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                          SECURITIES PURCHASE AGREEMENT

                                  BY AND AMONG

                        YOUTHSTREAM MEDIA NETWORKS, INC.,

                         YOUTHSTREAM ACQUISITION CORP.,

                              KES HOLDINGS, LLC AND

                         ATACAMA CAPITAL HOLDINGS, LTD.

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                             Dated February 25, 2005

                          SECURITIES PURCHASE AGREEMENT

     SECURITIES PURCHASE AGREEMENT (this "AGREEMENT") dated as of February 25,
2005 by and among YOUTHSTREAM MEDIA NETWORKS, INC., a Delaware corporation
("YOUTHSTREAM"), YOUTHSTREAM ACQUISITION CORP., a Delaware corporation (the
"PURCHASER"), KES HOLDINGS, LLC, a Delaware limited liability company ("KES
HOLDINGS"), and ATACAMA CAPITAL HOLDINGS, LTD., a British Virgin Islands company
("ACH"). KES Holdings and ACH are sometimes hereinafter each referred to as a
"SELLER" and collectively referred to as the "SELLERS." Capitalized terms that
are not defined shall have the meaning ascribed to such terms in Section 9.3.

                                   WITNESSETH:

     WHEREAS, KES Holdings is the record and beneficial owner of a 37.45%
membership interest (the "KES HOLDINGS MEMBERSHIP INTEREST") of KES Acquisition
Company, LLC, a Delaware limited liability company (the "COMPANY"), and Atacama
KES Holding Corporation, a Delaware corporation, which is a wholly owned
subsidiary of ACH ("AKHC"), owns a 62.55% membership interest (the "AKHC
MEMBERSHIP INTEREST") in the Company. The KES Holdings Membership Interest and
the AKHC Membership Interests are referred to herein as the "MEMBERSHIP
INTERESTS." The stock of AKHC is referred to herein as the "AKHC STOCK." The
Company owns and operates a steel mini-mill located in Ashland, Kentucky (the
"BUSINESS").

     WHEREAS, KES Holdings desires to sell, and the Purchaser desires to
purchase, the KES Holdings Membership Interest and ACH desires to sell, and
Purchaser desires to purchase, the AKHC Stock (collectively, the "PURCHASED
SECURITIES") pursuant to the provisions of this Agreement such that after giving
effect to such purchase, 100% of the total Membership Interests will be owned,
directly and indirectly, by the Purchaser.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:

                                    ARTICLE 1

                        SALE OF THE PURCHASED SECURITIES

     SECTION 1.1 SALE OF THE PURCHASED SECURITIES. Subject to the terms and
conditions herein stated, each of the Sellers agrees, severally and not jointly,
to sell, assign, transfer and deliver to the Purchaser on the Closing Date (as
defined in Section 2.4), and the Purchaser agrees to purchase from each of the
Sellers on the Closing Date, the Purchased Securities.

                                       2

                                    ARTICLE 2

                           PURCHASE PRICE AND CLOSING

     SECTION 2.1 PURCHASE PRICE. In full consideration for the purchase by the
Purchaser of the Purchased Securities, the purchase price (the "PURCHASE PRICE")
shall be paid by the Purchaser to the Sellers as follows:

          (a) SERIES B NON-VOTING COMMON STOCK. The Purchaser shall issue to the
Sellers shares of its Series B Non-Voting Common Stock (the "SERIES B COMMON
STOCK") as follows: (i) KES Holdings shall be issued five thousand nine hundred
ninety seven (5,997) shares of Series B Common Stock which represents,
Thirty-Seven and One-Half Percent (37.5%) of the outstanding Series B Common
Stock and (ii) ACH shall be issued nine thousand nine hundred ninety-five
(9,995) shares of Series B Common Stock which represents Sixty-Two and One-Half
Percent (62.5%) of the outstanding Series B Common Stock. The Series B Common
Stock shall be issued pursuant to that certain Series B Non-Voting Common Stock
Purchase Agreement, a form of which is attached to this Agreement as Exhibit A
(the "SERIES B COMMON PURCHASE AGREEMENT").

          (b) SERIES A PREFERRED STOCK. The Purchaser shall issue to the Sellers
shares of its Series A Non-Voting Preferred Stock (the "SERIES A PREFERRED
STOCK") as follows: (i) KES Holdings shall be issued Ten Thousand (10,000)
shares of Series A Preferred Stock and (ii) ACH shall be issued Fifteen Thousand
(15,000) shares of Series A Preferred Stock. The Series A Preferred Stock shall
be issued pursuant to that certain Series A Preferred Stock Purchase Agreement,
a form of which is attached to this Agreement as Exhibit B (the "SERIES A
PREFERRED PURCHASE AGREEMENT"). The parties hereto agree that the Series A
Preferred Stock shall be treated as preferred stock for income tax purposes, and
agree not to take a position inconsistent therewith.

          (c) PROMISSORY NOTES. The Purchaser shall issue promissory notes (the
"PROMISSORY NOTES") to the Sellers in the aggregate principal amount of Forty
Million Dollars ($40,000,000) as follows: (i) KES Holdings shall be issued
promissory notes in the aggregate principal amount of Nineteen Million Dollars
($19,000,000) and (ii) ACH shall be issued promissory notes in the aggregate
principal amount of Twenty-One Million Dollars ($21,000,000). The Promissory
Notes shall be issued pursuant to that certain Note Purchase Agreement, a form
of which is attached to this Agreement as Exhibit C (the "NOTE PURCHASE
AGREEMENT").

     SECTION 2.2 PAYMENT OF THE PURCHASE PRICE. Payment of the Purchase Price
shall be made by the Purchaser via delivery of the original instruments set
forth in Section 2.1 hereto in the manner directed by KES Holdings and ACH on or
prior to the Closing (as hereinafter defined).

     SECTION 2.3 SERIES A VOTING COMMON STOCK ISSUANCE. At or prior to the
Closing, YouthStream shall have contributed, in the aggregate, Five Hundred
Thousand Dollars ($500,000) in cash to the Purchaser in exchange for an
aggregate of 64,008 shares of Series A Voting Common Stock (the "SERIES A COMMON
STOCK") which represents One Hundred Percent

                                       3

(100%) of the outstanding Series A Voting Common Stock of the Purchaser. The
Series A Common Stock shall be issued pursuant to that certain Series A Common
Stock Purchase Agreement, a form of which is attached to this Agreement as
Exhibit D (the "SERIES A COMMON PURCHASE AGREEMENT").

     SECTION 2.4 CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place on February 28, 2005 (such date is
herein referred to as the "CLOSING DATE"), or at such other time and place as
the parties hereto may mutually agree upon and shall be held at the offices of
Pillsbury Winthrop LLP, 11682 El Camino Real, Suite 200, San Diego, California
92130 or by the exchange of documents and instruments by mail, courier, fax and
wire transfer to the extent mutually acceptable to the parties hereto.

     SECTION 2.5 COOPERATION. The Purchaser, YouthStream, KES Holdings and ACH
shall cooperate fully as and to the extent reasonably requested by any other
party, in connection with any audit, litigation or other proceeding. Such
cooperation shall include the retention and (upon any other party's request) the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. KES Holdings and ACH agree to (A) retain all
books and records with respect to any audit, litigation or other proceeding
until the expiration of the statute of limitations (and, to the extent notified
by the Purchaser, any extensions thereof), and to abide by all record retention
agreements entered into with any applicable authority, and (B) give any other
party reasonable written notice prior to transferring, destroying or discarding
any such books and records and, if any other party so requests, KES Holdings or
ACH, as the case may be, shall allow any other party to take possession of such
books and records.

                                    ARTICLE 3

                         REPRESENTATIONS OF THE SELLERS

     SECTION 3.1 EXECUTION AND VALIDITY OF AGREEMENTS; RESTRICTIVE DOCUMENTS.
Except as set forth on the Schedule of Exceptions attached to this Agreement as
Exhibit E, each of KES Holdings and ACH, severally and not jointly, hereby
represent, warrant and agree as to their respective statements set forth below,
as follows (for the avoidance of doubt, each party shall be deemed to make the
representations and warranties with respect only to its power and authority, and
its own business, properties, assets and financial condition and shall not be
deemed to make the representations and warranties with respect to the power or
authority or business, properties, assets and financial condition of the other
party):

     3.1.1 Execution and Validity. Each of the Sellers has the full power and
authority to enter into this Agreement and the specific agreements requiring the
signatures of Sellers as set forth herein (collectively, "OTHER SELLER
AGREEMENTS") and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement by each of the Sellers and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all required limited liability company or other company
action on behalf of KES Holdings and ACH. Each of this Agreement and the Other
Seller Agreements has been duly and validly executed and delivered by each
Seller and, assuming due authorization, execution and

                                       4

delivery by the Purchaser and any other party thereto, constitutes a legal,
valid and binding obligation of each Seller, enforceable against it in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights and (b) general principles of equity
that restrict the availability of equitable remedies.

     3.1.2 No Restrictions. There is no suit, action, claim, investigation or
inquiry by any court, tribunal, arbitrator, authority, agency, commission,
official or other instrumentality of the United States, any foreign country or
any domestic or foreign state, county, city or other political subdivision
("GOVERNMENTAL OR REGULATORY AUTHORITY"), and no legal, administrative or
arbitration proceeding pending or, to each Seller's knowledge, threatened
against it or any of its assets or properties with respect to the execution,
delivery and performance of this Agreement or the transactions contemplated
hereby or any other agreement entered into by Sellers in connection with the
transactions contemplated hereby.

     3.1.3 Non-Contravention. The execution, delivery and performance by each
Seller of its obligations hereunder and the consummation of the transactions
contemplated hereby, will not (a) violate, conflict with or result in the breach
of any provision of the Certificate of Formation and Limited Liability Company
Agreement of KES Holdings, (b) violate, conflict with or result in the breach of
any provision of the Certificate of Formation and Limited Liability Company
Agreement (or other comparable documents) of ACH or the Certificate of
Incorporation of AKHC, (c) to each Seller's knowledge result in the violation by
it of any statute, law, rule, regulation or ordinance (collectively, "LAWS"), or
any judgment, decree, order, writ, permit or license (collectively, "ORDERS"),
of any Governmental or Regulatory Authority, applicable to it, or any of its
assets or properties, or (d) conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under, or
require it to obtain any consent, approval or action of, make any filing with or
give any notice to, or result in or give to any Person (as defined in Section
9.3) any right of payment or reimbursement, termination, cancellation,
modification or acceleration of, or result in the creation or imposition of any
Lien upon any of its assets or properties, under any of the terms, conditions or
provisions of any agreement, commitment, lease, license, evidence of
indebtedness, mortgage, indenture, security agreement, instrument, note, bond,
franchise, permit, concession, or other instrument, obligation or agreement of
any kind (collectively, "CONTRACTS"), to which it is a party or by which it or
any of its assets or properties are bound (except with respect to clause (d),
for such conflicts, violations, breaches, defaults, payments, reimbursements,
terminations, cancellations, modifications or accelerations, as would not,
individually or in the aggregate, constitute a Material Adverse Effect).

     3.1.4 Approvals and Consents. No consent, approval or action of, filing
with or notice to any Governmental or Regulatory Authority or Person is
necessary or required under any of the terms, conditions or provisions of any
Law or Order of any Governmental or Regulatory Authority or any Contract to
which any Seller is a party or any of their respective assets or properties are
bound for the execution and delivery of this Agreement by the Sellers, the
performance by each of the Sellers of its obligations hereunder or the
consummation of the transactions contemplated hereby.

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     3.1.5 Ownership; No Options or Restrictions. ACH owns of record and
beneficially and has valid title to all of the issued and outstanding AKHC
Stock, and AKHC owns of record and beneficially and has valid title to the AKHC
Membership Interest, and such ownership of both the AKHC Stock and the AKHC
Membership Interest is free and clear of all Liens. AKHC was formed in Delaware
on November 30, 2004. KES Holdings owns of record and beneficially and has valid
title to the KES Holdings Membership Interest, and such ownership is free and
clear of all Liens. Except for the AKHC Stock being purchased pursuant to this
Agreement, there are no outstanding subscriptions, options, rights, warrants,
calls, commitments or arrangements of any kind to acquire any of the AKHC Stock
or the Membership Interests and there are no agreements or understandings with
respect to the sale or transfer of any of the AKHC Stock or the Membership
Interests.

     Except as set forth on the Schedule of Exceptions attached to this
Agreement as Exhibit E, KES Holdings represents, warrants and agrees as follows:

     SECTION 3.2 EXISTENCE AND GOOD STANDING. The Company is duly formed and is
validly existing and in good standing (including tax good standing) under the
laws of the State of Delaware, with the requisite power and authority to own its
property and to carry on the Business as it is now being conducted. The Company
is duly qualified to do business and is in good standing in the State of
Kentucky, which is the only jurisdiction in which the conduct or nature of its
business, makes such qualification necessary and where the failure to qualify
would have a Material Adverse Effect.

     SECTION 3.3 OWNERSHIP; NO OPTIONS OR RESTRICTIONS. The Membership Interests
owned by KES Holdings and AKHC represent 100% of the issued and outstanding
Membership Interests. There are no outstanding subscriptions, options, warrants,
rights (including "phantom stock rights"), calls, commitments, understandings,
conversion rights, rights of exchange, plans or other agreements of any kind
providing for the purchase, issuance or sale of any Membership Interest or other
equity security of the Company.

     SECTION 3.4 FINANCIAL STATEMENTS AND NO MATERIAL CHANGES. SCHEDULE 3.4 sets
forth (a) the unaudited balance sheet of the Company (for these purposes the
term "Company" means the Company and its predecessor, Kentucky Electric Steel,
Inc. (the "PREDECESSOR ENTITY") for all relevant periods) as of December 31,
2004 and the related unaudited statements of income for the fiscal year then
ended, and (b) the unaudited balance sheet of the Company as of January 31, 2005
and the related unaudited statement of income for the one (1) month then ended
(the unaudited balance sheet of the Company as of January 31, 2005 being
referred to herein as the "BALANCE SHEET"). Such financial statements have been
prepared in accordance with GAAP throughout the periods indicated, except for
the omission of footnote disclosure with respect to the unaudited balance sheet
as of January 31, 2005 and the related statement of income for the one (1) month
period then ended (the "INTERIM FINANCIAL STATEMENTS") and any ordinary year-end
adjustments with respect to such Interim Financial Statements. The Balance Sheet
fairly presents the financial condition of the Company, at the date thereof, and
reflects all claims against and all debts and liabilities of the Company, fixed
or contingent, at the date thereof, required to be shown thereon under GAAP and
the related statements of income fairly present the results of income for the
respective periods indicated. Since January 31, 2005 (the "BALANCE

                                       6

SHEET DATE"), there has been no material adverse change in the assets or
liabilities, or in the Business or condition, financial or otherwise, or in the
results of operations of the Company.

     SECTION 3.5 BOOKS AND RECORDS. All accounts, books, ledgers and other
records material to the Company have been properly and accurately kept and are
complete in all material respects, and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein. KES Holdings has
delivered to the Purchaser complete and correct copies of the Certificate of
Formation and Limited Liability Company Agreement of the Company, with all
amendments thereto, currently in effect, and its minute books and equity
transfer records.

     SECTION 3.6 TITLE TO PROPERTIES; ENCUMBRANCES. The Company now has good and
valid title to, or enforceable leasehold interests in or valid rights under
contract to use, all the properties and assets owned or used by it (real,
personal, tangible and intangible), in each case free and clear of all Liens,
except for Liens set forth on SCHEDULE 3.6. The property, plant and equipment
located at the Company's premises in Ashland, Kentucky (the "FACILITY"), whether
owned or otherwise contracted for, is in a state of good maintenance and repair
(ordinary wear and tear excepted) and is adequate and suitable for the purposes
for which they are presently being used.

     SECTION 3.7 REAL PROPERTY.

     3.7.1 Owned Real Property. SCHEDULE 3.7.1 contains an accurate and complete
list of all real property owned by the Company ("OWNED REAL PROPERTY"). Other
than the Owned Real Property, the Company does not own any real property
(including ground leases) or hold a freehold interest in any real property or
any option or right of first refusal or first offer to acquire any real property
and the Company is not obligated by Contract or otherwise to purchase any real
property. The Owned Real Property is in a state of good maintenance and repair,
is adequate and suitable for the purposes for which it is presently being used,
and there are no material repair or restoration works likely to be required in
connection with any of such owned real properties. There are no pending or to
the knowledge of KES Holdings, threatened condemnation or similar proceedings or
special assessments relating to the Owned Real Property. There are no leases,
subleases, licenses or other agreements, written or oral, granting to any party
the right of use or occupancy of any portion of the Owned Real Property. The
Company has received all required approvals of Governmental or Regulatory
Authorities (including, without limitation, permits and certificates of
occupancy or other such certificates permitting lawful occupancy of the Owned
Real Property) required in connection with the Company's use of the Owned Real
Property and all improvements thereon.

     3.7.2 Leased Real Property. SCHEDULE 3.7.2 contains an accurate and
complete list of all real property leases, subleases, licenses and other
occupancy agreements, including without limitation, any modification, amendment
or supplement thereto and any other related document or agreement executed or
entered into by the Company (including, without limitation, any Real Property
Lease which the Company has subleased or assigned to another Person and as to
which the Company remains or will remain liable) (each individually, a "REAL
PROPERTY LEASE" and collectively, the "REAL PROPERTY LEASES"). Each Real
Property Lease (a) is valid, binding and in full force and effect, enforceable
against the Company in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of

                                       7

general application affecting enforcement of creditors' rights and (ii) general
principles of equity that restrict the availability of equitable remedies; (b)
all rents and additional rents and other sums, expenses and charges due
thereunder to date on each such Real Property Lease have been paid; (c) there
exists no default or event of default by the Company or to the knowledge of KES
Holdings, by any other party to any Real Property Lease; and there exists no
occurrence, condition or act (including the purchase of the Purchased Securities
hereunder) which, with the giving of notice, the lapse of time or the happening
of any further event or condition, would become a default or event of default by
the Company under any Real Property Lease; and (d) there are no outstanding
claims of breach or indemnification or notice of default or termination of any
Real Property Lease. The Company holds the leasehold estate on all the Real
Property Leases free and clear of all Liens and any mortgagees' liens on the
real property in which such leasehold estate is located and liens which do not
and will not materially detract from or interfere with the use of the
properties, or otherwise materially impair business operations involving such
properties. The real property leased by the Company is in a state of good
maintenance and repair, is adequate and suitable for the purposes for which it
is presently being used and there are no material repair or restoration works
likely to be required in connection with any of such leased real properties.

     SECTION 3.8 CONTRACTS. SCHEDULE 3.8 hereto contains an accurate and
complete list of all of the material agreements to which the Company is
currently a party (each, a "CONTRACT"). Each Contract is in full force and
effect, except as limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (b) general principles of equity that
restrict the availability of equitable remedies, and there exists no default or
event of default by the Company or, to the knowledge of the Sellers, by any
other party, or occurrence, condition, or act (including the purchase of the
Purchased Securities hereunder) which, with the giving of notice, the lapse of
time or the happening of any other event or condition, would become a default or
event of default thereunder by the Company, and there are no outstanding claims
of breach or indemnification or notice of default or termination of any such
Contract.

     SECTION 3.9 NON-CONTRAVENTION; APPROVALS AND CONSENTS.

     3.9.1 Non-Contravention. The execution, delivery and performance by the
Company of its obligations under this Agreement and the consummation of the
transactions contemplated hereby and thereby, will not (a) violate, conflict
with or result in the breach of any provision of the Certificate of Formation
and Limited Liability Company Agreement of the Company; (b) to KES Holdings'
knowledge, result in the violation by the Company of any Laws or Orders of any
Governmental or Regulatory Authority applicable to the Company or any of its
assets or properties, or (c) if the consents and notices set forth in SCHEDULE
3.9.2 are obtained, given or waived, conflict with, result in a violation or
breach of, constitute (with or without notice or lapse of time or both) a
default under, or require the Company to obtain any consent, approval or action
of, make any filing with or give any notice to, or result in or give to any
Person any right of payment or reimbursement, termination, cancellation,
modification or acceleration of, or result in the creation or imposition of any
Lien upon any of the assets or properties of the Company, or under any of the
terms, conditions or provisions of any Contract.

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     3.9.2 Approvals and Consents. Except as set forth on SCHEDULE 3.9.2, no
consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority or other Person is necessary or required under any of the
terms, conditions or provisions of any Law or Order of any Governmental or
Regulatory Authority or any Contract to which the Company is a party, or by
which its assets or properties were or are bound for the execution and delivery
of this Agreement by the Company, the performance by the Company of its
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby.

     SECTION 3.10 LITIGATION. Except as set forth on SCHEDULE 3.10, there is no
action, suit, proceeding at law or in equity by any Person, or any employee
grievance, arbitration or any administrative or other proceeding by or before
(or to the knowledge of each of the Sellers, any investigation by) any
Governmental or Regulatory Authority, pending or, to the knowledge of each of
the Sellers, threatened, against the Company with respect to this Agreement or
the transactions contemplated hereby, or against or affecting the Business; and
no acts, facts, circumstances, events or conditions have occurred or exist which
are a basis for any such action, proceeding or investigation. Except as set
forth on SCHEDULE 3.10, neither KES Holdings nor the Company is subject to any
Order entered in any lawsuit or proceeding.

     SECTION 3.11 TAXES. The Company has timely completed and filed, or caused
to be filed, taking into account any valid extensions of due dates, all material
federal, state, local and foreign (if any) tax or information returns (including
estimated tax returns) required under the statutes, rules or regulations of such
jurisdictions to be filed by the Company. The term "TAXES" means taxes, duties,
charges or levies of any nature imposed by any taxing or other Governmental or
Regulatory Authority, including without limitation income, gains, capital gains,
surtax, capital, franchise, value-added taxes, taxes required to be deducted
from payments made by the payor and accounted for to any tax authority,
employees' income withholding, back-up withholding, withholding on payments to
foreign Persons, social security, national insurance, unemployment, worker's
compensation, payroll, disability, real property, personal property, sales, use,
goods and services or other commodity taxes, business, occupancy, excise,
customs and import duties, transfer, stamp, and other material taxes (including
interest, penalties or additions to tax in respect of the foregoing), and
includes all taxes payable by the Company pursuant to Treasury Regulations
Section 1.1502-6 or any similar provision of state, local or foreign law. All
Taxes shown on said returns to be due and all other Taxes due and owing (whether
or not shown on any Tax return) have been paid and all additional assessments
received prior to the date hereof have been paid. The Company has collected all
material sales, use, goods and services or other commodity Taxes required to be
collected and remitted or will remit the same to the appropriate taxing
authority within the prescribed time periods. The Company has withheld all
material amounts required to be withheld on account of Taxes from amounts paid
to employees, former employees, directors, officers, members, residents and
non-residents and remitted or will remit the same to the appropriate taxing
authorities within the prescribed time periods. The amount established as an
accrual for Taxes (apart from any reserved for deferred Taxes established to
reflect timing differences between book and Tax accrual) on the Balance Sheet
(without regard to the notes thereto) is sufficient for the payment of all
material unpaid Taxes of the Company whether or not disputed, for all periods
ended on and prior to the date thereof. Since the Balance Sheet Date, the
Company has not incurred any material liabilities for Taxes other than in the
ordinary course of business. KES Holdings has delivered to the Purchaser correct
and complete copies of all federal, state and local income tax returns filed
with

                                       9

respect to the Company for all taxable periods since its formation. None of the
federal, state or local income tax returns of the Company have ever been audited
by the Internal Revenue Service or any other Governmental or Regulatory
Authority. No examination of any return of the Company is currently in progress,
and KES Holdings has not received notice of any proposed audit or examination.
No deficiency in the payment of Taxes by the Company for any period has been
asserted in writing by any taxing authority and remains unsettled at the date of
this Agreement. The Company has not made any agreement, waiver or other
arrangement providing for an extension of time with respect to the assessment or
collection of any Taxes against it. The Company has not been a member of an
affiliated group filing consolidated federal income tax returns nor has it been
included in any combined, consolidated or unitary state or local income tax
return. The Company is not obligated to make any payments or is a party to any
agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Section 280G of the Code. Neither KES
Holdings, nor to KES Holding's knowledge, ACH, nor the Company has entered into
any Tax sharing or indemnification agreement with any party prior to the date
hereof. Neither the Company nor the Purchaser will be required to include any
item of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any: (A) change in method of accounting of the Company for a taxable period
ending on or prior to the Closing Date; (B) "closing agreement" of the Company
as described in Code Section 7121 (or any corresponding or similar provision of
state, local, or foreign income tax law); (C) installment sale or open
transaction disposition made by the Company on or prior to the Closing Date; or
(D) prepaid amount received by the Company on or prior to the Closing Date.
Since its formation, the Company has been treated as either a disregarded entity
or as a partnership for purposes of federal, state and local income tax laws
and, accordingly, has not been separately subject to federal or state tax based
on its gross or net income.

     SECTION 3.12 LIABILITIES. Except as set forth on the Balance Sheet or as
set forth in SCHEDULE 3.12, neither KES Holdings nor the Company has any
outstanding claims, liabilities or indebtedness of any nature whatsoever as to
which the Company is or may become responsible (collectively in this Section
3.12, "LIABILITIES"), whether accrued, absolute or contingent, determined or
undetermined, asserted or unasserted, and whether due or to become due, other
than (i) Liabilities specifically disclosed in any Schedule hereto (including,
pursuant to any document referrals in the Schedules); (ii) Liabilities which are
individually or in the aggregate not material to the Business; and (iii)
Liabilities incurred in the ordinary course of business and consistent with past
practice of the Company since the Balance Sheet Date not involving borrowings.

     SECTION 3.13 INSURANCE. SCHEDULE 3.13 contains a true and complete list of
all liability, property, workers' compensation and other insurance policies
currently in effect that insure the property, assets or business of the Company
or the employees of the Company (other than self-obtained insurance policies by
such employees). A copy of each such policy has been delivered to the Purchaser.
Each such insurance policy is valid and binding and in full force and effect,
all premiums due thereunder have been paid and the Company has not received any
notice of cancellation or termination in respect of any such policy or default
thereunder. In light of the nature of the Company's business, assets and
properties, KES Holdings believes they are in the amounts and have coverage that
are reasonable and customary for Persons engaged in such business and have such
assets and properties. Neither the Company nor, to the knowledge of

                                       10

KES Holdings, the Person to whom such policy has been issued has received notice
that any insurer under any policy referred to in this Section 3.13 is denying
liability with respect to a claim thereunder or defending under a reservation of
rights clause. Since the date on which the Company acquired the assets of the
Predecessor Entity (the "ACQUISITION DATE"), the Company has not filed for any
claims exceeding $25,000 against any of its insurance policies, exclusive of
automobile and health insurance policies. None of such policies shall lapse or
terminate by reason of the transactions contemplated by this Agreement and all
such policies shall continue in effect after the Closing Date for the benefit of
the Company. The Company has not received any notice of cancellation of any such
policy. KES Holdings has not received notice from any of its insurance carriers
that any premiums will be materially increased in the future or that any
insurance coverage listed on SCHEDULE 3.13 will not be available in the future
on substantially the same terms now in effect.

     SECTION 3.14 INTELLECTUAL PROPERTIES.

     3.14.1 Definitions. For purposes of this Agreement, the following terms
have the following definitions:

          "INTELLECTUAL PROPERTY" shall include, without limitation, any or all
of the following and all rights associated therewith: (a) all domestic and
foreign patents, and applications therefor, and all reissues, reexaminations,
divisions, renewals, extensions, continuations and continuations-in-part
thereof; (b) all inventions (whether patentable or not), invention disclosures,
improvements; (c) trade secrets, confidential and proprietary information, know
how, technology, technical data and customer lists, financial and marketing
data, pricing and cost information, business and marketing plans, databases and
compilations of data, rights of privacy and publicity, and all documentation
relating to any of the foregoing; (d) all copyrights, copyright registrations
and applications therefor, unregistered copyrights, the content of all World
Wide Web sites of the Company, and all other rights corresponding thereto
throughout the world; (e) all mask works, mask work registrations and
applications therefor; (f) all industrial designs and any registrations and
applications therefor; (g) all trade names, company names, logos, trade dress,
common law trademarks and service marks, trademark and service mark
registrations and applications therefor and all goodwill associated therewith;
(h) any and all Internet domain names and Web sites (including all software and
applications, and all components and/or modules thereof), used in connection
therewith; and (i) all computer software including all source code, object code,
firmware, development tools, files, records and data, all media on which any of
the foregoing is recorded, and all documentation related to any of the
foregoing.

          "INTELLECTUAL PROPERTY OF THE COMPANY" shall mean any Intellectual
Property that: (a) is owned by or exclusively licensed to the Company, or (b)
which is used in the operation of the Business, but shall specifically not
include any rights in or to materials created for customers as
"work-made-for-hire" or which are subject to an assignment in favor of customers
of the Company.

     3.14.2 Representations. SCHEDULE 3.14.2 hereto contains an accurate and
complete list of all registered trademarks, applications for registered
trademarks, registered service marks, applications for registered service marks,
and logos which are used in connection with the operation of the Business (the
"REGISTERED IP"). The Company has no patents or patent applications pending. The
registrations and applications of the Registered IP are owned by and

                                       11

are in the name of the Company and are valid, in proper form, enforceable and
subsisting, all necessary registration and renewal fees in connection with such
registrations have been made and all necessary documents and certificates in
connection with such registrations have been filed with the relevant patent,
copyrights and trademark authorities in the United States or other jurisdiction
for the purposes of maintaining such Intellectual Property registrations, and
applications therefor, except as would not, in any case, have a Material Adverse
Effect. No registration, or application therefor, for any of the Registered IP
has lapsed, expired, or been abandoned, and no such registrations, or
applications therefor, are the subject of any opposition, interference,
cancellation, or other legal, quasi-legal, or governmental proceeding pending
before any governmental, registration, or other authority in any jurisdiction,
except as would not, in any case, have a Material Adverse Effect. The Company
(i) has not granted to any Person, nor authorized any Person to retain, any
rights in the Intellectual Property of the Company, and (ii) owns all rights,
title and interest in, or has the right to use, all Intellectual Property used
in, or necessary for, the conduct of the Business, free and clear of all Liens,
except as would not, in any case, have a Material Adverse Effect. The
consummation of the transactions contemplated hereby will not result in any loss
or impairment of Company's rights to own or use any Intellectual Property, nor
will such consummation require the consent of any third party in respect of any
Intellectual Property, except as would not, in any case, have a Material Adverse
Effect. There are no proceedings pending or, to the knowledge of KES Holdings,
threatened against the Company with respect to the Intellectual Property, or
with respect to any other Intellectual Property, alleging the infringement or
misappropriation by the Company of any Intellectual Property of any Person, and
neither of the Sellers has received notice from any Person that the operation of
the Business infringes the Intellectual Property of any Person, except as would
not, in any case, have a Material Adverse Effect.

     SECTION 3.15 COMPLIANCE WITH LAWS; PERMITS.

     3.15.1 Compliance. The Company is, and the Business has been conducted, in
compliance with all applicable Laws and Orders, except in each case (other than
with respect to compliance with environmental Laws and Orders relating to the
regulation or protection of the environment and public health and safety
("ENVIRONMENTAL LAWS AND ORDERS")) where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect, including without
limitation: (a) all Laws and Orders promulgated by the Federal Trade Commission
or any other Governmental or Regulatory Authority; (b) all Environmental Laws
and Orders; and (c) all Laws and Orders relating to labor, civil rights, and
occupational safety and health laws, worker's compensation, employment and
wages, hours and vacations, or pay equity. The Company has not been charged
with, or, to the knowledge of KES Holdings, threatened with or under any
investigation with respect to, any charge concerning any violation of any Laws
or Orders.

     3.15.2 Permits. With respect to the jurisdictions in which it conducts
business, the Company, to the knowledge of KES Holdings, holds and is in
compliance with all permits, licenses, and other government certificates,
authorizations and approvals ("PERMITS") required by any Governmental or
Regulatory Authority (including, without limitation, those Permits required
under applicable Environmental Laws and Orders) for the operation of the
Business as presently operated or used, except where the failure to have such
Permits would not reasonably be expected to have a Material Adverse Effect. All
of the Permits are in full force and effect and

                                       12

no action or claim is pending, nor to the knowledge of KES Holdings is
threatened, to revoke or terminate any such Permit or declare any such Permit
invalid in any material respect. SCHEDULE 3.15.2 sets forth a list of the
Permits that are utilized by the Company in the operation of the Business.

     3.15.3 Hazardous Materials. There have been no chemicals, substances or
materials listed under, governed or regulated by Environmental Laws and Orders
(collectively "HAZARDOUS MATERIALS") spilled, released, discharged, emitted or
disposed of by the Business except in compliance with Environmental Laws and
Orders. There is no existing contamination at, under or around any part of the
Facility that would result in any Material Adverse Effect. The Company has not
received any notices, claims, demands, or requests for information from any
Governmental or Regulatory Authority or any third party with respect to
Hazardous Materials generated, spilled, released, discharged, emitted or
disposed of by the Business. True, complete and correct copies of the written
reports, and all parts thereof, of all environmental audits or assessments that
have been conducted with respect to the Business, either by the Company or any
environmental consultant or engineer engaged for such purpose, have been made
available to Purchaser and a list of all such reports, audits and assessments
and any other similar report, audit or assessment is included on SCHEDULE
3.15.3.

     SECTION 3.16 CUSTOMER RELATIONS. SCHEDULE 3.16 sets forth the 10 largest
customers of the Company (measured by revenues), and the revenues from each such
customer and from all customers (in the aggregate) for the 2004 fiscal year. No
customer of the Company has advised either the Company or the Sellers in writing
that it is (x) terminating or considering terminating the handling of its
business by the Company or in respect of any particular product, project or
service or (y) planning to reduce its future spending with the Company in any
material manner; and no customer has orally advised the Company or either Seller
of any of the foregoing events.

     SECTION 3.17 ACCOUNTS RECEIVABLE; WORK-IN-PROCESS; ACCOUNTS PAYABLE. The
amount of all work-in-process, accounts receivable, unbilled invoices (including
without limitation unbilled invoices for services and out-of-pocket expenses)
and other debts due or recorded in the records and books of account of the
Company as being due to the Company and reflected on the Balance Sheet represent
valid obligations arising from sales actually made or services actually
performed in the ordinary course of business, will be good and collectible in
full (less the amount of any provision, reserve or similar adjustment therefor
reflected on the Balance Sheet) in the ordinary course of business, and none of
the accounts receivable is or will be subject to any counterclaim or set-off
except to the extent of any such provision, reserve or adjustment. There has
been no change since the Balance Sheet Date in the amount or aging of the
work-in-process, accounts receivable, unbilled invoices, or other debts due to
the Company, or the reserves with respect thereto, or accounts payable of the
Company which would have a Material Adverse Effect.

     SECTION 3.18 EMPLOYMENT RELATIONS. Except as set forth on SCHEDULE 3.18,
(a) no unfair labor practice complaint against the Company is pending before any
Governmental or Regulatory Authority; (b) there is no organized labor strike,
dispute, slowdown or stoppage actually pending or to the knowledge of KES
Holdings threatened against or involving the Business; (c) there are no labor
unions representing or, to the knowledge of KES Holdings, attempting to
represent the employees of the Company; (d) no claim or grievance nor any

                                       13

arbitration proceeding arising out of or under any collective bargaining
agreement is pending against the Company, and to the knowledge of KES Holdings,
no such claim or grievance has been threatened; (e) no collective bargaining
agreement is currently being negotiated by the Company; and (f) the Company has
not experienced any work stoppage or similar organized labor dispute since the
Acquisition Date. Except as set forth on SCHEDULE 3.10, there is no legal
action, suit, proceeding or claim pending or, to the knowledge of KES Holdings,
threatened between the Company and any employees or former employees of the
Company or its Predecessor Entity, agents or former agents of the Company or its
Predecessor Entity, job applicants or any association or group of any employees
of the Company or its Predecessor Entity.

     SECTION 3.19 EMPLOYEE BENEFIT MATTERS.

     3.19.1 List of Plans. SCHEDULE 3.19 to this Agreement lists all employee
benefit plans (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) and all bonus, incentive, deferred
compensation, stock option, restricted stock, stock appreciation rights, phantom
stock rights, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all termination,
severance or other Contracts, whether covering one Person or more than one
Person, and whether or not subject to any of the provisions of ERISA, which are
or have been maintained, contributed to or sponsored by the Company, any
subsidiary of the Company or any ERISA Affiliate (as defined in Section 3.19.3)
for the benefit of any employee (each item listed on SCHEDULE 3.19 being
referred to herein individually, as a "PLAN" and collectively, as the "PLANS").
KES Holdings has delivered to the Purchaser, to the extent applicable, a
complete and accurate copy of: (a) each written Plan and descriptions of any
unwritten Plan (including all amendments thereto whether or not such amendments
are currently effective); (b) each summary plan description and all summaries of
material modifications relating to a Plan; (c) each trust agreement or other
funding arrangement with respect to each Plan, including insurance contracts;
(d) the most recently filed IRS Form 5500 relating to each Plan; (e) the most
recently received IRS determination letter for each Plan; and (f) the three most
recently prepared actuarial reports and financial statements in connection with
each Plan. Neither the Company nor KES Holdings has made any commitment, (i) to
create or cause to exist any Plan not set forth on SCHEDULE 3.19 or (ii) to
modify, change or terminate any Plan.

     3.19.2 Severance. None of the Plans, nor any employment agreement or other
Contract to which the Company is a party or bound, (a) provides for the payment
of or obligates the Company to pay separation, severance, termination or
similar-type benefits to any Person; or (b) obligates the Company to pay
separation, severance, termination or similar-type benefits as a result of any
transaction contemplated by this Agreement or as a result of a "change in
control," within the meaning of such term under Section 280G of the Code, either
alone or in conjunction with any subsequent occurrence.

     3.19.3 Multi-Employer Plans. Neither the Company nor any ERISA Affiliate
has maintained, contributed to or participated in a multi-employer plan (within
the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a multiple employer plan
subject to Sections 4063 and 4064 of ERISA, nor has any obligations or
liabilities, including withdrawal, reorganization or successor liabilities,
regarding any such plan. As used herein, the term "ERISA AFFILIATE" means

                                       14

any Person that is or has been a member of a controlled group of organizations
(within the meaning of Sections 414(b), (c), (m) or (o) of the Code) of which
KES Holdings is a member.

     3.19.4 Welfare Benefit Plans. The Company has expressly reserved the right,
in all Plan documents relating to welfare benefits provided to employees, former
employees, officers, directors and other participants and beneficiaries, to
amend, modify or terminate at any time the Plans which provide for welfare
benefits, and the Sellers are not aware of any fact, event or condition that
could reasonably be expected to restrict or impair such rights. Except as
required under Section 601 of ERISA, neither the Company nor any ERISA Affiliate
has made any promises or commitments to provide, and is not obligated to provide
(i) medical benefits (including without limitation through insurance) to
retirees or former employees of the Company or any ERISA Affiliate or their
respective dependants, or (ii) life insurance or other death benefits to retired
employees or former employees of the Company or the Predecessor Entity or any
ERISA Affiliate or their respective dependants.

     3.19.5 Administrative Compliance. Each Plan is now and has been operated in
all material respects in accordance with the requirements of all applicable
Laws, including, without limitation, ERISA, the Health Insurance Portability and
Accountability Act of 1996 and the Code, the Age Discrimination in Employment
Act, Family and Medical Leave Act, the Americans with Disabilities Act, the
Equal Pay Act, and Title VII of the Civil Rights Act of 1964, and the
regulations and authorities published thereunder. The Company has performed all
material obligations required to be performed by it under, is not in any respect
in default under or in violation of, and the Sellers have no knowledge of any
default or violation by any Person under, any Plan. Except as set forth on
SCHEDULE 3.10, no legal action, suit, audit, investigation or claim is pending
or, to the knowledge of KES Holdings, threatened with respect to any Plan (other
than claims for benefits in the ordinary course), and no fact, event or
condition exists that would be reasonably likely to provide a legal basis for
any such action, suit, audit, investigation or claim. All reports, disclosures,
notices and filings with respect to such Plans required to be made to employees,
participants, beneficiaries, alternate payees and any Governmental or Regulatory
Authority have been timely made or an extension has been timely obtained. With
respect to any insurance policy providing funding for benefits or an investment
alternative under any Plan, (i) no liability or loss shall be incurred by the
Company or any such Plan in the nature of a retroactive rate adjustment, loss
sharing arrangement or other liability or loss, and (ii) to the knowledge of KES
Holdings no insurance company issuing any such policy is in receivership,
conservatorship, liquidation or similar proceeding and, to the knowledge of KES
Holdings, no such proceedings with respect to any insurer are imminent.

     3.19.6 Tax-Qualification. Each Plan which is intended to be qualified under
Sections 401(a) or 408(k) of the Code is qualified under Sections 401(a) and
408(k) of the Code (and, if applicable, complies with the requirements of
Section 401(k) of the Code), and has received a favorable determination letter
from the IRS that it is so qualified. Each trust established in connection with
any Plan which is intended to be exempt from federal income taxation under
Section 501(a) of the Code is exempt under Section 501(a) of the Code and has
received a determination letter from the IRS that it is so exempt; and no fact
or event has occurred or condition exists since the date of such determination
letter from the IRS which would be reasonably likely to adversely affect the
qualified status of any such Plan or the exempt status of any such trust.

                                       15

     3.19.7 Funding; Excise Taxes. There has been no prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) with
respect to any Plan subject to ERISA. Neither the Company nor any subsidiary of
the Company has incurred any liability for any excise tax arising under Sections
4971, 4972, 4973, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980, 4980B,
4980D or 4980E of the Code or any civil penalty arising under Sections 409,
502(i) or 502(l) of ERISA, and no fact, event or condition exists which could
give rise to any such liability. Neither the Company nor any ERISA Affiliate has
incurred any liability under, arising out of or by operation of Section
302(c)(11) or Title IV of ERISA (other than liability for premiums to the
Pension Benefit Guaranty Corporation ("PBGC") arising in the ordinary course),
including, without limitation, any liability in connection with the termination
of any employee benefit plan subject to Title IV of ERISA (a "TITLE IV PLAN");
and, no fact, event or condition exists which could give rise to any such
liability. No complete or partial termination has occurred within the five (5)
years preceding the date hereof with respect to any Plan maintained by the
Company or any ERISA Affiliate, and no reportable event (within the meaning of
Section 4043 of ERISA), notice of which has not been waived by the PBGC, has
occurred or is expected to occur with respect to any Plan maintained by the
Company or any ERISA Affiliate. The transactions contemplated by this Agreement
will not result in liability to the Company or the Purchaser under Section 4069
of ERISA. No Title IV Plan or Plan subject to Section 302 of ERISA maintained by
the Company or any ERISA Affiliate had an accumulated funding deficiency (within
the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not
waived, as of the most recently ended plan year of such Plan. None of the assets
of the Company or any ERISA Affiliate is the subject of any Lien arising under
Section 302(f) of ERISA or Section 412(n) of the Code; neither the Company nor
any ERISA Affiliate has been required to post any security under Section 307 of
ERISA or Section 401(a)(29) of the Code relating to any Plan; and no fact or
event exists which could give rise to any such Lien or requirement to post any
such security. As of the Closing Date, no Plan which is a Title IV Plan will
have an "unfunded benefit liability" (within the meaning of Section 4001(a)(18)
of ERISA) and no Plan which is subject to Section 302 of ERISA will have an
"accumulated funding deficiency" (within the meaning of Section 302(a)(2) of
ERISA).

     3.19.8 Tax Deductions. All contributions, premiums or payments (including
all employer contributions and, if applicable, employee salary reduction
contributions) required to be made, paid or accrued with respect to any Plan
have been made, paid or accrued on or before their due dates, including
extensions thereof. All such contributions have been fully deducted or in the
case of the current year will be deducted for income tax purposes and no such
deduction has been challenged or disallowed by any Governmental or Regulatory
Authority, and no fact or event exists which could give rise to any such
challenge or disallowance.

     SECTION 3.20 INTERESTS IN CUSTOMERS, SUPPLIERS, ETC. Except as set forth on
SCHEDULE 3.20, to the knowledge of KES Holdings (without making any inquiry of
any member of the Related Group, as hereinafter defined), no officer, director,
or employee of the Company, or any parent, brother, sister, child or spouse of
any such officer, director, key executive or employee of the Company
(collectively, the "RELATED GROUP"), or any Person controlled by anyone in the
Related Group:

     (i) owns, directly or indirectly, any interest in (excepting for ownership,
     directly or indirectly, of less than 1% of the issued and outstanding
     shares of any class of securities

                                       16

     of a publicly held and traded company), or is an officer, director,
     employee, agent or consultant of, any Person which is, or is engaged in
     business as, a competitor, lessor, lessee, supplier, distributor of the
     Company;

     (ii) owns, directly or indirectly, in whole or in part, any material
     tangible or intangible property (including, but not limited to Intellectual
     Property), that the Company used in the conduct of the Business, other than
     immaterial personal items owned and used by employees at their work
     stations; or

     (iii) has any cause of action or other claim whatsoever against, or owes
     any amount to the Company, except for claims in the ordinary course of
     business such as for accrued vacation pay, accrued benefits under employee
     benefit plans, and similar matters and agreements existing on the date
     hereof.

     SECTION 3.21 BANK ACCOUNTS AND POWERS OF ATTORNEY. Set forth in SCHEDULE
3.21 is an accurate and complete list showing (a) the name and address of, and
account information for, each bank in which the Company maintains an account,
credit line or safe deposit box and the names of all Persons authorized to draw
thereon or to have access thereto, and (b) the names of all Persons, if any,
holding powers of attorney from the Company and a summary statement of the terms
thereof.

     SECTION 3.22 COMPENSATION OF EMPLOYEES. SCHEDULE 3.22 is an accurate and
complete list showing: (a) the names and positions of all employees and
consultants who are compensated by the Company at an annualized rate of $60,000
or more, together with a statement of the current annual salary, and the annual
salary, bonus and incentive compensation paid or payable with respect to
calendar year 2003 and 2004, and the material fringe benefits of such employees
and consultants not generally available to all employees of the Company; (b) all
bonus and incentive compensation paid or payable (whether by agreement, custom
or understanding) to any employee of the Company not listed in clause (a) above
for services rendered or to be rendered during the calendar years 2003 and 2004;
(c) the names of all retired employees, if any, of the Company or the
Predecessor Entity who are receiving or entitled to receive any healthcare or
life insurance benefits or any payments from the Company not covered by any
pension plan to which the Company is a party, their ages and current unfunded
pension rate, if any; and (d) a description of the current severance and
vacation policy of the Company.

     SECTION 3.23 NO CHANGES SINCE THE BALANCE SHEET DATE. Since the Balance
Sheet Date, except pursuant to a Contract made in the ordinary course of
business, the Company has not (i) incurred any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise), except in the
ordinary course of business, (ii) permitted any of its assets to be subjected to
any Lien, (iii) sold, transferred or otherwise disposed of any assets except in
the ordinary course of business, (iv) made any capital expenditure or commitment
therefor which individually or in the aggregate exceeded $50,000, (v) declared
or paid any dividends or made any distributions on any membership interests or
other equity or redeemed, purchased or otherwise acquired any membership
interests or other equity or any option, warrant or other right to purchase or
acquire any such membership interests or equity, (vi) made any bonus or profit
sharing distribution, (vii) increased or prepaid its indebtedness for borrowed
money, except current borrowings under existing credit lines, or made any loan
to any Person other than to any

                                       17

employee for normal travel and expense advances, (viii) wrote down the value of
any work-in-process, or wrote off as uncollectible any notes or accounts
receivable, except write-downs and write-offs in the ordinary course of
business, none of which individually or in the aggregate, were material to the
Company, (ix) granted any increase in the rate of wages, salaries, bonuses or
other remuneration of any employee who, whether as a result of such increase or
prior thereto, received aggregate compensation from the Company at an annual
rate of $50,000 or more, or except in the ordinary course of business to any
other employees, (x) entered into any employment or exclusive consulting
agreement which is not cancelable by the Company without penalty or other
financial obligation within thirty (30) days, (xi) canceled or waived any claims
or rights of material value, (xii) made any change in any method of accounting
procedures, (xiii) otherwise conducted the Business or entered into any
transaction, except in the usual and ordinary manner and in the ordinary course
of its business, (xiv) amended or terminated any agreement which is material to
the Business, (xv) renewed, extended or modified any lease of real property or
any lease of personal property, except in the ordinary course of business, (xvi)
adopted, amended or terminated any Plan or (xvii) agreed, whether or not in
writing, to do any of the actions set forth in any of the above clauses.

     SECTION 3.24 CORPORATE CONTROLS. The Company has not and to the knowledge
of KES Holdings, no officer, authorized agent, employee, or consultant has,
directly or indirectly, used any corporate fund for unlawful contributions,
gifts, or other unlawful expenses relating to political activity; made any
unlawful payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from corporate funds;
established or maintained any unlawful or unrecorded fund of corporate monies or
other assets; made any false or fictitious entry on its books or records;
participated in any racketeering activity; or made any bribe, rebate, payoff,
influence payment, kickback, or other unlawful payment, or other payment of a
similar or comparable nature, to any Person, private or public, regardless of
form, whether in money, property, or services, to obtain favorable treatment in
securing business or to obtain special concessions, or to pay for favorable
treatment for business secured or for special concessions already obtained.

     SECTION 3.25 BROKERS. No broker, finder, agent or similar intermediary has
acted on behalf of the Sellers or the Company in connection with this Agreement
or the transactions contemplated hereby, and no brokerage commissions, finder's
fees, consulting fees or similar fees or commissions are payable by the Company
or the Sellers in connection therewith based on any agreement, arrangement or
understanding with any of them.

     SECTION 3.26 COPIES OF DOCUMENTS. KES Holdings has caused to be made
available for inspection and copying by the Purchaser and its advisers, true,
complete and correct copies of all documents referred to in this Article III or
in any Schedule.

                                       18

                                    ARTICLE 4

                  REPRESENTATIONS, WARRANTIES AND COVENANTS OF

                          THE PURCHASER AND YOUTHSTREAM

     The Purchaser and YouthStream jointly and severally represent, warrant and
agree to and with the Sellers as follows:

     SECTION 4.1 EXISTENCE AND GOOD STANDING. Each of YouthStream and the
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with full corporate power and authority
to own its property and to carry on its business all as and in the places where
such properties are now owned or operated or such business is now being
conducted.

     SECTION 4.2 EXECUTION AND VALIDITY OF AGREEMENT. Each of YouthStream and
the Purchaser has the full corporate power and authority to make, execute,
deliver and perform this Agreement and the transactions contemplated hereby. The
execution and delivery of this Agreement by the Purchaser and YouthStream and
the consummation by the Purchaser and YouthStream of the transactions
contemplated hereby, including the authorization, issuance and delivery by the
Purchaser of the shares of Series B Common Stock and Series A Preferred Stock
being issued to the Sellers under this Agreement have been duly authorized by
all required action on behalf of the Purchaser and YouthStream, as applicable,
and this Agreement has been duly and validly executed and delivered by the
Purchaser and YouthStream and, assuming due authorization, execution and
delivery by the Sellers, constitutes legal, valid and binding obligations of the
Purchaser and YouthStream, enforceable against it in accordance with its terms.

     SECTION 4.3 LITIGATION. There is no action, suit, proceeding at law or in
equity by any Person, or any arbitration or any administrative or other
proceeding by or before (or to the knowledge of the Purchaser, any investigation
by), any Governmental or Regulatory Authority pending or, to the knowledge of
the Purchaser or YouthStream, threatened against the Purchaser or YouthStream or
any of their respective properties or rights with respect to this Agreement or
the transactions contemplated hereby.

     SECTION 4.4 NON-CONTRAVENTION; APPROVALS AND CONSENTS.

     4.4.1 Non-Contravention. The execution, delivery and performance by the
Purchaser and YouthStream of their respective obligations hereunder and the
consummation of the transactions contemplated hereby will not (a) violate,
conflict with or result in the breach of any provision of their respective
Certificates of Incorporation or By-laws, or (b) result in the violation by the
Purchaser or YouthStream of any Laws or Orders of any Governmental or Regulatory
Authority applicable to the Purchaser or YouthStream or any of their respective
assets or properties, or (c) result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default under any Contract
to which the Purchaser or YouthStream is a party or by which the Purchaser or
YouthStream or any of their respective assets or properties are bound.

                                       19

     4.4.2 Approvals and Consents. No consent, approval or action of, filing
with or notice to any Governmental or Regulatory Authority or other public or
private third party is necessary or required under any of the terms, conditions
or provisions of any Law or Order of any Governmental or Regulatory Authority or
any Contract to which the Purchaser or YouthStream is a party or by which the
Purchaser or YouthStream or any of their respective assets or properties is
bound for the Purchaser's and YouthStream's execution and delivery of this
Agreement, the performance by the Purchaser and YouthStream of their respective
obligations hereunder or the consummation of the transactions contemplated
hereby, other than a Form D filing that the Company may be required to file with
the Securities and Exchange Commission (the "SEC") and securities compliance
filings that YouthStream is required to make with the SEC in connection with the
transactions contemplated herein.

     SECTION 4.5 SHARE ISSUANCE. The shares of Series B Common Stock and Series
A Preferred Stock, when issued and delivered to the Sellers in accordance with
the terms of this Agreement, will be duly and validly issued, fully paid and non
assessable.

     SECTION 4.6 BROKERS. No broker, finder, agent or similar intermediary has
acted on behalf of the Purchaser or YouthStream in connection with this
Agreement or the transactions contemplated hereby, and no brokerage commissions,
finder's fees or similar fees or commissions are payable by the Purchaser and
YouthStream in connection therewith based on any agreement, arrangement or
understanding with any of them.

     SECTION 4.7 CERTAIN FREE CASH DISTRIBUTIONS.

     4.7.1 Each of the Purchaser and AKHC shall ensure that the Company
distributes to them sufficient amounts of cash and cash equivalents as are
necessary to enable each of them to make any required Tax Sharing Payments on a
timely basis.

     4.7.2 Each of the Company and AKHC shall distribute, and each of the
Purchaser, the Company and AKHC shall cause their respective Subsidiaries to
distribute, within thirty (30) days following the end of each fiscal quarter,
all cash and cash equivalents as are necessary such that the Purchaser shall
have, as of such date, cash and cash equivalents on hand in an amount equal to
the Free Cash for such quarter then ended; provided, however, that the Company
shall not be obligated to distribute any amount in excess of the maximum amount
that the Company is able to draw on the GECC Senior Loan Facility.

     SECTION 4.8 YOUTHSTREAM SERIES B PREFERRED STOCK PURCHASE COMMITMENT.
YouthStream shall purchase Series B Preferred Stock from the Purchaser within
ten (10) days following the end of each fiscal quarter in an amount equal to all
distributions received by YouthStream for such quarter under Section 6.2.1(a) of
that certain Amended and Restated Limited Liability Company Agreement of KES
Holdings, LLC dated July 3, 2003, as amended.

The Purchaser hereby represents, warrants and agrees to and with the Sellers as
follows:

     SECTION 4.9 DISCLOSURE. None of this Agreement nor the Other Seller
Documents delivered to the Sellers by or on behalf of the Purchaser in
connection with the transactions contemplated hereby, taken as a whole, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the

                                       20

circumstances under which they were made. There is no fact known to the
Purchaser that could reasonably be expected to have a Material Adverse Effect
that has not been set forth herein or in the Other Seller Documents delivered to
each Seller by or on behalf of the Purchaser specifically for use in connection
with the transactions contemplated hereby.

     SECTION 4.10 SUBSIDIARIES. Prior to the consummation of the transactions
contemplated hereby, the Purchaser had no Subsidiaries.

     SECTION 4.11 LITIGATION; OBSERVANCE OF AGREEMENTS; STATUTES AND ORDERS.

     4.11.1 There are no actions, suits or proceedings pending or, to the
knowledge of the Purchaser, threatened against or affecting the Purchaser or any
property of the Purchaser in any court or before any arbitrator of any kind or
before or by any Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

     4.11.2 The Purchaser is not in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or Governmental Authority or
is in violation of any applicable law, ordinance, rule or regulation (including
without limitation Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

     SECTION 4.12 TAXES. The Purchaser is newly formed and has not filed tax
returns. The Purchaser knows of no basis for any tax or assessment that could
reasonably be expected to have a Material Adverse Effect.

     SECTION 4.13 TITLE TO PROPERTY. Upon the closing of the transactions
contemplated by this Agreement, the Purchaser will have good and sufficient
title to its properties that individually or in the aggregate are Material, free
and clear of Liens prohibited by the Note Purchase Agreement.

     SECTION 4.14 LICENSES, PERMITS, ETC. Upon the closing of the transactions
contemplated by this Agreement, the Purchaser will own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others.

     SECTION 4.15 EXISTING DEBT; FUTURE LIENS.

          4.15.1 Prior to the consummation of the transactions contemplated in
this Agreement, the Purchaser had no Debt.

          4.15.2 The Purchaser has not agreed or consented to cause or permit in
the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien not
permitted by Section 10.2 of the Note Purchase Agreement.

                                       21

                                    ARTICLE 5

                ACTIONS AT CLOSING BY SELLERS AND/OR THE COMPANY

     Purchaser's obligation to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions:

     SECTION 5.1 CERTIFIED RESOLUTIONS. The Sellers shall have delivered to the
Purchaser (i) copies of resolutions of the Manager and Members of KES Holdings
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby and thereby, certified by one of its officers
as of the Closing Date and (ii) copies of corporate resolutions of ACH
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby and thereby, certified by one of its officers
as of the Closing Date.

     SECTION 5.2 REQUIRED APPROVALS AND CONSENTS. The Sellers and/or the Company
shall have obtained or given, at no expense to the Purchaser, and there shall
not have been withdrawn or modified, any consents or approvals or other actions
listed on SCHEDULE 3.9.2 hereof (including without limitation, obtaining all
such consents, approvals and/or waivers required under the Contracts in order to
permit the consummation of the transactions contemplated by this Agreement
without causing or resulting in a default, event of default, acceleration event
or termination event under any of such documents and without entitling any party
to any of such documents to exercise any other right or remedy adverse to the
interests of the Purchaser or the Company thereunder). Each such consent or
approval shall be in form satisfactory to counsel for the Purchaser.

     SECTION 5.3 SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF THE COMPANY. Each of the Sellers shall have cooperated with respect to
matters relating to the drafting and execution of a Second Amended and Restated
Limited Liability Company Agreement of the Company (the "SECOND AMENDED AND
RESTATED LLC AGREEMENT") dated as of the Closing Date, in the form of Exhibit F
hereto.

     SECTION 5.4 OPINION OF COUNSEL. The Purchaser shall have received the
opinion of (i) Pillsbury Winthrop LLP, counsel to KES Holdings and (ii) Seward &
Kissel LLP, counsel to ACH, dated as of the Closing Date, each in form and
substance reasonably satisfactory to the Purchaser.

     SECTION 5.5 NOTE PURCHASE AGREEMENT. Each of the Sellers shall have entered
into the Note Purchase Agreement with the Purchaser dated as of the date hereof.

     SECTION 5.6 SERIES B COMMON PURCHASE AGREEMENT. Each of the Sellers shall
have entered into the Series B Non-Voting Common Stock Purchase Agreement with
the Purchaser dated as of the date hereof.

     SECTION 5.7 SERIES A PREFERRED PURCHASE AGREEMENT. Each of the Sellers
shall have entered into the Series A Non-Voting Preferred Stock Purchase
Agreement with the Purchaser dated as of the date hereof.

                                       22

     SECTION 5.8 LIMITED LIABILITY COMPANY INTEREST PLEDGE AGREEMENTS. Each of
the Sellers shall have entered into a Limited Liability Company Interest Pledge
Agreement (collectively, the "PLEDGE AGREEMENTS") with YouthStream dated as of
the Closing Date, in the forms of Exhibit G-1 and G-2 hereto.

     SECTION 5.9 INTERCREDITOR AGREEMENT. Each of the Sellers shall have entered
into an Intercreditor Agreement (the "INTERCREDITOR AGREEMENT") dated as of the
Closing Date, in the form of Exhibit H hereto.

     SECTION 5.10 LOAN AND SECURITY AGREEMENT. KES Holdings, AKHC and Company
shall have entered into the Amendment No. 7 to Loan and Security Agreement
("LOAN AND SECURITY AGREEMENT") with GECC and Purchaser dated as of the Closing
Date, in the form of Exhibit I hereto.

     SECTION 5.11 AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT. Pinnacle
Steel, LLC and the Company shall have entered into the Amended and Restated
Management Services Agreement (defined below).

     SECTION 5.12 COMPLIANCE CERTIFICATES. Purchaser shall have received from
each of the Sellers a compliance certificate certifying that the representations
and warranties contained in Section 3 made by such party are true and correct at
and as of the Closing Date as though then made.

     SECTION 5.13 AKHC MATTERS. ACH shall deliver (i) stock certificates
representing all of the AKHC Stock to the Purchaser, together with stock powers
with respect thereto, duly endorsed and in a form acceptable to the Purchaser
and (ii) resignations of the existing officers and directors of AKHC.

     SECTION 5.14 KES HOLDINGS MATTERS. KES Holdings shall deliver (i)
certificates representing all of the KES Holdings Membership Interest owned by
it to the Purchaser (to the extent theretofore issued), together with executed
transfer instructions with respect thereto, duly endorsed and in a form
acceptable to the Purchaser and (ii) resignations of the existing officers and
the managers of the Company.

     SECTION 5.15 CERTIFICATE OF NON-FOREIGN STATUS. KES Holdings shall deliver
to Purchaser a certificate of non-foreign status in the form and executed in the
manner prescribed under Treasury Regulation Section 1.1445-2(b)(2)(iv)(B).

     SECTION 5.16 STATEMENT AND NOTICE OF AKHC. AKHC shall provide Purchaser
with at least two (2) executed originals of both a statement issued to Purchaser
and accompanying notice to the Internal Revenue Service, in the form and
executed in the manner prescribed by Treasury Regulation Sections 1.1445-2(c)(3)
and 1.897-2 (h), to the effect that AKHC is not, and has not been during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Internal Revenue
Code of 1986, as amended (the "CODE"), a "United States real property holding
corporation," as defined in Section 897(c)(2) of the Code and the Treasury
Regulations issued thereunder. AKHC and Purchaser further agree that (i) this
Section 5.17 constitutes a request by Purchaser for such statement in accordance
with Treasury Regulation Section 1.1445-2(c)(3), (ii) the statement issued to
Purchaser and accompanying notice issued to the Internal Revenue

                                       23

Service will each be dated as of the Closing Date, and (iii) immediately
following the Closing, an executed original of the statement and notice,
together with an appropriate transmittal letter, will be sent to the Internal
Revenue Service, by certified mail, return receipt requested, to the Director,
Philadelphia Service Center, P.O. Box 21086, Drop Point 8731, FIRPTA Unit,
Philadelphia, Pennsylvania 19114-0586.

     SECTION 5.17 PROCEEDINGS. All proceedings to be taken in connection with
the transactions contemplated by this Agreement and all documents incident
thereto must be reasonably satisfactory in form and substance to the Purchaser
and its counsel, and the Purchaser shall have received copies of all such
documents and other evidences as it or its counsel reasonably requested in order
to establish the consummation of such transactions and the taking of all
proceedings in connection therewith.

                                    ARTICLE 6

               ACTIONS AT CLOSING BY THE PURCHASER AND YOUTHSTREAM

     Sellers' obligations to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of the following conditions:

     SECTION 6.1 CERTIFIED RESOLUTIONS. The Purchaser and YouthStream shall have
delivered to the Company a copy of the resolutions of their respective Board of
Directors, authorizing the execution, delivery and performance of this Agreement
and the transactions contemplated hereby, certified by one of its officers.

     SECTION 6.2 OPINION OF COUNSEL. The Company shall have received the opinion
of Littman Krooks LLP, counsel to the Purchaser and YouthStream, dated the as of
Closing Date, substantially in the form and substance reasonably satisfactory to
the Sellers.

     SECTION 6.3 SECOND AMENDED AND RESTATED LLC AGREEMENT. The Purchaser shall
have entered into the Second Amended and Restated LLC Agreement.

     SECTION 6.4 NOTE PURCHASE AGREEMENT. The Purchaser shall have entered into
the Note Purchase Agreement with each of the Sellers dated as of the Closing
Date.

     SECTION 6.5 SERIES B COMMON PURCHASE AGREEMENT. The Purchaser shall have
entered into the Series B Common Purchase Agreement with each of the Sellers
dated as of date hereof.

     SECTION 6.6 SERIES A PREFERRED PURCHASE AGREEMENT. The Purchaser shall have
entered into the Series A Preferred Purchase Agreement with each of the Sellers
dated as of date hereof.

     SECTION 6.7 LIMITED LIABILITY COMPANY INTEREST PLEDGE AGREEMENTS.
YouthStream shall have entered into the Pledge Agreements with each of the
Sellers, as applicable.

                                       24

     SECTION 6.8 TAX SHARING AGREEMENT. The Purchaser, YouthStream and AKHC
shall have entered into a Tax Sharing Agreement (the "TAX SHARING AGREEMENT")
dated as of the Closing Date, in the form of Exhibit J hereto.

     SECTION 6.9 CONTINUING GUARANTY. The Purchaser shall have entered into a
Continuing Guaranty with GECC dated as of the Closing Date, in the form of
Exhibit K hereto.

     SECTION 6.10 POWER OF ATTORNEY. The Purchaser shall have executed a Power
of Attorney in favor of GECC dated as of the Closing Date, in the form of
Exhibit L hereto.

     SECTION 6.11 LOAN AND SECURITY AGREEMENT. The Purchaser shall have entered
into the Loan and Security Agreement with KES Holdings, AKHC, the Company and
GECC.

     SECTION 6.12 COMPLIANCE CERTIFICATE. Sellers shall have received from each
of Purchaser and YouthStream a compliance certificate certifying that the
representations and warranties contained in Section 4 made by such party are
true and correct at and as of the Closing Date as though then made.

     SECTION 6.13 PROCEEDINGS. All proceedings to be taken in connection with
the transactions contemplated by this Agreement, and all documents incident
thereto must be reasonably satisfactory in form and substance to KES Holdings
and its counsel and KES Holdings shall have received copies of all such
documents and other evidences as it or its counsel may reasonably request in
order to establish the consummation of such transactions and the taking of all
proceedings in connection therewith.

                                    ARTICLE 7

                                OTHER AGREEMENTS

     SECTION 7.1 MANAGEMENT OF THE COMPANY. The parties agree that the
operations of the Company shall continue to be conducted from and after the
Closing pursuant to that certain Amended and Restated Management Services
Agreement dated as of the Closing Date, by and between the Company and Pinnacle
Steel, LLC ("AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT").

     SECTION 7.2 TAX MATTERS. The Purchaser, KES Holdings and ACH shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of Tax returns pursuant to this Section 7.2 or any
other Tax returns relating to the operations of the Company, and any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. KES Holdings and ACH agree (A) to retain all books
and records with respect to Tax matters pertinent to the Company relating to any
taxable period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by the Purchaser, any
extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing

                                       25

authority, and (B) to give the other party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other party so requests, KES Holdings or ACH, as the case may be, shall allow
the other party to take possession of such books and records. In recognition of
the fact that the transfer by ACH of the AKHC Membership Interest to AKHC has
resulted in a technical termination of the Company under section 708(b)(1)(B) of
the Internal Revenue Code of 1986, as amended (the "CODE"), the parties hereto
shall cause a timely U.S. Partnership Return of Income (IRS Form 1065)
("PARTNERSHIP RETURN") to be filed for the taxable year of the Company ending on
the date of such termination, and to make an election under section 754 of the
Code thereon, if such election has not been made by the Company on a prior
taxable year's Partnership Return.

     SECTION 7.3 TAX LIABILITY. To the extent that any of the transactions
contemplated by this Agreement gives rise to sales and/or use tax liability or
other transfer, purchase, stamp or recordation documentary tax and fees
(collectively, "SALES TAXES"), Purchaser shall promptly pay such Sales Taxes to
the appropriate tax authorities.

     SECTION 7.4 NONDISCLOSURE OF CONFIDENTIAL INFORMATION.

     7.4.1 As used in this Section 7.4, the term "CONFIDENTIAL INFORMATION"
shall mean any and all information (oral and written) relating to YouthStream,
the Purchaser or the Company (following the Closing), that is in the possession
of either or both of the Sellers, other than such information which can be shown
to be in the public domain (such information not being deemed to be in the
public domain merely because it is embraced by more general information which is
in the public domain) other than as the result of a breach of the provisions of
Section 7.4.2.

     7.4.2 Each of the Sellers agree not to, at any time following the date of
this Agreement, directly or indirectly, use, communicate, disclose or
disseminate any Confidential Information in any manner whatsoever, unless
required to do so by applicable law, in which case the Sellers shall give prompt
notice so that YouthStream may seek a protective order or other appropriate
relief. In the event that such protective order is not obtained, Sellers shall
disclose only the portion of the Confidential Information that his counsel
advises that he is legally required to disclose.

     7.4.3 The parties hereby acknowledge and agree that (i) the other party
would be irreparably injured in the event of a breach of any of the obligations
under this Section 7.4, (ii) monetary damages would not be an adequate remedy
for any such breach, and (iii) the nonbreaching party shall be entitled to
injunctive relief, in addition to any other remedy which it may have, in the
event of any such breach. It is hereby also agreed that the existence of any
claims which any party may have against the other party, whether under this
Agreement or otherwise, shall not be a defense to the enforcement of any of the
rights under this Section 7.4.

                                    ARTICLE 8

                               SURVIVAL; INDEMNITY

     SECTION 8.1 SURVIVAL. Notwithstanding any right of any party hereto fully
to investigate the affairs of any other party, and notwithstanding any knowledge
of facts determined

                                       26

or determinable pursuant to such investigation or right of investigation, each
party hereto shall have the right to rely fully upon the representations,
warranties, covenants and agreements of the other parties contained in this
Agreement and the Schedules, if any, furnished by any other party pursuant to
this Agreement, or in any certificate or document delivered at the Closing by
any other party. Subject to the limitations set forth in Sections 8.6.2, 8.6.3
and 8.6.5, the respective representations, warranties, covenants and agreements
of each of the Sellers, the Purchaser and YouthStream contained in this
Agreement shall survive the Closing for a period of twelve (12) months;
provided, however, that the obligations set forth in Section 4.7 shall survive
until the earlier of (i) such date as all Series A Preferred Stock has been
redeemed and all Promissory Notes have been repaid or (ii) eleven (11) years
following the Closing Date.

     SECTION 8.2 OBLIGATION OF THE SELLERS TO INDEMNIFY. Subject to the
limitations contained in Sections 8.6.1 and 8.6.2, each of the Sellers hereby
agrees severally, in accordance with their respective ownership of Membership
Interests being sold to the Purchaser hereunder, to indemnify the Purchaser and
its affiliates, stockholders, officers, directors, employees, agents,
representatives and successors, permitted assignees of the Purchaser and their
affiliates (individually, a "PURCHASER INDEMNIFIED PARTY" and collectively, the
"PURCHASER INDEMNIFIED PARTIES") against, and to protect, save and keep harmless
the Purchaser Indemnified Parties from, and to pay on behalf of or reimburse the
Purchaser Indemnified Parties as and when incurred for, any and all liabilities
(including liabilities for Taxes), obligations, losses, damages, penalties,
demands, claims, actions, suits, judgments, settlements, penalties, interest,
out-of-pocket costs, expenses and disbursements (including reasonable costs of
investigation, and reasonable attorneys', accountants' and expert witnesses'
fees) of whatever kind and nature (collectively, "LOSSES"), that may be imposed
on or incurred by any Purchaser Indemnified Party, as a consequence of, in
connection with, incident to, resulting from or arising out of or in any way
relating to or by virtue of: (a) (i) in the case of either of the Sellers, any
misrepresentation, inaccuracy or breach of any warranty or representation
contained in Sections 3.2 through 3.26 or in any certificate delivered by either
of the Sellers with respect to such sections at the Closing, (ii) in the case of
KES Holdings, any misrepresentation, inaccuracy or breach of any warranty or
representation contained in Section 3.1 made by KES Holdings or in any
certificate delivered by such party at the Closing, and (iii) in the case of
ACH, any misrepresentation, inaccuracy or breach of any warranty or
representation contained in Section 3.1 made by ACH or in any certificate
delivered by such party at the Closing; (b) any action, demand, proceeding,
investigation or claim by any third party (including any Governmental or
Regulatory Authority) against or affecting any Purchaser Indemnified Party which
may give rise to or evidence the existence of or relate to a misrepresentation
or breach of any of the representations and warranties of such Seller contained
in Article III hereof or in any certificate delivered by Seller at the Closing;
(c) any breach or failure by such Seller to comply with, perform or discharge
any obligation, agreement or covenant by such Seller contained in this
Agreement; and (d) any liability or obligation or any assertion against any
Purchaser Indemnified Party, arising out of or relating, directly or indirectly,
in whole or in part, out of the conduct of the Company's business prior to the
Closing except for the Liabilities set forth on the Balance Sheet or on SCHEDULE
3.12.

     SECTION 8.3 OBLIGATION OF THE PURCHASER TO INDEMNIFY. Subject to the
limitations set forth in Section 8.6.3 and this Section 8.3, the Purchaser and
YouthStream, jointly and severally, hereby agree to indemnify each of the
Sellers and their respective affiliates, stockholders, officers, directors,
members, managers, employees, agents, representatives and successors,

                                       27

permitted assignees (individually, a "SELLER INDEMNIFIED PARTY" and
collectively, the "SELLER INDEMNIFIED PARTIES") against, and to protect, save
and keep harmless the Seller Indemnified Parties from, and to pay on behalf of
or reimburse the Seller Indemnified Parties as and when incurred for, any and
all Losses that may be imposed on or incurred by the Seller Indemnified Parties
as a consequence of, in connection with, incident to, resulting from or arising
out of or in any way related to or by virtue of: (a) any misrepresentation,
inaccuracy or breach of any warranty or representation of the Purchaser or
YouthStream contained in Article IV hereof or in any certificate delivered by
the Purchaser or YouthStream at the Closing; or (b) any action, demand,
proceeding, investigation or claim by any third party (including any
Governmental or Regulatory Authority) against any Seller Indemnified Party which
may give rise to or evidence the existence of or relate to a misrepresentation
or breach of any of the representations and warranties of the Purchaser or
YouthStream contained in Article IV hereof or in any certificate delivered by
the Purchaser or YouthStream at the Closing; (c) any breach or failure by the
Purchaser to comply with, perform or discharge any obligation, agreement or
covenant by the Purchaser contained in this Agreement or (d) any liability or
obligation or any assertion against any Seller Indemnified Party, arising out of
or relating directly to, the conduct of the Company's business after the
Closing; provided, however, that YouthStream's indemnification obligations shall
in all cases be limited to those matters set forth in subsection (a) and (b)
above only.

     SECTION 8.4 INDEMNIFICATION PROCEDURES.

     8.4.1 Non-Third Party Claims.

          (b) In the event that any Person entitled to indemnification under
this Agreement (an "INDEMNIFIED PARTY") asserts a claim for indemnification
which does not involve a Third Party Claim (as defined in Section 8.4.2) (the
"NON-THIRD PARTY CLAIM"), against which a Person is required to provide
indemnification under this Agreement (an "INDEMNIFYING PARTY"), the Indemnified
Party shall give written notice to the Indemnifying Party (the "NON-THIRD PARTY
CLAIM NOTICE"), which Non-Third Party Claim Notice shall (i) describe the claim
in reasonable detail, and (ii) indicate the amount (estimated, if necessary, and
to the extent feasible) of the Losses that have been or may be suffered by the
Indemnified Party.

          (c) The Indemnifying Party may acknowledge and agree by written notice
(the "NON-THIRD PARTY ACKNOWLEDGEMENT OF LIABILITY") to the Indemnified Party to
satisfy the Non-Third Party Claim within thirty (30) days of receipt of the
Non-Third Party Claim Notice. In the event that the Indemnifying Party disputes
the Non-Third Party Claim, the Indemnifying Party shall provide written notice
of such dispute (the "NON-THIRD PARTY DISPUTE NOTICE") to the Indemnified Party
within thirty (30) days of receipt of the Non-Third Party Claim Notice (the
"NON-THIRD PARTY DISPUTE PERIOD"), setting forth a reasonable basis of such
dispute. In the event that the Indemnifying Party shall fail to deliver the
Non-Third Party Acknowledgement of Liability or Non-Third Party Dispute Notice
within the Non-Third Party Dispute Period, the Indemnifying Party shall be
deemed to have acknowledged and agreed to pay the Non-Third Party Claim in full
and to have waived any right to dispute the Non-Third Party Claim. Once the
Indemnifying Party has acknowledged and agreed to pay any Non-Third Party Claim
pursuant to this Section 8.4.1, or once any dispute under this Section 8.4.1 has
been finally resolved in favor of indemnification by a court or other tribunal
of competent jurisdiction, subject to the provisions of Section 8.6.1, the
Indemnifying Party shall pay the amount of such Non-Third Party Claim to

                                       28

the Indemnified Party within ten (10) days of the date of acknowledgement or
resolution, as the case may be, to such account and in such manner as is
designated in writing by the Indemnified Party.

     8.4.2 Third Party Claims.

          (a) In the event that any Indemnified Party asserts a claim for
indemnification or receives notice of the assertion of any claim or of the
commencement of any action or proceeding by any Person who is not a party to
this Agreement or an affiliate of a party to this Agreement (a "THIRD PARTY
CLAIM") in respect of which such Indemnified Party is entitled to
indemnification by an Indemnifying Party under this Agreement, the Indemnified
Party shall give written notice to the Indemnifying Party (the "THIRD PARTY
CLAIMS NOTICE") within ten (10) Business Days after learning of such Third Party
Claim (or within such shorter time as may be necessary to give the Indemnifying
Party a reasonable opportunity to respond to such claim), together with a
statement specifying the basis of such Third Party Claim. The Third Party Claims
Notice shall (i) describe the claim in reasonable detail, and (ii) indicate the
amount (estimated, if necessary, and to the extent feasible) of the Losses that
have been or may be suffered by the Indemnified Party. The Indemnifying Party
must provide written notice to the Indemnified Party that it is either (i)
assuming responsibility for the Third Party Claim or (ii) disputing the claim
for indemnification against it (the "INDEMNIFICATION NOTICE"). The
Indemnification Notice must be provided by the Indemnifying Party to the
Indemnified Party with ten (10) days after receipt of the Third Party Claims
Notice or within such shorter time as may be necessary to give the Indemnified
Party a reasonable opportunity to respond to such Third Party Claim (the
"INDEMNIFICATION NOTICE PERIOD").

          (b) If the Indemnifying Party provides an Indemnification Notice to
the Indemnified Party within the Indemnification Notice Period that it assumes
responsibility for the Third Party Claim, the Indemnifying Party shall conduct
at its expense the defense against such Third Party Claim in its own name, or if
necessary in the name of the Indemnified Party. The Indemnification Notice shall
specify the counsel it will appoint to defend such claim ("DEFENSE COUNSEL");
provided, however, that the Indemnified Party shall have the right to approve
the Defense Counsel, which approval shall not be unreasonably withheld or
delayed. In the event that the Indemnifying Party fails to give the
Indemnification Notice within the Indemnification Notice Period, the Indemnified
Party shall have the right to conduct the defense and to compromise and settle
such Third Party Claim without the prior consent of the Indemnifying Party and
subject to the provisions of Section 8.6.1, the Indemnifying Party will be
liable for all costs, expenses, settlement amounts or other Losses paid or
incurred in connection therewith.

          (c) In the event that the Indemnifying Party disputes the claim for
indemnification against it, such Indemnifying Party shall notify the Indemnified
Party to such effect within ten (10) days after receipt of the Third Party
Claims Notice (or within such shorter time as may be necessary to give the
Indemnified Party a reasonable opportunity to respond to such Third Party Claim)
by delivering written notice thereof to the Indemnified Party. In such event,
the Indemnified Party shall have the right to conduct the defense and to
compromise and settle such Third Party Claim, without the prior consent of the
Indemnifying Party. Once such dispute has been finally resolved in favor of
indemnification by a court or other tribunal of competent jurisdiction or by
mutual agreement of the Indemnified Party and Indemnifying Party,

                                       29

subject to the provisions of Section 8.6.1, the Indemnifying Party shall within
ten (10) days of the date of such resolution or agreement, pay to the
Indemnified Party all Losses paid or incurred by the Indemnified Party in
connection therewith.

          (d) In the event that the Indemnifying Party delivers an
Indemnification Notice pursuant to which it elects to conduct the defense of the
Third Party Claim, the Indemnifying Party shall be entitled to have the
exclusive control over the defense of the Third Party Claim and the Indemnified
Party will cooperate in good faith with and make available to the Indemnifying
Party such assistance and materials as it may reasonably request, all at the
expense of the Indemnifying Party. The Indemnified Party shall have the right at
its expense to participate in the defense assisted by counsel of its own
choosing. The Indemnifying Party will not settle the Third Party Claim or cease
to defend against any Third Party Claim as to which it has delivered an
Indemnification Notice (as to which it has assumed responsibility for the Third
Party Claim), without the prior written consent of the Indemnified Party, which
consent will not be unreasonably withheld or delayed; provided, however, such
consent may be withheld for any reason if, as a result of such settlement or
cessation of defense, (i) injunctive relief or specific performance would be
imposed against the Indemnified Party, or (ii) such settlement or cessation
would lead to liability or create any financial or other obligation on the part
of the Indemnified Party for which the Indemnified Party is not entitled to
indemnification hereunder.

          (e) If an Indemnified Party refuses to consent to a bona fide offer of
settlement which the Indemnifying Party wishes to accept, which provides for a
full release of the Indemnified Party and its affiliates relating to the Third
Party Claims underlying the offer of settlement and solely for a monetary
payment, the Indemnified Party may continue to pursue such matter, free of any
participation by the Indemnifying Party, at the sole expense of the Indemnified
Party. In such an event, the obligation of the Indemnifying Party shall be
limited to the amount of the offer of settlement which the Indemnified Party
refused to accept plus the reasonable costs and expenses of the Indemnified
Party incurred prior to the date the Indemnifying Party notified the Indemnified
Party of the offer of settlement.

          (f) Notwithstanding clause (d) above, the Indemnifying Party shall not
be entitled to control, but may participate in, and the Indemnified Party shall
be entitled to have sole control over, the defense or settlement of (x) that
part of any Third Party Claim (i) that seeks a temporary restraining order, a
preliminary or permanent injunction or specific performance against the
Indemnified Party, or (ii) to the extent such Third Party Claim involves
criminal allegations against the Indemnified Party or (y) the entire Third Party
Claim (i) if such Third Party Claim would impose liability on the part of the
Indemnified Party in an amount which is greater than the amount as to which the
Indemnified Party is entitled to indemnification under this Agreement or (ii)
that if unsuccessful, would set a precedent that would have a material adverse
effect on, the business or financial condition of the Indemnified Party. In the
event the Indemnified Party retains control of the Third Party Claim, the
Indemnified Party will not settle the subject claim without the prior written
consent of the Indemnifying Party, which consent will not be unreasonably
withheld or delayed.

          (g) A failure by an Indemnified Party to give timely, complete or
accurate notice as provided in this Section 8.4 will not affect the rights or
obligations of any party hereunder except and only to the extent that, as a
result of such failure, any party entitled to

                                       30

receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise directly and materially damaged
as a result of such failure to give timely notice.

     SECTION 8.5 RIGHT OF OFFSET. Notwithstanding anything contained herein to
the contrary, in the event Purchaser asserts a Non-Third Party Claim or a Third
Party Claim against a Seller, the indemnification obligations shall be
implemented as set forth in this Section 8.5. The Purchaser shall be entitled,
subject to the limitations set forth in Section 8.6, to offset any claim for
indemnity made pursuant to Section 8.2 and in accordance with Section 8.4,
against any payment of principal and/or interest due such Seller under the
Promissory Note issued to such Seller hereunder ("OFFSET RIGHT"); provided,
however, the Purchaser may only exercise such right of offset in respect of
claims relating to Losses actually incurred by a Purchaser Indemnified Party (in
which case the amount of such offset shall be the amount of such actual Loss) or
claims actually asserted by a third party (in which case the amount of the
offset shall not exceed the Purchaser's good faith estimate of the amount of
indemnifiable Losses that will ultimately be payable to a Purchaser Indemnified
Party in respect of such claims). To exercise the Offset Right, Purchaser shall
indicate the specific principal and/or interest payment under the Promissory
Note that it intends to offset in the Non-Third Party Claim Notice or the Third
Party Claims Notice, as the case may be. In the case of a claim for indemnity
arising out of a breach by both Sellers, the Offset Right shall be applied pro
rata according to the amounts of debt owing under the respective Promissory
Notes held by the Sellers as of the date immediately prior to the enforcement of
the Offset Right. If any such claims for indemnity are resolved in favor of a
Seller by mutual agreement or otherwise, or if the amount withheld exceeds the
amount ultimately payable to a Purchaser Indemnified Party in respect of such
claim, the Purchaser shall pay to such Seller excess amount withheld with
respect to such claim, together with interest thereon for the period such amount
has been withheld at a rate equal to the published prime rate of interest of
J.P. Morgan Chase in New York, in effect from time to time during the relevant
period.

     SECTION 8.6 LIMITATIONS ON AND OTHER MATTERS REGARDING INDEMNIFICATION.

     8.6.1 Indemnity Cushion and Cap. Subject to Section 8.6.5, no Seller shall
have any liability to any Purchaser Indemnified Party with respect to Losses
arising out of any of the matters referred to in Section 8.2 until such time as
the amount of such liability shall exceed $3,000,000 in the aggregate (in which
case such Seller shall be liable for all Losses in excess of $3,000,000).
Notwithstanding anything to the contrary herein, subject to Section 8.6.5, the
maximum aggregate liability of each Seller for indemnity payments under Section
8.2 shall be an amount equal to the total principal amount and interest due and
owing under the Promissory Note held by such Seller.

     8.6.2 Termination of Indemnification Obligations of Sellers. Subject to
Section 8.6.5, the obligation of each Seller to indemnify under Section 8.2
hereof shall terminate on the date that is one (1) year following the Closing
Date, except as to matters as to which the Purchaser Indemnified Party has made
a claim for indemnification on or prior to such date, in which case the right to
indemnification with respect thereto shall survive the expiration of such period
until such claim for indemnification is finally resolved and any obligations
with respect thereto are fully satisfied.

                                       31

     8.6.3 Termination of Indemnification Obligations of the Purchaser and
YouthStream. The obligation of the Purchaser and YouthStream to indemnify under
Section 8.3 hereof shall terminate on the date that is one (1) year following
the Closing Date, except as to matters as to which any Seller Indemnified Party
has made a claim for indemnification on or prior to such date, in which case the
right to indemnification with respect thereto shall survive such period until
such claim for indemnification is finally resolved and any obligations with
respect thereto are fully satisfied.

     8.6.4 Treatment. Any indemnity payments by an Indemnifying Party to an
Indemnified Party under this Article VIII shall be treated by the parties as an
adjustment to the Purchase Price.

     8.6.5 Exceptions. The limitations set forth above in Section 8.6.1, 8.6.2
and 8.6.3 shall in no event (a) apply to any Losses incurred by a Purchaser
Indemnified Party which relate, directly or indirectly, to (i) any fraudulent
acts committed by either Seller; and (ii) any breach of a representation or
warranty contained in Sections 3.1 and 3.25 hereto or (b) apply to any Losses
incurred by a Seller Indemnified Party which relate, directly or indirectly, to
any fraudulent acts committed by the Purchaser. The limitations set forth in
Section 8.6.2 shall not apply to any breach of a representation or warranty
contained in Sections 3.6 (first sentence only), 3.7, 3.11, 3.15 or 3.19, all of
which shall survive until the expiration of the applicable statute of
limitations, with respect to such claim. The limitations set forth in Section
8.6.3 shall not apply to any breach of Sections 4.7 or 4.8, which provision and
the obligations set forth therein shall survive until the date that the earlier
of (i) such date as all Series A Preferred Stock has been redeemed and all
Promissory Notes have been repaid or (ii) eleven (11) years following the
Closing Date.

                                   ARTICLE 9

                                  MISCELLANEOUS

     SECTION 9.1 EXPENSES. Except as otherwise provided in this Agreement, each
party shall pay its own respective expenses relating to the transactions
contemplated by this Agreement, including, without limitation, the fees and
expenses of their respective counsel, financial advisors and accountants.

     SECTION 9.2 GOVERNING LAW. The interpretation and construction of this
Agreement, and all matters relating hereto (including, without limitation, the
validity or enforcement of this Agreement), shall be governed by the laws of the
State of Delaware without regard to any conflicts or choice of laws provisions
of the State of Delaware that would result in the application of the law of any
other jurisdiction.

     SECTION 9.3 DEFINITIONS.

     9.3.1 "AFFILIATE" means, with respect to any Person, any Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with such Person.

                                       32

     9.3.2 "CAPITAL EXPENDITURES" means all payments or accruals (including
Capital Lease Obligations) for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP.

     9.3.3 "BRIDGE INDEBTEDNESS" means, for any period, an amount equal to the
total principal and accrued interest payable by the Company as of the end of
such period with respect to each of the following: (i) Subordinated Promissory
Note dated March 29, 2004 in the amount of $300,000 in favor of Ravich Revocable
Trust of 1989, (ii) Subordinated Promissory Note dated March 29, 2004 in the
amount of $700,000 in favor of Atacama Capital Holdings, Ltd., (iii)
Subordinated Promissory Note dated May 19, 2004 in the amount of $2,450,000 in
favor of Atacama Capital Holdings, Ltd., (iv) Subordinated Promissory Note dated
May 19, 2004 in the amount of $1,050,000 in favor of Ravich Revocable Trust of
1989, (v) Subordinated Promissory Note dated August 26, 2004 in the amount of
$1,750,000 in favor of Atacama Capital Holdings, Ltd., (vi) Subordinated
Promissory Note dated August 26, 2004 in the amount of $450,000 in favor of
Libra Securities Holdings, LLC, and (vii) Subordinated Promissory Note dated
August 26, 2004 in the amount of $300,000 in favor of Ravich Revocable Trust of
1989.

     9.3.4 "CAPITAL LEASE" means any lease of any property (whether real,
personal or mixed) that, in accordance with GAAP, either would be required to be
classified and accounted for as a capital lease on the balance sheet of the
lessee or otherwise would be disclosed as such in a note to such balance sheet.

     9.3.5 "CAPITAL LEASE OBLIGATION" means, with respect to any Capital Lease,
the amount of the obligation of the lessee thereunder that, in accordance with
GAAP, would appear on a balance sheet of such lessee in respect of such Capital
Lease or otherwise be disclosed in a note to such balance sheet.

     9.3.6 "CASH CAPEX" means Capital Expenditures that are not financed through
the incurrence of Indebtedness.

     9.3.7 "CASH AND CASH EQUIVALENTS" means cash, demand deposit, money market
accounts, and debt instruments purchased with an original maturity of three
months or less.

     9.3.8 "ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

     9.3.9 "EXTRAORDINARY GAIN" means a gain realized by the Company as a result
of an event not undertaken in the ordinary course of business.

     9.3.10 "EXTRAORDINARY LOSS" means a loss incurred by the Company as a
result of an event not undertaken in the ordinary course of business; provided,
however, that the amount of any Extraordinary Loss shall be reduced by the
amount of any insurance proceeds or other monetary recovery received in
connection therewith.

                                       33

     9.3.11 "FREE CASH" means, for any period, (i) Net Income (Loss); minus (ii)
Tax Sharing Payments; plus (iii) amortization and depreciation expense as
determined in accordance with GAAP; minus (iv) Cash Capex; minus (v) net
increases in Working Capital, if any; minus (vi) any mandatory debt payments
(including any payment with respect to any Bridge Indebtedness) plus (vii)
Series B Preferred Stock Proceeds plus (viii) net decreases in Working Capital,
if any, plus (ix) any non-cash Extraordinary Losses, if any and minus (x) any
non-cash Extraordinary Gain, if any. For purposes of this Agreement, Free Cash,
and all components thereof, shall be calculated by the Company, AKHC and the
Purchaser, and each of their subsidiaries, on a combined basis.

     9.3.12 "GECC SENIOR SECURED LOAN FACILITY" shall mean that certain GECC
Senior Secured Loan Facility by and among KESA and GECC, as amended from time to
time.

     9.3.13 "GOVERNMENTAL AUTHORITY" means

               9.3.13.1 the government of the United States of America or any
State or other political subdivision thereof, or

               9.3.13.2 any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or

               9.3.13.3 any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.

     9.3.14 "GUARANTEED INDEBTEDNESS" means, as to any person, any obligation of
such person guaranteeing any indebtedness, lease, dividend, or other obligation
("PRIMARY OBLIGATIONS") of any other person (the "PRIMARY OBLIGOR") in any
manner, including any obligation or arrangement of such guaranteeing person
(whether or not contingent): (i) to purchase or repurchase any such primary
obligation; (ii) to advance or supply funds (a) for the purchase or payment of
any such primary obligation or (b) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor; (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation; or (iv) to indemnify the owner of such primary
obligation against loss in respect thereof.

     9.3.15 "INDEBTEDNESS" means, with respect to any person, (i) all
indebtedness of such person for borrowed money or for the deferred purchase
price of property or services (including reimbursement and all other obligations
which respect to surety bonds, letters of credit and bankers' acceptances,
whether or not matured, but not including obligations to trade creditors
incurred in the ordinary course of business and not more than 45 days past due);
(ii) all obligations evidenced by notes, bonds, debentures or similar
instruments; (iii) all indebtedness created or arising under any conditional
sale or other title retention agreements with respect to property acquired by
such person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property); (iv) all Capital Lease Obligations; (v) all Guaranteed
Indebtedness; (vi) all Indebtedness referred

                                       34

to in clauses (i), (ii), (iii), (iv) or (v) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including accounts and contract
rights) owned by such person, even though such person has not assumed or become
liable for the payment of such Indebtedness; and (vii) all liabilities under
Title IV of ERISA.

     9.3.16 "KNOWLEDGE" shall mean, where any representation and warranty
contained in this Agreement is expressly specified by reference to the knowledge
of a party hereto, the actual knowledge of the executive officers of such party,
as the case may be, and unless otherwise stated, such knowledge that would have
been discovered by such executive officers after reasonable due inquiry.

     9.3.17 "LIEN" means any mortgage, security deed or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, security title, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing, and
the filing of, or agreement to give, any financing statement, perfecting a
security interest under the Uniform Commercial Code or comparable law of any
jurisdiction).

     9.3.18 "LOSSES," as used in this Agreement is not limited to matters
asserted by third parties against a Purchaser Indemnified Party, but includes
Losses incurred or sustained by a Purchaser Indemnified Party in the absence of
third party claims.

     9.3.19 "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, prospects, operations, affairs, financial condition, assets or
properties of the Company, a Seller or the Purchaser, as the case may be, taken
as a whole, or (ii) the ability of the Purchaser to perform its obligations
under this Agreement and the Other Seller Documents, or (iii) the validity or
enforceability of this Agreement or the Other Seller Documents.

     9.3.20 "NET INCOME (LOSS)" means, for any period, the aggregate net income
(or loss) after taxes for such period (other than any liability on account of
U.S. federal income taxes), determined in accordance with GAAP.

     9.3.21 "OTHER SELLER DOCUMENTS" means the documents, certificates and
agreements contemplated by this Agreement, or by any of the documents,
certificates or agreements contemplated thereby.

     9.3.22 "PERSON" shall mean and include an individual, a company, a joint
venture, a corporation (including any non-profit corporation), an estate, an
association, a trust, a general or limited partnership, a limited liability
company, a limited liability partnership, an unincorporated organization and a
government or other department or agency thereof.

     9.3.24 "SERIES B PREFERRED STOCK PROCEEDS" means, for any period, the
amount contributed by YouthStream to the Purchaser during such period in
exchange for the issuance of shares of Series B preferred stock by the Purchaser
to YouthStream.

                                       35

     9.3.25 "SUBSIDIARY" means, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"SUBSIDIARY" is a reference to a Subsidiary of the Purchaser.

     9.3.26 "TAX SHARING PAYMENTS" means, for any period, the amount payable to
YouthStream for such period pursuant to the Tax Sharing Agreement dated as of
the Closing Date among YouthStream, the Purchaser and AKHC.

     9.3.27 "WORKING CAPITAL" means, for any period, the difference between
current balance sheet assets (excluding Cash and Cash Equivalents and including
deposits) and current balance sheet liabilities (excluding the current portion
of the Bridge Indebtedness and the net increases or decreases in any working
capital facility then in effect), in each case determined in accordance with
GAAP.

     SECTION 9.4 CAPTIONS. The Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.

     SECTION 9.5 PUBLICITY. The Sellers and Youthstream shall have the right to
approve before issuance of any press releases, SEC, OTCBB (or other applicable
trading market) or NASD filings, or any other public statements with respect to
the transactions contemplated hereby; provided, however, that Youthstream shall
be entitled, without the prior approval of any Seller, to make any press release
or SEC, OTCBB (or other applicable trading market) or NASD filings with respect
to such transactions as is required by applicable law and regulations based on
advice it receives from experienced securities counsel (although each of the
Sellers shall be consulted by Youthstream in connection with any such press
release or filing prior to its release and shall be provided with an opportunity
to comment thereon).

     SECTION 9.6 NOTICES. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to any other
party shall be in writing and shall be deemed to have been given (a) upon
personal delivery, if delivered by hand or courier, (b) three (3) days after the
date of deposit in the mails, postage prepaid, or (c) the next business day if
sent by facsimile transmission (if receipt is electronically confirmed) or by a
prepaid overnight courier service, and in each case at the respective addresses
or numbers set forth below or such other address or number as such party may
have fixed by notice:

     If to the Purchaser or YouthStream, addressed to:

        YouthStream Acquisition Corp.
        c/o YouthStream Media Networks, Inc.
        244 Madison Avenue, PMB #358
        New York, New York 10016
        Attention: Jonathan V. Diamond

                                       36

        Fax: (212) 490-2990
           with a copy to:
        Littman Krooks LLP
        655 Third Avenue, 20th Floor
        New York, New York 10017
        Attention: Mitchell C. Littman, Esq.
        Fax: (212) 490-2990

           with a copy to:
        Frost Brown Todd LLC
        2200 PNC Center
        201 East Fifth Street
        Cincinnati, Ohio 45202-4182
        Attention: Beth A. Buchanan, Esq.
        Fax: (513) 651-6981

     If to KES Holdings, to:
        KES Holdings, LLC
        c/o Libra/KES Investment I LLC
        11766 Wilshire Boulevard
        Suite 870
        Los Angeles, California 90025
        Attention: David C. Wang
        Fax: (310) 996-9590

           with a copy to:
        Pillsbury Winthrop LLP
        11682 El Camino Real, Suite 200,
        San Diego, California 92130
        Attention: Christopher M. Forrester, Esq.
        Fax: (858) 509-4010

     If to ACH, to:
        Atacama Capital Holdings, Ltd.
        c/o HWR Services Limited
        Craigmuir Chambers
        P.O. Box 71
        Road Town
        Tortola, British Virgin Islands
        Attention: Damian Resnik
        Fax: (441) 292-0866

           with a copy to:
        Seward & Kissel LLP
        One Battery Park Plaza
        New York, New York 10004
        Attention: Craig Hickernell, Esq.
        Fax: (212) 480-8421

     Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other parties in the manner herein
provided for giving notice.

                                       37

     SECTION 9.7 PARTIES IN INTEREST. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law. Any purported such transfer, assignment, pledge, or hypothecation (other
than by operation of law) shall be void and ineffective. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and permitted assigns.

     SECTION 9.8 SEVERABILITY. In the event any provision of this Agreement is
found to be void and unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement shall nevertheless be binding upon the
parties with the same effect as though the void or unenforceable part had been
severed and deleted.

     SECTION 9.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts or by facsimile transmission, all of which taken together shall
constitute one instrument.

     SECTION 9.10 ENTIRE AGREEMENT. This Agreement, including the other
documents referred to herein and the Exhibits and Schedules hereto that form a
part hereof, contains the entire understanding of the parties hereto with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

     SECTION 9.11 AMENDMENTS. This Agreement may not be amended, supplemented or
modified orally, but only by an agreement in writing signed by each of the
parties hereto.

     SECTION 9.12 THIRD PARTY BENEFICIARIES. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereto and their respective
successors and assigns as permitted under Section 9.9, except the Purchaser
Indemnified Parties as provided in Article VIII hereof.

     SECTION 9.13 USE OF TERMS. Whenever the context so requires or permits, all
references to the masculine herein shall include the feminine and neuter, all
references to the neuter herein shall include the masculine and feminine, all
references to the plural shall include the singular and all references to the
singular shall include the plural.

     SECTION 9.14 NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of law or contract interpretation that provides that
in the case of ambiguity or uncertainty a provision should be construed against
the draftsman will be applied against any party hereto.

                            [SIGNATURE PAGE FOLLOWS]

                                       38

     IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase Agreement on the day and year first above written.

                                    YOUTHSTREAM ACQUISITION CORP.

                                    BY: /s/ Jonathan V. Diamond
                                        ----------------------------------------
                                    NAME: Jonathan V. Diamond
                                          --------------------------------------
                                    TITLE: Chief Executive Officer
                                           -------------------------------------

                                    YOUTHSTREAM MEDIA NETWORKS, INC.

                                    BY: /s/ Jonathan V. Diamond
                                        ----------------------------------------
                                    NAME: Jonathan V. Diamond
                                          --------------------------------------
                                    TITLE: Chief Executive Officer
                                           -------------------------------------

                                    KES HOLDINGS, LLC

                                    By: Libra/KES Investment I, LLC
                                    Its: Manager

                                    By: /s/ Jess M. Ravich
                                        ----------------------------------------
                                    Name: Jess M. Ravich
                                    Its: Authorized Signatory

                                    ATACAMA CAPITAL HOLDINGS, LTD.

                                    BY: /s/ Gwenyth Vanterpool
                                        ----------------------------------------
                                    NAME: Gwenyth Vanterpool for Westlaw Limited
                                          --------------------------------------
                                    TITLE: Director
                                           -------------------------------------

                                       39================================================================================

                          YOUTHSTREAM ACQUISITION CORP.

                                   $40,000,000

                         8.0% SUBORDINATED SECURED NOTES

                                   ----------

                             NOTE PURCHASE AGREEMENT

                                   ----------

                          DATED AS OF FEBRUARY 25, 2005

================================================================================

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
SECTION 1.  Authorization Of Notes.......................................     1

SECTION 2.  Sale And Purchase of Notes...................................     2

SECTION 3.  Closing......................................................     2

SECTION 4.  Conditions To Closing........................................     2
   Section 4.1    Representations and Warranties.........................     2
   Section 4.2    Performance; No Default................................     3
   Section 4.3    Compliance Certificates................................     3
   Section 4.4    Purchase Permitted by Applicable Law, Etc..............     3
   Section 4.5    Related Transactions...................................     3
   Section 4.6    Proceedings and Documents..............................     3
   Section 4.7    Securities Purchase Agreement..........................     3

SECTION 5.  Representations and warranties of the company................     3
   Section 5.1    Organization; Power and Authority......................     3
   Section 5.2    Authorization, Etc.....................................     4
   Section 5.3    Disclosure.............................................     4
   Section 5.4    Subsidiaries...........................................     4
   Section 5.5    Compliance with Laws, Other Instruments, Etc...........     4
   Section 5.6    Governmental Authorizations, Etc.......................     4
   Section 5.7    Litigation; Observance of Agreements; Statutes and
                     Orders..............................................     5
   Section 5.8    Taxes..................................................     5
   Section 5.9    Title to Property......................................     5
   Section 5.10   Licenses, Permits, Etc.................................     5
   Section 5.11   Existing Debt; Future Liens............................     5

SECTION 6.  REPRESENTATIONS OF THE PURCHASER.............................     5
   Section 6.1    Purchase for Investment................................     5
   Section 6.2    Organization; Power and Authority......................     6
   Section 6.3    Authorization, Etc.....................................     6

SECTION 7.  Informational Covenants and Reports..........................     6
   Section 7.1    Financial and Business Information.....................     6
   Section 7.2    Inspection.............................................     8

SECTION 8.  Prepayment of the notes......................................     8
   Section 8.1    Required Prepayments...................................     8
   Section 8.2    Optional Prepayments...................................     8
   Section 8.3    Allocation of Partial Prepayments......................     8
   Section 8.4    Maturity; Surrender, Etc...............................     9
   Section 8.5    Change in Control......................................     9

SECTION 9.  Additional Affirmative covenants.............................    10
   Section 9.1    Compliance with Law....................................    10
   Section 9.2    Insurance..............................................    11

                                       i

   Section 9.3    Maintenance of Properties..............................    11
   Section 9.4    Payment of Taxes.......................................    11
   Section 9.5    Corporate Existence, Etc...............................    11
   Section 9.6    Covenants Regarding Earnings Before Interest, Taxes,
                     Depreciation and Amortization.......................    11
   Section 9.7    Cash...................................................    11
   Section 9.8    Additional Affirmative Covenants.......................    12

SECTION 10. Negative covenants...........................................    12
   Section 10.1   Priority Debt..........................................    13
   Section 10.2   Liens..................................................    13
   Section 10.3   Merger, Consolidation, etc.............................    14
   Section 10.4   Sale of Assets, etc....................................    14
   Section 10.5   Line of Business.......................................    14
   Section 10.6   Transactions with Affiliates...........................    14
   Section 10.7   Certain Other Covenants................................    15

SECTION 11. Events Of Default............................................    16

SECTION 12. Remedies On Default, Etc.....................................    18
   Section 12.1   Acceleration...........................................    18
   Section 12.2   Other Remedies.........................................    18
   Section 12.3   Rescission.............................................    18
   Section 12.4   No Waivers or Election of Remedies, Expenses, Etc......    19

SECTION 13. Registration; Exchange; Substitution Of Notes................    19
   Section 13.1   Registration of Notes..................................    19
   Section 13.2   Transfer and Exchange of Notes.........................    19
   Section 13.3   Replacement of Notes...................................    19

SECTION 14. Payments on notes and Certain Tax Matters....................    20
   Section 14.1   Payments...............................................    20
   Section 14.2   Withholding Taxes......................................    20

SECTION 15. Expenses, Etc................................................    21
   Section 15.1   Expenses...............................................    21
   Section 15.2   Survival...............................................    21

SECTION 16. Survival of representations and warranties; entire
               agreement.................................................    21

SECTION 17. Amendment and waiver.........................................    22
   Section 17.1   Requirements...........................................    22
   Section 17.2   Solicitation of Holders of Notes.......................    22
   Section 17.3   Binding Effect, Etc....................................    22

SECTION 18. Notices......................................................    22

SECTION 19. Reproduction Of Documents....................................    23

SECTION 20. Confidential Information.....................................    23

SECTION 21. Substitution of purchaser....................................    23

SECTION 20. Miscellaneous................................................    24

                                       ii

   Section 22.1   Successors and Assigns.................................    24
   Section 22.2   Payments Due on Non-Business Days......................    24
   Section 22.3   Severability...........................................    24
   Section 22.4   Certain Rights.........................................    24
   Section 22.5   Construction...........................................    24
   Section 22.6   Counterparts...........................................    25
   Section 22.7   Governing Law..........................................    25

                                       iii

SCHEDULE A    -- INFORMATION RELATING TO PURCHASERS

SCHEDULE B    -- DEFINED TERMS

SCHEDULE C    -- FORM OF INFORMATION REPORT

SCHEDULE 10.2 -- SCHEDULE OF LIENS

EXHIBIT 1-A   -- FORM OF 8.0% SUBORDINATED SECURED NOTE (KES HOLDINGS, LLC)

EXHIBIT 1-B   -- FORM OF 8.0% SUBORDINATED SECURED NOTE (ATACAMA CAPITAL
                 HOLDINGS, LTD.)

EXHIBIT 2-1   -- YOUTHSTREAM MEDIA NETWORKS, INC. PLEDGE AGREEMENT (KES
                 HOLDINGS, LLC)

EXHIBIT 2-2   -- YOUTHSTREAM MEDIA NETWORKS, INC. PLEDGE AGREEMENT (ATACAMA
                 CAPITAL HOLDINGS, LTD.)

EXHIBIT 2-A   -- FORM OF SECURITY AGREEMENT

EXHIBITS 2-B
AND 2-C       -- FORMS OF PLEDGE AGREEMENT

EXHIBIT 2-D   -- FORM OF FEE MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITY
                 AGREEMENT AND FIXTURE FILING

EXHIBIT 2-E   -- FORM OF ASSIGNMENT OF RENTS AND LEASES

                                       iv

                          YOUTHSTREAM ACQUISITION CORP.

                         8.0% SUBORDINATED SECURED NOTES

                                                                     Dated as of
                                                               February 25, 2005

TO EACH OF THE PURCHASERS LISTED IN
     THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

     YOUTHSTREAM ACQUISITION CORP., a Delaware corporation, agrees with the
Purchasers listed in the attached Schedule A as follows:

SECTION 1. AUTHORIZATION OF NOTES.

     The Company will authorize the issue and sale of Forty Million Dollars
($40,000,000) aggregate principal amount of its eight percent (8.0%)
Subordinated Secured Notes due February 28, 2015 (the "NOTES," such term to
include any such notes issued in substitution therefor pursuant to Section 13 of
this Agreement (as hereinafter defined)). The Notes shall be substantially in
the form set out in Exhibits 1-A and 1-B, with such changes therefrom, if any,
as may be approved by each Purchaser and the Company. The obligations of the
Company under this Agreement shall be guaranteed by YouthStream Media Networks,
Inc., on a limited recourse basis pursuant to a guarantee to be contained in the
YSTM Pledge Agreements defined below (the "GUARANTY"). The Guaranty shall be
secured by a pledge of all of the capital stock or other equity interests of the
Company owned by YouthStream Media Networks, Inc. pursuant to a YouthStream
Media Networks Pledge Agreement in the forms of Exhibit 2-1 and Exhibit 2-2 (the
"YSTM PLEDGE AGREEMENTS"). In addition, the Notes shall be secured, upon the
earlier of (x) the consent of General Electric Capital Corporation (together
with its successors or assigns, "GECC") or (y) the repayment in full of the
Company's obligations to GECC (as contemplated by Section 9.9), by the
following: (i) a Lien on all of the property of the Company pursuant to a
Security Agreement in the form set out in Exhibit 2-A (the "SECURITY
AGREEMENT"), (ii) pledges of the Membership Interest and AKHC Stock pursuant to
the Pledge Agreements in the forms set out in Exhibits 2-B and 2-C (the "PLEDGE
AGREEMENTS"), (iii) a Fee Mortgage, Assignment of Rents and Leases, Security
Agreement and Fixture Filing in the form set out in Exhibit 2-D (the "MORTGAGE")
and (iv) an Assignment of Rents and Leases in the form set out in Exhibit 2-E
(the "ASSIGNMENT") (collectively, this Agreement, the Notes and the YSTM Pledge
Agreements are referred to as the "PRIMARY LOAN DOCUMENTS"; the Security
Agreement, the Mortgage and the Assignment are referred to as the "SECONDARY
LOAN DOCUMENTS"; and the Primary Loan Documents and the Secondary Loan Documents
are referred to as the "LOAN DOCUMENTS"). The assets and properties subject to
the YSTM Pledge Agreements are referred to as the "PRIMARY COLLATERAL"; the
assets and properties subject to the Security Agreement, the Mortgage and the
Assignment are referred to as the "SECONDARY COLLATERAL"; and Primary Collateral
and the Secondary Collateral are referred to together as the "COLLATERAL." The
Lien and pledges with respect to the Primary Collateral shall be senior to all
other creditors of YouthStream Media Networks, Inc. with respect to the Primary
Collateral. The Lien and pledges with respect to the

Secondary Collateral shall be subordinated to any Lien securing any Priority
Debt. Certain capitalized terms used in this Agreement are defined in Schedule
B; references to a "SCHEDULE" or an "EXHIBIT" are, unless otherwise specified,
to a Schedule or an Exhibit attached to this Agreement.

SECTION 2. SALE AND PURCHASE OF NOTES.

     Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser's name in Schedule A. The Notes to be issued
and sold hereunder constitute a portion of the purchase price to be paid for the
membership interest ("MEMBERSHIP INTEREST") of KES Acquisition Company LLC ("KES
ACQUISITION") owned by KES Holdings, LLC, a Delaware limited liability company
("KESH"), and the shares of stock of Atacama KES Holding Corporation, a Delaware
corporation (the "AKHC STOCK"), owned by Atacama Capital Holdings, Ltd., a
British Virgin Islands company ("ACH"), which are being purchased by the Company
pursuant to that certain Securities Purchase Agreement by and among the Company
and the Purchasers dated as of even date herewith (the "SECURITIES PURCHASE
AGREEMENT"). The obligations of each Purchaser hereunder are several and not
joint obligations and each Purchaser shall have no obligation and no liability
to any Person for the performance or nonperformance by any other Purchaser
hereunder.

SECTION 3. CLOSING.

     The sale and purchase of the Notes to be purchased by each Purchaser shall
occur at the same time and place as the transactions contemplated in the
Securities Purchase Agreement are consummated (the "CLOSING"). At the Closing,
the Company will deliver to each Purchaser the Notes to be purchased by such
Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least One Hundred Thousand Dollars ($100,000) as such
Purchaser may request), and such Purchaser's respective executed YSTM Pledge
Agreement, all dated the date of the Closing and registered in such Purchaser's
name (or in the name of such Purchaser's nominee). If, at the Closing, the
Company shall fail to tender such Notes to any Purchaser as provided above in
this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to any Purchaser's satisfaction, such Purchaser shall, at such
Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.

SECTION 4. CONDITIONS TO CLOSING.

     The obligation of each Purchaser to purchase and pay for the Notes to be
sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:

     Section 4.1 Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.

                                        2

     Section 4.2 Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in the Primary Loan
Documents required to be performed or complied with by it prior to or at the
Closing, and after giving effect to the issue and sale of the Notes, no Default
or Event of Default shall have occurred and be continuing.

     Section 4.3 Compliance Certificates.

          (a) Officer's Certificate. The Company shall have delivered to such
     Purchaser an Officer's Certificate, dated the date of the Closing,
     certifying that the conditions specified in Sections 4.1; 4.2 and 4.7 have
     been fulfilled.

          (b) Secretary's Certificate. The Company shall have delivered to such
     Purchaser a certificate certifying as to the resolutions attached thereto
     and other corporate proceedings relating to the authorization, execution
     and delivery of the Notes and this Agreement.

     Section 4.4 Purchase Permitted by Applicable Law, Etc. On the date of the
Closing each purchase of Notes shall be permitted by the laws and regulations of
each jurisdiction to which each Purchaser is subject. If requested by any
Purchaser, such Purchaser shall have received an Officer's Certificate
certifying as to such matters of fact as such Purchaser may reasonably specify
to enable such Purchaser to determine whether such purchase is so permitted.

     Section 4.5 Related Transactions. The Company shall have consummated the
sale of the entire principal amount of the Notes scheduled to be sold on the
date of Closing pursuant to this Agreement.

     Section 4.6 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by the Primary Loan Documents
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and such Purchaser's special counsel, and such
Purchaser and such Purchaser's special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or such Purchaser's special counsel may reasonably request.

     Section 4.7 Securities Purchase Agreement. The transactions contemplated in
the Securities Purchase Agreement shall be fully consummated.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     The Company represents and warrants to each Purchaser that:

     Section 5.1 Organization; Power and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company has the
corporate power and authority to own or hold under lease the properties it
currently purports to

                                        3

own or hold under lease, to transact the business it transacts and currently
proposes to transact, to execute and deliver this Agreement, the other Primary
Loan Documents, and if delivered in accordance with the terms of this Agreement,
the Secondary Loan Documents, and to perform the provisions hereof and thereof.

     Section 5.2 Authorization, Etc. This Agreement, the other Primary Loan
Documents, and if delivered in accordance with the terms of this Agreement, the
Secondary Loan Documents, have been duly authorized by all necessary corporate
action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each other Loan Document will constitute, a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

     Section 5.3 Disclosure. None of the Loan Documents, the documents,
certificates or other writings delivered to each Purchaser by or on behalf of
the Company in connection with the transactions contemplated thereby, taken as a
whole, contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. There is no fact known to the
Company that could reasonably be expected to have a Material Adverse Effect that
has not been set forth herein or in the other documents, certificates and other
writings delivered to each Purchaser by or on behalf of the Company specifically
for use in connection with the transactions contemplated hereby.

     Section 5.4 Subsidiaries. Prior to the consummation of the transactions
contemplated in the Securities Purchase Agreement, the Company had no
Subsidiaries.

     Section 5.5 Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of the Loan Documents will not (a)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of the Company under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which the
Company is bound or by which the Company or any of its properties may be bound
or affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or (c) violate
any provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company, except for such contraventions, breaches,
defaults, liens, conflicts or violations as would not, individually or in the
aggregate, be reasonably likely to constitute a Material Adverse Affect.

     Section 5.6 Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of the Loan Documents other than the filing of Form D with the
Securities and Exchange Commission and comparable state securities law filings
which may be required.

                                        4

     Section 5.7 Litigation; Observance of Agreements; Statutes and Orders.

          (a) There are no actions, suits or proceedings pending or, to the
     knowledge of the Company, threatened against or affecting the Company or
     any property of the Company in any court or before any arbitrator of any
     kind or before or by any Governmental Authority that, individually or in
     the aggregate, could reasonably be expected to have a Material Adverse
     Effect.

          (b) The Company is not in default under any term of any agreement or
     instrument to which it is a party or by which it is bound, or any order,
     judgment, decree or ruling of any court, arbitrator or Governmental
     Authority or is in violation of any applicable law, ordinance, rule or
     regulation (including without limitation Environmental Laws) of any
     Governmental Authority, which default or violation, individually or in the
     aggregate, could reasonably be expected to have a Material Adverse Effect.

     Section 5.8 Taxes. The Company is newly formed and has not filed tax
returns. The Company knows of no basis for any tax or assessment that could
reasonably be expected to have a Material Adverse Effect.

     Section 5.9 Title to Property. Upon the closing of the transactions
contemplated by the Securities Purchase Agreement, the Company will have good
and sufficient title to its properties that individually or in the aggregate are
Material, free and clear of Liens prohibited by this Agreement.

     Section 5.10 Licenses, Permits, Etc. Upon the closing of the transactions
contemplated by the Securities Purchase Agreement, the Company will own or
possess all licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that individually
or in the aggregate are Material, without known conflict with the rights of
others.

     Section 5.11 Existing Debt; Future Liens.

          (a) Prior to the consummation of the transactions contemplated in the
     Securities Purchase Agreement, the Company had no Debt.

          (b) The Company has not agreed or consented to cause or permit in the
     future (upon the happening of a contingency or otherwise) any of its
     property, whether now owned or hereafter acquired, to be subject to a Lien
     not permitted by Section 10.2.

SECTION 6. REPRESENTATIONS OF THE PURCHASER.

     Section 6.1 Purchase for Investment. Each Purchaser represents that it is
purchasing the Notes for its own account or for one or more separate accounts
maintained by it and not with a view to the distribution thereof, provided that
the disposition of such Purchaser's property shall at all times be within such
Purchaser's control. Each Purchaser understands that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under

                                        5

circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.

     Section 6.2 Organization; Power and Authority. Each Purchaser represents
that it is an entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or formation, is duly qualified as
a foreign corporation or limited liability company and is in good standing in
each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each Purchaser has the corporate power and
authority to own or hold under lease all property that it purports to own or
hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Assignment and to
perform the provisions hereof and thereof.

     Section 6.3 Authorization, Etc. Each of the Loan Documents to which such
Purchaser is (or becomes) a party has been duly authorized by all necessary
corporate action on the part of such Purchaser, and constitutes, upon execution
and delivery thereof, a legal, valid and binding obligation of each such
Purchaser enforceable against such Purchaser in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditor's rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

SECTION 7. INFORMATIONAL COVENANTS AND REPORTS.

     Section 7.1 Financial and Business Information. The Company's quarterly and
annual financial statements will be included in the consolidated financial
statements of YouthStream Media Networks, Inc., which will be filed as required
with the Securities and Exchange Commission. The Company shall deliver to each
Holder of Notes:

          (a) Notice of Default or Event of Default -- promptly, and in any
     event within five (5) Business Days after a Responsible Officer becoming
     aware of the existence of any Default or Event of Default, a written notice
     specifying the nature and period of existence thereof and what action the
     Company is taking or proposes to take with respect thereto;

          (b) Notices from Governmental Authority -- promptly, and in any event
     within thirty (30) days of receipt thereof, copies of any notice to the
     Company from any Federal or state Governmental Authority relating to any
     order, ruling, statute or other law or regulation that could reasonably be
     expected to have a Material Adverse Effect; and

          (c) Financial Reports -

               (i) Within fifteen (15) calendar days following the end of each
          fiscal month, an aged trial balance by account debtor and an inventory
          perpetual or physical (as requested by the Holders) in a form
          reasonably approved by the Holders and as soon as available but in no
          event later than thirty (30) calendar

                                        6

          days following the end of each fiscal month, a reconciliation of the
          aged trial balance and the inventory perpetual or physical (as
          requested by the Holders) to the Company's general ledger and from the
          general ledger to the financial statements for such fiscal month
          accompanied by supporting detail and documentation as the Holders may
          request;

               (ii) Within fifteen (15) calendar days following the end of each
          fiscal month, an accounts payable analysis in a form reasonably
          approved by the Holders (together with an accounts payable aging) and
          an accounts receivable roll forward analysis in a form reasonably
          approved by the Holders, each certified as true and correct by the
          Chief Financial Officer of the Company or such other officer as is
          acceptable to the Holders;

               (iii) Within thirty (30) calendar days following the end of each
          fiscal month, the financial statements for such fiscal month, which
          shall provide comparisons to budget and actual results for the
          corresponding period during the prior fiscal year, both on a monthly
          and year-to-date basis, and accompanied by a certification from the
          Chief Executive Officer or Chief Financial Officer of the Company (or
          such other officer as is acceptable to the Holders) that such
          financial statements are complete and correct, that there was no Event
          of Default (or specifying the Event(s) of Defaults that have occurred
          during such period), and showing in reasonable detail the calculations
          used in determining compliance with the financial covenants hereunder;

               (iv) Within ninety (90) calendar days following the end of each
          fiscal year, the financial statements for such fiscal year certified
          without qualification by an independent certified accounting firm
          acceptable to the Holders, which shall provide comparisons to the
          prior fiscal year, and shall be accompanied by (i) a statement in
          reasonable detail showing the calculations used in determining
          compliance with the financial covenants hereunder, (ii) a report from
          the Company's accountants to the effect that in connection with their
          audit examination nothing has come to their attention to cause them to
          believe that an Event of Default has occurred or is continuing (or
          specifying such Events of Default) and (iii) any management letter
          that may be issued;

               (v) Within five (5) calendar days prior to the end of each fiscal
          quarter, commencing with the fiscal quarter ending March 31, 2005, an
          operating budget (the "OPERATING BUDGET") for the next fiscal quarter,
          which will be prepared by the Company in good faith, with care and
          diligence, and using assumptions that are reasonable under the
          circumstances at the time such budget is delivered to the Holders and
          disclosed therein when delivered, and which shall be acceptable to
          Required Holders; provided, however, that the approval of the Required
          Holders shall not be withheld unreasonably and; provided, further,
          that in the event that the Company is in material compliance with all
          terms of this Agreement as of the end of the fiscal quarter
          immediately preceding the fiscal quarter for which each such Operating
          Budget is delivered and is expected, based upon such Operating Budget,
          to be in compliance with all applicable financial

                                        7

          covenants under this Agreement with respect to such fiscal quarter,
          any refusal by the Required Holders to approve such Operating Budget
          shall not be deemed to be reasonable.

               (vi) On the first (1st) and fifteenth (15th) day of each month, a
          report in substantially the form set forth in Schedule C, attached
          hereto, containing the information with respect to the Company for the
          two-week period then ended.

          (d) Requested Information -- with reasonable promptness, such other
     data and information relating to the business, operations, affairs,
     financial condition, assets or properties of the Company, including,
     without limitation, income statements, balance sheets, statements of cash
     flows, tax returns and other similar financial information regarding the
     Company, tax returns (together with supporting documentation) as the
     Holders may request from time to time, or relating to the ability of the
     Company to perform its obligations hereunder and under the Notes as from
     time to time may be reasonably requested by any such Holder of Notes. In
     addition, the Company shall promptly advise the Holders in reasonable
     detail of (i) any Lien, other than a Permitted Lien, attaching to or
     asserted against any of the Collateral or any occurrence causing a material
     loss or decline in value of any Collateral and the estimated (or actual, if
     available) amount of any such loss or decline, (ii) any material change in
     the composition of the Collateral and (iii) the occurrence of any Event of
     Default or any other event that has had or could reasonably be expected to
     have a Material Adverse Effect.

     Section 7.2 Inspection. The Company shall permit the representatives of
each Holder of Notes at the expense of such Holder and upon reasonable prior
notice to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company with the Company's
officers, and (with the consent of the Company, which consent will not be
unreasonably withheld) to visit the other offices and properties of the Company,
and generally to inspect the Collateral, all at such reasonable times and as
often as may be reasonably requested in writing.

SECTION 8. PREPAYMENT OF THE NOTES.

     Section 8.1 Required Prepayments. Certain prepayments of principal are
required under the Notes. The entire outstanding principal amount of the Notes
shall become due and payable on February 28, 2015.

     Section 8.2 Optional Prepayments. Except as set forth in the Notes and in
Section 8.5 of this Agreement, the Company may not prepay the Notes.

     Section 8.3 Allocation of Partial Prepayments. Except if any Holder of a
Note declines to accept an offer of prepayment pursuant to Section 8.5, in the
case of each partial prepayment of the Notes, the principal amount of the Notes
to be prepaid shall be allocated among all of the Notes at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment.

                                        8

     Section 8.4 Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest as
aforesaid, interest on such principal amount shall cease to accrue. Any Note
paid or prepaid in full shall be surrendered to the Company and cancelled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.

     Section 8.5 Change in Control.

          (a) Notice of Change in Control or Control Event. The Company will,
     within five (5) Business Days after any Responsible Officer has knowledge
     of the occurrence of any Change in Control or Control Event, give written
     notice of such Change in Control or Control Event to each Holder of Notes
     unless notice in respect of such Change in Control (or the Change in
     Control contemplated by such Control Event) shall have been given pursuant
     to subparagraph (b) of this Section 8.5. If a Change in Control has
     occurred, such notice shall contain and constitute an offer to prepay Notes
     as described in subparagraph (c) of this Section 8.5 and shall be
     accompanied by the certificate described in subparagraph (g) of this
     Section 8.5.

          (b) Condition to Company Action. The Company will not take any action
     that consummates or finalizes a Change in Control unless (i) at least
     fifteen (15) days prior to such action it shall have given to each Holder
     of Notes written notice containing and constituting an offer to prepay
     Notes as described in subparagraph (c) of this Section 8.5, accompanied by
     the certificate described in subparagraph (g) of this Section 8.5, and (ii)
     contemporaneously with such action, it prepays all Notes required to be
     prepaid in accordance with this Section 8.5.

          (c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
     subparagraphs (a) and (b) of this Section 8.5 shall be an offer to prepay,
     in accordance with and subject to this Section 8.5, all, but not less than
     all, the Notes held by each Holder (in this case only, "Holder" in respect
     of any Note registered in the name of a nominee for a disclosed beneficial
     owner shall mean such beneficial owner) on a date specified in such offer
     (the "PROPOSED PREPAYMENT DATE"). If such Proposed Prepayment Date is in
     connection with an offer contemplated by subparagraph (a) of this Section
     8.5, such date shall be not less than ten (10) Business Days and not more
     than twenty (20) Business Days after the date of such offer (if the
     Proposed Prepayment Date shall not be specified in such offer, the Proposed
     Prepayment Date shall be the fifteenth (15th) Business Day after the date
     of such offer).

          (d) Acceptance. A Holder of Notes may accept the offer to prepay made
     pursuant to this Section 8.5 by causing a notice of such acceptance to be
     delivered to the Company at least three (3) Business Days prior to the
     Proposed Prepayment Date. A failure by a Holder of Notes to respond to an
     offer to prepay made pursuant to this Section 8.5 shall be deemed to
     constitute an acceptance of such offer by such Holder.

                                        9

          (e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
     Section 8.5 shall be at one hundred percent (100%) of the principal amount
     of such Notes, together with interest on such Notes accrued to the date of
     prepayment. The prepayment shall be made on the Proposed Prepayment Date
     except as provided in subparagraph (f) of this Section 8.5.

          (f) Deferral Pending Change in Control. The obligation of the Company
     to prepay Notes pursuant to the offers required by subparagraph (b) and
     accepted in accordance with subparagraph (d) of this Section 8.5 is subject
     to the occurrence of the Change in Control in respect of which such offers
     and acceptances shall have been made. In the event that such Change in
     Control does not occur on the Proposed Prepayment Date in respect thereof,
     the prepayment shall be deferred until and shall be made on the date on
     which such Change in Control occurs. The Company shall keep each Holder of
     Notes reasonably and timely informed of (i) any such deferral of the date
     of prepayment, (ii) the date on which such Change in Control and the
     prepayment are expected to occur, and (iii) any determination by the
     Company that efforts to effect such Change in Control have ceased or been
     abandoned (in which case the offers and acceptances made pursuant to this
     Section 8.5 in respect of such Change in Control shall be deemed
     rescinded).

          (g) Officer's Certificate. Each offer to prepay the Notes pursuant to
     this Section 8.5 shall be accompanied by a certificate, executed by a
     Senior Financial Officer of the Company and dated the date of such offer,
     specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made
     pursuant to this Section 8.5; (iii) the principal amount of each Note
     offered to be prepaid; (iv) the interest that would be due on each Note
     offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that
     the conditions of this Section 8.5 have been fulfilled; and (vi) in
     reasonable detail, the nature and date or proposed date of the Change in
     Control.

          (h) Effect on Required Payments. The amount of each payment of the
     principal of the Notes made pursuant to this Section 8.5 shall be applied
     against and reduce each of the then remaining principal payments due by a
     percentage equal to the aggregate principal amount of the Notes so paid
     divided by the aggregate principal amount of the Notes outstanding
     immediately prior to such payment.

SECTION 9. ADDITIONAL AFFIRMATIVE COVENANTS.

     The Company covenants that so long as any of the Notes are outstanding:

     Section 9.1 Compliance with Law. The Company will comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

                                       10

     Section 9.2 Insurance. The Company will maintain, with financially sound
and reputable insurers, insurance with respect to their respective properties
and businesses against such casualties and contingencies, of such types, on such
terms and in such amounts (including deductibles, co-insurance and
self-insurance, if adequate reserves are maintained with respect thereto) as, to
the Company's knowledge, is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.

     Section 9.3 Maintenance of Properties. The Company will maintain and keep
its properties in good repair, working order and condition (other than ordinary
wear and tear), so that the business carried on in connection therewith may be
properly conducted, provided that this Section 9.3 shall not prevent the Company
from discontinuing the operation and the maintenance of any of its properties if
such discontinuance is desirable in the conduct of its business and the Company
has concluded that such discontinuance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

     Section 9.4 Payment of Taxes. YouthStream Media Networks, Inc., shall or
shall cause the Company to file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company,
provided that any such tax or assessment or claims need not be paid if (i) the
amount, applicability or validity thereof is contested by the Company on a
timely basis in good faith and in appropriate proceedings, and the Company has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or (ii) the nonpayment of all such taxes and assessments in the
aggregate could not reasonably be expected to have a Material Adverse Effect.

     Section 9.5 Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence and all
rights and franchises of the Company unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise could not, individually or
in the aggregate, have a Material Adverse Effect.

     Section 9.6 Covenants Regarding Earnings Before Interest, Taxes,
Depreciation and Amortization. For the nine months ending September 30, 2005,
the Company must have, on a consolidated basis, in excess of Four Million
Dollars ($4,000,000) of earnings before interest, taxes, depreciation and
amortization, calculated in accordance with GAAP ("EBITDA"). For each of the
fiscal years ending on and after September 30, 2006, the Company must have, on a
consolidated basis, in excess of Seven Million Two Hundred Thousand Dollars
($7,200,000) of EBITDA. At March 31 of each fiscal year following the year ended
September 30, 2005 in which the obligations under the Notes remain outstanding,
the Company must have, on a consolidated basis, in excess of Three Million
Dollars ($3,000,000) of EBITDA for the six (6) months then ended.

     Section 9.7 Cash. On a consolidated basis, the Company must maintain, at
all times, a minimum amount of Cash (the "CASH REQUIREMENT") as follows:

                                       11

          (a) From the Closing through March 31, 2005, of Five Hundred Thousand
     Dollars ($500,000);

          (b) From April 1, 2005 through September 30, 2005, of One Million
     Dollars ($1,000,000);

          (c) From October 1, 2005 through December 31, 2005, of One Million
     Five Hundred Thousand Dollars ($1,500,000); and

          (d) From January 1, 2006 and thereafter, of One Million Five Hundred
     Thousand Dollars ($1,500,000) at all times;

provided, however, that the Cash Requirement may be satisfied with a combination
of cash and borrowing availability under a credit facility (the "REVOLVER"). For
the avoidance of doubt, if, at any test date, the Company has cash of $1,000,000
and borrowing availability of $500,000 under a Revolver it shall be deemed to
have met the Cash Requirement.

     Section 9.8 Additional Affirmative Covenants. For so long as the
obligations under the Notes remain outstanding, YouthStream Media Networks, Inc.
shall take, and shall cause its subsidiaries to take, the following actions:

          (a) Provide financial reports to the Holders with respect to the
     consolidated financial condition of the Company and YouthStream Media
     Networks, Inc.; and

          (b) Comply with all laws applicable to YouthStream Media Networks,
     Inc., the Company and their subsidiaries, except as to where such
     noncompliance would not have a Material Adverse Effect.

     Section 9.9 Additional Collateral. For so long as the obligations under the
Notes remain outstanding, the Company shall, from time to time, but not less
than once every calendar quarter, request that GECC permit the Company to
execute and deliver the Secondary Loan Documents, in the form attached hereto as
Exhibits 2-A through 2-E (or in such other form as is acceptable to GECC and the
Required Holders) to the Holders and to perform the Company's obligations
thereunder (including, without limitation, the granting of security interests in
the assets of the Company thereunder). Upon the earlier of (x) such time as GECC
permits the Company to execute and deliver such Secondary Loan Documents, or (y)
the repayment in full of the obligations of the Company to GECC, the Company
shall execute and deliver each of the Secondary Loan Documents to which such
Person is a party to the Holders. Notwithstanding any other provision herein to
the contrary, the Holders agree that GECC's consent to the executing and
delivery of the Secondary Loan Documents shall be determined in its sole and
absolute discretion and in no event shall any lien with respect to the Secondary
Loan Documents arise in connection with any refinancing of the obligations of
the Company to GECC with a new lender without the consent of such new lender.

SECTION 10. NEGATIVE COVENANTS.

     The Company covenants that so long as any of the Notes are outstanding:

                                       12

     Section 10.1 Priority Debt. The Company will not at any time permit
Priority Debt to exceed Forty Million Dollars ($40,000,000); provided, however,
that Priority Debt may exceed such amount with the consent of the Required
Holders.

     Section 10.2 Liens. The Company will not directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any of the Company's subsidiaries, whether now
owned or held or hereafter acquired, or any income or profits therefrom or
assign or otherwise convey any right to receive income or profits without the
consent of the Required Holders, which will not be unreasonably withheld,
except:

          (a) Liens for property taxes and assessments or governmental charges
     or levies and Liens securing claims or demands of mechanics and materialmen
     incurred in the ordinary course of business;

          (b) Liens of or resulting from any judgment or award, the time for the
     appeal or petition for rehearing of which shall not have expired, or in
     respect of which the Company shall at any time in good faith be prosecuting
     an appeal or proceeding for a review and in respect of which a stay of
     execution pending such appeal or proceeding for review shall have been
     secured, provided that the Company maintains any and all reserves which may
     be required under GAAP in connection with any claims secured by such Liens
     described in this Section 10.2(b);

          (c) Liens incidental to the conduct of business or the ownership of
     properties and assets (including Liens in connection with worker's
     compensation, unemployment insurance and other like laws, warehousemen's
     and attorneys' liens and statutory landlords' liens) and Liens to secure
     the performance of bids, tenders or trade contracts, or to secure statutory
     obligations, surety or appeal bonds or other Liens of like general nature;
     provided that (i) all of such Liens described in this Section 10.2(c) are
     incurred in the ordinary course of business and not in connection with the
     borrowing of money; and (ii) in each case, the obligation secured is not
     overdue or, if overdue, is being contested in good faith by appropriate
     actions or proceedings;

          (d) minor survey exceptions or minor encumbrances, easements or
     reservations, or rights of others for rights-of-way, utilities and other
     similar purposes, or zoning or other restrictions as to the use of real
     properties, which are necessary for the conduct of the activities of the
     Company or which customarily exist on properties of corporations engaged in
     similar activities and similarly situated and which do not materially
     impair their use in the operation of the business of the Company;

          (e) Liens existing as of the date of Closing and reflected in Schedule
     10.2 hereto;

          (f) Liens incurred after the date of Closing with respect to Priority
     Debt or given to secure the payment of the purchase price of fixed assets
     acquired or purchased in the ordinary course of business by the Company to
     be used in carrying on the business of

                                       13

     the Company, provided that (i) the Lien shall attach solely to the fixed
     assets purchased or acquired and (ii) at the time of the purchase or
     acquisition of such fixed assets, the aggregate amount remaining unpaid on
     all Debt secured by Liens on such fixed assets shall not exceed an amount
     equal to one hundred percent (100%) of the lesser of the total purchase
     price or fair market value at the time of purchase or acquisition of such
     fixed assets (as determined in good faith by the Board of Directors of the
     Company); and

          (g) any Lien extending, renewing or replacing any Lien permitted by
     the immediately preceding subparagraphs (a) through (f), inclusive, of this
     Section 10.2, provided that (i) except in the case of Priority Debt, the
     aggregate principal amount of Debt secured by such Lien immediately prior
     to such extension, renewal or replacement is not increased or the maturity
     thereof reduced and (ii) such Lien is not extended to any other property,
     except for the substitution of property of a similar nature and equal or
     greater value than the property securing the Lien immediately prior to such
     extension, renewal or replacement.

For the purposes of this Section 10.2, any Person becoming a Subsidiary after
the date of this Agreement shall be deemed to have incurred all of its then
outstanding Liens at the time it becomes a Subsidiary, and any Person extending,
renewing or refunding any Debt secured by any Lien shall be deemed to have
incurred such Lien at the time of such extension, renewal or refunding.

     Section 10.3 Merger, Consolidation, etc. The Company will not consolidate
with or merge with any other Person or convey, transfer or lease substantially
all of its assets in a single transaction or series of transactions to any
Person.

     Section 10.4 Sale of Assets, etc. Except as permitted under Section 10.3,
but subject to the YSTM Pledge Agreements, and the Secondary Loan Documents, if
such Secondary Loan Documents have been executed and delivered in accordance
with the terms of this Agreement, the Company will not make any Asset
Disposition unless the Company has paid to each Purchaser such amount as the
Purchaser may require to release the Lien encumbering the property that is the
subject of the Asset Disposition.

     Section 10.5 Line of Business. The Company will not engage in any business
if, as a result, the general nature of the business in which the Company, taken
as a whole, would then be engaged would be materially changed from the general
nature of the business in which the Company, taken as a whole, are engaged on
the date of this Agreement.

     Section 10.6 Transactions with Affiliates. The Company will not enter into
directly or indirectly any transaction or Material group of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Company), except in the ordinary course and pursuant to the
reasonable requirements of the Company's business and upon fair and reasonable
terms no less favorable to the Company than would be obtainable in a comparable
arm's-length transaction with a Person who is not an Affiliate of the Company.

                                       14

     Section 10.7 Certain Other Covenants. The Company and each of its
Subsidiaries will not, without the consent of the Required Holders, take (or
agree to take) any of the following actions:

          (a) Form any Subsidiary or merge with, acquire all or substantially
     all of the assets or stock of, or otherwise combine with or make any
     investment in, or loan or advance to, any Person or form any Subsidiary.

          (b) Cancel any Debt owing to it or increase, incur, assume or permit
     to exist any Debt except: (i) the Notes, (ii) obligations of KES
     Acquisition or the Company existing as of the Closing and set forth on the
     balance sheet of KES Acquisition or the Company as of the Closing, (iii)
     deferred taxes, (iv) by endorsement of instruments or items of payment for
     deposit to the general account of the Purchasers, (v) for Debt incurred for
     the benefit of the Company if the primary obligation is permitted by this
     Agreement, and (vi) additional Debt incurred after the Closing in an
     aggregate outstanding amount not exceeding Ten Million Dollars
     ($10,000,000).

          (c) Enter into any lending or borrowing arrangement with any of its
     employees, directors, Affiliates or other Person related to the Company
     (including upstreaming and downstreaming of cash and intercompany advances
     and payments that are not otherwise permitted hereunder) or enter into any
     consulting arrangement or employment arrangement with any officer, employee
     or affiliate of YouthStream Media Networks, Inc.

          (d) Make any changes in any of its business objectives, purposes, or
     operations that could reasonably be expected to adversely affect repayment
     of the Notes or could reasonably be expected to have a Material Adverse
     Effect or engage in any business other than that presently engaged in.

          (e) Sell, transfer, issue, convey, assign or otherwise dispose of any
     of its assets or properties, including its accounts or any shares of its
     stock (other than, in the case of the Company, the sale of its Series B
     Preferred Stock to YouthStream Media Networks, Inc.) or engage in any
     sale-leaseback, synthetic lease or similar transaction; provided, however,
     that the foregoing shall not prohibit the sale of inventory or obsolete or
     unnecessary equipment in the ordinary course of its business.

          (f) Change (i) its name as it appears in official filings in the state
     of its incorporation or organization, (ii) its chief executive office,
     corporate offices, warehouses or other Collateral locations, or location of
     its records concerning any of the Collateral, (iii) the type of legal
     entity that it is, (iv) its organization identification number, if any,
     issued by its state of incorporation or organization, or (v) acquire from
     any Person or lease to any Person any real estate after the Closing
     without, in each instance, providing the Holders with not less than thirty
     (30) calendar days prior written notice and taking all actions deemed
     necessary or appropriate by the Holders to continuously protect and perfect
     the Holders' Liens upon the Collateral.

          (g) Make or permit any Restricted Payment, other than:

                                       15

               (i) Payment of the "Management Fee" under and as defined in the
          Management Agreement;

               (ii) so long as no Default or Event of Default has occurred and
          is continuing or would result from the payment thereof, payment of the
          "Management Incentive Fee" under and as defined in the Management
          Services Agreement;

               (iii) any payment or transfer of funds required pursuant to
          Sections 4.7 and 4.8 of the Securities Purchase Agreement.

          (h) Make or commit to make any individual capital expenditure in
     excess of Two Hundred Fifty Thousand Dollars ($250,000) in any fiscal year
     or One Million Dollars ($1,000,000) in the aggregate in any fiscal year for
     all such capital expenditures.

          (i) Amend the Company's Restated Certificate of Incorporation in any
     manner so as to adversely affect any right of the Holders to receive
     payment or principal or interest with respect to the Notes in a timely
     manner.

          (j) Amend, default under the terms of, or terminate (or permit any of
     its Affiliates to amend, default under the terms of, or terminate) the
     Amended and Restated Management Agreement by and between KES Acquisition
     and Pinnacle (the "MANAGEMENT AGREEMENT") without the prior written consent
     of the Required Holders; provided, however, that:

               (i) In no event shall an amendment to the Management Agreement be
          deemed to constitute an Event of Default under Section 11 if such
          amendment is not reasonably likely to have a Material Adverse Effect;
          and

               (ii) In the event that Pinnacle ceases to perform its obligations
          under the Management Agreement for any reason, including, without
          limitation, bankruptcy or other solvency related events, and as a
          result the Company (or its Affiliates) terminates the Management
          Agreement, no Event of Default under Section 11 shall be deemed to
          have occurred hereunder unless the Company (or its Affiliates) fails
          to enter into a new management agreement on terms reasonably
          satisfactory to the Required Holders with a management company that is
          reasonably acceptable to the Required Holders within ninety (90) days
          of such termination.

SECTION 11. EVENTS OF DEFAULT.

     An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:

          (a) the Company defaults in the payment of any principal on any Note
     for more than five (5) Business Days after the same becomes due and
     payable, whether at maturity or at a date fixed for prepayment or by
     declaration or otherwise; or

                                       16

          (b) the Company defaults in the payment of any interest on any Note
     for more than five (5) Business Days after the same becomes due and
     payable; or

          (c) the Company defaults in the performance of or compliance with any
     term contained herein or in any other Loan Document (other than those
     referred to in paragraphs (a) and (b) of this Section 11) and such default
     is not remedied within thirty (30) days after the earlier of (i) a
     Responsible Officer obtaining actual knowledge of such default or (ii) the
     Company receiving written notice of such default from any Holder of a Note
     (any such written notice to be identified as a "NOTICE OF DEFAULT" and to
     refer specifically to this paragraph (c) of Section 11); or

          (d) (i) the Company is in default (as principal or as guarantor or
     other surety) in the payment of any principal of or interest on any Debt
     that is outstanding in an aggregate principal amount of at least Four
     Hundred Thousand Dollars ($400,000) beyond any period of grace provided
     with respect thereto, or (ii) as a consequence of the occurrence or
     continuation of any event or condition (other than the passage of time or
     the right of the Holder of Debt to convert such Debt into equity
     interests), the Company has become obligated to purchase or repay Debt
     before its regular maturity or before its regularly scheduled dates of
     payment in an aggregate outstanding principal amount of at least Four
     Hundred Thousand Dollars ($400,000); or

          (e) the Company (i) is generally not paying, or admits in writing its
     inability to pay, its debts as they become due, (ii) files, or consents by
     answer or otherwise to the filing against it of, a petition for relief or
     reorganization or arrangement or any other petition in bankruptcy, for
     liquidation or to take advantage of any bankruptcy, insolvency,
     reorganization, moratorium or other similar law of any jurisdiction, (iii)
     makes an assignment for the benefit of its creditors, (iv) consents to the
     appointment of a custodian, receiver, trustee or other officer with similar
     powers with respect to it or with respect to any substantial part of its
     property, (v) is adjudicated as insolvent or to be liquidated, or (vi)
     takes corporate action for the purpose of any of the foregoing; or

          (f) a court or governmental authority of competent jurisdiction enters
     an order appointing, without consent by the Company, a custodian, receiver,
     trustee or other officer with similar powers with respect to it or with
     respect to any substantial part of its property, or constituting an order
     for relief or approving a petition for relief or reorganization or any
     other petition in bankruptcy or for liquidation or to take advantage of any
     bankruptcy or insolvency law of any jurisdiction, or ordering the
     dissolution, winding-up or liquidation of the Company, or any such petition
     shall be filed against the Company and such petition shall not be dismissed
     within ninety (90) days; or

          (g) a final judgment or judgments for the payment of money aggregating
     in excess of Four Hundred Thousand Dollars ($400,000) (to the extent such
     judgment or judgments are not covered by an insurance policy underwritten
     by a solvent insurer who has accepted in writing responsibility for such
     judgment or judgments) are rendered against one or more of the Company and
     which judgments are not, within sixty (60) days after entry thereof,
     bonded, discharged or stayed pending appeal, or are not discharged within
     sixty (60) days after the expiration of such stay.

                                       17

SECTION 12. REMEDIES ON DEFAULT, ETC.

     Section 12.1 Acceleration.

          (a) If an Event of Default with respect to the Company described in
     paragraph (e) or (f) of Section 11 has occurred, all the Notes then
     outstanding shall automatically become immediately due and payable.

          (b) If any Event of Default described in paragraph (a) or (b) of
     Section 11 has occurred and is continuing, any Holder or Holders of Notes
     at the time outstanding affected by such Event of Default may at any time,
     at its or their option, by notice or notices to the Company, declare all
     the Notes held by it or them to be immediately due and payable.

          (c) If any other Event of Default has occurred and is continuing, the
     Required Holders may at any time at its or their option, by notice or
     notices to the Company, declare all the Notes then outstanding to be
     immediately due and payable.

Upon any Note's becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus all accrued and unpaid interest
thereon, shall all be immediately due and payable, in each and every case
without presentment, demand, protest or further notice, all of which are hereby
waived.

     Section 12.2 Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the Holder of
any Note at the time outstanding may proceed (i) with any and all remedies
provided for in the YTSM Pledge Agreements, and, any of the Secondary Loan
Documents, if such Secondary Loan Documents have been executed and delivered in
accordance with the terms of this Agreement, and (ii) to protect and enforce the
rights of such Holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.

     Section 12.3 Rescission. At any time after any Notes have been declared due
and payable pursuant to clause (c) of Section 12.1, the Required Holders, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of any Notes that are due and payable and are unpaid other than by
reason of such declaration, and all interest on such overdue principal and (to
the extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.

                                       18

     Section 12.4 No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any Holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such Holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any Holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the Holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such Holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys'
fees, expenses and disbursements.

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

     Section 13.1 Registration of Notes. The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each Holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and Holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any Holder of a Note promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered Holders of Notes.

     Section 13.2 Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered Holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the Holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such Holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than One Hundred Thousand
Dollars ($100,000), provided that if necessary to enable the registration of
transfer by a Holder of its entire holding of Notes, one Note may be in a
denomination of less than One Hundred Thousand Dollars ($100,000). Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.1.

     Section 13.3 Replacement of Notes. Upon receipt by the Company of notices
from a Holder evidence of the loss, theft, destruction or mutilation of any
Note, and

                                       19

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory to it (provided that if the Holder of such Note is, or is a
     nominee for, an original Purchaser or another Holder of a Note with a
     minimum net worth of at least Five Million Dollars ($5,000,000), such
     Person's own unsecured agreement of indemnity shall be deemed to be
     satisfactory); or

          (b) in the case of mutilation, upon surrender and cancellation
     thereof, the Company at its own expense shall execute and deliver, in lieu
     thereof, a new Note, dated and bearing interest from the date to which
     interest shall have been paid on such lost, stolen, destroyed or mutilated
     Note or dated the date of such lost, stolen, destroyed or mutilated Note if
     no interest shall have been paid thereon.

SECTION 14. PAYMENTS ON NOTES AND CERTAIN TAX MATTERS.

     Section 14.1 Payments. So long as any Purchaser or such Purchaser's nominee
shall be the Holder of any Note, the Company will pay all sums becoming due on
such Note for principal, and interest by the method and at the address specified
for such purpose for such Purchaser on Schedule A, or by such other method or at
such other address as such Purchaser shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, such Purchaser shall surrender such
Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office. Prior to any sale or other
disposition of any Note held by any Purchaser or such Purchaser's nominee such
Purchaser will, at its election, either endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid thereon or
surrender such Note to the Company in exchange for a new Note or Notes pursuant
to Section 13.2.

     Section 14.2 Withholding Taxes. All payments due under the Notes shall be
made net of any applicable U.S. withholding taxes. Notwithstanding the
immediately preceding sentence, the Company shall not withhold any U.S. taxes in
respect of interest payments to a Foreign Holder (as defined below) that would
otherwise be imposed under sections 1441 (relating to withholding at source in
the case of non-resident aliens) or 1442 (relating to withholding at source in
the case of foreign corporations) of the Internal Revenue Code of 1986, as
amended (the "CODE"), provided that such interest qualifies as "portfolio
interest" exempt from U.S. withholding taxes under section 871(h) of the Code in
the case of a non-resident alien or under section 881(c) in the case of a
foreign corporation, and provided, further that such Foreign Holder shall
provide the Company with Form W-8 BEN, at such time and in such manner as shall
be prescribed by the Internal Revenue Service (the "SERVICE"), certifying that
such Holder is a foreign person and satisfies the requirements for the exemption
from U.S. withholding taxes for "portfolio interest" under section 871(h) or
881(c) of the Code (as the case may be) with respect to the interest payable
under the Notes and otherwise provides the Company with such other information
and documentation in support thereof as it may reasonably request from time to
time. Alternatively, if the Foreign Holder is entitled to an exemption from or
reduced rate of withholding with respect to interest payable under the Notes
under an applicable income tax treaty between the United States and the foreign
jurisdiction in which the Foreign Holder is organized or fiscally resident, the
Company shall withhold U.S. taxes on the interest payable

                                       20

under the Notes to the Foreign Holder at such rate as is specified in such
treated, provided that the Foreign Holder satisfies the requirements for the
benefits under such treaty and provided, further that the Foreign Holder shall
provide the Company with Form W-8BEN, at such time and in such manner as shall
be prescribed by the Service, certifying that the Foreign Holder is a foreign
person entitled to such treaty benefits and otherwise provides the Company with
such other information and documentation in support thereof as it may reasonably
request from time to time. A Foreign Holder is any person that is not a "United
States person," as defined in section 7701(a)(30) of the Code. In the case of a
United States person (as defined above) who holds the Notes, the Company shall
not withhold U.S. taxes on any amounts payable under the Notes, pursuant to the
"backup" withholding provisions of section 3406 of the Code, provided that such
United States person provides, at such times and in such manner as the Service
shall prescribe from time to time, a Form W-9 (or the equivalent thereof),
certifying as to such United States person's name, address and Taxpayer
Identification or Social Security Number, and that such person is not subject to
"backup" withholding.

SECTION 15. EXPENSES, ETC.

     Section 15.1 Expenses. Whether or not the transactions contemplated hereby
are consummated, each of the Company and each Purchaser of Notes will pay their
own costs and expenses incurred in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes. The Company will pay: (a) the reasonable costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under any of the Loan Documents or in responding
to any subpoena or other legal process or informal investigative demand issued
in connection with any of the Loan Documents, or by reason of being a Holder of
any Note, and (b) the costs and expenses, including financial advisors' fees,
incurred in connection with the insolvency or bankruptcy of the Company or in
connection with any work-out or restructuring of the transactions contemplated
by any of the Loan Documents.

     Section 15.2 Termination; Survival. This Agreement shall terminate upon
payment in full of all of the Notes; provided, however, that the obligations of
the Company under this Section 15 will survive the payment or transfer of any
Note, the enforcement, amendment or waiver of any provision of any of the Loan
Documents, and the termination of any of the Loan Documents, including this
Agreement.

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

     All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, for a period of twelve
(12) months and may be relied upon by any subsequent Holder of a Note. All
statements contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant to this Agreement (including, without limitation,
any of the Loan Documents) shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, the Loan
Documents embody the entire agreement and understanding between each Purchaser
and the Company and supersede all prior agreements and understandings relating
to the subject matter hereof.

                                       21

SECTION 17. AMENDMENT AND WAIVER.

     Section 17.1 Requirements. This Agreement and the Notes may be amended, and
the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and each of the Holders.

     Section 17.2 Solicitation of Holders of Notes.

          (a) Solicitation. The Company will provide each Holder of the Notes
     (irrespective of the amount of Notes then owned by it) with reasonably
     sufficient information, in advance of the date a decision is required, to
     enable such Holder to make an informed and considered decision with respect
     to any proposed amendment, waiver or consent in respect of any of the
     provisions hereof or of the Notes. The Company will deliver executed or
     true and correct copies of each amendment, waiver or consent effected
     pursuant to the provisions of this Section 17 to each Holder of outstanding
     Notes promptly following the date on which it is executed and delivered by,
     or receives the consent or approval of, the requisite Holders of Notes.

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

     Section 17.3 Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all Holders of Notes and is
binding upon them and upon each future Holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the Holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any Holder of such
Note. As used herein, the term "THIS AGREEMENT" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.

SECTION 18. NOTICES.

     All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

               (i) if to a Purchaser or such Purchaser's nominee, to such
          Purchaser or such Purchaser's nominee at the address specified for
          such communications for

                                       22

          such Purchaser on Schedule A, or at such other address as such
          Purchaser or such Purchaser's nominee shall have specified to the
          Company in writing,

               (ii) if to any other Holder of any Note, to such Holder at such
          address as such other Holder shall have specified to the Company in
          writing, or

               (iii) if to the Company, to the Company at its address set forth
          at the beginning hereof to the attention of Chief Financial Officer,
          or at such other address as the Company shall have specified to the
          Holder of each Note in writing.

     Notices under this Section 18 will be deemed given only when actually
received.

SECTION 19. REPRODUCTION OF DOCUMENTS.

     This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other Holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.

SECTION 20. CONFIDENTIAL INFORMATION.

     The parties hereto and the transactions contemplated herein are subject to
the confidentiality provisions set forth in the Securities Purchase Agreement,
the terms of which are incorporated by this reference.

SECTION 21. SUBSTITUTION OF PURCHASER.

     Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Purchaser's Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice,
wherever the word "PURCHASER" is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate in lieu of
such Purchaser. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to such Purchaser
all

                                       23

of the Notes then held by such Affiliate, upon receipt by the Company of notice
of such transfer, wherever the word "PURCHASER" is used in this Agreement (other
than in this Section 21), such word shall no longer be deemed to refer to such
Affiliate, but shall refer to such Purchaser, and such Purchaser shall have all
the rights of an original Holder of the Notes under this Agreement.

SECTION 22. MISCELLANEOUS.

     Section 22.1 Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent Holder of a Note) whether so expressed or
not.

     Section 22.2 Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
interest on any Note that is due on a date other than a Business Day shall be
made on the next succeeding Business Day without including the additional days
elapsed in the computation of the interest payable on such next succeeding
Business Day.

     Section 22.3 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.4 Certain Rights. In the event that there shall be a
"determination" (as such term is defined in section 1313(a), of the Code) that
any amounts paid or distributed (or deemed paid or distributed) in respect of
the Series A Preferred Stock are subject to withholding at source under either
sections 1441 or 1442 of the Code, as the case may be, the Company shall be
entitled to offset against the balance of any principal, interest or other
payments remaining at the time of such determination to be paid in respect of
the Notes held by any Foreign Holder thereof (after giving effect to any
withholding taxes that are payable or are anticipated to be payable in respect
of the balance of such payments due under the Notes to any Foreign Holder
thereof in accordance with Section 14.2) the sum of the following: (i) the
amount of any withholding taxes (plus any interest and penalties due thereon)
determined to be due and assessed under sections 1441 and 1442 of the Code in
respect of amounts previously paid or distributed (or previously deemed paid or
distributed) in respect of the Series A Preferred Stock to any Foreign Holder,
(ii) the amount of any additional withholding taxes due under Sections 1441 or
1442 of the Code in respect of amounts described in clause (i) which shall have
been paid (or shall be deemed to have been paid) by the Company on behalf of any
Foreign Holder of the Series A Preferred Stock in respect of prior actual or
deemed payments or distributions with respect to the Series A Preferred Stock,
and (iii) in view of the facts and circumstances surrounding, and the terms of,
any such determination, withholding taxes that are anticipated to be due with
respect to actual or deemed future payments or distributions with respect to any
Foreign Holder of the Series A Preferred Stock.

     Section 22.5 Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein,

                                       24

so that compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other covenant.
Where any provision herein refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

     Section 22.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

     Section 22.7 Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of Delaware excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.

                                    * * * * *

                                       25

     The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set forth.
This Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.

                                    Very truly yours,

                                    YOUTHSTREAM ACQUISITION CORP.

                                    By: /s/ Jonathan V. Diamond
                                        ----------------------------------------
                                    Name: Jonathan V. Diamond
                                          --------------------------------------
                                    Title: Chief Executive Officer
                                           -------------------------------------

                                    YOUTHSTREAM MEDIA NETWORKS, INC.

                                    By: /s/ Jonathan V. Diamond
                                        ----------------------------------------
                                    Name: Jonathan V. Diamond
                                          --------------------------------------
                                    Title: Chief Executive Officer
                                           -------------------------------------

                                       26

                             NOTE PURCHASE AGREEMENT

                                    SIGNATURE PAGE OF PURCHASERS

                                    Accepted as of the first date written above.

                                    KES HOLDINGS, LLC

                                    By: Libra/KES Investment I, LLC
                                    Its: Manager

                                    By: /s/ Jess M. Ravich
                                        ----------------------------------------
                                    Name: Jess M. Ravich
                                    Its: Authorized Signatory

                                    ATACAMA CAPITAL HOLDINGS, LTD.

                                    By: /s/ Gwenyth Vanterpool
                                        ----------------------------------------
                                    Name: Gwenyth Vanterpool for Westlaw Limited
                                          --------------------------------------
                                    Title: Director
                                           -------------------------------------

                                       27

                                   SCHEDULE A

        NAME AND ADDRESS                                        PRINCIPAL AMOUNT
          OF PURCHASER                                           OF NOTES TO BE
                                                                    PURCHASED

KES Holdings, LLC
11766 Wilshire Blvd., Suite 870
Los Angeles, CA 90025                                                $19,000,000

PAYMENTS

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as 8.0%
Notes due 2015, PPN ______, principal, premium or interest) to:

     for credit to: _________________ Account Number _____________
     Re: Description of security, principal and interest split

with telephone advice of payment to the _________________________________ at
(___) ___-____, Facsimile: (___) ____-____.

NOTICES

All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention:
__________________________________.

NAME OF NOMINEE IN WHICH NOTES ARE TO BE ISSUED: NONE

TAXPAYER I.D. NUMBER: ______________

                                   Schedule A
                          (to Note Purchase Agreement)

                                   SCHEDULE A

        NAME AND ADDRESS                                        PRINCIPAL AMOUNT
          OF PURCHASER                                           OF NOTES TO BE
                                                                    PURCHASED

Atacama Capital Holdings, Ltd.
c/o HWR Services Limited
Craigmuir Chambers
P.O. Box 71
Road Town
Tortola, British Virgin Islands                                      $21,000,000

Attention: _____________________________
Fax Number: (___) ___-____

PAYMENTS

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as 8.0%
Notes due 2015, PPN ______, principal, premium or interest) to:

     for credit to: ___________________________
     Account #______

NOTICES

All notices of payments, on or in respect of the Notes and written confirmation
of each such payment to:

Attention: _____________________________
Fax Number: (___) ___-____

All notices and communications other than those in respect to payments to be
addressed as first provided above.

NAME OF NOMINEE IN WHICH NOTES ARE TO BE ISSUED:

TAXPAYER I.D. NUMBER:

                                      A-2

                                   SCHEDULE B

                                  DEFINED TERMS

     As used in the Agreement, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:

     "AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, ten percent (10%) or more of any class of voting or equity
interests of the Company or any Subsidiary or any corporation of which the
Company beneficially own or hold, in the aggregate, directly or indirectly, ten
percent (10%) or more of any class of voting or equity interests. As used in
this definition, "CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an
"AFFILIATE" is a reference to an Affiliate of the Company.

     "ASSET DISPOSITION" means any Transfer by the Company except:

          (a) any

               (i) Transfer  from a Subsidiary  to the Company or a Wholly Owned
          Subsidiary;

               (ii) Transfer from the Company to a Wholly Owned Subsidiary; and

               (iii)  Transfer  from the Company to a  Subsidiary  (other than a
          Wholly Owned  Subsidiary)  or from a Subsidiary to another  Subsidiary
          (other than a Wholly  Owned  Subsidiary),  which in either case is for
          Fair Market Value, so long as immediately before and immediately after
          the consummation of any such Transfer and after giving effect thereto,
          no Default or Event of Default exists;

          (b) any Transfer made in the ordinary course of business and involving
     only property that is either (i) inventory held for sale or (ii) equipment,
     fixtures,  supplies or materials no longer required in the operation of the
     business of the Company or any of its Subsidiaries or that is obsolete; or

          (c) any Transfer made to a Holder of Priority Debt.

     "ASSIGNMENT" means the Assignment of Rents and Leases attached hereto as
Exhibit 2-E.

     "BRIDGE INDEBTEDNESS" means, for any period, an amount equal to the total
principal and accrued interest payable by the Company as of the end of such
period with respect to each and all of the following: (i) Subordinated
Promissory Note dated March 29, 2004 in the amount of Three Hundred Thousand
Dollars ($300,000) in favor of Ravich Revocable Trust of 1989, (ii)

                                   Schedule B
                          (to Note Purchase Agreement)

Subordinated Promissory Note dated March 29, 2004 in the amount of Seven Hundred
Thousand ($700,000) in favor of Atacama Capital Holdings, Ltd., (iii)
Subordinated Promissory Note dated May 19, 2004 in the amount of Two Million
Four Hundred Fifty Thousand Dollars ($2,450,000) in favor of Atacama Capital
Holdings, Ltd., (iv) Subordinated Promissory Note dated May 19, 2004 in the
amount of One Million Fifty Thousand Dollars ($1,050,000) in favor of Ravich
Revocable Trust of 1989, (v) Subordinated Promissory Note dated August 26, 2004
in the amount of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000)
in favor of Atacama Capital Holdings, Ltd., (vi) Subordinated Promissory Note
dated August 26, 2004 in the amount of Four Hundred Fifty Thousand Dollars
($450,000) in favor of Libra Securities Holdings, LLC., and (vii) Subordinated
Promissory Note dated August 26, 2004 in the amount of Three Hundred Thousand
Dollars ($300,000) in favor of Ravich Revocable Trust of 1989.

     "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City, New York are required or authorized to
be closed.

     "CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

     "CHANGE IN CONTROL" means the failure of YouthStream Media Networks, Inc.,
a Delaware corporation, to own and control (directly or indirectly) (A) prior to
an IPO, greater than fifty percent (50%) (in the aggregate) of the Company's
shares of voting stock outstanding, or (B) on or after the consummation of an
IPO, at least ten percent (10%) (in the aggregate) of the Company's shares of
voting stock outstanding.

     "CLOSING" is defined in Section 3.

     "COMPANY" means YouthStream Acquisition Corp., a Delaware corporation;
provided, however, that for purposes of Sections 7, 9, 10 and 11, the term
"Company" shall be deemed to include YouthStream Acquisition Corp., KES
Acquisition Company, LLC and Atacama KES Holdings Corporation.

     "CONTROL EVENT" or "CONTROL EVENT" means:

               (i) the execution by the Company or Affiliates of any agreement
          or letter of intent with respect to any proposed transaction or event
          or series of transactions or events which, individually or in the
          aggregate, may reasonably be expected to result in a Change in
          Control,

               (ii) the execution of any written agreement which, when fully
          performed by the parties thereto, would result in a Change in Control,
          or

               (iii) the making of any written offer by any person (as such term
          is used in section 13(d) and section 14(d)(2) of the Exchange Act as
          in effect on the date of the Closing) or related persons constituting
          a group (as such term is used in Rule 13d-5 under the Exchange Act as
          in effect on the date of the Closing) to the Holders of the common
          stock of the Company, which offer, if accepted by the requisite number
          of Holders, would result in a Change in Control.

                                       B-2

     "DEBT" with respect to any Person means, at any time, without duplication,

          (a) its liabilities for borrowed money;

          (b) its liabilities determined in accordance with GAAP for the
     deferred purchase price of property acquired by such Person (excluding any
     part of such deferred purchase price payable in equity interest of such
     Person and excluding accounts payable arising in the ordinary course of
     business but including all liabilities created or arising under any
     conditional sale or other title retention agreement with respect to any
     such property);

          (c) all liabilities appearing on its balance sheet in accordance with
     GAAP in respect of Capital Leases;

          (d) all liabilities for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such liabilities);

          (e) all its liabilities in respect of letters of credit or instruments
     serving a similar function issued or accepted for its account by banks and
     other financial institutions (whether or not representing obligations for
     borrowed money);

          (f) any Guaranty of such Person with respect to liabilities of a type
     described in any of clauses (a) through (e) hereof; and

          (g) any liabilities of a type described in any of clauses (a) through
     (f) hereof of such Person resulting from such Person being a general
     partner or member of a joint venture, whether by provision of applicable
     law, contract or otherwise.

     Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.

     "DEFAULT" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

     "DEFAULT RATE" means twelve percent (12%).

     "EBITDA" has the meaning set forth in Section 9.6.

     "ENVIRONMENTAL LAWS" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

     "EVENT OF DEFAULT" is defined in Section 11.

                                       B-3

     "EXCHANGE ACT" means the Securities Exchange Act of 1934.

     "FAIR MARKET VALUE" means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).

     "FREE CASH" shall have the meaning ascribed to such term in the Securities
Purchase Agreement by and among the Company, KES Holdings, LLC, Atacama Capital
Holdings, Ltd., YouthStream Media Networks, Inc. and YouthStream Acquisition
Corp. dated as of the date of this Agreement.

     "GECC" is defined in Section 1.

     "GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.

     "GOVERNMENTAL AUTHORITY" means:

          (a) the government of the United States of America or any State or
     other political subdivision thereof, or

          (b) any jurisdiction in which the Company or any Subsidiary conducts
     all or any part of its business, or which asserts jurisdiction over any
     properties of the Company or any Subsidiary, or

          (c) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

     "GUARANTY" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation) obligations incurred
through an agreement, contingent or otherwise, by such Person:

          (a) to purchase such Debt or obligation or any property constituting
     security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
     Debt or obligation, or (ii) to maintain any working capital or other
     balance sheet condition or any income statement condition of any other
     Person or otherwise to advance or make available funds for the purchase or
     payment of such Debt or obligation;

          (c) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such Debt or obligation
     of the ability of any other Person to make payment of the Debt or
     obligation; or

                                       B-4

          (d) otherwise to assure the owner of such Debt or obligation against
     loss in respect thereof.

     In any computation of the Debt or other liabilities of the obligor under
any Guaranty, the Debt or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

     "HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.

     "IPO" means the initial public offering by the Company of its voting shares
of common stock.

     "LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).

     "LONG TERM DEBT" shall mean any obligation of the Company or its
Subsidiaries with a maturity of greater than one year; provided, however, that
the parties agree that all debt to GECC and IDB Leasing, Inc. and all debt with
respect to the Bridge Notes shall be considered Long-Term Debt; provided,
further, that the Priority Debt shall not include the Notes.

     "MATERIAL" means material in relation to the business, operations, affairs,
financial condition, assets, properties or prospects of the Company taken as a
whole.

     "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, prospects, operations, affairs, financial condition, assets or
properties of a Purchaser or the Company, as the case may be, taken as a whole,
or (b) the ability of the Company to perform its obligations under this
Agreement and the Notes, or (c) the validity or enforceability of this Agreement
or the Notes.

     "MORTGAGE" means the Fee Mortgage, Assignment of Rents and Leases, Security
Agreement and Fixture Filing attached hereto as Exhibit 2-D.

     "NOTES" is defined in Section 1.

     "OFFICER'S CERTIFICATE" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.

     "PERSON" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.

     "PLEDGE AGREEMENTS" mean the Pledge Agreements attached hereto as Exhibits
2-B and 2-C.

                                       B-5

     "PRIORITY DEBT" means, without duplication, the sum of all Long-Term Debt
of the Company or any Subsidiaries, on a consolidated basis.

     "PROPERTY" or "PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.

     "REQUIRED HOLDERS" means, at any time, the Holders of at least a majority
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).

     "RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.

     "RESTRICTED PAYMENT" means (i) the declaration or payment of any dividend
or the incurrence of any liability to make any other payment or distribution of
cash or other property or assets on or in respect of a Person's capital stock;
(ii) any payment or distribution made in respect of any subordinated
indebtedness in violation of any subordination or other agreement made in favor
of the Holders; (iii) any payment on account of the purchase, redemption,
defeasance or other retirement of a Person's capital stock or indebtedness or
any other payment or distribution made in respect of any thereof, either
directly or indirectly; provided, however, that Restricted Payment does not
include the following: (a) any obligation to any Holder arising under this
Agreement, (b) any payment in respect of indebtedness of KES Acquisition in
effect as of the Closing, or (c) any payment in respect of cumulative dividends
or redemption payments to holders of Series A Preferred Stock under the
Company's Restated Certificate of Incorporation in effect as of the Closing.

     "REVOLVER" has the meaning set forth in Section 9.7.

     "SECURITIES ACT" means the Securities Act of 1933.

     "SECURITY" has the meaning set forth in Section 2(1) of the Securities Act
of 1933.

     "SECURITY AGREEMENT" means the Security Agreement attached hereto as
Exhibit 2-A.

     "SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

     "SUBSIDIARY" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"SUBSIDIARY" is a reference to a Subsidiary of the Company.

                                       B-6

     "TRANSFER" means, with respect to any Person, any transaction in which such
Person sells, conveys, transfers or leases (as lessor) any material property or
asset, including, without limitation, stock of a Subsidiary.

     "YOUTHSTREAM MEDIA NETWORKS, INC." means YouthStream Media Networks, Inc.,
a Delaware corporation.

     "YSTM PLEDGE AGREEMENTS" mean the YouthStream Media Networks, Inc. Pledge
Agreements attached hereto as Exhibits 2-1 and 2-2.

                                       B-7

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