Document:

Exhibit 10.1

 

GUARANTY

 

This Guaranty is entered into as of March 8, 2005
by GRANITE BROADCASTING CORPORATION, a
Delaware corporation (“Guarantor”),
in favor of and for the benefit of D.B. ZWIRN SPECIAL
OPPORTUNITIES FUND, L.P., and its successors, in such capacity, as
agent for and representative of (in such capacity herein called “Guarantied Party”) the financial institutions (“Lenders”) party to that certain Credit Agreement dated as
of March 8, 2005 by and among Malara
Broadcast Group, Inc., a Delaware corporation (“Parent”),
Malara Broadcast Group of Duluth LLC, a Delaware limited liability company (“KDLH(TV)”), Malara Broadcast Group of Duluth Licensee LLC,
a Delaware limited liability company (the “Duluth Licensee”,
and, together with KDLH(TV), the “Duluth Borrowers”),
Malara Broadcast Group of Fort Wayne LLC, a Delaware limited liability company
(“WPTA(TV)”), Malara Broadcast Group of
Fort Wayne Licensee LLC, a Delaware limited liability company (the “Fort Wayne Licensee”, and, together with WPTA(TV), the “Fort Wayne Borrowers”; the Fort Wayne Borrowers and the
Duluth Borrowers being each referred to herein as a “Borrower”
and collectively as “Borrowers”;
Borrowers together with Parent are referred to as “Loan
Parties”), Dresdner Bank AG New York and Grand Cayman Branches, as
Syndication Agent, Guarantied Party and Lenders (said Credit Agreement as it
may hereafter be amended, supplemented, restated or otherwise modified from
time to time, being the “Credit Agreement”;
capitalized terms defined therein and not otherwise defined herein being used
herein as therein defined) and in favor of and for the benefit of the other
Beneficiaries (as defined below).  In
accordance with the provisions of the Credit Agreement, it is desired that all
obligations of Borrowers with respect to the Revolving Loans and the Tranche B
Term Loans under the Credit Agreement and the other Loan Documents be
guarantied hereunder.  Lenders holding
Revolving Loan Exposure and Lenders holding Tranche B Term Loan Exposure
(collectively, “Guarantied Lenders”), together
with Guarantied Party are sometimes
referred to herein as “Beneficiaries”.

 

1.                                      Guaranty.

 

(a)                                  In
order to induce Guarantied Lenders to extend credit to Borrowers pursuant to
the Credit Agreement, Guarantor irrevocably and unconditionally guaranties, as
primary obligor and not merely as surety, the due and punctual payment in full
of all Guarantied Obligations (as hereinafter defined) when the same shall
become due, whether at stated maturity, by acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code).  The term “Guarantied Obligations”
is used herein in its most comprehensive sense and includes any and all
Obligations of each Borrower of every nature (including, without limitation,
both payment and performance obligations), whether contingent, liquidated,
fixed or otherwise, matured or unmatured, pre- or post-petition of each
Borrower, owed to Administrative Agent, Guarantied Lenders or any of them
arising under or in connection with the Revolving Loans and Tranche B Term
Loans under the Credit Agreement, this Guaranty and the other Loan Documents,
whether for principal, interest (including, without limitation, all interest
that accrues after the commencement of any case or proceeding against any Loan
Party in bankruptcy, whether or not allowed or allowable in such case or
proceeding), fees, expenses, indemnification or otherwise, including those
arising under successive borrowing transactions involving the Revolving Loans
and Tranche B Term Loans which shall either continue such obligations of
Borrowers or from time to time renew them after they have been satisfied.  For the avoidance of doubt, the term

 

F-1

 

“Guarantied Obligations”
shall in no way be deemed to include any obligations, including fees, expenses,
indemnification expenses or otherwise, of any Loan Party arising in connection
with the Tranche A Term Loans or any refinancings thereof pursuant to the
Credit Agreement.

 

Guarantor acknowledges that the Guarantied Obligations
are being incurred for and will inure to the benefit of Guarantor.

 

Any interest on any portion of the Guarantied
Obligations that accrues after the commencement of any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of any Loan Party (or, if interest
on any portion of the Guarantied Obligations ceases to accrue by operation of
law by reason of the commencement of said proceeding, such interest as would
have accrued on such portion of the Guarantied Obligations if said proceeding
had not been commenced) shall be included in the Guarantied Obligations because
it is the intention of Guarantor and Guarantied Party that the Guarantied
Obligations should be determined without regard to any rule of law or order
that may relieve any Loan Party of any portion of such Guarantied Obligations.

 

In the event that all or any portion of the Guarantied
Obligations is paid by any Loan Party, the obligations of Guarantor hereunder
shall continue and remain in full force and effect or be reinstated, as the
case may be, in the event that all or any part of such payment(s) is rescinded
or recovered directly or indirectly from Guarantied Party or any other
Beneficiary as a preference, fraudulent transfer or otherwise, and any such
payments that are so rescinded or recovered shall constitute Guarantied
Obligations.

 

Subject to the other provisions of this Section 1,
upon the failure of any Borrower to pay any of the Guarantied Obligations when
and as the same shall become due, Guarantor will upon demand pay, or cause to
be paid, in cash, to Guarantied Party for the ratable benefit of Beneficiaries,
an amount equal to the aggregate of the unpaid Guarantied Obligations.

 

(b)                                 Anything
contained in this Guaranty to the contrary notwithstanding, the obligations of
Guarantor under this Guaranty shall be limited to a maximum aggregate amount
equal to the largest amount that would not render its obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548
of Title 11 of the United States Code or any applicable provisions of
comparable state law (collectively, the “Fraudulent Transfer Laws”),
in each case after giving effect to all other liabilities of Guarantor,
contingent or otherwise, that are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of Guarantor (x) in respect
of intercompany indebtedness to Borrowers or other affiliates of Borrowers to
the extent that such indebtedness would be discharged in an amount equal to the
amount equal to the amount paid by Guarantor hereunder and (y) under any
guaranty of Subordinated Indebtedness which guaranty contains a limitation as
to maximum amount similar to that set forth in this Section 1(b), pursuant
to which the liability of Guarantor hereunder is included in the liabilities
taken into account in determining such maximum amount) and after giving effect
as assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of Guarantor pursuant to applicable law or pursuant
to the terms of any agreement.

 

F-2

 

2.                                      Guaranty
Absolute; Continuing Guaranty. 
The obligations of Guarantor hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guarantied Obligations.  In furtherance of the foregoing and without
limiting the generality thereof, Guarantor agrees that:  (a) this Guaranty is a guaranty of
payment when due and not of collectibility; (b) Guarantied Party may enforce
this Guaranty upon the occurrence and during the continuance of an Event of
Default under the Credit Agreement notwithstanding the existence of any dispute
between any Loan Party and any Beneficiary with respect to the existence of
such event; (c) the obligations of Guarantor hereunder are independent of the
obligations of each Loan Party under the Loan Documents and the obligations of
any other guarantor of obligations of each Loan Party and a separate action or
actions may be brought and prosecuted against Guarantor whether or not any
action is brought against any Loan Party or any of such other guarantors and
whether or not any Loan Party is joined in any such action or actions; and (d)
Guarantor’s payment of a portion, but not all, of the Guarantied Obligations
shall in no way limit, affect, modify or abridge Guarantor’s liability for any
portion of the Guarantied Obligations that has not been paid.  This Guaranty is a continuing guaranty and
shall be binding upon Guarantor and its successors and assigns, and Guarantor
irrevocably waives any right to revoke this Guaranty as to future transactions
giving rise to any Guarantied Obligations.

 

3.                                      Actions
by Beneficiaries.  Any
Beneficiary may from time to time, without notice or demand and without
affecting the validity or enforceability of this Guaranty or giving rise to any
limitation, impairment or discharge of Guarantor’s liability hereunder, (a) renew,
extend, accelerate or otherwise change the time, place, manner or terms of
payment of the Guarantied Obligations, (b) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations, (c) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty or the
Guarantied Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations, or
any other obligation of any Person with respect to the Guarantied Obligations,
(e) enforce and apply any security now or hereafter held by or for the
benefit of any Beneficiary in respect of this Guaranty or the Guarantied
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that Guarantied Party or the other Beneficiaries, or any
of them, may have against any such security, as Guarantied Party in its
discretion may determine consistent with the Credit Agreement and any applicable
security agreement, including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, and (f) exercise any other rights
available to Guarantied Party or the other Beneficiaries, or any of them, under
the Loan Documents, at law or in equity.

 

4.                                      No
Discharge.  This Guaranty and the
obligations of Guarantor hereunder shall be valid and enforceable and shall not
be subject to any limitation, impairment or discharge for any reason (other
than payment in full of the Guarantied Obligations), including without
limitation the occurrence of any of the following, whether or not Guarantor
shall have had notice or knowledge of any of them:  (a) any failure to assert or enforce or
agreement not to assert or

 

F-3

 

enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy with respect to the Guarantied
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guarantied Obligations,
(b) any waiver or modification of, or any consent to departure from, any
of the terms or provisions of the Credit Agreement, any of the other Loan
Documents or any agreement or instrument executed pursuant thereto, or of any
other guaranty or security for the Guarantied Obligations, (c) the
Guarantied Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect, (d) the
application of payments received from any source to the payment of indebtedness
other than the Guarantied Obligations, even though Guarantied Party or the
other Beneficiaries, or any of them, might have elected to apply such payment
to any part or all of the Guarantied Obligations, (e) any failure to
perfect or continue perfection of a security interest in any collateral which
secures any of the Guarantied Obligations, (f) any defenses, set-offs or
counterclaims which any Loan Party may assert against Guarantied Party or any
Beneficiary in respect of the Guarantied Obligations, including but not limited
to failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury, and (g) any
other act or thing or omission, or delay to do any other act or thing, which
may or might in any manner or to any extent vary the risk of Guarantor as an
obligor in respect of the Guarantied Obligations.

 

5.                                      Waivers.  Guarantor waives, for the benefit of
Beneficiaries:  (a) any right to
require Guarantied Party or the other Beneficiaries, as a condition of payment
or performance by Guarantor, to (i) proceed against any Loan Party, any
other guarantor of the Guarantied Obligations or any other Person,
(ii) proceed against or exhaust any security held from any Loan Party, any
other guarantor of the Guarantied Obligations or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Beneficiary in favor of any Loan Party or any other Person, or
(iv) pursue any other remedy in the power of any Beneficiary; (b) any
defense arising by reason of the incapacity, lack of authority or any
disability or other defense of Loan Party including, without limitation, any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto
or by reason of the cessation of the liability of any Loan Party from any cause
other than payment in full of the Guarantied Obligations; (c) any defense
based upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in other respects more burdensome
than that of the principal; (d) any defense based upon Guarantied Party’s
or any other Beneficiary’s errors or omissions in the administration of the
Guarantied Obligations, except behavior that amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise,
that are or might be in conflict with the terms of this Guaranty and any legal
or equitable discharge of Guarantor’s obligations hereunder, (ii) the
benefit of any statute of limitations affecting Guarantor’s liability hereunder
or the enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any Lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of this Guaranty, notices of default under the Credit Agreement, or any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related thereto,
notices of any extension of credit to any Loan Party and notices of any of the
matters referred to in Sections 3

 

F-4

 

and 4 and any right to consent to any thereof; and
(g) to the fullest extent permitted by law, any defenses or benefits that
may be derived from or afforded by law which limit the liability of or
exonerate guarantors or sureties, or which may conflict with the terms of this
Guaranty.

 

6.                                      Guarantor’s
Rights of Subrogation, Contribution, Etc.; Subordination of Other Obligations.
Until the Guarantied Obligations (other than Unasserted Obligations) shall have
been paid in full and the Commitments shall have terminated, Guarantor shall
withhold exercise of (a) any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against any Loan Party or any of its
assets in connection with this Guaranty or the performance by Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and including
without limitation (i) any right of subrogation, reimbursement or
indemnification that Guarantor now has or may hereafter have against any Loan
Party,  including but not limited to any
right Guarantor now has or may hereafter have against any Loan Party in
connection with any draw on the Tranche A Letter of Credit or in connection
with the Station Agreements except as permitted under subsection 6.1 of
the Credit Agreement, (ii) any right to enforce, or to participate in, any
claim, right or remedy that any Beneficiary now has or may hereafter have
against any Loan Party, and (iii) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary and (b) any right of contribution Guarantor now has or may hereafter
have against any other guarantor of any of the Guarantied Obligations.  Guarantor further agrees that, to the extent
the agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification Guarantor may have
against any Loan Party or against any collateral or security, and any rights of
contribution Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights Guarantied Party or the other
Beneficiaries may have against any Loan Party, to all right, title and interest
Guarantied Party or the other Beneficiaries may have in any such collateral or
security, and to any right Guarantied Party or the other Beneficiaries may have
against such other guarantor.

 

Any indebtedness of any Loan Party now or hereafter
held by Guarantor is subordinated in right of payment to the Guarantied
Obligations, and any such indebtedness of any Loan Party to Guarantor collected
or received by Guarantor after an Event of Default has occurred and is
continuing, and any amount paid to Guarantor on account of any subrogation,
reimbursement, indemnification or contribution rights referred to in the
preceding paragraph when all Guarantied Obligations have not been paid in full,
shall be held in trust for Guarantied Party on behalf of Beneficiaries and
shall forthwith be paid over to Guarantied Party for the benefit of
Beneficiaries to be credited and applied against the Guarantied Obligations.

 

7.                                      Expenses.  Guarantor agrees to pay, or cause to be paid,
on demand, and to save Guarantied Party and the other Beneficiaries harmless
against liability for, (i) any and all costs and expenses (including fees,
costs of settlement and disbursements of counsel and allocated costs of
internal counsel) incurred or expended by Guarantied Party or any other
Beneficiary in connection with the enforcement of or preservation of any rights
under this Guaranty and (ii) any and all costs and expenses (including those
arising from rights of indemnification) required to be paid by Guarantor under
the provisions of any other Loan Document.

 

F-5

 

8.                                      Financial
Condition of Loan Parties.  No
Beneficiary shall have any obligation, and Guarantor waives any duty on the
part of any Beneficiary, to disclose or discuss with Guarantor its assessment,
or Guarantor’s assessment, of the financial condition of any Loan Party or any
matter or fact relating to the business, operations or condition of any Loan
Party.  Guarantor has adequate means to
obtain information from any Loan Party on a continuing basis concerning the
financial condition of any Loan Party and its ability to perform its
obligations under the Loan Documents, and Guarantor assumes the responsibility
for being and keeping informed of the financial condition of any Loan Party and
of all circumstances bearing upon the risk of nonpayment of the Guarantied
Obligations.

 

9.                                      Conditions
to Loans under the Credit Agreement. 
The obligations of Guarantied Lenders to make any Revolving Loans
and the Tranche B Term Loans on the Closing Date pursuant to the Credit
Agreement are, in addition to the conditions precedent specified in subsection 9(b),
subject to prior or concurrent satisfaction of the following conditions:

 

(a)                                  Guarantor
shall have delivered to Guarantied Lenders (or to Administrative Agent with
sufficient originally executed copies, where appropriate, for each Lender) the
following:

 

(i)                                     Copies
of the Articles, Certificate of Incorporation, partnership agreement or other
organizational document of Guarantor, certified as of a recent date by the
Secretary of State of its state of formation or incorporation;

 

(ii)                                  Copies
of the Bylaws, if any, of Guarantor, certified by the Secretary or an Assistant
Secretary of Guarantor;

 

(iii)                               Copies
of resolutions of the Board of Directors or other authorizing documents of
Guarantor, in form and substance satisfactory to the Lender, approving the
transactions contemplated by the Loan Documents and the Borrowings hereunder;

 

(iv)                              An
incumbency certificate executed by the Secretary or an Assistant Secretary of
Guarantor or equivalent document, certifying the names and signatures of the
officers of Guarantor or other Persons authorized to sign the Loan Documents
and the Station Agreements to which Guarantor is a party and the other
documents to be delivered under the Credit Agreement; and

 

(v)                                 Executed
copies of all Loan Documents and Station Agreements to which Guarantor is a
party.

 

(b)                                 Guarantor
shall have delivered to Administrative Agent an Officer’s Certificate, in form
and substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 10 are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that
such representations and warranties were true, correct and complete in all
material respects on and as of such earlier date) and that Guarantor has
performed in all material respects all agreements and satisfied all conditions
which this Guaranty provides shall be performed or satisfied by it on or before
the Closing Date except as otherwise disclosed to and agreed to in

 

F-6

 

writing by Administrative
Agent; provided that, if a representation and warranty, covenant or
condition is qualified as to materiality, the applicable materiality qualifier
set forth above shall be disregarded with respect to such representation and
warranty, covenant or condition for purposes of this condition.

 

(c)                                  Financial Statements. 
On or before the Closing Date, Guarantied Lenders shall have received
from Guarantor (i) audited financial statements of Guarantor and its
Subsidiaries for Fiscal Years 2002 and 2003, consisting of balance sheets and
the related consolidated statements of income, stockholders’ equity and cash
flows for such Fiscal Years,  and (ii)
unaudited financial statements of Guarantor and its Subsidiaries for Fiscal
Year 2004, consisting of balance sheets and the related consolidated statements
of income, stockholders’ equity and cash flows for such Fiscal Year, all in
reasonable detail and certified by the chief financial officer of Guarantor
that they fairly present the financial condition of Guarantor and its
Subsidiaries as of the dates indicated.

 

(d)                                 Opinions of Counsel to Guarantor.  Guarantied Lenders shall have received
originally executed copies of one or more favorable written opinions of (i)
Akin Gump Strauss Hauer & Feld LLP, counsel for Guarantor, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of
the Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit 1 annexed hereto and as to such other matters as
Administrative Agent action on behalf of Guarantied Lenders may reasonably
request (this Guaranty constituting a written request by Guarantor to such
counsel to deliver such opinions to Guarantied Lenders), and (ii) Richards,
Layton & Finger, P.A. special Delaware counsel to Guarantor, in form and
substance reasonably satisfactory to Administrative Agent and its counsel,
dated as of the Closing Date.

 

(e)                                  Compliance with Existing Granite Indebtedness.  Administrative Agent shall have received an
Officer’s Certificate of Guarantor, in form and in substance satisfactory to
Administrative Agent, stating that, after giving effect to the transactions
contemplated by the Loan Documents, the Acquisition Agreements and the Station
Agreements, (i) all principal of and interest on the Tranche A Term Loans
constitute “Permitted Indebtedness” under clause (15) of the definition
thereof contained in the Indenture, (ii) all Obligations other than
principal of and interest on the Tranche A Term Loans constitute “Permitted
Indebtedness” under clause (4) of the definition thereof contained in the
Indenture, and (iii) the Liens under the Collateral Documents constitute “Permitted
Liens” under clauses (16) and (17), respectively of the definition of such term
contained in the Indenture.

 

(f)                                    Solvency Assurances. 
On the Closing Date, Administrative Agent and Guarantied Lenders shall
have received an Officer’s Certificate of Guarantor dated the Closing Date,
substantially in the form of Exhibit 2 annexed hereto with appropriate
attachments, in each case demonstrating that, after giving effect to the
consummation of the transactions contemplated by the Loan Documents, Guarantor
and each of its Subsidiaries on a consolidated basis will be Solvent.

 

(g)                                 Officer’s
Certificate.  Administrative Agent
shall have received an Officer’s Certificate from Guarantor to the effect that
(a) the representations and warranties of Guarantor, if any, in the
Acquisition Agreements to which it is party are true, correct and

 

F-7

 

complete in all material respects on and as of the
Closing Date to the same extent as though made on and as of that date,
(b) the Acquisition Agreements to which it is party are in full force and
effect and no provision thereof has been modified or waived in any respect
without the consent of Administrative Agent and (c) Guarantor has complied
with all agreements and conditions contained in the Acquisition Agreements to
which it is party and any agreements or documents referred to therein required
to be performed or complied with by it on or before the Closing Date, and
Guarantor is not in default in its performance or compliance with any of the
terms or provisions thereof.

 

10.                               Representations
and Warranties.  Guarantor, for
the benefit of Beneficiaries, represents and warrants as follows:

 

(a)                                  Organization. 
Guarantor is duly organized, validly existing and in good standing under
the laws of the state of its formation, and has all requisite corporate power
and authority to own and operate its properties and to carry out its
business.  Guarantor is also duly
qualified and in good standing in all applicable jurisdictions to carry on its
business, except where failure to so qualify would not have a Material Adverse
Effect.

 

(b)                                 Authorization.  The
execution, delivery and performance by Guarantor of this Guaranty, the Tranche
A Letter of Credit, the Loan Documents and the Station Agreements to which it
is a party are within Guarantor’s corporate powers and have been duly
authorized by all necessary corporate action.

 

(c)                                  No Conflict.  The
execution, delivery and performance by Guarantor of this Guaranty, the Tranche
A Letter of Credit, the Loan Documents and the Station Agreements to which it
is a party do not (i) violate Guarantor’s charter, by-laws or other organizational
document or (ii) violate any law or regulation (including Regulations T, U and
X) applicable to Guarantor or any order, judgment or decree of any court or
governmental agency body binding on Guarantor, or (iii) result in a breach of
or a default under, or result in or require the imposition of a Lien pursuant
to any contract binding on Guarantor.

 

(d)                                 Governmental Consents. 
No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by Guarantor of this Guaranty, the
Tranche A Letter of Credit, the Loan Documents and the Station Agreements to
which it is a party, except for such as has been obtained.

 

(e)                                  Validity.  This
Guaranty, the Loan Documents and the Station Agreements to which Guarantor is a
party are the binding obligations of Guarantor, enforceable in accordance with
their respective terms; except in each case as such enforceability may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to
or affecting creditors’ rights.

 

(f)                                    Financial Condition. 
The balance sheets of Guarantor and its consolidated Subsidiaries as at December 31,
2004 and the related statements of income and retained earnings of the
Guarantor and its consolidated Subsidiaries for the fiscal year and fiscal
quarters then ended, copies of which have been furnished to each Lender, fairly
present the

 

F-8

 

financial
condition of Guarantor and its consolidated Subsidiaries as at such dates and
the results of the operations of Guarantor and its consolidated Subsidiaries
for the respective periods ended on such dates, all in accordance with
GAAP.  Since December 31, 2004, no
event or change has occurred that has caused or evidences, either in any case
or the aggregate, (i) a material adverse effect upon the business, operations,
properties, assets, condition (financial or otherwise) of Guarantor and its
Subsidiaries taken as a whole or (ii) the impairment of the ability of
Guarantor to perform or Beneficiaries to enforce Guarantor’s obligations under
the Guaranty, Loan Documents, the Station Agreements and the Tranche A Letter
of Credit (each, a “Material Adverse Effect”).

 

(g)                                 Litigation.  There is
no pending or threatened action or proceeding affecting Guarantor or any of its
Subsidiaries before any court, governmental agency or arbitrator, which could reasonably
be expected to result in a Material Adverse Effect.

 

(h)                                 Employee Benefit Plans. 
Guarantor and each of its ERISA Affiliates is in compliance in all
material respects with any applicable provisions of ERISA and the regulations
and published interpretations thereunder with respect to all Employee Benefit
Plans.  No ERISA Event has occurred or is
reasonably expected to occur with respect to any Pension Plan.

 

(i)                                     Disclosure.  No
representation or warranty of Guarantor or its Subsidiaries contained in the
Confidential Information Memorandum or other document, certificate or written
statement furnished to Guarantied Lenders, or in any Loan Document or Related
Agreement, taken as a whole, in each case, by or on behalf of Guarantor or any
of its Subsidiaries for use in connection with the transactions contemplated by
this Agreement contains (as of the date on which such statement is made or is
required to be true under subsection 9(b) hereof or any other provision of
the Loan Documents) any untrue statement of a material fact or omits to state a
material fact (known to Guarantor or any of its Subsidiaries, in the case of
any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made.  Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Guarantor and its
Subsidiaries to be reasonable at the time made, it being recognized by
Guarantied Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results.  There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Guarantor and its
Subsidiaries (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Guarantied Lenders
for use in connection with the transactions contemplated hereby.

 

(j)                                     Environmental Matters. 
Guarantor conducts in the ordinary course of business a review of the
effect on its business, operations and properties of Environmental Laws and all
claims, however asserted, alleging potential liability or responsibility for
violation of any Environmental Law or release or injury to the
environment.  As a result thereof,
Guarantor has reasonably concluded that no event or condition has occurred or
is occurring with respect to

 

F-9

 

Guarantor or any of its Subsidiaries relating to any
Environmental Law, which individually or in the aggregate has had or could
reasonably be expected to have a Material Adverse Effect.

 

(k)                                  Title to Properties; Liens. 
Guarantor and its Subsidiaries have (i) good, sufficient and legal title
to (in the case of fee interests in real property), (ii) valid leasehold
interests in (in the case of leasehold interests in real or personal property),
or (iii) good title to (in the case of all other personal property), to all of
their respective properties and assets reflected in the financial statements
referred to in subsection 9(f) or in the most recent financial statements
delivered pursuant to subsection 10(a), in each case except for assets
disposed of since the date of such financial statements in the ordinary course
of business.

 

(l)                                     Payment of Taxes.  All
tax returns and reports of Guarantor and its Subsidiaries required to be filed
by any of them have been timely filed, and all taxes shown on such tax returns
to be due and payable and all assessments, fees and other governmental charges
upon Guarantor and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises that are due and payable have been
paid when due and payable, provided that no such tax, assessment, charge
or claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.  Guarantor knows of no proposed tax assessment
against Guarantor or any of its Subsidiaries that is not being actively
contested by Guarantor or such Subsidiary in good faith and by appropriate
proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have
been made or provided therefor.

 

(m)                               Governmental Regulation. 
Neither Guarantor nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act or the Investment Company Act of 1940 or under any
other federal or state statute or regulation which may limit its ability to
incur Indebtedness or which may otherwise render all or any portion of
Guarantor’s obligations hereunder unenforceable.

 

(n)                                 Licenses, Permits, etc. 
(a) Guarantor and its Subsidiaries own or possess all material licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, necessary for the operation of
their businesses, without known conflict with the rights of others; (b) to the
best knowledge of Guarantor, no product of Guarantor or its Subsidiaries
infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and (c) to the best knowledge of Guarantor,
there is no material violation by any Person of any right of Guarantor or any
of its Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by Guarantor or any of its
Subsidiaries.

 

(o)                                 Performance of Agreements. 
Neither Guarantor nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its material Contractual Obligations, including
without limitation, the Indenture, and no condition exists that, with the
giving of notice or the

 

F-10

 

lapse of time or both, would constitute such a
default, except where the consequences, direct or indirect, of such default or
defaults, if any, could not reasonably be expected to result in a Material
Adverse Effect.

 

(p)                                 Effect of Loan Documents on Existing Guarantor Indebtedness.  The execution and delivery of the Loan
Documents do not, and the performance by Guarantor and each other Loan Party of
its obligations thereunder will not violate, breach, or result in a default
under, any existing obligation of or restriction on any of the Loan Parties or
Guarantor under any Contractual Obligation of Guarantor, including but not
limited to the Indenture.  Without
limiting the generality of the foregoing, after giving effect to the
transactions contemplated by the Loan Documents, the Acquisition Agreements and
the Station Agreements, (a) all principal of and interest on the Tranche A
Term Loans constitute “Permitted Indebtedness” under clause (15) of the
definition thereof contained in the Indenture, (b) all Obligations other
than principal of and interest on the Tranche A Term Loans constitute “Permitted
Indebtedness” under clause (4) of the definition thereof contained in the
Indenture, and (c) the Liens under the Collateral Documents constitute “Permitted
Liens” under clauses (16) and (17), respectively of the definition of such term
contained in the Indenture.

 

11.                               Affirmative
Covenants. Guarantor agrees that, so long as any part of the Guarantied
Obligations shall remain unpaid or any Guarantied Lender shall have any
Commitment, Guarantor will, unless Guarantied Lenders holding more than 50% of
the Revolving Loan Exposure and the Tranche B Term Loan Exposure shall
otherwise consent in writing:

 

(a)                                  Financial Information. 
Furnish to Guarantied Party:

 

(i)                                     as
soon as available, but in any event within fifteen days of the Closing Date,
unaudited financial statements of Guarantor and its Subsidiaries as at January 31,
2005, consisting of a balance sheet and the related consolidated statements of
income, stockholders’ equity and cash flows for the one-month period ending on
such date, all in reasonable detail and certified by the chief financial
officer of Guarantor that they fairly present the financial condition of
Guarantor and its Subsidiaries as of the dates indicated.

 

(ii)                                  as
soon as available, but in any event within ninety (90) days after the end of
each fiscal year of the Guarantor, a copy of the consolidated balance sheet of
Guarantor and its consolidated Subsidiaries as at the end of each fiscal year
and the related consolidated statements of income and retained earnings (or
comparable statement) employed in the business and changes in financial
position and cash flow for such year, setting forth in each case in comparative
form the figures for the previous year, accompanied by a report and opinion
thereon of independent certified public accountants acceptable to Guarantied
Party;

 

(iii)                               as soon as available,
but in any event within forty-five (45) days after the end of each of the first
three fiscal quarters of the Guarantor, the Guarantor’s unaudited consolidated
balance sheet of itself and its consolidated Subsidiaries as at the end of such
period and the related unaudited consolidated statements of income and retained
earnings (or comparable statement) and changes in financial position and cash

 

F-11

 

flow
for such period and year to date, setting forth in each case in comparative
form the figures as at the end of the previous fiscal year as to the balance
sheet and the figures for the previous corresponding period as to the other
statements, certified by a duly authorized officer of the Guarantor as being
fairly stated in all material respects subject to year end adjustments; and

 

all such financial statements to
be complete and correct in all material respects and to be prepared in
reasonable detail acceptable to Guarantied Party and in accordance with GAAP;

 

(iv)                              together
with each delivery of financial statements of Guarantor and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, an officers’ certificate stating
that the signers have reviewed the terms of the Indenture, the Loan Documents
and the Station Agreements to which Guarantor is a party, and have made, or
caused to be made under their supervision, a review in reasonable detail of the
transactions and condition of Guarantor and its Subsidiaries during the
accounting period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the date of the
officers’ certificate, of any condition or event which constitutes an event of
default under the Indenture, the Loan Documents or the Station Documents to
which it is a party, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action Guarantor
has taken, is taking and proposes to take with respect thereto.

 

(b)                                 Notices and Information. 
Deliver to Guarantied Party:

 

(i)                                     promptly
upon any officer of the Guarantor obtaining knowledge (a) of any condition or
event which constitutes an Event of Default or Potential Event of Default under
the Indenture, the Loan Documents and the Station Agreements to which Guarantor
is a party (b) that any Person has given any notice to the Guarantor, any of
its Subsidiaries or any Loan Party or taken any other action with respect to a
claimed default or event or condition of the type referred to in subsection 7.2
of the Credit Agreement, (c) of the institution of any litigation involving an
alleged liability (including possible forfeiture of property) of the Guarantor,
any of its Subsidiaries or any Loan Party equal to or greater than $100,000 or
any adverse determination in any litigation involving a potential liability of
the Guarantor, any of its Subsidiaries or any Loan Party equal to or greater
than $100,000, in each case not covered by insurance, or (d) of a condition or
events that could reasonably be expected to cause a Material Adverse Effect, an
officers’ certificate specifying the nature and period of existence of any such
condition or event, or specifying the notice given or action taken by such
holder or Person and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition, and what action the Guarantor
has taken, is taking and proposes to take with respect thereto;

 

(ii)                                  promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any (a) ERISA Event, or (b) “prohibited transaction,”
as such term is defined in Section 4975 of the Internal Revenue Code or Section 406
of ERISA,

 

F-12

 

in
connection with any Employee Benefit Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action the Guarantor has
taken, is taking or proposes to take with respect thereto, and, when known, any
action taken or threatened by the Internal Revenue Service, the Department of
Labor, or the Pension Benefit Guaranty Corporation with respect thereto;

 

(iii)                               with reasonable
promptness copies of (a) all notices received by the Guarantor or any of its
ERISA Affiliates of the Pension Benefit Guaranty Corporation’s intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan; (b) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by the Guarantor or any of its ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan; and (c)
all notices received by the Guarantor or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA;

 

(iv)                              promptly,
and in any event within thirty (30) days after receipt thereof, a copy of any
notice, summons, citation, directive, letter or other form of communication
from any governmental authority or court in any way concerning any action or
omission on the part of the Guarantor or any of its Subsidiaries in connection
with any substance defined as toxic or hazardous by any applicable federal,
state or local law, rule, regulation, order or directive or any waste or by
product thereof, or concerning the filing of a lien upon, against or in
connection with the Guarantor, its Subsidiaries, or any of their leased or
owned real or personal property, in connection with a Hazardous Substance
Superfund or a Post-Closure Liability Fund as maintained pursuant to § 9507
of the Internal Revenue Code;

 

(v)                                 promptly
after the delivery to or by Guarantor or any of its Subsidiaries thereof,
copies of all notices and reports delivered in connection with the Indenture or
any material Indebtedness of Guarantor or any of its Subsidiaries;

 

(vi)                              promptly,
and in any event within twenty (20) days after the end of each calendar month,
a report setting forth calculations in reasonable detail of the Granite Actual
Incremental Expenses (as defined in the Credit Agreement) for such month; and

 

(vii)                           promptly, and in any event
within ten (10) days after request, such other information and data with
respect to the Guarantor as from time to time may be reasonably requested by
Guarantied Party.

 

(c)                                  Corporate Existence, Etc.  At
all times preserve and keep in full force and effect
Guarantor’s corporate existence, rights, franchises and licenses material to
its business.

 

(d)                                 Payment of Taxes and Claims. 
Pay, and cause each of its Subsidiaries to pay, all taxes, assessments
and other governmental charges imposed upon it or any of its properties or
assets or in respect of any of its franchises, business, income or property
before any penalty or interest accrues thereon, and all claims (including, without
limitation, claims for labor,

 

F-13

 

services, materials and supplies) for sums which have
become due and payable and which by law have or may become a lien upon any of
its properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.

 

(e)                                  Maintenance of Properties; Insurance.  Maintain or cause to be maintained in good
repair, working order and condition all material properties used or useful in
the business of the Guarantor and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof.  Guarantor will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and business of its
Subsidiaries against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar businesses
and similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other corporations.

 

(f)                                    Inspection.  Permit
any authorized representatives designated by the Guarantied Party to visit and
inspect any of the properties of Guarantor or any of its Subsidiaries,
including its and their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants, all at
such reasonable times during normal business hours no more frequently than once
in each twelve-month period or at any time following the occurrence and during
the continuation of an Event of Default under the Credit Agreement.

 

(g)                                 Compliance with Laws, Etc. 
Exercise, and cause each of its Subsidiaries to exercise, all due
diligence in order to comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, including, without
limitation, all Environmental Laws, noncompliance with which counsel reasonably
be expected to cause, either individually or in the aggregate, a Material
Adverse Effect.

 

(h)                                 Compliance with Indenture.  
Perform and observe, and cause each of its Subsidiaries to perform and
observe, all of the terms, covenants and agreements of the Indenture and any
documents relating thereto or delivered in connection therewith.

 

(i)                                     Solvency.  Ensure that
Guarantor and each of its Subsidiaries after giving effect to the transactions
contemplated by the Loan Documents at all times will be, on a consolidated
basis, Solvent.

 

12.                               Negative
Covenants.

 

(a)                                  Guarantor
agrees that, so long as any part of the Guarantied Obligations shall remain
unpaid or any Guarantied Lender shall have any Commitment, Guarantor will not,
unless Guarantied Lenders holding more than 50% of the Revolving Loan Exposure
and Tranche B Term Loan Exposure shall otherwise consent in writing:

 

(i)                                     Liens, Etc.  Create or
suffer to exist, or permit any of its Subsidiaries to create or suffer to
exist, any Lien upon or with respect to any of its

 

F-14

 

assets or properties, whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any right to receive
income, in each case to secure any Indebtedness of any Person other than Liens
permitted under the Indenture, or if the Indenture is no longer effective, the
Indenture as last in effect.

 

(ii)                                  Indebtedness.  Create
or suffer to exist, or permit any of its Subsidiaries to create or suffer to
exist, any Indebtedness, other than Indebtedness pursuant to the Indenture, or
if the Indenture is no longer effective, the Indenture as last in effect.

 

(iii)                               Loans, Investments, Contingent Liabilities.  Make or permit to remain outstanding, or
permit any Subsidiary to make or permit to remain outstanding, any loan or
advance to, or guarantee, induce or otherwise become contingently liable,
directly or indirectly, in connection with the obligations, stock or dividends
of, or own, purchase or acquire any stock, obligations or securities of or any
other interest in, or make any capital contribution to, any other Person,
except that, to the extent permitted by the Indenture, or if the Indenture is
no longer effective, the Indenture as last in effect.

 

(iv)                              Transactions with Shareholders and
Affiliates.  Enter into or
permit to exist, or permit any of its Subsidiaries to enter into or permit to
exist, any transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of the Guarantor
on terms that are less favorable to Guarantor or that Subsidiary, as the case
may be, than those that might be obtained at the time from Persons who are not
such an Affiliate; provided that the foregoing restriction shall not
apply to any transaction between Guarantor and any of its wholly-owned
Subsidiaries or between any of its wholly-owned Subsidiaries or any transaction
permitted under the Indenture, or if the Indenture is no longer effective, the
Indenture as last in effect.

 

(b)                                 Station Agreements.                                Guarantor
agrees that, so long as any part of the Guarantied Obligations shall remain
unpaid or any Guarantied Lender shall have any Commitment, Guarantor will not,
without the written consent of Secured Party, consent to the establishment of
reserves by any Borrower as provided in the Station Agreements.

 

13.                               Set
Off.  In addition to any other
rights any Beneficiary may have under law or in equity, if any amount shall at
any time be due and owing by Guarantor to any Beneficiary under this Guaranty,
such Beneficiary is authorized at any time or from time to time, without notice
(any such notice being expressly waived), to set off and to appropriate and to
apply any and all deposits (general or special, including but not limited to
indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness of such Beneficiary owing to Guarantor
and any other property of Guarantor held by a Beneficiary to or for the credit
or the account of Guarantor against and on account of the Guarantied
Obligations and liabilities of Guarantor to any Beneficiary under this
Guaranty.

 

14.                               Amendments
and Waivers.  No amendment,
modification, termination or waiver of any provision of this Guaranty, and no
consent to any departure by Guarantor therefrom, shall in any event be
effective without the written concurrence of Guarantied Party

 

F-15

 

and,
in the case of any such amendment or modification, Guarantor.  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.

 

15.                               Miscellaneous.  It is not necessary for Beneficiaries to
inquire into the capacity or powers of Guarantor or any Loan Party or the
officers, directors or any agents acting or purporting to act on behalf of any
of them.

 

The rights, powers and remedies given to Beneficiaries
by this Guaranty are cumulative and shall be in addition to and independent of
all rights, powers and remedies given to Beneficiaries by virtue of any statute
or rule of law or in any of the Loan Documents or any agreement between
Guarantor and one or more Beneficiaries or between any Loan Party and one or
more Beneficiaries.  Any forbearance or
failure to exercise, and any delay by any Beneficiary in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.

 

In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

 

THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
GUARANTOR, GUARANTIED PARTY AND THE OTHER BENEFICIARIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.

 

This Guaranty shall inure to the benefit of
Beneficiaries and their respective successors and assigns.

 

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR
ARISING OUT OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS GUARANTY GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS GUARANTY.  Guarantor agrees
that service of all process in any such proceeding in any such court may be
made by registered or certified mail, return receipt requested, to Guarantor at
its address set forth below its signature hereto, such service being
acknowledged by Guarantor to be sufficient for personal jurisdiction in any
action against Guarantor in any such court and to be otherwise effective and
binding service in every respect. 
Nothing herein shall affect the right to serve process in any other
manner permitted by

 

F-16

 

law
or shall limit the right of Guarantied Party or any Beneficiary to bring
proceedings against Guarantor in the courts of any other jurisdiction.

 

GUARANTOR AND, BY ITS ACCEPTANCE OF
THE BENEFITS HEREOF, GUARANTIED PARTY EACH AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS GUARANTY.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS.  GUARANTOR AND, BY
ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH
(I) ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR GUARANTOR
AND GUARANTIED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT GUARANTOR AND
GUARANTIED PARTY HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
GUARANTY OR ACCEPTING THE BENEFITS THEREOF, AS THE CASE MAY BE, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS, AND
(II) FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF THIS
GUARANTY.  In the event of
litigation, this Guaranty may be filed as a written consent to a trial by the
court.

 

16.                               Counterparts.  This Guaranty may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
for all purposes; but all such counterparts together shall constitute but one
and the same instrument.

 

17.                               Guarantied
Party as Agent.

 

(a)                                  Guarantied
Party has been appointed to act as Guarantied Party hereunder by Guarantied Lenders.  Guarantied Party shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise
or refrain from exercising any rights, and to take or refrain from taking any
action, solely in accordance with this Guaranty and the Credit Agreement.

 

(b)                                 Guarantied
Party shall at all times be the same Person that is Agent under the Credit
Agreement.  Written notice of resignation
by Agent pursuant to subsection 9.5 of the Credit Agreement shall also
constitute notice of resignation as Guarantied Party under this Guaranty;
removal of Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute removal as Guarantied Party under this Guaranty; and
appointment of a successor

 

F-17

 

Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute appointment of a successor Guarantied Party
under this Guaranty.  Upon the acceptance
of any appointment as Agent under subsection 9.5 of the Credit Agreement
by a successor Agent, that successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring or removed Guarantied Party under this Guaranty, and the retiring or
removed Guarantied Party under this Guaranty shall promptly (i) transfer to
such successor Guarantied Party all sums held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate
in connection with the assignment to such successor Guarantied Party of the
rights created hereunder, whereupon such retiring or removed Guarantied Party
shall be discharged from its duties and obligations under this Guaranty.  After any retiring or removed Guarantied
Party’s resignation or removal hereunder as Guarantied Party, the provisions of
this Guaranty shall inure to its benefits as to any actions taken or omitted to
be taken by it under this Guaranty while it was Guarantied Party hereunder.

 

[Remainder of page
intentionally left blank]

 

F-18

 

IN WITNESS WHEREOF, Guarantor
and, solely for purposes of the waiver of the right to jury trial contained in Section 14,
Guarantied Party have caused this Guaranty to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first
written above.

 

 

	
   

  	
  GRANITE BROADCASTING

  CORPORATION, as
  Guarantor

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

							

 

 

	
   

  	
  D.B. ZWIRN SPECIAL OPPORTUNITIES

  FUND, L.P.,

  	 

	
   

  	
  as Guarantied Party

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	 

	
   

  	
  D.B.
  Zwirn Special Opportunities Fund, L.P.

  	
   

  	 

	
   

  	
  c/o
  D.B. Zwirn & Co., L.P.

  	
   

  	 

	
   

  	
  745
  5th Avenue

  	
   

  	 

	
   

  	
  18th
  Floor

  	
   

  	 

	
   

  	
  New
  York, NY  101051

  	
   

  	 

						

 

S-1

 

[FORM OF]
Exhibit 1 to Granite Guaranty

 

 

OPINION
OF COUNSEL TO GRANITE

 

 

Please see attached.

 

F-1-1Exhibit
10.38

 

 

 

RESTRICTED STOCK
UNIT AGREEMENT

for

Non-Employee
Directors

 

 

RESTRICTED STOCK UNIT
AGREEMENT (this “Agreement”), dated as of the Grant Date, by and between the
Grantee and Hexcel Corpo­ra­tion (the “Corpo­ration”).

 

W I  T  N  E  S
S  E  T  H:

 

 

WHEREAS,
the Corporation has adopted the Hexcel Corporation 2003 Incentive Stock Plan
(the “Plan”); and

 

WHEREAS, the Board of
Directors of the Corporation (the “Board”) has determined that it is desirable
and in the best interests of the Corporation to grant to the Grantee restricted
stock units (“RSUs”) as an incentive for the Grantee to advance the interests
of the Corporation.

 

NOW, THEREFORE, the
parties agree as follows:

 

1.       Notice of Grant; Incorporation of Plan.  Pursuant to the Plan and subject to the terms
and conditions set forth herein and therein, the Corporation hereby grants to
the Grantee the number of RSUs indicated on the Notice of Grant attached hereto
as Annex A, which Notice of Grant is incorporated by reference herein.  Unless otherwise provided herein, capitalized
terms used herein and set forth in such Notice of Grant shall have the meanings
ascribed to them in the Notice of Grant and capitalized terms used herein and
set forth in the Plan shall have the meanings ascribed to them in the Plan. The
Plan is incorporated by reference and made a part of this Agreement, and this
Agreement shall be subject to the terms of the Plan, as the Plan may be amended
from time to time, provided that any such amendment of the Plan must be made in
accordance with Section IX of the Plan. The RSUs granted herein constitute an
Award within the meaning of the Plan.

 

2.       Terms of Restricted Stock Units.  The grant of RSUs provided in Section 1
hereof shall be subject to the following terms, conditions and restrictions:

 

(a)       No Ownership.             The Grantee shall not possess any
incidents of ownership (including, without limitation, dividend and voting
rights) in shares of the Common Stock in respect of the RSUs until such RSUs
have vested and been distributed to the Grantee in the form of shares of Common
Stock.

 

(b)       Transfer of RSUs.        Except as provided in this Section 2(b),
the RSUs and any interest therein may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution and subject to the conditions set forth in the Plan
and this Agreement. Any attempt to transfer RSUs in contravention of this
Section is void ab initio. RSUs shall not be subject to execution,
attachment or other process. Notwithstanding the foregoing, the Grantee shall
be permitted to transfer RSUs to members of his or her immediate family (i.e.,
children, grandchildren or spouse), trusts for the benefit of such family
members, and partnerships or other entities whose only partners or equity
owners are such family 

 

members; provided, however, that no consideration can be paid for the
transfer of the RSUs and the transferee of the RSUs must agree to be subject to
all conditions applicable to the RSUs (including all of the terms and
conditions of this Agreement) prior to transfer.

 

(c)       Vesting
and Conversion of RSUs.  Subject to
Sections 2(d) and 2(e), the RSUs shall vest at the rate of 33-1/3% of the RSUs
on each of the grant date and the first and second anniversaries of the Grant
Date, and shall be converted into an equivalent number of shares of Common
Stock that will be immediately distributed to the Grantee on the second
anniversary of the Grant Date; provided that if the Grantee has
delivered to the Corporation, on or prior to the date that is thirty days after
the Grant Date, an irrevocable written election to defer conversion of the RSUs
until such time as the Grantee’s service as a member of the Board terminates,
then the RSUs will be converted into an equivalent number of shares of Common
Stock that will be immediately distributed to the Grantee on the date that
Grantee’s service as a member of the Board terminates. Upon the distribution of
the shares of Common Stock in respect of the RSUs, the Corporation shall issue
to the Grantee or the Grantee’s personal representative a stock certificate
representing such shares of Common Stock, free of any restrictions.

 

(d)       Termination of
Service as Director.

 

                                    (i)    If the
Grantee ceases to be a member of the Board for any reason other than death,
disability or Cause, then (A) all RSUs that have vested on or prior to the date
the Grantee ceased to be a member of the Board shall be converted into an
equivalent number of shares of Common Stock and immediately distributed to the
Grantee, and (B) the Grantee shall forfeit all RSUs which have not yet become
vested as of the date the Grantee ceased to be a member of the Board.

 

                                    (ii)   In the
event the Grantee dies or the Grantee ceases to be a member of the Board
because of disability, all RSUs shall vest, be converted into an equivalent
number of shares of Common Stock and be immediately distributed to the Grantee.

 

                                    (iii)  In the
event the Grantee ceases to be a member of the Board for Cause, then the
Grantee shall forfeit all RSUs, whether or not vested.

 

(e)       Change of Control.  In the event of a Change in Control (as
defined below), all RSUs shall vest, be converted into shares of Common Stock
and be immediately distributed to the Grantee.

 

3.         Equitable Adjustment.            The aggregate number of shares of
Common Stock subject to the RSUs shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares or other capital adjustment, or
the payment of a stock dividend or other increase or decrease in such shares,
effected without the receipt of consideration by the Corporation, or other
change in corporate or capital structure. The Committee shall also make the
foregoing changes and any other changes, including changes in the classes of
securities available, to the extent reasonably necessary or desirable to
preserve the intended benefits under this Agreement in 

 

 

2

 

the event of any
other reorganization, recapitalization, merger, consolidation, spin-off,
extraordinary dividend or other distribution or similar transaction involving
the Corporation.

 

4.         Taxes.  The Grantee shall pay to the Corporation
promptly upon request any taxes the Corporation reasonably determines it is
required to withhold under applicable tax laws with respect to the RSUs.  Such payment shall be made as provided in
Section VIII(f) of the Plan.

 

5.         No Right to Continued Service as
Director.  Nothing contained herein
shall be deemed to confer upon the Grantee any right to continue to serve as a
member of the Board.

 

6.         Governing Law/Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
reference to principles of conflict of laws.

 

7.         Resolution of Disputes.  Any disputes arising under or in connection
with this Agreement shall be resolved by binding arbitration before a single
arbitrator, to be held in New York in accordance with the commercial rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator shall be final and subject to appeal only to the
extent permitted by law. Each party shall bear such party’s own expenses
incurred in connection with any arbitration; provided, however,
that the cost of the arbitration, including without limitation, reasonable
attorneys’ fees of the Grantee, shall be borne by the Corporation in the event
the Grantee is the prevailing party in the arbitration. Anything to the contrary
notwithstanding, each party hereto has the right to proceed with a court action
for injunctive relief or relief from violations of law not within the
jurisdiction of an arbitrator.

 

8.         Notices.  Any notice required or permitted under this
Agreement shall be deemed given when delivered personally, or when deposited in
a United States Post Office, postage prepaid, addressed, as appropriate, to the
Grantee at the last address specified in Grantee’s records with the
Corporation, or such other address as the Grantee may designate in writing to
the Corporation, or to the Corporation, Attention:  Corporate Secretary, or such other address as
the Corporation may designate in writing to the Grantee.

 

9.         Failure To Enforce Not a Waiver.  The failure of either party hereto to enforce
at any time any provision of this Agreement shall in no way be construed to be
a waiver of such provision or of any other provision hereof.

 

10.       Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be an original but all of which together
shall represent one and the same agreement.

 

11.       Miscellaneous.  This Agreement cannot be changed or
terminated orally. This Agreement and the Plan contain the entire agreement
between the parties relating to the subject matter hereof.  The section headings herein are intended for
reference only and shall not affect the interpretation hereof.

 

12.       Definitions.               For purposes of this Agreement:

 

(I)                        “Affiliate” of any Person shall mean any
other Person that directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such first
Person.  The term “Control” shall have
the meaning specified in Rule 12b-2 under the Exchange Act.

 

3

 

 

(II)                    “Beneficial Owner” (and variants thereof)
shall have the meaning given in Rule 13d-3 promulgated under the Exchange Act.

 

(III)                A director will be deemed to cease being a member of the Board for “Cause”
if such cessation is due to his fraud, dishonesty or intentional
misrepresentation in connection with his duties as a Director or his
embezzlement, misappropriation or conversion of assets or opportunities of the
Corporation or any Subsidiary.

 

(IV)     “Change in Control” shall
mean any of the following events:

 

(1)  any Person is or becomes the Beneficial
Owner, directly or indirectly, of 40% or more of either (a) the then
outstanding Common Stock of the Corporation (the “Outstanding Common Stock”) or
(b) the combined voting power of the then outstanding securities entitled to
vote generally in the election of directors of the Corporation (the “Total
Voting Power”); excluding, however, the following: (i) any acquisition by the
Corporation or any of its Controlled Affiliates, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any of its Controlled Affiliates and (iii) any Person who
becomes such a Beneficial Owner in connection with a transaction described in
the exclusion within paragraph (3) below; or

 

(2)  a change in the composition of the Board such
that the individuals who, as of the effective date of this Agreement,
constitute the Board (such individuals shall be hereinafter referred to as the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board; provided, however, for purposes of this definition, that
any individual who becomes a director subsequent to such effective date, whose
election, or nomination for election by the Corporation’s stockholders, was
made or approved pursuant to the terms of each then existing Stockholders
Agreement or by a vote of at least a majority of the Incumbent Directors (or
directors whose election or nomination for election was previously so approved)
shall be considered a member of the Incumbent Board; but, provided, further,
that any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person or legal entity other than the Board shall not be considered a member of
the Incumbent Board; or

 

(3)  there is consummated a merger or
consolidation of the Corporation or any direct or indirect Subsidiary of the
Corporation or a sale or other disposition of all or substantially all of the
assets of the Corporation (“Corporate Transaction”); excluding, however, such a
Corporate Transaction (a) pursuant to which all or substantially all of the
individuals and entities who are the Beneficial Owners, respectively, of the
Outstanding Common Stock and Total Voting Power immediately prior to such
Corporate Transaction will Beneficially Own, directly or indirectly, more than
50%, respectively, of the outstanding common stock and the combined voting
power of the  then outstanding common
stock and the combined voting power of the then outstanding securities entitled
to vote generally in the election of directors of the company resulting from
such Corporate Transaction (including, without limitation, a company which as a
result of such transaction 

 

4

 

owns the
Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Corporate Transaction
of the Outstanding Common Stock and Total Voting Power, as the case may be, and
(b) immediately following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of the board of
directors of the company resulting from such Corporate Transaction (including,
without limitation, a company which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries); or

 

(4)  the approval by the stockholders of the
Corporation of a complete liquidation or dissolution of the Corporation;

 

 

(V)       “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time.

 

(VI)     “Person” shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) of the Exchange Act.

 

(VII)    “Stockholders Agreement”
shall mean any stockholders agreement, governance agreement or other similar
agreement between the Corporation and a holder or holders of Voting Securities.

 

                                    (VIII)   “Voting Securities” means Common Stock and
any other securities of the Corporation entitled to vote generally in the
election of directors of the Corporation.

 

 

 

5

Annex A

 

NOTICE OF GRANT

RESTRICTED STOCK UNIT AGREEMENT

HEXCEL CORPORATION 2003 INCENTIVE STOCK PLAN

 

The
following member of the Board of Directors of Hexcel Corporation, a Delaware
corporation (“Hexcel”), has been granted Restricted Stock Units in accordance
with the terms of this Notice of Grant and the Restricted Stock Unit Agreement
to which this Notice of Grant is attached.

 

The
terms below shall have the meanings ascribed to them below when used in the Restricted
Stock Unit Agreement.

 

	
  Grantee

  	
   

  
	
  Address of Grantee

  	
   

  
	
  Grant Date

  	
   

  
	
  Aggregate Number of RSUs Granted

  	
   

  

 

 

IN WITNESS WHEREOF, the parties hereby agree to the terms of this Notice
of Grant and the Restricted Stock Unit Agreement to which this Notice of Grant
is attached and execute this Notice of Grant and Restricted Stock Unit
Agreement as of the Grant Date.

 

 

	
   

  	
   

  	
  HEXCEL
  CORPORATION

  
	
  Grantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ira J. Krakower

  
	
   

  	
   

  	
  Senior Vice
  President

  

 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]