Exhibit 10.2

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Security Agreement”), dated as of April 13, 2005,
is by and among the parties identified as “Grantors” on the signature pages
hereto and such other parties as may become Grantors hereunder after the date
hereof (individually a “Grantor”, and collectively the “Grantors”) and BANK OF
AMERICA, N.A., as Collateral Agent.

 

W I T N E S S E T H

 

WHEREAS, a credit facility has been established in favor of DIRECTV HOLDINGS
LLC, a Delaware limited liability company (the “Borrower”), pursuant to the
terms of that certain Credit Agreement, dated as of the date hereof (as amended,
increased, extended, renewed, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the Guarantors identified
therein, the Lenders party thereto and BANK OF AMERICA, N.A., as Administrative
Agent and Collateral Agent; and

 

WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of each Lender to its make initial Credit
Extensions thereunder that the Borrower shall have executed and delivered this
Security Agreement to the Administrative Agent for the benefit of the holders of
the Secured Obligations.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.                                       Definitions and Interpretive
Provisions.

 

(a)                                  Definitions.  Capitalized terms used and
not otherwise defined herein shall have the meanings provided in the Credit
Agreement.  In addition, the following terms, which are defined in the UCC, are
used as defined therein:  Accession, Account, As-Extracted Collateral, Chattel
Paper, Commercial Tort Claim, Commingled Goods, Consumer Goods, Deposit Account,
Document, Equipment, Farm Products, Fixtures, General Intangible, Goods,
Instrument, Inventory, Investment Property, Letter-of-Credit Right, Manufactured
Home, Proceeds, Software, Standing Timber, Supporting Obligation and Tangible
Chattel Paper.  As used herein:

 

“Borrower” has the meaning provided in the recitals hereto.

 

“Collateral” has the meaning provided in Section 2 hereof.

 

“Copyright License” means any written agreement, naming any Grantor as licensor,
granting any right under any Copyright including any thereof referred to in
Schedule 1(a) attached hereto.

 

“Copyrights” means (a) all registered United States copyrights in all Works, now
existing or hereafter created or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Copyright Office including any
thereof referred to in Schedule 1(a) attached hereto, and (b) all renewals
thereof including any thereof referred to in Schedule 1(a) attached hereto.

 

“Credit Agreement” has the meaning provided in the recitals hereto.

 

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“Grantors” has the meaning provided in the recitals hereto, together with their
respective successors and assigns.

 

“Patent License” means any agreement, whether written or oral, providing for the
grant by or to a Grantor of any right to manufacture, use or sell any invention
covered by a Patent, including any thereof referred to in Schedule 1(a) attached
hereto.

 

“Patents” means (a) all letters patent of the United States or any other country
and all reissues and extensions thereof, including any letters patent referred
to in Schedule 1(a) attached hereto, and (b) all applications for letters patent
of the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including any thereof referred to in
Schedule 1(a) attached hereto.

 

“Secured Obligations” means, without duplication, (a) all advances to, and
debts, liabilities, obligations, covenants and duties of, any Credit Party
arising under any Credit Document or otherwise with respect to any Loan or
Letter of Credit, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Credit Party of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding, (b) all
obligations under any Swap Contract between any Credit Party and any Lender or
Affiliate of a Lender to the extent permitted under the Credit Agreement, (c)
all obligations under any Treasury Management Agreement between any Credit Party
and any Lender or Affiliate of a Lender and (d) all costs and expenses incurred
in connection with enforcement and collection of clauses (a) through (c) of this
definition, including reasonable attorneys’ fees and disbursements.

 

“Security Agreement” has the meaning provided in the recitals hereto, as the
same may be amended or modified from time to time.

 

“Trademark License” means any agreement, written or oral, providing for the
grant by or to a Grantor of any right to use any Trademark, including any
thereof referred to in Schedule 1(a) attached hereto.

 

“Trademarks” means (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any state thereof or any other country or any political
subdivision thereof, or otherwise, including any thereof referred to in
Schedule 1(a) attached hereto, and (b) all renewals thereof.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York on
the date hereof.

 

“Work” means any work that is subject to copyright protection pursuant to Title
17 of the United States Code.

 

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(b)                                 Interpretive Provisions, etc.  Each of the
terms and provisions of Section 1.02 of the Credit Agreement (in each case as
the same may be amended or modified as provided therein) are incorporated herein
by reference to the same extent and with the same effect as if fully set forth
herein.

 

2.                                       Grant of Security Interest in the
Collateral.  To secure the prompt payment and performance in full when due,
whether by lapse of time, acceleration, mandatory prepayment or otherwise, of
the Secured Obligations, each Grantor hereby grants to the Collateral Agent, for
the ratable benefit of the holders of the Secured Obligations, a continuing
security interest in, and a right to set off against, any and all right, title
and interest of such Grantor in and to all personal property of the Grantors of
whatever type or description, whether now owned or existing or owned, acquired,
or arising hereafter (collectively, the “Collateral”), including the following:

 

(a)                                  all Accounts;

 

(b)                                 all cash and currency;

 

(c)                                  all Chattel Paper;

 

(d)                                 those Commercial Tort Claims identified on
Schedule 2(d) attached hereto;

 

(e)                                  all Copyright Licenses;

 

(f)                                    all Copyrights;

 

(g)                                 all Deposit Accounts;

 

(h)                                 all Documents;

 

(i)                                     all Equipment;

 

(j)                                     all Fixtures;

 

(k)                                  all General Intangibles;

 

(l)                                     all Instruments;

 

(m)                               all Inventory;

 

(n)                                 all Investment Property;

 

(o)                                 all Letter-of-Credit Rights;

 

(p)                                 all Patent Licenses;

 

(q)                                 all Patents;

 

(r)                                    all Software;

 

(s)                                  all Supporting Obligations;

 

(t)                                    all Trademark Licenses;

 

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(u)                                 all Trademarks; and

 

(v)                                 all Accessions and all Proceeds of any and
all of the foregoing.

 

Notwithstanding anything to the contrary contained herein, the security
interests granted under this Security Agreement shall not extend to, and the
“Collateral” shall not include, (i) any Excluded Property, (ii)(A) any property
that is subject to a Lien securing purchase money or sale/leaseback Indebtedness
permitted under the Credit Agreement pursuant to documents that prohibit such
Grantor from granting any other Liens in such property or (B) any permit or
lease of a Grantor hereafter executed or obtained if the grant of a security
interest in such permit or lease in the manner contemplated by this Security
Agreement, under the terms thereof and under applicable law, is prohibited and
would result in the termination thereof or give the other parties thereto the
right to terminate, accelerate or otherwise adversely alter (in a material
manner) such Grantor’s rights, titles and interests thereunder (including upon
the giving of notice or the lapse of time or both); provided in each case that
any such limitation on the security interests granted hereunder shall only apply
to the extent that (1) after reasonable efforts (which shall not include the
payment of any additional consideration), consent from the relevant party or
parties has not been obtained and (2) any such prohibition could not be rendered
ineffective pursuant to the UCC or any other applicable law (including Debtor
Relief Laws) or principles of equity, (iii) any Pledged Collateral (as such term
is defined in the Pledge Agreement) that is expressly included in the grant of
security interests to the Collateral Agent pursuant to the Pledge Agreement, to
the extent the Collateral Agent holds a valid first priority perfected security
interest in such Pledged Collateral thereunder, (iv) any Capital Stock that is
expressly excluded from the grant of security interests in Pledged Collateral
under the Pledge Agreement, and (v) any Capital Stock of a Foreign Subsidiary
(A) that is not Capital Stock of a First-Tier Foreign Subsidiary or (B) that is
Capital Stock of a First-Tier Foreign Subsidiary for so long as the granting,
pledging or assigning of such Capital Stock (1) would in the good faith judgment
of the Borrower reasonably be expected to result in adverse tax consequences to
the Borrower or any other member of the Consolidated Group or (2) is prohibited
by applicable law.  The Grantors and the Collateral Agent, on behalf of the
holders of the Secured Obligations, hereby acknowledge and agree that the
security interest created hereby in the Collateral (x) constitutes continuing
collateral security for all of the Secured Obligations, whether now existing or
hereafter arising and (y) is not to be construed as an assignment of any
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks or
Trademark Licenses.

 

3.                                       Provisions Relating to Accounts.

 

(a)                                  Anything herein to the contrary
notwithstanding, each of the Grantors shall remain liable under each of the
Accounts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Account.  Neither the Collateral Agent nor
any holder of the Secured Obligations shall have any obligation or liability
under any Account (or any agreement giving rise thereto) by reason of or arising
out of this Security Agreement or the receipt by the Collateral Agent or any
holder of the Secured Obligations of any payment relating to such Account
pursuant hereto, nor shall the Collateral Agent or any holder of the Secured
Obligations be obligated in any manner to perform any of the obligations of a
Grantor under or pursuant to any Account (or any agreement giving rise thereto),
to make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party under any Account (or any agreement giving rise thereto), to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts that may have been assigned to it or to which it may be
entitled at any time or times.

 

(b)                                 After the occurrence and during the
continuation of an Event of Default at any time with advance notice, the
Collateral Agent shall have the right, but not the obligation, to make test
verifications of

 

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the Accounts in any manner and through any medium that it reasonably considers
advisable, and the Grantors shall furnish all such assistance and information as
the Collateral Agent may reasonably require in connection with such test
verifications.  After the occurrence and during the continuation of an Event of
Default, the Collateral Agent in its own name or in the name of others may
communicate with account debtors on the Accounts to verify with them to the
Collateral Agent’s satisfaction the existence, amount and terms of any Accounts.

 

4.                                       Representations and Warranties.  Each
Grantor hereby represents and warrants to the Collateral Agent, for the benefit
of the Collateral Agent and the holders of the Secured Obligations, that:

 

(a)                                  Legal Name; Chief Executive Office.  As of
the date hereof:

 

(i)                                     Each Grantor’s exact legal name is (and
for the prior five years, or since its formation if less than five years, has
been) and state of incorporation or formation, principal place of business and
chief executive office are (and for the prior five months, or since its
formation if less than five months, have been) as set forth on Schedule 4(a)(i)
attached hereto.

 

(ii)                                  Other than as set forth on
Schedule 4(a)(ii) attached hereto, no Grantor has been party to a merger,
consolidation or other change in structure or used any tradename in the prior
five years.

 

(b)                                 Location of Inventory and Equipment.  As of
the date hereof, the location of all Inventory and Equipment (other than mobile
goods and Inventory and Equipment in transit or held by retail customers) owned
by each Grantor is as shown on Schedule 4(b) hereto.

 

(c)                                  Ownership.  Each Grantor is the legal and
beneficial owner of its Collateral and has the right to pledge, sell, assign or
transfer the same.

 

(d)                                 Security Interest/Priority.  This Security
Agreement creates a valid security interest in favor of the Collateral Agent,
for the ratable benefit of the holders of the Secured Obligations, in the
Collateral of such Grantor and, when properly perfected by filing, shall
constitute a valid perfected security interest in such Collateral, to the extent
such security interest can be perfected by filing under the UCC, free and clear
of all Liens except for Permitted Liens.

 

(e)                                  Types of Collateral.  None of the
Collateral consists of, or is the Accessions or the Proceeds of, As-Extracted
Collateral, Consumer Goods, Farm Products, Manufactured Homes, or Standing
Timber.

 

(f)                                    Copyrights, Patents and Trademarks.

 

(i)                                     Schedule 1(a) attached hereto includes
all material Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses owned by any Grantor in its own name, or to
which any Grantor is a party, as of the date hereof.

 

(ii)                                  As of the date hereof, except as set forth
in Schedule 1(a) attached hereto, none of such material Copyrights, Patents and
Trademarks is the subject of any licensing or franchise agreement.

 

5.                                       Covenants.  Each Grantor covenants
that, so long as any of the Secured Obligations remains outstanding and until
all of the commitments relating thereto have been terminated, such Grantor
shall:

 

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(a)                                  Other Liens.  Defend the Collateral against
the claims and demands of all other parties claiming an interest therein, keep
the Collateral free from all Liens, except for Permitted Liens, and not sell,
exchange, transfer, assign, lease or otherwise dispose of the Collateral or any
interest therein, except as permitted under the Credit Agreement.

 

(b)                                 Preservation of Collateral.  Keep the
Collateral in good order, condition and repair (ordinary wear and tear excepted)
and not use the Collateral in violation of the provisions of this Security
Agreement or any other Credit Document.

 

(c)                                  Instruments/Tangible Chattel
Paper/Documents.  If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument or Tangible Chattel
Paper, or if any property constituting Collateral shall be stored or shipped
subject to a Document, and the principal or face amount or value thereof for all
such Instruments, Tangible Chattel Paper and Documents exceeds $50 million in
the aggregate, such Grantor shall ensure that such Instrument, Tangible Chattel
Paper or Document is either in the possession of such Grantor at all times or,
if requested by the Collateral Agent, is immediately delivered to the Collateral
Agent, duly endorsed in a manner satisfactory to the Collateral Agent.  After
the occurrence and during the continuation of an Event of Default, such Grantor
shall ensure that any Collateral consisting of Tangible Chattel Paper is marked
with a legend acceptable to the Collateral Agent indicating the Collateral
Agent’s security interest in such Tangible Chattel Paper.

 

(d)                                 Change in Structure, Location or Type.  Not,
without providing ten (10) days’ prior written notice to the Collateral Agent,
change its name, state of formation or corporate structure.

 

(e)                                  Authorization.  Authorize the Collateral
Agent to prepare and file such financing statements (including renewal
statements), amendments and supplements or such other instruments as the
Collateral Agent may from time to time reasonably deem necessary, appropriate or
convenient in order to perfect and maintain the security interests granted
hereunder in accordance with the UCC.

 

(f)                                    Perfection of Security Interest.  Execute
and deliver to the Collateral Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments and restatements
of existing documents, as the Collateral Agent may reasonably request) and do
all such other things as the Collateral Agent may reasonably deem necessary,
appropriate or convenient (i) to assure to the Collateral Agent the
effectiveness and priority of its security interests hereunder, including (A)
such financing statements (including renewal statements), amendments and
supplements or such other instruments as the Collateral Agent may from time to
time reasonably request in order to perfect and maintain the security interests
granted hereunder in accordance with the UCC, (B) with regard to Copyrights, a
Notice of Grant of Security Interest in Copyrights for filing with the United
States Copyright Office in the form of Exhibit 5(f)(i) attached hereto, (C) with
regard to Patents, a Notice of Grant of Security Interest in Patents for filing
with the United States Patent and Trademark Office in the form of Exhibit
5(f)(ii) attached hereto and (D) with regard to Trademarks, a Notice of Grant of
Security Interest in Trademarks for filing with the United States Patent and
Trademark Office in the form of Exhibit 5(f)(iii) attached hereto, (ii) to
consummate the transactions contemplated hereby and (iii) to otherwise protect
and assure the Collateral Agent of its rights and interests hereunder.  To that
end, each Grantor agrees that the Collateral Agent may file one or more
financing statements (with collateral descriptions broader and/or less specific
than the description of the Collateral contained herein) disclosing the
Collateral Agent’s security interest in any or all of the Collateral of such
Grantor without such Grantor’s signature thereon, and further each Grantor also
hereby irrevocably makes, constitutes and appoints the Collateral Agent, its
nominee or any other Person whom the Collateral Agent may designate, as such
Grantor’s attorney-in-fact with full power and for the limited purpose to sign
in the name of such Grantor any such financing statements (including renewal
statements), amendments and supplements, notices or any similar documents that
in the Collateral Agent’s reasonable discretion would be necessary, appropriate
or convenient in order to perfect and maintain perfection of the security
interests

 

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granted hereunder, such power, being coupled with an interest, being and
remaining irrevocable so long as the Secured Obligations remain unpaid and until
the commitments relating thereto shall have been terminated.  Each Grantor
hereby agrees that a carbon, photographic or other reproduction of this Security
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Collateral Agent without notice thereof to such
Grantor wherever the Collateral Agent may in its sole discretion desire to file
the same.  In the event for any reason the law of any jurisdiction other than
the applicable jurisdiction as of the Closing Date becomes or is applicable to
the Collateral of any Grantor or any part thereof, or to any of the Secured
Obligations, such Grantor agrees to execute and deliver all such instruments and
to do all such other things as the Collateral Agent in its reasonable discretion
deems necessary, appropriate or convenient to preserve, protect and enforce the
security interests of the Collateral Agent under the law of such other
jurisdiction (and, if a Grantor shall fail to do so promptly upon the request of
the Collateral Agent, then the Collateral Agent may execute any and all such
requested documents on behalf of such Grantor pursuant to the power of attorney
granted hereinabove).  After the occurrence and during the continuation of an
Event of Default, if any Collateral is in the possession or control of a
Grantor’s agents and the Collateral Agent so requests, such Grantor agrees to
notify such agents in writing of the Collateral Agent’s security interest
therein and, upon the Collateral Agent’s request, instruct them to hold all such
Collateral for the account of the holders of the Secured Obligations and subject
to the Collateral Agent’s instructions.

 

(g)                                 Control.  After the occurrence and during
the continuation of an Event of Default, use commercially reasonable efforts to
execute and deliver all agreements, assignments, instruments or other documents
as the Collateral Agent shall reasonably request for the purpose of obtaining
and maintaining control within the meaning of the UCC with respect to any
Collateral consisting of Deposit Accounts.   Use commercially reasonable efforts
to execute and deliver all agreements, assignments, instruments or other
documents as the Collateral Agent shall reasonably request for the purpose of
obtaining and maintaining control within the meaning of the UCC with respect to
any Collateral consisting of Investment Property, Letter-of-Credit Rights and
Electronic Chattel Paper with a principal or face amount greater than $50
million in the aggregate for all such Investment Property, Letter-of-Credit
Rights and Electronic Chattel Paper.

 

(h)                                 Collateral held by Warehouseman, Bailee,
etc.  After the occurrence and during the continuation of an Event of Default,
if any Collateral with a value greater than $20 million is at any time in the
possession or control of a warehouseman, bailee, agent or processor of such
Grantor, notify the Collateral Agent of such possession or control and if
reasonably requested by the Collateral Agent (i) notify such Person of the
Collateral Agent’s security interest in such Collateral, (ii) instruct such
Person to hold all such Collateral for the Collateral Agent’s account and
subject to the Collateral Agent’s instructions and (iii) use its commercially
reasonable efforts to obtain an acknowledgment from such Person that it is
holding such Collateral for the benefit of the Collateral Agent and the holders
of the Secured Obligations.

 

(i)                                     Treatment of Accounts.  Not grant or
extend the time for payment of any Account, or compromise or settle any Account
for less than the full amount thereof, or release any Person or property, in
whole or in part, from payment thereof, or allow any credit or discount thereon,
other than in the ordinary course of a Grantor’s business or as required by law.

 

(j)                                     Covenants Relating to Copyrights.  Not
make any assignment or agreement in conflict with the security interest in the
Copyrights of each Grantor hereunder, except as otherwise permitted by the
Credit Agreement.

 

(k)                                  Covenants Relating to Patents and
Trademarks.  Not make any assignment or agreement in conflict with the security
interest in the Patents or Trademarks of each Grantor hereunder, except as
otherwise permitted by the Credit Agreement.

 

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(l)                                     New Patents, Copyrights and Trademarks. 
Within ninety (90) days after the filing of an application for the registration
of any material Copyright, Patent or Trademark with the U.S. Copyright Office or
the U.S. Patent and Trademark Office, as applicable, or the issuance of material
registrations or letters on applications by the U.S. Copyright Office or the
U.S. Patent and Trademark Office, as applicable, after the Closing Date, provide
the Collateral Agent with (i) a listing of all such applications and issued
registrations or letters, which new applications and issued registrations or
letters shall be subject to the terms and conditions hereunder, and (ii) upon
the request of the Collateral Agent (A) with respect to such Copyrights, a duly
executed Notice of Security Interest in Copyrights, (B) with respect to such
Patents, a duly executed Notice of Security Interest in Patents, (C) with
respect to such Trademarks, a duly executed Notice of Security Interest in
Trademarks or (D) such other duly executed documents as the Collateral Agent may
reasonably request in a form acceptable to counsel for the Collateral Agent and
suitable for recording to evidence the security interest in such Copyright,
Patent or Trademark that is the subject of such new application.

 

(m)                               Insurance.  Insure, repair and replace the
Collateral of such Grantor as set forth in the Credit Agreement.  All insurance
proceeds shall be subject to the security interest of the Collateral Agent
hereunder.

 

(n)                                 Commercial Tort Claims.

 

(i)                                     Within ninety (90) days after the
initiation thereof, notify the Collateral Agent in writing of the initiation of
any Commercial Tort Claim in an amount greater than $20 million before any
Governmental Authority by or in favor of such Grantor.

 

(ii)                                  Execute and deliver such statements,
documents and notices and do and cause to be done all such things as the
Collateral Agent may reasonably deem necessary, appropriate or convenient, or as
are required by law, to create, perfect and maintain the Collateral Agent’s
security interest in any Commercial Tort Claim in an amount greater than $20
million.

 

(iii)                               Notwithstanding anything to the contrary
contained herein, for purposes of this clause (n), “Commercial Tort Claims”
shall not include any claims related to the piracy, theft of service or
“hacking” of the conditional access system of the Borrower or any of its
Subsidiaries.

 

6.                                       Advances and Performance by Holders of
the Secured Obligations.  After the occurrence and during the continuation of an
Event of Default, on failure of any Grantor to perform any of the covenants and
agreements contained herein, the Collateral Agent may, at its sole option and in
its sole discretion, perform the same and in so doing may expend such sums as
the Collateral Agent may reasonably deem advisable in the performance thereof,
including the payment of any insurance premiums, the payment of any taxes, a
payment to obtain a release of a Lien or potential Lien, expenditures made in
defending against any adverse claim and all other expenditures that the
Collateral Agent may make for the protection of the security hereof or that may
be compelled to make by operation of law.  All such sums and amounts so expended
shall be repayable by the Grantors on a joint and several basis (subject to
Section 25 hereof) promptly upon timely notice thereof and demand therefor,
shall constitute additional Secured Obligations and shall bear interest from the
date said amounts are expended at the Default Rate for Revolving Loans that are
Base Rate Loans.  No such performance of any covenant or agreement by the
Collateral Agent on behalf of any Grantor, and no such advance or expenditure
therefor, shall relieve the Grantors of any default under the terms of this
Security Agreement or the other Credit Documents.  The Collateral Agent may make
any payment hereby authorized in accordance with any bill, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such bill, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Grantor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

 

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7.                                       Remedies.

 

(a)                                  General Remedies.  Upon the occurrence of
an Event of Default and during the continuation thereof, the Collateral Agent
and the holders of the Secured Obligations shall have, in addition to the rights
and remedies provided herein, in the Credit Documents, or by law (including levy
of attachment and garnishment), the rights and remedies of a secured party under
the UCC of the jurisdiction applicable to the affected Collateral and, further,
the Collateral Agent may, with or without judicial process or the aid and
assistance of others, (i) enter on any premises on which any of the Collateral
may be located and, without resistance or interference by the Grantors, take
possession of the Collateral, (ii)  dispose of any Collateral on any such
premises, (iii) require the Grantors to assemble and make available to the
Collateral Agent at the expense of the Grantors any Collateral at any place and
time designated by the Collateral Agent that is reasonably convenient to both
parties, (iv) remove any Collateral from any such premises for the purpose of
effecting sale or other disposition thereof, and/or (v) without demand and
without advertisement, notice, hearing or process of law, all of which each of
the Grantors hereby waives to the fullest extent permitted by law, at any place
and time or times, sell and deliver any or all Collateral held by or for it at
public or private sale, by one or more contracts, in one or more parcels, for
cash, upon credit or otherwise, at such prices and upon such terms as the
Collateral Agent deems advisable, in its sole discretion (subject to any and all
mandatory legal requirements).  Each of the Grantors acknowledges that any
private sale referenced above may be at prices and on terms less favorable to
the seller than the prices and terms that might have been obtained at a public
sale and agrees that such private sale shall be deemed to have been made in a
commercially reasonable manner.  Neither the Collateral Agent’s compliance with
applicable law nor its disclaimer of warranties relating to the Collateral shall
be considered to adversely affect the commercial reasonableness of any sale.  In
addition to all other sums due the Collateral Agent and the holders of the
Secured Obligations with respect to the Secured Obligations, the Grantors shall
pay the Collateral Agent and each of the holders of the Secured Obligations all
reasonable documented costs and expenses incurred by the Collateral Agent or any
such holder of the Secured Obligations (including reasonable attorneys’ fees and
disbursements and court costs) in obtaining or liquidating the Collateral, in
enforcing payment of the Secured Obligations, or in the prosecution or defense
of any action or proceeding by or against the Collateral Agent or the holders of
the Secured Obligations or the Grantors concerning any matter arising out of or
connected with this Security Agreement, any Collateral or the Secured
Obligations, including any of the foregoing arising in, arising under or related
to a case under Debtor Relief Laws.  To the extent the rights of notice cannot
be legally waived hereunder, each Grantor agrees that any requirement of
reasonable notice shall be met if such notice is personally served on or mailed,
postage prepaid, to the Borrower in accordance with the notice provisions of
Section 11.02 of the Credit Agreement at least ten (10) Business Days before the
time of sale or other event giving rise to the requirement of such notice.  The
Collateral Agent and the holders of the Secured Obligations shall not be
obligated to make any sale or other disposition of the Collateral regardless of
notice having been given.  To the extent permitted by law, any holder of the
Secured Obligations may be a purchaser at any such sale.  To the extent
permitted by applicable law, each of the Grantors hereby waives all of its
rights of redemption with respect to any such sale.  Subject to the provisions
of applicable law, the Collateral Agent and the holders of the Secured
Obligations may postpone or cause the postponement of the sale of all or any
portion of the Collateral by announcement at the time and place of such sale,
and such sale may, without further notice, to the extent permitted by law, be
made at the time and place to which the sale was postponed, or the Collateral
Agent and the holders of the Secured Obligations may further postpone such sale
by announcement made at such time and place.

 

(b)                                 Remedies relating to Accounts.  Upon the
occurrence of an Event of Default and during the continuation thereof, whether
or not the Collateral Agent has exercised any or all of its rights and remedies
hereunder, each Grantor will promptly upon request of the Collateral Agent
instruct all account debtors to remit all payments in respect of Accounts to a
mailing location selected by the Collateral Agent.  In addition, the Collateral
Agent shall have the right to enforce any Grantor’s rights against its customers
and account

 

9

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debtors, and the Collateral Agent or its designee may notify any Grantor’s
customers and account debtors that the Accounts of such Grantor have been
assigned to the Collateral Agent or of the Collateral Agent’s security interest
therein, and may (either in its own name or in the name of a Grantor or both)
demand, collect (including by way of a lockbox arrangement), receive, take
receipt for, sell, sue for, compound, settle, compromise and give acquittance
for any and all amounts due or to become due on any Account, and, in the
Collateral Agent’s discretion, file any claim or take any other action or
proceeding to protect and realize upon the security interest of the holders of
the Secured Obligations in the Accounts.  Each Grantor acknowledges and agrees
that the Proceeds of its Accounts remitted to or on behalf of the Collateral
Agent in accordance with the provisions hereof shall be solely for the
Collateral Agent’s own convenience and that such Grantor shall not have any
right, title or interest in such Accounts or in any such other amounts except as
expressly provided herein.  The Collateral Agent and the holders of the Secured
Obligations shall have no liability or responsibility to any Grantor for
acceptance of a check, draft or other order for payment of money bearing the
legend “payment in full” or words of similar import or any other restrictive
legend or endorsement or be responsible for determining the correctness of any
remittance.  Each Grantor hereby agrees to indemnify the Collateral Agent and
the holders of the Secured Obligations from and against all liabilities,
damages, losses, actions, claims, judgments, costs, expenses and charges
(including reasonable attorneys’ fees and disbursements) suffered or incurred by
the Collateral Agent or the holders of the Secured Obligations (each, an
“Indemnified Party”) because of the maintenance of the foregoing arrangements
except as relating to or arising out of the gross negligence or willful
misconduct of an Indemnified Party or its officers, employees or agents.  In the
case of any investigation, litigation or other proceeding, the foregoing
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by a Grantor, its directors, shareholders or creditors or
an Indemnified Party or any other Person or any other Indemnified Party is
otherwise a party thereto.

 

(c)                                  Access.  In addition to the rights and
remedies hereunder, upon the occurrence of an Event of Default and during the
continuation thereof, the Grantor shall provide the Collateral Agent with access
to the Collateral without cost or charge to the Collateral Agent, and the
reasonable use of the same, together with materials, supplies, books and records
of the Grantors for the purpose of collecting and liquidating the Collateral, or
for preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise.  In addition, the Collateral Agent may remove
Collateral, or any part thereof, from such premises and/or any records with
respect thereto, in order to effectively collect or liquidate such Collateral. 
If the foregoing activities are restricted by the terms of any lease, the
pertinent Grantor shall promptly take reasonable steps to move the Collateral
from such leased location to a new location satisfactory to the Collateral
Agent.

 

(d)                                 Nonexclusive Nature of Remedies.  Failure by
the Collateral Agent or the holders of the Secured Obligations to exercise any
right, remedy or option under this Security Agreement, any other Credit
Document, or as provided by law, or any delay by the Collateral Agent or the
holders of the Secured Obligations in exercising the same, shall not operate as
a waiver of any such right, remedy or option.  To the extent permitted by law,
neither the Collateral Agent, the holders of the Secured Obligations, nor any
party acting as attorney for the Collateral Agent or the holders of the Secured
Obligations, shall be liable hereunder for any acts or omissions or for any
error of judgment or mistake of fact or law other than their gross negligence or
willful misconduct hereunder.  The rights and remedies of the Collateral Agent
and the holders of the Secured Obligations under this Security Agreement shall
be cumulative and not exclusive of any other right or remedy that the Collateral
Agent or the holders of the Secured Obligations may have.

 

(e)                                  Retention of Collateral.  To the extent
permitted under applicable law, in addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default and during the
continuation thereof, the Collateral Agent may, after providing the notices
required by Sections 9-620 and 9-621 of the UCC or otherwise complying with the
requirements of applicable law of the relevant jurisdiction, accept or retain
all or any portion of the Collateral in satisfaction of the Secured
Obligations.  Unless and until the Collateral Agent shall have provided such
notices, however, the Collateral Agent shall not be deemed to have accepted or
retained any Collateral in satisfaction of any Secured Obligations for any
reason.

 

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(f)                                    Deficiency.  In the event that the
proceeds of any sale, collection or realization are insufficient to pay all
amounts to which the Collateral Agent or the holders of the Secured Obligations
are legally entitled, the Grantors shall be jointly and severally liable for the
deficiency (subject to Section 25 hereof), together with interest thereon at the
Default Rate for Revolving Loans that are Base Rate Loans, together with the
costs of collection and reasonable attorneys’ fees and disbursements.  Any
surplus remaining after the full payment and satisfaction of the Secured
Obligations shall be returned to the Grantors or to whomsoever a court of
competent jurisdiction shall determine to be entitled thereto.

 

8.                                       Rights of the Collateral Agent.

 

(a)                                  Power of Attorney.  In addition to other
powers of attorney contained herein, each Grantor hereby designates and appoints
the Collateral Agent, on behalf of the holders of the Secured Obligations, and
each of its designees or agents, as attorney-in-fact of such Grantor,
irrevocably and with power of substitution, with authority to take any or all of
the following actions upon the occurrence and during the continuation of an
Event of Default:

 

(i)                                     to demand, collect, settle, compromise
and adjust, and give discharges and releases concerning the Collateral, all as
the Collateral Agent may reasonably deem appropriate;

 

(ii)                                  to commence and prosecute any actions at
any court for the purposes of collecting any of the Collateral and enforcing any
other right in respect thereof;

 

(iii)                               to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or release as the
Collateral Agent may reasonably deem appropriate;

 

(iv)                              to receive, open and dispose of mail addressed
to a Grantor and endorse checks, notes, drafts, acceptances, money orders, bills
of lading, warehouse receipts or other instruments or documents evidencing
payment, shipment or storage of the goods giving rise to the Collateral on
behalf of and in the name of such Grantor, or securing, or relating to such
Collateral;

 

(v)                                 to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or threatened against the
Collateral;

 

(vi)                              to direct any parties liable for any payment
in connection with any of the Collateral to make payment of any and all monies
due and to become due thereunder directly to the Collateral Agent or as the
Collateral Agent shall direct;

 

(vii)                           to receive payment of and receipt for any and
all monies, claims, and other amounts due and to become due at any time in
respect of or arising out of any Collateral;

 

(viii)                        to sell, assign, transfer, make any agreement in
respect of, or otherwise deal with or exercise rights in respect of, any
Collateral or the goods or services that have given rise thereto, as fully and
completely as though the Collateral Agent were the absolute owner thereof for
all purposes;

 

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(ix)                                to adjust and settle claims under any
insurance policy relating thereto;

 

(x)                                   to authorize or to execute and deliver all
assignments, conveyances, statements, financing statements, renewal financing
statements, security and pledge agreements, affidavits, notices and other
agreements, instruments and documents that the Collateral Agent may reasonably
deem appropriate in order to perfect and maintain the security interests and
liens granted in this Security Agreement and in order to fully consummate all of
the transactions contemplated therein;

 

(xi)                                to institute any foreclosure proceedings
that the Collateral Agent may reasonably deem appropriate; and

 

(xii)                             to do and perform all such other acts and
things as the Collateral Agent may reasonably deem appropriate or convenient in
connection with the Collateral.

 

This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations shall remain
outstanding and until all of the commitments relating thereto shall have been
terminated.  The Collateral Agent shall be under no duty to exercise or withhold
the exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Collateral Agent in this Security Agreement, and shall
not be liable for any failure to do so or any delay in doing so.  The Collateral
Agent shall not be liable for any act or omission or for any error of judgment
or any mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross negligence or
willful misconduct.  This power of attorney is conferred on the Collateral Agent
solely to protect, preserve and realize upon its security interest in the
Collateral.

 

(b)                                 Assignment by the Collateral Agent.  The
Collateral Agent may from time to time assign the Secured Obligations and any
portion thereof and/or the Collateral and any portion thereof in connection with
its resignation as Collateral Agent pursuant to Article X of the Credit
Agreement, and the assignee shall be entitled to all of the rights and remedies
of the Collateral Agent under this Security Agreement in relation thereto.

 

(c)                                  The Collateral Agent’s Duty of Care.  Other
than the exercise of reasonable care to assure the safe custody of the
Collateral while being held by the Collateral Agent hereunder, the Collateral
Agent shall have no duty or liability to preserve rights pertaining thereto, it
being understood and agreed that the Grantors shall be responsible for
preservation of all rights in the Collateral, and the Collateral Agent shall be
relieved of all responsibility for the Collateral upon surrendering it or
tendering the surrender of it to the Grantors.  The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
which shall be no less than the treatment employed by a reasonable and prudent
agent in the industry, it being understood that the Collateral Agent shall not
have responsibility for taking any necessary steps to preserve rights against
any parties with respect to any of the Collateral.  In the event of a public or
private sale of Collateral pursuant to Section 7 hereof, the Collateral Agent
shall have no obligation to clean, repair or otherwise prepare the Collateral
for sale.

 

9.                                       Rights of Required Lenders.  All rights
of the Collateral Agent hereunder, if not exercised by the Collateral Agent, may
be exercised by the Required Lenders.

 

10.                                 Application of Proceeds.  Upon the
occurrence and during the continuation of an Event of Default, any payments in
respect of the Secured Obligations and any proceeds of the Collateral, when
received by the Collateral Agent or any of the holders of the Secured
Obligations in cash or its equivalent,

 

12

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will be applied in reduction of the Secured Obligations in the order set forth
in the Credit Agreement, and each Grantor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Collateral Agent’s sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.

 

11.                                 Release of Collateral.  Upon request, the
Collateral Agent shall promptly deliver to the applicable Grantor (at the
Grantor’s expense) appropriate release documentation to the extent the release
of Collateral is permitted under, and on the terms and conditions set forth in
the Credit Agreement; provided that any such release, or the substitution of any
of the Collateral for other Collateral, will not alter, vary or diminish in any
way the force, effect, lien, pledge or security interest of this Security
Agreement as to any and all Collateral not expressly released or substituted,
and this Security Agreement shall continue as a first priority lien (subject to
Permitted Liens) on any and all Collateral not expressly released or
substituted.

 

12.                                 Costs and Expenses.  At all times hereafter,
whether or not upon the occurrence of an Event of Default, the Grantors agree to
promptly pay upon demand any and all reasonable costs and expenses (including
reasonable attorneys’ fees and disbursements) of the Collateral Agent and the
holders of the Secured Obligations as required under Section 11.04 of the Credit
Agreement.  All of the foregoing costs and expenses shall constitute Secured
Obligations hereunder.

 

13.                                 Continuing Agreement.

 

(a)                                  This Security Agreement shall be a
continuing agreement in every respect and shall remain in full force and effect
so long as any of the Secured Obligations remains outstanding and until all of
the commitments relating thereto have been terminated (other than any
obligations with respect to the indemnities and the representations and
warranties set forth in the Credit Documents).  Upon such payment and
termination, this Security Agreement shall be automatically terminated and the
Collateral Agent and the holders of the Secured Obligations shall, upon the
request and at the expense of the Grantors, forthwith release all of its liens
and security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by the
Grantors evidencing such termination.  Notwithstanding the foregoing, all
indemnities provided hereunder shall survive termination of this Security
Agreement.

 

(b)                                 This Security Agreement shall continue to be
effective or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is rescinded or
must otherwise be restored or returned by the Collateral Agent or any holder of
the Secured Obligations as a preference, fraudulent conveyance or otherwise
under any bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of the
Secured Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including reasonable attorneys’ fees and disbursements)
incurred by the Collateral Agent or any holder of the Secured Obligations in
defending and enforcing such reinstatement shall be deemed to be included as a
part of the Secured Obligations.

 

14.                                 Amendments and Waivers.  This Security
Agreement and the provisions hereof may not be amended, waived, modified,
changed, discharged or terminated except by written agreement of (a) the
Grantors and (b) the Collateral Agent (with the consent or at the direction of
the Required Lenders under the Credit Agreement).

 

15.                                 Successors in Interest.  This Security
Agreement shall create a continuing security interest in the Collateral and
shall be binding upon each Grantor, its successors and assigns, and shall inure,
together with the rights and remedies of the Collateral Agent and the holders of
the Secured Obligations hereunder, to

 

13

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the benefit of the Collateral Agent and the holders of the Secured Obligations
and their successors and permitted assigns; provided, however, that none of the
Grantors may assign its rights or delegate its duties hereunder without the
prior written consent of the Required Lenders under the Credit Agreement (other
than in connection with a transaction permitted by Section 8.04 of the Credit
Agreement).

 

16.                                 Notices.  All notices required or permitted
to be given under this Security Agreement shall be given as provided in
Section 11.02 of the Credit Agreement.

 

17.                                 Counterparts.  This Security Agreement may
be executed in any number of counterparts, each of which where so executed and
delivered shall be an original, but all of which shall constitute one and the
same instrument.  It shall not be necessary in making proof of this Security
Agreement to produce or account for more than one such counterpart.

 

18.                                 Headings.  The headings of the sections and
subsections hereof are provided for convenience only and shall not in any way
affect the meaning or construction of any provision of this Security Agreement.

 

19.                                 Governing Law; Submission to Jurisdiction;
Venue.

 

(a)                                  THIS SECURITY AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE;
PROVIDED THAT THE COLLATERAL AGENT SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.

 

(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS SECURITY AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS SECURITY AGREEMENT, EACH GRANTOR AND THE COLLATERAL AGENT
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS.  EACH GRANTOR AND THE COLLATERAL AGENT IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
SECURITY AGREEMENT OR ANY OTHER CREDIT DOCUMENT RELATED HERETO.  EACH GRANTOR
AND THE COLLATERAL AGENT WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.

 

20.                                 Waiver of Right to Trial by Jury.  TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS SECURITY AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER THIS SECURITY AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS SECURITY AGREEMENT OR
ANY OTHER CREDIT DOCUMENT RELATED HERETO, OR THE TRANSACTIONS RELATED THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY

 

14

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TO THIS SECURITY AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

21.                                 Severability.  If any provision of this
Security Agreement is determined to be illegal, invalid or unenforceable, such
provision shall be fully severable and the remaining provisions shall remain in
full force and effect and shall be construed without giving effect to the
illegal, invalid or unenforceable provisions.

 

22.                                 Entirety.  This Security Agreement and the
other Credit Documents represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, any other documents relating to the Secured Obligations, or
the transactions contemplated herein and therein.

 

23.                                 Survival.  All representations and
warranties of the Grantors hereunder shall survive the execution and delivery of
this Security Agreement and the other Credit Documents, the delivery of the
Notes and the extension of credit thereunder or in connection therewith.

 

24.                                 Other Security.  To the extent that any of
the Secured Obligations are now or hereafter secured by property other than the
Collateral (including real property and securities owned by a Grantor), or by a
guarantee, endorsement or property of any other Person, then the Collateral
Agent shall have the right to proceed against such other property, guarantee or
endorsement upon the occurrence of any Event of Default, and the Collateral
Agent shall have the right, in its sole discretion, to determine which rights,
security, liens, security interests or remedies the Collateral Agent shall at
any time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or the Secured Obligations
or any of the rights of the Collateral Agent or the holders of the Secured
Obligations under this Security Agreement, under any of the other Credit
Documents or under any other document relating to the Secured Obligations.

 

25.                                 Joint and Several Obligations of Grantors.

 

(a)                                  Subject to subsection (c) of this
Section 25, each of the Grantors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
holders of the Secured Obligations, for the mutual benefit, directly and
indirectly, of each of the Grantors and in consideration of the undertakings of
each of the Grantors to accept joint and several liability for the obligations
of each of them.

 

(b)                                 Subject to subsection (c) of this
Section 25, each of the Grantors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Grantors with respect to the payment and
performance of all of the Secured Obligations arising under this Security
Agreement and the other Credit Documents, it being the intention of the parties
hereto that all the Secured Obligations shall be the joint and several
obligations of each of the Grantors without preferences or distinction among
them.

 

(c)                                  Notwithstanding any provision to the
contrary contained herein or in any other of the Credit Documents, the
obligations of each Grantor that is a Guarantor under the Credit Agreement and
the other Credit Documents shall be limited to an aggregate amount equal to the
largest amount that would not render such obligations subject to avoidance under
Section 548 of the Bankruptcy Code of the United States or any other applicable
Debtor Relief Law (including any comparable provisions of any applicable state
law).

 

15

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26.                                 Certain Regulatory Matters.  The exercise of
any remedy with respect to any Satellite, equipment or other assets that are the
subject of FCC Licenses shall be consistent with the rules and regulations
administered by the FCC.

 

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Each of the parties hereto has caused a counterpart of this Security Agreement
to be duly executed and delivered as of the date first above written.

 

GRANTORS:

DIRECTV HOLDINGS LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

DIRECTV FINANCING CO., INC.,

 

a Delaware corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

DIRECTV ENTERPRISES, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

DIRECTV CUSTOMER SERVICES, INC.,

 

a Delaware corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

DIRECTV HOME SERVICES, LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

DIRECTV, INC.,

 

a California corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

DIRECTV HOLDINGS LLC

SECURITY AGREEMENT

 

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DIRECTV MERCHANDISING, INC.,

 

a Delaware corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

DIRECTV OPERATIONS, LLC,

 

a California limited liability company

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

USSB II, INC.,

 

a Minnesota corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

DIRECTV PROGRAMMING HOLDINGS I, INC.,

 

a Delaware corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

DIRECTV PROGRAMMING HOLDINGS II, INC.,

 

a Delaware corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

LABC PRODUCTIONS, INC.,

 

a California corporation

 

 

 

By:

 

 

 

Name:

 

Title:

 

Accepted and agreed to as of the date first above written.

 

BANK OF AMERICA, N.A.,

as Collateral Agent

 

By:

 

 

Name:

Title:

 

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