<PAGE>


                                GUARANTY OF PAYMENT


     THIS GUARANTY OF PAYMENT (this "GUARANTY") is made this July 30, 1998 by 
Children's Broadcasting Corporation, a Minnesota corporation ("GUARANTOR") in 
favor of Heller Financial, Inc., a Delaware corporation ("LENDER").

                                      RECITALS

     A.   FINANCIAL ACCOMMODATIONS.  Lender and Harmony Holdings, Inc., 
Harmony Pictures, Inc., The End, Inc., Curious Pictures Corporation, Pure 
Film, Inc., Melody Films, Inc., Lexington Films, Inc., Serial Dreamer Films, 
Inc., The Beginning Entertainment, Inc., The Moment Films, Inc., Gigantic 
Entertainment, Inc., Furious Pictures Corporation, and Delirious Pictures 
Corporation (collectively "BORROWER") are concurrently herewith entering into 
that certain Loan and Security Agreement (the "LOAN AGREEMENT") of even date 
herewith pursuant to which Lender shall extend financial accommodations to 
Borrower.

     B.   INDUCEMENT.  To induce Lender to extend to Borrower the financial 
accommodations set forth in the Loan Agreement, Guarantor is willing to 
execute and deliver this Guaranty.

     C.   SUBORDINATION.  Pursuant to that certain Intercreditor Agreement, 
dated as of July 30, 1998, entered into between Foothill Capital Corporation, 
a California corporation ("FOOTHILL") and Lender, and acknowledged by 
Guarantor (the "INTERCREDITOR AGREEMENT"), the obligations of Guarantor to 
Lender under this Guaranty shall at all times be junior and subordinate to 
the obligations of Guarantor to Foothill under the Foothill Transactional 
Documents (as such term is defined in the Intercreditor Agreement).

     In consideration of the foregoing, and for other good and valuable 
consideration, the receipt and sufficiency of which is hereby acknowledged, 
Guarantor hereby agrees as follows:

SECTION 1 DEFINED TERMS

     All capitalized terms used herein shall have the meanings ascribed 
thereto in the Loan Agreement unless otherwise defined herein.

SECTION 2 THE GUARANTY

     2.1  GUARANTY OF OBLIGATIONS.  Guarantor jointly and severally (if more 
than one), unconditionally and absolutely, if more than one, guarantees the 
full and prompt payment and performance when due, whether at maturity or 
earlier, by reason of acceleration or otherwise, and at all times thereafter, 
of the indebtedness, liabilities and 

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obligations of every kind and nature of Borrower to Lender, including those 
arising under or in any way relating to the Loan Agreement or any of the 
other Loan Documents, howsoever created, incurred or evidenced, whether 
direct or indirect, absolute or contingent, now or hereafter existing, due or 
to become due, and howsoever owned, held or acquired by Lender (collectively, 
the "OBLIGATIONS").  Without limitation to the foregoing, the Obligations 
shall include (a) all reasonable attorneys' and paralegals' fees, costs and 
expenses and all court costs and costs of appeal incurred by Lender in 
collecting any amount due Lender under this Guaranty or in prosecuting any 
action against Borrower, Guarantor or any other guarantor with respect to all 
or any part of the Obligations, and (b) all interest, fees, costs and 
expenses due Lender after the filing of a bankruptcy petition by or against 
Borrower regardless of whether such amounts can be collected during the 
pendency of the bankruptcy proceedings.  

     2.2  CONTINUING GUARANTY; GUARANTY OF PAYMENT. This Guaranty is a 
continuing guaranty of the Obligations, and Guarantor agrees that the 
obligations of Guarantor to Lender hereunder shall be primary obligations, 
shall not be subject to any counterclaim, set-off, abatement, deferment or 
defense based upon any claim that Guarantor may have against Lender, Borrower 
or any other person or entity, and shall remain in full force and effect 
without regard to, and shall not be released, discharged or affected in any 
way by any circumstances or condition (whether or not Guarantor shall have 
any knowledge thereof), including, without limitation: (a) the attempt or the 
absence of any attempt by Lender to obtain payment or performance by Borrower 
or any other guarantor (this being a guaranty of payment and performance and 
not of collection); (b) Lender's delay in enforcing Guarantor's Obligations 
hereunder, or any prior partial exercise by Lender of any right or remedy 
against Guarantor hereunder; (c) the lack of validity or enforceability of, 
or Lender's waiver or consent with respect to, any provision of any 
instrument evidencing, securing or otherwise relating to the Obligations, or 
any part thereof; (d) the failure by Lender to take any steps to perfect, 
maintain and enforce its security interests, or to preserve its rights to any 
security or collateral, for the Obligations; (e) any voluntary or involuntary 
bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment 
for the benefit of creditors, composition, receivership, liquidation, 
marshalling of assets and liabilities or similar events or proceedings with 
respect to Borrower or Guarantor, as applicable, or any of their respective 
properties (each, an "INSOLVENCY PROCEEDING"), or any action taken by Lender, 
any trustee or receiver or by any court in any such proceeding; (f) in any 
proceeding under Title 11 of the United States Code (11 U.S.C. Section 101 et 
seq.), as amended (the "BANKRUPTCY CODE"), (i) any election by Lender under 
Section 1111(b)(2) of the Bankruptcy Code, (ii) any borrowing or grant of a 
security interest by Borrower as debtor-in-possession under Section 364 of 
the Bankruptcy Code, (iii) the inability of Lender to enforce the Obligations 
against Borrower by application of the automatic stay provisions of Section 
362 of the Bankruptcy Code, or (iv) the disallowance, under Section 502 of 
the Bankruptcy Code, of all or any portion of Lender's claim(s) against 
Borrower for repayment of the Obligations; (g) the failure of Guarantor to 
receive notice of any intended disposition of the collateral for the 
Obligations; (h) any merger or consolidation of Borrower into or with any 
other entity, or any sale, lease or transfer of any of the assets

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of Borrower or Guarantor to any other person or entity; (i) any change in the 
ownership of Borrower or any change in the relationship between Borrower and 
Guarantor, or any termination of any such relationship; (k) the death or 
incapacity of Guarantor; and (l) any other circumstance which might otherwise 
constitute a legal or equitable discharge or defense of Borrower, Guarantor 
or any other guarantor.

     Guarantor hereby expressly waives and surrenders any defense to its 
liability under this Guaranty based upon any of the foregoing acts, 
omissions, agreements, waivers or matters.  It is the purpose and intent of 
this Guaranty that the obligations of Guarantor hereunder shall be absolute 
and unconditional under any and all circumstances.

     2.3  RIGHTS OF LENDER.  Lender is hereby authorized, without notice to 
or demand of Guarantor and without affecting the liability of Guarantor 
hereunder, to take any of the following actions from time to time: (a) 
increase or decrease the amount of, or renew, extend, accelerate or otherwise 
change the time for payment of, or other terms relating to, the Obligations, 
or otherwise modify, amend or change the terms of any promissory note or 
other agreement evidencing, securing or otherwise relating to any of the 
Obligations, including, without limitation, the making of additional advances 
thereunder; (b) accept and apply any payments on or recoveries against the 
Obligations from any source, and any proceeds of any security therefor, to 
the Obligations in such manner, order and priority as Lender may elect; (c) 
take, hold, sell, release or otherwise dispose of all or any security for the 
Obligations or the payment of this Guaranty, subject to the provisions of the 
Intercreditor Agreement; (d) settle, release, compromise, collect or 
otherwise liquidate the Obligations or any portion thereof; (e) accept, hold, 
substitute, add or release any other guaranty or endorsements of the 
Obligations; and (f) subject to the provisions of the Intercreditor 
Agreement, at any time after maturity of the Obligations, appropriate and 
apply toward payment of the Obligations (i) any indebtedness due or to become 
due from Lender to Guarantor, and (ii) any moneys, credits, or other property 
belonging to Guarantor at any time held by or coming into the possession of 
Lender or any affiliates thereof, whether for deposit or otherwise.

SECTION 3 GUARANTOR'S WAIVERS

     3.1  STATUTES OF LIMITATION. Guarantor irrevocably waives all statutes 
of limitation as a defense to any action or proceeding brought against 
Guarantor by Lender, to the fullest extent permitted by law.

     3.2  ELECTION OF REMEDIES. Guarantor irrevocably waives any defense 
based upon an election of remedies made by Lender or any other election 
afforded to Lender pursuant to applicable law, including, without limitation, 
(a) any election to proceed by judicial or nonjudicial foreclosure or by deed 
in lieu thereof, or any election of remedies which destroys or otherwise 
impairs the subrogation rights of the Guarantor or the rights of the 
Guarantor to proceed against Borrower for reimbursement, or both, (b) the 
waiver

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by Lender, either by action or inaction of Lender or by operation of law, of 
a deficiency judgment against Borrower, and (c) any election pursuant to an 
Insolvency Proceeding.

     3.3  RIGHTS OF SUBROGATION AND OTHER RIGHTS.  Guarantor irrevocably 
waives (a) all rights at law or in equity to seek subrogation, contribution, 
indemnification or any other form of reimbursement or repayment from Borrower 
or any other person or entity now or hereafter primarily or secondarily 
liable for any of the Obligations for any disbursements made by any Guarantor 
under or in connection with this Guaranty, (b) all claims of any kind or type 
against Borrower as a result of any payment made by Guarantor to Lender, and 
(c) any right to participate in any security now or hereafter held by Lender. 
 In furtherance, and not in limitation, of the foregoing, Guarantor agrees 
that any payment to Lender pursuant to this Guaranty shall be deemed a 
contribution to the capital of Borrower or other obligated party and shall 
not constitute Guarantor a creditor of such party.  Guarantor further agrees 
that to the extent the waiver of its rights of subrogation as set forth 
herein is found by a court of competent jurisdiction to be void or voidable 
for any reason, any rights of subrogation Guarantor may have against Borrower 
or against any collateral or security for any of the Obligations shall be 
junior and subordinate to any rights Lender may have against Borrower and to 
all right, title and interest Lender may have is such collateral or security.

     3.4  DEMANDS AND NOTICES.  Guarantor irrevocably waives all 
presentments, demands for performance, protests, notices of protest, notices 
of dishonor, notices of acceptance of this Guaranty and of the existence, 
creation or incurring of new or additional Obligations, and demands and 
notices of every kind that may be required to be given by any statute or rule 
or law.

     3.5  BORROWER INFORMATION; OTHER DEFENSES.  Guarantor irrevocably waives 
(a) any duty of Lender to advise Guarantor of any information known to Lender 
regarding the financial condition of Borrower (it being the obligation of 
Guarantor to keep informed regarding such condition), and (b) any defense 
based on any claim that Guarantor's obligations exceed or are more burdensome 
than those of Borrower, and any and all other defenses now or at any time 
hereafter available to Guarantor at law or in equity. 

SECTION 4 REPRESENTATIONS AND WARRANTIES

     Guarantor represents and warrants to Lender as follows:

     4.1  EXISTENCE; AUTHORITY; EXECUTION.  To the extent Guarantor is a 
corporation, limited liability company or limited partnership, Guarantor 
hereby represents and warrants that: (a) it is duly organized, validly 
existing, and in good standing under the laws of the state of its 
incorporation or formation; and (b) this Guaranty has been duly and validly 
authorized, executed and delivered and constitutes the binding obligation of 
Guarantor, enforceable in accordance with its terms.

     4.2  FINANCIAL STATEMENTS.  All financial statements and other financial 
information furnished or to be furnished to Lender (a) are or will be true 
and correct and

<PAGE>

do or will fairly represent the financial condition of Guarantor (including 
all contingent liabilities), and (b) were or will be prepared in accordance 
with generally accepted accounting principles, or such other accounting 
principles as may be acceptable to Lender at the time of their preparation, 
consistently applied.  There has been no material adverse change in 
Guarantor's financial condition since the dates of the statements most 
recently furnished Lender.

     4.3  NO DEFAULTS.   There is no existing event of default, and no event 
has occurred which with the passage of time and/or the giving of notice or 
both will constitute an event of default, under any agreement to which 
Guarantor is a party, the effect of which event of default will impair 
performance by Guarantor of the Obligations pursuant to and as contemplated 
by the terms of this Guaranty, and neither the execution and delivery of this 
Guaranty nor compliance with the terms and provisions hereof will violate any 
presently existing provision of law or any presently existing regulation, 
order, writ, injunction or decree of any court or governmental department, 
commission, board, bureau, agency or instrumentality, or constitute a default 
under, any agreement to which Guarantor is a party or by which Guarantor is 
bound.

     4.4  NO LITIGATION.  There are no actions, suits or proceedings pending 
or threatened against the Guarantor before any court or any governmental, 
administrative, regulatory, adjudicatory or arbitrational body or agency of 
any kind that will adversely affect performance by the Guarantor of its 
obligations pursuant to and as contemplated by the terms and provisions of 
this Guaranty.

     4.5  ACCURACY.  Neither this Guaranty nor any document, financial 
statement, credit information, certificate or statement heretofore furnished 
or required herein to be furnished to Lender by the Guarantor contains any 
untrue statement of fact or omits to state a fact material to this Guaranty.

SECTION 5 EVENTS OF DEFAULT

     Upon the occurrence of any of the following events, Lender may, without 
notice to Borrower or Guarantor, declare any or all of the Obligations, 
whether or not then due, immediately due and payable by Guarantor under the 
Guaranty, and subject to the provisions of the Intercreditor Agreement Lender 
shall be entitled to enforce the obligations of Guarantor hereunder:

     5.1  DEFAULT BY BORROWER.  Borrower shall default in the payment or 
performance of any of the Obligations guarantied hereby, after giving effect 
to any applicable notice and cure provisions.

     5.2  FAILURE TO PERFORM.  Guarantor fails to perform any of its 
obligations under this Guaranty or any agreement under which security is 
given therefor, or this Guaranty is revoked or terminated by Guarantor, or 
any representation or warranty made or given by Guarantor to Lender proves to 
be false or misleading in any material respect.

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     5.3  INSOLVENCY PROCEEDING.  The making by Guarantor of any assignment 
for the benefit of creditors, or a trustee or receiver being appointed for 
Guarantor or for any property of Guarantor, or Guarantor becoming insolvent 
or the subject of any Insolvency Proceeding and, in the case of such a 
proceeding being commenced against Guarantor, such proceeding is not 
dismissed within thirty (30) days following the commencement date thereof.

     5.4  DEATH OR DISSOLUTION. Guarantor dies, dissolves or liquidates, or 
the business of Guarantor is suspended or terminated for any reason.

SECTION 6 MISCELLANEOUS

     6.1  REVIVAL AND REINSTATEMENT.  If at any time all or any part of any 
payment theretofore applied by Lender to any of the Obligations is or must be 
rescinded or returned by Lender for any reason whatsoever (including, without 
limitation, the insolvency, bankruptcy or reorganization of Borrower), such 
Obligations shall, for the purposes of this Guaranty, to the extent such 
payment is or must be rescinded or returned, be deemed to have continued in 
existence, notwithstanding such application by Lender, and this Guaranty 
shall continue to be effective or be reinstated, as the case may be, as to 
such Obligations, all as though such application by Lender had not been made.

     6.2  NO MARSHALING.  Lender has no obligation to marshal any assets in 
favor of Guarantor, or against or in payment of (a) any of the Obligations, 
or (b) any other obligation owed to Lender by Guarantor, Borrower, or any 
other person.

     6.3  NO MODIFICATION, WAIVER OR RELEASE WITHOUT WRITING.  Except as may 
otherwise be expressly set forth herein, this Guaranty may not be modified, 
amended, revised, revoked, terminated, changed or varied in any way 
whatsoever, nor shall any waiver of any of the provisions of this Guaranty be 
binding upon Lender, except as expressly set forth in a writing duly executed 
by Lender and Guarantor.  No waiver by Lender of any default shall operate as 
a waiver of any other default or the same default on a future occasion, and 
no action by Lender permitted hereunder shall in any way affect or impair 
Lender's rights or the obligations of Guarantor under this continuing 
Guaranty.

     6.4  ASSIGNMENT; SUCCESSORS AND ASSIGNS.  Guarantor may not assign 
Guarantor's obligations or liabilities under this Guaranty.  Subject to the 
preceding sentence, this Guaranty shall be binding upon the parties hereto 
and their respective heirs, executors, successors, representatives and 
assigns and shall inure to the benefit of the parties hereto and their 
respective successors and assigns.  Lender may assign its rights under this 
Guaranty.

     6.5  INTEGRATION.  This Guaranty is the entire agreement of Guarantor 
with respect to the subject matter of this Guaranty.

<PAGE>

     6.6  RIGHTS CUMULATIVE.  All of Lender's rights under this Guaranty are 
cumulative.  The exercise of any one right does not exclude the exercise of 
any other right given in this Guaranty or any other right of Lender not set 
forth in this Guaranty.

     6.7  SEVERABILITY.  Whenever possible each provision of this Guaranty 
shall be interpreted in such manner as to be effective and valid under 
applicable law, but if any provision of this Guaranty shall be prohibited by 
or invalid under such law, such provision shall be ineffective to the extent 
of such prohibition or invalidity, without invalidating the remainder of such 
provision or the remaining provisions of this Guaranty.

     6.8  MATERIAL INDUCEMENT; CONSIDERATION.  Guarantor acknowledges and 
agrees that Lender is specifically relying upon the representations, 
warranties, agreements and waivers contained herein and that such 
representations, warranties, agreements and waivers constitute a material 
inducement to Lender to accept this Guaranty and to enter into the Loan 
Agreement and the transaction contemplated therein.  Guarantor further 
acknowledges that it expects to benefit from Lender's extension of financing 
accommodations to Borrower because of its relationship to Borrower, and that 
it is executing this Guaranty in consideration of that anticipated benefit.

     6.9  INDEMNIFICATION.  Subject to the provisions of the Intercreditor 
Agreement, Guarantor agrees to indemnify, pay and hold Lender and its 
officers, directors, employees, agents, and attorneys (collectively called 
the "INDEMNITEES") harmless from and against any and all liabilities, 
obligations, losses, damages, penalties, actions, judgments, suits, claims, 
costs, expenses and disbursements of any kind or nature whatsoever (including 
the reasonable fees and disbursements of counsel for such Indemnitees in 
connection with any investigative, administrative or judicial proceeding 
commenced or threatened) that may be imposed on, incurred by, or asserted 
against that Indemnitee, in any manner relating to or arising out of this 
Guaranty or the exercise of any right or remedy hereunder or under the other 
documents pertaining to the Obligations (the "INDEMNIFIED LIABILITIES"); 
PROVIDED that Guarantor shall have no obligation to an Indemnitee hereunder 
with respect to Indemnified Liabilities arising from the gross negligence or 
willful misconduct of that Indemnitee as determined by a court of competent 
jurisdiction. To the extent that the undertaking to indemnify, pay and hold 
harmless set forth in the preceding sentence may be unenforceable because it 
is violative of any law or public policy, Guarantor shall contribute the 
maximum portion that it is permitted to pay and satisfy under applicable law 
to the payment and satisfaction of all Indemnified Liabilities incurred by 
the Indemnitees or any of them.

     6.10 COUNTERPARTS.  This Guaranty may be executed in counterparts, each 
of which shall be deemed an original, but all of which, when taken together, 
shall be deemed one and the same agreement.

     6.11 GOVERNING LAW.  This Guaranty shall be governed by and construed in 
accordance with the internal laws of the State of Illinois, without regard to 
conflicts of law provisions.

<PAGE>

     6.12 VENUE.  GUARANTOR, IN ORDER TO INDUCE LENDER TO ACCEPT THIS 
GUARANTY, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND 
SUFFICIENCY OF WHICH HEREBY IS ACKNOWLEDGED, AGREES THAT ALL ACTIONS OR 
PROCEEDINGS ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN CONNECTION WITH, OUT 
OF, RELATED TO OR FROM THIS GUARANTY SHALL BE LITIGATED, AT LENDER'S SOLE 
DISCRETION AND ELECTION, ONLY IN COURTS HAVING A SITUS WITHIN THE COUNTY OF 
COOK, STATE OF ILLINOIS. GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE 
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY 
AND STATE.  GUARANTOR HEREBY IRREVOCABLY APPOINTS AND DESIGNATES CT 
CORPORATION SYSTEM, WHOSE ADDRESS IS GUARANTOR, C/O CT CORPORATION SYSTEM, 
208 S. LASALLE STREET, CHICAGO, ILLINOIS 60604, AS ITS DULY AUTHORIZED AGENT 
FOR SERVICE OF LEGAL PROCESS AND AGREES THAT SERVICE OF SUCH PROCESS UPON 
SUCH PARTY SHALL CONSTITUTE PERSONAL SERVICE OF PROCESS UPON SUCH PARTY.  IN 
THE EVENT SERVICE IS UNDELIVERABLE BECAUSE SUCH AGENT MOVES OR CEASES TO DO 
BUSINESS IN CHICAGO, ILLINOIS, GUARANTOR SHALL, WITHIN TEN (10) DAYS AFTER 
LENDER'S REQUEST, APPOINT A SUBSTITUTE AGENT (IN CHICAGO, ILLINOIS) ON ITS 
BEHALF AND WITHIN SUCH PERIOD NOTIFY LENDER OF SUCH APPOINTMENT.  IF SUCH 
SUBSTITUTE AGENT IS NOT TIMELY APPOINTED, LENDER SHALL, IN ITS SOLE 
DISCRETION, HAVE THE RIGHT TO DESIGNATE A SUBSTITUTE AGENT UPON FIVE (5) 
DAYS' NOTICE TOGUARANTOR.  GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE 
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY 
AND STATE.  GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR 
CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST IT BY LENDER ON THIS 
GUARANTY IN ACCORDANCE WITH THIS PARAGRAPH.

     6.13 WAIVER OF JURY TRIAL.  GUARANTOR, AND BY ITS ACCEPTANCE OF THIS 
GUARANTY, LENDER, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN 
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF 
THIS GUARANTY AND THE BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED.  THIS 
WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY GUARANTOR, AND BY 
ITS ACCEPTANCE OF THIS GUARANTY, LENDER, AND GUARANTOR ACKNOWLEDGES THAT 
NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY 
REPRESENTATIONS OF FACT TO INCLUDE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN 
ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.

<PAGE>

     6.14 WAIVERS.  THE WAIVERS SET FORTH HEREIN (INCLUDING, WITHOUT 
LIMITATION, SECTIONS 2.2 AND 3 ABOVE) ARE KNOWINGLY, INTENTIONALLY, AND 
VOLUNTARILY MADE BY GUARANTOR, AND  GUARANTOR ACKNOWLEDGES THAT NEITHER 
LENDER NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS 
OF FACT TO INDUCE THESE WAIVERS OR IN ANY WAY TO MODIFY OR NULLIFY ITS 
EFFECT.  GUARANTOR FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS 
HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS GUARANTY AND IN 
THE MAKING OF THESE WAIVERS BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN 
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THESE WAIVERS WITH 
COUNSEL. 

     6.15 SUBORDINATION. Anything contained in the foregoing to the contrary 
notwithstanding, the Obligations of Guarantor to Lender under this Guaranty 
shall at all times be junior and subordinate to the obligations of Guarantor 
to Foothill under the Foothill Transactional Documents (as such term is 
defined in the Intercreditor Agreement), and Lender's rights under this 
Guaranty shall at all times be subject to and limited by the terms and 
conditions of the Intercreditor Agreement.

     Guarantor has duly executed this Guaranty as of the date and year first 
above written.

                                   CHILDREN'S BROADCASTING  CORPORATION

                                   By:  /s/ James G. Gilbertson
                                       --------------------------------------
                                   Name:  James G. Gilbertson
                                         ------------------------------------
                                   Title: Chief Operating Officer
                                          -----------------------------------
                                   Address:

                                   724 First Street North, Fourth Floor
                                   Minneapolis, Minnesota  55401

                                   FEIN: 41-1663712