Document:

Exhibit 4.2

 

 

GRANITE BROADCASTING
CORPORATION,

 

 

 

THE GUARANTORS PARTY
HERETO

 

and

 

THE BANK OF NEW YORK,

as Trustee

 

 

SECOND SUPPLEMENTAL
INDENTURE

 

Dated as of July 5,
2006

 

to

 

INDENTURE

 

Dated as of December 22,
2003 as amended by

the First Supplemental
Indenture

dated as of March 9,
2005

 

 

9-3/4% SENIOR SECURED
NOTES

DUE 2010

 

This SECOND SUPPLEMENTAL
INDENTURE, dated as of July 5, 2006 (this “Second Supplemental
Indenture”), is made by and among Granite Broadcasting Corporation, a
Delaware corporation, as issuer (the “Company”), the Guarantors, and The
Bank of New York, a New York banking corporation, as trustee (the “Trustee”).

RECITALS:

A.                The Company, the Guarantors
listed on the signature pages thereto (the “Original Guarantors”)
and the Trustee executed an Indenture, dated as of December 22, 2003 (as
amended from time to time, the “Indenture”), in respect of the Company’s
9-3/4% Senior Secured Notes due 2010 (the “Notes”).

B.                The Company, the Original
Guarantors, the additional Guarantors listed on the signature pages thereto
(the “Original Additional Guarantors”) and the Trustee executed a First
Supplemental Indenture, dated as of March 9, 2005 (the “First
Supplemental Indenture”), in order to add Guarantees of the Notes by the
Original Additional Guarantors.

C.                The Company has organized two
Restricted Subsidiaries, WBNG, Inc. and WBNG License,  Inc, (collectively, the “Additional
Guarantors”), each a Delaware corporation, to consummate the Binghamton
Acquisition (as defined below).

D.                Each Additional Guarantor, as a
Restricted Subsidiary under the Indenture, will be required under the Indenture
to execute and deliver to the Trustee a supplemental indenture pursuant to
which such Additional Guarantor shall unconditionally guarantee all of the
Company’s Obligations under the Notes and the Indenture on the terms set forth
in the Indenture, as a Guarantor.

E.                 Pursuant to Section 9.1 of
the Indenture, the Trustee, the Company, the Original Additional Guarantors,
the Additional Guarantors and the Original Guarantors (collectively, the “Guarantors”)
are authorized to execute and deliver this Second Supplemental Indenture to add
Guarantees of the Notes by the Additional Guarantors, without the consent of
any Holder of a Note.

F.                 Section 9.2 of the
Indenture provides, among other things, that the Indenture, the Notes and the
Security Documents may be amended by the Company, the Guarantors and the
Trustee with the consent of the Holders of at least a majority in principal
amount of the Notes then Outstanding (the “Requisite Holders”).

G.                The Company has obtained
consents from the Requisite Holders relating to the amendments of covenants and
other matters relating to the Indenture and amendments to the Notes and certain
Security Documents as set out in this Second Supplemental Indenture.

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H.                The Company has requested that
the Trustee execute this Second Supplemental Indenture in accordance with Section 9.1
and Section 9.2 of the Indenture.

AGREEMENT:

NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, each party agrees as follows for
the benefit of the other parties and for the equal and ratable benefit of the
Holders of the Company’s 9-3/4% Senior Secured Notes due 2010:

Section 1   Capitalized Terms.

Capitalized terms used
but not otherwise defined herein that are defined in the Indenture shall have
the meanings given to them in the Indenture.

Section 2.1   Amendments
to Definitions.

(a)           Certain definitions defined in Section 1.1
of the Indenture shall be deemed deleted when references to such definitions
would be eliminated as a result of the amendments set forth in this Second
Supplemental Indenture.

(b)           The following definitions set forth
in Section 1.1 of the Indenture are hereby deleted in their entirety and
replaced with the following:

“Asset Sale”
means any direct or indirect sale, issuance, conveyance, transfer, lease (other
than operating leases entered into in the ordinary course of business),
assignment or other transfer for value by the Company or any of its Restricted
Subsidiaries (including any Sale and Leaseback Transaction) to any Person other
than the Company or a Wholly Owned Restricted Subsidiary of the Company of:

(1)           any
Capital Stock of any Restricted Subsidiary of the Company; or

(2)           any
other tangible or intangible property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business (including a television station or license);

provided, however, that asset sales or other
dispositions shall not include:

(a)           a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $1.0
million;

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(b)           the
sale, lease, conveyance, disposition or other transfer of all or substantially
all of the assets of the Company as permitted under Article V hereof;

(c)           any
Restricted Payment permitted by Section 4.7 hereof or that constitutes a
Permitted Investment and the disposition of an Investment constituting a
Restricted Payment;

(d)           the
sale or discount, in each case without recourse, of accounts receivable arising
in the ordinary course of business, but only in connection with the compromise
or collection thereof;

(e)           disposals
or replacements of obsolete or worn out equipment;

(f)            an
Asset Swap permitted by Section 4.10 hereof;

(g)           cash
and Cash Equivalents; or

(h)           any
transaction constituting a Change of Control.

“Change of Control”
means the occurrence of one or more of the following events:

(1)           any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
to any “person” or “group” of related “persons” as defined in Rules 13d-3
and 13d-5 under the Exchange Act (whether or not otherwise in compliance with
the provisions of this Indenture), other than to the Permitted Holders;

(2)           the
approval by the holders of Capital Stock of the Company of any plan or proposal
for the liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture);

(3)           any
“person” or “group” of related “persons” as defined in Rules 13d-3 and 13d-5
under the Exchange Act (other than the Permitted Holders and any entity formed
solely for the purpose of owning Capital Stock of the Company) shall become the
owner, directly or indirectly, beneficially or of record, of shares
representing more than 50% of the aggregate ordinary voting power represented
by the issued and outstanding Capital Stock of the Company;

(4)           the
replacement of a majority of the Board of Directors of the Company over a
two-year period from the directors who constituted the Board of Directors of
the Company at the beginning of such period, and such replacement shall not
have been approved by a vote of at least a 

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majority of the Board of Directors of the Company then
still in office who either were members of such Board of Directors at the
beginning of such period or whose election as a member of such Board of
Directors was previously so approved;

(5)           any
event, the occurrence of which constitutes a change of control of the Company
for purposes of any Indebtedness of the Company or any of its Restricted
Subsidiaries; or

(6)           the
Company consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Company or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where the Voting Stock of
the Company outstanding immediately prior to such transaction is converted into
or exchanged for Voting Stock (other than Disqualified Capital Stock) of the
surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance).

“Net Cash Proceeds”
means, with respect to any Asset Sale, the proceeds in the form of cash or Cash
Equivalents including payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (other than the portion of any
such deferred payment constituting interest) received by the Company or any of
its Restricted Subsidiaries from, arising out of, in connection with or
relating to, such Asset Sale net of:

(1)           reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales
commissions);

(2)           taxes
paid or payable after taking into account any reduction in consolidated tax
liability due to available tax credits or deductions and any tax sharing
arrangements;

(3)           repayment
of Indebtedness that is secured by the property or assets that are the subject
of such Asset Sale; and

(4)           appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale.

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“Outstanding”
means, as of the date of determination, all Notes theretofore authenticated and
delivered under this Indenture, except:

(i)            Notes
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

(ii)           Notes,
or portions thereof, for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Notes; provided that, if the Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
pursuant to Section 14.1 hereof or otherwise satisfactory to the Trustee
has been made;

(iii)          Notes
which have been paid pursuant to Section 2.6 hereof or in exchange for or
in lieu of which other Notes have been authenticated and delivered pursuant to
this Indenture, other than any such Notes in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Notes are held
by a bona fide purchaser in whose hands such Notes are valid obligations of the
Company; and

(iv)          Notes
which have been defeased pursuant to a Legal Defeasance effected pursuant to Article VIII
hereof;

provided, however,
that in determining whether the Holders of the requisite principal amount of
the Outstanding Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Company or any other
obligor upon the Notes or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes which a Responsible Officer of the Trustee actually knows to be so owned
shall be so disregarded; provided further, however,
that, notwithstanding the foregoing, any Notes held by an Affiliate of the
Company (other than an obligor upon the Notes) shall be deemed not to be
Outstanding solely with respect to the actions referred to in Section 6.4
and Section 6.5 of this Indenture and shall be deemed to be Outstanding
for all other purposes. Notes so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee’s right so to act with respect to such Notes and
that the pledgee is not the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor.

“Permitted Business
Acquisition” means (i) the Binghamton Acquisition, (ii) the
Permitted Business Acquisitions permitted by Section 6.8(f) of the
Credit Agreement and (iii) the acquisition of a television station or
stations either (x) directly by the Company or a Restricted Subsidiary of
the Company that is a 

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Guarantor or (y) by an LSAE as long as such
assets are all subject to a Local Services Agreement; provided that any such
acquisition described in clause (x) or (y) results in there being at
least two television stations owned by the Company and its Restricted
Subsidiaries (including the LSAE) in a single market.

“Permitted Collateral Liens”
means (i) Liens securing the Notes issued pursuant to this Indenture (and
the related Guarantees), (ii) Liens securing Indebtedness incurred
pursuant to and in accordance with clause (16) of the definition of “Permitted
Indebtedness” (other than Liens on Binghamton Assets), provided that all
payments and other obligations due under such Indebtedness and the Notes (and
the related Guarantees) are secured on an equal and ratable basis (other than
any mortgages with respect to existing mortgaged property on the date of this
amendment, which mortgages will be junior to the existing Mortgages), (iii) (a) a
first-priority Lien on the Binghamton Assets securing Indebtedness incurred
pursuant to the Credit Agreement and (b) a second-priority Lien on the
Binghamton Assets securing the Notes (and the related Guarantees), (iv) Liens
securing Indebtedness incurred pursuant to and in accordance with clause (13)
of the definition of “Permitted Indebtedness,” (v) with respect to real
property Collateral, the prior Liens or encumbrances permitted under the
applicable mortgage or deed of trust encumbering the same and Liens of the type
described in (and as limited by) clauses (1), (2), (3), (5), (6) (12),
(13), (14) and (15) of the definition of “Permitted Liens” and (iv) with
respect to personal property Collateral, Liens of the type described in (and as
limited by) clauses (1), (2), (3), (4), (5), (7), (8), (10), (11), (12), (13),
(14), (15) and (17) of the definition of “Permitted Liens”; provided that, in
each case of clauses (2), (3) and (5) of the definition of “Permitted
Liens,” (x) any proceeding instituted contesting such Lien shall
conclusively operate to stay the sale or forfeiture of any portion of the Collateral
on account of such Lien and (y) upon the request of the Trustee or the
Collateral Agent, as the case may be, the Company or the applicable Restricted
Subsidiary shall maintain cash reserves in an amount sufficient to pay and
discharge such Lien and the Trustee’s or the Collateral Agent’s, as the case
may be, reasonable estimate of all interest and penalties related thereto.

“Permitted Holders”
means (i) W. Don Cornwell, (ii) the members of the immediate family
of W. Don Cornwell, (iii) any trust created for the benefit of W. Don
Cornwell or his estate or (iv) any Person that is controlled by W. Don
Cornwell.

“Permitted Indebtedness”
means, without duplication, each of the following:

(1)           Indebtedness
under the Notes issued on the Issue Date in an aggregate principal amount not
to exceed $405 million;

(2)           other
Indebtedness of the Company and its Restricted Subsidiaries outstanding on the
Issue Date;

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(3)           [Intentionally
omitted and any cross—references hereto shall have no effect];

(4)           Purchase
Money Indebtedness of an LSAE to acquire assets described in clause (i) of
the definition of “LSAE” and which are subject to the option described in
clause (iii) of the definition of “LSAE” and guarantees of such
Indebtedness by the Company or any Restricted Subsidiary that is a Guarantor;
provided that at no time may the Indebtedness incurred and then outstanding
under this clause (4), plus refinancings of Indebtedness incurred under this
clause (4), exceed $35 million in aggregate principal amount; provided that the
Existing Malara Credit Agreement may be refinanced with the Malara Credit
Agreement and the limit above shall be increased by up to $10 million in order
to finance any Special Acquisition (as defined in and permitted pursuant to Section 6.8(f) of
the Credit Agreement (which increased amount shall be reduced by the amount of
any Net Cash Proceeds used by the Company pursuant to Section 4.10(a)(3) of
this Indenture to finance any Special Acquisition));

(5)           Indebtedness
of a Restricted Subsidiary of the Company to the Company, to a Guarantor or to
a Wholly Owned Restricted Subsidiary of the Company for so long as such
Indebtedness is held by the Company, a Guarantor or a Wholly Owned Restricted
Subsidiary of the Company or the holder of Indebtedness secured by a Lien
permitted under this Indenture, in each case subject to no Lien held by a
Person other than the Company, a Guarantor or a Wholly Owned Restricted
Subsidiary of the Company or the holder of Indebtedness secured by a Lien
permitted under this Indenture; provided, however, that if as of any date any
Person other than the Company, a Guarantor or a Wholly Owned Restricted
Subsidiary of the Company or the holder of Indebtedness secured by a Lien
permitted under this Indenture owns or holds any such Indebtedness or holds a
Lien in respect of such Indebtedness, such date shall be deemed the incurrence
of Indebtedness not constituting Permitted Indebtedness under this clause (5) by
the issuer of such Indebtedness;

(6)           Indebtedness
of the Company to a Guarantor that is a Restricted Subsidiary of the Company
for so long as such Indebtedness is held by a Guarantor that is a Restricted
Subsidiary of the Company or the holder of Indebtedness secured by a Lien
permitted under this Indenture, in each case subject to no Lien other than a
Lien permitted under this Indenture; provided, however, that if as of any date
any Person other than a Guarantor that is a Restricted Subsidiary of the
Company or the holder of Indebtedness secured by a Lien permitted under this Indenture
owns or holds any such Indebtedness or any Person holds a Lien in respect of
such Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness under this clause (6) by the Company;

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(7)           Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business; provided, however, that such Indebtedness is extinguished within two
Business Days of incurrence;

(8)           Indebtedness
of the Company or any of its Restricted Subsidiaries in respect of performance
bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal
bonds, payment obligations in connection with self-insurance or similar
obligations, and bank overdrafts in the ordinary course of business (and
letters of credit in respect thereof in the ordinary course of business or in
respect of the obligations referred to in clause (4)), provided that no
instrument permitted hereunder is in favor of, or otherwise supports
Indebtedness otherwise permitted by clause (4);

(9)           [Intentionally
omitted and any cross—references hereto shall have no effect];

(10)         Refinancing
Indebtedness;

(11)         Indebtedness
represented by guarantees by the Company or its Restricted Subsidiaries of
Indebtedness otherwise permitted to be incurred by the Company or its
Restricted Subsidiaries (other than an LSAE) under this Indenture;

(12)         Indebtedness
of the Company or any Restricted Subsidiary consisting of guarantees,
indemnities or obligations in respect of purchase price adjustments in
connection with the acquisition or disposition of assets by the Company or its
Restricted Subsidiaries, provided that no instrument permitted hereunder is in
favor of, or otherwise supports, Indebtedness otherwise permitted by clause
(4);

(13)         additional
Indebtedness (including Purchase Money Indebtedness and Capitalized Lease
Obligations) or Disqualified Capital Stock of the Company or additional
Indebtedness of its Restricted Subsidiaries that are Guarantors in an aggregate
principal amount not to exceed $5.0 million at any one time outstanding;

(14)        
[Intentionally omitted and any cross—references hereto shall have no effect];

(15)         Indebtedness
(including, but not limited to, guarantees) incurred to finance, directly or
indirectly, a Permitted Business Acquisition, plus refinancings thereof,
provided that an amount equal to 101% of the principal amount of such Indebtedness,
plus interest thereon for a one calendar quarter period (but in no event more
than 105% of the principal amount thereof) is, and remains, secured with cash
or Cash 

 9
 

 

Equivalents (or a letter of credit or bond secured by
cash or Cash Equivalents); provided further (and only to the extent) that such
cash has been funded from (i) Net Cash Proceeds of an Asset Sale; (ii) net
cash proceeds from the issuance and sale of Qualified Capital Stock of the
Company; (iii) [intentionally omitted and any cross—references hereto
shall have no effect]; (iv) other cash and Cash Equivalents up to $25
million if incurred prior to July 5, 2006 (provided for purposes of
clarity that none may be incurred thereafter); or (v) any combination
thereof;

(16)         Indebtedness
under the Credit Agreement together with the incurrence of the guarantees
thereunder;

(17)         Preferred
Stock issued upon conversion of any or all of the Tranche B Term Loan issued
under the Credit Agreement; and

(18)         any
guarantee of the Indebtedness incurred under the Malara Credit Facility.

“Permitted Investments”
means:

(1)           Investments
by the Company or any Restricted Subsidiary of the Company in any Person that
is or will become immediately after such Investment a Guarantor or that will
merge or consolidate into the Company or a Guarantor;

(2)           Investments
in the Company by any Restricted Subsidiary of the Company; provided, however,
that any Indebtedness evidencing such Investment and held by a Restricted
Subsidiary that is not a Guarantor is unsecured and subordinated, pursuant to a
written agreement, to the Company’s Obligations under the Notes and this
Indenture;

(3)           Investments
in cash and Cash Equivalents (i) held in a Control Account (as defined in
the Security Documents) with respect to which the Trustee, for the benefit of
the Noteholders, has a first priority perfected Lien, (ii) held in
collection accounts existing on the Issue Date other than Control Accounts or
held in collection accounts acquired or established in connection with the
Binghamton Acquisition, the Permitted Business Acquisitions permitted by Section 6.8(f) of
the Credit Agreement and the Asset Acquisitions permitted pursuant to Section 4.23
of this Indenture, provided that there are in place standing instructions to
sweep all such deposits, on a daily basis, into an account described in clause (i) and
all such accounts are so swept on a daily basis, (iii) held in certain
accounts other than Control Accounts, provided such funds are (x) used
only to fund periodic payroll of the Company and its Subsidiaries, (y) deposited
in such accounts no more than three business days prior to the date payroll
checks are to be issued and (z) only to the extent of the payroll
obligations as of such date or as otherwise set forth in the Security 

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Agreement, (iv) held in the Collateral Account or
(v) as otherwise permitted by clause (15) of the definition of “Permitted
Indebtedness” or clause (10) of the definition of “Permitted Liens”;

(4)           loans
and advances to employees, directors and officers of the Company and its
Restricted Subsidiaries (other than employees, directors and officers that are
Permitted Holders or Affiliates thereof) in the ordinary course of business for
bona fide business purposes not in excess of $1.0 million at any one time
outstanding and incurred after the Issue Date;

(5)           [Intentionally
omitted and any cross-references hereto shall have no effect];

(6)           Investments
in securities of trade creditors or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers or in good faith settlement of delinquent
obligations of such trade creditors or customers or upon the foreclosure,
perfection or enforcement of any Lien in favor of the Company or any of its Restricted
Subsidiaries;

(7)           Investments
made by the Company or its Restricted Subsidiaries as a result of consideration
received in connection with an Asset Sale made in compliance with Section 4.10
hereof;

(8)           Investments
represented by Indebtedness (including guarantees) that are otherwise permitted
under this Indenture;

(9)           Investments
in a Permitted Business the payment for which is Qualified Capital Stock of the
Company;

(10)         any
Asset Swap made in accordance with Section 4.10 hereof;

(11)         additional
Investments in a Permitted Business not to exceed $500,000 at any one time
outstanding; such Investments to be valued at original cost less cash
distributions or return thereon that are not otherwise reflected in
Consolidated EBITDA of the Company; and

(12)         any
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility, workers’ compensation and performance and other similar
deposits and prepaid expenses made in the ordinary course of business.

(13)         The
initial deposit by the Company on the date hereof of $1.0 million in the
Trustee Reserve Fund as contemplated pursuant to Section 12.9 of this
Indenture.

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“Permitted Liens”
means the following types of Liens:

(1)           Liens
on (a) assets of a Person that merges with or into or consolidates with
the Company or any of its Restricted Subsidiaries after the Issue Date, (b) assets
of a Person that otherwise becomes a Restricted Subsidiary of the Company after
the Issue Date or (c) assets acquired by the Company or any of its
Restricted Subsidiaries after the Issue Date; provided that, in each case, (x) such
Liens existed at the time of such event, (y) such Liens were not incurred
in connection with, or in contemplation of, such event and (z) such Liens
do not extend to any assets of the Company or any of its Restricted
Subsidiaries (other than, in the case of clauses (a) and (b) above,
the assets of such Person);

(2)           Liens
for taxes, assessments or governmental charges or claims either (a) not
delinquent or (b) contested in good faith by appropriate proceedings and
as to which the Company or any of its Restricted Subsidiaries shall have set
aside on its books such reserves as may be required pursuant to GAAP;

(3)           statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in good
faith, if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made in respect thereof;

(4)           Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in the ordinary
course of business consistent with past practice in connection therewith, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment
of borrowed money);

(5)           judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been duly initiated
for the review of such judgment shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have expired;

(6)           easements,
rights-of-way, zoning restrictions, minor defects and irregularities in title
and other similar charges or encumbrances in respect of real property that do
not, individually or in the aggregate, have a material adverse effect on the
value of the real property encumbered thereby and do not interfere in any
material respect with the 

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ordinary conduct of the business of the Company or any
of its Restricted Subsidiaries;

(7)           Liens
representing any interest or title of a lessor under any Capitalized Lease;
provided that such Liens do not extend to any property or assets which is not
leased property subject to such Capitalized Lease and accessions and
improvements thereto and proceeds thereof;

(8)           Liens
upon specific items of inventory or other goods and proceeds thereof of any
Person securing such Person’s obligations in respect of bankers’ acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;

(9)           Liens
securing reimbursement obligations with respect to commercial letters of credit
which encumber documents and other property relating to such letters of credit
and products and proceeds thereof;

(10)         Liens
encumbering deposits made to secure ordinary course business obligations
arising from statutory, regulatory or contractual (other than with respect to
Indebtedness) requirements of the Company or any of its Restricted
Subsidiaries, including rights of offset and set-off;

(11)         [Intentionally
omitted and any cross references hereto shall have no effect];

(12)        
leases or subleases granted to others not interfering in any material respect
with the business of the Company or any of the Company’s Restricted
Subsidiaries and any interest or title of a lessor under any lease permitted by
this Indenture;

(13)         [Intentionally
omitted and any cross-references hereto shall have no effect];

(14)         Liens
securing Indebtedness incurred pursuant to clause (13) of the definition of “Permitted
Indebtedness,” provided that (x) if such Indebtedness is not Purchase
Money Indebtedness or Capitalized Lease Obligations or any refinancing thereof,
such Liens do not extend to any property or assets that are not Collateral, (y) if
such Indebtedness is Purchase Money Indebtedness or Capitalized Lease
Obligations, such Lien extends only to the property being financed with such Indebtedness
and accessions and improvements thereto and proceeds thereof and (z) if
such Indebtedness is Purchase Money Indebtedness, the Lien securing such
Indebtedness shall be created within 180 days of such acquisition,
installation, construction or improvement or, in the case of a Refinancing of
any Purchase Money Indebtedness, within 180 days of such Refinancing;

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(15)         [Intentionally
omitted and any cross-references hereto shall have no effect];

(16)         solely
to the extent of any LSAE assets, Liens by an LSAE on its assets to secure
Indebtedness incurred pursuant to clause (4) of the definition of “Permitted
Indebtedness”;

(17)         solely
to the extent of cash (or Cash Equivalents), Liens on such cash (or Cash
Equivalents) as contemplated by (and only to the extent contemplated by) clause
(15) of the definition of “Permitted Indebtedness”; and

(18)         Liens
on any interest or title of a lessor under any real property leased by the
Company or any of the Company’s Restricted Subsidiaries.

(19)         The
Lien created pursuant to Section 12.9 of this Indenture in connection with
the initial deposit by the Company on the date hereof of $1.0 million in the
Trustee Reserve Fund.

“Refinancing Indebtedness”
means any Refinancing by the Company or any Restricted Subsidiary of the
Company of Indebtedness incurred in accordance with Section 4.9 hereof (i) pursuant
to clause (1) of the definition of “Permitted Indebtedness,” but only if
100% of such Indebtedness is refinanced or (ii) pursuant to clause (2) of
the definition of “Permitted Indebtedness”, in each case that does not:

(1)           result
in an increase in the aggregate principal amount (or, if issued with original
issue discount, the aggregate accreted value) of Indebtedness of such Person as
of the date of such proposed Refinancing (plus the amount of any premium or
defeasance costs required to be paid under the terms of the instrument
governing such Indebtedness and plus the amount of accrued fees and expenses
incurred in connection with such Refinancing); or

(2)           create
Indebtedness with: (a) a Weighted Average Life to Maturity that is less
than the Weighted Average Life to Maturity of the Indebtedness being
Refinanced; or (b) a final maturity earlier than the final maturity of the
Indebtedness being Refinanced; provided, however, that (x) if such
Indebtedness being Refinanced is Indebtedness solely of the Company or of an
LSAE (and is not otherwise guaranteed by a Restricted Subsidiary of the
Company), then such Refinancing Indebtedness shall be Indebtedness solely of
the Company or of such LSAE, as the case may be, and (y) if such
Indebtedness being Refinanced is subordinate or junior to the Notes or any
Guarantee (or is Disqualified Capital Stock), then such Refinancing
Indebtedness shall be subordinate to the Notes or such Guarantee (or shall be
Disqualified Capital Stock, as the case may be), as the 

 14
 

 

case may be, at least to the same extent and in the
same manner as the Indebtedness (or Disqualified Capital Stock) being
Refinanced.

“Security Agreement”
means that certain security agreement, between the Company, the Restricted
Subsidiaries from time to time party thereto, and the Collateral Agent,
substantially in the form of Exhibit G hereto, as amended by the Security
Agreement Amendment.

“Senior Secured
Indebtedness” means (i) Indebtedness represented by the
Notes and the Guarantees and (ii) Indebtedness incurred pursuant to and in
accordance with clause (16) of the definition of “Permitted Indebtedness”.

“Senior Secured Parties”
means the Collateral Agent for its benefit and the benefit of the Trustee, the
Holders of the Notes (including any Additional Notes subsequently issued under
and in compliance with the terms of this Indenture), and the holders from time
to time of the Senior Secured Indebtedness described in clause (ii) of the
definition of “Senior Secured Indebtedness”.

“Unrestricted Subsidiary”
of any Person means:

(1)           any
Subsidiary of such Person that at the time of determination shall be or
continue to be designated an Unrestricted Subsidiary by the Board of Directors
of such Person in the manner provided below; and

(2)           any
Subsidiary of an Unrestricted Subsidiary.

The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary), other than any LSAE,
to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock
of, or owns or holds any Lien on any property of, the Company or any other
Restricted Subsidiary of the Company that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that:

(1)           the Company certifies to the Trustee
that (a) such designation complies with Section 4.7 hereof and (b) immediately
after giving effect to such designation, the Company is able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.9 hereof;

(2)           each Subsidiary to be so designated
and each of its Subsidiaries has not at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to
which the lender has recourse to any of the assets of the Company or any of its
Restricted Subsidiaries; and

 15
 

 

(3)           immediately before and immediately
after giving effect to such designation, no Default or Event of Default shall
have occurred and be continuing.

For purposes of making the determination of whether
any such designation of a Subsidiary as an Unrestricted Subsidiary complies
with Section 4.7 hereof, the portion of the fair market value of the net
assets of such Subsidiary of the Company at the time that such Subsidiary is
designated as an Unrestricted Subsidiary that is represented by the interest of
the Company and its Restricted Subsidiaries in such Subsidiary, in each case as
determined in good faith by the Board of Directors of the Company, shall be
deemed to be an Investment. Such designation will be permitted only if such
Investment would be permitted at such time under Section 4.7 hereof.

The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary only if:

(1)           immediately after giving effect to
such designation, the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.9
hereof; and

(2)           immediately before and immediately
after giving effect to such designation, no Default or Event of Default shall
have occurred and be continuing.

Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
Board Resolution giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the foregoing provisions.

(c)           The following
definitions are hereby added in the correct alphabetical order to Section 1.1
of the Indenture:

“Binghamton Acquisition”
means the acquisition of certain assets related to the ownership and operation
of a CBS-affiliated broadcast television station WBNG-TV, Binghamton, New York
and its auxiliary facilities.

“Binghamton Assets”
means all of the real, personal and mixed assets, rights, benefits and
privileges, both tangible and intangible, acquired pursuant to the Binghamton
Acquisition.

“Credit Agreement”
means that certain Credit and Guaranty Agreement dated as of July 5, 2006
among the Company, the guarantors party thereto, the lenders party thereto and
Silver Point Finance, LLC as administrative agent, as amended, restated,
modified and supplemented from time to time.

 16
 

 

“Existing Malara Credit
Facility” means that certain Credit Agreement dated as of March 8,
2005 by and among Malara Broadcast Group Inc., as parent guarantor, Malara
Broadcast Group of Duluth LLC, Malara Broadcast Group of Duluth Licensee, LLC,
Malara Broadcast Group of Fort Wayne LLC, Malara Broadcast Group of Fort Wayne
Licensee LLC (collectively as borrowers), the lenders party thereto, D.B. Zwirn
Special Opportunities Fund, L.P., as administrative agent, Dresdner Bank AG New
York and Grand Cayman Branches, as syndication agent, and D.B. Zwirn Special
Opportunities Fund, L.P. as arranger.

“Malara Credit Facility”
means the credit facility to be entered into by one or more of Malara Broadcast
Group Inc., as parent guarantor, Malara Broadcast Group of Duluth LLC, Malara
Broadcast Group of Duluth Licensee, LLC, Malara Broadcast Group of Fort Wayne
LLC, Malara Broadcast Group of Fort Wayne Licensee LLC, as borrowers and the
lenders party to the Credit Agreement to refinance the Existing Malara Credit
Facility, as amended, restated, refinanced, replaced, modified and supplemented
from time to time.

“Second Supplemental
Indenture” means the Second Supplemental Indenture, dated as of July 5,
2006 made by and among the Company, the Guarantors, and the Trustee.

“Security Agreement
Amendment” means that certain First Amendment and Joinder to the
Security Agreement dated as of July 5, 2006 between the Company, the
Restricted Subsidiaries from time to time party thereto, the Trustee, the
Collateral Agent, the lenders under the Credit Agreement and Silver Point
Finance, LLC, as administrative agent under the Credit Agreement, substantially
in the form of Exhibit J hereto.

“Supplemental Agreement”
means that certain supplemental agreement dated as of July 5, 2006 between
the Company, the Guarantors party thereto and the Qualified Holders (as defined
therein) party thereto.

“Tranche A Term Loan”
means any Tranche A Term Loan made under the Credit Agreement by a lender party
thereto to the Company.

“Tranche B Term Loan”
means any Tranche B Term Loan made under the Credit Agreement by a lender party
thereto to the Company.

“Voting Stock”
of any Person as of any date means the Capital Stock of such Person that is at
the time entitled to vote in the election of the Board of Directors of such
Person.

“WB Disposition”
means the disposition of certain assets related to the ownership and operation
of a WB-affiliated broadcast television station KBWB(TV), San Francisco,
California and its auxiliary facilities and the disposition of certain assets
related to the ownership and operation of a WB-

 17
 

 

affiliated broadcast television station WDWB(TV),
Detroit, Michigan and its auxiliary facilities, in each case, pursuant to the
applicable WB Sale Agreement.

“WB Sale Agreements”
means the Purchase and Sale Agreement dated as of May 1, 2006, entered
into in respect of the WB Disposition, by and among DS Audible San Francisco,
LLC, Granite Broadcasting Corporation, KBWB, Inc. and KBWB License, Inc.,
the Purchase and Sale Agreement dated as of May 1, 2006, entered into in
respect of the WB Disposition, by and among DS Audible Detroit, LLC, Granite
Broadcasting Corporation, WXON, Inc. and WXON License, Inc., the
Letter Agreement dated May 1, 2006 among DS Audible San Francisco, LLC, DS
Audible Detroit, LLC, Granite Broadcasting Corporation, WXON, Inc. and
WXON License, Inc., KBWB, Inc. and KBWB License, Inc., the form
of Closing Agreement to be executed at closing among DS Audible San Francisco,
LLC, DS Audible Detroit, LLC, Granite Broadcasting Corporation, WXON, Inc.
and WXON License, Inc., KBWB, Inc. and KBWB License, Inc., and
the form of Additional Escrow Agreement to be executed at closing among DS
Audible San Francisco, LLC, DS Audible Detroit, LLC, Granite Broadcasting
Corporation, WXON, Inc. and WXON License, Inc., KBWB, Inc. and
KBWB License, Inc., in each case as amended through the date hereof and as
may be further amended not in violation of this Indenture.

“WB Stations”
means KBWB(TV), San Francisco, California and its auxiliary facilities, and
WDWB(TV), Detroit, Michigan and its auxiliary facilities.

Section 2.2  Amended Notes.

(a)           References to Exhibit A (Form of
Series A Note) and Exhibit B (Form of Series B Note) in Section 2.1
and elsewhere in the Indenture shall be deemed to be references to the Exhibit A
and Exhibit B, respectively, attached to this Second Supplemental
Indenture.

(b)           The parties hereto hereby agree that
the (i) existing Global Note representing the Series A Notes will be
surrendered and replaced with a new Global Note substantially in the form
attached as Exhibit A hereto and (ii) existing Global Note
representing the Series B Notes will be surrendered and replaced with a
new Global Note substantially in the form attached as Exhibit B
hereto. The Company agrees to issue, and the Trustee, upon receipt of an
authentication order in accordance with Section 2.2 of the Indenture,
agrees to authenticate such new Global Notes.

Section 2.3  Amended Sections.

(a)           Section 1.02
is hereby amended by adding the following new term in alphabetical order:

“Trustee Reserve Fund................................................12.9”

 18
 

 

(b)           The following is
hereby added to the Indenture as 2.14:

“Section 2.14   Amendment
of Notes.

It shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver to the Notes, as they may be amended from time to time in
accordance with the terms of this Indenture. Any consent given by the Holders
of at least a majority in principal amount of the then Outstanding Notes to
amend, restate or replace the Notes (subject to Section 9.2) shall be
deemed to be an authorization and direction by such Holders to the Company to
execute and deliver, and to the Trustee to authenticate, any amended Notes
incorporating the approved amendments.”

(c)           Section 4.7 of the Indenture is
hereby deleted in its entirety and replaced with the following:

“Section 4.7. Limitation
on Restricted Payments.

The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly:

(1)           declare or pay any dividend or make
any distribution (other than dividends or distributions payable in Qualified
Capital Stock of the Company) on or in respect of shares of the Company’s
Capital Stock to holders of such Capital Stock;

(2)           purchase, redeem or otherwise acquire
or retire for value any Capital Stock of the Company;

(3)           make any principal payment on,
purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for
value, prior to any scheduled final maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Indebtedness of the Company or the
Guarantors; or

(4)           make any Investment (other than
Permitted Investments)

(each of the foregoing actions set forth in clauses (1), (2), (3) and
(4) being referred to as a “Restricted Payment”).

Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit:

(1)           [Intentionally omitted and any
cross-references hereto shall have no effect];

(2)           if no Default or Event of Default
shall have occurred and be continuing, the acquisition of any shares of Capital
Stock of the Company, either (i) in exchange for shares of Qualified Capital
Stock of 

 19
 

 

the Company, (ii) through
the application of net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of shares of Qualified Capital
Stock of the Company or (iii) a combination thereof;

(3)           [Intentionally omitted and any cross—references
hereto shall have no effect];

(4)           so long as no Default or Event of
Default shall have occurred and be continuing, repurchases by the Company of
Common Stock of the Company from officers, directors and employees of the
Company or any of its Subsidiaries (other than officers, directors or employees
that are Permitted Holders or any Affiliates thereof) in an amount not to
exceed $1.0 million in any twelve month period;

(5)           so long as no Default or Event of
Default has occurred and is continuing, the declaration and payment of
dividends to holders of any class or series of Disqualified Capital Stock of
the Company issued after the Issue Date in accordance with Section 4.9
hereof and otherwise in accordance with the terms of this Indenture to the
extent such dividends are included in the definition of “Consolidated
Interest Expense” but excluding the declaration and payment of
dividends with respect to the Company’s 12 3/4% Cumulative Exchangeable
Preferred Stock and any Refinancing thereof;

(6)           repurchases of Capital Stock deemed
to occur upon the exercise of stock options if such Capital Stock represents a
portion of the exercise price thereof;

(7)           [Intentionally omitted and any
cross-references hereto shall have no effect]

(8)           any purchase or redemption of
subordinated obligations as a result of a Change of Control, provided that the
offer to purchase pursuant to Sections 3.9 and 4.15 hereof shall have been
consummated prior to any such purchase; or

(9)           any purchase or redemption of, and
payment of the consent fee with respect to, the 8 7/8% Notes pursuant to the 8
7/8% Notes Tender Offer.”

(d)           Section 4.9(a) is
hereby deleted in its entirety and replaced with the following:

“(a)   The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or otherwise, with respect to, or otherwise become
responsible for payment of (collectively, “incur”) any
Indebtedness (other than 

 20
 

 

Permitted Indebtedness); provided, however, that solely for purposes of determining
(and for purposes of clarity not for incurring) whether the Company and its
Restricted Subsidiaries are permitted to (i) effect a merger or
consolidation or sale of assets under Section 5.1 or (ii) designate
Unrestricted Subsidiaries in accordance with the definition of “Unrestricted
Subsidiary,” the Company and its Restricted Subsidiaries will be deemed to be
able to incur such Indebtedness if no Default or Event of Default shall have
occurred and be continuing at the time of or as a consequence of the deemed
incurrence of any such Indebtedness if on the date of the deemed incurrence of
such Indebtedness, after giving effect to the deemed incurrence thereof, the Consolidated
Leverage Ratio of the Company shall not be greater than 7.5 to 1.0; provided, however, that any Indebtedness of a Person
existing at the time such Person becomes or ceases to be a Restricted
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall
be deemed to be incurred at the time it becomes or ceases to be a Restricted
Subsidiary.”

(e)           Section 4.10 of
the Indenture is hereby deleted in its entirety and replaced with the
following:

“Section 4.10   Limitation on Asset Sales.

(a)           The Company will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)           the Company or the applicable
Restricted Subsidiary, as the case may be, receives consideration at the time
of such Asset Sale at least equal to the fair market value of the assets sold
or otherwise disposed of (as determined in good faith by the Company’s Board of
Directors);

(2)           at least 90% of the consideration
received by the Company or the Restricted Subsidiary, as the case may be, from
such Asset Sale shall be in the form of cash, Cash Equivalents and/or
Replacement Assets (as defined below) and is received at the time of such
disposition; provided, however, that the amount of any notes or other obligations
received by the Company or such Restricted Subsidiary from such transferee that
are within 30 days converted by the Company or such Restricted Subsidiary into
cash (to the extent of the cash received) shall be deemed, to the extent of
cash so received, to be cash for purposes of this provision; provided further
that any liabilities (as shown on the Company’s or such Restricted Subsidiary’s
most recent balance sheet) of the Company or any Restricted Subsidiary (other
than contingent liabilities and liabilities that are by their terms
subordinated to the Notes or any Guarantee, and excluding Indebtedness other
than Indebtedness under clause (3) of the definition of “Indebtedness” or Purchase Money
Indebtedness) that are assumed by the transferee and are not otherwise
thereafter required to be reflected on the Company’s consolidated balance sheet
shall be deemed to be cash for purposes of this provision;

 21
 

 

(3)           upon the consummation of an Asset
Sale, the Company shall apply, or cause such Restricted Subsidiary to apply,
the Net Cash Proceeds in excess of $5.0 million for any one Asset Sale (or
series of related Asset Sales) relating to such Asset Sale (in the case of the
WB Disposition (or the first sale of a WB Station) only, the $5.0 million
amount referred to above shall be $6.0 million for purposes of this Asset Sale
in the event that $1.0 million has been previously deposited by the Company
pursuant to Section 12.9 of this Indenture) (i) if any Tranche A Term
Loans are outstanding at the time the WB Disposition (or the sale of any WB
Station) occurs, to repay the full amount of such outstanding Tranche A Term
Loans, such repayment to be made concurrently with such WB Disposition (or the
sale of any WB Station) and prior to any other use permitted by this paragraph
(a)(3) and (ii) within 180 days of receipt thereof to make an
investment in properties and assets that replace the properties and assets that
were the subject of such Asset Sale or in properties and assets (excluding
Capital Stock other than Capital Stock of an entity that is (or will
immediately become) a Guarantor) that will be used in the business of the
Company and its Restricted Subsidiaries as existing on the Issue Date or in
businesses reasonably related thereto (“Replacement Assets”)
or to finance, directly or indirectly, a Permitted Business Acquisition or
enter into a definitive agreement to effectuate such acquisition, subject only
to customary conditions, including FCC approval, within 90 days of receipt of
the Net Cash Proceeds of such Asset Sale and consummate such acquisition within
270 days of receipt thereof; provided that (A) the
primary purpose of such acquisition of Replacement Assets or Permitted Business
Acquisition is to acquire, and there is acquired, a television station with a Big-4
(ABC, CBS, NBC or Fox) network affiliation agreement in place or the creation
(through ownership by the Company and its Restricted Subsidiaries) of a “duopoly”
in a market and (B) that the Company shall use all reasonable best efforts
to promptly dispose of any other assets acquired in such acquisition or
Permitted Business Acquisition; provided further
that to the extent such Net Cash Proceeds were received from an Asset Sale of
assets or property that constituted Collateral, such Replacement Assets so
acquired shall be owned by the Company or a Guarantor, shall not be subject to
any Liens other than Permitted Collateral Liens and the Company shall execute
and deliver to the Trustee such Security Documents or other instruments as
shall be reasonably necessary to cause such property or assets to become
Collateral subject to the Lien of the applicable Security Documents (subject to
the release provisions contained in Article X); and

(4)           if such Asset Sale consists, in whole
or in part, of the sale of any Capital Stock of any Restricted Subsidiary,
Capital Stock of such Restricted Subsidiary shall be sold or otherwise disposed
of in the same transaction or series of related transactions such that such
Person is no longer a Subsidiary.

 22
 

 

(b)           Pending the final application of such
Net Cash Proceeds, the Company shall deposit such proceeds in a separate
Collateral Account. Any such Net Cash Proceeds so deposited shall be promptly
disbursed by the Trustee in accordance with the provisions of this Indenture
upon notice from the Company such that the Company may apply such Net Cash
Proceeds in accordance with the provisions of this Section 4.10. On the
181st day after an Asset Sale, or the 30th day after the termination of the
acquisition agreement referred to in clause (3) of Section 4.10(a),
as applicable, or such earlier date, if any, as the Board of Directors of the
Company or of such Restricted Subsidiary determines not to apply the Net Cash
Proceeds relating to such Asset Sale as set forth in clause (3) of Section 4.10(a) (each,
a “Net Proceeds Offer Trigger Date”),
such aggregate amount of Net Cash Proceeds which have not been applied on or
before such Net Proceeds Offer Trigger Date as permitted in clause (3) of Section 4.10(a) (each,
a “Net Proceeds Offer Amount”) shall be
applied by the Company or such Restricted Subsidiary to make an offer to
purchase (the “Net Proceeds Offer”) to all
Holders and the holders of any Senior Secured Indebtedness and, to the extent
that such Net Proceeds Offer Amount relates to an Asset Sale of assets or
property that did not constitute Collateral at the time of such Asset Sale and
the terms of any pari passu Indebtedness require that an offer to purchase be
made to all holders of such pari passu Indebtedness, to all holders of such
Senior Secured Indebtedness and pari passu Indebtedness on a date (the “Net Proceeds Offer Payment Date”)
not less than 30 nor more than 45 days following the applicable Net Proceeds
Offer Trigger Date, from all Holders (and holders of such Senior Secured
Indebtedness and pari passu Indebtedness) on a pro rata basis, that amount of
Notes (and Senior Secured Indebtedness and pari passu Indebtedness) equal to
the Net Proceeds Offer Amount at a price equal to 100% of the principal amount
of the Notes (and 100% of the principal amount of the Senior Secured
Indebtedness and pari passu Indebtedness) to be purchased, plus accrued and
unpaid interest (and Additional Interest, if any) thereon, if any, to the date
of purchase; provided, however, that if at any time any non-cash consideration
received by the Company or any Restricted Subsidiary of the Company, as the
case may be, in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash (other than interest received with respect to
any such non-cash consideration), then such conversion or disposition shall be
deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof
shall be applied in accordance with this covenant.

(c)           The Company may defer the Net
Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount
equal to or in excess of $10.0 million resulting from one or more Asset Sales
(at which time, the entire unutilized Net Proceeds Offer Amount, and not just
the amount in excess of $10.0 million, shall be applied as required pursuant to
this paragraph).

(d)           In the event of the transfer of
substantially all (but not all) of the property and assets of the Company and
its Restricted Subsidiaries as an entirety to a Person in a transaction permitted
under Article V hereof which transaction does not constitute a Change of
Control, the successor corporation shall be 

 23
 

 

deemed to have sold the properties and assets of the
Company and its Restricted Subsidiaries not so transferred for purposes of this
covenant, and shall comply with the provisions of this covenant with respect to
such deemed sale as if it were an Asset Sale. In addition, the fair market
value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this covenant.

(e)           Each Net Proceeds Offer shall comply
with the procedures set forth in Section 3.10. If any Net Cash Proceeds
remain after the consummation of any Net Proceeds Offer, the Company may use
those Net Cash Proceeds for any purpose not otherwise prohibited by this
Indenture. Upon completion of each Net Proceeds Offer, the amount of Net Cash
Proceeds will be reset at zero.

(f)            The Company will not, and will not
cause or permit any of its Restricted Subsidiaries to, engage in any Asset
Swaps, unless:

(1)           at
the time of entering into such Asset Swap and immediately after giving effect
to such Asset Swap, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;

(2)           in
the event such Asset Swap involves the transfer by the Company or any
Restricted Subsidiary of assets having an aggregate fair market value in excess
of $5 million, either (i) the terms of such Asset Swap shall be approved
by the Board of Directors of the Company which shall have determined that the
Company or the applicable Restricted Subsidiary is receiving consideration in
the Asset Swap at least equal to the fair market value of the assets swapped or
(ii) the Company shall, prior to the consummation thereof, obtain a
favorable opinion as to the fairness of such Asset Swap to the Company or such
Restricted Subsidiary, as the case may be, from a financial point of view, from
an Independent Financial Advisor and file the same with the Trustee; and

(3)           to
the extent such Asset Swap consists of assets or property that constituted
Collateral, the assets received in such Asset Swap shall be owned by the
Company or a Restricted Subsidiary that is a Guarantor, shall not (subject to
the release provisions contained in Article X) be subject to any Liens
other than Permitted Collateral Liens and the Company shall execute and deliver
to the Trustee such Security Documents or other instruments as shall be
reasonably necessary to cause such property or assets to become Collateral
subject to the Lien of the applicable Security Documents.

(g)           The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes pursuant to a Net
Proceeds Offer. To the extent that the 

 24
 

 

provisions of any securities laws or regulations
conflict with the provisions of this Indenture, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.10 by virtue thereof.”

(f)            Section 4.19
of the Indenture is hereby deleted in its entirety and replaced with the following:

 “Section 4.19   Events of Loss.

In the event of an Event
of Loss with respect to any Collateral, the Company or the affected Guarantor,
as the case may be, will apply the Net Loss Proceeds from such Event of Loss,
within 90 days after receipt, at its option:

(1)           to
the rebuilding, repair, replacement or construction of improvements to the
affected property (the “Subject Property”); or

(2)           to
make capital expenditures with respect to Collateral or to acquire properties
or assets that will constitute Collateral and be used or useful in the
Permitted Business of the Company or any of its Restricted Subsidiaries;

provided that if during such 90—day period the Company
or a Restricted Subsidiary enters into a definitive agreement committing it to
apply such Net Loss Proceeds in accordance with the requirements of clause (1) or
(2) or if the application of such Net Loss Proceeds is part of a project
authorized by the Board of Directors of the Company in good faith that will
take longer than 90 days (but in no event longer than 270 days in the
aggregate) to complete, and such project has begun, such 90—day period will be
extended with respect to the amount of Net Loss Proceeds so committed until
required to be paid in accordance with such agreement (or, if earlier, until
termination of such agreement) or until completion of such project, as the case
may be. Pending the final application of any Net Loss Proceeds, the Company or
any Restricted Subsidiary shall deposit such Net Loss Proceeds in the
Collateral Account.

Any Net Loss Proceeds
from an Event of Loss that are not applied or invested as provided in the first
sentence of the preceding paragraph will be deemed to constitute “Excess Loss
Proceeds.” When the aggregate amount of Excess Loss Proceeds exceeds $5.0 million
(such date, the “Loss Proceeds Offer Trigger Date”), the Company will make an
offer to all Holders and the holders of any Senior Secured Indebtedness (a “Loss
Proceeds Offer”) to purchase the maximum principal amount of Notes (and Senior
Secured Indebtedness) that may be purchased out of such Excess Loss Proceeds
(the “Loss Proceeds Offer Amount”), at an offer price in cash in an amount
equal to 100% of their principal amount plus accrued and unpaid interest and
Additional Interest, if any, to the date of purchase (subject to the right of
Holders of record on a record date to 

 25
 

 

receive interest and Additional Interest, if any, on
the relevant interest payment date in accordance with the procedures set forth
in this Indenture).

If the aggregate principal
amount of Notes surrendered by Holders exceeds the Excess Loss Proceeds to be
used to purchase Notes, the Trustee shall select the Notes to be purchased on a
pro rata basis. Notwithstanding anything to the contrary in the foregoing, the
Company may commence a Loss Proceeds Offer prior to the expiration of 270 days
after the occurrence of an Event of Loss. If any Excess Loss Proceeds remain
after the consummation of any Loss Proceeds Offer, the Company may use those
Excess Loss Proceeds for any purpose not otherwise prohibited by this
Indenture.

The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws or
regulations are applicable in connection with the repurchase of the Notes
pursuant to a Loss Proceeds Offer. To the extent that the provisions of any
applicable securities laws or regulations conflict with the provisions of this
Indenture, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.19 by virtue thereof.”

(g)           Section 4.23
of the Indenture is hereby deleted in its entirety and replaced with the
following:

 “Section 4.23        Limitation on Asset Acquisitions for Cash.

The
Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Acquisition if any part of the consideration therefor is
cash or Cash Equivalents unless:

(i)            the
Consolidated EBITDA of the Person or assets so acquired in the Asset
Acquisition was greater than zero for its most recently completed Four Quarter
Period (it being understood that in making such determination the Company can
rely, in good faith, on the representations and warranties of the seller of
such Person or assets and its principal officers); and

(ii)           the
total consideration paid by or on behalf of the Company in such Asset
Acquisition does not exceed 9.0x the increase in the Broadcast Cash Flow of the
Company resulting from such Asset Acquisition,

such Consolidated EBITDA
or increase in the Broadcast Cash Flow of the Company to be determined by the
Company in good faith on a pro forma basis consistent with the pro forma
adjustments described under the definition of “Consolidated Leverage Ratio,”
but also after giving effect to incremental revenue or expense and cost
reductions determined in good faith by the Company to be reasonably achievable
during the four fiscal quarter period succeeding such Asset Acquisition
(regardless of whether such incremental revenue or cost savings could be
reflected in pro forma financial statements under GAAP 

 26
 

 

or Regulation S—X
under the Securities Act) and evidenced in each case by an Officers’
Certificate of the Company setting forth such calculation.

(h)           Section 6.1
of the Indenture is hereby amended by deleting “or” immediately after paragraph
8, deleting the period at the end of paragraph (9) and replacing it with “;
or” and by adding a new paragraph (10) as follows:

“(10) a default in the observance or performance of any covenant
or agreement contained in the Supplemental Agreement and the default continues
for a period of 3 days.”

(i)            Section 7.5 of
the Indenture is hereby deleted in its entirety and replaced with the
following:

“Section 7.5   Notice
of Defaults.

If a Default or Event of Default occurs and is continuing, the Trustee
shall mail to Holders of Notes a notice of the Default or Event of Default
within 60 days after it occurs. Except in the case of a Default in payment on
any Note (including the failure to make a mandatory repurchase pursuant
hereto), the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice
is in the interests of the Holders of the Notes.”

(j)            Section 10.3(c) of
the Indenture is hereby deleted in its entirety and replaced with the
following:

“(c)  Notwithstanding any other provision in this Indenture or in
the Security Documents, prior to the delivery of an Acceleration Notice in accordance
with Section 6.2 hereof, the Company and the Guarantors shall also be
entitled to obtain a release of the Trustee to use cash or Cash Equivalents
(excluding any cash or Cash Equivalents held in the Collateral Account related
to any Asset Sale and any cash and Cash Equivalents held in the Repurchase
Sub-Account), to pay operating expenses and to pay interest on the Notes.”

(k)           The third paragraph
of Section 10.7 of the Indenture is hereby deleted in its entirety and
replaced with the following:

“Notwithstanding any other provision in this Indenture
or in the Security Documents, prior to the delivery of an Acceleration Notice
in accordance with Section 6.2 hereof, the Company and the Guarantors
shall also be entitled, without any release or consent of the Trustee, to use
cash or Cash Equivalents (excluding any cash and Cash Equivalents held in any
Collateral Account related to any Asset Sale and any cash and Cash Equivalents
held in the Repurchase Sub-Account), to pay operating expenses and to pay interest
on the Notes.”

(l)            The following is hereby added to the
Indenture as Section 10.12:

 27
 

 

“Section 10.12   Amendment
of Security Agreement.

The Security Agreement shall be amended as provided in
the Security Agreement Amendment substantially in the form attached as Exhibit J
hereto. It shall not be necessary for the Holders to approve the particular
form of any proposed amendment or waiver to the Security Agreement as it may be
amended from time to time in accordance with the terms of this Indenture. Any
consent given by the Holders of at least a majority in principal amount of the
then Outstanding Notes to amend, restate or replace the Security Agreement
(subject to Section 9.2) shall be deemed to be an authorization and
direction by such Holders to the Collateral Agent and Trustee to execute and
deliver the Security Agreement Amendment.”

(m)          The following is hereby added to the
Indenture as Section 12.9:

“Section 12.9.   Trustee Reserve Fund.

Upon the effectiveness of the Second Supplemental
Indenture, the Company shall transfer $1.0 million dollars to the Trustee to be
deposited by the Trustee in a sub-account of the Collateral Account, or such
other account as the Trustee may designate, to indemnify the Trustee, as set
forth in Section 7.7 of this Indenture (the “Trustee
Reserve Fund”), against all losses, liabilities, claims,
damages, or expenses incurred by it arising out of or in connection with the
administration of its duties under this Indenture (including Section 9.6
of this Indenture).

The Trustee shall have title to and shall be the owner of all monies in
the Trustee Reserve Fund and shall be authorized to use such monies, in its
sole discretion, for the purposes set forth in Section 7.7 of this
Indenture. However, any monies remaining in the Trustee Reserve Fund shall
revert to the Company eighteen months after the effectiveness of the Second
Supplemental Indenture if, at that time, no Event of Default has occurred and
is continuing and no unresolved claims are then pending against the Trustee in
connection with this Indenture as then supplemented; and if at that time any
such claims are unresolved, such that the funds are not then refunded to the
Company, any monies remaining in the Trustee Reserve Fund shall, upon
resolution thereof, be refunded to the Company.”

(n)           The following
Exhibits attached hereto shall be deemed to be attached to the Indenture:

Exhibit A                Form of
Series A Note

Exhibit B                Form of
Series B Note

Exhibit J                 Form of Security Agreement
Amendment

Exhibit K                Form of
Supplemental Agreement

 28
 

 

Section 4   Additional Guarantees.

Pursuant to Section 4.16
of the Indenture, each Additional Guarantor unconditionally guarantees all of
the Company’s Obligations under the Notes and the Indenture, as a Guarantor, on
the terms and conditions set forth in the Indenture, and otherwise agrees to be
bound by the terms and conditions of the Indenture, as a Guarantor.

Section 5.   Indenture.

Except as amended hereby,
the Indenture, the Security Documents and the Notes are in all respects
ratified and confirmed and all their terms shall remain in full force and
effect. From and after the effectiveness of this Second Supplemental Indenture,
any reference to the Indenture shall mean the Indenture as so amended by this
Second Supplemental Indenture.

Section 6.   Governing
Law.

THIS SECOND SUPPLEMENTAL
INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

Section 7.   Successors.

All agreements of the
Company, the Guarantors and the Trustee in this Second Supplemental Indenture
shall bind their respective successors and permitted assigns. This Second
Supplemental Indenture shall be binding upon each Holder of Notes and their
respective successors and assigns.

Section 8.   Counterpart
Originals.

The parties may sign any
number of copies of this Second Supplemental Indenture. Each signed copy shall
be an original, but all of them together represent the same agreement.

Section 9.   Effective
Date of this Second Supplemental Indenture.

This Second Supplemental
Indenture shall be effective pursuant to Section 9.4 of the Indenture
immediately upon execution by the Company and the Guarantors and delivery to
and execution by the Trustee of this Second Supplemental Indenture.

Section 10.   Trustee
Disclaimer.

 29
 

 

The Trustee accepts the
amendment of the Indenture effected by this Second Supplemental Indenture and
agrees to execute the trust created by the Indenture as hereby amended, but only
upon the terms and conditions set forth in the Indenture, including the terms
and provisions defining and limiting the liabilities and responsibilities of
the Trustee, which terms and provisions shall in like manner define and limit
its liabilities and responsibilities in the performance of the trust created by
the Indenture as hereby amended. Without limiting the generality of the
foregoing, the Trustee shall not be responsible in any manner whatsoever for or
with respect to any of the recitals or statements contained herein, all of
which recitals or statements are made solely by the Guarantors, or for or with
respect to (i) the validity, efficacy, or sufficiency of this Second
Supplemental Indenture or any of the terms or provisions hereof, (ii) the
proper authorization hereof by the Company or any Guarantor by corporate action
or otherwise, or (iii) the due execution hereof by the Company and each
Guarantor, and the Trustee makes no representation with respect to any such
matters.

Section 11.   Severability.

In case any provision of
this Second Supplemental Indenture shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

Section 12.   Headings.

The Section headings
of this Second Supplemental Indenture, which have been inserted for convenience
of reference only, are not to be considered a part of this Second Supplemental
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.

Section 13.   Trustee
Makes no Representation.

The Trustee makes no
representation as to the validity or sufficiency of this Second Supplemental
Indenture.

Section 14.   Reaffirmation
of Section 7.7.

The Company and each
Guarantor hereby reaffirm their indemnification obligations to the Trustee
pursuant to Section 7.7 of the Indenture in connection with the Trustee’s
execution of this Second Supplemental Indenture.

[Signature page follows]

 30
 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Second Supplemental Indenture to be duly
executed and delivered by their duly authorized officers as of the date first
above written.

 

	
  

  	
   

  	
  GRANITE BROADCASTING CORPORATION,

  	 

	
   

  	
   

  	
   

  	
   

  	
  as Issuer

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Lawrence I. Wills

  	 

	
   

  	
   

  	
   

  	
   

  	
  Name: Lawrence I. Wills

  	 

	
   

  	
   

  	
   

  	
   

  	
  Title: Senior Vice President - Chief Financial Officer

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  CHANNEL 11 LICENSE, INC.

  	 

	
   

  	
   

  	
  GRANITE RESPONSE TELEVISION, INC.

  	 

	
   

  	
   

  	
  KBJR LICENSE, INC.

  	 

	
   

  	
   

  	
  KBJR, INC.

  	 

	
   

  	
   

  	
  KBWB LICENSE, INC.

  	 

	
   

  	
   

  	
  KBWB, INC.

  	 

	
   

  	
   

  	
  KSEE LICENSE, INC.

  	 

	
   

  	
   

  	
  KSEE TELEVISION, INC.

  	 

	
   

  	
   

  	
  QUEEN CITY BROADCASTING OF NEW YORK, INC.

  	 

	
   

  	
   

  	
  WEEK-TV LICENSE, INC.

  	 

	
   

  	
   

  	
  WISE-TV, INC.

  	 

	
   

  	
   

  	
  WISE-TV LICENSE, LLC

  	 

	
   

  	
   

  	
  WKBW-TV LICENSE, INC.

  	 

	
   

  	
   

  	
  WTVH LICENSE, INC.

  	 

	
   

  	
   

  	
  WXON LICENSE, INC.

  	 

	
   

  	
   

  	
  WXON, INC.,

  	 

	
   

  	
   

  	
  WBNG, INC.

  	 

	
   

  	
   

  	
  WBNG LICENCE, INC.

  	 

	
   

  	
   

  	
   

  	
   

  	
  as Guarantors

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President, Secretary and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 31
 

 

 

	
  

  	
   

  	
  WTVH, LLC,

  
	
   

  	
   

  	
   

  	
  as a Guarantor

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  GRANITE BROADCASTING CORPORATION,

  
	
   

  	
   

  	
   

  	
  the Sole Member of WTVH, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  /s/ Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Senior Vice President - Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NEW YORK, 

  
	
   

  	
   

  	
   

  	
  as Trustee 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Remo J. Reale

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Remo J. Reale

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

 32Exhibit 4.3

 

 

 

GRANITE BROADCASTING CORPORATION

 

 

SUPPLEMENTAL AGREEMENT

 

Dated as of July 5, 2006

 

In relation to

 

SECOND SUPPLEMENTAL INDENTURE

 

And

 

CREDIT AND GUARANTY AGREEMENT

 

Each dated as of July 5,
2006

 

This SUPPLEMENTAL
AGREEMENT, dated as of July 5, 2006 (this “Agreement”), is made by
and among Granite Broadcasting Corporation, a Delaware corporation (the “Company”),
the parties identified as “Guarantors” on the signature pages hereof (the “Guarantors”)
and the parties identified as “Qualified Holders” on the signature pages hereto
(together with any investment fund or entity managed or controlled by Silver
Point Capital, L.P. or its affiliates, the “Qualified Holders”).

RECITALS:

A.            The Company, the Guarantors and The Bank of New York, as
trustee (the “Trustee”)  have
executed a Second Supplemental Indenture, dated as of the date hereof (the “Supplemental
Indenture”), to an Indenture, dated as of December 22, 2003 (as
amended, restated, modified and supplemented from time to time, the “Indenture”),
by and among the Company, the Original Guarantors and the Trustee in respect of
the Company’s 9-3/4% Senior Secured Notes due 2010 (the “Notes”).

B.            The Company, the guarantors party thereto, the lenders
party thereto and Silver Point Finance LLC, as administrative agent, are
entering into a Credit and Guaranty Agreement, dated as of July 5, 2006
(as amended, restated, modified and supplemented from time to time, the “Credit
Agreement”) contemporaneously with this Supplemental Agreement.

C.            The Company, the Guarantors and the Qualified Holders
party hereto wish to enter into certain additional agreements in connection
with the Supplemental Indenture and the Credit Agreement.

AGREEMENT:

NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, each party agrees as follows :

Section 1.   Capitalized
Terms.

Capitalized terms used
but not otherwise defined herein that are defined in the Indenture shall have
the meanings given to them in the Indenture.

Section 2.   Supplemental
Provisions.

Section 2.1   Certain
Restrictions.

The parties hereto hereby
agree that notwithstanding anything to the contrary contained in the Indenture,
at any time that Qualified Holders are the beneficial owners of at least a
majority in aggregate principal amount of the Notes then Outstanding, without
the prior written consent of Holders of at least a majority of the aggregate
principal amount of the Notes then Outstanding, the Company will not, and will
not permit 

 2
 

 

any of its Restricted
Subsidiaries to, directly or indirectly:

a.               create, incur,
assume, guarantee, acquire, become liable, contingently or otherwise, with
respect to any Permitted Indebtedness of the type described in clause (15) of
the definition of “Permitted Indebtedness” in the Indenture;

b.              make any Permitted
Investment of the types described in clause (1), (3)(v), (7) or (9) of
the definition of “Permitted Investment” in the Indenture; provided however
that in respect of clause (1), this restriction shall apply only in respect of
Persons that will become, after such an Investment, a Guarantor or that will
merge or consolidate into the Company or a Guarantor (other than the Binghamton
Acquisition and Permitted Business Acquisitions permitted by Section 6.8(f) of
the Credit Agreement as in effect on the date hereof (each of which, upon
consummation, will be owned by a Guarantor)); it being understood that nothing
herein shall limit Permitted Investments by the Company in the Guarantors as of
the date hereof or the creation of new Guarantors;

c.               create, incur,
assume or permit or suffer to exist any Permitted Liens of the type described
in clause (17) of the definition of “Permitted Liens” in the Indenture;

d.              consummate an Asset
Sale, other than the WB Disposition;

e.               make (by purchase,
merger, consolidation or otherwise) any Asset Acquisition or Permitted Business
Acquisition, other than the Binghamton Acquisition and Permitted Business
Acquisitions permitted by Section 6.8(f) of the Credit Agreement as
in effect on the date hereof;

f.                 consummate an
Asset Swap pursuant to Section 4.10(f) of the Indenture;

g.              issue or sell or
enter into any agreement or arrangement for the issuance and sale of any shares
of its Capital Stock, any securities convertible into or exchangeable for its
Capital Stock, or any warrants, options or other rights for the purchase or
acquisition of shares of its Capital Stock, except:

(1)          as provided in Section 11.1
of the Credit Agreement;

(2)          the issuance of the
Company’s 12.75% cumulative exchangeable preferred stock;

(3)          the issuance of any new
class of preferred stock by Company; provided that such preferred stock (i) matures
no earlier than December 31, 2011, (ii) is non-cash pay until at
least December 31, 2011, (iii) is not convertible or exchangeable
into any other security or for any value and (iv) is not Voting Stock and
does not have any equity voting rights, control rights, rights to elect

 3
 

 

directors
or similar rights except for voting rights as may be otherwise required by the
mandatory provisions of applicable law;

(4)          the issuance of any
common stock by a Subsidiary of the Company to the Company; and

(5)          the issuance of any
common stock by the Company; provided that such common stock is not Voting
Stock and does not have any equity voting rights, control rights, rights to
elect directors or similar rights except for voting rights as may be otherwise
required by the mandatory provisions of applicable law;

where for purposes hereof, “Voting Stock” of any Person as of
any date means the Capital Stock of such Person that is at the time entitled to
vote in the election of the board of directors of such Person; or

h.              agree to any
amendment, restatement, supplement or other modification to, or waiver of, any
provision of the WB Sale Agreements.

Section 2.2   Further
Supplemental Indenture.

The Company and the
Guarantors shall as promptly as practicable and, in any event, by not later
than July 31, 2006, enter into, and direct the Trustee to enter into, a
supplement to the Indenture which amends the Indenture to incorporate the
provisions set forth in Section 2 and Section 3 hereof; provided that
failure to satisfy the foregoing shall not be a breach of this Agreement if
such failure results from the failure of the Qualified Holders to execute and
deliver a consent to such supplement in substance as contemplated by this Section 2.2
or with modifications requested to facilitate the agreement by the Trustee or
the Company that are not adverse to the Qualified Holders.

Section 2.3   Notice
of Beneficial Ownership.

If the Qualified Holders
cease to be beneficial owners of at least a majority in aggregate principal
amount of the Notes then Outstanding, they shall provide notice of that fact to
the Company within 10 business days. In connection with any request by the
Company for any consent pursuant to, or amendment of, this Agreement, the
Qualified Holders will, at the time of notifying the Company of their
determination as to whether or not to consent to the request by the Company,
certify to the Company that they continue to be beneficial owners of at least a
majority in aggregate principal amount of the Notes then Outstanding.

Section 2.4   Change
of Control.

Upon a Modified Change of
Control (as defined below), the Company will offer to repurchase from each
Holder of the Notes all or such lesser portion of the Notes as 

 4
 

 

each such Holder shall specify on terms and in a
manner substantially the same as those that would apply to a Change of Control
Offer in the event that a Change of Control under the Indenture had occurred. For
purposes of this Agreement, a “Modified Change of Control” shall means the
replacement of a majority of the board of directors of the Company over a
one-year period (any such period to begin after the date hereof) who
constituted the board of directors of the Company at the beginning of such
period, provided that any director that becomes a director after the date hereof
that is “independent” as defined under the rules and regulations of the
New York Stock Exchange and approved by the Qualified Holders (which approval
shall not be unreasonably withheld or delayed in light of the circumstances
surrounding the appointment of such director) shall be deemed to be a director
at the beginning of any such period.

Section 2.5   Notice
of Defaults.

If a Default or Event of
Default occurs and is continuing, the Company will deliver to the Qualified
Holders a copy of any notice of the Default or Event of Default that is
delivered to the Trustee pursuant to Section 4.4 of the Indenture. Such
notice shall be delivered to the Qualified Holders by the Company at the same
time that it is delivered to the Trustee.

Section 3.   Termination.

This Agreement shall
terminate in the event that Qualified Holders cease to be beneficial owners of
at least a majority in aggregate principal amount of the Notes then Outstanding.
In the event of termination, the Company will remain liable to Qualified
Holders for any breach of this Agreement by the Company existing at the time of
such termination.

Section 4.   Survival.

The provisions of this
Supplemental Agreement shall survive the termination of the Credit Agreement.

Section 5.   Notices.

Any
notice or communication hereunder shall be duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested),  telecopier or
overnight air courier guaranteeing next day delivery.

Any
such notice must be sent,

a.   if
to the Company or a Guarantor, to:

Granite Broadcasting Corporation

767 Third Avenue

 5
 

 

34th Floor

New York, New York 10017

Fax: (212) 826-2858

or to the Company or such Guarantor at such other address as the
Company or such Guarantor shall have specified to the Qualified Holders in
writing; and

b.   if to a
Qualified Holder, to:

Silver Point Capital, L.P.

2 Greenwich Plaza, 1st Floor

Greenwich, CT 06830

Attn: Fred Fogel

Fax:  (203)
542-4308

or to such Qualified
Holder at such other address as such Qualified Holder shall have specified to
the Company and each Guarantor in writing.

Section 6.   Governing
Law.

THIS SUPPLEMENTAL
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

Section 7.   Successors.

All agreements of the
parties hereto shall bind their respective successors and permitted assigns.

Section 8.   Counterpart Originals.

The parties may sign any
number of copies of this Supplemental Agreement. Each signed copy shall be an
original, but all of them together represent the same agreement.

Section 9.   Effective
Date of this Supplemental Agreement.

This Supplemental
Agreement shall be effective immediately upon its execution by each of the
parties hereto, delivery to and execution of the Second Supplemental Indenture
by each of the parties thereto, and delivery and execution of the Credit
Agreement by each of the parties thereto.

Section 10.   Severability.

 6
 

 

In case any provision of
this Supplemental Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

Section 11.   Headings.

The Section headings
of this Supplemental Agreement, which have been inserted for convenience of
reference only, are not to be considered a part of this Supplemental Agreement
and shall in no way modify or restrict any of the terms or provisions hereof.

[Signature page follows]

 7
 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Supplemental Agreement to be duly executed and
delivered by their duly authorized officers as of the date first above written.

 

	
  

  	
   

  	
  GRANITE BROADCASTING CORPORATION,

  
	
   

  	
   

  	
   

  	
  as the Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lawrence I. Wills

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Lawrence I. Wills

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice President - Chief Financial
  Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CHANNEL 11 LICENSE, INC.

  
	
   

  	
   

  	
  GRANITE RESPONSE TELEVISION, INC.

  
	
   

  	
   

  	
  KBJR LICENSE, INC.

  
	
   

  	
   

  	
  KBJR, INC.

  
	
   

  	
   

  	
  KBWB LICENSE, INC.

  
	
   

  	
   

  	
  KBWB, INC.

  
	
   

  	
   

  	
  KSEE LICENSE, INC.

  
	
   

  	
   

  	
  KSEE TELEVISION, INC.

  
	
   

  	
   

  	
  QUEEN CITY BROADCASTING OF NEW YORK, INC.

  
	
   

  	
   

  	
  WEEK-TV LICENSE, INC.

  
	
   

  	
   

  	
  WISE-TV, INC.

  
	
   

  	
   

  	
  WISE-TV LICENSE, LLC

  
	
   

  	
   

  	
  WKBW-TV LICENSE, INC.

  
	
   

  	
   

  	
  WTVH LICENSE, INC.

  
	
   

  	
   

  	
  WXON LICENSE, INC.

  
	
   

  	
   

  	
  WXON, INC.,

  
	
   

  	
   

  	
  WBNG, INC.

  
	
   

  	
   

  	
  WBNG LICENSE, INC.

  
	
   

  	
   

  	
   

  	
   

  	
  as Guarantors

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President, Secretary and Treasurer

  
							

 

 8
 

 

 

	
  

  	
   

  	
  WTVH, LLC,

  
	
   

  	
   

  	
   

  	
  as a Guarantor

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  GRANITE BROADCASTING CORPORATION,

  the Sole Member of WTVH, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Senior Vice President - Chief Financial
  Officer

  

 

 9
 

 

 

	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Silver Point Capital, L.P.

  
	
   

  	
   

  	
   

  	
  as a Qualified Holder

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ F. Fogel

  
	
   

  	
   

  	
   

  	
  Name:

  	
  F. Fogel

  
	
   

  	
   

  	
   

  	
  Title:

  	
  General Counsel

  

 

 10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]