable in arrears on each Quarterly Date
and on the date such Commitments terminate, commencing on the first such date to
occur after the Closing Date. All commitment fees shall be computed on the basis
of a year of 365 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

 

(c) The Borrower agrees to pay with respect to Letters of Credit outstanding
hereunder the following fees:

 

(i) to the Administrative Agent for the account of each Revolving Credit Lender
a participation fee with respect to its participations in Letters of Credit,
which shall accrue at a rate per annum equal to the Applicable Margin then used
in determining interest on Revolving Credit LIBOR Loans on the average daily
amount of such Lender’s LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Closing Date to but excluding the later of the date on which such Lender’s
Revolving Credit Commitment terminates and the date on which there shall no
longer be any Letters of Credit outstanding hereunder, and

 

(ii) to the Issuing Lender (x) a fronting fee for its own account, equal to
0.25% per annum on the face amount of each Letter of Credit, payable in arrears
on each Quarterly Date, and (y) the Issuing Lender’s standard fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder.

 

Accrued participation fees shall be payable in arrears on each Quarterly Date
and on the date the Revolving Credit Commitments terminate, commencing on the
first such date to occur after the date hereof, provided that any such fees
accruing after the date on which the Revolving Credit Commitments terminate
shall be payable on demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

 

(d) The Borrower agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed in writing
between the Borrower and the Administrative Agent.

 

(e) All fees payable hereunder shall be paid on the dates due, in immediately
available funds. Fees paid shall not be refundable under any circumstances,
absent manifest error in the determination thereof.

 

2.13 Interest.

 

(a) The Loans comprising each Base Rate Borrowing shall bear interest at a rate
per annum equal to the Adjusted Base Rate plus the Applicable Margin.

 

(b) The Loans comprising each LIBOR Borrowing shall bear interest at a rate per
annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin.

 

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(c) Notwithstanding the foregoing, (i) all amounts which are not paid when due
shall bear interest until paid in full at the Post-Default Rate and (ii) during
the period when any Event of Default shall have occurred and be continuing,
immediately upon the delivery of written notice from the Administrative Agent to
the Borrower at the request of the Required Lenders the principal of all Loans
hereunder shall bear interest, after as well as before judgment, at the
Post-Default Rate.

 

(d) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan; provided that (i) interest accrued at the
Post-Default Rate shall be payable on demand, (ii) in the event of any repayment
or prepayment of any LIBOR Loan, accrued interest on the principal amount repaid
or prepaid shall be payable on the date of such repayment or prepayment, (iii)
in the event of any conversion of any LIBOR Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion and (iv) all accrued interest on all Loans
shall be payable upon expiration of the Revolving Credit Commitments.

 

(e) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Adjusted Base Rate at times
when the Adjusted Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Adjusted Base Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

(f) Notwithstanding anything to the contrary set forth herein, the aggregate
interest, fees and other amounts required to be paid by the Borrower to the
Lenders or any Lender hereunder are hereby expressly limited so that in no
contingency or event whatsoever whether by reason of acceleration of maturity of
the Indebtedness evidenced hereby or otherwise, shall the amount paid or agreed
to be paid to the Lenders or any Lender for the use or the forbearance of the
Indebtedness evidenced hereby exceed the maximum permissible under applicable
law. If under or from any circumstances whatsoever, fulfillment of any provision
hereof or of any of the other Loan Documents at the time of performance of such
provision shall be due, shall involve transcending the limit of such validity
prescribed by applicable law then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity and if under or from
circumstances whatsoever the Lenders or any Lender should ever receive as
interest any amount which would exceed the highest lawful rate, the amount of
such interest that is excessive shall be applied to the reduction of the
principal balance of the Indebtedness evidenced hereby and not to the payment of
interest. This provision shall control every other provision of this Agreement
and all provisions of every other Loan Document.

 

2.14 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a LIBOR Borrowing:

 

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period; or

 

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(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
affected Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and such Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any such Borrowing to, or
continuation of any such Borrowing as, a LIBOR Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a LIBOR Borrowing, such Borrowing
shall be made as a Base Rate Borrowing.

 

2.15 Increased Costs.

 

(a) If any Change in Law shall:

 

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Lender; or

 

(ii) impose on any Lender or the Issuing Lender or the London interbank market
any other condition affecting this Agreement or LIBOR Loans made by such Lender
or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to such Lender or the Issuing
Lender of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender, as the case may be, for such additional costs incurred or reduction
suffered.

 

(b) If any Lender or the Issuing Lender reasonably determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s or the Issuing Lender’s capital or on the
capital of such Lender’s or the Issuing Lender’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued the Issuing
Lender, to a level below that which such Lender or the Issuing Lender or such
Lender’s or the Issuing Lender’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the Issuing
Lender’s policies and the policies of such Lender’s or the Issuing Lender’s
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender, or such Lender’s or the Issuing Lender’s holding company, for any such
reduction suffered.

 

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(c) A certificate of a Lender or the Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section 2.15 shall be delivered to the Borrower and shall be conclusive so long
as it reflects a reasonable basis for the calculation of the amounts set forth
therein and does not contain any manifest error. The Borrower shall pay such
Lender or the Issuing Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

 

(d) Failure or delay on the part of any Lender or the Issuing Lender to demand
compensation pursuant to this Section 2.15 shall not constitute a waiver of such
Lender’s or the Issuing Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Lender pursuant to this Section 2.15 for any increased costs or reductions
incurred more than six months prior to the date that such Lender or the Issuing
Lender, as the case may be, notifies the Borrower of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s or the Issuing
Lender’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is (i)
retroactive and (ii) occurred within such six-month period, then the six-month
period referred to above may be extended to include the period of retroactive
effect thereof, but in no event any period prior to the Closing Date.

 

2.16 Break Funding Payments.

 

(a) In the event of (i) the payment of any principal of any LIBOR Loan other
than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (ii) the conversion of any LIBOR Loan other than
on the last day of the Interest Period applicable thereto, (iii) the failure to
borrow, convert, continue or prepay any LIBOR Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice is permitted
to be revocable and is revoked in accordance herewith) or (iv) the assignment of
any LIBOR Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.9, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event; provided that if the occurrence of any
event described in clause (iii) above shall occur solely as a result of any
Lender’s failure to make available such Lender’s share of any LIBOR Borrowing,
such Lender shall not be entitled to compensation under this Section 2.16(a)
with respect to such event. Nothing in this Section 2.16 shall be deemed to
relieve any Lender from its obligation to fulfill its Commitments to the extent
required by this Agreement or to prejudice any rights that the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

 

(b) In the case of a LIBOR Loan, the loss to any Lender attributable to any such
event shall be deemed to include an amount determined by such Lender to be equal
to the excess, if any, of

 

(i) the amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or

 

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continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate for such Interest Period (or if such Lender does not accept
deposits, then the Adjusted LIBO Rate for such Interest Period),

 

over

 

(ii) the amount of interest that such Lender would earn on such principal amount
for such period if such Lender were to invest such principal amount for such
period at the interest rate that would be bid by such Lender (or an Affiliate of
such Lender) for U.S. dollar deposits from other banks in the LIBOR market at
the commencement of such period.

 

(c) A certificate of any Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section 2.16 shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

 

2.17 Taxes.

 

(a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.17) the Administrative Agent, any Lender or the Issuing
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

 

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

(c) The Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.17) paid by the Administrative Agent, such Lender or the Issuing
Lender, as the case may be (and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto during the period prior to the
Borrower making the payment demanded under this paragraph (c)), whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuing Lender, shall be conclusive absent manifest error. If
the Administrative Agent, a Lender or the Issuing Lender (as the case may be)
shall become aware that it is entitled to claim a refund from a Governmental
Authority in respect of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower, or with respect to which the Borrower has paid
increased amounts pursuant to this Section 2.17, such

 

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Lender shall notify the Borrower of the availability of such refund claim and
shall exercise reasonable efforts (at no cost to such Lender) to make the
appropriate claim to such Governmental Authority for such a refund. In the event
any such Indemnified Taxes or Other Taxes paid by the Borrower to the
Administrative Agent, a Lender or the Issuing Lender are refunded to such
Administrative Agent, Lender or Issuing Lender, the Lender receiving such refund
shall forthwith pay over such amount to the Administrative Agent and each such
refunded amount shall be (i) applied to prepay interest payable on the Revolving
Credit Loans, or to pay any other obligations of the Credit Parties then due
hereunder, or (ii) in the event all obligations hereunder and under all of the
Loan Documents have been indefeasibly paid in full, refunded to the Borrower.

 

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of any receipt issued by
such Governmental Authority to the Borrower evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

 

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of a jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.

 

2.18 Payments Generally: Pro Rata Treatment; Sharing of Set-Offs.

 

(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
under Sections 2.15, 2.16 or 2.17, or otherwise) prior to 1:00 p.m., New York
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at such of its offices
in New York as shall be notified to the relevant parties from time to time,
except payments to be made directly to the Issuing Lender as expressly provided
herein and except that payments pursuant to Sections 2.15, 2.16 or 2.17 and 10.3
shall be made directly to the Persons entitled thereto. The Administrative Agent
shall distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof, and the
Borrower shall have no liability in the event timely or correct distribution of
such payments is not so made. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in U.S. dollars.

 

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements,

 

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interest and fees then due hereunder under any circumstances, including during,
or as a result of the exercise by the Administrative Agent or the Lenders of
remedies under the Collateral Documents and applicable law, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties and (iii) third, to obligations with respect to Hedging
Agreements entered into by a Lender; in each case, regardless of whether such
funds are the proceeds of Collateral that is security for less than all of the
Loans.

 

(c) If any Revolving Credit Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of set-off or otherwise) on account of the
Revolving Credit Loans made by it (other than pursuant to Sections 2.4, 2.8,
2.15 or 2.17), then, if there is any Reimbursement Obligation outstanding in
respect of which the Issuing Lender has not received payment in full from such
Revolving Credit Lender pursuant to Section 2.4(e) (the amount of such
Reimbursement Obligation being such Revolving Credit Lender’s “LC Deficiency
Amount”) or if there is any Swing Loan outstanding in respect of which, pursuant
to Section 2.8(d)(i) or (ii), the Swing Loan Lender has not received payment in
full from such Revolving Credit Lender pursuant to Section 2.8(d)(i) or (ii)
(the amount of such Swing Loan being such Revolving Credit Lender’s “SL
Deficiency Amount”), such Revolving Credit Lender shall both (a) purchase a
participation in such Reimbursement Obligation in an amount equal to the amount
obtained by multiplying the amount of such payment obtained by such Revolving
Credit Lender (the “Payment Amount”) by a fraction, the numerator of which is
such LC Deficiency Amount and the denominator of which is the sum of such LC
Deficiency Amount plus such SL Deficiency Amount (such sum being the “Aggregate
Deficiency” with respect to such Payment Amount), and (b) purchase a
participation in such Swing Loan in an amount equal to the amount obtained by
multiplying such Payment Amount by a fraction, the numerator of which is such SL
Deficiency and the denominator of which is such Aggregate Deficiency. If, after
giving effect to the foregoing, any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans (or participations in LC Disbursements)
(other than pursuant to Sections 2.4, 2.8, 2.15 or 2.17), resulting in such
Lender receiving payment of a greater proportion of the aggregate principal
amount of its Loans (and participations in LC Disbursements) and accrued
interest thereon than the proportion of such amounts received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans (and LC Disbursements) of the
other Lenders to the extent necessary so that the benefit of such payments shall
be shared by all the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans (and participations
in LC Disbursements); provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans (or participations in LC Disbursements) to any assignee or participant,
other than to any Credit Party or any Subsidiary or Affiliate thereof (as to
which the provisions of this paragraph shall apply). The Borrower consents to
the foregoing and agrees, to the extent it may effectively do so under

 

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applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Lender entitled thereto (the
“Applicable Recipient”) hereunder that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Applicable Recipient the amount due. In such event, if the
Borrower has not in fact made such payment, then each Applicable Recipient
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Applicable Recipient with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate.

 

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.4(d), 2.4(e), 2.5(b), 2.8(d)(i) or (ii) or 2.18(d), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Section until all such unsatisfied obligations are fully paid.

 

(f) Except to the extent otherwise provided herein: (i) each Borrowing of
Revolving Credit Loans from the Lenders under Section 2.1 shall be made from the
Lenders, each payment of commitment fee under Section 2.12 in respect of
Commitments shall be made for the account of the Lenders, and each termination
or reduction of the amount of the Commitments under Section 2.3 shall be applied
to the Commitments of the Lenders, pro rata according to the amounts of their
respective Commitments; (ii) LIBOR Loans having the same Interest Period shall
be allocated pro rata among the Lenders according to the amounts of their
Commitments (in the case of the making of Loans) or their Loans (in the case of
conversions and continuations of Loans); (iii) each payment or prepayment by the
Borrower of principal of Loans shall be made for the account of the Lenders pro
rata in accordance with the respective unpaid principal amounts of the Loans
held by such Lenders, except as otherwise set forth in Section 2.11(c); (iv)
each payment by the Borrower of interest on Loans shall be made for the account
of the Lenders pro rata in accordance with the amounts of interest on such Loans
then due and payable to the Lenders; and (v) each payment by the Borrower of
participation fees in respect of Letters of Credit shall be made for the account
of the Revolving Credit Lenders pro rata in accordance with the amount of
participation fees then due and payable to the Revolving Credit Lenders.

 

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ARTICLE 3

 

Guarantee by Guarantors

 

3.1 The Guarantee. Each Guarantor hereby jointly and severally guarantees to
each Lender, the Issuing Lender and the Administrative Agent and their
respective successors and assigns the prompt payment and performance in full
when due (whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans made by the Lenders to the Borrower, all
LC Disbursements and all other amounts from time to time owing to the Lenders,
the Issuing Lender or the Administrative Agent by the Borrower hereunder or
under any other Loan Document, and all other obligations of the Borrower to any
Lender hereunder or to any Lender or the affiliate of any Lender under any
Hedging Agreement, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the “Guaranteed
Obligations”). Each Guarantor hereby further agrees that if the Borrower shall
fail to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, each Guarantor will promptly pay
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.

 

3.2 Obligations Unconditional. The obligations of each Guarantor under Section
3.1 are absolute and unconditional irrespective of the value, genuineness,
validity, regularity or enforceability of this Agreement, the other Loan
Documents or any other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of or security for
any of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 3.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantors hereunder which shall remain absolute and
unconditional as described above:

 

(i) at any time or from time to time, without notice to such Guarantors, the
time for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;

 

(ii) any of the acts mentioned in any of the provisions hereof or of the other
Loan Documents or any other agreement or instrument referred to herein or
therein shall be done or omitted;

 

(iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or
any of the Guaranteed Obligations shall be modified, supplemented or amended in
any respect, or any right hereunder or under the other Loan Documents or any
other agreement or instrument referred to herein or therein shall be waived or
any

 

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other guarantee of any of the Guaranteed Obligations or any security therefor
shall be released or exchanged in whole or in part or otherwise dealt with; or

 

(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent, the Issuing Lender or any Lender or Lenders as security
for any of the Guaranteed Obligations shall fail to be perfected or any
Collateral is released or otherwise compromised or liquidated for less than fair
value.

 

The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever (except as expressly required hereby) and any
requirement that the Administrative Agent, the Issuing Lender or any Lender
exhaust any right, power or remedy or proceed against the Borrower hereunder or
under the other Loan Documents or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.

 

3.3 Reinstatement. The obligations of each Guarantor under this Article 3 shall
be automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each of the Guarantors agrees that it will
indemnify the Administrative Agent, the Issuing Lender and each Lender on demand
for all reasonable costs and expenses (including reasonable fees and expenses of
counsel) incurred by the Administrative Agent, any Lender or the Issuing Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.

 

3.4 Subrogation. Until such time as the Guaranteed Obligations shall have been
indefeasibly paid in full, each Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including any such right arising under the Federal Bankruptcy Code of 1978, as
amended) or otherwise by reason of any payment by it pursuant to the provisions
of this Article 3.

 

3.5 Remedies. Each Guarantor agrees that, as between such Guarantor and the
Lenders, the obligations of the Borrower hereunder may be declared to be
forthwith due and payable as provided in Section 8.1 or Section 2.4(i), as
applicable (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 8.1 or Section 2.4(i), as applicable) for
purposes of Section 3.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by such Guarantor for purposes
of Section 3.1.

 

3.6 Continuing Guarantee. The guarantee in this Article 3 is a continuing
irrevocable guarantee of payment and performance, and shall apply to all
Guaranteed Obligations prior to the indefeasible payment in full of Borrower’s
obligations hereunder.

 

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3.7 Rights of Contribution. The Guarantors hereby agree, as between themselves,
that if any Guarantor shall become an Excess Funding Guarantor (as defined
below) by reason of the payment by such Guarantor of any Guaranteed Obligations,
each other Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Guarantor’s Pro Rata Share (as defined below and determined, for
this purpose, without reference to the properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of
such Guaranteed Obligations. The payment obligation of a Guarantor to any Excess
Funding Guarantor under this Section 3.7 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Article 3 and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations.

 

For purposes of this Section 3.7, (i) “Excess Funding Guarantor” means, in
respect of any Guaranteed Obligations, a Guarantor that has paid an amount in
excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “Excess
Payment” means, in respect of any Guaranteed Obligations, the amount paid by an
Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed
Obligations and (iii) “Pro Rata Share” means, for any Guarantor, the ratio
(expressed as a percentage) of (x) the amount by which the aggregate present
fair saleable value of all properties of such Guarantor (excluding any shares of
stock of, or ownership interest in, any other Guarantor) exceeds the amount of
all the debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder and any obligations of any other
Guarantor that have been Guaranteed by such Guarantor) to (y) the amount by
which the aggregate fair saleable value of all properties of all of the Credit
Parties exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower and the Guarantors hereunder and under the other
Loan Documents) of all of the Credit Parties, determined (A) with respect to any
Guarantor that is a party hereto at the Effective Time, as of the Effective
Time, and (B) with respect to any other Guarantor, as of the date such Guarantor
becomes a Guarantor hereunder.

 

3.8 General Limitation on Guarantee Obligations. In any action or proceeding
involving any state or non-U.S. corporate law, or any state or Federal or
non-U.S. bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Guarantor under Section
3.1 would otherwise, taking into account the provisions of Section 3.7, be held
or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its liability under
Section 3.1, then, notwithstanding any other provision hereof to the contrary,
the amount of such liability shall, without any further action by such
Guarantor, any Lender, Agent or other Person, be automatically limited and
reduced to the highest amount that is valid and enforceable and not subordinated
to the claims of other creditors as determined in such action or proceeding.

 

3.9 Waivers. As used in this paragraph, any reference to “the principal”
includes the Borrower, and any reference to “the creditor” includes the
Administrative Agent and each of the Lenders. In accordance with Section 2856 of
the California Civil Code (a) each Guarantor waives any and all rights and
defenses available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, 2899 and 3433 of the California Civil Code, including without
limitation any

 

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and all rights or defenses any Guarantor may have by reason of protection
afforded to the principal with respect to any of the Guaranteed Obligations, or
to any other guarantor of any of the Guaranteed Obligations with respect to any
of such guarantor’s obligations under its guaranty, in either case pursuant to
the antideficiency or other laws of the State of California limiting or
discharging the principal’s indebtedness or such guarantor’s obligations,
including without limitation Section 580a, 580b, 580d, or 726 of the California
Code of Civil Procedure; and (b) each Guarantor waives all rights and defenses
arising out of an election of remedies by the creditor, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for a Guaranteed Obligation, has destroyed Guarantor’s rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the Code
of Civil Procedure or otherwise; and even though that election of remedies by
the creditor, such as nonjudicial foreclosure with respect to security for an
obligation of any other guarantor of any of the Guaranteed Obligations, has
destroyed Guarantor’s rights of contribution against such other guarantor. No
other provision of this Guaranty shall be construed as limiting the generality
of any of the covenants and waivers set forth in this paragraph. As provided
below, this Agreement shall be governed by, and shall be construed and enforced
in accordance with, the laws of the State of New York. This paragraph is
included solely out of an abundance of caution, and shall not be construed to
mean that any of the above-referenced provisions of California law are in any
way applicable to the provisions of this Article 3 or to any of the Guaranteed
Obligations.

 

ARTICLE 4

 

Representations and Warranties

 

Each of the Credit Parties and Empire Burbank represents and warrants to the
Lenders, the Issuing Lender and the Administrative Agent, as to itself and each
other Credit Party and Empire Burbank that:

 

4.1 Organization; Powers. Each Credit Party and Empire Burbank has been duly
formed or organized and is validly existing under the laws of formations or its
jurisdiction of organization. Each Credit Party and Empire Burbank has all
requisite organizational power and authority to carry on its business as now
conducted and is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where the failure to
have such power or authority or to be so qualified or in good standing,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect.

 

4.2 Authorization; Enforceability. The Transactions are within the
organizational power and authority of each Credit Party and Empire Burbank to
the extent such Credit Party or Empire Burbank, as applicable, is a party to the
Basic Documents and have been duly authorized by all necessary organizational
action on the part of such Credit Party or Empire Burbank, as applicable, to the
extent such Credit Party or Empire Burbank, as applicable, is a party thereto.
This Agreement, the Collateral Documents and all other Basic Documents have been
duly authorized, executed and delivered by each Credit Party or Empire Burbank,
that is a party thereto and constitute legal, valid and binding obligations of
such Credit Party or Empire Burbank, as applicable, enforceable in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’

 

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rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

4.3 Governmental Approvals; No Conflicts. As of the Closing Date except as set
forth on Schedule 4.3, the Transactions (a) do not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, (b) will not violate any applicable law, policy or
regulation or the organizational documents of any Credit Party or Empire Burbank
that is a party to the Basic Documents or any order of any Governmental
Authority where any violation would have a Material Adverse Effect, (c) will not
violate or result in a default under any material indenture, agreement or other
instrument binding upon any Credit Party or Empire Burbank, or any assets, or
give rise to a right thereunder to require any payment to be made by any Credit
Party or Empire Burbank, where any such violation or default or right to payment
would have a Material Adverse Effect, and (d) except for the Liens created by
the Collateral Documents, will not result in the creation or imposition of any
material Lien on any asset of any Credit Party or Empire Burbank. Except as set
forth therein, all consents, approvals, registrations, filings and other actions
required as set forth in such Schedule 4.3 have been obtained on or before the
Closing Date.

 

4.4 Financial Condition; No Material Adverse Change.

 

(a) The Borrower has heretofore delivered to the Lenders the following financial
statements:

 

(i) the audited consolidated balance sheet, statements of earnings, statements
of stockholders’ equity, statements of cash flows and notes to consolidated
financial statements of Holdings and the applicable Credit Parties as of and for
fiscal years ended December 31, 2001, 2002 and 2003 respectively, accompanied by
an opinion of Ernst & Young, LLP independent public accountants;

 

(ii) the unaudited consolidated balance sheet and income statement to
consolidated financial statements of Holdings and the applicable Credit Parties
as of and for the three-month period ended March 31, 2004, certified by a
Financial Officer of Holdings that such financial statements fairly present in
all material respects (subject, in the case of such balance sheet as at March
31, 2004 and such statements of income and cash flows for the three months then
ended, to normal year-end audit adjustments) the consolidated financial
condition of Holdings and the applicable Credit Parties as at such dates and the
consolidated results of the operations of Holdings and the applicable Credit
Parties for the periods ended on such dates and that all such financial
statements, including the related schedules thereto have been prepared in
accordance with GAAP applied consistently throughout the periods involved; and

 

(iii) projected statements of cash flow for the Credit Parties for fiscal years
2004 through 2008.

 

Such financial statements (except for any portion thereof which represents a
projection or assumption as to future events of the date of such statement,
including any financial projections and pro formas) in the Borrower’s opinion
present fairly, in all material respects, the respective

 

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actual consolidated financial position and results of operations and cash flows
of the respective entities as of such respective dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of such unaudited statements. Such pro forma statements
were prepared by the Credit Parties in good faith and incorporate adjustments
that were reasonable when made. Such projections were prepared by the Credit
Parties in good faith and were based on assumptions that the Credit Parties
believed were reasonable when made.

 

(b) Since March 31, 2004, there has been no change in the business, assets,
operations or condition, financial or otherwise, of the Credit Parties taken as
a whole from that set forth in the March 31, 2004 unaudited consolidated
financial statements referred to in clause (ii) of paragraph (a) above that has
a Material Adverse Effect.

 

(c) None of the Credit Parties has on the date hereof any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments in each case
that are material in relation to the Credit Parties taken as a whole, except as
referred to or reflected or provided for in the balance sheets as at the end of
their respective fiscal years ended in 2002 and 2003 and as at the end of the
fiscal quarter ended on March 31, 2004, referred to above, as provided for in
Schedule 4.4, or as otherwise expressly provided in this Agreement, or as
referred to or reflected or provided for in the financial statements described
in this Section 4.4.

 

4.5 Properties.

 

(a) Each of the Credit Parties has good and marketable title to, or valid,
subsisting and enforceable leasehold interests in, all its Property material to
its business, except where the failure to have such good and marketable title or
leasehold or license interests could not reasonably be expected to have a
Material Adverse Effect.

 

(b) As of the Closing Date, except as disclosed on Schedule 4.5(b), each of the
Credit Parties owns, or is licensed to use, all trademarks, service marks, trade
names, copyrights, patents and other intellectual property material to its
business (including the call letters with respect to each Broadcast Station)
(excluding rights related to software programs and copyrights with respect to
the content of news and other programming broadcast or disseminated as part of
the Permitted Lines of Business) as currently conducted except for those failure
to own or license which would not reasonably be expected to have a Material
Adverse Effect (the “Proprietary Rights”), and, to the Borrower’s knowledge, the
use thereof by the Credit Parties does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect. As of the Closing Date, all such trademark applications and
registrations, trademarks, registered copyrights, patents and patent
applications, together with the domain names, web sites, and web site
registrations which are owned by or licensed to any Credit Party are listed on
Schedule 4.5(b) (collectively “Registered Rights”). As of the Closing Date,
except as set forth on Schedule 4.5, all of the Registered Rights have been duly
registered in, filed in or issued by the PTO, the United States Register of
Copyrights, a domain name registrar or other corresponding offices of other
jurisdictions as identified on such schedule, and have been properly maintained
and renewed in accordance with all applicable provisions of law and

 

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administrative regulations in the United States or in each such other
jurisdiction, as applicable, except where the failure to so register, file,
maintain or renew would not reasonably be expected to result in a Material
Adverse Effect.

 

(c) As of the Closing Date, Schedule 4.5(c) contains a true, accurate and
complete list of (i) all owned Real Property Assets and (ii) all material
leases, subleases or assignments of leases (together with all material
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Property Asset of any Credit Party, regardless of whether
such Credit Party is the landlord or tenant (whether directly or as an assignee
or successor in interest) under such lease, sublease or assignment. As of the
Closing Date, to the Borrower’s knowledge except as specified in clause (ii) of
Schedule 4.5(c), each agreement listed in clause (ii) of the immediately
preceding sentence is in full force and effect and, to the Borrower’s knowledge,
no material default has occurred and is continuing thereunder, and each such
agreement constitutes the legal, valid and binding obligation of each applicable
Credit Party, enforceable against such Credit Party in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles.

 

4.6 Litigation and Environmental Matters.

 

(a) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority which have been filed against or, to the Borrower’s
knowledge, threatened against or affecting the Credit Parties (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents.

 

(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, none of the Credit Parties (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) to the Borrower’s knowledge, has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or any inquiry, allegation, notice or other
communication from any Governmental Authority which is currently outstanding or
pending concerning its compliance with any Environmental Law or (iv) knows of
any basis for any Environmental Liability.

 

(c) Since the date of this Agreement, there has been no change in the status of
(i) the Disclosed Matters (excluding the Disclosed Matters related to potential
Environmental Liabilities) or (ii) to the Borrower’s knowledge, the Disclosed
Matters related to potential Environmental Liabilities, that, in each case,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

 

4.7 Compliance with Laws and Agreements. Except as set forth on Schedule 4.7,
each of the Credit Parties is in compliance with all laws, regulations, policies
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other

 

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instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

4.8 Investment and Holding Company Status. No Credit Party is (a) an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended, (b) a “holding company” as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as amended or
(c) a “bank holding company” as defined in, or subject to regulation under, the
Bank Holding Company Act of 1956, as amended.

 

4.9 Taxes. Except as set forth on Schedule 4.9, each of the Credit Parties has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which such Credit Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP or (b) to
the extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect.

 

4.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect.

 

4.11 Disclosure. As of the Closing Date, the management structure of the Credit
Parties is set forth on Schedule 4.11. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Credit Parties or the Holding Companies to the Administrative Agent or any
Lender, both in connection with the negotiation, preparation or delivery of this
Agreement and the other Basic Documents or included herein or therein or
delivered pursuant hereto or thereto, prepared by the Administrative Agent in
reliance on such information, when taken as a whole do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading in any material respect at the time made or delivered.

 

4.12 Ownership and Capitalization. As of the Closing Date, the capital structure
and ownership of the Credit Parties and the Holding Companies is correctly
described in Schedule 4.12. As of Closing Date after giving effect to the
Transactions occurring on or prior to such date, the authorized, issued and
outstanding capital stock of, and other equity interests in, each of the Credit
Parties and the Holding Companies consists of the stock and interests described
on Schedule 4.12, in each case all of which is duly and validly issued and
outstanding, fully paid and nonassessable. As of Closing Date after giving
effect to the Transactions occurring on or prior to such date, except as set
forth in Schedule 4.12, (x) there are no outstanding Equity Rights with respect
to any Credit Party and (y) there are no outstanding obligations of any Credit
Party to repurchase, redeem, or otherwise acquire any shares of capital stock of
or other interests in any Credit Party nor are there any outstanding obligations
of any Credit Party to make payments to any Person, such as “phantom stock”
payments, where the amount thereof is calculated with reference to the fair
market value or equity value of any Credit Party.

 

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4.13 Subsidiaries.

 

(a) As of the Closing Date after giving effect to the Transactions occurring on
or prior to such date, set forth in Schedule 4.12 is a complete and correct list
of all of the Subsidiaries of the Credit Parties, after giving effect to the
Transactions occurring on or prior to such date, together with, for each such
Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each
Person holding ownership interests in such Subsidiary and (iii) the nature of
the ownership interests held by each such Person and the percentage of ownership
of such Subsidiary represented by such ownership interests. Except as disclosed
in Schedule 4.12, (x) each Credit Party and its respective Subsidiaries owns,
free and clear of Liens (other than Liens created pursuant to the Collateral
Documents), and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Schedule 4.12, (y) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.

 

(b) Except as set forth in Schedule 7.8 and except for the Senior Subordinated
Note Indenture and the documents related thereto, the Media Holdings Discount
Notes Indenture and the documents related thereto, and the Holdings Securities
Purchase Documents, none of the Credit Parties is subject to any indenture,
agreement, instrument or other arrangement containing any provision of the type
described in Section 7.8, other than any such provision the effect of which has
been unconditionally, irrevocably and permanently waived so long as any portion
of the Loans or any Commitment is outstanding.

 

4.14 Material Indebtedness, Liens and Agreements.

 

(a) As of the Closing Date, Schedule 4.14(a) is a complete and correct list of
all Material Indebtedness (other than intercompany loans between or among the
Credit Parties and/or to or from Empire Burbank) to, or guarantee of any
Material Indebtedness by, any Credit Party or Holding Company, and, to the
extent specified therein, the aggregate principal or face amount outstanding or
that may become outstanding with respect thereto is correctly described in
Schedule 4.14(a).

 

(b) As of the Closing Date, Schedule 4.14(b) is a complete and correct list of
each Lien securing Material Indebtedness of any Credit Party and covering any
property of the Credit Parties, and the aggregate Material Indebtedness secured
(or which may be secured) by such Liens in the aggregate and the Property
covered by each such Lien is correctly described in the appropriate part of
Schedule 4.14(b).

 

(c) As of the Closing Date, Schedule 4.14(c) is a complete and correct list of
each Material Property License and material equipment lease to which any Credit
Party is a party with an indication of whether such license or lease requires
the consent of the licensor or lessor for it to be assignable to the
Administrative Agent pursuant to the Collateral Documents and whether such
consent has been obtained.

 

(d) As of the Closing Date, Schedule 4.14(d) is a complete and correct list of
all programming, advertising, management, network affiliation, engineering,
research, service

 

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billing, purchase, “LMA”, co-location and other contracts to which any Credit
Party is a party for which breach, nonperformance, cancellation or failure to
renew would have a Material Adverse Effect.

 

True and complete copies of each agreement listed on the appropriate part of
Schedule 4.14 have been delivered to the Administrative Agent or Special
Counsel, together with all amendments, waivers and other modifications thereto.
As of the Closing Date, all such agreements are valid, subsisting, in full force
and effect, are currently binding and after the Transactions occurring on or
prior to such date will continue to be binding upon each Credit Party that is a
party thereto and, to the Credit Parties’ knowledge, binding upon the other
parties thereto in accordance with their terms, except where the failure to be
so valid, subsisting, in full force and effect or binding would not reasonably
be expected to have a Material Adverse Effect. As of the Closing Date, the
Credit Parties are not in default under any such agreements, except where such
default would not reasonably be expected to have a Material Adverse Effect. As
of the Closing Date, the licenses and other agreements listed on Schedule 4.14
collectively entitle the Credit Parties to use all Proprietary Rights material
to the conduct of the business of the Credit Parties as presently conducted and
as proposed to be conducted after the Transactions occurring on or prior to such
date, except where the failure to be so entitled would not reasonably be
expected to have a Material Adverse Effect.

 

4.15 Permits and Licenses.

 

(a) Each of the Credit Parties has, and is in all material respects in
compliance with respect to, all licenses, permits, approvals and authorizations
of Governmental Authorities necessary to conduct its business as presently
conducted and to own or lease and operate its properties excluding FCC Licenses.

 

(b) As of the Closing Date, Schedule 4.15 is a complete and correct list of each
Material FCC License granted or assigned to any Credit Party, including those
under which the Credit Parties have the right to operate their respective
television and radio broadcast stations covered thereby (“Broadcast Stations”)
(and includes, with respect to each such FCC License, the city of license and
the call letters, frequency and expiration date thereof). As of the Closing
Date, the FCC Licenses listed on Schedule 4.15 with respect to any Broadcast
Station owned or operated by the Credit Parties include all material
authorizations, licenses and permits issued by the FCC (other than auxiliary
services licenses) that are required or necessary for the operation of such
Broadcast Station and conduct of the business of the Credit Parties with respect
to such Broadcast Station, as now conducted or proposed to be conducted. As of
the Closing Date, the FCC Licenses listed on Schedule 4.15 are validly issued
and in full force and effect. As of the Closing Date, the Credit Parties have
fulfilled all of their obligations with respect thereto (including the filing of
all registrations, applications, reports, and other documents as required by the
FCC or other Governmental Authority), and have paid all fees and other amounts
required to be paid by them under all applicable FCC Regulations, in each case,
except where the failure to do so would not result in termination, suspension or
material diminution in scope of a Material FCC License. To the Borrower’s
knowledge, no rights of any Credit Party under any Material FCC License conflict
with the valid rights of any other Person in any material respect. To the
Borrower’s knowledge, no event has occurred that would be reasonably likely to
result in the revocation, termination or material adverse modification of any
Material FCC License or affect

 

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materially adversely any rights of the Credit Parties thereunder, and none of
the Credit Parties has any reason to believe that any Material FCC License will
not be renewed in the ordinary course of business other than FCC Licenses for
analog television stations which may expire upon completion of conversion to
digital television or loss of any license solely as a result from a Relocation.

 

4.16 Federal Reserve Regulations. No Credit Party is engaged principally or as
one of its important activities in the business of extending credit for the
purpose of purchasing or carrying margin stock (as defined in Regulation U of
the Board). The making of the Loans hereunder, the use of the proceeds thereof
or of any Letter of Credit as contemplated hereby and the security arrangements
contemplated by the Loan Documents will not violate or be inconsistent with any
of the provisions of Regulation U, T or X of the Board of Governors of the
Federal Reserve System.

 

4.17 Burdensome Restrictions. No Credit Party is a party to or otherwise bound
by any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter, corporate or partnership restriction which
has a currently operative provision which would have a Material Adverse Effect.

 

4.18 Force Majeure. Since the date of the most recent financial statements
referred to in Section 4.4(a)(ii) to the Closing Date, the business, properties
and other assets of the Credit Parties have not, as the result of any fire or
other casualty, strike, lockout or other labor trouble, embargo, sabotage,
confiscation, contamination, riot, civil disturbance, activity of armed forces
or act of God, suffered a Material Adverse Effect.

 

4.19 Labor and Employment Matters.

 

(a) As of the Closing Date, except as set forth on Schedule 4.19, (A) no
employee of any Credit Party is represented by a labor union, no labor union has
been certified or recognized as a representative of any such employee; (B) there
are no pending or, to the Borrower’s knowledge, threatened representation
campaigns, elections or proceedings; (C) no Credit Party has any knowledge of
any strikes, slowdowns or work stoppages of any kind, or threats thereof; and
(D) no Credit Party has engaged in, admitted committing or been held to have
committed any unfair labor practice, in each case except where such occurrence
would not reasonably be expected to have a Material Adverse Effect.

 

(b) As of the Closing Date, Schedule 4.19 sets forth all material employment
contracts for members of senior management of the Credit Parties under which any
Credit Party thereof has any obligations to provide compensation or remuneration
of any kind (other than obligations to make current wage or salary payments that
are terminable at will without notice).

 

(c) Except as set forth on Schedule 4.19, each Credit Party has at all times
complied in all material respects, and are in material compliance with, all
applicable laws, rules and regulations respecting employment, wages, hours,
compensation, benefits, and payment and withholding of taxes in connection with
employment, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect.

 

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(d) Except as set forth on Schedule 4.19, except as could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
the Credit Parties have at all times since March 31, 2004 complied with, and are
in compliance with, all applicable laws, rules and regulations respecting
occupational health and safety, whether now existing or subsequently amended or
enacted, including the Occupational Safety & Health Act of 1970, 29 U.S.C.
Section 651 et seq. and the state analogies thereto, all as amended or
superseded from time to time, and any common law doctrine relating to worker
health and safety.

 

4.20 Subchapter S Election and QSSS Election. As of the Closing Date, Holdings
has made an S Corporation election in accordance with Code Section 1362 and an
election to treat Media Holdings and the Borrower as a qualified subchapter S
subsidiaries have been made. As of the Closing Date, Holdings has not elected,
pursuant to California Revenue and Taxation Code Section 23801, not to be
treated as an S Corporation for California income tax purposes. As of the
Closing Date, none of Holdings’ individual shareholders are nonresidents of the
State of California.

 

4.21 Senior Indebtedness. The obligations of the Credit Parties hereunder and
under the other Loan Documents constitute “Senior Debt” and “Designated Senior
Debt” under and as defined in the Senior Subordinated Note Indenture. The
provisions of Article 10 of the Senior Subordinated Note Indenture are
enforceable by each Lender and each other holder of any obligations of the
Credit Parties under the Loan Documents in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.

 

4.22 Patriot Act. Each Credit Party is in compliance, in all material respects,
with the (i) the Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (ii) the Uniting And Strengthening America
By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA
Patriot Act of 2001, Title III of Pub. L. 107-56 (signed into law October 26,
2001), the “Patriot Act”).

 

ARTICLE 5

 

Conditions

 

5.1 Effective Time. The obligations of the Lenders to make Revolving Credit
Loans, and of the Issuing Lender to issue Letters of Credit, hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.2):

 

(a) Counterparts of Agreement. The Administrative Agent shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.

 

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(b) Notes. The Administrative Agent shall have received a duly completed and
executed Revolving Credit Note for each Lender, unless waived by the Lender
which would otherwise receive any such note.

 

(c) Organizational Structure. The organizational structure, capitalization and
ownership of the Credit Parties, after giving effect to the Transactions
occurring on or prior to the Closing Date, shall be as set forth on Schedules
4.11 and 4.12. The Administrative Agent shall have had the opportunity to
review, and shall be reasonably satisfied with, the Credit Parties’ state and
federal tax assumptions and the capital, organization and structure of the
Credit Parties, after giving effect to the Transactions occurring on or prior to
the Closing Date.

 

(d) Existence and Good Standing. The Administrative Agent shall have received
such documents and certificates as the Administrative Agent or Special Counsel
may reasonably request relating to the organization, existence and good standing
of Empire Burbank, each Credit Party and Holding Company, the authorization of
the Transactions occurring on the Closing Date and any other legal matters
relating to the Credit Parties or Holding Companies, this Agreement, the other
Loan Documents or the Transactions occurring on the Closing Date, all in form
and substance reasonably satisfactory to the Administrative Agent and Special
Counsel.

 

(e) Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to Section 5.1(f), the Administrative Agent shall
have received evidence satisfactory to it that the Credit Parties shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings that may be necessary
or, in the opinion of the Administrative Agent, desirable in order to create in
favor of the Administrative Agent, for the benefit of the Lenders, a valid and
perfected First Priority security interest in the entire personal and mixed
property Collateral; provided, however, that to the extent that the
Administrative Agent in its reasonable discretion after good faith consultation
with the Borrower shall determine that the costs of obtaining a security
interest in any item of Collateral is excessive in relation to the value of the
security to be afforded thereby, the Administrative Agent may waive such
requirement with respect to such item, so long as the Credit Parties covenant
that such item shall not become subject to any Liens other than Permitted Liens.
Such actions shall include the following:

 

(i) Collateral Documents. Delivery to the Administrative Agent of the Omnibus
Confirmation Agreement, the Second Confirmation to Subordination Agreements,
duly executed by the parties thereto, together with accurate and complete
schedules to all such Collateral Documents;

 

(ii) Lien Searches and UCC Termination Statements. Delivery to the
Administrative Agent of (A) the results of recent searches, by one or more
Persons satisfactory to the Administrative Agent, as set forth in Schedule
5.1(e)(ii) with respect to UCC financing statements and fixture filings and
judgment and tax lien filings which may have been made with respect to any
personal or mixed property of the Credit Parties, together with copies of all
such filings disclosed by such search, and UCC termination statements for filing
in all applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings encumbering the assets of the Credit

 

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Parties (other than any such financing statements or fixture filings in respect
of Liens permitted to remain outstanding pursuant to the terms of this
Agreement);

 

(iii) Control Agreements. Delivery to the Administrative Agent of a Control
Agreement, in form and substance reasonably satisfactory to the Administrative
Agent, for the deposit accounts and securities accounts listed on Schedule
5.1(e)(iii) and maintained by the Credit Parties at Union Bank of California,
N.A other than those accounts noted on such schedule as not being subject to a
Control Agreement.

 

(f) Existing Mortgage Amendments; Etc. The Administrative Agent shall have
received from each Credit Party:

 

(i) Existing Mortgage Amendments. With respect to each Real Property Asset
listed on Schedule 4.5(c) (each an “Existing Mortgaged Property”), a fully
executed and notarized Existing Mortgage Amendment, in proper form for recording
in all appropriate places in all applicable jurisdictions.

 

(ii) Leasehold Interests. In the case of each Existing Mortgaged Property, which
is a Leasehold Property, copies of any new leases or any amendments to all
existing leases between any Credit Party and any landlord or tenant to the
extent such new leases or amendments were executed and delivered after the
applicable Existing Mortgages were executed.

 

(iii) Matters Relating to Flood Hazard Properties. (A) Evidence reasonably
acceptable to the Administrative Agent as to whether any Existing Mortgaged
Property is a Flood Hazard Property and (B) if any Existing Mortgaged Property
is a Flood Hazard Property, evidence that the applicable Credit Party has
obtained flood insurance with respect to each Flood Hazard Property in amounts
approved by the Administrative Agent, or evidence acceptable to the
Administrative Agent that such insurance is not available;

 

(iv) Title Insurance. A CLTA Form 110.5 and a CLTA Form 104.1 endorsement or
unconditional commitment therefor with respect to each of the Existing Title
Policies issued with respect to an Existing Mortgaged Property located in
California, and a Texas Form T-38 and T-3 endorsement or unconditional
commitment therefor and a Nothing Further Certificate with respect to each of
the Existing Title Policies issued with respect to an Existing Mortgaged
Property located in Texas, (such endorsements, each being referred to herein as
an “Existing Title Policy Endorsement”) and (C) evidence satisfactory to the
Administrative Agent that such Credit Party has (I) delivered to the Title
Company all certificates and affidavits required by the Title Company in
connection with the issuance of the Existing Title Policy Endorsement and (II)
paid to the Title Company or to the appropriate Governmental Authorities or
concurrently with the Closing Date shall pay all expenses and premiums of the
Title Company in connection with the issuance of the Existing Title Policy
Endorsement and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Existing Mortgage
Amendment in the appropriate real estate records; and

 

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(v) Copies of Documents Relating to Title Exceptions. Copies of all recorded
documents listed as new exceptions to title or otherwise referred to in the
Existing Title Policy Endorsement, the Nothing Further Certificate (referred to
in clause (iv) above) or CLTA Form 110.5;

 

(g) Evidence of Insurance. The Administrative Agent shall have received a
certificate from the Credit Parties’ insurance broker or other evidence
satisfactory to them that all insurance required to be maintained pursuant to
Section 6.5 is in full force and effect and that the Administrative Agent on
behalf of the Lenders has been named as additional insured, mortgagee and loss
payee thereunder to the extent required under Section 6.5.

 

(h) Management; Employment and Consulting Contracts. The management structure of
the Credit Parties after giving effect to the Transactions shall be as set forth
on Schedule 4.11. To the extent not delivered to the Administrative Agent in
connection with the Existing Credit Agreement, the Administrative Agent shall
have received copies of, and shall be satisfied with the form and substance of
(i) any and all agreements among any of the holders of capital stock of or other
equity interests in the Credit Parties, (ii) any and all material consulting
agreements with any Persons and (iii) any stock option plans, phantom stock
incentive programs and similar arrangements provided by the Credit Parties to
any Person, in each case as such will be in effect from and after the Closing
Date. The employment agreements with Messrs. Eduardo Leon, dated December 1,
1999, Andrew Mars, dated November 15, 1998, Xavier Ortiz, dated September 1,
1999, Winter Horton, dated December 18, 2002, and Brett Zane, dated March 21,
2003 and, subject to Section 6.16, Miguel Banojian that may be entered into
after the Closing Date, as each may have been amended from time to time (and all
such amendments have been delivered to the Administrative Agent) constitute all
material employment agreements with senior executives of the Credit Parties on
the Closing Date.

 

(i) Necessary Governmental Authorizations and Consents; Expiration of Waiting
Periods, Etc. The Credit Parties have obtained all permits, licenses,
authorizations or consents from all Governmental Authorities (including the FCC)
and all consents of other Persons with respect to Material Indebtedness, Liens
and agreements listed on Schedule 4.14 (and so identified thereon), in each case
that are necessary in connection with the Transactions contemplated by the Basic
Documents and occurring on the Closing Date, and the continued operation of the
Broadcast Stations operated and business conducted, and proposed to be
conducted, by the Credit Parties, in substantially the same manner as conducted
by the Credit Parties prior to the Closing Date, and each of the foregoing shall
be in full force and effect, in each case other than those the failure to obtain
or maintain which, either individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. All applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Transactions occurring on the Closing Date (including the
Pre-Merger/Hart-Scott-Rodino Act, as amended). No action, request for stay,
petition for review or rehearing, reconsideration or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable Governmental
Authority to take action to set aside its consent on its own motion shall have
expired.

 

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(j) Financial Statements. The Administrative Agent shall have received from the
Credit Parties the certified financial statements, operating projections and
budgets referred to in Section 4.4 hereof, and the same shall be reasonably
satisfactory to the Administrative Agent and the Lenders and shall not be
inconsistent with the information previously provided to the Administrative
Agent.

 

(k) Solvency Assurances. The Administrative Agent shall have received a
certificate, substantially in the form of Exhibit G, from a Financial Officer of
the Borrower to the effect that, as of the Effective Time and after giving
effect to the initial Loans hereunder (if any) and to the other Transactions
occurring on the Closing Date:

 

(i) the aggregate value of all properties of the Credit Parties at their present
fair saleable value on a going concern basis (i.e., the amount that may be
realized within a reasonable time, considered to be six months to one year,
either through collection or sale at the regular market value, conceiving the
latter as the amount that could be obtained for such properties within such
period by a capable and diligent businessman from an interested buyer who is
willing to purchase under ordinary selling conditions), exceed the amount of all
the debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of the Credit Parties;

 

(ii) the Credit Parties will not, on a consolidated basis, have unreasonably
small capital with which to conduct their business operations as heretofore
conducted; and

 

(iii) the Credit Parties will have, on a consolidated basis, sufficient cash
flow to enable them to pay their debts as they mature.

 

Such certificate shall include a statement to the effect that the financial
projections and underlying assumptions contained in such analysis are, fair and
reasonable in the opinion of such Financial Officer at the time when made.

 

(l) No Material Adverse Effect. Since March 31, 2004, there shall have occurred
no Material Adverse Effect (in the reasonable judgment of the Administrative
Agent) with respect to the Credit Parties taken as a whole.

 

(m) Opinions. The Administrative Agent shall have received favorable written
opinions (addressed to the Administrative Agent and the Lenders and dated the
Closing Date) of (i) O’Melveny & Myers LLP, Piper Rudnick, LLP, and Strasburger
& Price, each special counsel to the Credit Parties, substantially in the forms
of Exhibits K-1, K-2 and K-3, respectively, and (ii) Wiley, Rein & Fielding,
LLP, special FCC counsel to the Credit Parties substantially in the form of
Exhibit L (and each Credit Party hereby requests each such counsel to deliver
such opinions).

 

(n) Fees and Expenses. The Administrative Agent and the Issuing Lender shall
have received all reasonable fees and other amounts due and payable to such
Persons and Special Counsel at or prior to the Effective Time, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.

 

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(o) Other Documents. The Administrative Agent shall have received all material
contracts and such other documents as the Administrative Agent or any Lender or
Special Counsel shall have reasonably requested and the same shall be
satisfactory to each of them and Special Counsel.

 

5.2 Each Extension of Credit. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Lender to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

 

(a) Representations and Warranties. The representations and warranties of each
Credit Party set forth in this Agreement and the other Loan Documents shall be
true and correct on and as of the date of such Borrowing, or (as applicable) the
date of issuance, amendment, renewal or extension of such Letter of Credit, both
before and after giving effect thereto and to the use of the proceeds thereof
(or, if any such representation or warranty is expressly stated to have been
made as of an earlier date, such representation or warranty shall have been true
and correct as of such earlier date, and to the extent any representation or
warranty makes reference to one or more of the Schedules to this Agreement, the
Credit Parties shall make revisions to the Schedules, reasonably acceptable to
the Administrative Agent, to take into account the consummation of any
Acquisitions permitted hereunder and other transactions permitted hereunder).

 

(b) No Defaults. At the time of and immediately after giving effect to such
Borrowing, or (as applicable) the date of issuance, amendment, renewal or
extension of such Letter of Credit, no Default shall have occurred and be
continuing.

 

ARTICLE 6

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of the Credit Parties covenants
and agrees with the Lenders that:

 

6.1 Financial Statements and Other Information. The Borrower will furnish to the
Administrative Agent for distribution to each Lender:

 

(a) as soon as available and in any event no later than the earlier of (x) 90
days after the end of each fiscal year of the Credit Parties and (y) five days
after the date the financial statements for the Borrower and its Subsidiaries
referred to in clause (i) below are required to be filed with the Securities and
Exchange Commission (after giving effect to any extensions):

 

(i) consolidated statements of income and consolidated statements of retained
earnings and cash flows of the Credit Parties for such fiscal year and the
related consolidated balance sheet of the Credit Parties as at the end of such
fiscal year, setting forth in each case in comparative form the corresponding
consolidated figures for the preceding fiscal year, and

 

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(ii) an opinion of independent certified public accountants of recognized
national standing (without a “going concern” or like qualification or exception
and without any qualification or exception as to the scope of such audit)
stating that said consolidated financial statements referred to in the preceding
clause (i) fairly present in all material respects the consolidated financial
condition and results of operations of the Credit Parties as at the end of, and
for, such fiscal year in accordance with GAAP, and a statement of such
accountants that, in connection with their audit, nothing came to their
attention that caused them to believe that the Credit Parties failed to comply
with the terms, covenants, provisions or conditions of Section 7.10, insofar as
they relate to accounting matters,

 

(b) as soon as available and in any event within no later than the earlier of
(x) 45 days after the end of each quarterly fiscal period (including the fourth
fiscal period) of each fiscal year of the Credit Parties and (y) five days after
the date the financial statements for the Borrower and its Subsidiaries referred
to in clause (i) below are required to be filed with the Securities and Exchange
Commission (after giving effect to any extensions):

 

(i) consolidated statements of income of the Credit Parties for such period and
for the period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated balance sheet of the Credit Parties as
at the end of such period, together with a comparison against amounts set forth
in the budget for statements of income for such period, and

 

(ii) a certificate of a Financial Officer of the Credit Parties, which
certificate shall state that said consolidated financial statements referred to
in the preceding clause (i) fairly present, in all material respects, the
consolidated financial condition and results of operations of the Credit Parties
in accordance with generally accepted accounting principles, consistently
applied, as at the end of, and for, such period (subject to normal year-end
audit adjustments and the omission of footnotes);

 

(c) commencing with the financial statements delivered under clause (b) above
for the fiscal quarter ending June 30, 2004, concurrently with any delivery of
financial statements under clauses (a) and (b) above, a Compliance Certificate;

 

(d) promptly upon the mailing thereof to the holders of any Indebtedness or
equity interests in the Credit Parties or any Holding Company generally, copies
of all financial statements, regular reports and other statements so mailed;

 

(e) as soon as available and in any event no later than 60 days after the
commencement of each fiscal year, a budget for the Credit Parties for such
fiscal year;

 

(f) promptly after the same become publicly available, copies of all
registration statements, regular periodic and other reports and statements filed
by any Holding Company or any Credit Party with the Securities and Exchange
Commission or any Governmental Authority succeeding to any or all of the
functions of said Commission or with any national securities exchange or market
quotation system and copies of all press releases by the Holding Company or any
Credit Party including, to the extent not included in the foregoing,

 

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any regular periodic and other reports and statements provided by any Holding
Company or any Credit Party to the holders of the Senior Subordinated Notes or
the holders of the Media Holdings Discount Notes;

 

(g) promptly after receipt thereof, copies of all further material
correspondence from the FCC or material notices from the FCC related to those
certain Equal Opportunity Employment audit letters sent by the FCC on May 28,
2004, with respect to radio stations KBUA(FM), San Fernando, California and
KEYH(AM), Houston, Texas. and

 

(h) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Credit Party, or
compliance with the terms of this Agreement, as the Administrative Agent or the
Required Lenders may reasonably request.

 

6.2 Notices of Material Events. The Credit Parties, promptly upon obtaining
knowledge thereof, will furnish to the Administrative Agent for distribution to
each Lender written notice of the following:

 

(a) the occurrence of any Default;

 

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting any Credit Party
or other Affiliate thereof for which there is a reasonable possibility of a
determination that would have a Material Adverse Effect;

 

(c) a final judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate (regardless of insurance coverage), shall be
rendered by one or more courts, administrative tribunals or other bodies having
jurisdiction against any Credit Party;

 

(d) the occurrence of any ERISA Event related to the Plan of any Credit Party or
knowledge after due inquiry of any ERISA Event related to a Plan of any other
ERISA Affiliate that, alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Credit
Parties in an aggregate amount exceeding $1,000,000;

 

(e) the receipt by any Credit Party from the FCC or any other Governmental
Authority of (i) any order or notice of the FCC or any other Governmental
Authority or any court of competent jurisdiction which designates any Material
FCC License or any other material license, permit or authorization of the Credit
Parties, or any application therefore, for a hearing, or which refuses renewal
or extension of, or revokes, materially modifies, terminates or suspends any
Material FCC License or other material license, permit or authorization now or
hereafter held by any Credit Party, or (ii) any notice of any competing
application filed with respect to any Material FCC License or other material
license, permit or authorization now or hereafter held by any Credit Party, or
any material citation, material notice of violation or material order to show
cause issued by the FCC or any other Governmental Authority with respect to any
Credit Party;

 

(f) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect;

 

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(g) any communication, written or oral, with the Internal Revenue Service or the
California Franchise Tax Board regarding the validity, revocation, and/or
termination of the S Corporation Election or the QSSS Election as well as the
timing thereof;

 

(h) copies of its federal income tax returns (Forms 1120-S), California income
tax returns, and summaries of all financial information used to calculate the
Permitted Shareholder Tax Distributions and Permitted Holdings Tax
Distributions;

 

(i) for any taxable year of Holdings ending prior to the Qualifying IPO Closing
Date, any communications, written or oral, with the Internal Revenue Service or
the California Franchise Tax Board regarding proposed or agreed upon changes in
the Federal Taxable Income or the California Taxable Income which would have a
Material Adverse Effect;

 

(j) for any taxable year of Holdings ending prior to the Qualifying IPO Closing
Date in which the Federal Taxable Income or the California Taxable Income is
negative, with copies of Holdings’ shareholders’ individual federal and
California income tax returns for the taxable year(s) of its shareholder(s)
ending on or after such year; and

 

(k) on the date of the occurrence thereof, notice that (i) any or all of the
obligations under the Senior Subordinated Note Indenture or the Media Holdings
Discount Notes Indenture have been accelerated, or (ii) that trustee or required
holders of the Senior Subordinated Notes or of the Media Holdings Discount Notes
has been given notice that any or all such obligations are to be accelerated.

 

Each notice delivered under this Section 6.2 shall be accompanied by a statement
of a Financial Officer or other executive officer of the Credit Parties setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.

 

6.3 Existence; Conduct of Business. Each of the Credit Parties will do or cause
to be done all things necessary in the exercise of its reasonable business
judgment to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of the business of the Credit Parties taken as a whole; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or any discontinuance or sale of such business permitted under
Section 7.4.

 

6.4 Payment of Obligations. Each of the Credit Parties will pay its obligations,
including Tax liabilities, that, if not paid, could result in a Material Adverse
Effect before the same shall become delinquent or in default, except where (a)
the validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) such Credit Party has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

 

6.5 Maintenance of Properties; Insurance. Each of the Credit Parties will (a)
keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain
insurance, with financially sound and reputable insurance companies, as may be
required by law, and such other insurance in such

 

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amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations, including business interruption, product liability insurance media
perils insurance. Without limiting the generality of the foregoing, the Credit
Parties will maintain or cause to be maintained (or provide evidence reasonably
acceptable to the Administrative Agent that such insurance is not available at a
reasonable cost) replacement value property insurance on the Collateral under
such policies of insurance and (x) with respect to each property located in
California on the Closing Date, such policies of earthquake insurance as are
currently maintained by the Credit Parties and (y) for each property located in
California acquired after the Closing Date such additional policies of
earthquake insurance with similar scope and amounts as the policies maintained
by the Credit Parties on the Closing Date, in each case with such insurance
companies, in such amounts, with such deductibles, and covering such terms and
risks as are at all times satisfactory to the Administrative Agent in its
commercially reasonable judgment. Such policies of insurance with respect to the
Credit Parties shall (x) name the Administrative Agent and the Lenders as
additional insureds thereunder as their interests may appear and (y) in the case
of each business interruption and property insurance policy, contain a loss
payable clause or endorsement, satisfactory in form and substance to the
Administrative Agent that names the Administrative Agent for the benefit of the
Lenders as the loss payee thereunder (except with respect to losses of less than
$1,000,000 per occurrence, which may be paid directly to Borrower provided no
Default is continuing) and provides for at least 30 days’ prior written notice
to the Administrative Agent of any modifications or cancellation of such policy
except that only 10 days’ prior written notice shall be required for
cancellation for non-payment of premium.

 

6.6 Books and Records; Inspection Rights. Each of the Credit Parties will keep
proper books of record and account in which entries are made of all material
dealings and transactions in relation to its business and activities which
fairly record such transactions and activities consistent with past practice.
Each of the Credit Parties will permit any representatives designated by the
Administrative Agent or any Lender upon reasonable notice and at reasonable
times during normal business hours to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with Jose Liberman, Lenard Liberman or the
Borrower’s chief financial officer and Borrower’s independent accountants;
provided the Borrower may choose to be present at or participate in any of such
discussions. The Credit Parties, in consultation with the Administrative Agent,
if requested by the Administrative Agent, will arrange for a meeting to be held
at least once every year with the Lenders and the Administrative Agent hereunder
at which the business and operations of the Credit Parties are discussed.

 

6.7 Fiscal Year. None of the Credit Parties will change its fiscal year or the
method of determining the last day of the first three fiscal quarters in each of
its fiscal years without the prior written consent of the Administrative Agent,
which consent shall not be unreasonably withheld but which may be conditioned on
amendments to Section 7.10.

 

6.8 Compliance with Laws, Maintenance of FCC Licenses. Each of the Credit
Parties will comply with (i) all laws, rules, regulations and orders including
all FCC Regulations, Environmental Laws and all other laws, rules, regulations,
policies and orders of any Governmental Authority, (ii) the terms of all FCC
Licenses, and (iii) all contractual obligations, in each case applicable to it
or its property, except, in each case, where the failure to do so,

 

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individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. Each Credit Party shall file or cause to be filed all
necessary applications for renewal of, and shall preserve in full force and
effect all, Material FCC Licenses; provided, however, that any failure to
preserve any Material FCC License in full force and effect which results either
from (x) the conversion of analog television stations to digital television or
(y) from a Relocation shall not constitute a breach of this Section 6.8. Each
Credit Party shall promptly furnish or caused to be furnished to the
Administrative Agent copies of all material applications, reports and filings
filed by the Credit Parties with the FCC, and promptly upon the Borrower
acquiring knowledge thereof, copies of all material petitions and motions filed
by third parties with the FCC involving the Credit Parties, in each case, with
respect to the Material FCC Licenses or the Broadcast Stations.

 

6.9 Use of Proceeds. The proceeds of the Loans and the Letters of Credit will be
used only for (a) Transaction Costs, (b) Permitted Acquisitions pursuant to
Section 7.4, (c) Capital Expenditures permitted hereunder, (d) closing costs for
the Transactions, (e) the Qualifying IPO Funding Transactions to be paid by the
Borrower, and (f) general corporate and working capital purposes of the Credit
Parties. No part of the proceeds of any Loan or the Letters of Credit will be
used, whether directly or indirectly, to purchase or carry any margin stock or
for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations U, T and X. All net proceeds of primary offering portion
of the IPO will be applied to the Qualifying IPO Funding Transactions and the
payment of Transaction Costs.

 

6.10 Certain Obligations Respecting Guarantors and Collateral Security.

 

(a) Additional Subsidiaries. In the event that any Credit Party shall form or
acquire any new Subsidiary after the date hereof, such Credit Party will cause
such new Subsidiary,

 

(i) within ten Business Days after such formation or acquisition:

 

(A) to execute and deliver to the Administrative Agent the following documents:
(1) a counterpart to this Agreement (and thereby to become a party to this
Agreement, as a “Guarantor” hereunder) and (2) a counterpart to the Pledge
Agreement and a counterpart to the Security Agreement (and thereby to become a
party to each such agreement);

 

(B) to take such action (including delivering such shares of stock and executing
and delivering such UCC financing statements) as shall be necessary to create
and perfect valid and enforceable First Priority Liens on all assets and
property of such Subsidiary, subject only to Permitted Liens, consistent with
the provisions of the applicable Collateral Documents (other than the Mortgages
to be provided under clause (ii) below); and

 

(C) to deliver such proof of corporate action, incumbency of officers and other
documents as is consistent with those delivered by each Credit Party pursuant to
Section 5.1 at the Effective Time or as the Administrative Agent shall have
reasonably requested; and

 

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(ii) within thirty days after such formation or acquisition to execute and
deliver to the Administrative Agent Mortgages and such other instruments,
documents and agreements as may be reasonably required by the Administrative
Agent as shall be necessary to create and perfect valid and enforceable First
Priority Liens, subject only to Permitted Liens;.

 

(b) Ownership of Subsidiaries. Subject to Section 7.4, no Credit Party shall
sell, transfer or otherwise dispose of any shares of stock or other equity
interests in any Subsidiary owned by it, nor issue or permit any Subsidiary, to
issue, any shares of stock of any class or other equity interests whatsoever to
any Person, except that (i) the Borrower may issue stock or equity to any
Holding Company and (ii) any Credit Party may issue stock or equity to another
Credit Party provided such stock or equity is pledged to the Administrative
Agent as set forth below. Subject to Section 7.4, each of the Credit Parties
will cause each of its Subsidiaries to take such action from time to time as
shall be necessary to ensure that the percentage of the equity capital of any
class or character owned by such Credit Party in any Subsidiary on the date
hereof (or, in the case of any newly formed or newly acquired Subsidiary, on the
date of formation or acquisition) is not at any time decreased, other than by
reason of transfers to another Credit Party. In the event that any additional
shares of stock or other equity interests shall be issued by any Credit Party
(other than issuance by the Borrower of its capital stock to any Holding
Company), the respective holder of such shares of stock or other equity
interests shall forthwith deliver to the Administrative Agent pursuant to the
Pledge Agreement the certificates evidencing such shares of stock, accompanied
by undated stock powers executed in blank, and shall take such other action as
the Administrative Agent shall request to perfect the security interest created
therein pursuant to such pledge agreement.

 

6.11 ERISA. Except where a failure to comply with any of the following,
individually or in the aggregate, would not or could not reasonably be expected
to result in a Material Adverse Effect, (i) to the extent applicable, the Credit
Parties will maintain, and cause each ERISA Affiliate to maintain, each Plan of
any Credit Party or any ERISA Affiliate in compliance with all applicable
requirements of ERISA and of the Code and with all applicable rulings and
regulations issued under the provisions of ERISA and of the Code and (ii) the
Credit Parties will not and, to the extent they have the authority to do so,
will not permit any of the ERISA Affiliates to (a) engage in any transaction
with respect to any Plan which would subject any Credit Party to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code, (b) fail to make full payment when due of all amounts which,
under the provisions of any Plan, any of the Credit Parties or any ERISA
Affiliate is required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency (as such term is defined in Section 302 of ERISA
and Section 412 of the Code), whether or not waived, with respect to any Pension
Plan or (c) fail to make any payments to any Multiemployer Plan that any of the
Credit Parties or any of the ERISA Affiliates may be required to make under any
agreement relating to such Multiemployer Plan or any law pertaining thereto.

 

6.12 Environmental Matters; Reporting. The Credit Parties will observe and
comply with, and cause each Affiliate to observe and comply with all laws,
rules, regulations and orders of any government or government agency relating to
health, safety, pollution, hazardous materials or other environmental matters to
the extent non-compliance could have a Material Adverse Effect. The Credit
Parties will give the Administrative Agent prompt written notice of

 

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any violation as to any environmental matter by any Credit Party or Affiliate
and of the commencement of any judicial or administrative proceeding relating to
health, safety or environmental matters (a) in which an adverse result would
have a material adverse effect on any operating permits, air emission permits,
water discharge permits, hazardous waste permits or other permits held by any
Credit Party or Affiliate which are material to the operations of such Credit
Party or Affiliate, or (b) which will, or is likely to, have a Material Adverse
Effect on such Credit Party or Affiliate to any Person or which will require a
material expenditure by such Credit Party or Affiliate to cure any alleged
problem or violation.

 

6.13 Conforming Leasehold Interests; Matters Relating to Real Property
Collateral.

 

(a) If (i) any Credit Party acquires or (ii) at the time any Person becomes a
Subsidiary (other than a Subsidiary that is not required to become a Guarantor),
such Person holds, any Material Leasehold Property, the Credit Party or such
Person shall cause such Material Leasehold Property to be a Conforming Leasehold
Interest but excluding any Material Leasehold Property where, in the
Administrative Agent’s reasonable discretion, the costs of causing such property
to become a Conforming Leasehold Interest is excessive in relation to the value
of the benefit to be afforded to the Lenders thereby or where such property is
not material to the business and operations of such Credit Party or such Person.

 

(b) From and after the Effective Time, in the event that (i) any Credit Party
acquires any fee interest in real property or any Material Leasehold Property or
(ii) at the time any Person becomes a Subsidiary (other than a Subsidiary that
is not required to become a Guarantor), such Person owns or holds any fee
interest in real property or any Material Leasehold Property, in either case
excluding any such Real Property Asset (x) where, in the Administrative Agent’s
reasonable discretion, the costs of obtaining a security interest in such Real
Property Asset is excessive in relation to the value of the benefit to be
afforded to the Lenders thereby or where such property is not material to the
business and operations of such Credit Party or such Person or (y) the
encumbering of which requires the consent of any applicable lessor or (in the
case of clause (ii) above) any then-existing senior lienholder, where the Credit
Parties are unable to obtain such lessor’s or senior lienholder’s consent (any
such non-excluded Real Property Asset described in the foregoing clause (i) or
(ii) being a “Additional Mortgaged Property”), such Credit Party shall deliver
to the Administrative Agent, as soon as practicable after such Person acquires
such Additional Mortgaged Property or after such Person is acquired the
following:

 

(i) Additional Mortgages. A fully executed and notarized Mortgage (an
“Additional Mortgage”), in proper form for recording in all appropriate places
in all applicable jurisdictions, encumbering the interest of such Credit Party
in such Additional Mortgaged Property, and the Administrative Agent shall have
the right in its sole discretion, but only after consulting with the Borrower,
to record such Additional Mortgage;

 

(ii) Leasehold Interests. In the case of any Additional Mortgaged Property
consisting of a Leasehold Property, copies of all leases between any Credit
Party and any landlord or tenant;

 

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(iii) Landlord Waivers and Consents. In the case of any Additional Mortgaged
Property consisting of a Leasehold Property, (a) a Landlord Waiver and Consent
with respect thereto and where required by the terms of any lease, the consent
of the mortgagee, ground lessor or other party and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;

 

(iv) Matters Relating to Flood Hazard Properties. (A) Evidence as to whether any
Additional Mortgaged Property is a Flood Hazard Property and (B) if such
Additional Mortgaged Property is a Flood Hazard Property, evidence that the
applicable Credit Party has obtained flood insurance with respect to each Flood
Hazard Property in amounts reasonably approved by the Administrative Agent, or
evidence acceptable to the Administrative Agent that such insurance is not
available;

 

(v) Title Insurance. (A) If required by the Administrative Agent, ALTA mortgagee
title insurance policies or unconditional commitments therefor (the “Additional
Mortgage Policies”) issued by the Title Company with respect to the Additional
Mortgaged Property, in an amount reasonably satisfactory to the Administrative
Agent, insuring fee simple title to, or a valid leasehold interest in, each such
Additional Mortgaged Property vested in such Credit Party and assuring the
Administrative Agent that such Additional Mortgage creates a valid and
enforceable First Priority mortgage Lien on such Additional Mortgaged Property,
subject only to any standard exceptions as may be reasonably acceptable to the
Administrative Agent, which Additional Mortgage Policy (I) shall include all
endorsements for matters reasonably requested by the Administrative Agent and
(II) shall provide for affirmative insurance and such reinsurance as the
Administrative Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent; and (B) evidence
reasonably satisfactory to the Administrative Agent that such Credit Party has
(I) delivered to the Title Company all certificates and affidavits required by
the Title Company in connection with the issuance of the Additional Mortgage
Policy and (II) paid to the Title Company or to the appropriate Governmental
Authorities all expenses and premiums of the Title Company in connection with
the issuance of the Additional Mortgage Policy and all recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection with
recording the Additional Mortgage in the appropriate real estate records;

 

(vi) Copies of Documents Relating to Title Exceptions. Copies of all recorded
documents listed as exceptions to title or otherwise referred to in the
Additional Mortgage Policy;

 

(vii) Environmental Audit. If reasonably required by the Administrative Agent,
reports and other information in form, scope and substance reasonably
satisfactory to the Administrative Agent and prepared by environmental
consultants satisfactory to the Administrative Agent, concerning any
environmental hazards or liabilities to which any Credit Party may be subject
with respect to such Additional Mortgaged Property; and

 

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(viii) Opinions of Counsel. (1) A favorable opinion of counsel (which counsel
shall be reasonably satisfactory to the Administrative Agent and Special
Counsel), as to the due authorization, execution and delivery by such Credit
Party of such Additional Mortgage and such other matters as the Administrative
Agent may reasonably request, and (2) if required by the Administrative Agent,
an opinion of counsel (which counsel shall be reasonably satisfactory to the
Administrative Agent and Special Counsel) in the state in which such Additional
Mortgaged Property is located with respect to the enforceability of the form of
Additional Mortgages to be recorded in such state and such other matters
(including any matters governed by the laws of such state regarding personal
property security interests in respect of any Collateral) as the Administrative
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to the Administrative Agent.

 

(c) If (i) any Credit Party acquires or (ii) at the time any Person becomes a
Subsidiary (other than a Subsidiary that is not required to become a Guarantor),
such Person holds, any Material Property License, the Credit Party or such
Person shall cause to be delivered to the Administrative Agent, a Licensor
Consent with respect thereto excluding any Material Property License where, in
the Administrative Agent’s reasonable discretion, the costs of obtaining such
consent is excessive in relation to the value of the benefit to be afforded to
the Lenders thereby.

 

(d) Notwithstanding the foregoing, the Credit Parties and Empire Burbank shall
not be obligated to comply with this Section 6.13 with regard to the Burbank
Office Property so long as the Empire Burbank Loan shall be outstanding, and the
Empire Burbank Mortgage shall continue to encumber such property. So long as the
Empire Burbank Loan shall be outstanding, Empire Burbank shall not be required
to grant to the Administrative Agent a security interest in any of its assets.

 

6.14 Hedging Agreements. The Borrower shall maintain, at all times when the
Total Leverage Ratio as at the end of the preceding fiscal quarter for which
financial statements and a Compliance Certificate shall have been delivered
pursuant to Section 6.1(c) is greater than or equal to 4.00 to 1, a Hedging
Agreement, reasonably satisfactory to the Administrative Agent, that shall cap
for the period from the Existing Credit Agreement Closing Date to the second
anniversary thereof the rate of interest payable by the Borrower with respect to
its outstanding Indebtedness for borrowed money with respect to the principal
amount of such Indebtedness equal to the excess of (a) 50% of the aggregate
outstanding principal amount of Indebtedness for borrowed money and with respect
to letters of credit of the Borrower minus (b) any Indebtedness for borrowed
money and with respect to letters of credit of the Borrower that is subject to a
fixed rate of interest.

 

6.15 Post-Closing Obligations. The Credit Parties agree to use diligent efforts
to deliver to the Administrative Agent:

 

(a) on or before the date that is 30 days after the Closing Date, perfection
certificates substantially in the form of Schedule I to the form of Security
Agreement duly executed by a Financial Officer of each Credit Party;

 

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(b) on or before the date that is 30 days after the Closing Date, with respect
to the tower site for KQQK-FM located in Beaumont, Liberty County, Texas, a
Landlord Waiver and Consent with respect thereto;

 

(c) if the Credit Parties shall occupy the transmitter building for KZJL-TV
located in De Walt, Fort Bend County, Texas on or after December 31, 2004,
promptly after such date, a Landlord Waiver and Consent with respect thereto;

 

(d) on or before the date that is 30 days after the Closing Date, the Credit
Parties shall execute and deliver a trademark and service marks agreement to the
Administrative Agent, which agreement shall be in a form substantially the same
as the service marks agreement executed in connection with the Existing Credit
Agreement and shall be recorded with the USPTO, in order to reflect the security
interest of the Administrative Agent in certain trademarks and service marks
owned or used by the Credit Parties since the Existing Credit Agreement Closing
Date; and

 

(e) to the extent the existing Control Agreement with Union Bank of California,
N.A. cannot be amended prior to the Closing Date to add account no. 9050000130
maintained by the Credit Parties at Union Bank of California, N.A. as an account
subject to such control agreement, on or before the date that is 30 days after
the Closing Date, the Credit Parties shall execute and deliver, with respect to
such account, a Control Agreement or an amendment to such existing Control
Agreement.

 

With respect to clauses (b) and (c) above, if the Administrative Agent
reasonably believes that the Credit Parties have defaulted in any of their
obligations set forth in this Section 6.15 as a consequence of their failure to
exercise diligent efforts, the Administrative Agent shall so deliver written
notice to the Credit Parties and the Credit Parties thereafter shall have thirty
(30) days to demonstrate to the reasonable satisfaction of the Administrative
Agent that the Credit Parties have exercised diligent efforts. If the Credit
Parties are unable to so demonstrate during such thirty (30) day period then the
Administrative Agent shall have the option to declare an Event of Default as a
result of such failure by written notice to the Borrower. For purposes of such
clauses (b) and (c), diligent efforts means sending the requests for such
Landlord Waiver and Consents to each applicable landlord and making reasonable
follow-up telephone calls or other communications requesting the execution and
delivery of such Landlord Waiver and Consent but not the obligation to pay money
or to bring an action to obtain such performance.

 

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6.16 Employment Agreements. Promptly after the amendment, modification of any of
the employment agreements described in Section 5.1(h)(ii), the Credit Parties
will deliver a copy of such amendment or modification to the Administrative
Agent. Notwithstanding any provision herein to the contrary, with respect to
that certain employment agreement of Miguel Banojian proposed to be entered into
after the Closing Date (and only with respect to such employment agreement),
such provisions shall be of no force and effect unless such employment agreement
is substantially in the same form as the other employment agreements referred to
in Section 5.1(h).

 

ARTICLE 7

 

Negative Covenants

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit shall have expired or terminated and all LC Disbursements
shall have been reimbursed, the Credit Parties covenant and agree with the
Administrative Agent and the Lenders that:

 

7.1 Indebtedness. The Credit Parties and their Subsidiaries shall not create,
incur, assume or permit to exist any Indebtedness, except:

 

(a) Indebtedness created under the Loan Documents;

 

(b) Indebtedness existing on the date hereof which is set forth in Schedule 4.14
and has been designated on such schedule as Indebtedness that will remain
outstanding following the funding of the initial Loans, and any extension,
renewal, refunding or replacement of any such Indebtedness that does not
increase the principal amount thereof;

 

(c) Unsecured Indebtedness of any Credit Party to any other Credit Party;

 

(d) Indebtedness of Empire Burbank under the Empire Burbank Loan Documents;
provided that the outstanding principal amount of Indebtedness under the Empire
Burbank Loan does not exceed $3,000,000;

 

(e) On or after the Qualifying IPO Closing Date, unsecured Indebtedness of the
Borrower to Media Holding pursuant to the LBI Media Intercompany Note and all of
such note shall be repaid as and when provided in clause (f) of the definition
of Qualifying IPO Funding Transactions;

 

(f) Indebtedness to Jose and/or Lenard Liberman (or their spouses, lineal
descendants, or heirs and devises or any trusts controlled by them) but only to
the extent such indebtedness is subordinated to the Loans (or any Credit Party’s
obligations to the Lenders and the Administrative Agent) pursuant to
subordination agreements substantially identical to the Liberman Subordination
Agreements; provided that the aggregate Indebtedness of the Credit Parties under
this Section 7.1(f) shall not exceed $5,000,000 at any one time outstanding;

 

(g) Indebtedness of the Credit Parties (determined on a consolidated basis
without duplication in accordance with GAAP) consisting of Capital Lease
Obligations, secured

 

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by Liens permitted under Section 7.2(i) and/or in connection with the
acquisition of real property (other than any real property received or acquired
in any Acquisition or Relocation) in an aggregate principal amount not exceeding
(i) prior to the Qualifying IPO Closing Date, $7,000,000 at any one time
outstanding or (ii) thereafter, $20,000,000 at any one time outstanding;

 

(h) Indebtedness (i) under any Hedging Agreement required under Section 6.14 or
otherwise not prohibited under Section 7.5(b) or (ii) for bank overdrafts in the
ordinary course of business that are promptly repaid;

 

(i) Indebtedness arising from guaranties of Indebtedness of any Credit Party
permitted hereunder or other agreements of any Credit Party providing for
indemnification, adjustment of purchase price or similar customary obligations,
in each case incurred or assumed in connection with the disposition of any
business or assets of any Credit Party permitted by Section 7.4; provided that
the maximum assumable liability in respect of all such Indebtedness shall at no
time exceed the gross proceeds actually received by the Credit Parties in
connection with such disposition;

 

(j) Indebtedness in respect of the Relocation Profit to the extent required to
be paid to the Shop At Home Sellers pursuant to the Shop At Home Acquisition
Documents;

 

(k) Unsecured Indebtedness in respect of the Senior Subordinated Notes in an
aggregate principal amount not exceeding $150,000,000; provided the Borrower may
incur up to an additional $50,000,000 of unsecured Indebtedness in respect of
the Senior Subordinated Notes so long as no Default shall have occurred and be
continuing or caused thereby and, if the interest rate on such additional
Indebtedness exceeds 10-1/8% per annum, then subject to the delivery by the
Borrower to the Administrative Agent of an officer’s certificate executed by a
Financial Officer demonstrating on a pro forma basis compliance with the
covenant set forth in Section 7.10(c) for the period of four consecutive fiscal
quarters most recently ended as if such incurrence had occurred on the first day
of such period;

 

(l) Indebtedness required to be incurred in connection with any “Incentive
Bonus” which may become payable pursuant to Eduardo Leon’s employment agreement;
and

 

(m) In addition to the foregoing, unsecured Indebtedness in an aggregate
principal amount not exceeding (i) prior to the Qualifying IPO Closing Date,
$4,000,000 at any time outstanding or (ii) thereafter, $10,000,000 at any time
outstanding; provided that no Indebtedness to any holder of Indebtedness of
Holdings shall be permitted to be incurred under this subsection (m) unless such
Indebtedness is subject to a subordination agreement satisfactory in form and
substance to the Administrative Agent.

 

7.2 Liens. No Credit Party or Subsidiary will create, incur, assume or permit to
exist any Lien in favor of any other Person on any Property or asset now owned
or hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except (the following
being called “Permitted Liens”):

 

(a) Liens created under the Loan Documents;

 

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(b) any Lien on any property or asset of any Credit Party or Subsidiary existing
on the date hereof and set forth in Schedule 7.2(b); provided that (i) such Lien
shall not apply to any other property or asset of any Credit Party and (ii) such
Lien shall secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

 

(c) Liens imposed by any Governmental Authority for taxes, assessments or
charges not yet due or (in the case of property taxes and assessments not
exceeding $1,000,000 in the aggregate more than 90 days overdue) which are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of any Credit Party or Subsidiary in
accordance with GAAP;

 

(d) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens, and vendors’ Liens imposed by statute or common
law not securing the repayment of Indebtedness, arising in the ordinary course
of business which are not overdue for a period of more than 60 days or which are
being contested in good faith and by appropriate proceedings and Liens securing
judgments (including pre-judgment attachments) but only to the extent for an
amount and for a period not resulting in an Event of Default under Section
8.1(j) hereof;

 

(e) pledges or deposits under worker’s compensation, unemployment insurance and
other social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance agreements;

 

(f) pledges and deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;

 

(g) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business and encumbrances consisting of
zoning restrictions, easements, licenses, restrictions on the use of Property or
minor imperfections in title thereto which, in the aggregate, are not material
in amount, and which do not, in the aggregate, materially detract from the value
of the Property of any Credit Party or materially interfere with the ordinary
conduct of the business of any Credit Party;

 

(h) Liens consisting of bankers’ liens and rights of setoff, in each case,
arising by operation of law, and Liens on documents presented in letter of
credit drawings;

 

(i) Liens on tangible property, including real or personal property, acquired,
constructed or improved by any Credit Party, provided that (A) such Liens secure
Indebtedness (including Capital Lease Obligations) permitted by Section 7.1(g),
(B) such Liens and the Indebtedness secured thereby are incurred prior to or
within 120 days after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets, and (D) such
security interests shall not apply to any other property or assets of any Credit
Party or Subsidiary;

 

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(j) the Liens created by (i) the Empire Burbank Mortgage; provided that such
Liens shall apply only to the Burbank Property and any other property of Empire
Burbank referred to in such Mortgage on the date the Empire Burbank Loan was
funded and (ii) the Empire Burbank Lease;

 

(k) Uniform Commercial Code financing statement filings with respect to Property
leased by the Credit Parties;

 

(l) Assignments of uncollectible accounts receivable to collection agencies in
the ordinary course of business; and

 

(m) any zoning or similar law or right reserved to or vested in any Governmental
Authority to control or regulate the use of any real property which does not
result in, or could not reasonably be expected to result in, a Material Adverse
Effect.

 

7.3 Contingent Liabilities. No Credit Party or Subsidiary will Guarantee the
Indebtedness or other obligations of any Person, or Guarantee the payment of
dividends or other distributions upon the stock of, or the earnings of, any
Person, except:

 

(a) endorsements of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;

 

(b) Guarantees of obligations of any Credit Party by any other Credit Party to
the extent constituting Indebtedness expressly permitted by Section 7.1, except
that no Credit Party shall Guarantee the Empire Burbank Loan;

 

(c) Guarantees in effect on the date hereof which are disclosed in Schedule
4.14, and any replacements thereof in amounts not exceeding such Guarantees;

 

(d) obligations to the Issuing Lender in respect of Letters of Credit;

 

(e) Guarantees of obligations of any Credit Party by any other Credit Party for
obligations to suppliers, customers, franchisees, lessors and licensees to the
extent incurred in the ordinary course of business;

 

(f) unsecured Guarantees by the Guarantors of the Senior Subordinated Notes; and

 

(g) Guarantees of the Credit Parties in addition to the Guarantees permitted
under the foregoing clauses of this Section 7.3 (excluding any Guarantee of the
Empire Burbank Loan); provided that (i) the maximum aggregate principal amount
Guaranteed under this clause (g) shall not exceed (A) prior to the Qualifying
IPO Closing Date, $2,000,000 at any time outstanding or (B) thereafter,
$5,000,000 at any time outstanding and (ii) the maximum aggregate principal
amount Guaranteed under this clause (g) plus principal amount of any Investments
permitted under Section 7.5(a)(iii) shall not exceed (A) prior to the Qualifying
IPO Closing Date, $4,000,000 at any time outstanding or (B) thereafter,
$10,000,000 at any time outstanding.

 

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7.4 Fundamental Changes; Asset Sales. No Credit Party will enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution). No Credit Party will
effect any Disposition or Relocation or acquire any business or property from,
or capital stock of, or other equity interests in, or be a party to any
acquisition (including any Acquisition) of, any Person except for purchases by
any Credit Party of property to be used in the ordinary course of business,
Investments permitted hereunder, Capital Expenditures permitted hereunder, and
Acquisitions permitted hereunder. No Credit Party will convey, sell, lease,
transfer or otherwise dispose (including any Disposition) of, in one transaction
or a series of transactions, any part of its business or property, whether now
owned or hereafter acquired (including receivables and leasehold interests, but
excluding (x) obsolete or worn-out property (including leasehold interests),
tools or equipment no longer used or useful in its business, and (y) any
inventory or other property sold or disposed of in the ordinary course of
business and on ordinary business terms; provided that a Credit Party may (1)
lease or sublease real property to the extent such lease or sublease would not
materially interfere with the operation of the businesses of the Credit Parties
and (2) enter into any sale, lease, transfer or other disposition described
clauses (a) through (f) of the definition of Disposition. The Lenders and the
Administrative Agent (as the case may be) at the Borrower’s expense hereby agree
to complete, execute and deliver to the Borrower, upon reasonable prior written
notice to the Administrative Agent and upon provision by the Borrower of a draft
of such instrument, any release or termination of security interest required to
permit the applicable Credit Party conveying, selling, leasing, transferring or
otherwise disposing of any part of its property pursuant to and in accordance
with the preceding sentence to convey, sell, lease, transfer or otherwise
dispose of such property free and clear of any Lien under the Collateral
Documents.

 

Notwithstanding the foregoing provisions of this Section 7.4:

 

(a) any Credit Party (other than the Borrower or any License Subsidiary) may be
merged or consolidated with or into the Borrower or any other Credit Party, and
any Subsidiary that is not a Credit Party may be merged into any Credit Party
(with the Credit Party as the surviving entity); provided that if any such
transaction shall be between a Subsidiary and the Borrower or a Wholly Owned
Subsidiary, the Borrower or such Wholly Owned Subsidiary, as applicable, shall
be the continuing or surviving corporation;

 

(b) any Credit Party (other than the Borrower or any License Subsidiary) may
sell, lease, transfer or otherwise dispose of any or all of its property (upon
voluntary liquidation or otherwise) to any other Credit Party;

 

(c) the capital stock of, or other equity interests in, any Credit Party may be
sold, transferred or otherwise disposed of to the Borrower or any other Credit
Party;

 

(d) any Credit Party may enter into Acquisitions to acquire all or substantially
all of the assets or any division, business or broadcast station or capital
stock of, or other equity interests in (including acquisitions by merger), any
Person (collectively, “Permitted Acquisitions”), subject to satisfaction of the
following conditions:

 

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(i) the aggregate consideration paid or exchanged by the Borrower and its
Subsidiaries in connection with any such Acquisition shall not exceed (A) prior
to the Qualifying IPO Closing Date, $50,000,000 for such Acquisition or (B)
thereafter, $125,000,000 for such Acquisition;

 

(ii) both (A) immediately prior to the proposed Acquisition and (B) immediately
following the proposed Acquisition after giving effect to such Acquisition on a
pro forma basis incorporating such pro forma assumptions as are satisfactory to
the Administrative Agent in its reasonable discretion, the Credit Parties shall
be in compliance with the covenants set forth in Section 7.10;

 

(iii) the business so acquired shall be in the Permitted Lines of Business and
shall be located in (A) prior to the Qualifying IPO Closing Date, the United
States or (B) thereafter, the United States or any state or territory thereof or
Mexico; provided that the aggregate consideration paid or exchanged by the
Borrower and its Subsidiaries after the date hereof in connection with all
acquisitions of businesses located in Mexico shall not exceed $50,000,000;

 

(iv) the assets so acquired shall be transferred free and clear of any Liens
(except to the extent permitted by Section 7.2), and no Indebtedness shall be
incurred, guaranteed, assumed or consolidated in connection with such
Acquisition (except to the extent permitted by Section 7.1);

 

(v) the Administrative Agent shall have received Lien searches reasonably
satisfactory to the Administrative Agent with respect to the assets of, and
equity interests in, any business being acquired;

 

(vi) the Administrative Agent shall have received a First Priority perfected
security interest in substantially all of the assets being acquired in such
Acquisition (including the assets of any entity acquired) but excluding real
property not otherwise required under Section 6.13 and all filings, recordings
and other actions with respect thereto shall be reasonably satisfactory in form
and substance to the Administrative Agent; provided, however, that the security
interest or mortgage as to any real property asset which is required to be
obtained hereunder shall be perfected within a reasonable time after the
consummation of such Acquisition;

 

(vii) if requested, the Administrative Agent shall have received an opinion of
counsel in each applicable jurisdiction reasonably satisfactory to it to the
effect that the Administrative Agent has been granted a perfected security
interest in such assets and as to such other matters as the Administrative Agent
may reasonably require;

 

(viii) in connection with such proposed Acquisition, the Borrower shall deliver
to the Administrative Agent (i) a copy of the purchase agreement pursuant to
which such Acquisition will be consummated, (ii) unless waived by the
Administrative Agent in its reasonable discretion, a consent to the assignment
of such purchase agreement to the Administrative Agent for collateral purposes,
which consent shall be in form and substance satisfactory to the Administrative
Agent; (iii) a copy of each material

 

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services agreement, consulting agreement, lease, credit or financing agreement
or other material agreement relating to such Acquisition to be in effect after
the consummation of such Acquisition, (iv) unless waived by the Administrative
Agent in its reasonable discretion, an opinion of counsel to the sellers
addressed to the Administrative Agent and the Lenders or permitting them to rely
thereon and (v) such other information or reports as the Administrative Agent
may reasonably request with respect to such Acquisition;

 

(ix) to the extent any representation or warranty herein makes reference to one
or more of the Schedules to this Agreement, the Credit Parties shall make
revisions to such Schedules, in each case as of the date of the consummation of
such Acquisition and notwithstanding that such representation or warranty may
expressly state that it is made as of an earlier date, reasonably acceptable to
the Administrative Agent, solely to take into account the consummation of such
Acquisition;

 

(x) the Credit Parties shall have obtained all material permits, licenses,
authorizations or consents from all Governmental Authorities (including the FCC
and the United States Department of Justice) and all consents of other Persons,
in each case that are necessary in connection with such proposed Acquisition,
the continued operation of the business being acquired in such proposed
Acquisition, as proposed to be conducted, by the Credit Parties, prior to or
concurrently with the consummation thereof, and each of the foregoing shall be
in full force and effect, in each case other than those the failure to obtain or
maintain which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect;

 

(xi) subject to the waiver by the Administrative Agent in its reasonable
discretion, all applicable waiting periods with respect to such proposed
Acquisition shall have expired without any action being taken or threatened by
any competent authority which would restrain, prevent or otherwise impose
adverse conditions on such Acquisition (including the
Pre-Merger/Hart-Scott-Rodino Act, as amended), and no action, request for stay,
petition for review or rehearing, reconsideration or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable Governmental
Authority to take action to set aside its consent on its own motion shall have
expired;

 

(xii) the Administrative Agent shall have received a certificate from the Credit
Parties’ insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to Section 6.5 is in full force and
effect with respect to the assets being acquired in such Acquisition and that
the Administrative Agent on behalf of the Lenders has been named as additional
insured, mortgagee and loss payee thereunder to the extent required under
Section 6.5; and

 

(xiii) immediately prior to such Acquisition and after giving effect thereto, no
Default shall have occurred and be continuing.

 

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(e) The Credit Parties shall be permitted to effect any Relocation, provided
that the following conditions have been satisfied:

 

(i) Such Voluntary Relocation shall not, as determined on the date of the
consummation of such Voluntary Relocation, have a material adverse effect on the
business, assets, operations or financial condition of the Credit Parties, taken
as a whole;

 

(ii) The Credit Parties shall give 30 days’ prior written notice to the
Administrative Agent of the proposed Relocation which notice shall include a
description of all material aspects of the Relocation including the
consideration to be received by any Credit Party in connection therewith;

 

(iii) Simultaneously with informing the Shop At Home Sellers under the Shop At
Home Acquisition Documents of any Relocation Profit, the Credit Parties shall so
inform the Administrative Agent and thereafter keep the Administrative Agent
apprised of the negotiation thereof, and shall forward to the Administrative
Agent copies of all material correspondence, including, without limitation, any
“Buyer’s Relocation Profit Notice” or “Challenge Notice” (as such terms are
defined in the Shop At Home Acquisition Documents) and all correspondence
pertaining to any implementation of the Valuation Mechanism (as defined in the
Shop At Home Acquisition Documents);

 

(iv) to the extent any representation or warranty herein makes reference to one
or more of the Schedules to this Agreement, the Credit Parties shall make
revisions to such Schedules, in each case as of the date of the consummation of
any Relocation and notwithstanding that such representation or warranty may
expressly state that it is made as of an earlier date, reasonably acceptable to
the Administrative Agent, solely to take into account the consummation of such
Relocation; and

 

(v) In connection with any Involuntary Relocation the Credit Parties shall use
their best efforts to receive only cash consideration therefor.

 

(f) The Credit Parties shall be permitted to sell (pursuant to an asset sale,
stock sale or otherwise) any radio and television stations in any fiscal year,
provided that the aggregate EBITDA attributable to all such stations sold in any
fiscal year shall not exceed 20% of the EBITDA of the Credit Parties for the
immediately preceding fiscal year as stated in the Compliance Certificate
required to be delivered for such fiscal year pursuant to Section 6.1(c) or, if
such Compliance Certificate is not available at the time of such proposed sale,
as demonstrated through financial statements and reports acceptable to the
Administrative Agent in its reasonable discretion.

 

(g) Upon 30 days prior written notice to the Administrative Agent and with the
prior written consent of the Administrative Agent (such consent not to be
unreasonably withheld), the Borrower may merge with an Affiliate incorporated
solely for the purpose of reincorporating the Borrower in another jurisdiction
to realize tax or other benefits. The Administrative Agent shall give prompt
notice thereof to the Lenders.

 

(h) Upon 10 days prior written notice to the Administrative Agent and so long as
no Default shall have occurred and be continuing and no Default shall be caused
thereby, any Credit Party (other than the Borrower or any License Subsidiary)
may acquire the stock or assets of, or merge with, Spanish Media Rep Team Inc.
(with such Credit Party as the surviving entity).

 

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7.5 Investments; Hedging Agreements.

 

(a) No Credit Party will make or permit to remain outstanding any Investment,
except in the case of any Credit Party:

 

(i) Investments by the Credit Parties in capital stock of, and other equity
interests in, their Subsidiaries to the extent outstanding at the Effective Time
and as set forth on Schedule 4.12 hereto, Investments consisting of deferred
payment obligations in connection with permitted sales of assets in the
aggregate not to exceed $1,000,000 at any one time, advances by any Credit Party
to any other Credit Party (which advances, whether existing on the Closing Date
or made thereafter, may be cancelled or forgiven by such Credit Party) and
capital contributions by any Credit Party to any other Credit Party;

 

(ii) Permitted Investments;

 

(iii) advances, loans and extensions of credit to any director, officer or
employee of a Credit Party or any other Person, Investments by the Credit
Parties in connection with the satisfaction of accounts receivable or other
Indebtedness due from a customer of a Credit Party or claims due and owing to
the Credit Parties or otherwise for the benefit the business of the Credit
Parties; provided that (A) the maximum aggregate principal amount of any
Investments permitted under Section 7.5(a)(iii) shall not exceed $5,000,000 at
any time outstanding and (B) the maximum aggregate principal amount of any
Investments permitted under Section 7.5(a)(iii) plus the principal amount
Guaranteed under Section 7.3(g) shall not exceed (1) prior to the Qualifying IPO
Closing Date, $4,000,000 at any time outstanding or (2) thereafter, $10,000,000
at any time outstanding, and, so long as no Default shall have occurred and be
continuing and no Default shall be caused thereby, the Credit Parties may
forgive or cancel any such advance, loan or extension of credit;

 

(iv) Checking and deposit accounts used in the ordinary course of business
maintained with the Administrative Agent or depository institutions who have
executed Control Agreements except for (A) the deposit accounts maintained with
Wells Fargo Bank, N.A., so long as the Borrower maintains an agreement to sweep
the daily balances in such accounts at the end of each Business Day on which
such daily balances exceed a specified balance, not to exceed $400,000 to (1) an
account at Union Bank of California, N.A. described on Schedule 1 of the Control
Agreement delivered in connection with the Original Credit Agreement (the
“Existing Control Agreement”) or (2) an account covered by a new Control
Agreement obtained pursuant to Section 5.1(e)(iii) or otherwise, and (B) the
securities accounts and deposit accounts maintained with Union Bank of
California, N.A. for which Control Agreements will not be obtained as described
on Schedule 5.1(e)(iii);

 

(v) escrow deposits made pursuant to the KNOR Acquisition or other Acquisitions
permitted hereunder;

 

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(vi) the Borrower and its Subsidiaries may continue to own the Investments owned
by them and described in Schedule 7.5 annexed hereto and the Borrower may own
intercompany loans made to Holdings prior to the Closing Date and the Borrower
may forgive or cancel such loans;

 

(vii) the Borrower may acquire and hold obligations of one or more officers or
other employees of the Credit Parties in connection with such officers’ or
employees’ acquisition of shares of Holdings’ common stock, so long as no cash
is actually advanced by any Credit Party to such officers or employees or any
Holding Company in connection with the acquisition of any such obligations and,
so long as no Default shall have occurred and be continuing and no Default shall
be caused thereby, the Credit Parties may forgive or cancel any such advance,
loan or extension of credit;

 

(viii) the Credit Parties may accept promissory notes, debt or equity securities
or other Investments as consideration in any Relocation, the aggregate amount of
which received after the Closing Date shall not exceed $10,000,000; provided,
that the Credit Parties may accept promissory notes, debt or equity securities
or other Investments as consideration in an Involuntary Relocation in excess of
such amount so long as the receipt of such excess Investments would not result
in a Material Adverse Effect; and

 

(ix) (1) with respect to any period during which Holdings is an S Corporation or
a substantially similar pass-through entity for federal income tax purposes and
a QSSS Election is in effect for the Borrower, the Borrower may make loans to
Media Holdings, Holdings or the shareholders of Holdings in an amount (together
with dividend payments made pursuant to Section 7.6(a)) not in excess of the
Permitted Holdings Tax Distributions and the Permitted Shareholder Tax
Distributions, (2) so long as no Default shall have occurred and be continuing
and no Default shall be caused thereby, the Borrower may make loans to any
Holding Company or the shareholders of Holdings (in each case, together with
dividends made from Excess Cash Flow pursuant to Section 7.6(c)) (i) prior to
the Qualifying IPO Closing Date, at any time the Total Leverage Ratio is less
than 4.5 to 1 as of the end of any fiscal year with respect thereto, as shown in
the financial statements required to be delivered pursuant to Section 6.1(a) and
in the Compliance Certificate required to be delivered in respect of such fiscal
year pursuant to Section 6.1(c) (or until the first Compliance Certificate is
delivered hereunder with respect to the financial statements required to be
delivered pursuant to Section 6.1(a), as stated in the Compliance Certificate
most recently delivered pursuant to the Existing Credit Agreement together with
the financial statements required to be delivered pursuant to Section 6.1(a)
thereof), to the extent of Excess Cash Flow for such fiscal year in an aggregate
amount not in excess of $5,000,000 and (ii) thereafter, up to 50% of Excess Cash
Flow for such fiscal year, (3) so long as no Default shall have occurred and be
continuing or shall be caused thereby, the Borrower may make loans to any
Holding Company to pay corporate administrative expenses and other costs and
expenses, provided, that the amount of cash loans made pursuant to this clause
(3) (together with the amount of cash distributions made pursuant to Section
7.6(d)) shall not exceed (i) prior to the Qualifying IPO Closing Date,
$1,500,000 and (ii) thereafter, $5,000,000, in each case, in any fiscal year,
(4) so long as no Default shall have occurred and be

 

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continuing or shall be caused thereby, any Credit Party may make loans to
Holdings to enable Holdings to make the payments with respect to any portion of
the “Incentive Bonus” which may become payable pursuant to the employment
agreements of Winter Horton dated December 18, 2002, Andrew Mars dated November
15, 1998, Xavier Ortiz dated September 1, 1999 and, subject to Section 6.16,
Miguel Banojian that may be entered into after the Closing Date, in each case as
amended from time to time, respectively, or with respect to any notes issued
with respect thereto; provided that the aggregate amount of such loans (together
with the aggregate amount of dividends made pursuant to Section 7.6(g)) shall
not exceed the amount of such bonuses required to be paid under such employment
agreements (including any amounts required to be paid under any such notes), (5)
so long as no Default shall have occurred and be continuing and no Default shall
be caused thereby, the Borrower may make loans (together with dividend payments
made pursuant to Section 7.6(h)) to Media Holdings in an amount equal to the
scheduled payments of interest on the Media Holdings Discount Notes to the
extent required to be paid in cash pursuant to the Media Holdings Discount Notes
Indenture, provided, that, in any fiscal year, the aggregate amount of cash
loans made pursuant to this clause (5) during such fiscal year (together with
the amount of cash distributions made pursuant to Section 7.6(h) during such
fiscal year) shall not exceed the aggregate amount of scheduled payments of
interest on the Media Holdings Discount Notes to the extent required to be paid
in cash on or after October 15, 2008 pursuant to the Media Holdings Discount
Notes Indenture during such fiscal year (for the avoidance of doubt any cash
interest payments which may become due prior to October 15, 2008 as a result of
any election to make cash interest payments with respect to the Media Holdings
Discount Notes shall not be deemed to be “required to be paid in cash,” for the
purposes of Sections 7.5 and 7.6), (6) so long as no Default shall have occurred
and be continuing and no Default shall be caused thereby, the Borrower may make
loans (together with dividend payments made pursuant to Section 7.6(j)) to any
Holding Company in an amount equal to the scheduled payments of interest on the
Holding Company Debt incurred in accordance with Section 7.15(a)(iv) to the
extent required to be paid in cash pursuant to the documentation governing such
Holding Company Debt and any liquidated damages required to be paid during such
fiscal year in connection with any registration rights agreement relating
thereto, provided, that, in any fiscal year, the aggregate amount of cash loans
made pursuant to this clause (6) during such fiscal year (together with the
amount of cash distributions made pursuant to Section 7.6(j) during such fiscal
year) shall not exceed the aggregate amount of scheduled payments of interest on
such Holding Company Debt to the extent required to be paid in cash during such
fiscal year, and (7) Borrower may forgive or cancel any of the loans made
pursuant to clause (1), (2), (3), (4), (5) or (6) above.

 

(b) No Credit Party will enter into any Hedging Agreement, other than (i)
Hedging Agreements required to be entered into pursuant to Section 6.14 of this
Agreement and (ii) Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which any Credit Party is exposed in the
conduct of its business or the management of its liabilities.

 

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7.6 Restricted Junior Payments. No Credit Party will declare or make any
Restricted Junior Payment at any time; provided, however, that (a) with respect
to any period during which Holdings is an S Corporation or a substantially
similar pass-through entity for federal income tax purposes and a QSSS Election
is in effect for the Borrower, the Borrower may declare and make dividend
payments to Media Holdings in an amount (together with loans made pursuant to
Section 7.5(a)(ix)(1)) not in excess of the Permitted Holdings Tax Distributions
and the Permitted Shareholder Tax Distributions; (b) so long as no Default shall
have occurred and be continuing and no Default shall be caused thereby, the
Borrower may make scheduled payments of interest on the Senior Subordinated
Notes to the extent required to be paid in cash pursuant to the Senior
Subordinated Note Indenture; (c) so long as no Default shall have occurred and
be continuing and no Default shall be caused thereby, the Borrower may declare
and make dividend payments to Media Holdings or any other Holding Company, as
applicable (together with loans made from Excess Cash Flow pursuant to Section
7.5(a)(ix)(2)), (i) prior to the Qualifying IPO Closing Date, at any time the
Total Leverage Ratio is less than 4.5 to 1 as of the end of any fiscal year with
respect thereto, as shown in the financial statements required to be delivered
pursuant to Section 6.1(a) and Compliance Certificate required to be delivered
in respect of such fiscal year pursuant to Section 6.1(c) (or until the first
Compliance Certificate is delivered hereunder with respect to the financial
statements required to be delivered pursuant to Section 6.1(a), as stated in the
Compliance Certificate most recently delivered pursuant to the Existing Credit
Agreement together with the financial statements required to be delivered
pursuant to Section 6.1(a) thereof), to the extent of Excess Cash Flow for such
fiscal year in an aggregate amount not in excess of $5,000,000 and (ii)
thereafter, up to 50% of Excess Cash Flow for such fiscal year, (d) so long as
no Default shall have occurred and be continuing or shall be caused thereby the
Borrower may declare and make Restricted Junior Payments to any Holding Company
to pay corporate administrative expenses and other costs and expenses; provided
that the amount of cash distributions made pursuant to this clause (d) (together
with the amount of loans made pursuant to Section 7.5(a)(ix)(3)) shall not
exceed (i) prior to the Qualifying IPO Closing Date, $1,500,000 and (ii)
thereafter, $5,000,000, in each case, in any fiscal year, (e) the Credit Parties
may pay their obligations to Empire Burbank to the extent required to be paid
under the Empire Burbank Lease, (f) so long as no Default shall have occurred
and be continuing or shall be caused thereby, LBCI, or any successor entity
thereto, may make the payments described in clause (vi) of the definition of
Restricted Junior Payment or make the payments with respect to any notes issued
under the employment agreement described in such clause (vi), (g) so long as no
Default shall have occurred and be continuing or shall be caused thereby, any
Credit Party may make dividend payments to Holdings (through another Holding
Company, if applicable), to enable Holdings to make the payments with respect to
any portion of the “Incentive Bonus” which may become payable pursuant to the
employment agreements of Winter Horton dated December 18, 2002, Andrew Mars
dated November 15, 1998, Xavier Ortiz dated September 1, 1999 and, subject to
Section 6.16, Miguel Banojian that may be entered into after the Closing Date,
in each case as amended from time to time, respectively, or with respect to any
notes issued with respect thereto; provided that the aggregate amount of such
dividends (together with the aggregate amount of loans made pursuant to Section
7.5(a)(ix)(4)) shall not exceed the amount of such bonuses required to be paid
under such employment agreements (including any amounts required to be paid
under any such notes), (h) so long as no Default shall have occurred and be
continuing and no Default shall be caused thereby, the Borrower may declare and
make dividends (together with loans made pursuant to Section 7.5(a)(ix)(5)) to

 

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Media Holdings in an amount equal to the scheduled payments of interest on the
Media Holdings Discount Notes to the extent required to be paid in cash pursuant
to the Media Holdings Discount Notes Indenture, provided that, in any fiscal
year, the aggregate amount paid pursuant to this clause (h) during such fiscal
year (together with the aggregate amount of loans made pursuant to Section
7.5(a)(ix)(5) during such fiscal year), shall not exceed the aggregate amount of
scheduled payments of interest on the Media Holdings Discount Notes to the
extent required to be paid in cash on or after October 15, 2008 pursuant to the
Media Holdings Discount Notes Indenture during such fiscal year (for the
avoidance of doubt any cash interest payments which may become due prior to
October 15, 2008 as a result of any election to make cash interest payments with
respect to the Media Holdings Discount Notes shall not be deemed to be “required
to be paid in cash,” for the purposes of Sections 7.5 and 7.6) and any
liquidated damages required to be paid during such fiscal year in connection
with any registration rights agreement related thereto; (i) the Borrower may
make the Qualifying IPO Funding Transaction payments, (j) so long as no Default
shall have occurred and be continuing or shall be caused thereby, the Borrower
may make dividends (together with loans made pursuant to Section 7.5(a)(ix)(6))
to any Holding Company in an amount equal to the scheduled payments of interest
on Holding Company Debt incurred in accordance with Section 7.15(a)(iv) to the
extent required to be paid in cash pursuant to the documentation governing such
Holding Company Debt, provided, that, in any fiscal year, the aggregate amount
of dividends made pursuant to this clause (j) during such fiscal year (together
with the amount of loans made pursuant to Section 7.5(a)(ix)(6) during such
fiscal year) shall not exceed the aggregate amount of scheduled payments of
interest on such Holding Company Debt to the extent required to be paid in cash
during such fiscal year and (k) so long as no Default shall have occurred and be
continuing or shall be caused thereby, the Borrower may make payments of
interest on the Liberman Subordinated Debt to the extent such payments of
interest are permitted to be made under the Liberman Subordination Agreements.

 

Nothing herein shall be deemed to prohibit the making of any dividend or
distribution, or other payment constituting a Restricted Junior Payment under
clauses (ii) or (iii) of the definition thereof by any Subsidiary to any Credit
Party. Notwithstanding anything herein to the contrary, if part or all of a
Permitted Holdings Tax Distribution or a Permitted Shareholder Tax Distribution
is made in the form of a loan (rather than a dividend or other form of
distribution), then (i) the terms of such loan shall be determined in the sole
discretion of the Borrower, and (ii) the subsequent cancellation or forgiveness
of such loan shall not be treated as a Restricted Junior Payment and shall not
reduce the amount of subsequent Permitted Holdings Tax Distributions or
Permitted Shareholder Tax Distributions.

 

Notwithstanding anything in this Agreement or any of the other Loan Documents
(including the Alta Subordination Agreement and the Investor Subordination
Agreement) to the contrary, each Agent and each Lender hereby consents to the
Assumption Agreement, Reaffirmation Agreement, the Stockholder Voting Agreement,
the Termination Agreement, the Election[s] to Purchase, the Irrevocable
Instructions, the Conversion Election[s], the Holdings Merger Agreement, the
Holdings Merger, the Qualifying IPO, and the Qualifying IPO Funding Transactions
and to the execution, delivery and performance by the Administrative Agent (for
itself and on behalf of the Lenders) of the Second Confirmation of Subordination
Agreements and the Omnibus Confirmation Agreement. Nothing herein shall be
deemed to prohibit the Alta

 

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Repayment on or within one Business Day after the Qualifying IPO Closing Date or
any of the other Qualifying IPO Funding Transactions.

 

7.7 Transactions with Affiliates. Except as expressly permitted by this
Agreement (including pursuant to any of the Sections of Articles 6 or 7), no
Credit Party will directly or indirectly (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
property to an Affiliate; (c) merge into or consolidate with an Affiliate, or
purchase or acquire property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including guarantees and assumptions of obligations of an Affiliate); provided
that:

 

(i) any Affiliate who is an individual may serve as a director, officer,
employee or consultant of any Credit Party, receive compensation for his or her
services in such capacity and benefit from Investments to the extent specified
in Section 7.5(a)(iii);

 

(ii) the Credit Parties may engage in and continue the transactions with or for
the benefit of Affiliates which are described in Schedule 7.7, and in other
similar transactions or transactions entered in the ordinary course of business
provided that the terms of such similar transactions or such ordinary course
transactions are not less favorable to the Credit Parties than the terms of a
commercially reasonable, arms’ length transaction between non-affiliated
parties; provided, further that with respect to any such transaction involving
the payment by a Credit Party of consideration in excess of $5,000,000, the
Credit Parties shall provide adequate documentary and other evidence reasonably
satisfactory to the Administrative Agent that the terms of such transaction
satisfy the immediately preceding proviso; and

 

(iii) the Credit Parties may make the payments permitted by Sections 6.9(e) and
(f);

 

(iv) the Borrower may issue the LBI Media Intercompany Note to Media Holdings,
borrow funds thereunder and repay such note, in each case, subject to the
restrictions and conditions set forth herein; and

 

(v) the Credit Parties may enter into and consummate the transactions described
in Section 7.4(h).

 

7.8 Restrictive Agreements. No Credit Party will, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement (other than
this Agreement, the Senior Subordinated Note Indenture and the documents related
thereto, the Media Holdings Discount Notes Indenture and the documents related
thereto, any documents governing any Holding Company Debt incurred in accordance
with Section 7.15(a)(iv) and the Holdings Securities Purchase Documents) that
prohibits, restricts or imposes any condition upon (a) the ability of any Credit
Party to create, incur or permit to exist any Lien upon any of its property or
assets, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or other equity
interests or to make or repay loans or advances to any other Credit Party or to
Guarantee Indebtedness of any other Credit Party; provided that (i)

 

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the foregoing shall not apply to restrictions and conditions imposed by law,
this Agreement, the Senior Subordinated Note Indenture and the documents related
thereto, the Media Holdings Discount Notes Indenture and the documents thereto,
the Holdings Securities Purchase Documents or any documents governing any
Holding Company Debt permitted to be incurred pursuant to Sections 7.15(a)(iv),
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 7.8 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary, its assets or other Dispositions pending such sale or Disposition;
provided such restrictions and conditions apply only to the Subsidiary or assets
that are to be sold or Disposed of, as the case may be, and such sale or
Disposition is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement and (v) clause (a) of the foregoing
shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof.

 

7.9 Sale-Leaseback Transactions. No Credit Party will, directly or indirectly,
enter into any arrangements with any Person (other than another Credit Party;
provided the Administrative Agent receives prior written notice of such
transaction, copies of all documents and an opportunity to comment thereon)
whereby such Credit Party shall sell or transfer (or request another Person to
purchase) any property, real, personal or mixed, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property from any Person.

 

7.10 Certain Financial Covenants. All of the following covenants shall be
measured at the end of each fiscal quarter of the Credit Parties, based on the
four immediately preceding fiscal quarters of the Credit Parties, except as
otherwise set forth below.

 

(a) Total Leverage Ratio. The Credit Parties will not permit the Total Leverage
Ratio at the end of any fiscal quarter occurring during the periods below to
exceed the ratio set opposite such period below:

 

Period

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

   Ratio

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

Closing Date through September 30, 2004

   Not Applicable

October 1, 2004 through December 31, 2004

   7.50 to 1

January 1, 2005 through December 31, 2005

   7.25 to 1

January 1, 2006 through December 31, 2006

   6.75 to 1

January 1, 2007 through December 31, 2007

   6.50 to 1

January 1, 2008 through December 31, 2008

   6.25 to 1

January 1, 2009 and thereafter

   6.00 to 1

 

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(b) Senior Leverage Ratio. The Credit Parties will not permit the Senior
Leverage Ratio at the end of any fiscal quarter occurring during the periods
below to exceed the ratio set opposite such period below:

 

Period

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

   Ratio

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

Closing Date through September 30, 2005

   4.50 to 1

October 1, 2005 through December 31, 2006

   4.25 to 1

January 1, 2007 and thereafter

   4.00 to 1

 

(c) Interest Coverage Ratio. The Credit Parties will not permit the Interest
Coverage Ratio at the end of any fiscal quarter occurring during the periods
below to be less than the ratio set opposite such period below:

 

Period

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

   Ratio

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

Closing Date through December 31, 2004

   1.50 to 1

January 1, 2005 through December 31, 2005

   1.60 to 1

January 1, 2006 through December 31, 2006

   1.70 to 1

January 1, 2007 and thereafter

   1.75 to 1

 

(d) Capital Expenditures. The Credit Parties will not permit the aggregate
amount of Capital Expenditures in any fiscal year to exceed the amount below set
forth opposite such period:

 

Period

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

   Amount

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

Fiscal Year ending December 31, 2004

   $ 15,000,000

Fiscal Year ending December 31, 2005

   $ 15,000,000

Fiscal Year ending December 31, 2006

   $ 18,000,000

Fiscal Year ending December 31, 2007

   $ 21,000,000

Fiscal Year ending December 31, 2008 and each fiscal year ending thereafter

   $ 24,000,000

 

; provided, however that to the extent that actual Capital Expenditures
permitted hereunder in any fiscal year shall be less than the maximum amount
permitted hereunder for such fiscal year, the excess of the maximum amount
permitted hereunder over the actual Capital Expenditures shall be available for
Capital Expenditures hereunder in the immediately succeeding fiscal year but may
not be carried over into any subsequent fiscal year. For purposes of this
Section 7.10(d), Capital Expenditures made by the reinvestment of Net Cash
Payments in accordance with Section 2.11(b) shall not be deemed Capital
Expenditures.

 

(e) Fixed Charge Ratio. The Credit Parties will not permit the Fixed Charge
Ratio at the end of any fiscal quarter occurring after the Closing Date to be
less than 1.05 to 1.

 

7.11 Lines of Business; Restrictions on the Borrower. No Credit Party shall
engage to any substantial extent in any line or lines of business activity other
than (i) the Permitted Lines of Business, and (ii) such other lines of business
as may be consented to by the Required Lenders and the Administrative Agent. The
Borrower shall not own any assets, other than holding the equity interests of
its Subsidiaries, cash and cash equivalents, and Investments permitted hereunder
and shall not conduct any business, other than performing managerial functions

 

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relating the business of the Credit Parties and entering into and performing the
Basic Documents, the Basic Documents (as defined in the Existing Credit
Agreement), the Empire Burbank Lease, the Empire Burbank Sublease and other
documents to which it is a party to the extent the execution of such documents
is not otherwise prohibited hereunder (excluding by operation of this sentence)
including agreements with respect to Acquisitions permitted hereunder and all
activities reasonably incident thereto.

 

7.12 Subordinated Indebtedness. No Credit Party will purchase, redeem, retire or
otherwise acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for the purchase, redemption, retirement or other
acquisition of, or make any payment or prepayment of the principal of or
interest on, or any other amount owing in respect of, any Subordinated
Indebtedness, except (a) to the extent permitted by the Liberman Subordination
Agreements, (b) scheduled payments of interest in respect of the Senior
Subordinated Notes and (c) the Qualifying IPO Funding Transactions.

 

7.13 Modifications of Certain Documents. No Credit Party will consent to any
modification, supplement or waiver of any of the provisions of any agreements,
instruments or documents in respect of any Subordinated Indebtedness, the effect
of which is to (i) increase principal, interest, fees, reimbursements or other
amounts payable with respect thereto or create any additional payment
obligations thereunder, (ii) accelerate any scheduled or otherwise required
payments of principal, interest, fees, reimbursements or other amounts, (iii)
cause any covenants or other agreements to be more restrictive upon, or
burdensome to the Credit Parties in any material respect, (iv) alter any event
of default provisions contained in any Subordinated Indebtedness in a manner
materially adverse to the Credit Parties, (v) modify any of the subordination
provisions thereof, (vi) designate any Indebtedness (other than the Loans and
the other obligations of the Credit Parties under the Loan Documents) as
“Designated Senior Debt” for purposes of the Senior Subordinated Note Indenture,
or (vii) make any other change which could reasonably be expected to have a
Material Adverse Effect, in each case, without the prior consent of the Required
Lenders or the Administrative Agent on their behalf. No Credit Party will
consent to any modification, supplement or waiver of any of the provisions of
any of the Shop At Home Acquisition Documents in a manner materially adverse to
the Credit Parties, without the prior consent of the Required Lenders or the
Administrative Agent on their behalf. Without limiting the generality of the
foregoing except as expressly permitted by this Agreement, no Credit Party will
Guarantee any Subordinated Indebtedness or any Holding Company Debt or any other
Indebtedness of any Holding Company without the prior consent of the Required
Lenders and the Administrative Agent.

 

7.14 Empire Burbank.

 

(a) Empire Burbank shall not (i) amend, modify or change, or consent or agree to
any amendment, modification or change to, the Empire Burbank Loan Documents in a
manner which materially adversely affects the Administrative Agent or the
Lenders (it being understood that no amendment or modification to Section 10.1
(regarding the pledge of Empire Burbank stock to the Administrative Agent, and
the exercise of the Administrative Agent’s rights in connection therewith),
Section 13, or Section 14.3 (regarding notice to the Administrative Agent)
thereof shall be permitted without the prior written consent of the
Administrative Agent) or (ii) amend, modify or change, or consent or agree to
any amendment, modification or change

 

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to, the Empire Burbank Lease in a manner which materially adversely affects the
Administrative Agent or the Lenders (it being understood that no amendment or
modification to the last sentence of Section 5.2 of the Empire Burbank Lease
(regarding the rights of creditors to enter the premises to exercise rights and
remedies regarding personal property of LBCI) shall be permitted without the
prior written consent of the Administrative Agent) without the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld or delayed. Notwithstanding anything to the contrary in this Agreement
or any of the other Loan Documents, so long as no Default shall have occurred
and be continuing and no Default shall be caused thereby, Empire Burbank may at
any time pay or prepay in full or in part the obligations owing under the Empire
Burbank Loan Documents (whether or not such payment or prepayment is made with
the proceeds of a Permitted Refinancing), provided that if such payment or
prepayment is made with proceeds of the Loans, Empire Burbank shall provide to
the Administrative Agent the documentation required to be delivered by Credit
Parties for Additional Mortgaged Property as set forth in Section 6.13(b) as
soon a practicable after such prepayment.

 

(b) The Borrower agrees to deliver to the Administrative Agent prompt written
notice of any written declaration of default made by the lender under the Empire
Burbank Loan Documents.

 

(c) Empire Burbank shall not (i) engage in any business other than the ownership
of the Burbank Office Property (and any additions to such Property), the leasing
of such Property pursuant to the Empire Burbank Lease, the subleasing of certain
portions thereof under the Empire Burbank Sublease, the subleasing or renting to
third parties of certain sound stages, production equipment, studios and related
office space included in such Property (or any additions to such Property) for
use by such third parties or Empire Burbank as production facilities and
businesses incidental thereto and guaranteeing the obligations under the Loan
Documents, the obligations under the Senior Subordinated Notes and the Senior
Subordinated Note Indenture and the documents related thereto or (ii) own any
assets other than the Burbank Office Property and any additions to such
Property, its interests under the Empire Burbank Lease and the Empire Burbank
Sublease and certain production and related equipment for use by third parties
in connection with the subleasing of such sound stages and studios and
additional assets necessary or advisable for the conduct in the ordinary course
of its business described in clause (i).

 

7.15 Holding Company Restrictions.

 

(a) The Holding Companies shall not create, incur, assume or permit to exist any
Indebtedness which requires the payment in cash of any principal or interest in
respect thereof prior to March 31, 2011, without the written consent of the
Required Lenders, except for (i) the Indebtedness incurred or to be incurred by
(A) Holdings pursuant to the Holdings Securities Purchase Documents and (B)
Media Holdings pursuant to the Media Holdings Discount Notes Indenture, the net
cash proceeds of which additional Indebtedness incurred after the Closing Date
shall be contributed as capital to the Borrower and shall be applied to the
Loans in accordance with Section 2.11(b)(v) and any Refinancing Indebtedness,
(ii) intercompany Indebtedness incurred by any Holding Company and owing to the
Borrower or any other Credit Party or any other Holding Company, (iii) the
Indebtedness which may be required to be incurred by

 

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Holdings under the employment agreement described in Section 5.1(h) to the
extent that payments under the phantom stock incentive provisions of such
agreements are not permitted by this Agreement or any other document to be made
in cash and any Refinancing Indebtedness, and (iv) in addition to any of the
foregoing clauses (i), (ii) and (iii), Indebtedness incurred by any Holding
Company after the date hereof (and any Refinancing Indebtedness) so long as (1)
no Default exists at the time of such incurrence or would result therefrom, (2)
no installments of principal of such Holding Company Debt shall be payable
(whether by sinking fund payments, mandatory redemptions or repurchases or
otherwise) earlier than the date six months after the Revolving Credit Maturity
Date, (3) the covenants, events of default and mandatory prepayment requirements
(whether by sinking fund payments, mandatory redemptions or repurchases or
otherwise), of such Holding Company Debt are not more restrictive in any
material respect on the Borrower and its Subsidiaries than the covenants, events
of default and mandatory prepayment requirements in the Loan Documents, (4) the
aggregate principal amount of all such Holding Company Debt (and any Refinancing
Indebtedness) incurred after the date hereof does not exceed $25,000,000 at any
one time outstanding, (5) no Liens are created by the Borrower or any Subsidiary
to secure such Indebtedness, (6) no Credit Party shall guaranty any such Holding
Company Debt, and (7) the Borrower furnishes to the Administrative Agent on the
date of such incurrence a certificate of a Financial Officer demonstrating in
reasonable detail compliance with the foregoing conditions.

 

(b) Except for the Qualifying IPO Funding Transactions and the execution,
delivery and performance of agreements in connection therewith (including the
Assumption Agreement, the Termination Agreement and documents related thereto),
no Holding Company will purchase, redeem, retire or otherwise acquire for value,
or set apart any money for a sinking, defeasance or other analogous fund for the
purchase, redemption, retirement or other acquisition of, or make any payment or
prepayment of the principal of, or interest on, or any other amount owing in
respect of, (i) the Holdings Securities Purchase Documents, except, subject to
the provisions of the Alta Subordination Agreement, to the extent required by
the Holdings Securities Purchase Documents or (ii) the Media Holdings Discount
Notes, except (A) to the extent required by the Media Holdings Discount Notes
Indenture (for the avoidance of doubt any cash interest payments which may
become due prior to October 15, 2008 as a result of any election to make cash
interest payments with respect to the Media Holdings Discount Notes shall not be
deemed to be a payment of interest required by the Media Holdings Discount Notes
Indenture) or (B) if no Default shall have occurred and be continuing, permitted
by the Media Holdings Discount Notes Indenture.

 

(c) Except for the Qualifying IPO Funding Transactions and the execution,
delivery and performance of agreements in connection therewith (including the
Assumption Agreement, the Termination Agreement and documents related thereto),
no Holding Company will consent to any modification, supplement or waiver of any
of the provisions of the Media Holdings Discount Notes Indenture, the Holdings
Securities Purchase Documents or any document relating to any other Holding
Company Debt permitted hereunder, the effect of which is to (i) increase
principal, interest, fees, reimbursements or other amounts payable with respect
thereto or create any additional payment obligations thereunder, (ii) accelerate
any scheduled or otherwise required payments of principal, interest, fees,
reimbursements or other amounts, (iii) cause any amount of interest payable ‘in
kind” to be payable in cash, (iv) cause any covenants or other agreements to be
more restrictive upon, or burdensome to, such Holding Company, in any respect
materially adverse to the Credit Parties, (v) alter any event of default
provisions

 

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contained in the Media Holdings Discount Notes Indenture or the Holdings
Securities Purchase Documents in any material respect, or (vi) make any other
change which could reasonably be expected to have a Material Adverse Effect, in
each case, without the prior written consent of the Required Lenders or the
Administrative Agent on their behalf.

 

(d) Media Holdings shall not conduct any business or own any assets other than
holding all of the equity interests issued by the Borrower or any other Holding
Company, holding cash and cash equivalents, making any loans to or from any
other Holding Company or any Credit Party, or any loans to any shareholder of
Holdings, forgiving or canceling any such loans or any other loans to its
Affiliates, performing managerial functions relating to the businesses of the
Credit Parties, entering into and performing its obligations under the Media
Holdings Discount Notes Indenture, the LBI Media Intercompany Note, any
documents relating to any other Holding Company Indebtedness permitted
hereunder, the Basic Documents to which it is a party, the Basic Documents (as
defined in the Existing Credit Agreement and/or the Original Credit Agreement)
to which it is a party, and any activities reasonably incident to the foregoing.

 

(e) Holdings shall not conduct any business or own any assets other than holding
all of the equity interests issued by Media Holdings (or, if a new Holding
Company is created after the Closing Date, all of the equity interests of such
Holding Company to the extent applicable), holding cash and cash equivalents,
making any loans to or from any other Holding Company or any Credit Party or any
loans to any shareholder of Holdings, forgiving or canceling any such loans or
any other loans to its Affiliates, making distributions or loans to its
shareholders with the proceeds of Permitted Shareholder Tax Distributions or
Permitted Holdings Tax Distributions, performing managerial functions relating
to the businesses of the Credit Parties and the other Holding Companies,
performing all activities in connection with (and entering into and performing
any agreements in respect of), the Holdings Securities Purchase Documents, any
other Holding Company Debt, the key employee agreements to which it is or will
be a party (and service agreements with any Credit Party relating to such
employment agreements), any stock incentive plans or other employee benefit
plans for the issuance of equity or any interests in its equity, any
transactions pursuant to which Holdings issues its equity or any interests in
its equity as consideration for acquisitions and other transactions, the
Holdings Merger, a Qualifying IPO, and the Qualifying IPO Funding Transactions,
and engaging in all activities entered into (and entering into and performing
any agreements related thereto) in order to perform its roles and functions as
may be necessary or desirable as a publicly traded holding company, and
performing such roles and functions as may be necessary or desirable as a
publicly traded holding company.

 

(f) Media Holdings shall not pledge, encumber or hypothecate any of the capital
stock of the Borrower. Holdings shall not pledge, encumber or hypothecate any of
the capital stock of Media Holdings.

 

7.16 License Subsidiaries.

 

(a) Other than ancillary FCC Licenses owned by Empire Burbank (none of which are
Material FCC Licenses), the Credit Parties will cause each FCC License which is
owned or acquired by any Credit Party to be held in a License Subsidiary at all
times (and provided that any FCC License relating to a Broadcast Station located
outside the Designated Market Areas of those Broadcast Stations owned on the
Closing Date, and acquired after the date

 

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hereof shall, at the reasonable request of the Required Lenders, be held in a
separate License Subsidiary).

 

(b) The Credit Parties shall not allow any License Subsidiary to (i) own any
right, franchise or other asset except for FCC Licenses transferred to it by a
Credit Party and FCC Licenses acquired by it directly or (ii) engage in any
business or make any Investment other than holding such FCC Licenses.

 

(c) Notwithstanding the foregoing, no License Subsidiary shall be permitted,
under any circumstances, to create, incur, assume or suffer to exist:

 

(i) any Indebtedness, other than Indebtedness to the Credit Parties or under the
Loan Documents and the Indebtedness as a guarantor under the Senior Subordinated
Note Indenture;

 

(ii) any Lien, other than Liens created under the Loan Documents; and

 

(iii) any Guarantee, other than the Guarantee of the Loans and the Guarantee of
the Senior Subordinated Note Indenture and the Senior Subordinated Notes.

 

ARTICLE 8

 

Events of Default

 

8.1 Events of Default.

 

If any of the following events (“Events of Default”) shall occur:

 

(a) the Credit Parties shall fail to pay to the Administrative Agent or the
Lenders (i) any principal of any Loan or any Reimbursement Obligation in respect
of any LC Disbursement, on the due date thereof, (ii) any interest on, any Loan,
within three Business Days after the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or otherwise,
or (iii) any other amount payable under this Agreement or any fee payable under
this Agreement or any other agreement, within five Business Days after the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof, by acceleration of such due or prepayment date, or
otherwise;

 

(b) any representation or warranty made or deemed made by or on behalf of any
Credit Party or Empire Burbank in or in connection with this Agreement or any
amendment or modification hereof or of any Loan Document, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or of any
Loan Document, shall prove to have been incorrect when made or deemed made in
any material respect;

 

(c) (i) any Credit Party shall fail to observe or perform any covenant,
condition or agreement contained in Sections 6.2, 6.3, 6.7, 6.8, 6.9, 6.10, 6.14
or in Article 7, (ii)

 

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any Holding Company shall fail to observe or perform any covenant, condition or
agreement contained in Section 7.15, or (iii) any Credit Party shall fail to
observe or perform any other covenant, condition or agreement contained in
Article 6 and such failure described in this clause (iii) shall continue
unremedied for a period of 30 days after the earlier of (x) actual knowledge by
a Financial Officer of any Credit Party or (y) notice thereof from the
Administrative Agent (given at the request of any Lender) to the Borrower;

 

(d) (i) any Credit Party shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clauses (a), (b) or (c) of this Article) or any other Loan Document or (ii)
Empire Burbank shall fail to observe or perform any covenant, condition or
agreement contained in Section 7.14, and such failure described in clause (i) or
(ii) shall continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent (given at the request of any Lender) to the Borrower;

 

(e) any Credit Party shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness
(other than obligations under the Loan Documents) of any Credit Party, when and
as the same shall become due and payable, after giving effect to any grace
period with respect thereto;

 

(f) any event or condition occurs that results in any Material Indebtedness of
any Credit Party becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any such Material Indebtedness or any trustee or agent on
its or their behalf to cause any such Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity except for prepayments, repurchases, redemptions or
defeasances of secured Material Indebtedness of any Credit Party resulting from
the voluntary sale or transfer of property securing such Indebtedness;

 

(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Credit Party or Holding Company or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Credit Party or Holding Company or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall be entered;

 

(h) any Credit Party or Holding Company shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (g) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Credit Party or Holding Company or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting

 

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any of the foregoing; provided that none of the foregoing events of this clause
(h) shall be deemed to have occurred as a result of the consummation of the
Holdings Merger;

 

(i) any Credit Party or Holding Company shall become unable, admit in writing or
fail generally to pay its debts as they become due;

 

(j) a final judgment or judgments for the payment of money in excess of
$10,000,000 in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such judgment)
shall be rendered by one or more courts, administrative tribunals or other
bodies having jurisdiction against any Credit Party and the same shall not be
vacated or discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 60 days from the date of
entry thereof and the relevant Credit Party shall not, within said period of 60
days, or such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed during
such appeal;

 

(k) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect;

 

(l) there shall have been asserted against any Credit Party claims or
liabilities, whether accrued, absolute or contingent, based on or arising from
the generation, storage, transport, handling or disposal of Hazardous Materials
by any Credit Party or any of its Affiliates, or any predecessor in interest of
any Credit Party or any of its Affiliates, or relating to any site or facility
owned, operated or leased by any Credit Party or any of its Subsidiaries or
Affiliates, which claims or liabilities (insofar as they are payable by any
Credit Party but after deducting any portion thereof which is reasonably
expected to be paid by other credit worthy Persons jointly and severally liable
therefor), in the judgment of the Required Lenders are reasonably likely to be
determined adversely to any Credit Party, and the amount thereof is, singly or
in the aggregate, reasonably likely to have a Material Adverse Effect;

 

(m) any Change of Control shall have occurred;

 

(n) any of the following shall occur: (i) the Liens created by the Collateral
Documents shall at any time (other than by reason of the Administrative Agent
relinquishing such Lien) cease in any material respect to constitute valid and
perfected Liens on the Collateral intended to be covered thereby; (ii) except
for expiration in accordance with its respective terms, any Collateral Document
shall for whatever reason be terminated, or shall cease to be in full force and
effect; or (iii) the enforceability of any Collateral Document shall be
contested in writing by any Credit Party;

 

(o) any Credit Party or Empire Burbank shall assert in writing that its
obligations hereunder or under the Collateral Documents shall be invalid or
unenforceable;

 

(p) any Holding Company shall fail to observe or perform any covenant, condition
or agreement in respect of any Holding Company Debt with an aggregate principal
amount exceeding $10,000,000 that results in such Holding Company Debt becoming
due prior to its scheduled maturity or that enables or permits (with or without
the giving of notice, the

 

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lapse of time or both) the holder or holders of any Holding Company Debt with an
aggregate principal amount exceeding $10,000,000 or any trustee or agent on its
or their behalf to cause such Holding Company Debt to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity except for prepayments, repurchases, redemptions or
defeasances resulting from the voluntary sale or transfer of property securing
such Holding Company Debt to the extent permitted hereunder;

 

(q) Jose or Lenard Liberman shall default in the observance or performance of
their respective obligations under the Liberman Subordination Agreements (if
any) and such default shall continue unremedied for a period of 30 days after
the earlier of (x) actual knowledge by a Financial Officer of any Credit Party
or (y) notice thereof from the Administrative Agent (given at the request of any
Lender) to the Borrower;

 

(r) other than as a result of a sale or other Disposition permitted hereunder or
from the conversion of any Broadcast Station to digital television or in
connection with any Relocation, except any such conversion or Relocation which
causes a Material Adverse Effect, any Credit Party shall lose, fail to keep in
force, suffer the termination, suspension or revocation of, or terminate,
forfeit or suffer an adverse amendment to, any main station FCC License(s)
(excluding any auxiliary service licenses) held by any Credit Party which
contribute(s) in the aggregate in excess of 10% of the EBITDA of the Credit
Parties for the immediately preceding fiscal year as stated in the Compliance
Certificate required to be delivered for such fiscal year pursuant to Section
6.1(c) or, if such Compliance Certificate is not available at the time of such
loss, termination, suspension or revocation, as demonstrated through financial
statements and reports acceptable to the Administrative Agent in its reasonable
discretion; or

 

(s) any Credit Party shall permit its on-the-air broadcast operations to be
interrupted at any time for more than seven days, whether or not consecutive,
during any period of ten consecutive days, if such interruption is likely to
have a Material Adverse Effect unless (and only so long as), substantially all
damages, liabilities and other effects of such interruption of service
(including any adverse effect on the Credit Parties’ ability to perform its
obligations under this Agreement) are fully covered by business interruption
insurance;

 

then, and in every such event (other than an event described in clause (g) or
(h) of this Section 8.1), and at any time thereafter during the continuance of
such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Credit Parties, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Credit Parties accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties, and
(iii) the Administrative Agent may exercise all of the rights hereunder or under
the Collateral Documents or applicable law, including the rights as secured
party and mortgagee under the Collateral Documents; and in case of any event
described in clause (g) or (h) of this Section 8.1, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued

 

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interest thereon and all fees and other obligations of the Credit Parties
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties, and the Administrative Agent shall be
permitted to exercise such rights hereunder or under the Collateral Documents or
applicable law, including the rights as secured party and mortgagee under the
Collateral Documents to the extent permitted by applicable law.

 

ARTICLE 9

 

The Administrative Agent

 

9.1 Appointment and Authorization. Each of the Lenders and the Issuing Lender
hereby irrevocably appoints the Administrative Agent as its agent and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such actions and powers as
are reasonably incidental thereto.

 

9.2 Administrative Agent’s Rights as Lender. The Lender or other financial
institution serving as the Administrative Agent or the Issuing Lender hereunder
shall have the same rights and powers in its capacity as a Lender hereunder as
any other Lender and may exercise the same as though it were not the
Administrative Agent or the Issuing Lender, and such institution and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Credit Party or any Subsidiary or other Affiliate of
any thereof as if it were not the Administrative Agent or the Issuing Lender
hereunder.

 

9.3 Duties As Expressly Stated. Neither the Administrative Agent nor the Issuing
Lender shall have any duties or obligations except those expressly set forth in
this Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, (a) neither the Administrative Agent nor the Issuing Lender shall
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) neither the Administrative Agent nor
the Issuing Lender shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by this Agreement and the other Loan Documents that the
Administrative Agent or Issuing Lender is required to exercise in writing by the
Required Lenders (or such other number or percentage of the Lenders as is
required hereunder with respect to such action), and (c) except as expressly set
forth herein and in the other Loan Documents, neither the Administrative Agent
nor the Issuing Lender shall have any duty to disclose, or shall be liable for
the failure to disclose, any information relating to any Credit Party or any of
their respective Subsidiaries that is communicated to or obtained by the
financial institution serving as the Administrative Agent or the Issuing Lender
or any of its Affiliates or Approved Funds in any capacity. Neither the
Administrative Agent nor the Issuing Lender shall be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as is required hereunder with
respect to such action) or all of the Lenders if expressly required, or in the
absence of its own gross negligence or willful misconduct. Neither the
Administrative Agent nor the Issuing Lender shall be deemed to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent or the Issuing Lender by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for

 

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or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in, or in connection with, this Agreement or the other Loan
Documents, (ii) the contents of any certificate, report or other document
delivered hereunder or under any of the other Loan Documents or in connection
herewith of therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article 5 or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent or the Issuing Lender.
Neither the Administrative Agent nor the Issuing Lender shall, except to the
extent the Administrative Agent expressly instructed by the Required Lenders
with respect to collateral security under the Collateral Documents, be required
to initiate or conduct any litigation or collection proceedings hereunder or
under any other Loan Document; provided, however, that the Administrative Agent
shall not be required to take any action which exposes the Administrative Agent
to personal liability or which is contrary to the Loan Documents or applicable
law.

 

9.4 Reliance By Administrative Agent. The Administrative Agent and the Issuing
Lender shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person. The Administrative Agent and the Issuing Lender
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent and the Issuing Lender may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts. The Administrative Agent and the Issuing Lender
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action (it
being understood that this provision shall not release the Administrative Agent
from performing any action with respect to the Borrower expressly required to be
performed by it pursuant to the terms hereof) under this Agreement. The
Administrative Agent and the Issuing Lender shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Loans.

 

9.5 Action Through Sub-Agents. The Administrative Agent and the Issuing Lender
may perform any and all of its duties, and exercise its rights and powers, by or
through any one or more sub-agents appointed by the Administrative Agent or the
Issuing Lender. The Administrative Agent and the Issuing Lender and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through its Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and the Issuing Lender and any such sub-agent, and shall
apply to its

 

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activities in connection with the syndication of the credit facilities provided
for herein as well as activities of the Administrative Agent or the Issuing
Lender.

 

9.6 Resignation of Administrative Agent and Appointment of Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
Administrative Agent, as provided in this paragraph, the Administrative Agent
may resign at any time upon 30 days’ notice to the Lenders, the Issuing Lender
and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the prior written consent of the Borrower (which shall not be
unreasonably withheld or delayed), to appoint a successor Administrative Agent.
If no successor shall have been so appointed and shall have accepted such
appointment within 30 days after such retiring Administrative Agent gives notice
of its resignation, then such retiring Administrative Agent may, on behalf of
the Lenders and the Issuing Lender, appoint a successor Administrative Agent,
which shall be a bank with an office in Los Angeles, California or New York, New
York, or an Affiliate of any such bank. Upon the acceptance of its appointment
as Administrative Agent hereunder, by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 10.3 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.

 

9.7 Lenders’ Independent Decisions. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Lender or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Issuing Lender or any other Lender
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement and the other Loan Documents, any related
agreement or any document furnished hereunder or thereunder. Except as
explicitly provided herein, neither the Administrative Agent nor the Issuing
Lender has any duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
to such operations, business, property, condition or creditworthiness, whether
such information comes into its possession on or before the first Event of
Default or at any time thereafter. Neither the Administrative Agent nor the
Issuing Lender shall be deemed a trustee or other fiduciary on behalf of any
party.

 

9.8 Indemnification. Each Lender agrees to indemnify and hold harmless the
Administrative Agent, the Lead Arranger and the Issuing Lender (to the extent
not reimbursed under Section 10.3, but without limiting the obligations of the
Borrower under Section 10.3), ratably in accordance with the aggregate principal
amount of the respective Commitments of and/or Loans and LC Exposure held by the
Lenders (or, if all of the Commitments shall have been terminated or expired,
ratably in accordance with the aggregate outstanding amount of the

 

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Loans and LC Exposure held by the Lenders), for any and all liabilities
(including pursuant to any Environmental Law), obligations, losses, damages,
penalties, actions, judgments, deficiencies, suits, costs, expenses (including
reasonable attorney’s fees) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Administrative
Agent, the Lead Arranger or the Issuing Lender (including by any Lender) arising
out of or by reason of any investigation in or in any way relating to or arising
out of any Loan Document or any other documents contemplated by or referred to
therein for any action taken or omitted to be taken by the Administrative Agent,
the Lead Arranger or the Issuing Lender under or in respect of any of the Loan
Documents or other such documents or the transactions contemplated thereby
(including the costs and expenses that the Borrower is obligated to pay under
Section 10.3, but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided, however, that no Lender shall
be liable for any of the foregoing to the extent they are determined by a court
of competent jurisdiction in a final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of the party to be indemnified.
The agreements set forth in this Section 9.8 shall survive the payment of all
Loans and other obligations hereunder and shall be in addition to and not in
lieu of any other indemnification agreements contained in any other Loan
Document.

 

9.9 Consents Under Other Loan Documents. Except as otherwise provided in this
Agreement and the other Loan Documents, the Administrative Agent may, with the
prior consent of the Required Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the other Loan Documents.

 

ARTICLE 10

 

Miscellaneous

 

10.1 Notices. Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telephonic facsimile (fax), as follows:

 

(a) if to any Credit Party, to LBI Media, Inc., 1845 West Empire Avenue,
Burbank, CA 91504, Attention: Executive Vice President (fax no. (818) 558-4244),
with copies to: O’Melveny & Myers LLP, 400 South Hope Street, Los Angeles, CA
90071, Attention: Joseph K. Kim (fax no. (213) 430-6407).

 

(b) if to the Administrative Agent, to Credit Suisse First Boston, Eleven
Madison Avenue, 23rd Floor, New York, New York 10010, Attention: William O’Daly
(fax no. (212) 325-8072), with a copy to Palmer & Dodge LLP, 111 Huntington
Avenue, Boston, Massachusetts 02199, Attention: George Ticknor (fax no. (617)
227-4420);

 

(c) if to any Lender (including to CSFB in its capacity as the Issuing Lender),
to it at its address (or fax number) set forth in its Administrative
Questionnaire.

 

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Any party hereto may change its address or fax number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

 

10.2 Waivers; Amendments.

 

(a) No failure or delay by the Administrative Agent, the Issuing Lender or any
Lender in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Lender and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by any Credit Party or Subsidiary
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 10.2, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Lender may have had notice or knowledge of such Default at the time.

 

(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except to the extent this
Agreement or any other Loan Document provides for revisions to the schedules
hereto or thereto with the approval of the Administrative Agent or pursuant to
an agreement or agreements in writing entered into by the Borrower and the
Required Lenders or by the Borrower and the Administrative Agent with the
written consent of the Required Lenders and the Administrative Agent; provided
that no such agreement shall:

 

(i) increase the Commitment of any Lender without the written consent of such
Lender and the Administrative Agent, except that the consent of the
Administrative Agent shall not be required with respect to any Revolving Credit
Commitment Increase;

 

(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby;

 

(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement other than mandatory prepayments of the Loans required under
Section 2.11(b), or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, change the maturity date
of any Loan, or postpone the scheduled date of expiration of any Commitment, or
postpone the ultimate expiration date of any Letter of Credit beyond the
Revolving Credit Maturity Date, without the written consent of each Lender
affected thereby;

 

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(iv) change Section 2.11(c) in a manner that would alter the application of
prepayments thereunder, or change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without in each case
the written consent of each Lender;

 

(v) change any of the provisions of this Section 10.2 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
under any other Loan Document or make any determination or grant any consent
hereunder or thereunder, without the written consent of each Lender;

 

(vi) release any of the Guarantors from its obligations in respect of its
Guarantee under Article 3 or release all or substantially all of the Collateral
(or terminate any Lien with respect thereto), except as expressly permitted in
the Loan Documents, without the written consent of each Lender; or

 

(vii) waive any of the conditions precedent specified in Section 5.1 without the
consent of each Lender and the Administrative Agent;

 

provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Swing Loan Lender or the
Issuing Lender hereunder without the prior written consent of such Agent, the
Swing Loan Lender or the Issuing Lender, as the case may be.

 

(c) None of the Collateral Documents nor any provision thereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Credit Parties party thereto, and by the Administrative
Agent with the written consent of the Required Lenders.

 

10.3 Expenses; Indemnity; Damage Waiver.

 

(a) The Credit Parties jointly and severally agree to pay, or reimburse the
Administrative Agent, the Lead Arranger or the Lenders, as applicable, for
paying, (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent, the Lead Arranger and their Affiliates, including the reasonable fees,
charges and disbursements of Special Counsel, any FCC counsel or local counsel,
in connection with the syndication of the credit facilities provided for herein,
the preparation of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Lender in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) all out-of-pocket
expenses incurred by the Administrative Agent, the Issuing Lender, the Lead
Arranger or any Lender, including the reasonable fees, charges and disbursements
of any counsel for the Administrative Agent, the Issuing Lender, the Lead
Arranger or any Lender, in connection with the enforcement or protection of its
rights in connection with this Agreement and the other Loan Documents, including
its rights under this Section 10.3, or in connection with the Loans made or
Letters of Credit issued hereunder, including in connection with any workout,
restructuring or

 

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negotiations in respect thereof, and (iv) all Other Taxes levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Collateral Document or any other document referred to
therein.

 

(b) The Credit Parties jointly and severally agree to indemnify the
Administrative Agent, the Lead Arranger, the Issuing Lender and each Lender, and
each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee and settlement
costs, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, the other Loan Documents or any agreement or instrument contemplated
hereby, the performance or failure to perform by the parties hereto and thereto
of their respective obligations hereunder or thereunder or the consummation of
the Transactions or any other transactions contemplated hereby or thereby, (ii)
any Loan or Letter of Credit or the use of the proceeds therefrom (including any
refusal by the Issuing Lender to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by any Credit Party or any of their Subsidiaries, or any Environmental
Liability related in any way to any Credit Party or any of their Subsidiaries,
or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have) resulted from the gross negligence or willful misconduct of
such Indemnitee.

 

(c) To the extent that the Credit Parties fail to pay any amount required to be
paid by them to the Administrative Agent under paragraph (a) or (b) of this
Section 10.3, each Lender severally agrees to pay to the Administrative Agent
such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent in its capacity as such. To the extent
that the Credit Parties fail to pay any amount required to be paid by them to
the Lead Arranger under paragraph (a) or (b) of this Section 10.3, each Lender
severally agrees to pay to the Lead Arranger such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Lead Arranger in its capacity as
such. To the extent that the Credit Parties fail to pay any amount required to
be paid by them to the Issuing Lender under paragraph (a) or (b) of this Section
10.3, each Revolving Credit Lender severally agrees to pay to the Issuing Lender
such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the

 

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unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Issuing
Lender in its capacity as such.

 

(d) To the extent permitted by applicable law, none of the Credit Parties shall
assert, and each Credit Party hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, the other Loan Documents or any
agreement or instrument contemplated hereby or thereby, the Transactions, any
Loan or Letter of Credit or the use of the proceeds thereof.

 

(e) All amounts due under this Section 10.3 shall be payable promptly after
written demand therefor.

 

10.4 Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that no Credit Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and the Administrative Agent (and any attempted assignment or
transfer by any Credit Party without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Related Parties of the Administrative Agent, the Issuing Lender and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) and may assign Revolving
Credit Commitment and Revolving Credit Loans; provided that:

 

(i) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund of a Lender, the Borrower and the Administrative Agent (and,
in the case of an assignment of all or a portion of a Revolving Credit
Commitment or any Lender’s obligations in respect of its LC Exposure, the
Issuing Lender) each must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld, delayed or conditioned),

 

(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or Approved Fund of a Lender or an assignment of the entire remaining amount of
the assigning Lender’s Loans or Commitment, the amount of the Loans or
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than the lesser of
$5,000,000 or the entire Commitment of such assigning Lender, unless the
Borrower and the Administrative Agent otherwise consent; provided that for such
purposes, the amount of outstanding

 

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Loans and unused Commitments shall be determined without regard to any Swing
Loans then outstanding;

 

(iii) the parties to each assignment (other than an assignment to a Lender or
its Affiliate or Approved Fund) shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and recordation
fee of $3,000, and

 

(iv) the assignee shall be an Eligible Assignee and shall deliver to the
Administrative Agent an Administrative Questionnaire;

 

provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required (i) if an Event of Default has occurred and is
continuing, (ii) in the event of an assignment to an existing Lender, or (iii)
in the event of an assignment by General Electric Capital Corporation following
a determination by such Lender or its affiliate, the National Broadcasting
Company (“NBC”), that continued ownership of rights or obligations hereunder
would (A) violate FCC rules pertinent to attributable ownership or (B) cause NBC
to forgo investments or acquisition opportunities in any of the markets in which
the Borrower then operates, then, in each case, such Lender shall consult with
the Borrower and the Administrative Agent regarding proposed assignees and use
reasonable efforts to cause such assignment to an assignee reasonably acceptable
to the Borrower and the Administrative Agent.

 

Notwithstanding the foregoing, the restrictions of this Section 10.4(b)(ii)
shall not apply until the date on which the primary syndication of the
Commitments has been completed.

 

(c) Upon acceptance and recording pursuant to paragraph (e) of this Section
10.4, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.15,
2.16, 2.17 and 10.3 with respect to matters described therein occurring or
accruing prior to the effective date of any such Assignment and Acceptance).
Notwithstanding anything therein to the contrary, no Approved Fund shall be
entitled to receive any greater amount pursuant to Sections 2.15, 2.16 and 2.17
than the transferor Lender would have been entitled to receive in respect of the
assignment effected by such transferor Lender had no assignment occurred. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with paragraph (b) of this Section 10.4 shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (f) of this Section.

 

(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in New York, New York or Los
Angeles, California a copy of each Assignment and Acceptance and Lender Joinder
Agreement delivered to it and a register for the recordation of the names and
addresses of the Lenders, the identity of the Swing

 

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Loan Lender and the amount of the Swing Loan Commitment and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive (absent manifest error), and the Borrower, the
Administrative Agent, the Issuing Lender and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary (absent manifest error). The Register shall be available for inspection
by the Borrower, the Issuing Lender and any Lender or the Administrative Agent,
at any reasonable time and from time to time upon reasonable prior notice.

 

(e) (i) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section 10.4
and any written consent to such assignment required by paragraph (b) of this
Section 10.4, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph, and (ii) upon its
receipt of a duly completed Lender Joinder Agreement executed by a New Lender
and Administrative Agent in accordance with Section 2.1(b), and the New Lender’s
completed Administrative Questionnaire, the Administrative Agent shall accept
such Lender Joinder Agreement and record the information contained therein in
the Register.

 

(f) Any Lender may, without the consent of or notice to the Borrower, the
Administrative Agent or the Issuing Lender, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 10.2(b), or Section 10.2(c), that affects such Participant. Subject to
paragraph (g) of this Section 10.4, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.15. 2.16 and 2.17 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 10.4.

 

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(g) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.

 

(h) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any such pledge or assignment to a Federal Reserve Bank;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto.

 

(i) Anything in this Section 10.4 to the contrary notwithstanding, no Lender may
assign or participate any interest in any Loan held by it hereunder to any
Credit Party or any of its Affiliates or Subsidiaries without the prior consent
of each Lender and the Administrative Agent.

 

(j) A Lender may furnish any information concerning any Credit Party, Holding
Company or Subsidiary in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants)
subject, however, to and so long as the recipient agrees in writing to be bound
by, the provisions of Section 10.13. In addition, the Administrative Agent may
furnish any information concerning any Credit Party or any of its Subsidiaries
or Affiliates in the Administrative Agent’s possession to any Affiliate of the
Administrative Agent, subject, however, to the provisions of Section 10.13. The
Credit Parties shall assist any Lender in effectuating any assignment or
participation pursuant to this Section 10.4 (including during syndication) in
whatever manner such Lender reasonably deems necessary, including participation
in meetings with prospective transferees.

 

(k) Each Lender listed on the signature pages hereof hereby agrees (i) that it
is an Eligible Assignee described in the definition thereof. Each Lender that
becomes a party hereto pursuant to an Assignment and Acceptance shall be deemed
to agree that the agreements of such Lender contained in Section 3 of such
Assignment and Acceptance are incorporated herein by this reference.

 

10.5 Survival. All covenants, agreements, representations and warranties made by
the Credit Parties and Subsidiaries herein and in the other Loan Documents, and
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement and the other Loan Documents, shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Lender or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect so long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement or the other Loan Documents
is outstanding and

 

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unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and
10.3 and Article 9 shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment of
the Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any other Loan Document or
any provision hereof or thereof.

 

10.6 Counterparts; Integration; References to Agreement; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent or its counsel and to certain other lenders constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Whenever there is a reference in any
Collateral Document or UCC Financing Statement to the “Credit Agreement” to
which the Administrative Agent, the Lenders and the Credit Parties are parties,
such reference shall be deemed to be made to this Agreement among the parties
hereto. Except as provided in Section 5.1, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

 

10.7 Severability. Any provision of this Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

10.8 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section 10.8 are in addition to any other rights and remedies
(including other rights of setoff) that such Lender may have.

 

10.9 Governing Law; Jurisdiction; Consent to Service of Process.

 

(a) This Agreement and all issues arising with respect hereto, including the
validity or enforceability of any agreement contained herein and the issue of
usury with respect

 

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to the transactions contemplated hereby, shall be construed in all respects in
accordance with and governed by the law of the State of New York.

 

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the courts of State of New
York and of the United States District Court for the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York court
(or, to the extent permitted by law, in such Federal court). Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, the Issuing Lender or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
against any Credit Party or Subsidiary or its properties in the courts of any
jurisdiction.

 

(c) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
court referred to in paragraph (b) of this Section 10.9. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

 

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 10.1. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

 

10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.

 

10.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.

 

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10.12 Release of Collateral and Guarantees. The Administrative Agent and the
Lenders agree that if all of the capital stock of or other equity interests in,
or any assets of, any Subsidiary that is owned by the Credit Parties is sold to
any Person as permitted by the terms of this Agreement and the Collateral
Documents, or if any Subsidiary is merged or consolidated with or into any other
Person as permitted by the terms of this Agreement and such Subsidiary is not
the continuing or surviving corporation, the Administrative Agent shall, upon
request of the Borrower (and upon the receipt by the Administrative Agent of
such evidence as the Administrative Agent or any Lender may reasonably request
to establish that such sale, designation, merger or consolidation is permitted
by the terms of this Agreement), terminate the Guarantee of such Subsidiary
under Article 3 and authorize the Administrative Agent to release the Lien
created by the Collateral Documents on any capital stock of or other equity
interests in such Subsidiary and on any assets of such Subsidiary.

 

10.13 Confidentiality. Each Lender agrees to keep confidential information
obtained by it pursuant hereto and the other Loan Documents confidential in
accordance with such Lender’s customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender’s employees, representatives, directors, attorneys, auditors (including
any external auditors), agents, professional advisors, trustees or Affiliates
who are advised of the confidential nature of such information or to any direct
or indirect contractual counter party in swap agreements or such contractual
counter party’s professional advisor (so long as such auditors, contractual
counterparty or professional advisor to such contractual counter party agrees to
be bound by the provisions of this Section 10.13), (b) to the extent such
information presently is or hereafter becomes available to such Lender on a
non-confidential basis from any source of such information that is in the public
domain at the time of disclosure (so long as such information does not become
publicly available as a result of a breach of this Section 10.13), (c) to the
extent disclosure is required by law (including applicable securities law),
regulation, subpoena or judicial order or process (provided that notice of such
requirement or order shall be promptly furnished to the Borrower unless such
notice is legally prohibited) or requested or required by bank, securities,
insurance or investment company regulators or auditors or any administrative
body or commission (including the Securities Valuation Office of the National
Association of Insurance Commissioners) to whose jurisdiction such Lender may be
subject, (d) to any rating agency to the extent required in connection with any
rating to be assigned to such Lender, (e) to assignees or participants or
prospective assignees or participants who agree to be bound by the provisions of
this Section 10.13, (f) to the extent required in connection with any litigation
between any Credit Party and any Lender with respect to the Loans or this
Agreement and the other Loan Documents or (g) with the Borrower’s prior written
consent.

 

10.14 Continued Effectiveness; No Novation. Notwithstanding anything contained
herein, the terms of this Agreement are not intended to and do not serve to
effect a novation of the obligations, liabilities or indebtedness of the Credit
Parties under the Existing Credit Agreement. Instead, it is the express
intention of the parties hereto to reaffirm, amend and restate the obligations,
liabilities and indebtedness created under or otherwise evidenced by the
Existing Credit Agreement that is evidenced by the notes provided for therein
and secured by the collateral contemplated thereby and hereby (it being
understood that it was the intention of the parties to the Existing Credit
Agreement to reaffirm, amend and restate the obligations, liabilities and
indebtedness created under or otherwise evidenced by the Original Credit
Agreement that is

 

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evidenced by the notes provided for therein and secured by the collateral
contemplated thereby). The Credit Parties acknowledge and confirm that the liens
and security interests granted pursuant to the Loan Documents secure the
obligations, liabilities and indebtedness of the Credit Parties to the Lenders
under the Existing Credit Agreement, as amended and restated hereby, and that
the term “Secured Obligations” used in certain of the Loan Documents (or any
other term used herein to describe or refer to the obligations, liabilities and
indebtedness of the Credit Parties) describes and refers to the Credit Parties’
obligations, liabilities and indebtedness hereunder and under the Existing
Credit Agreement, as amended and restated hereby, as the same had been amended,
modified, supplemented or restated prior to the date hereof and as the same may
be further amended, modified, supplemented or restated from time to time. The
Loan Documents and all agreements, documents and instruments executed and
delivered in connection with any of the foregoing shall each be deemed to be
amended to the extent necessary to give effect to the provisions of this
Agreement. Cross-references in the Loan Documents to particular section or
subsection numbers in the Original Credit Agreement or the Existing Credit
Agreement shall be deemed to be cross-references to the corresponding sections
or subsections, as applicable, of this Agreement.

 

10.15 USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Patriot Act, and the Borrower
agrees to provide such information from time to time to any Lender upon
reasonable request.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

 

BORROWER

 

LBI MEDIA, INC., a California corporation

By:   /s/    Brett Zane             Name:   Brett Zane     Title:   Chief
Financial Officer

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

GUARANTORS

 

LIBERMAN TELEVISION OF HOUSTON, INC., a California corporation

KZJL LICENSE CORP., a California corporation

LIBERMAN TELEVISION, INC., a California corporation

KRCA TELEVISION, INC., a California corporation

KRCA LICENSE CORP., a California corporation

LIBERMAN BROADCASTING, INC., a California corporation

LBI RADIO LICENSE CORP., a California corporation

LIBERMAN BROADCASTING OF HOUSTON, INC., a California corporation

LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP., a California corporation

LIBERMAN BROADCASTING OF DALLAS, INC., a California corporation

LIBERMAN BROADCASTING OF DALLAS LICENSE CORP., a California corporation

LIBERMAN TELEVISION OF DALLAS, INC.,

a California corporation

LIBERMAN TELEVISION OF DALLAS LICENSE CORP., a California corporation

EMPIRE BURBANK STUDIOS, INC.,

a California Corporation

 

 

By:

  /s/    Brett Zane     Name:   Brett Zane     Title:   Chief Financial Officer

 

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HOLDING COMPANIES

 

Solely with respect to provisions of Section 7.15:

 

 

LBI HOLDINGS I, INC.,

a California corporation

By:   /s/    Brett Zane     Name:   Brett Zane     Title:   Chief Financial
Officer

LBI MEDIA HOLDINGS, INC.,

a Delaware corporation

By:   /s/    Brett Zane     Name:   Brett Zane     Title:   Chief Financial
Officer

 

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ADMINISTRATIVE AGENT/ LEAD ARRANGER CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS
BRANCH, as Administrative Agent, Lead Arranger and Lender By:  

/s/    William O’Daly        

    Name:   William O’Daly     Title:   Director By:  

/s/    Doreen B. Welch

    Name:   Doreen B. Welch     Title:   Associate

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

LENDERS U.S. BANK, N.A. By:  

/s/    Jaycee A. Earll        

    Name:   Jaycee A. Earll     Title:   Vice President

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

 

CIT LENDING SERVICES CORPORATION By:  

/s/    Douglas Maher        

    Name:   Douglas Maher     Title:   Vice President

 

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

SUNTRUST BANK

By:

 

/s/    Kip Hurd

    Name:   Kip Hurd     Title:   Vice President

 

 

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

UBS LOAN FINANCE LLC By:  

/s/    Wilfred V. Saint

    Name:   Wilfred V. Saint     Title:   Director         Banking Products
Services, U.S.

      By:  

/s/    Juan Zuniga

    Name:   Juan Zuniga     Title:   Associate Director         Banking Products
Services, U.S.

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

WEBSTER BANK, NATIONAL ASSOCIATION By:      

/s/    Robert E. Meditz        

    Name:   Robert E. Meditz     Title:   Vice President

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

CIBC INC. By:  

/s/    Jonathan Rabinowitz        

    Name:   Jonathan Rabinowitz     Title:   Executive Director         CIBC
World Markets Corp.         as Agent

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

UNION BANK OF CALIFORNIA, N.A. By:   /s/    Peter C. Connoy     Name:   Peter C.
Connoy     Title:   Senior Vice President

 

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DEUTSCHE BANK TRUST COMPANY AMERICAS By:  

/s/    Gregory Shefrin        

    Name:   Gregory Shefrin     Title:   Director

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

The following have become parties to this Credit Agreement as of the date set
forth next to their respective signatures:

 

           

ADDITIONAL GUARANTORS

 

[NAME OF GUARANTOR]

Dated:               By:                             Name:                      
  Title:    

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

SCHEDULE 2.1

 

Commitments

 

Part I Existing Credit Agreement Commitments

 

LENDER

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

   REVOLVING CREDIT
COMMITMENT

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

CREDIT SUISSE FIRST BOSTON

   $ 20,000,000.00

UNION BANK OF CALIFORNIA, N.A.

   $ 30,000,000.00

CIT LENDING SERVICES CORPORATION

   $ 20,000,000.00

U.S. BANK, N.A.

   $ 20,000,000.00

SUNTRUST BANK

   $ 30,000,000.00

WEBSTER BANK

   $ 10,000,000.00

UBS LOAN FINANCE LLC

   $ 15,000,000.00

CIBC INC.

   $ 5,000,000.00

DEUTSCHE BANK TRUST COMPANY AMERICAS

   $ 20,000,000.00

TOTALS:

   $ 170,000,000.00

 

Part II Closing Date Revolving Credit Commitments

 

LENDER

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

   REVOLVING CREDIT
COMMITMENT

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

CREDIT SUISSE FIRST BOSTON

   $ 20,000,000.00

UNION BANK OF CALIFORNIA, N.A.

   $ 30,000,000.00

CIT LENDING SERVICES CORPORATION

   $ 20,000,000.00

U.S. BANK, N.A.

   $ 20,000,000.00

SUNTRUST BANK

   $ 30,000,000.00

WEBSTER BANK

   $ 10,000,000.00

UBS LOAN FINANCE LLC

   $ 15,000,000.00

CIBC INC.

   $ 10,000,000.00

DEUTSCHE BANK TRUST COMPANY AMERICAS

   $ 20,000,000.00

TOTALS:

   $ 175,000,000.00