Exhibit
10.9


 


NOTE PURCHASE AGREEMENT


 


by and among


 


CURRENT MEDIA, LLC


 


HSBC BANK USA, NATIONAL ASSOCIATION, AS COLLATERAL
AGENT


 


and


 


THE LENDERS NAMED HEREIN


 


Dated as of September 20, 2006


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I
  DEFINED TERMS

  	
  1

  
	
   

  	
  Section 1.1

  	
   

  	
  Definitions

  	
  1

  
	
  ARTICLE II SALE OF NOTES

  	
  11

  
	
   

  	
  Section 2.1

  	
   

  	
  Authorization of Notes

  	
  11

  
	
   

  	
  Section 2.2

  	
   

  	
  Purchase and Sale

  	
  12

  
	
   

  	
  Section 2.3

  	
   

  	
  Subsidiary Guaranty

  	
  12

  
	
  ARTICLE III CLOSING; CONDITIONS PRECEDENT

  	
  12

  
	
   

  	
  Section 3.1

  	
   

  	
  Time and Place of
  Closing

  	
  12

  
	
   

  	
  Section 3.2

  	
   

  	
  Deliveries by the
  Company

  	
  13

  
	
   

  	
  Section 3.3

  	
   

  	
  Deliveries by each
  Lender

  	
  13

  
	
   

  	
  Section 3.4

  	
   

  	
  Company’s Conditions

  	
  14

  
	
   

  	
  Section 3.5

  	
   

  	
  Closing Date Conditions to Each Lender’s Obligations
  Under this Agreement

  	
  14

  
	
   

  	
  Section 3.6

  	
   

  	
  Conditions to Each Loan
  Extension

  	
  15

  
	
  ARTICLE IV REVOLVING LOANS

  	
  15

  
	
   

  	
  Section 4.1

  	
   

  	
  Revolving Commitments

  	
  15

  
	
   

  	
  Section 4.2

  	
   

  	
  Borrowing Mechanics for
  Revolving Loans

  	
  15

  
	
   

  	
  Section 4.3

  	
   

  	
  Ratable Sharing

  	
  16

  
	
   

  	
  Section 4.4

  	
   

  	
  Defaulting Lenders

  	
  16

  
	
   

  	
  Section 4.5

  	
   

  	
  Optional Termination or
  Reduction of Commitments

  	
  17

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
  17

  
	
   

  	
  Section 5.1

  	
   

  	
  Corporate Existence of
  the Company; Subsidiaries

  	
  18

  
	
   

  	
  Section 5.2

  	
   

  	
  Authorization

  	
  18

  
	
   

  	
  Section 5.3

  	
   

  	
  Binding Agreement

  	
  18

  
	
   

  	
  Section 5.4

  	
   

  	
  Subsidiary Guaranties

  	
  18

  
	
   

  	
  Section 5.5

  	
   

  	
  No Violations

  	
  19

  
	
   

  	
  Section 5.6

  	
   

  	
  Compliance with Laws

  	
  19

  
	
   

  	
  Section 5.7

  	
   

  	
  Permits

  	
  20

  
	
   

  	
  Section 5.8

  	
   

  	
  Title to Properties

  	
  20

  
	
   

  	
  Section 5.9

  	
   

  	
  Defaults

  	
  20

  
	
   

  	
  Section 5.10

  	
   

  	
  Financial Statements

  	
  20

  
	
   

  	
  Section 5.11

  	
   

  	
  Absence of Undisclosed
  Liabilities

  	
  21

  
	
   

  	
  Section 5.12

  	
   

  	
  Absence of Certain
  Changes

  	
  21

  
	
   

  	
  Section 5.13

  	
   

  	
  Tax Matters

  	
  21

  
	
   

  	
  Section 5.14

  	
   

  	
  Litigation

  	
  21

  
	
   

  	
  Section 5.15

  	
   

  	
  Intellectual Property

  	
  21

  
	
   

  	
  Section 5.16

  	
   

  	
  Environmental Matters

  	
  22

  
	
   

  	
  Section 5.17

  	
   

  	
  Employee Benefit Plans

  	
  22

  
	
   

  	
  Section 5.18

  	
   

  	
  Labor Matters

  	
  23

  
	
   

  	
  Section 5.19

  	
   

  	
  Use of Proceeds; Margin
  Regulations

  	
  23

  
	
   

  	
  Section 5.20

  	
   

  	
  Creation and Perfection
  of Security Interests

  	
  23

  
	
   

  	
  Section 5.21

  	
   

  	
  Solvency

  	
  23

  
	
   

  	
  Section 5.22

  	
   

  	
  Brokers or Finders

  	
  23

  
															



 

















 


	
   

  	
  Section 5.23

  	
   

  	
  No General Solicitation

  	
  24

  
	
   

  	
  Section 5.24

  	
   

  	
  Investment Company Act

  	
  24

  
	
  ARTICLE VI
  REPRESENTATIONS AND WARRANTIES OF THE LENDERS

  	
  24

  
	
   

  	
  Section 6.1

  	
   

  	
  Investment Purpose

  	
  25

  
	
   

  	
  Section 6.2

  	
   

  	
  Availability of Funds

  	
  25

  
	
   

  	
  Section 6.3

  	
   

  	
  Access to Information

  	
  25

  
	
   

  	
  Section 6.4

  	
   

  	
  Limited Operating
  History

  	
  25

  
	
   

  	
  Section 6.5

  	
   

  	
  Accredited Investor

  	
  25

  
	
   

  	
  Section 6.6

  	
   

  	
  Brokers or Finders

  	
  26

  
	
  ARTICLE VII PAYMENT OF
  THE NOTES; REDEMPTION

  	
  26

  
	
   

  	
  Section 7.1

  	
   

  	
  Required Payments

  	
  26

  
	
   

  	
  Section 7.2

  	
   

  	
  Optional Prepayment of
  the Notes

  	
  26

  
	
   

  	
  Section 7.3

  	
   

  	
  Purchase of Notes

  	
  26

  
	
   

  	
  Section 7.4

  	
   

  	
  Redemption

  	
  26

  
	
  ARTICLE VIII
  AFFIRMATIVE COVENANTS

  	
  27

  
	
   

  	
  Section 8.1

  	
   

  	
  Maintenance of
  Existence; Compliance with Obligations

  	
  27

  
	
   

  	
  Section 8.2

  	
   

  	
  Compliance with Laws

  	
  27

  
	
   

  	
  Section 8.3

  	
   

  	
  Financial Information

  	
  27

  
	
   

  	
  Section 8.4

  	
   

  	
  Notice of Defaults

  	
  28

  
	
   

  	
  Section 8.5

  	
   

  	
  Inspection of Property,
  Books and Records

  	
  28

  
	
   

  	
  Section 8.6

  	
   

  	
  Further Assurances

  	
  29

  
	
   

  	
  Section 8.7

  	
   

  	
  Direct Subsidiaries

  	
  29

  
	
   

  	
  Section 8.8

  	
   

  	
  Current TV as a
  Subsidiary Guarantor

  	
  29

  
	
  ARTICLE IX NEGATIVE
  COVENANTS

  	
  29

  
	
   

  	
  Section 9.1

  	
   

  	
  Indebtedness

  	
  29

  
	
   

  	
  Section 9.2

  	
   

  	
  Negative Pledge

  	
  30

  
	
   

  	
  Section 9.3

  	
   

  	
  Investments

  	
  31

  
	
   

  	
  Section 9.4

  	
   

  	
  Merger, Consolidation,
  etc.

  	
  32

  
	
   

  	
  Section 9.5

  	
   

  	
  Transactions with
  Affiliates

  	
  33

  
	
   

  	
  Section 9.6

  	
   

  	
  Restricted Payments,
  etc.

  	
  33

  
	
   

  	
  Section 9.7

  	
   

  	
  Dispositions

  	
  34

  
	
   

  	
  Section 9.8

  	
   

  	
  Subsidiaries

  	
  34

  
	
  ARTICLE X EVENTS OF
  DEFAULT

  	
  34

  
	
   

  	
  Section 10.1

  	
   

  	
  Event of Default

  	
  34

  
	
   

  	
  Section 10.2

  	
   

  	
  Consequences of Events
  of Default

  	
  36

  
	
  ARTICLE XI
  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

  	
  38

  
	
   

  	
  Section 11.1

  	
   

  	
  Registration of Notes

  	
  37

  
	
   

  	
  Section 11.2

  	
   

  	
  Transfer and Exchange
  of Notes

  	
  37

  
	
   

  	
  Section 11.3

  	
   

  	
  Replacement of Notes

  	
  38

  
	
  ARTICLE XII COLLATERAL
  AGENT

  	
  37

  
	
   

  	
  Section 12.1

  	
   

  	
  Appointment of the
  Collateral Agent

  	
  38

  
	
   

  	
  Section 12.2

  	
   

  	
  Nature of Duties of
  Collateral Agent

  	
  39

  
	
   

  	
  Section 12.3

  	
   

  	
  Right to Realize on
  Collateral and Enforce Subsidiary Guaranty

  	
  39

  
	
   

  	
  Section 12.4

  	
   

  	
  Lack of Reliance on the
  Collateral Agent

  	
  39

  



 


ii

















 


	
   

  	
  Section 12.5

  	
   

  	
  Certain Rights of the
  Collateral Agent

  	
  39

  
	
   

  	
  Section 12.6

  	
   

  	
  Reliance by the
  Collateral Agent

  	
  40

  
	
   

  	
  Section 12.7

  	
   

  	
  Indemnification of the
  Collateral Agent

  	
  40

  
	
   

  	
  Section 12.8

  	
   

  	
  The Collateral Agent in
  its Individual Capacity

  	
  40

  
	
   

  	
  Section 12.9

  	
   

  	
  Successor Collateral
  Agent

  	
  40

  
	
   

  	
  Section 12.10

  	
   

  	
  Collateral Matters

  	
  41

  
	
  ARTICLE XIII EXPENSES,
  ETC.

  	
  41

  
	
   

  	
  Section 13.1

  	
   

  	
  Transaction Expenses

  	
  41

  
	
   

  	
  Section 13.2

  	
   

  	
  Survival

  	
  42

  
	
  ARTICLE XIV SURVIVAL
  AND INDEMNIFICATION

  	
  41

  
	
   

  	
  Section 14.1

  	
   

  	
  Survival of
  Representations and Warranties

  	
  42

  
	
   

  	
  Section 14.2

  	
   

  	
  Company’s Agreement to
  Indemnify

  	
  42

  
	
   

  	
  Section 14.3

  	
   

  	
  Indemnification
  Procedures

  	
  43

  
	
  ARTICLE XV AMENDMENT
  AND WAIVER

  	
  43

  
	
   

  	
  Section 15.1

  	
   

  	
  Requirements

  	
  44

  
	
   

  	
  Section 15.2

  	
   

  	
  Solicitation of Holders
  of Notes

  	
  45

  
	
   

  	
  Section 15.3

  	
   

  	
  Binding Effect

  	
  45

  
	
   

  	
  Section 15.4

  	
   

  	
  Notes held by the
  Company

  	
  45

  
	
  ARTICLE XVI
  MISCELLANEOUS

  	
  45

  
	
   

  	
  Section 16.1

  	
   

  	
  Governing Law; Consent
  to Jurisdiction

  	
  46

  
	
   

  	
  Section 16.2

  	
   

  	
  Waiver of Jury Trial

  	
  46

  
	
   

  	
  Section 16.3

  	
   

  	
  Legal Rate

  	
  46

  
	
   

  	
  Section 16.4

  	
   

  	
  Severability

  	
  46

  
	
   

  	
  Section 16.5

  	
   

  	
  Entire Agreement

  	
  47

  
	
   

  	
  Section 16.6

  	
   

  	
  No Waiver

  	
  47

  
	
   

  	
  Section 16.7

  	
   

  	
  Confidentiality

  	
  47

  
	
   

  	
  Section 16.8

  	
   

  	
  Transferability

  	
  47

  
	
   

  	
  Section 16.9

  	
   

  	
  Notices

  	
  48

  
	
   

  	
  Section 16.10

  	
   

  	
  Descriptive Headings

  	
  49

  
	
   

  	
  Section 16.11

  	
   

  	
  Counterparts

  	
  49

  
	
   

  	
  Section 16.12

  	
   

  	
  Successors and Assigns

  	
  49

  
	
   

  	
  Section 16.13

  	
   

  	
  Payments Due on
  Non-Business Days

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule A

  	
  -

  	
   

  	
  Revolving Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
   

  	
  Form of Funding Notice

  	
   

  
	
  Exhibit B

  	
  -

  	
   

  	
  Form of Revolving Loan Note

  	
   

  
	
  Exhibit C

  	
  -

  	
   

  	
  Form of Security Agreement

  	
   

  
	
  Exhibit D

  	
  -

  	
   

  	
  Form of
  Subsidiary Guaranty

  	
   

  
								



 


iii

















 


NOTE PURCHASE AGREEMENT


 


This NOTE PURCHASE
AGREEMENT, dated as of September 20, 2006 (this “Agreement”), is
entered into by and among Current Media, LLC, a Delaware limited liability
company (the “Company”), the lenders listed on the signature page hereof
(each a “Lender,” and collectively, the “Lenders”) and HSBC Bank
USA, National Association, as collateral agent on behalf of the Lenders (the “Collateral
Agent”).


 


WHEREAS, the Company is in
need of additional funds for ongoing operations, obligations and general
corporate purposes;


 


WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the Company and the
Collateral Agent for the benefit of the Lenders are entering into a Security
Agreement (as defined below) in the form of Exhibit C hereto; and


 


WHEREAS, the Notes (as
defined below) will be secured by the Collateral (as defined below).


 


NOW, THEREFORE, in
consideration of the foregoing and the mutual representations, warranties,
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:


 


ARTICLE I


DEFINED TERMS


 


Section 1.1                    Definitions.


 


All references in this
Agreement to “dollars” or “$” shall refer to U.S. dollars. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural number the singular. The following terms, when used in this
Agreement, have the following meanings, unless the context otherwise indicates:


 


“Affiliate” shall
have the meaning specified in Rule 12b-2 promulgated under the Exchange
Act.


 


“Aggregate Amounts Due”
shall have the meaning specified in Section 4.3.


 


“Agreement” shall
have the meaning specified in the Preamble.


 


“Applicable Law”
shall mean all federal, state, foreign or other law, statute, constitution,
principle of common law, resolution, ordinance, order, policy or guideline,
judgment, decision, writ, injunction, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity.


 

















 


“Bankruptcy Code”
shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.


 


“Board of Directors”
shall mean the Board of Directors of the Company.


 


“Business Day” shall
mean any day other than a Saturday, a Sunday or a holiday on which commercial
banks in the State of New York or the State of California are closed.


 


“Cash Equivalents”
shall mean (a) marketable direct obligations issued by, or guaranteed by,
the United States Government or any agency thereof which mature within one year
from the date of acquisition thereof; (b) certificates of deposit, time
deposits, Eurodollar time deposits or overnight bank deposits issued or held,
as the case may be, by any commercial bank or trust company organized under the
laws of the United States, any State thereof or the District of Columbia, and
in each case (i) having outstanding unsecured indebtedness that is rated
AA or better by Standard & Poor’s Ratings Services (“S&P”)
and Aa or better by Moody’s Investors Service, Inc. (“Moody’s”), or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of unsecured bank
indebtedness and (ii) maturing within one year from the date of
acquisition thereof; (c) commercial paper of an issuer rated at least A-1
by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally and maturing not later
than one hundred eighty (180) days from the date of acquisition thereof; (d) repurchase
obligations of any commercial bank satisfying the requirements of clause (b) of
this definition with respect to securities issued or fully guaranteed or
insured by the United States government and maturing not later than one hundred
eighty (180) days from the date of acquisition thereof; and (e) shares of
money market mutual or similar funds which invest solely in assets satisfying
the requirements of clauses (a) through (d) of this definition.


 


“Capital Stock” shall
mean, with respect to any Person at any time, any and all shares, interests or
other equivalents (however designated, whether voting or non-voting) of capital
stock, partnership interests (whether general or limited), membership interests
(whether general or limited) or other equity or ownership interests in or
issued by such Person.


 


“Capitalized Lease
Liabilities” shall mean, with respect to any Person, all monetary
obligations of such Person and its Subsidiaries under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should be) classified
as capitalized leases, and for purposes of this Agreement the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.


 


“Change of Control”
shall mean the occurrence of any event or circumstance whatsoever following
which Permitted Holders cease to own, directly or indirectly, for any reason
whatsoever, in excess of fifty percent (50%) of the voting


 


2

















 


Capital Stock of the
Company, on a fully diluted basis, or of the surviving, resulting, successor or
purchasing corporation of the Company in a transaction permitted by Section 9.4,
as the case may be.


 


“Change of Control Notice”
shall have the meaning specified in Section 7.4(b).


 


“Charges” shall have
the meaning specified in Section 16.3.


 


“Claim” shall have
the meaning specified in Section 14.3(a).


 


“Claim Notice” shall
have the meaning specified in Section 14.3(a).


 


“Closing” shall have
the meaning specified in Section 3.1.


 


“Closing Date” shall
have the meaning specified in Section 3.1.


 


“Code” shall mean the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder.


 


“Collateral” shall
have the meaning specified in the Security Agreement.


 


“Collateral Agent”
shall have the meaning specified in the Preamble.


 


“Commitment” shall
mean any Revolving Commitment.


 


“Company” shall have
the meaning specified in the Preamble.


 


“Company Plan” shall
mean each employee benefit plan, program and arrangement maintained by the
Company, any Subsidiary of the Company or any ERISA Affiliate during the
preceding six (6) years (including without limitation each bonus, deferred
compensation, pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted stock, stock option,
employment, termination, severance, compensation, medical, health, other
welfare or other plan, agreement, policy or arrangement).


 


“Company’s Disclosure
Schedule” shall have the meaning specified in Article V.


 


“Convertible Securities”
shall mean any evidences of Indebtedness (other than this Note), Capital Stock
or other securities directly or indirectly convertible into or exercisable or
exchangeable (including upon the further conversion, exercise or exchange of
underlying securities) for Capital Stock.


 


“Current International”
shall mean Current International, LLC, a Delaware limited liability company and
a direct wholly owned subsidiary of the Company.


 


3

















 


“Current TV” shall
mean Current TV, LLC, a Delaware limited liability company and a direct wholly
owned subsidiary of the Company.


 


“Default” shall mean
any Event of Default or any condition, occurrence or event which, after notice
or lapse of time or both, would, unless cured or waived, constitute an Event of
Default.


 


“Default Excess”
shall mean, with respect to any Defaulting Lender, the excess, if any, of such
Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal
amount of Loans of all Lenders (calculated as if all Defaulting Lenders (other
than such Defaulting Lender) had funded all of their respective defaulted
Loans) over the aggregate outstanding principal amount of all Loans of such
Defaulting Lender.


 


“Defaulting Lender”
shall have the meaning specified in Section 4.4(a).


 


“Default Period”
shall mean, with respect to any Defaulting Lender, the period commencing on the
date of the applicable Funding Default and ending on the earliest of the
following dates: (a) the date on which all Commitments are cancelled or
terminated and/or all amounts owing to any Lender under the Note Documents are
declared or become immediately due and payable, (b) the date on which (i) the
Default Excess with respect to such Defaulting Lender shall have been reduced
to zero and (ii) such Defaulting Lender shall have delivered to the
Company a written reaffirmation of its intention to honor its obligations
hereunder with respect to its Commitments, and (c) the date on which the
Company shall waive all Funding Defaults of such Defaulting Lender in writing.


 


“Disposition” shall
mean any direct or indirect sale, transfer, license, lease, contribution,
disposition or other conveyance (including by way of merger or consolidation or
by way of sale or other transfer or conveyance of Capital Stock of any
Subsidiary of the Company) of any of the Company’s or its Subsidiaries’
properties or assets to any other Person in a single transaction or series of
related transactions.


 


“Environmental Claim”
shall mean any claim, action, cause of action, investigation or notice (written
or oral) by any Person alleging actual or potential liability for
investigatory, cleanup or governmental response costs, or natural resources or
property damages, or personal injuries, attorney’s fees or penalties relating
to (a) the presence, or release into the environment, of any Materials of
Environmental Concern at any location, or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.


 


“Environmental Law”
shall mean each federal, state, local and foreign law and regulation relating
to pollution, protection or preservation of human health or the
environment  including ambient air,
surface water, ground water, land surface or subsurface strata, and natural
resources, and including each law and regulation relating to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern, or otherwise relating to the manufacturing, processing, distribution,
use,


 


4

















 


treatment, generation, storage,
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon and each law and
regulation with regard to record keeping, notification, disclosure and
reporting requirements respecting Materials of Environmental Concern.


 


“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder.


 


“ERISA Affiliate”
shall mean each Person which is deemed a single employer with the Company or
any Subsidiary of the Company under Section 414 of the Code or Section 4001(b) of
ERISA.


 


“Event of Default”
shall have the meaning specified in Section 10.1.


 


“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.


 


“Existing Note” shall
mean the 9.25% Senior Purchase Money Note, dated as of May 4, 2004, made
by Current TV in favor of Dylan Holdings, Inc., a Delaware corporation.


 


“Existing Security
Agreement” shall mean the Security Agreement dated as of May 4, 2004,
by and between Current TV and Dylan Holdings, Inc.


 


“Final Maturity Date”
shall mean May 4, 2008, or if such day is not a Business Day, then on the
next succeeding Business Day.


 


“Financial Statements”
shall mean (a) the audited consolidated financial statements of the
Company and its Subsidiaries and related auditor’s reports for the calendar
years ended December 31, 2005 and 2004, including balance sheets as of December 31,
2005 and 2004, and statements of income, statements of changes in owners’
equity and statements of cash flows for the above described periods and (b) the
unaudited consolidated balance sheet, and the related statements of income and
cash flows of the Company and its Subsidiaries for the fiscal quarters ended March 31,
2006 and June 30, 2006, including in each case the related schedules and
notes.


 


“Fiscal Quarter”
shall mean any period of three (3) consecutive calendar months ending on
the last day of March, June, September and December or such other
period as the Company shall notify the Lenders of in writing.


 


“Fiscal Year” shall
mean any period of twelve (12) consecutive calendar months ending on December 31
or such other period as the Company shall notify Lenders of in writing;
references to a Fiscal Year with a number corresponding to any calendar year
(e.g., the “2006 Fiscal Year”) refer to the Fiscal Year ending on December 31
of such calendar year or such other date as the Company shall notify the
Lenders of in writing.


 


5

















 


“Funding Default”
shall have the meaning specified in Section 4.4(a).


 


“Funding Notice”
shall mean a notice substantially in the form of Exhibit A hereto.


 


“GAAP” shall mean
United States generally accepted accounting principles, as in effect from time
to time.


 


“Governmental Entity”
shall mean any foreign or United States national, state, provincial or local
government or governmental or regulatory authority, agency, or body thereof, or
political subdivision thereof, or court, arbitral tribunal, administrative
agency or commission.


 


“Guarantee Obligation”
of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or purporting to
guarantee any Indebtedness of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
the guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness; provided that the term Guarantee Obligations
shall not include endorsements for collection or deposit in the ordinary course
of business.


 


“Indebtedness” of any
Person shall mean, without duplication:


 


(a)                                  all obligations
of such Person for borrowed money or advances and all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments;


 


(b)                                 all
obligations, contingent or otherwise, relative to the face amount of all
letters of credit, whether or not drawn, and banker’s acceptances issued for
the account of such Person;


 


(c)                                  all Capitalized
Lease Liabilities of such Person;


 


(d)                                 all obligations
of such Person to pay the deferred purchase price of property or services;


 


(e)                                  any mandatorily
redeemable preferred equity issued by such Person, if such Person is, or may
be, required to redeem such preferred equity prior to the fifth (5th) Business
Day following the Final Maturity Date;


 


6

















 


(f)                                    all obligations
of such Person under “swaps,” “caps,” “floors,” “collars,” or other interest
rate hedging contracts or similar arrangements;


 


(g)                                 all obligations
of such Person to purchase securities (or other property) which arise out of,
or in connection with, the sale of the same or substantially similar securities
or property (other than such obligations which under no circumstances require
such Person to purchase such securities (or other property) prior to five (5) Business
Days after the Final Maturity Date);


 


(h)                                 all
Indebtedness of others secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person; and


 


(i)                                     all Guarantee
Obligations of such Person in respect of any of the foregoing.


 


Notwithstanding the
foregoing, Indebtedness shall not include any obligations to make any
Restricted Payment permitted by Section 9.6 and declared but not yet paid.
The Indebtedness of any Person shall include the Indebtedness of any other
Person to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such Person, except to the
extent the terms of such Indebtedness provide that such Person is not liable
therefor.


 


“Indemnified Party”
shall have the meaning specified in Section 14.3(a).


 


“Indemnifying Party”
shall have the meaning specified in Section 14.3(a).


 


“Intellectual Property”
shall mean any patents and patent rights, trademarks and trademark rights,
trade names and trade name rights, service marks and service mark rights,
service names and service name rights, brand names, domain names, inventions,
copyrights and copyright rights, computer programs and pending applications for
and registrations of patents, trademarks, service marks, and copyrights. Intellectual
Property shall include, without limitation, any programming, on-air and other
promotional, marketing, advertising and publicity materials, of whatever form
or nature, whether used or not used, and any rights or licenses to use the
same.


 


“Interest” shall have
the meaning specified in Section 2.1(b).


 


“Interest Accrual Date”
shall have the meaning specified in Section 2.1(b).


 


“Investment” by any
Person shall mean any investment in any Person, including, without limitation,
by any direct or indirect purchase or acquisition of Capital Stock, bonds,
notes, debentures or other securities (including any Option, warrant or other
right to acquire any of the foregoing) or evidences of Indebtedness issued by
any other Person (whether by merger, consolidation or otherwise and whether or
not purchased directly from the issuer of such securities or evidences of
Indebtedness). Investments shall exclude (a) extensions of trade credit
and advances to customers and suppliers, (b) endorsements of negotiable
instruments for collection and (c) any acquisition of Capital


 


7

















 


Stock or other securities
(including any option, warrant or other right to acquire any of the foregoing)
in connection with a joint venture or other similar arrangement entered into by
the Company (or any Subsidiary of the Company) and another Person or Persons; provided
that in the case of each of clauses (a) and (b) above, Investments shall
only exclude such items to the extent made in the ordinary course of business
and in accordance with customary industry practice.


 


“Issue Date” shall
mean the date of the issuance of the Notes which shall be the date hereof.


 


“Knowledge of the Company”
shall mean the current, actual knowledge of Joel Hyatt, Chief Executive Officer
of the Company, and Mark Goldman, Chief Operating Officer of the Company, after
due inquiry.


 


“Legal Rate” shall
have the meaning specified in Section 16.3.


 


“Lender” and “Lenders”
shall have the meanings specified in the Preamble.


 


“Lender Indemnified Party”
shall have the meaning specified in Section 14.2.


 


“Lien” shall mean any
and all liens, encumbrances, charges, security interests, options, claims,
mortgages, pledges, agreements, obligations, understandings or arrangements or
other restrictions on title or transfer of any nature whatsoever; provided
that any requirement set forth in the LLC Agreement or any similar corporate
governance document of any Subsidiary of the Company that requires the consent
of any equity holder, board of directors or similar governing body of the
Company or any Subsidiary of the Company to the sale or transfer of assets of
such Person shall not be deemed to be a Lien on such assets so long as neither
the intent nor the effect of such a requirement is to give any Person a
security interest in any such assets or to interfere with the rights of the
Lenders under this Agreement or the other Note Documents.


 


“LLC Agreement” shall
mean the First Amended and Restated Operating Agreement of the Company, dated
as of May 4, 2004, as the same may be amended, supplemented or otherwise
modified from time to time.


 


“Loan” shall mean a
Revolving Loan.


 


“Loan Date” shall
mean the date of a Loan Extension.


 


“Loan Extension”
shall mean the making of a Loan.


 


“Loss” and “Losses”
shall have the meanings specified in Section 14.2.


 


“Mandatory Redemption
Notice” shall have the meaning specified in Section 7.4(c).


 


8

















 


“Material Subsidiary”
shall mean, at any time, any Subsidiary of the Company which (a) holds any
Capital Stock of the Company, (b) in the aggregate with its Subsidiaries
has consolidated assets with a value of not less than two percent (2%) of the
total value of the assets of the Company and its Subsidiaries, taken as a whole
or (c) in the aggregate with its Subsidiaries has consolidated revenues
not less than two percent (2%) of the consolidated revenues of the Company and
its Subsidiaries, taken as a whole.


 


“Material Adverse Effect”
shall mean a material adverse change in, or effect on, the business, financial
condition, or results of operations of the Company and its Subsidiaries taken
as a whole, or on the validity, priority or perfection of any Lien granted
pursuant to the Note Documents.


 


“Materials of
Environmental Concern” shall mean chemicals, pollutants, contaminants,
wastes, toxic or hazardous substances, materials and wastes, petroleum and
petroleum products, asbestos and asbestos-containing materials, polychlorinated
biphenyls, lead and lead-based paints and materials, and radon.


 


“Note” shall mean a
promissory note substantially in the form of Exhibit B hereto, as it may
be amended, supplemented or otherwise modified from time to time in accordance
with this Agreement.


 


“Note Documents”
shall mean this Agreement, the Notes, the Security Agreement, and the
Subsidiary Guaranties entered into pursuant to Section 2.3, Section 8.8
or Section 9.8.


 


“Officer’s Certificate”
shall have the meaning specified in Section 3.2(f).


 


“Obligations” shall
mean the collective reference to the unpaid principal of and interest on the
Notes and all other obligations and liabilities of the Company (including,
without limitation, interest accruing at the then applicable rate provided in
this Agreement after the maturity of the Loans and interest accruing at the
then applicable rate provided in this Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Company, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to any
Lender or the Collateral Agent, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with the Notes, this Agreement or any
other Note Document or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest, indemnities,
cost, expenses or otherwise.


 


“Option” shall mean
rights, options or warrants to subscribe for, purchase or otherwise acquire
Capital Stock or Convertible Securities.


 


“Permit” shall mean
permits, registration, licenses and other governmental consents, approvals and
authorizations.


 


9

















 


“Permitted Holder”
shall mean Albert Gore, Jr., Joel Hyatt, members of their respective
families, trusts for the benefit of any of them and any of their respective Affiliates.


 


“Permitted Lien”
shall have the meaning specified in Section 9.2.


 


“Person” shall mean a
natural person, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Entity or other entity or organization.


 


“Pro Rata Share” as
to each Lender shall mean a fraction (expressed as a percentage), the numerator
of which shall be the aggregate amount of such Lender’s Commitment and the
denominator of which shall be the Revolving Commitments.


 


“Redemption Price”
shall have the meaning specified in Section 7.4(a).


 


“Required Holders”
shall mean, at any time, the holders of at least fifty percent (50%) in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any Defaulting Lender); provided that in any
determination of whether the Required Holders shall have consented to an
amendment or waiver of any terms of this Agreement, there shall be excluded
from such determination any consent given by a holder of any Notes as a
condition to or in consideration for or in contemplation of the prepayment or
purchase of any of such Notes by the Company, or by a Person acting on behalf
of the Company.


 


“Restricted Payment”
shall mean (a) any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of
Capital Stock of the Company or any of its Subsidiaries, (b) any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
cancellation or termination of any such shares of Capital Stock of the Company
or any of its Subsidiaries or any Option of the Company or any of its
Subsidiaries or (c) any payment of management or similar fees to any
Permitted Holder or any Affiliate of a Permitted Holder or any other Person who
controls (as defined in Rule 12b-2 promulgated under the Exchange Act) the
Company or any of its Subsidiaries (excluding, for the avoidance of any doubt,
the payment of salary, bonuses, fees, compensation or benefits, including,
without limitation, directors’ fees, in the ordinary course of business).


 


“Revolving Commitment”
shall mean the commitment of a Lender to make or otherwise fund any Revolving
Loan and “Revolving Commitments” means such commitments of all Lenders
in the aggregate. The amount of each Lender’s Revolving Commitment, if any, is
set forth on Schedule A hereto, subject to any adjustment or reduction pursuant
to the terms and conditions hereof. The aggregate amount of the Revolving
Commitments as of the Issue Date is fifteen million dollars ($15,000,000).


 


10

















 


“Revolving Commitment
Period” shall mean the period from the Issue Date to but excluding the
Final Maturity Date.


 


“Revolving Loan”
shall mean a Loan made by a Lender to the Company pursuant to Article IV.


 


“Securities Act”
shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.


 


“Security Agreement”
shall mean the Security Agreement, dated as of the date hereof, by and between
the Company and the Collateral Agent substantially in the form of Exhibit C
hereto, as the same may be amended, modified or supplemented from time to time.


 


“Subsidiary” shall
mean, with respect to any Person, any corporation, limited liability company,
partnership or other business entity (i) which is organized under the laws
of one of the states of the United States of America or the District of
Columbia and (ii) of which more than 50% of the securities, more than 50%
of the limited liability company membership interests, more than 50% of the
partnership interests or more than 50% of the ownership interests, in each
case, representing the total outstanding voting power of the issuer, at the
time any determination is being made, are owned directly by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of it
Subsidiaries.


 


“Subsidiary Guarantor”
shall mean all current and future formed or acquired Subsidiaries of the
Company; provided, however, that the term “Subsidiary Guarantor”
shall not include Current TV and its Subsidiaries so long as the Existing Note
remains outstanding.


 


“Subsidiary Guaranty”
shall mean the guarantee executed by each Subsidiary Guarantor, substantially
in the form of Exhibit D hereto, as the same may be amended, modified or
supplemented from time to time.


 


“Successor Agent”
shall have the meaning specified in Section 12.9(a).


 


“Tax” shall mean all
taxes imposed by any federal, state, local or foreign governmental authority,
on or with respect to income, gross receipts, excise, property, sales, gain,
use, license, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, profit, gift, severance, value added, disability,
recapture, occupation, employment, stamp and other similar taxes, and shall
include interest, penalties or additions thereto.


 


“Tax Rate” shall have
the meaning specified in Section 9.6(c).


 


“Tax Return” shall
mean any return, declaration, report, claim for refund, or information return
or statement relating to Taxes, including any such document


 


11

















 


prepared on a consolidated,
combined or unitary basis and also including any schedule or attachment
thereto, and including any amendment thereof.


 


ARTICLE II


SALE OF NOTES


 


Section 2.1                    Authorization of Notes.


 


(a)                                  The Company has authorized the
issuance and sale to the Lenders of fifteen million dollars ($15,000,000)
aggregate principal amount of its Senior Notes due May 4, 2008 (the “Notes,”
such term to include any such notes issued in substitution therefor pursuant to
Article XI). The then outstanding principal amount of the Notes, together
with all accrued and unpaid interest thereon, shall be paid in cash to the
Lenders on the Final Maturity Date, except that any overdue payment of
principal or overdue interest shall be payable on demand. The Notes shall be
substantially in the form of Exhibit B hereto, with such changes thereto,
if any, as may be approved by the Lenders and the Company in accordance with Section 15.1.


 


(b)                                 Interest shall accrue on the unpaid
principal amount of the Notes quarterly in arrears on February 4th,
May 4th, August 4th and November 4th
of each year, commencing on the Issue Date through the Final Maturity Date
(each such date, an “Interest Accrual Date”) as follows: (i) at the
rate of fifteen percent (15%) per annum for the period commencing on the Issue
Date and ending on the first anniversary thereof and (ii) thereafter at
the rate of eighteen percent (18%) per annum (“Interest”). Accrued
interest shall be capitalized on the Interest Accrual Date and added to the
principal amount of the Notes then outstanding and shall thereafter be included
in the principal amount of the Notes for all purposes thereof (including,
without limitation, the calculation of subsequent interest accruals). For each
day on, after and during the continuation of an Event of Default under Section 10.1(a),
Interest on the unpaid principal amount of the Notes shall accrue at two
percent (2%) above the rate then applicable to the Notes. Interest on the Notes
shall be payable on the Final Maturity Date, except that any overdue payment of
interest shall be payable on demand.


 


Section 2.2                                      Purchase and Sale. Subject to the terms
and the conditions of this Agreement, at the Closing provided for in Section 3.1,
the Company will issue and sell to each Lender, and each Lender will purchase
from the Company the Notes in the principal amount specified opposite each
Lender’s name on Schedule A hereto.  On
the Closing Date, the Lenders agree to make a Loan to the Company in an
aggregate principal amount of five million dollars ($5,000,000) with each
Lender paying its Pro Rata Share of such amount on the Closing Date.  The obligations of each Lender hereunder are
several and not joint obligations and no Lender shall have any liability to any
Person for the performance or nonperformance of any obligation by any other
Lender hereunder.


 


Section 2.3                                      Subsidiary Guaranty.
The payment by the Company of all amounts due with respect to the Notes and the
performance by the Company of its


 


12

















 


obligations under this Agreement and the Notes will be absolutely and
unconditionally guaranteed by the Subsidiary Guarantors pursuant to the terms
of this Agreement and the Subsidiary Guaranties.


 


ARTICLE III

CLOSING; CONDITIONS PRECEDENT


 


Section 3.1                                      Time and Place of Closing. Subject to the terms
and the  conditions of this Agreement,
the closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, 1440 New York Avenue, NW, Washington, DC at 10:00 a.m. (local
time) on the date hereof following the satisfaction or waiver of all of the
conditions set forth in Section 3.4 and Section 3.5, or at such other
date, place or time as the parties may agree. 
The date on which the Closing occurs and the transactions contemplated
hereby become effective is referred to herein as the “Closing Date.”


 


Section 3.2                                      Deliveries by the Company. Concurrently with
the execution and delivery of this Agreement, the Company shall deliver the
following to each Lender:


 


(a)                        a Note, duly executed by the
Company;


 


(b)                       the Security Agreement, duly
executed by the Company;


 


(c)                        a Subsidiary Guaranty, duly executed
by Current International;


 


(d)                       a certificate of the secretary of
the Company, dated as of the Closing Date, (i) certifying to the
resolutions attached thereto relating to the authorization, execution and
delivery of the Notes, this Agreement and the Security Agreement and (ii) the
incumbency of each of the officers of the Company who executes this Agreement
and the other Note Documents to which the Company is a party;


 


(e)                        a certificate of the secretary of
Current International, dated as of the Closing Date, (i) certifying to the
resolutions attached thereto relating to the authorization, execution and
delivery of the Subsidiary Guaranty and (ii) the incumbency of each of the
officers of Current International who executes the Subsidiary Guaranty;


 


(f)                          a certificate of the chief operating
officer of the Company (the “Officer’s Certificate”), dated as of the
Closing Date, to the effect that, to the best of such officer’s knowledge, the
conditions set forth in Section 3.5(a) and Section 3.5(b) have
been satisfied; and


 


(g)                       a copy of the financing statement
attached as Schedule B to the Security Agreement, which financing statement
shall be filed within five (5) Business Days following the Closing Date in
the office of the Secretary of State of the State of Delaware.


 


13

















 


In addition, concurrently with the execution
and delivery of this Agreement, the Company shall deliver to the Collateral
Agent, a copy of the financing statement as well as the certificates listed on
Schedule A to the Security Agreement along with blank transfer powers.


 


Section 3.3                                      Deliveries by each Lender.
Concurrently with the execution and delivery of this Agreement, each Lender
shall deliver the following to the Company:


 


(a)                        each Lender’s Pro Rata Share of the
Loan, in immediately available funds, being made by the Lenders at the Closing;


 


(b)                       the Security Agreement, duly
executed by the Collateral Agent; and


 


(c)                        a receipt, duly executed by the
Collateral Agent acknowledging receipt of the certificates listed on Schedule A
to the Security Agreement.


 


Section 3.4                                      Company’s Conditions. The obligations of
the Company to issue the Notes to the Lenders at the Closing is subject to the
satisfaction at or prior to the Closing Date of the following conditions:


 


(a)                        Each of the representations and
warranties of each of the Lenders in this Agreement shall have been true, correct
and complete in all material respects on the Closing Date, except that those
representations and warranties which address matters only as of a particular
date shall remain true, correct and complete in all material respects as of
such date.


 


(b)                       Each Lender shall have delivered to
the Company its Pro Rata Share of the Loan being made by the Lenders at the
Closing, by wire transfer in immediately available funds.


 


Section 3.5                                      Closing Date Conditions to Each
Lender’s Obligations Under this Agreement. Each Lender’s obligation to purchase
and pay for the Notes to be sold to such Lender at the Closing is subject to
the satisfaction at or prior to the Closing Date of the following conditions:


 


(a)                        Each of the representations and
warranties of the Company in this Agreement and the Security Agreement shall
have been true, correct and complete in all material respects on and as of the
Closing Date, except that those representations and warranties which address
matters only as of a particular date shall remain true, correct and complete in
all material respects as of such date. 
The representations of the Subsidiary  Guarantors contained in the Subsidiary
Guaranties shall have been true, correct and complete in all material respects
as of the Closing Date.


 


(b)                       The Company shall have performed and
complied with all agreements and conditions contained in this Agreement and the
Security Agreement


 


14

















 


required to be performed or complied with by
the Company prior to or at the Closing, and after giving effect to the issue
and sale of the Notes (and the application of the proceeds thereof), no Default
or Event of Default shall have occurred and be continuing.


 


(c)                        The Company and each Subsidiary
Guarantor, as applicable, shall have duly authorized, executed and delivered
each of the Note Documents.


 


Section 3.6                                      Conditions to Each Loan Extension.  The obligation of each Lender to make any
Loan on any Loan Date, including the Closing Date, are subject to the
satisfaction or waiver of the following conditions precedent:


 


(a)                        The Lenders shall have received a
Funding Notice executed by a duly authorized officer of the Company in a
writing delivered to the Lenders and an Officer’s Certificate, dated as of such
Loan Date, to the effect that, to the best of such officer’s knowledge, the
conditions set forth in Section 3.6(b) and Section 3.6(c) have
been satisfied.


 


(b)                       As of such Loan Date, the
representations and warranties contained herein shall be true, correct and
complete in all material respects on and as of that Loan Date to the same
extent as though made on and as of that date, except that those representations
and warranties which address matters only as of a particular date shall remain
true, correct and complete in all material respects as of such date.


 


(c)                        As of such Loan Date, the Company
shall have performed and complied with all agreements and conditions contained
in this Agreement required to be performed or complied with by the Company
prior to or at the applicable Loan Extension, and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing.


 


The Required Holders shall be entitled, but not
obligated to, request and receive, prior to the making of any Loan Extension,
additional information reasonably satisfactory to the requesting party
confirming the satisfaction of any of the foregoing if, in the good faith
judgment of such Lender(s) such request is warranted under the
circumstances.


 


ARTICLE IV


REVOLVING LOANS


 


Section 4.1                                      Revolving
Commitments. Each Lender’s commitment hereunder shall be a Revolving
Commitment.  During the Revolving
Commitment Period, subject to the terms and conditions hereof, each Lender
severally agrees to make Revolving Loans to the Company in an aggregate amount
up to but not exceeding such Lender’s Revolving Commitment.  Amounts borrowed may be repaid and reborrowed
during the Revolving Commitment Period; provided that the conditions set
forth in Section 3.6 are complied with at the time of such borrowing.  Each Lender’s Revolving Commitment shall
expire on the Final Maturity Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.


 


15

















Section 4.2                                      Borrowing Mechanics for Revolving
Loans.


 


(a)                        Revolving Loans shall be made in an
aggregate minimum amount of five million dollars ($5,000,000) and integral
multiples of five million dollars ($5,000,000) in excess of that amount.


 


(b)                       Whenever the Company desires that
the Lenders make Revolving Loans, the Company shall deliver to each Lender the
Officer’s Certificate specified in Section 3.6(a) and a fully
executed Funding Notice in respect of such Revolving Loans, together with the
amount of each Lender’s Pro Rata Share thereof, if any, together with the
applicable interest rate, at least ten (10) Business Days in advance of
the proposed Loan Date.  The Funding
Notice shall be delivered to each Lender by facsimile or electronic
transmission.


 


(c)                        Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified in Section 3.6,
each Lender shall make its Pro Rata Share of the Revolving Loan available to
the Company not later than the Loan Date specified in the applicable Funding
Notice by wire transfer of same day funds in lawful money of the United States
of America to the account designated by the Company to each Lender by facsimile
or electronic transmission.


 


Section 4.3                                      Ratable Sharing.  The Lenders hereby agree among themselves
that, except as otherwise provided in the other Note Documents with respect to
amounts realized from the exercise of rights with respect to Liens on the
Collateral, if any of them shall, whether by voluntary payment (other than a
voluntary prepayment of Loans made and applied in accordance with the terms
hereof), through the exercise of any right of set-off or banker’s lien, by
counterclaim or cross action or by the enforcement of any right under the Note
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, or amounts payable
in respect of other amounts then due and owing to such Lender hereunder or
under the other Note Document (collectively, the “Aggregate Amounts Due”
to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due to such other Lender, then the
Lender receiving such proportionately greater payment shall (a) notify the
Company and each  other Lender of the
receipt of such payment and (b) apply a portion of such payment to
purchase participations (which it shall be deemed to have purchased from each
seller of a participation simultaneously upon the receipt by such seller of its
portion of such payment) in the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them; provided, if
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of the Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without
interest.  The Company expressly consents
to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any


 


16

















 


and all rights of banker’s lien, set-off or counterclaim with respect
to any and all monies owing by the Company to that Lender with respect thereto
as fully as if that Lender were owed the amount of the participation held by
that Lender.


 


Section 4.4                                      Defaulting
Lenders.


 


(a)                        A
Lender who fails to pay the Company its Pro Rata Share of any Revolving Loan,
or who fails to pay any other amount owing by it (collectively, a “Funding
Default”) to the Company, is a “Defaulting Lender.”  The Company may recover all such amounts
owing by a Defaulting Lender on demand. 
If the Defaulting Lender does not pay such amounts on the Company’s
demand, the Company shall be entitled to pursue all remedies (at law or in
equity) available to it to require the Defaulting Lender to pay the aggregate
amount of the Funding Default and to compensate the Company for the reasonable
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
by or on behalf of the Company as a result of such failure.


 


(b)                       During any Default Period with
respect to a Defaulting Lender, (i) such Defaulting Lender shall be deemed
not to be a “Lender” for purposes of voting on any matters (including the
granting of any consents or waivers in accordance with Section 15.1) with
respect to this Agreement and the Notes, (ii) the Notes held by such
Defaulting Lender shall not be included for purposes of determining whether the
Required Holders have consented to any amendment or waiver, and (iii) to
the extent permitted by Applicable Law, any voluntary prepayment of the
Revolving Loans shall, if the Company so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of the other Lenders as
if such Defaulting Lender had no Revolving Loan outstanding.  The operation of this Section 4.4(b) shall
not be construed to increase or otherwise affect the Commitment of any Lender,
or relieve or excuse the performance by the Company of its duties and
obligations hereunder.


 


(c)                        The failure of any Lender to fund
its Pro Rata Share of any Revolving Loan shall not relieve any other Lender of
its obligation to fund its Pro Rata Share of such Revolving Loan.  Conversely, no Lender shall be responsible
for the failure of another Lender to fund its Pro Rata Share of a Revolving
Loan.


 


Section 4.5                                      Optional Termination or Reduction of
Commitments.  The
Company shall have the right, upon not less than three (3) Business Days’
written notice to the Lenders, to terminate the Revolving Commitments or, from
time to time, to reduce the amount of the Revolving Commitments.  Any such reduction shall be in an amount
equal to $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall reduce permanently the Revolving Commitments then in effect.  Any such termination or reduction shall be
applied ratably to the Lenders’ Revolving Commitments and be accompanied by the
ratable prepayment of the Loans, and accrued interest on the amount so prepaid,
to the extent that the principal amount of Loans then outstanding exceeds the
amount of the Revolving Commitments as so reduced.


 


17

















 


ARTICLE V


REPRESENTATIONS AND WARRANTIES OF
THE COMPANY


 


Except as set forth in the disclosure schedule dated
as of the date of this Agreement and executed and delivered by the Company to
the Lenders concurrently with or prior to the execution and delivery by the
Company of this Agreement (the “Company Disclosure Schedule”), the
Company represents and warrants to the Lenders, that:


 


Section 5.1                                      Corporate Existence of the Company;
Subsidiaries.  The
Company and each of its Subsidiaries (a) is a limited liability company,
corporation or limited partnership duly formed, validly existing and in good
standing under the laws of its jurisdiction of organization or incorporation; (b) has
full limited liability company or corporate power and authority to carry on
their respective businesses as they are now being conducted; and (c) is
duly qualified or licensed to do business as a foreign corporation currently in
good standing in every jurisdiction in which the conduct of their respective
businesses requires such qualification, excluding from clause (c) such
qualifications or licenses the failure of which to obtain would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.  As of the date hereof, the
Subsidiaries of the Company are Current International and Current TV.  All outstanding Capital Stock of the Company
and its Subsidiaries have been duly authorized and validly issued and, with
respect to any Subsidiary of the Company that is organized as a corporation,
all of the shares of Capital Stock of such Subsidiary are fully paid and
nonassessable, and are owned by the Company free and clear of any Lien other
than Liens contemplated by the Security Agreement.


 


Section 5.2                                      Authorization.  The Company has full limited liability
company power and authority to execute and deliver this Agreement and the
Security Agreement  and to
consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by
the Company of this Agreement and the Security Agreement and the consummation
by the Company of the transactions contemplated hereby and thereby have been
duly authorized by its Board of Directors and no other limited liability
company power is necessary to authorize the execution and delivery by the
Company of this Agreement or the Security Agreement or the consummation by it
of the transactions contemplated hereby and thereby.  No vote of, or consent by, the holders of any
class or series of membership interests or voting debt issued by the Company
(which has not already been obtained on or prior to the date hereof) is
necessary to authorize the execution and delivery by the Company of this
Agreement or the Security Agreement or the consummation by the Company of the
transactions contemplated hereby and thereby.


 


Section 5.3                                      Binding Agreement.  This Agreement and the Security Agrement have
been duly executed and delivered by the Company and, assuming due and valid
authorization, execution and delivery hereof and thereof by the Lenders, this
Agreement and the Security Agreement each constitutes, and upon execution and
delivery thereof each Note will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except (a) as limited by


 


18

















 


applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws of general application affecting
enforcement of creditors’ rights generally and (b) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought.


 


Section 5.4                                      Subsidiary Guaranties.


 


(a)                        Each Subsidiary Guarantor has full
limited liability company power and authority to execute and deliver its
Subsidiary Guaranty  and to
consummate the transactions contemplated thereby.  The execution, delivery and performance by
such Subsidiary Guarantor of the Subsidiary Guaranty and the consummation by
such Subsidiary Guarantor of the transactions contemplated thereby have been
duly authorized by its board of directors (or similar governing body) and no
other limited liability company or other power is necessary to authorize the
execution and delivery by such Subsidiary Guarantor of its Subsidiary Guaranty  or the consummation by it of the
transactions contemplated thereby.  No
vote of, or consent by, the holders of any class or series of equity interests
or voting debt issued by such Subsidiary Guarantor (which has not already been
obtained on or prior to the date hereof) is necessary to authorize the
execution and delivery by such Subsidiary Guarantor of its Subsidiary Guaranty
or the consummation by such Subsidiary Guarantor of the transactions
contemplated thereby.


 


(b)                       Each Subsidiary Guaranty has been
duly executed and delivered by the Subsidiary Guarantor party thereto and, such
Subsidiary Guaranty constitutes a valid and binding obligation of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws of general application affecting enforcement of creditors’ rights
generally and (ii) the availability of the remedy of specific performance
or injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought.


 


Section 5.5                                      No Violations.  None of the execution, delivery or
performance of this Agreement or the other Note Documents by the Company or any
of its Subsidiaries, nor the consummation by the Company or any of its
Subsidiaries of the transactions contemplated hereby or thereby will (a) conflict
with or result in any breach of any provision of the limited liability company
operating agreement or similar organizational documents of the Company or any
of its Subsidiaries, (b) result in a violation or breach of, or constitute
(with or without due notice or the passage of time or both) a default (or give
rise to any right of termination, amendment, modification, cancellation or
acceleration) under, any agreement, indenture, mortgage, lease, sublease,
license, promissory note, evidence of indebtedness or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which any of its assets are bound, or (c) violate any order, writ,
injunction, decree, statute, rule or regulation of any Governmental Entity
applicable to the Company or any of its Subsidiaries or their respective
properties or assets, excluding from the foregoing clauses (b) and (c),
such


 


19

















 


violations, breaches or defaults which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.


 


Section 5.6                                      Compliance with Laws.  The Company and each of its Subsidiaries has
complied in all material respects with all laws, rules and regulations,
ordinances, judgments, decrees, orders, writs and injunctions of all Government
Entities that affect their respective businesses, properties or assets, and (a) no
notice, charge, claim, action or assertion has been received by the Company or
any of its Subsidiaries from any Governmental Entity alleging a violation of
the foregoing, (b) no written notice, charge, claim, action or assertion
has been received by the Company or any of its Subsidiaries from any Person (excluding
any Governmental Entity) alleging a violation of the foregoing and (c) to
the Knowledge of the Company, no charge, claim or action has been threatened
against the Company or any of its Subsidiaries (with respect to their
businesses) alleging a violation of the foregoing.  No consent, approval or authorization of,
registration, filing (other than the filing of the UCC financing statements as
contemplated by the Security Agreement) or declaration with, any Governmental
Entity is required in connection with the execution, delivery or performance by
the Company or its Subsidiaries with this Agreement and the other Note
Documents.


 


Section 5.7                                      Permits.   There are no Permits that are held by the
Company or any of its Subsidiaries that are material to the operation of their
respective businesses as presently conducted or the ownership and use of their
respective property and assets as presently owned and used.


 


Section 5.8                                      Title
to Properties.   The Company and its
Subsidiaries have good and sufficient title to their respective material
properties, in each case free and clear of Liens other than Permitted
Liens.  All material leases to which the
Company or any of its Subsidiaries is a party are in full force and effect.


 


Section 5.9                                      Defaults.   Except
as set forth on Section 5.9 of the Company’s Disclosure Schedule, neither
the Company nor any Subsidiary is in default in any material respect (or with
notice or the passage of time or both would be in default in any material
respect), under any material contract, and, to the Knowledge of the Company, no
other party to any material contract is in default in any material respect
thereunder (or with notice or the passage of time or both would be in default
in any material respect thereunder).  No
party to any material contracts of the Company or any Subsidiary has exercised
any termination or cancellation rights with respect thereto.


 


Section 5.10                                Financial Statements.


 


(a)                        The Financial Statements have been
prepared from, in accordance with and accurately reflect the books and records
of the Company and its Subsidiaries, prepared in accordance with GAAP applied
on a consistent basis during the periods involved except as may be stated in
the notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments) and present fairly, in all


 


20

















 


material respects, the results of operations
of the Company and its Subsidiaries as of the times and for the periods
referred to therein.


 


(b)                       Since June 30, 2006, there has
been no development or event, and no change in the business, assets, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole, which has had or could reasonably be expected to have a Material
Adverse Effect.


 


Section 5.11                                Absence of Undisclosed Liabilities.  Since June 30, 2006, neither the Company
nor any of its Subsidiaries has incurred any liability or obligation (whether
direct or indirect, fixed, contingent or otherwise) other than (a) such as
have been reflected on the Financial Statements, (b) liabilities which
would not be required to be reflected or reserved against on the Financial
Statements in accordance with GAAP, (c) liabilities incurred subsequent to
June 30, 2006 in the ordinary course of business, and (d) such as
have been set forth on Section 5.11 of the Company’s Disclosure Schedule.


 


Section 5.12                                Absence of Certain Changes.   Since December 31, 2005, the Company and
each of its Subsidiaries has conducted its business, in all material respects,
in the ordinary course consistent with past practice, and there has not
occurred any event, occurrence, fact, condition, change, development or effect
that, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect.


 


Section 5.13                                Tax Matters.  Except as set forth on Section 5.13 of
the Company’s Disclosure Schedule:


 


(a)                        The Company and each of its
Subsidiaries has duly filed all material Tax Returns that it is required to
file with respect to the income, properties or operations of, the Company
and/or any of its Subsidiaries and has duly paid or caused to be duly paid in
full all Taxes shown as due on such Tax Returns.  All such Tax Returns are true, correct and
complete in all material respects and accurately reflect all liability for
Taxes for the periods covered thereby.


 


(b)                       No federal, state, local or foreign
audits, examinations, investigations or other administrative proceedings or
court proceedings are presently pending with regard to any Taxes or Tax Returns
with respect to the income, properties or operations of, the Company and/or any
of its Subsidiaries.


 


(c)                        There are no Liens for Taxes except
for statutory liens for Taxes not yet due.


 


Section 5.14                                Litigation.  Except as set forth on Section 5.14 of
the Company’s Disclosure Schedule, there are no actions, suits or proceedings
pending or, to the Knowledge of the Company, threatened against or affecting
the Company or any Subsidiary or any property of the Company or any Subsidiary
in any court or before any


 


21

















 


arbitrator of any kind or before or by any Governmental Entity which
individually or in the aggregate may reasonably be expected to have a Material
Adverse Effect.


 


Section 5.15                                Intellectual Property.


 


(a)                        The Company and its Subsidiaries
either own, singly or jointly, license or otherwise possess legally enforceable
rights to use the Intellectual Property.


 


(b)                       Except as set forth on Section 5.15(b) of
the Company’s Disclosure Schedule, (i) neither the Company nor any of its
Subsidiaries has received any notice that the Company or any of its
Subsidiaries are, in default in any material respect (or with the giving of
notice or lapse of time or both, would be in default in any material respect),
under any contract to use the Intellectual Property, (ii) there are no
material restrictions on the transfer of any material contract, or any interest
therein, held by the Company or any of its Subsidiaries in respect of any
Intellectual Property, and (iii) to the Knowledge of the Company, no
Intellectual Property is being infringed upon by any other Person.


 


(c)                        To the Knowledge of the Company, the
conduct of the business of the Company and its Subsidiaries and the
Intellectual Property does not infringe in any material respect upon any
Intellectual Property rights of any Person, and neither the Company nor any of
its Subsidiaries has received any notice from any other Person pertaining to or
challenging the right of the Company and its Subsidiaries to use any of the
Intellectual Property.


 


Section 5.16                                Environmental Matters.  Except as set forth on Section 5.16 of
the Company’s Disclosure Schedule:


 


(a)                        Each of the Company and its
Subsidiaries has been and is in compliance in all material respects with all
applicable Environmental Laws.


 


(b)                       Neither the Company nor any of its
Subsidiaries has received any written communication from any Person that
alleges that the Company or any of its Subsidiaries is not in material
compliance with any Environmental Laws, and, to the Knowledge of the Company,
there are no circumstances that may prevent or interfere with such compliance
in the future.


 


(c)                        There is no material pending
Environmental Claims by any Person that is pending or, to the Knowledge of the
Company, threatened in writing against the Company or any of its Subsidiaries
or against any Person whose liability for any Environmental Claim the Company
or any of its Subsidiaries has retained or assumed either contractually or by
operation of law.


 


(d)                       To the Knowledge of the Company,
there are no past or present actions, activities, circumstances, conditions,
events or incidents, including the release, emission, discharge, presence or
disposal of any Materials of Environmental


 


22

















 


Concern, that could form the basis of any
Environmental Claim against the Company or any of its Subsidiaries or, to the
Knowledge of the Company, against any Person whose liability for any
Environmental Claim the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of law.


 


Section 5.17                                Employee Benefit Plans.  Each Company Plan, if any, has at all times
complied in form and in operation in all material respects with its terms and
the requirements of Applicable Laws, including without limitation, ERISA and
the Code.


 


Section 5.18                                Labor Matters.  Neither the Company nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect.  There is no strike, labor
dispute, slowdown or stoppage pending against the Company or any of its
Subsidiaries or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.


 


Section 5.19                                Use of Proceeds; Margin Regulations.  All proceeds from the issuance of the Notes
will be used by the Company for general corporate purposes.  No part of the proceeds from the Notes will
be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation G of the Board of Governors of
the Federal Reserve System, or for the purpose of buying or carrying or trading
in any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board or to involve any broker or dealer in a
violation of Regulation T of said Board. 
As used in this Section 5.19, the term “margin stock” and “purpose
of buying or carrying” shall have the meanings assigned to them in Regulation
G.


 


Section 5.20                                Creation and Perfection of Security
Interests.  The provisions of the Security Agreement are
effective to create in favor of the Collateral Agent a valid and enforceable
security interest in all of the right, title and interest of the Company in the
Collateral.  The security interests
granted pursuant to the Security Agreement (a) upon completion of the
filings and other actions specified therein shall constitute valid perfected
security interests in all of the Collateral in favor of the Collateral Agent as
collateral security for the Obligations, enforceable in accordance with the
terms thereof against all creditors of the Company and any Persons purporting
to purchase any Collateral from the Company and (b) are prior to all other
Liens on the Collateral in existence on the date hereof.


 


Section 5.21                                Solvency.  After giving effect to the sale of the Notes
and the application of the proceeds thereof, (a) the fair value of the
Company’s consolidated assets will be in excess of the total amount of the
Company’s liabilities, including, without limitation, contingent obligations, (b) the
Company will be able to pay its liabilities as they mature, and (c) the
Company will not have unreasonably small capital to carry on its business.


 


23














 


Section 5.22              Brokers or
Finders.  No Person has acted,
directly or indirectly, as a broker, finder or financial advisor for the
Company in connection with the transactions contemplated by this Agreement and
the other Note Documents and no Person is entitled to any fee or commission or
like payment in respect thereof.


 


Section 5.23              No General
Solicitation.  Neither the Company,
nor any of its Subsidiaries, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the meaning of Regulation D promulgated
under the Securities Act) in connection with the offer or sale of the Notes.


 


Section 5.24              Investment
Company Act.  Neither the Company nor
any of its Subsidiaries is subject to regulation under the Investment Company
Act of 1940, as amended.


 


ARTICLE VI


REPRESENTATIONS AND WARRANTIES OF THE LENDERS


 


Each Lender
severally and not jointly represents and warrants to the Company as follows:


 


Section 6.1                    Investment Purpose. 
Each Lender understands and acknowledges that (a) the
Notes have not been registered under the Securities Act or any state securities
laws and are being offered and sold in reliance upon exemptions provided in the
Securities Act and state securities laws for transactions not involving any
public offering and, therefore, cannot be resold or transferred unless they are
subsequently registered under the Securities Act and applicable state laws or
unless an exemption from such registration is available; and (b) each
Lender is purchasing the Note for investment purposes only for the account of
such Lender or for one or more separate accounts maintained by it or for the
account of one or more pension or trust funds and not with any view toward a
distribution thereof; provided that the disposition of such Lender’s
Note shall at all times be within such Lender’s control.


 


Section 6.2                    Availability of Funds. 
Each Lender represents that it has and will have
sufficient funds available to it to pay its respective Revolving Commitment as
set forth on Schedule A hereto at any time prior to the Final Maturity Date
upon the request of the Company pursuant to Article IV.


 


Section 6.3                    Access to Information.  Each Lender has received, read
carefully and understands this Agreement and the other Note Documents and all
exhibits thereto and has consulted its own attorney, accountant and/or
investment advisor with respect to the transactions contemplated hereby and
thereby and its suitability for such Lender. The Company has made available to
the Lenders, prior to the purchase of the Notes, the opportunity to ask
questions of and receive answers from management of the Company concerning the
terms and conditions of this Agreement and the other Note Documents and to
obtain any additional information necessary to verify information contained in
the Agreement, the Notes or otherwise relative to the financial data and


 


24

















 


business of the Company, to the extent that
such parties possess such information or can acquire it without unreasonable
effort or expense, and all such questions, if asked, have been answered
satisfactorily and all such documents, if requested, have been found to be
satisfactory.


 


Section 6.4                    Limited Operating History. 
Each Lender is aware and acknowledges that (a) the
Company is a new venture that has no substantial operating history, and there
is a high degree of risk that the Company will be unable to execute its
business strategy successfully; (b) the Notes involve a substantial degree
of risk of loss of its entire investment; (c) each Lender, in purchasing
the Notes, is relying solely upon the advice of such Lender’s personal tax
advisor with respect to the tax aspects of purchasing the Notes; and (d) because
there are substantial restrictions on the transferability of the Notes it may
not be possible for the undersigned to liquidate its investment readily.


 


Section 6.5                    Accredited Investor.  Each Lender is an accredited
investor within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act. Each Lender maintains its domicile, and
is not merely a transient or temporary resident, at the residence address shown
in Schedule A hereto.


 


Section 6.6                    Brokers or Finders.  None of the Lenders nor anyone
acting on each Lender’s behalf has paid any commission or other remuneration to
any person in connection with the purchase of the Notes hereunder.


 


ARTICLE VII


PAYMENT OF THE NOTES; REDEMPTION


 


Section 7.1                    Required Payments. 
The principal amount of the Notes, together with any and
all accrued and unpaid interest thereon, shall be paid in cash to the Lenders
on the Final Maturity Date at the principal office of the Company, or, upon the
written request of the Lender, by wire transfer of immediately available funds
to an account designated by such Lender; provided that any overdue
payment (including any overdue prepayment) of principal or interest shall be
payable on demand.


 


Section 7.2                    Optional Prepayment of the Notes. 
The Company may, upon one (1) Business Day’s written
notice to the Lenders, at any time and from time to time, without premium or
penalty, prepay in whole the aggregate unpaid principal amount of the Notes,
together with all accrued and unpaid Interest thereon, in cash, to (but
excluding) the date of prepayment, or prepay in part in amounts aggregating one
million dollars ($1,000,000) or more the aggregate unpaid principal amount of
the Notes, together with accrued and unpaid Interest thereon, in cash, to (but
excluding) the date of prepayment.


 


Section 7.3                    Purchase of
Notes.  The Company will not and will
not permit any of its Subsidiaries to purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes.


 


25

















 


Section 7.4                    Redemption.


 


(a)                                  If during the time the Notes remain
outstanding there occurs a Change of Control, each Lender shall have the right
(exercisable for a period from (and including) the date on which such Change of
Control occurred to (and including) the thirtieth (30th) day after
each Lender’s receipt of the Change of Control Notice) to require the Company
to redeem its Note in cash at a price (the “Redemption Price”) equal to
the then outstanding principal amount plus any accrued and unpaid Interest
thereon.


 


(b)                                 The Company shall deliver a written
notice (the “Change of Control Notice”) to each Lender as promptly as
reasonably practicable following (and in any event within two (2) Business
Days of) the closing or occurrence of the event causing the Change of Control,
describing in reasonable detail the facts and circumstances giving rise
thereto.


 


(c)                                  If, following its receipt of the
Change of Control Notice, a Lender desires to exercise its right to require the
Company to redeem its Note pursuant to clause (a) above, then such Lender
shall deliver written notice thereof (the “Mandatory Redemption Notice”)
to the Company by no later than the date that occurs thirty (30) days after the
date the Change of Control Notice is received by such Lender, and the Company
shall redeem the Note and pay the Redemption Price within fifteen (15) days
after its receipt of the Mandatory Redemption Notice upon presentation and surrender
of the Note by such Lender to the Company at the Company’s principal place of
business, free and clear of all Liens (other than any Liens imposed in
accordance with any Note Document), whereupon after such payment the Note shall
thereafter be canceled by the Company and the Lender shall no longer hold a
Commitment under the Note Documents.


 


(d)                                 If, within thirty (30) days after
its receipt of the Change of Control Notice, a Lender fails to deliver written
notice to the Company of its desire to exercise its right to require the
Company to redeem its Note, then such right shall be deemed waived.


 


ARTICLE VIII


AFFIRMATIVE COVENANTS


 


The Company
covenants and agrees that so long as any Commitment is in effect or any amount
is owing to any Lender or the Collateral Agent under any Note Document, the
Company will perform or cause to be performed the obligations set forth below:


 


Section 8.1                    Maintenance
of Existence; Compliance with Obligations. The Company will, and will cause
each of its Subsidiaries to, (a) continue to engage in business of the
same general type as is currently contemplated to be conducted by the Company
and its Subsidiaries and do or cause to be done all things necessary to
preserve and keep in full force and effect its legal existence and (b) satisfy
all of their respective material obligations and liabilities as and when they
become due; provided, however, that the foregoing shall not
prohibit (i) any merger, consolidation or other


 


26

















 


transaction permitted under Section 9.4,
(ii) any Disposition made pursuant to, and in compliance with, Section 9.7,
or (iii) the Company or any of its Subsidiaries from changing its form of
legal entity, as long as, (x) in the case of each of clause (i), (ii) and
(iii) of this proviso, after giving effect thereto, no Default (including,
without limitation, under Section 10.1(j)) shall have occurred and be
continuing or could reasonably be expected to result therefrom, and (y) in
the case of each of clause (i) and (iii) of this proviso, the
provisions of Section 13(a) of the Security Agreement have been
complied with.


 


Section 8.2                    Compliance with Laws. 
The Company will, and will cause each of its Subsidiaries
to, comply with the requirements of all Applicable Laws, rules, regulations and
orders of any Governmental Entity, except to the extent the non-compliance
therewith would not reasonably be expected to result in a Material Adverse
Effect.


 


Section 8.3                    Financial Information. 
The Company will furnish the following to each Lender:


 


(a)                                  as soon as available and in any
event within sixty (60) days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, a copy of the consolidated balance sheet of the
Company and its Subsidiaries as of the end of such Fiscal Quarter and the
related consolidated statements of income and cash flow of the Company and its
Subsidiaries for such Fiscal Quarter and for the period commencing at the end
of the previous Fiscal Year and ending with the end of such Fiscal Quarter, and
including (in each case), following the first full Fiscal Quarter following the
one-year anniversary of the date hereof, in comparative form, the figures for
the corresponding Fiscal Quarter in, and year to date portion of, the
immediately preceding Fiscal Year;


 


(b)                                 as soon as available and in any
event within one hundred and twenty (120) days after the end of each Fiscal
Year, a copy of the consolidated balance sheet of the Company and its
Subsidiaries and the related consolidated statements of income and cash flow of
the Company and its Subsidiaries for such Fiscal Year, setting forth, following
the first full Fiscal Year following the one-year anniversary of the date
hereof, in comparative form the figures for the immediately preceding Fiscal
Year;


 


(c)                                  simultaneously with the delivery of
each set of financial statements referred to in clauses (a) and (b) above,
a certificate of the chief financial officer of the Company (delivered on
behalf of the Company and in his or her capacity as chief financial officer of
the Company, not in his or her individual capacity) stating that such financial
statements (A) present fairly, in all material respects, the financial
position, the results of operations and the cash flows of the Company as of the
date of such financial statements and (B) were prepared, in all material
respects, in accordance with GAAP applied on a consistent basis; and


 


(d)                                 simultaneously with the delivery of
each set of financial statements referred to in clauses (a) and (b) above,
a certificate of the chief financial


 


27

















 


officer or chief
executive officer of the Company stating (i) whether, to his knowledge,
any Default then exists and (ii) if, to his knowledge, any Default then
exists, the details thereof and the actions which the Company is taking or
proposes to take with respect thereto.


 


Section 8.4                    Notice of Defaults. 
Promptly, and in any event within seven (7) Business
Days, after any officer of the Company obtains knowledge of the occurrence of
any Default, the Company shall furnish to the Lenders a certificate of the
chief executive officer or the chief financial officer of the Company setting
forth the details thereof and the actions which the Company is taking or
proposes to take with respect thereto.


 


Section 8.5                    Inspection of Property, Books and
Records.  The Company will keep, and will
cause each of its Subsidiaries to keep, proper books of record and account in
which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and, if an Event of
Default has occurred and is continuing, will permit, and will cause each of its
Subsidiaries to permit, representatives of the Lenders to visit and inspect any
of their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired. The provisions of Section 9 of the Security Agreement apply to
any information acquired by a Lender in the exercise of its rights under this Section 8.5.


 


Section 8.6                    Further Assurances. 
From time to time, the Company shall, or shall cause its
Subsidiaries to, do and perform any and all acts and execute any and all
documents as may be required by Appliable Law or as may be necessary or as
reasonably requested by the Collateral Agent or any Lender in order to effect
the purposes of this Agreement and the other Note Documents to which the
Company is a party and to protect the interests of the Lenders under this
Agreement and the other Note Documents to which the Company is a party
including, without limitation, taking all action reasonably necessary to
maintain the perfection and priority of all Liens on the Collateral.


 


Section 8.7                    Direct
Subsidiaries.  Upon the formation of
any direct Subsidiary of the Company created after the date hereof, the Company
and any such Subsidiary shall take all necessary steps to perfect the security
interest held by the Lenders pursuant to the Security Agreement in the equity
interests of such direct Subsidiary held by the Company.


 


Section 8.8                    Current TV as a Subsidiary Guarantor. 
Upon repayment of the Existing Note, if after such date
any Note is still outstanding, Current TV and its Subsidiaries will execute a
Subsidiary Guaranty.


 


28

















 


ARTICLE IX


NEGATIVE COVENANTS


 


The Company
covenants and agrees that so long as any Commitment is in effect or any amount
is owing to any Lender or the Collateral Agent under any Note Document:


 


Section 9.1                    Indebtedness. 
The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
other than:


 


(a)                                  Indebtedness in respect of the Notes
and the Existing Note;


 


(b)                                 trade Indebtedness (i) incurred
in the ordinary course of business of the Company and its Subsidiaries
(including current accounts payable extended by suppliers on normal trade terms
in connection with purchases of goods and services which are not overdue for a
period of more than ninety (90) days or, if overdue for more than ninety (90)
days, as to which either (x) such amounts are accrued on the books of the
Company or such Subsidiary or (y) a dispute exists and adequate reserves
in conformity with GAAP have been established on the books of the Company or
such Subsidiary) and (ii) in respect of performance, surety or appeal
bonds provided in the ordinary course of business;


 


(c)                                  Indebtedness (i) evidencing the
deferred purchase price of newly acquired property or incurred solely to
finance the acquisition of such property of the Company and its Subsidiaries
(pursuant to purchase money mortgages or otherwise, whether owed to the seller
or a third party) (provided that such Indebtedness is incurred within
one hundred and eighty (180) days of the acquisition of such property), (ii) incurred
solely to finance the construction or improvement of property or assets owned
by the Company or any of its Subsidiaries or (iii) that constitutes
Capitalized Lease Liabilities;


 


(d)                                 unsecured intercompany Indebtedness
among the Company and its Subsidiaries;


 


(e)                                  reimbursement obligations or guarantees
arising in the ordinary course of business in respect of business-related
expenses incurred by any employee of the Company or of any Subsidiary of the
Company;


 


(f)                                    unsecured Guarantee Obligations of
the Company or any Subsidiary of the Company with respect to Indebtedness of
the Company or a Subsidiary permitted under this Section 9.1 (so long as
each such Guarantee Obligation is expressly and fully subordinated to the Notes
and the other Note Documents); and


 


(g)                                 renewals and refinancing of any Indebtedness
permitted pursuant to clause (c) above; provided  that the principal amount of such
Indebtedness does not exceed the principal amount of the Indebtedness
refinanced.


 


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Section 9.2                    Negative Pledge. 
The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Liens upon or
with respect to any asset now owned or hereafter acquired by it (including,
without limitation, the Collateral) or on any of its rights in respect thereof,
except for the following (collectively, the “Permitted Liens”):


 


(a)                                  Liens granted pursuant to the
Security Agreement, the Existing Security Agreement and the Existing Note;


 


(b)                                 Liens existing as of the Closing
Date as set forth on Schedule 5.13 of the Company’s Disclosure Schedule;


 


(c)                                  Liens incidental to the ordinary
conduct of the business of the Company and its Subsidiaries or the ownership of
their respective assets which do not secure Indebtedness, such as carrier’s,
warehousemen’s, materialmen’s, landlord’s and mechanic’s liens, and which do
not in the aggregate materially detract from the value of their respective
assets or materially impair the use thereof in the ordinary course of business;


 


(d)                                 Liens incurred or deposits made in
the ordinary course of business in connection with workers’ compensation,
unemployment insurance or other forms of governmental insurance or benefits, or
to secure performance of tenders, statutory obligations, bids, leases or other
similar obligations (other than for Indebtedness) entered into in the ordinary
course of business or to secure obligations on surety and appeal bonds or
performance bonds entered into in the ordinary course of business;


 


(e)                                  judgment Liens which do not otherwise
result in an Event of Default under Section 10.1(h);


 


(f)                                    Liens securing Indebtedness
permitted pursuant to Section 9.1(c); provided that with respect to
Liens securing Indebtedness permitted pursuant to Section 9.1(c), such
Liens do not extend to any property other than the property being acquired or
constructed or to the property being improved (but only to the extent of such
improvement);


 


(g)                                 Liens for Taxes, assessments or
governmental charges or levies, or otherwise arising by operation of law, which
Taxes, assessments or governmental charges or levies are not yet due and
payable or which are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance with GAAP;


 


(h)                                 Liens arising solely by virtue of
any statutory provisions relating to banker’s liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds maintained
with a creditor depositary institution; and


 


30

















 


(i)                                     other Liens in respect of assets now
owned or hereafter acquired by the Company or any of its Subsidiaries not
described in clauses (a) through (h) above; provided that each
such Lien and the obligation that it secures is expressly and fully subordinated
to all Liens granted pursuant to the Security Agreement and the obligations of
the Company under this Agreement and the other Note Documents by documents that
contain subordination terms that are reasonably satisfactory to the Lenders.


 


Section 9.3                    Investments. 
The Company will not, and will not permit any of its
Subsidiaries to, make any Investment in any Person, except for:


 


(a)                                  the purchase of all or substantially
all of the Capital Stock of another Person constituting the acquisition of a
business unit;


 


(b)                                 Investments in Cash Equivalents;


 


(c)                                  Investments received in connection
with the bankruptcy or reorganization of, or settlement of delinquent accounts
and disputes with, customers and suppliers, in each case in the ordinary course
of business;


 


(d)                                 Investments by way of contributions
to capital or purchases of Capital Stock of any of the Company’s Subsidiaries
or loans to the Company or any Subsidiary of the Company;


 


(e)                                  Investments consisting of any
deferred portion of the sales price received by the Company or any Subsidiary
in connection with any Disposition permitted under Section 9.7;


 


(f)                                    Investments in Capital Stock of any
Person received in exchange for bona fide services provided to such Person or
its Affiliates by any of the Company’s Subsidiaries in the ordinary course of
business; and


 


(g)                                 other Investments not described in
clauses (a) through (f) above; provided that the Investments
permitted under this clause (g) do not to exceed, in the aggregate, the
sum of five million dollars ($5,000,000).


 


Section 9.4                    Merger, Consolidation, etc. 
The Company shall not, and shall not permit any of its
Subsidiaries to, consolidate or merge with any other Person or sell, transfer
or otherwise dispose of any of its properties and assets substantially as an
entirety to any Person, unless:


 


(a)                                  in the event that the Company or any
of its Subsidiaries shall consolidate with or merge into another Person or
sell, transfer or otherwise dispose of its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or into
which the Company or any of its Subsidiaries is merged or the Person which
acquires the properties and assets of the Company or any of its Subsidiaries
shall be a corporation, limited liability company, partnership or trust
organized and


 


31

















 


validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia;


 


(b)                                 in the event that the Company shall
consolidate or merge with another Person and the Person surviving such
transaction is not the Company, then such surviving Person shall expressly
assume, by delivery of a written instrument in form reasonably satisfactory to
the Required Holders, all of the Company’s rights and obligations under this
Agreement and under the other Note Documents;


 


(c)                                  in the event that any Subsidiary of
the Company shall consolidate or merge with another Person and the Person
surviving such transaction is not the Subsidiary, then such surviving Person
shall expressly assume, by delivery of a written instrument in form reasonably
satisfactory to the Required Holders, all of the Subsidiary’s rights and
obligations under the Note Documents and under any guarantees granted pursuant
to the Notes; and


 


(d)                                 immediately after giving effect to
such transaction, no Event of Default shall have occurred and be continuing (or
could reasonably be expected to result therefrom).


 


Section 9.5                    Transactions with Affiliates. 
The Company will not, and will not permit any of its
Subsidiaries to, enter into any transaction or contract with any of its
Affiliates, unless such transaction or contract (a) is on fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
could obtain in an arm’s-length transaction with a Person that is not an
Affiliate, (b) was entered into prior to the date hereof or contemplated
by any agreement entered into prior to the date hereof (copies of which have
been furnished to the Lenders), (c) is with officers, directors or other
employees of the Company or its Subsidiaries relating specifically and solely
to employment as such, or (d) relates specifically and solely to the ownership
or issuance of equity interests in the Company or in any of the Company’s
Subsidiaries. Notwithstanding anything in this Section 9.5 to the
contrary, each of the Company’s Subsidiaries shall be permitted to reimburse
the Company for reasonable administrative expenses paid or incurred by the
Company in connection with services performed on behalf of or in support of any
of the Company’s Subsidiaries or in connection with the maintenance of the
consolidated group composed of the Company and its Subsidiaries.


 


Section 9.6                    Restricted Payments, etc. 
The Company will not, and will not permit any of its
Subsidiaries to, declare or make a Restricted Payment other than:


 


(a)                                  Restricted Payments made by (i) a
Subsidiary of the Company to the Company or (ii) a Subsidiary of the
Company to another Subsidiary of the Company;


 


(b)                                 Restricted Payments made in
connection with the repurchase of the Company’s or any of its Subsidiaries’
Capital Stock or Options held by the officers, directors and employees of the
Company or any of its Subsidiaries, so long as each such


 


32

















 


repurchase is
pursuant to, and in accordance with the terms of, a management and/or employee
stock plan, a management and/or employee benefit plan, a stock subscription or
similar agreement or a shareholder or similar agreement approved by the board
of directors or comparable governing body of any Subsidiary of the Company that
is bound thereby, is made in accordance with the LLC Agreement (as such
agreement exists on the date hereof, a copy of which has been furnished to the
Lenders) or as required by Applicable Law;


 


(c)                                  so long as no Event of Default has
occurred and is continuing, Restricted Payments made by the Company’s
Subsidiaries to the Company to enable the Company to make distributions
sufficient for the Company or its members to pay Taxes; provided, however,
that the aggregate amount of all such Restricted Payments that may be made by a
Company Subsidiary in any Fiscal Year shall not exceed the product of (A) the
Tax Rate and (B) the aggregate net taxable income of the Company that is
derived from such Subsidiary for the most recently ended Fiscal Year. “Tax
Rate” means the sum of (1) the maximum federal income tax rate
applicable to individuals for the calendar year that includes the end of the
most recently ended Fiscal Year, plus (2) the product of (x) the
maximum state and local income tax rate for such calendar year applicable to
individuals residing in the locality in which the Subsidiary has its principal
place of business and (y) the excess of one hundred percent (100%) over
the rate described in (1) above; and


 


(d)                                 Restricted Payments made to the
Company to reimburse the Company for reasonable administrative expenses paid or
incurred by the Company in connection with services performed on behalf of or
in support of any of the Company’s Subsidiaries or in connection with the
maintenance of the consolidated group composed of the Company and its
Subsidiaries.


 


Section 9.7                    Dispositions. 
The Company will not, and will not permit any of its
Subsidiaries to, make any Disposition, except:


 


(a)                                  Dispositions in the ordinary course
of business;


 


(b)                                 Dispositions made (i) by a
Subsidiary to the Company or any other Subsidiary of the Company or (ii) by
the Company to any of its Subsidiaries;


 


(c)                                  licenses or sublicenses of trademarks,
trade names, copyrights, patents and other intellectual property entered into
by any of the Company’s Subsidiaries in the ordinary course of business; and


 


(d)                                 Dispositions of property not
prohibited by Section 9.4 and not otherwise specifically addressed by
clauses (a) through (c) above, so long as the net proceeds of any
such Disposition (to the extent received by the Company or its Subsidiary, as
applicable, in cash and following such receipt by the Company or its
Subsidiary, as applicable) are either: (i) reinvested into the Company or
a Subsidiary of the Company within one hundred and eighty (180) days after such
Disposition or (ii)


 


33

















 


applied as a
prepayment of the then outstanding principal amount of the Notes and permanent
reduction of Commitments in such amount.


 


Section 9.8                    Subsidiaries. 
The Company will not, and will not permit any of its
Subsidiaries to, create a Subsidiary unless such Subsidiary guarantees the
Notes by executing a Subsidiary Guaranty.


 


ARTICLE X


EVENTS OF DEFAULT


 


Section 10.1              Event of Default .
An “Event of Default” shall exist if any of the following conditions or
events shall occur and be continuing:


 


(a)                                  the Company fails to pay the then
outstanding principal amount and accrued Interest on the Notes on the Final
Maturity Date or on any other date any such amounts become due and payable;


 


(b)                                 the Company or any Material
Subsidiary shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator; (ii) be
generally unable to pay its debts as such debts become due; (iii) make a
general assignment for the benefit of the Company’s or any Material Subsidiary’s
creditors; (iv) commence a voluntary case under the Bankruptcy Code; (v) file
a petition seeking to take advantage of any other law of any jurisdiction
relating to bankruptcy, insolvency, or composition or readjustment of debts; (vi) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under the Bankruptcy Code;
or (vii) take any action to authorize any of the actions set forth in
clauses (i) through (vii) above;


 


(c)                                  a proceeding or case shall be
commenced, without the application or consent of the Company or any Material
Subsidiary, in any court of competent jurisdiction, seeking (i) liquidation,
reorganization or other relief with respect to it or its assets or the
composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of any substantial part of
its assets, or (iii) similar relief in respect of the Company or any
Material Subsidiary under any law of any jurisdiction relating to bankruptcy,
insolvency, or the composition or readjustment of debts, and, in each case,
such proceedings or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of sixty (60) days, if in the United
States, or ninety (90) days, if outside of the United States; or an order for
relief against the Company or any Material Subsidiary shall be entered in an
involuntary case under any bankruptcy, insolvency, composition, readjustment of
debt, liquidation of assets or similar law of any jurisdiction;


 


(d)                                 if any representation or warranty
made by the Company or any of its Subsidiaries in any Note Document shall prove
to have been incorrect in a material respect when made;


 


34

















 


(e)                                  if the Company or any Subsidiary of
the Company fails to observe or perform any covenant or agreement contained in Section 8.4;


 


(f)                                    the Company or any Subsidiary of the
Company fails to observe or perform any covenant or agreement contained in Article IX
hereof and such failure to observe or perform continues for a period of ten (10) days
after the Company’s receipt of written notice from a Lender of such failure;


 


(g)                                 the Company or any Subsidiary of the
Company fails to observe or perform any covenant or agreement contained in any
of the Note Documents (other than those specified in Section 10.1(a), Section 10.1(e) and
Section 10.1(f)) and such failure to observe or perform continues for a
period of thirty (30) days after the Company’s receipt of written notice from
the Lenders of such failure;


 


(h)                                 any judgment or order for the
payment of money, individually or in the aggregate, of one million dollars
($1,000,000) or more (exclusive of any amounts covered by insurance (less any
applicable deductible)) shall be rendered against the Company or any of its
Subsidiaries and such judgment shall not have been vacated or discharged or
stayed pending appeal (for so long as such appeal is pending) or satisfied
pending appeal by the posting of a bond or guaranty (for so long as such appeal
is pending) within thirty (30) days, if in the United States, or sixty (60)
days, if outside the United States (but only if the Company or any of its
Subsidiaries has used its reasonable best efforts to cause such judgment to be
vacated, discharged or stayed pending appeal), in each case after the entry
thereof or enforcement proceedings shall have been commenced by any creditor
upon such judgment or order and shall not have been dismissed, stayed or
discharged within the period prescribed by Applicable Law;


 


(i)                                     a default shall occur in the payment
of any amount when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any principal or stated amount of, or interest or
fees on, any Indebtedness of the Company or any of its Subsidiaries having an
outstanding principal amount, individually or in the aggregate, of one million
dollars ($1,000,000) or more or an event of default shall occur under any
instrument evidencing or securing any such Indebtedness which gives the holder(s) of
such Indebtedness or any Person acting on behalf of such holder(s) thereof
the right to accelerate the maturity of such Indebtedness; or


 


(j)                                     any Note Document shall cease, for
any reason, to be in full force and effect, or any Lien created by any Note
Document shall fail, for any reason, to constitute a valid and perfected Lien
with respect to the Collateral set forth therein, subject to no other Lien
(other than Permitted Liens), or the Company or any Subsidiary or Affiliate of
the Company shall assert any of the foregoing in writing; provided that
an Event of Default shall not be deemed to have occurred pursuant to this Section 10.1(j) if
(i) the applicable Note Document(s) become in full force and effect
or the applicable Lien becomes valid and perfected within five (5) Business
Days following the date on which the applicable Note Document(s) ceased to
be in full force and effect or the applicable Lien failed to constitute a valid
and perfected Lien with respect to the Collateral set forth


 


35

















 


therein and (ii) the
Collateral shall not have become subjected to any Lien not created by a Note
Document (other than Permitted Liens) at any time during the period referred to
in clause (i) hereof.


 


Section 10.2              Consequences of Events of Default.  If an Event of Default has
occurred and is continuing, then the Required Holders may by notice to the
Company declare all or any portion of the then outstanding principal amount of
the Notes, together with all accrued and unpaid Interest thereon, and the Notes
shall thereupon become, immediately due and payable in cash, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company; provided that in the case of any of the
Events of Default specified in Section 10.1(b) or Section 10.1(c),
without any notice to the Company or any other act by the Lenders, all
outstanding Notes shall thereupon become immediately due and payable in cash,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company. Such remedies shall be cumulative and not
exclusive and shall be in addition to any other remedies that the Lenders may
have under the Security Agreement and the other Note Documents or under
Applicable Law.


 


ARTICLE XI


REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES


 


Section 11.1              Registration of Notes. 
The Company shall keep at its principal executive office a
register for the registration and transfer of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and
address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any institutional holder of a Note, promptly upon request therefor, a complete
and correct copy of the names and addresses of all registered holders of Notes.


 


Section 11.2              Transfer and Exchange of Notes. 
Upon surrender of any Note at the principal executive
office of the Company (as specified in Section 16.9) for transfer or
exchange (and in the case of a surrender for registration for transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by
the registered holder of such Note or such holder’s attorney duly authorized in
writing and accompanied by the relevant address and other information for
notices of each transferee of such Note or part thereof), within ten (10) Business
Days thereafter, the Company shall execute and deliver, at the Company’s
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such Person as such holder may request and shall be substantially
in the form of Exhibit B hereto. Each such new Note shall be dated the
date of the surrendered Note. The Company may require payment of a sum sufficient
to cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes.


 


36

















 


Notes shall not be transferred in
denominations of less than one hundred thousand dollars ($100,000); provided
that if necessary to enable a holder of Notes to transfer its entire holding of
Notes, one Note may be in a denomination of less than one hundred thousand
dollars ($100,000). Any transferee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representations set forth in Article VI. The Company shall not be required
to register the transfer of any Note to any Person (other than a transfer by
holder of a Note to its nominee not involving a change of beneficial ownership
of such Note) unless the Company receives (a) from the proposed transferee
a representation reasonably satisfactory to the Company that the
representations and warranties set forth in Article VI are true with
respect to such transferee and (b) in the case of any transfer in which
the Note will be registered in the name of a nominee, the name of the
beneficial owner of the Note and confirmation that such nominee is permitted to
transfer such Note only with the consent of the beneficial owner.


 


Section 11.3              Replacement of
Notes.  Upon receipt by the Company
of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note (which evidence shall be, in the
case of an institutional investor, notice from such institutional investor of
such ownership and such loss, theft, destruction or mutilation), and


 


(a)                                  in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to it (provided that
if the holder of such Note is, or is a nominee for, an institutional investor,
such holder’s own unsecured agreement of indemnity shall be deemed to be
satisfactory),


 


(b)                                 in the case of mutilation, upon
surrender and cancellation thereof, or


 


(c)                                  the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated the date of such lost,
stolen, destroyed or mutilated Note.


 


ARTICLE XII


COLLATERAL AGENT


 


Section 12.1              Appointment of the Collateral Agent.


 


(a)                                  Each Lender hereby authorizes Joel
Z. Hyatt in his capacity as a Lender hereunder, to act on behalf its behalf to
designate a collateral agent. Joel Z. Hyatt hereby designates HSBC Bank USA,
National Association as Collateral Agent to act on behalf of the Lenders and
irrevocably authorizes the Collateral Agent to take action on its behalf under
the Security Agreement and with respect to the Collateral, to exercise the
powers and perform the duties described therein, and to exercise such other
powers reasonably incidental thereto. The Collateral Agent may perform any of
its duties through its agents or employees.


 


(b)                                 Other than the Company’s rights
under Section 12.9, this Article XII is for the benefit of the
Collateral Agent and the Lenders only. The Collateral


 


37

















 


Agent shall act only
for the Lenders and assumes no obligation to or agency or trust relationship
with the Company.


 


Section 12.2              Nature of Duties of Collateral Agent.


 


(a)                                  Each Lender hereby further
authorizes the Collateral Agent, as applicable, on behalf of and for the
benefit of the Lenders, to be the agent for and representative of the Lenders
with respect to the Collateral and the Security Agreement. Subject to Section 15.1,
without further written consent or authorization from the Lenders, the
Collateral Agent may execute any documents or instruments necessary
to release any Lien encumbering any item of Collateral that is the subject
of a sale or other disposition of assets permitted hereby or to which the
Required Holders (or such other Lenders as may be required to give such consent
under Section 15.1) have otherwise consented.


 


(b)                                 The Collateral Agent has no duties
or responsibilities except those expressly set forth in the Note Documents. Neither
the Collateral Agent nor any of its officers, directors, employees or agents
shall be liable for any action taken or omitted hereunder or in connection
herewith. The duties of the Collateral Agent shall be mechanical and
administrative in nature. The Collateral Agent shall not have a fiduciary relationship
to any Lender or any Affiliate of any Lender.


 


Section 12.3              Right to Realize on Collateral. 
Anything contained in any of the Note Documents to the
contrary notwithstanding, the Company, the Collateral Agent and each Lender
hereby agree that (a) no Lender shall have any right individually to
realize upon any of the Collateral, it being understood and agreed that all
powers, rights and remedies under the Security Agreement may be exercised
solely by the Collateral Agent, on behalf of the Lenders in accordance with the
terms hereof and thereof, and (b) in the event of a foreclosure by the
Collateral Agent on any of the Collateral pursuant to a public or private sale,
the Collateral Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and the Collateral Agent, as agent for and
representative of the Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless the Required Holders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the
obligations as a credit on account of the purchase price for any collateral
payable by the Collateral Agent at such sale.


 


Section 12.4              Lack of Reliance on the Collateral
Agent.  Independently and without
reliance upon the Collateral Agent, each Lender has made and shall continue to
make its own independent investigation and analysis of the content and validity
of the Note Documents or of the performance and creditworthiness of the Company
thereunder. The Collateral Agent assumes no responsibility and undertakes no
obligation to make any inquiry with respect to such matters.


 


38

















 


Section 12.5              Certain Rights of the Collateral
Agent.  The Collateral Agent may
request instructions from the Lenders at any time. If the Collateral Agent
requests instructions from the Lenders with respect to any action or inaction,
the Collateral Agent shall be entitled to await instructions from the Required
Holders before such action or inaction. No Lender shall have any right of
action based upon the Collateral Agent’s action or inaction in response to instructions
from the Lenders.


 


Section 12.6              Reliance by the Collateral Agent. 
The Collateral Agent may rely upon written or telephonic
communication it believes to be genuine and to have been signed, sent or made
by the proper person. The Collateral Agent may obtain the advice of legal
counsel (including, for matters concerning the Company, counsel for the
Company), independent public accountants and other experts selected by it and
shall have no liability for action or inaction in good faith based upon such
advice.


 


Section 12.7              Indemnification of the Collateral
Agent.  To the extent
the Collateral Agent is not reimbursed and indemnified by the Company, each
Lender will reimburse and indemnify the Collateral Agent, to the extent of its
Pro Rate Share, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever (including
all expenses) which may be imposed on, incurred by or asserted against the
Collateral Agent in performing its duties hereunder or otherwise relating to
the Note Documents, unless resulting from the Collateral Agent’s gross
negligence or willful misconduct.


 


Section 12.8              The Collateral Agent in its
Individual Capacity . In its individual capacity, the
Collateral Agent shall have the same rights and powers hereunder as any other
Lender and may exercise them as though it was not performing the duties
specified herein. The terms “Lenders,” or any similar terms shall, unless the
context clearly otherwise indicates, include the Collateral Agent in its
individual capacity. The Collateral Agent and its Affiliates may accept
deposits from, lend money to, acquire equity interests in, and generally engage
in any kind of banking, trust, financial advisory or other business with the
Company or any Affiliate of the Company as if it were not performing the duties
specified herein, and may accept fees and other consideration from the Company
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.


 


Section 12.9              Successor
Collateral Agent.


 


(a)                                  The
Collateral Agent may, upon five (5) Business Days’ notice to the Lenders
and the Company, resign by giving written notice thereof to the Lenders and the
Company. The Collateral Agent’s resignation shall be effective upon the
appointment of a successor collateral agent (the “Successor Agent”).


 


(b)                                 Upon receipt of the Collateral Agent’s
resignation, the Lenders may appoint a Successor Agent. Unless an Event of
Default shall have occurred and be continuing at the time of such appointment,
the Successor Agent shall be subject to approval by the Company, which approval
shall not to be unreasonably withheld and


 


39

















 


 shall be delivered to the Lenders within five (5) Business
Days after the Company’s receipt of notice of a proposed Successor Agent. If a
Successor Agent has not accepted its appointment within fifteen (15) Business
Days, then the retiring Collateral Agent may, on behalf of the Lenders and at
the expense of the Company, appoint a Successor Agent which it reasonably deems
competent to act as collateral agent.


 


(c)                                  Upon its acceptance of the agency
hereunder, a Successor Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
under this Agreement. The retiring Collateral Agent shall continue to have the
benefit of this Article XII for any action or inaction while it was
Collateral Agent.


 


Section 12.10        Collateral Matters.


 


(a)                                  Each Lender authorizes and directs
the Collateral Agent to enter into the Security Agreement for the benefit of
the Lenders. Except as otherwise set forth herein, any action or exercise of
powers by the Lenders under the Note Documents, together with such other powers
as are reasonably incidental thereto, shall be authorized and binding upon all
of the Lenders. Prior to an Event of Default, without notice to or consent from
any Lender, the Collateral Agent may take any action necessary or advisable to
perfect and maintain the perfection of the Liens upon the Collateral.


 


(b)                                 The Collateral Agent shall have no
obligation to assure that the Collateral exists or is owned by the Company or
any of its Subsidiaries, that such Collateral is cared for, protected or
insured, or that the Liens in the Collateral have been created, perfected, or
have any particular priority. With respect to the Collateral, the Collateral
Agent may act in any manner it may deem appropriate, in its sole discretion,
given the Collateral Agent’s own interest in the Collateral as one of the
Lenders, and it shall have no duty or liability whatsoever to the Lenders,
except for its gross negligence or willful misconduct.


 


(c)                                  In addition to the Collateral Agent’s
right to take actions on its own accord as permitted under this Agreement, the
Collateral Agent shall take such action with respect to a Default or Event of
Default as shall be directed by the Required Holders in writing. Until the
Collateral Agent shall have received such written directions, the Collateral
Agent may act (or not act) as it deems advisable and in the best interests of
the Lenders.


 


(d)                                 In no event shall the Collateral
Agent be liable, directly or indirectly, for any special, indirect or
consequential damages, even if the Collateral Agent has been advised of the
possibility of such damages.


 


40

















 


ARTICLE XIII


EXPENSES, ETC.


 


Section 13.1              Transaction Expenses. 
Whether or not the transactions contemplated hereby are
consummated, the Company agrees to pay all reasonable and documented costs and
expenses (including reasonable attorneys’ fees) incurred by each Lender and the
Collateral Agent in connection with such transactions and in connection with
any amendments, waivers and consents under or in respect of this Agreement or
the Notes (whether or not such amendment, waiver or consent become effective),
including (a) the reasonable and documented costs and expenses incurred in
connection with the preparation, execution and delivery of this Agreement and
the other Note Documents and any waiver or amendment with respect thereto, and
of the Company’s performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied with, and (b) the
reasonable and documented costs and expenses incurred in connection with the
enforcement of this Agreement and the other Note Documents or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the other Note Documents, or by reason of
being a holder of any Note, or otherwise in connection with the transactions
contemplated hereby and thereby.


 


Section 13.2              Survival. 
The obligations of the Company under this Article XIII
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.


 


ARTICLE XIV


SURVIVAL AND INDEMNIFICATION


 


Section 14.1              Survival of Representations and
Warranties.All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the Notes, the purchase or transfer by each
Lender of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note, regardless
of any investigation made at any time by or on behalf of each Lender or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the other Note
Documents embody the entire agreement and understanding between each Lender and
the Company and supersede all prior agreements and understandings relating to
the subject matter hereof.


 


Section 14.2              Company’s Agreement to Indemnify.  Subject to the terms and
conditions set forth herein, the Company hereby agrees to indemnify, defend and
hold the Lenders and the Collateral Agent and their directors, officers,
employees, members, Affiliates, agents, attorneys, representatives, successors
and assigns (each a “Lender Indemnified Party”) harmless from and
against any and all losses, liabilities,


 


41

















 


claims, charges, proceedings, judgments,
settlements, damages, interest, penalties, costs and expenses (including
reasonable attorneys’ fees, and expenses and costs of enforcement of such
indemnification claim) (individually, a “Loss” and collectively, “Losses”)
based upon, attributable to or resulting from any investigation, litigation,
action or other proceeding (including any governmental action or proceeding)
(whether or not a Lender Indemnified Party is a party thereto) related to the
entering into and/or performance of this Agreement or the use of any proceeds
of the Notes hereunder or the consummation of any transactions contemplated
herein or any other legal, administrative or other proceeding arising out of
the transactions contemplated hereby, other than such Losses which are
judicially determined in a final and non-appealable decision to have resulted
from the gross negligence or willful misconduct of the Lender Indemnified
Party.


 


Section 14.3              Indemnification Procedures.


 


(a)                                  In the event that any legal proceedings,
judicial, administrative or arbitral action, suit, or proceeding shall be
instituted or any claim or demand shall be asserted by any party hereto or by
any third party in respect of which payment may be sought under Section 14.2
(a “Claim”), the party seeking indemnification pursuant to this Article XIV
(the “Indemnified Party”) shall promptly give written notice thereof
(the “Claim Notice”) to the party from whom such Indemnified Party is
seeking indemnification pursuant to this Article XIV (the “Indemnifying
Party”), specifying in reasonable detail the nature of the Claim and, to
the extent practicable, the amount or the estimated amount thereof and the
source of the Loss under Section 14.2; provided, however,
the failure to give such notice shall not affect the Indemnifying Party’s
obligations hereunder except to the extent that the Indemnifying Party incurs
incremental out-of-pocket expenses or is actually prejudiced by such failure.


 


(b)                                 With respect to Claims not involving
a third party, following receipt of a Claim Notice related to such Claim, the
Indemnifying Party shall have the opportunity to make such investigation of the
Claim as such Indemnifying Party reasonably deems necessary or desirable, and
shall have thirty (30) days following receipt of a Claim Notice related to such
Claim to give notice of dispute of such Claim to the Indemnified Party. For the
purposes of such investigation, such Indemnified Party agrees to make available
to such Indemnifying Party and/or its authorized representative(s) the
information relied upon by such Indemnified Party to substantiate the Claim, as
well as any other information bearing thereon reasonably requested by such
Indemnifying Party. If the Indemnifying Party has timely disputed its liability
with respect to such Claim or fails to notify the Indemnified Party whether
such indemnifying person disputes its liability with respect to such Claim, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute, and if not resolved through
negotiations within sixty (60) days following the receipt of the Claim Notice
related to such Claim, such dispute shall be resolved by litigation in a court
of competent jurisdiction.


 


(c)                                  The Indemnifying Party shall have
the right to assume the defense of, negotiate, settle or otherwise deal with
any Claim brought by any third party,


 


42

















 


 with counsel of its own choice, which counsel
must be reasonably acceptable to the Indemnified Party, by giving written
notice, within fifteen (15) days from the date of receipt of the Claim Notice,
to the Indemnified Party of its intent to do so, whereupon it shall have the
sole power to direct and control such defense except as provided below. If the
Indemnifying Party elects not to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnifiable against hereunder
or fails to notify the Indemnified Party of its election as herein provided,
the Indemnified Party may defend against, negotiate, settle or otherwise deal
with such Claim. If the Indemnifying Party shall assume the defense of any
Claim, the Indemnified Party may participate, at its own expense, in the
defense of such Claim; provided, however, that such Indemnified
Party shall be entitled to participate in any such defense with separate
counsel at the expense of the Indemnifying Party if, in the reasonable written
opinion of counsel to the Indemnified Party, a conflict or potential conflict
exists between the Indemnified Party and the Indemnifying Party in the conduct
of the defense of such Claim; and provided, further, that the
Indemnifying Party shall not be required to pay for more than one such counsel
for all Indemnified Parties, in each jurisdiction, in connection with any Claim.
The parties hereto agree to reasonably cooperate with each other in connection
with the defense, negotiation or settlement of any such Claim. The Indemnifying
Party shall not settle or compromise any indemnifiable Claim or consent to
entry of any judgment without the written consent of the Indemnified Party
(which consent shall not be unreasonably withheld or delayed), unless such
settlement, compromise or judgment includes an unqualified release from all liability
in respect of the indemnifiable Claim by each claimant or plaintiff to such
Indemnified Party. An Indemnified Party shall not settle or compromise any
indemnifiable Claim or consent to entry of any judgment without the prior
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld or delayed). If the Indemnifying Party makes any payment
on any indemnifiable Claim, the Indemnifying Party shall be subrogated, to the
extent of such payment, to all rights and remedies of the Indemnified Party to
any Claims of the Indemnified Party with respect to such indemnifiable Claim.


 


(d)                                 After any final judgment or award
shall have been rendered by a Governmental Entity of competent jurisdiction and
the expiration of the time in which to appeal therefrom, or a settlement shall
have been consummated in accordance with the requirements of this Section 14.3,
or the Indemnified Party and the Indemnifying Party shall have arrived at a
mutually binding agreement with respect to a Claim hereunder, the Indemnified
Party shall forward to the Indemnifying Party notice of any sums due and owing
by the Indemnifying Party pursuant to this Agreement with respect to such
matter and the Indemnifying Party shall be required to pay all of the sums so
due and owing to the Indemnified Party by wire transfer of immediately
available funds within ten (10) Business Days after the date of such
notice.


 


ARTICLE XV


AMENDMENT AND WAIVER


 


Section 15.1              Requirements. 
This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either


 


43

















 


retroactively or prospectively), with (and
only with) the written consent of the Company, the Required Holders and, solely
with respect to Article XII hereof, the Collateral Agent, except that (a) no
amendment or waiver of any of the provisions of Section 2.1, Section 2.2,
Article III, Article IV, or Article XII, or any defined term (as
it is used therein), will be effective as to a holder of a Note unless
consented to by such holder in writing, and (b) no such amendment or
waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 10.2,
change the amount or time of any prepayment or payment of principal of, or
reduce the rate or change the time of payment or method of computation of
interest on, the Notes, (ii) reduce the percentage of the principal amount
of the Notes the holders of which are required to consent to any such amendment
or waiver, by amendment of the definition of “Required Holders” or otherwise, (iii) change
the percentage of the principal amount of the Notes the holders of which may
declare the Notes to be due and payable as provided in Section 10.2, or
which may rescind any such declaration, or (iv) amend any of Section 10.1(a),
Section 10.2, Section 16.7, or this Article XV.


 


Section 15.2              Solicitation of
Holders of Notes.  (a) The Company
will provide each Lender (irrespective of the amount of any Commitment then
owed to such Lender) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such Lender to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The Company
will deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 15.2(a) to
each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.


 


(b)                                 The Company will not directly or
indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any security,
to any Lender as consideration for or as an inducement to the entering into by
any Lender or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each Lender even if such Lender did not
consent to such waiver or amendment.


 


Section 15.3              Binding Effect. 
Any amendment or waiver consented to as provided in this Article XV
applies equally to all Lenders and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has
been marked to indicate such amendment or waiver. No such amendment or waiver
will extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and any Lender nor any delay
in exercising any rights hereunder or under any Note shall operate as a waiver
of any rights of any Lender. As used herein and in the Notes, the term “this
Agreement” and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.


 


44

















 


Section 15.4              Notes held by the Company.  Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Subsidiaries shall be deemed not
to be outstanding.


 


ARTICLE XVI


MISCELLANEOUS


 


Section 16.1              Governing Law; Consent to
Jurisdiction.  THIS NOTE AND THE OTHER NOTE
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. The Company and each Lender (a) consents to submit
itself to the personal jurisdiction of any New York state or federal court
located in the city and county of New York in the event any dispute arises out
of this Note or any other Note Document or any of the transactions contemplated
hereby or thereby, (b) agrees that it shall not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court and (c) agrees that it shall not bring any action relating to this
Note or any other Note Document or any of the transactions contemplated hereby
or thereby in any court other than a federal or state court sitting in the city
and county of New York.


 


Section 16.2              Waiver of Jury Trial. 
THE COMPANY, THE COLLATERAL AGENT AND EACH LENDER HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER NOTE DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF THE COMPANY OR EACH LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF AND THEREOF.


 


Section 16.3              Legal Rate.  Notwithstanding anything to the contrary
contained herein or in any other Note Document, if any time the interest rate
payable under the Notes, together with all fees and charges which are treated
as interest under Applicable Law (collectively “Charges”), as provided
in the Notes or otherwise contracted for, charged, received, taken or reserved
by the Lenders, shall exceed the maximum lawful rate (the “Legal  Rate”) which may be contracted for,
charged, received, taken or reserved by a Lender in accordance with Applicable
Law, the interest rate applicable to the Notes, together with all Charges
payable to the Lender, shall be limited to the Legal Rate and any interest or
Charges not so limited, taken, received or reserved by the Lender at such time
shall be spread, prorated or amortized over the term of the Notes to the
fullest extent permitted by Applicable Law.


 


45

















 


Section 16.4              Severability.  Any term or provision of this
Agreement and the other Note Documents that is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof and thereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof or
thereof is invalid, void or unenforceable, the Company and each Lender agrees
that the court making such determination shall have the power to reduce the
scope, duration, area or applicability of the term or provision, to delete
specific words or phrases, or to replace any invalid, void or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision.


 


Section 16.5              Entire Agreement.  This Agreement and the other
Note Documents constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof and supercede all prior
agreements, understandings and negotiations, whether written or oral, of the
parties hereto.


 


Section 16.6              No Waiver. 
No failure or delay by a Lender in exercising any right,
power or privilege under this Agreement or any other Note Document shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided herein and therein
shall be cumulative and not exclusive of any rights or remedies provided by
law.


 


Section 16.7              Confidentiality. 
For a period of time beginning on the date hereof and
ending on the third anniversary of the date hereof, the Lenders shall, and
shall cause their respective officers, directors, employees, consultants,
advisors and representatives including, without limitation, the Collateral
Agent to, treat as confidential the terms of this Agreement and all the other
Note Documents and all nonpublic, confidential or proprietary information
concerning the Company and its Subsidiaries, and the Lenders shall not, and
shall cause their respective officers, directors, employees, consultants,
advisors and representatives including, without limitation, the Collateral
Agent not to, disclose or use such information to the detriment of the Company
or its Subsidiaries, except (a) as otherwise provided herein, (b) with
the prior written consent of the Company, (c) as may be required by
Applicable Law or (d) with respect to such information which is or becomes
generally available to the public other than as a result of a violation of this
provision; provided, however, that the Collateral Agent may
disclose any such information to its counsel, the Lenders and the Lenders’
counsel and any bank auditors and examiners or any other regulatory authority
requiring such information.


 


Section 16.8              Transferability.


 


(a)                                  The Notes and the Commitments shall
not be transferred directly or indirectly, by any Lender to any Person (other
than to Persons who are and


 


46

















 


remain Affiliates of
the Lender) without the prior written consent of the Company, which consent
shall not be unreasonably withheld or delayed; provided, however,
that the Company may, in its sole discretion, withhold consent to a transfer of
any Note to a competitor of the Company or any of its Subsidiaries. Any
purported transfer of the Notes and the Commitments in violation of this Section 16.8
shall be null and void.


 


(b)                                 The provisions of the Notes and the
other Note Documents shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, except
that the Company may not assign or otherwise transfer any of its rights or
obligations under the Notes or any Note Document without the prior written
consent of the Required Holders.


 


Section 16.9              Notices. 
All notices and other communications hereunder shall be in
writing and shall be deemed given when mailed, delivered personally, sent via
facsimile (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by such party by like notice):


 


If to the Company to:


 


Current Media, LLC


118 King Street


San Francisco, CA 94107


Attention: 
Joel Hyatt


Telephone: 
(415) 995-8200


Facsimile Number:  (415) 995-8283


 


with a copy to:


 


Skadden, Arps, Slate, Meagher & Flom
LLP


1440 New York Avenue, N.W.


Washington, DC 20005


Attention: Ronald C. Barusch


Telephone: (202) 371-7990


Facsimile Number: (202) 393-5760


 


If to a
Lender, to its address and facsimile number set forth on Schedule A attached
hereto, with copies to, in the case the Lender is Blum Strategic Partners II,
L.P., Simpson Thacher & Bartlett LLP at 2550 Hanover Street, Palo
Alto, CA 94304, Attention: William Brentani, Telephone: (650) 251-5110,
Facsimile Number: (650) 251-5002.


 


If to the Collateral Agent, to:


 


HSBC Bank USA, National Association


452 Fifth Avenue


New York, NY 10018


 


47

















 


Attention: 
Corporate Trust & Loan Agency


Telephone: 
(212) 525-1351


Facsimile Number:  (212) 525-1300


 


with a copy to:


 


Simpson Thacher & Bartlett LLP


2550 Hanover Street


Palo Alto, CA
94304


Attention:  William Brentani


Telephone: 
(650) 251-5110


Facsimile Number:  (650) 251-5002


 


Section 16.10        Descriptive Headings. 
The descriptive headings herein are inserted for
convenience of reference only and shall in no way be construed to define,
limit, describe, explain, modify, amplify, or add to the interpretation,
construction or meaning of any provision of, or scope or intent of, this
Agreement nor in any way affect this Agreement.


 


Section 16.11        Counterparts. 
This Agreement may be executed in counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.


 


Section 16.12        Successors and Assigns. 
All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the
benefit of their respective successors and assigns (including, without
limitation, any subsequent holder of a Note) whether so expressed or not.


 


Section 16.13        Payments Due on Non-Business Days. 
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or interest on any Note that is
due on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.


 


[Signature
Page Follows]


 


48

















 


IN WITNESS
WHEREOF, each of the undersigned has caused this Agreement to be duly signed as
of the date first above written.


 


	
   

  	
   

  	
  CURRENT MEDIA, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
  :

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BLUM STRATEGIC PARTNERS II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory D. Mitchan

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
  :

  	
  Title: 
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BCP AIV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory D. Mitchan

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: 
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Albert Gore, Jr.

  	
   

  
	
   

  	
   

  	
  Albert Gore, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hyatt
  Irrevocable Trust FBO Jared Z. Hyatt

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: 
  Trustee

  
										



 

















 


	
   

  	
   

  	
  Hyatt
  Irrevocable Trust FBO Zachary R. Hyatt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James A. Kohlberg Revocable
  Trust

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James A. Kohlberg

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Albert J. Dwoskin

  
	
   

  	
   

  	
  Albert J. Dwoskin

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Andrew Tobias

  
	
   

  	
   

  	
  Andrew Tobias

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Bruce Rauner

  
	
   

  	
   

  	
  Bruce Rauner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Philip Murphy

  
	
   

  	
   

  	
  Philip Murphy

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FPB Investments

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Gramercy Fund

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 

















 


Schedule A


 


Revolving
Commitments


 


	
  Holder

  (name and address)

  	
   

  	
  Revolving Commitment

  	
   

  	
  Pro

  Rata Share

  	
   

  
	
  Blum Strategic Partners II, L.P.

  909 Montgomery Street

  San Francisco, CA 94133

  Facsimile Number: (415) 288-7238

  	
   

  	
  $

  	
  4,128,426

  	
   

  	
  27.523

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BCP AIV, L.P.

  909 Montgomery Street

  San Francisco, CA 94133

  Facsimile Number: (415) 288-7238

  	
   

  	
  $

  	
  2,201,574

  	
   

  	
  14.677

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Albert Gore, Jr.

  The Office of the Honorable Al Gore, Jr.

  2100 West End Avenue

  Nashville, TN 37203

  Facsimile Number: (615) 292-2056

  	
   

  	
  $

  	
  3,000,000

  	
   

  	
  20.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hyatt Irrevocable Trust FBO Jared Z. Hyatt

  c/o Joel Hyatt

  118 King Street

  San Francisco, CA 94107

  Facsimile Number: (415) 995-8283

  	
   

  	
  $

  	
  1,500,000

  	
   

  	
  10.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hyatt Irrevocable Trust FBO Zachary R. Hyatt

  c/o Joel Hyatt

  118 King Street

  San Francisco, CA 94107

  Facsimile Number: (415) 995-8283

  	
   

  	
  $

  	
  1,500,000

  	
   

  	
  10.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James A. Kohlberg Revocable Trust  

  Attn: Jim Kohlberg

  Kohlberg & Company 

  258 High Street, Suite 100

  Palo Alto, CA 94301-1040

  Facsimile Number: (650) 463-1482

  	
   

  	
  $

  	
  2,000,000

  	
   

  	
  13.333

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Albert J. Dwoskin

  9302 Lee Highway, Suite 300

  Fairfax, VA 22031-1214

  	
   

  	
  $

  	
  200,000

  	
   

  	
  1.333

  	
  %

  



 

















 


	
  Andrew Tobias

  787 North East 71st Street 

  Miami, FL 33138

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bruce Rauner

  GTCR Golden Rauner, LLC

  6100 Sears Tower

  Chicago, IL 60606

  Facsimile Number: (312) 382-2213

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Philip Murphy

  45 Blossom Cove Road

  Red Bank, NJ 07701

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FPB Investments

  Jeff Franzen

  867 Alvermar Ridge Drive

  McLean, VA 22102

  Facsimile Number: (703) 760-9211

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Gramercy Fund

  Attn: Tom Gegax

  2810 W. Lake of the Isles Pkwy.

  Minneapolis, MN 55416

  	
   

  	
  $

  	
  70,000

  	
   

  	
  0.467

  	
  %