Document:

Exhibit 10.39

 

PLEDGE AGREEMENT

 

THIS PLEDGE
AGREEMENT (this “Pledge Agreement”)  is dated as of April 9, 2008, between
Greenlady II, LLC (“Pledgor”),  a limited liability company organized
under Delaware law and Bank of America, N.A. (together with its permitted
assigns, “Secured Party”).

 

WHEREAS, Pledgor
and Secured Party have entered into a Credit Agreement, dated as of even date
herewith (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”),  pursuant to which Secured Party will make
the Loans (as defined therein) to Pledgor on the terms set forth therein (all
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Credit Agreement);

 

WHEREAS, pursuant
to the Transaction Acknowledgement, Pledgor and Secured Party have entered into
six distinct Components specified in (and defined under) the Transaction
Acknowledgement, further to be evidenced by the Collar Agreement;

 

WHEREAS, Pledgor
has agreed to secure its obligations to Secured Party under the Credit
Agreement, the Collar Transaction Documents and each transaction thereunder;

 

NOW, THEREFORE, in
consideration of their mutual covenants contained herein and to secure the full
and punctual observance and performance by Pledgor of all Secured Obligations
(as defined herein), the parties hereto, intending to be legally bound, hereby
mutually covenant and agree as follows:

 

1.                          Definitions. As used herein, the following
words and phrases shall have the following meanings:

 

“Additions
and Substitutions” has the meaning provided in Section 2(a).

 

“Authorized
Officer” of Pledgor means any officer, trustee, managing
member or general partner (or any officer thereof), as applicable, as to whom
Pledgor shall have delivered notice to Secured Party that such trustee,
managing member, general partner or officer is authorized to act hereunder on
behalf of Pledgor. The managing member of Pledgor shall be an Authorized
Officer without the provision of such notice.

 

“Base
Number” means the product of the Number of Options and the
Option Entitlement, each as defined in the Collar Transaction Documents.

 

“Business
Day” shall mean any day on which commercial banks are open
for general business in New York City.

 

“Cash” means
U.S. dollars.

 

“Collateral”
has the meaning provided in Section 2(a).

 

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“Collateral
Account” means the securities account (as defined in Section 8-501
of the UCC) titled “Bank of America Collateral Account of Greenlady II, LLC”
and established and maintained at Bane of America Securities LLC.

 

“Collateral
Deficiency” means, at any time, the failure of the Collateral
to include, as Eligible Collateral, Shares at least equal in number to the Base
Number or Substitute Collateral having a value equal to 105% of the net amount
of the Secured Obligations outstanding at such time as determined by the
Secured Party.

 

“Collateral
Event of Default” means (A) a Collateral Deficiency
continues unremedied on the Business Day following notice from Secured Party or
(B) failure at any time of the Security Interests to constitute valid and
perfected security interests in all of the Collateral, subject to no prior or
equal Lien in favor of any Person other than Secured Party (or any Affiliate
thereof), or assertion of such by Pledgor in writing, or (C) any material
misrepresentation, breach of warranty or breach of covenant hereunder.

 

“Control”
means “control” as defined in Section 8-106 and Section 9-106
of the UCC.

 

“Credit
Agreement” has the meaning ascribed to such term in the
preamble of this Agreement.

 

“Custodian”
means Bane of America Securities LLC.

 

“Default
Event” means (i) any Event of Default with respect to
Pledgor under the Collar Transaction Documents, (ii) any Event of Default
under the Credit Agreement and (iii) any Collateral Event of Default
hereunder.

 

“Eligible
Collateral” means Shares, Substitute Collateral and, for
purposes of Section 5(k), Eligible Collateral within the meaning of such Section 5(k) or
other collateral acceptable to Secured Party in its sole discretion, provided
in each case that Pledgor has good and marketable title thereto, free of all
Liens (other than the Security Interests) and Transfer Restrictions (other than
any Existing Transfer Restrictions) and that Secured Party has a valid, first
priority perfected security interest therein, a first lien thereon and, if
applicable, Control with respect thereto.

 

“Existing
Transfer Restrictions” means Transfer Restrictions existing
due to the Shares being “restricted securities” and “control securities” within
the meaning of Rule 144 under the Securities Act and those contained in
the certificate of incorporation of the Issuer as in effect on the date hereof.

 

“Greenlady”
means Greenlady Corp., a Delaware corporation.

 

“Initial
Shares” means 170,000,000 Shares.

 

“ISDA
Receivable” has the meaning provided in Section 2(a).

 

“Issuer”
means The DIRECTV Group, Inc. The term “Issuer” shall also include the
issuer of any shares which holders of The DIRECTV Group, Inc. shares
receive as a

 

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result of a spinoff,
recapitalization, merger, consolidation or other corporate action of the
applicable Issuer.

 

“Lien” means
any lien, mortgage, security interest, pledge, charge or encumbrance of any
kind.

 

“Location”
means, with respect to any party, the place such party is
located within the meaning of Section 9-307 of the UCC.

 

“Margin
Deficiency” means at any time, with respect to each Tranche
(as defined in the Credit Agreement) the excess, if any, of (i) the
aggregate of all Proceeds (as defined in the Credit Agreement) advanced by the
Lender under the Credit Agreement related to such Tranche and not repaid at
that time over (ii) the aggregate Maximum Loan Value (as defined in the
Credit Agreement) of the Eligible Collateral allocated to such Tranche at that
time.

 

“Person”
means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

 

“Pledged
Items” means, as of any date, any and all securities (or
security entitlements with respect thereto) and instruments, cash, financial
assets or other property delivered by Pledgor to be held by or on behalf of
Secured Party under this Pledge Agreement as Collateral, including without
limitation the Initial Shares delivered pursuant to Section 5.

 

“Pledgor”
has the meaning ascribed to such term in the introductory paragraph of this
Agreement.

 

“Secured
Obligations” means, at any time, any and all obligations,
covenants and agreements of any kind whatsoever of Pledgor to Secured Party
under (i) the Collar Transaction Documents, (ii) the Credit
Agreement, (iii) each Note and (iv) this Pledge Agreement, whether
with respect to the payment of money, delivery of securities or other
instruments or property or otherwise, whether now in existence or hereafter
arising.

 

“Secured
Party” has the meaning ascribed to such term in the
introductory paragraph of this Agreement.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Security
Interests” means the security interests in the Collateral
created hereby.

 

“Shares”
means the shares of the relevant Issuer. The initial Shares are shares of the
common stock of The DIRECTV Group, Inc.

 

“Substitute
Collateral” has the meaning provided in Section 5(k).

 

“Transfer
Restrictions” means, with respect to any property or item of
Collateral (including, in the case of securities, security entitlements in
respect thereof), any

 

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condition to or
restriction on the ability of the holder thereof to sell, assign or otherwise
transfer such property or item of Collateral or to exercise or enforce the
provisions thereof or of any document related thereto whether set forth in such
property or item of Collateral itself or in any document related thereto,
including, without limitation, (i) any requirement that any pledge, sale,
assignment, transfer or exercise or enforcement of, or with respect to, such
property or item of Collateral be consented to or approved by any Person,
including, without limitation, the issuer thereof or any other obligor thereon,
(ii) any limitations on the type or status, financial or otherwise, of any
purchaser, pledgee, assignee or transferee of such property or item of
Collateral, (iii) any requirement of the delivery of any certificate,
consent, agreement, opinion of counsel, notice or any other document of any Person
to the issuer of, any other obligor on or any registrar or transfer agent for,
such property or item of Collateral, prior to the sale, pledge, assignment or
other transfer or exercise or enforcement of, or with respect to, such property
or item of Collateral, (iv) any registration or qualification requirement
or prospectus delivery requirement for such property or item of Collateral
pursuant to any federal, state or foreign securities law (including, without
limitation, any such requirement arising under the Securities Act) and (v) any
legend or other notification appearing on any certificate representing such
property or item of Collateral to the effect that any such condition or
restriction exists, provided however, that the required delivery of any assignment,
stock power, instruction or entitlement order from the seller, pledgor,
assignor or transferor of a security or other item of Collateral, together with
any evidence of the authority of the Person executing or delivering such
assignment, stock power, instruction or entitlement order, shall not constitute
a “Transfer Restriction”.

 

“Treasury
Obligations” means negotiable obligations issued by the
United States Treasury Department which (i) are unconditional direct
obligations of the United States of America; (ii) are debt obligations in
a stated principal amount having a fixed maturity and cannot be called by, or
put to, the issuer prior to the stated maturity; (iii) bear interest on
the stated principal amount at a non-variable fixed rate until maturity (or, in
the case of obligations having an original maturity at issuance of one year or
less, bear no interest at all) and (iv) are issued in uncertificated form
and are transferable only on the securities transfer system of the Federal
Reserve System. For purposes of this Pledge Agreement, Treasury Obligations
shall be valued as Eligible Collateral at the following percentages of their
stated principal amount, based on their remaining term to maturity: One year or
less, 99.5%; more than one year, but not more than five years, 98%; more than
five years; 95%.

 

“UCC”
means the Uniform Commercial Code as in effect from time to time in the State
of New York.

 

2.         The
Security Interests. In order to secure the full and punctual
observance and performance by Pledgor of all Secured Obligations:

 

(a) Pledgor
hereby assigns and pledges to Secured Party and grants to Secured Party,
security interests in and to, and a lien upon and right of set-off against, and
transfers to Secured Party, as and by way of a security interest having
priority over all other security interests, with power of sale, all of its
right, title and interest in and to

 

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(i) the Pledged
Items; (ii) subject to Section 6(a), all additions to and substitutions
for any Pledged Items including without limitation any additional or substitute
shares of any capital stock of any class (such additions and substitutions, the
“Additions and Substitutions”);  (iii) all of Pledgor’s right, title
and interest in and to the Collar Transaction Documents, including any amount
payable at the maturity or upon the termination of the Collar Transaction
Documents or any portion thereof (the “ISDA
Receivable”);  (iv) subject
to Section 6(a), the Collateral Account and all cash, securities and other
financial assets (each as defined in Section 8-102 of the UCC), including
the Pledged Items and the Additions and Substitutions, and other funds,
property or assets from time to time held therein or credited thereto; (v) subject
to Section 6(a), all interest, income, proceeds, distributions and
collections received or to be received, or derived or to be derived, now or any
time hereafter (whether before or after the commencement of any proceeding
under applicable bankruptcy, insolvency or similar law, by or against Pledgor,
with respect to Pledgor) from or in connection with any of the foregoing
(including, without limitation, any shares of capital stock issued by any
issuer in respect of any Shares or other securities constituting Collateral or
any cash, securities or other property distributed in respect of or exchanged
for any Shares or other securities constituting Collateral, or into which any
such Shares or other securities are converted, in connection with any merger or
similar event or otherwise, and any security entitlements in respect of any of
the foregoing); and (vi) all powers and rights now owned or hereafter
acquired under or with respect to the Pledged Items or the Additions and
Substitutions (such Pledged Items, Additions and Substitutions, ISDA
Receivable, proceeds, collections, powers, rights, the Collateral Account and
assets held therein or credited thereto being herein collectively called the “Collateral”).  Secured Party shall have all of the rights, remedies and recourses
with respect to the Collateral afforded a secured party by the UCC, in addition
to, and not in limitation of, the other rights, remedies and recourses afforded
to Secured Party by this Pledge Agreement. For the avoidance of doubt, the
Collateral shall not include the Delta DTV Shares (as such term is defined in
the Operating Agreement of the Pledgor).

 

(b) On or
prior to the date hereof, Pledgor shall deliver to Secured Party in the manner
described in Section 5(c) in pledge hereunder Eligible Collateral
consisting of the Initial Shares.

 

(c) In the
event that the Issuer at any time issues to Pledgor in respect of any Shares
constituting Collateral hereunder any Additions or Substitutions, Pledgor shall
immediately pledge and deliver to Secured Party in accordance with Section 5(c) all
Additions and Substitutions as additional Collateral hereunder, subject to Section 6(a).

 

(d) The
parties hereto expressly agree that (i) all rights, assets and property at
any time held in or credited to the Collateral Account shall be treated as
financial assets (as defined in Section 8-102 of the UCC) and (ii) until
all Secured Obligations are satisfied in full and the Commitment is terminated,
Custodian will act only on entitlement orders (as defined in Section 8-102
of the UCC) or other instructions of Secured Party (without further consent of
Pledgor).

 

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(e) Notwithstanding
anything contained in the Collar Transaction Documents to the contrary, all
amounts payable by Secured Party thereunder shall be paid into the Collateral
Account.

 

3.         Representations and
Warranties of Pledgor. Pledgor hereby represents, warrants and
covenants to Secured Party on the date hereof, on the date that the Loans (as
defined under the Credit Agreement) are made under the Credit Agreement and on
each date on which Pledgor delivers or Secured Party otherwise receives
Collateral that:

 

(a) Pledgor (i) owns
and, at all times prior to the release of the Collateral pursuant to the terms
of this Pledge Agreement, will own the Collateral free and clear of any Liens
(other than the Security Interests) or Transfer Restrictions (other than any
Existing Transfer Restrictions) and (ii) is not and will not become a
party to or otherwise be bound by any agreement, other than this Pledge
Agreement and the Credit Agreement that (x) restricts in any manner the
rights of any present or future owner of the Collateral with respect thereto or
(y) provides any Person other than Pledgor, Secured Party or any securities
intermediary through whom any Collateral is held (but in the case of any such
securities intermediary only in respect of Collateral held through it) with
Control with respect to any Collateral.

 

(b) Other
than financing statements or other similar or equivalent documents or
instruments with respect to the Security Interests, no financing statement,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien, security
interest or other encumbrance of any kind on such Collateral.

 

(c) Upon (i) the
delivery of certificates evidencing any Collateral consisting of Shares or
other securities, as applicable, to Secured Party in accordance with Section 5(c)(A) or
(ii) the crediting of any securities or other financial assets or of any
cash to the Collateral Account, Secured Party will have a valid and perfected
security interest in such Collateral, subject to no prior Lien.

 

(d) Except
for the filing of a UCC financing statement in the Location of Pledgor, no
registration, recordation or filing with any governmental body, agency or
official, other than such as have been made, is required in connection with the
execution and delivery of this Pledge Agreement or necessary for the validity
or enforceability hereof or thereof or for the perfection or enforcement of the
Security Interests.

 

(e) Pledgor
has not performed and will not perform any acts that might prevent Secured
Party from enforcing any of the terms of this Pledge Agreement or that might
limit Secured Party in any such enforcement.

 

(f) The
Location of Pledgor is Delaware.

 

4.         Certain Covenants of
Pledgor. Pledgor agrees that, so long as any Secured Obligation
remains outstanding:

 

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(a) Upon
notice from Secured Party as provided herein that a Collateral Deficiency
exists, Pledgor shall pledge additional Eligible Collateral in the manner
described in Sections 5(b) and 5(c) as necessary to cause such
Collateral Deficiency to cease to exist.

 

(b) Pledgor
shall, at the expense of Pledgor and in such manner and form as Secured Party
may require, give, execute, deliver, file and record any financing statement,
notice, instrument, document, undated stock or bond powers or other instruments
of transfer, agreement or other papers that may in Secured Party’s sole
discretion be necessary or desirable in order (i) to create, preserve,
perfect, substantiate or validate any security interest granted pursuant
hereto, (ii) to create or maintain Control with respect to any such
security interests in the Collateral or any part thereof or (iii) to
enable Secured Party to exercise and enforce its rights hereunder with respect
to such security interest. To the extent permitted by applicable law, Pledgor
hereby authorizes Secured Party to execute and file, in the name of Pledgor as
debtor, UCC financing or continuation statements that Secured Party in its sole
discretion may deem necessary or desirable to further perfect, or maintain the
perfection of, the Security Interests.

 

(c) Pledgor
shall warrant and defend its title to the Collateral, subject to the rights of
Secured Party, against the claims and demands of all persons. Secured Party may
elect, but without an obligation to do so, to discharge any Lien of any third
party on any of the Collateral.

 

(d) Pledgor
agrees that it shall not (1) change its name or identity or its
organizational structure in any manner or (2) change its Location, unless
in any such case (A) it shall have given Secured Party not less than 30
days’ prior notice thereof and (B) such change shall not cause any of the
Security Interests to become unperfected, cause Secured Party to cease to have
Control in respect of any of the Security Interests in any Collateral
consisting of investment property (as defined in Section 9-102(a)(49) of
the UCC) or subject any Collateral to any other Lien.

 

(e) Pledgor
agrees that it shall not (1) create or permit to exist any Lien (other
than the Security Interests) upon or with respect to the Collateral (2) create
or approve any Transfer Restriction (other than any Existing Transfer
Restrictions) upon or with respect to the Collateral, (3) sell or
otherwise dispose of, or grant any option with respect to, any of the
Collateral (other than those contemplated by the terms of the Collateral) or (4) enter
into or consent to any agreement pursuant to which any Person other than
Pledgor, Secured Party and any securities intermediary through whom any of the
Collateral is held (but in the case of any such securities intermediary only in
respect of Collateral held through it) has or will have Control in respect of
any Collateral.

 

5.         Administration of the
Collateral and Valuation of the Securities.

 

(a) Secured
Party shall determine on each Business Day whether a Collateral Event of
Default shall have occurred.

 

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(b) Pledgor
may pledge additional Eligible Collateral hereunder at any time. Concurrently
with the delivery of any such additional Eligible Collateral, Pledgor shall
deliver to Secured Party a certificate of Pledgor in form and substance
reasonably satisfactory to Secured Party and dated the date of such delivery (A) identifying
the additional items of Collateral being pledged and (B) repeating the
representations, warranties and covenants set forth in Section 3 with
respect to such additional items of Collateral (as modified by any change in
Pledgor’s Location as notified to Secured Party in accordance with Section 4(d) hereof
or by any change in Pledgor’s status as notified to Secured Party in accordance
with Section 4(d) hereof). Pledgor hereby covenants and agrees to
take all actions required to create for the benefit of Secured Party a valid,
first priority, perfected security interest in, and a first lien upon, such
additional Eligible Collateral, as to which Secured Party will have Control, if
applicable.

 

(c) Delivery
of the Initial Shares shall be effected by physical delivery to the Secured
Party of certificates evidencing the Initial Shares registered in the name of
Greenlady or the Pledgor, accompanied by any required transfer tax stamps, and
in suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, all in form and substance satisfactory to Custodian and the
crediting by Custodian of such securities to the Collateral Account; provided
that, if any Initial Shares so delivered are registered in the name of
Greenlady, Pledgor shall cause such Initial Shares to be reregistered in the
name of Pledgor within five Business Days after the date hereof and
certificates evidencing such reregistered Shares shall be delivered in
accordance with clause (A) below. Subject to the foregoing, any delivery
by Pledgor of securities as Collateral shall be effected (A) in the case
of Collateral consisting of certificated securities registered in the name of
Pledgor, by delivery of certificates representing such securities to Secured
Party, accompanied by any required transfer tax stamps, and in suitable form
for transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately guaranteed, all
in form and substance satisfactory to Custodian and Secured Party and the
crediting by Custodian of such securities to the Collateral Account, (B) in
the case of shares or other securities in respect of which security
entitlements are held by Pledgor through a securities intermediary (including,
without limitation, Secured Party or Custodian), by the crediting of such
shares or other securities, accompanied by any required transfer tax stamps, to
a securities account of Custodian at such securities intermediary, including
Custodian, or, at the option of Custodian at another securities intermediary
satisfactory to Custodian and Secured Party and the crediting by Custodian of
such securities to the Collateral Account or (C) in any case, by complying
with such alternative delivery instructions as Secured Party shall provide to
Pledgor in writing. Upon delivery of any such Pledged Item under this
Agreement, Secured Party or Custodian may examine such Pledged Item and any
certificates delivered pursuant to Section 5(b) or otherwise pursuant
to the terms hereof in connection therewith to determine that they comply as to
form with the requirements for Collateral herein.

 

(d) Any
delivery by Pledgor of Cash as Collateral shall be effected by the delivery of
such Cash to the Collateral Account.

 

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(e) If on any
Business Day Secured Party determines that a Collateral Event of Default shall
have occurred, Secured Party shall promptly notify Pledgor of such
determination by telephone call to an Authorized Officer of Pledgor followed by
a written confirmation of such call.

 

(f) If on any
Business Day after the end of the Availability Period in respect of a Tranche
or the termination of all Commitments applicable to such Tranche, Secured Party
determines that no Default Event or failure by Pledgor to meet any of its
obligations under Sections 4 or 5 hereof has occurred and is continuing,
Pledgor may obtain the release from the Security Interests of any Collateral
allocated to such Tranche provided that, after such release, no Collateral
Event of Default would occur and, if applicable, Section 5(k) was
complied with and provided further, such release does not create or increase a
Margin Deficiency in respect of such Tranche.

 

(g) If on any
Business Day after the payment in full of all amounts owed under the Credit
Agreement and the permanent termination of all Commitments thereunder, Secured
Party determines that no Default Event or failure by Pledgor to meet any of its
obligations under Sections 4 or 5 hereof has occurred and is continuing,
Pledgor may obtain the release from the Security Interests of any Collateral
provided that, after such release, no Collateral Event of Default would occur
and, if applicable, Section 5(k) was complied with.

 

(h) Subject
to Existing Transfer Restrictions, Secured Party may at any time or from time
to time, but only after the occurrence of a Default Event that is continuing at
such time or with the prior consent of Pledgor, cause any or all of the Shares
pledged hereunder not registered in the name of the Secured Party or its
nominee to be transferred of record into the name of Secured Party or its
nominee. Pledgor shall promptly give to Secured Party copies of any notices or
other communications received by Pledgor with respect to Shares pledged
hereunder registered, or held through a securities intermediary, in the name of
Pledgor or Pledgor’s nominee and Secured Party shall promptly give to Pledgor
copies of any notices and communications received by Secured Party with respect
to Shares pledged hereunder registered, or held through a securities
intermediary, in the name of Secured Party or Secured Party’s nominee.

 

(i) Pledgor
agrees that Pledgor shall forthwith upon demand pay to Secured Party:

 

i.     the amount of any taxes that Secured Party
may have been required to pay by reason of the Security Interests or to free
any of the Collateral from any Lien thereon, and

 

ii.    the amount of any and all out-of-pocket
expenses, including the reasonable fees and disbursements of counsel and of any
other experts, that Secured Party may incur in connection with (A) the
enforcement of this Pledge Agreement, including such expenses as are incurred
to preserve the value of the Collateral and the validity, perfection, rank and
value of the Security Interests, (B) the collection, sale or other

 

9

 

disposition of any of the
Collateral or (C) the exercise by Secured Party of any of the rights
conferred upon it hereunder.

 

Any such amount not paid
on demand shall bear interest (computed on the basis of a year of 360 days and
payable for the actual number of days elapsed) at a rate per annum equal to 1%
plus the prime rate as published in The Wall
Street Journal, Eastern Edition in effect from time to time during
the period from the date hereof to the date of the termination of this Pledge
Agreement.

 

(j) Pledgor
hereby acknowledges that during such time as any Collateral is held by Secured
Party pursuant to the terms of this Pledge Agreement, Pledgor will not receive
periodic account statements with respect to the value thereof.

 

(k) Unless a
Default Event shall have occurred and is continuing, Pledgor shall be entitled,
upon not less than two Business Days’ prior written notice to Secured Party, to
withdraw all but not less than all of the Shares from the lien created herein
upon (x) delivering to Secured Party Substitute Collateral having a market
value at least equal to 105% of the aggregate amount of the Secured Obligations
then outstanding, on the date of such delivery, and (y) taking such other
actions as Secured Party may reasonably require to create for the benefit of
Secured Party a valid and perfected security interest in such Substitute
Collateral, a first lien thereon and, if applicable, Control of Secured Party
with respect thereto. The “Substitute
Collateral” shall consist of (i) Treasury Obligations, (ii) cash
or (iii) such other securities as Secured Party may approve. Pledgor shall
make each delivery of Substitute Collateral to Secured Party in a manner
prescribed by Section 5(c) or 5(d) hereof. Pledgor shall make
deliveries of additional Substitute Collateral on a daily basis as necessary so
that the market value of the Substitute Collateral pledged is at least equal to
105% of the aggregate amount of the Secured Obligations then outstanding,
determined daily. Provided that no Default Event has occurred and is
continuing, if at the close of business on any Business Day the aggregate
market value of the Substitute Collateral pledged hereunder exceeds 108% of the
aggregate amount of the Secured Obligations then outstanding, Secured Party
shall upon written notice by Pledgor release Substitute Collateral from the
lien created herein and return them to Pledgor to the extent that the aggregate
market value of such Substitute Collateral exceeds 108% of the aggregate amount
of the Secured Obligations then outstanding. All calculations of the market
value of Substitute Collateral shall be made in good faith by Secured Party on
a “mark-to-market” basis.

 

(1) For the
avoidance of doubt, the parties acknowledge that Secured Party shall have no
right to rehypothecate the Collateral prior to a Default Event.

 

(m) As of the
date hereof, the Collateral allocated to each Tranche shall be as set forth in
Schedule 1 hereto. Any Additions and Substitutions in respect of specific
Collateral shall be allocated to the Tranche to which such Collateral relates.
In connection with any Collateral Adjustment, the Borrower shall allocate the
additional Collateral pledged to a specific Tranche by providing written notice
of such allocation to the Secured Party on or prior to the date of such
Collateral Adjustment.

 

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6.         Income
and Voting Rights in Collateral.

 

(a) For so
long as no Default Event shall have occurred and be continuing, Secured Party
shall have the right to receive and retain as Collateral hereunder all proceeds
of the Collateral provided that the Pledgor shall be entitled to receive and
retain any dividends, interest and other distributions that it is entitled to
receive as holder of the Shares and if and when such dividends, interest and
other distributions do not or no longer constitute (as applicable) Restricted
Payments that would be prohibited by Section 7.06 of the Credit Agreement
if such dividends, interest and other distributions were to be distributed in
respect of the equity interests in Pledgor, such dividends, interests and other
distributions shall, thereupon, be free and clear of all Liens created
hereunder. If a Default Event shall have occurred and be continuing, Secured
Party shall have the right to receive and retain as Collateral hereunder all
proceeds (including, without limitation, any dividends, interest and other
distributions) of the Collateral, and Pledgor shall in each case take all such
action as Secured Party shall reasonably deem necessary or appropriate to give
effect to such right. All such proceeds that are received by Pledgor contrary
to the provisions of this Pledge Agreement shall be received in trust for the
benefit of Secured Party and, if Secured Party so directs, shall be segregated
from other funds of Pledgor and shall, forthwith upon demand by Secured Party,
be delivered over to Secured Party as Collateral in the same form as received
(with any necessary endorsement). Notwithstanding the foregoing, if Pledgor
shall be required under the Collar Transaction Documents to deliver any
dividend or other distribution to Secured Party, then if and to the extent that
such dividend or other distribution is received into or credited to the
Collateral Account, Pledgor may instruct Secured Party to satisfy Pledgor’s
obligation to pay or deliver such dividend or other distribution to Secured
Party pursuant to the Collar Transaction Documents by applying such dividend or
distribution to such obligation. Otherwise, so long as no Default Event shall
have occurred and be continuing, Secured Party shall promptly deliver over to
Pledgor any dividends, interest and other distributions received in or credited
to the Collateral Account.

 

(b) At all
times prior to the disposition of any Shares by the Secured Party pursuant to Section 7
hereof, Pledgor shall have the right, from time to time, to vote and to give
consents, ratifications and waivers with respect to the Collateral for all
purposes, provided that the Pledgor agrees that the Pledgor will not vote the
Shares in any manner that is inconsistent with the terms of this Agreement, the
Credit Agreement or any Collateral Transaction Document or would reasonably be
expected to have a material adverse effect on the value of the Shares or the
Secured Party’s interest therein. For the avoidance of doubt, the Secured Party
shall have no voting rights with respect to the Shares, except to the extent
that the Secured Party buys any Shares in a sale or other disposition made
pursuant to Section 7.

 

(c) If a
Default Event shall have occurred and be continuing, all proceeds that are
received by Pledgor shall be received in trust for the benefit of Secured
Party, shall be segregated from other property of Pledgor and shall immediately
be delivered over to Secured Party as Collateral in the same form as received
(with any necessary endorsement).

 

11

 

7.         Remedies upon Default
Events.

 

(a) Subject
to Section 7(b) below, if any Default Event shall have occurred and
be continuing, Secured Party may exercise all the rights of a secured party
under the UCC (whether or not in effect in the jurisdiction where such rights
are exercised) and, in addition, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
may:

 

(i)           deliver or cause to be delivered to
itself or to an affiliate from the Collateral Account, Collateral consisting of
Shares with a value sufficient to satisfy in full all Secured Obligations,
whereupon Secured Party shall hold such Shares absolutely free from any claim
or right of whatsoever kind, including any equity or right of redemption of
Pledgor that may be waived or any other right or claim of Pledgor, and Pledgor,
to the extent permitted by law, hereby specifically waives all rights of
redemption, stay or appraisal that Pledgor has or may have under any law now
existing or hereafter adopted;

 

(ii)          sell such Collateral as may be
necessary to generate proceeds sufficient to satisfy in full all Secured
Obligations, at public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as Secured Party may deem satisfactory;

 

(iii)         collect any amounts payable under the
ISDA Receivable and apply such amounts against any Secured Obligation;

 

(iv)         take any combination of the actions
described in clauses (i), (ii) and (iii) above.

 

Pledgor covenants and
agrees that it will execute and deliver such documents and take such other
action as Secured Party deems necessary or advisable in order that any such
sale, may be made in compliance with law. Upon any such sale Secured Party
shall have the right to deliver, assign and transfer to the buyer thereof the
Collateral so sold. Each buyer at any such sale shall hold the Collateral so
sold absolutely and free from any claim or right of whatsoever kind, including
any equity or right of redemption of Pledgor that may be waived or any other
right or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal that Pledgor
has or may have under any law now existing or hereafter adopted. The notice (if
any) of such sale required by Section 9-611 of the UCC shall (1) in
case of a public sale, state the time and place fixed for such sale, (2) in
case of sale at a broker’s board or on a securities exchange, state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof so being sold, will first be offered for
sale at such board or exchange, and (3) in the case of a private sale,
state the day after which such sale may be consummated. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as Secured Party may fix in the notice of such sale. At any
such sale the Collateral may be sold in

 

12

 

one lot as an entirety or
in separate parcels, as Secured Party may determine. Secured Party shall not be
obligated to make any such sale pursuant to any such notice. Secured Party may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by Secured Party until the sale price is paid by the buyer thereof,
but Secured Party shall not incur any liability in case of the failure of such
buyer to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. Secured Party,
instead of exercising the power of sale herein conferred upon it, may proceed
by a suit or suits at law or in equity to foreclose the Security Interests and
sell the Collateral, or any portion thereof, under a judgment or decree of a
court or courts of competent jurisdiction.

 

(b) The
Pledgor and the Secured Party agree that (i) the Secured Party shall not
be entitled to exercise its remedies hereunder in a manner that would cause it
to become at any one time the beneficial owner of more than 9.9% of the common
shares of the Issuer then outstanding and (ii) the Secured Party will not
sell, in any single transaction, to one or more purchasers, an amount of Shares
representing Shares in excess of 9.9% of the common shares of the Issuer then
outstanding. The Pledgor hereby (x) acknowledges that selling or otherwise
disposing of the Collateral in accordance with the restrictions set forth in
this Section 7(b) may result in prices and terms less favorable to
the Secured Party than those that could be obtained by selling or otherwise
disposing of the Shares in a single transaction to a single purchaser and (y) agrees
and acknowledges that no method of sale or other disposition of Collateral
shall be deemed commercially unreasonable because of any action taken or not
taken by the Secured Party to comply with such restrictions.

 

(c) Pledgor
hereby irrevocably appoints Secured Party its true and lawful attorney, with
full power of substitution, in the name of Pledgor, Secured Party or otherwise,
for the sole use and benefit of Secured Party, but at the expense of Pledgor,
to the extent permitted by law, to exercise, at any time and from time to time
while a Default Event has occurred and is continuing, all or any of the
following powers with respect to all or any of the Collateral:

 

i.             to demand, sue for, collect,
receive and give acquittance for any and all monies due or to become due upon
or by virtue thereof,

 

ii.            to settle, compromise, compound,
prosecute or defend any action or proceeding with respect thereto,

 

iii.           to sell, transfer, assign or
otherwise deal in or with the same or the proceeds or avails thereof, as fully
and effectually as if Secured Party were the absolute owner thereof (including,
without limitation, the giving of instructions and entitlement orders in
respect thereof), and

 

13

 

iv.           to extend the time of payment of any
or all thereof and to make any allowance and other adjustments with reference
thereto;

 

provided
that Secured Party shall give Pledgor not less than one day’s
prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral that threatens to
decline speedily in value, including, without limitation, equity securities, or
is of a type customarily sold on a recognized market. Secured Party and Pledgor
agree that such notice constitutes “reasonable authenticated notification of
disposition” within the meaning of Section 9-611 of the UCC. Pledgor and
Secured Party hereby acknowledge and agree that the Shares are of a type (or
are convertible into securities of a type) customarily sold on a recognized
market.

 

(d) Upon any
delivery or sale of all or any part of any Collateral made either under the
power of delivery or sale given hereunder or under judgment or decree in any
judicial proceedings for foreclosure or otherwise for the enforcement of this
Pledge Agreement, Secured Party is hereby irrevocably appointed the true and
lawful attorney of Pledgor, in the name and stead of Pledgor, to make all
necessary deeds, bills of sale, instruments of assignment, transfer or
conveyance of the property, and all instructions and entitlement orders in
respect of the property, thus delivered or sold. For that purpose Secured Party
may execute all such documents, instruments, instructions and entitlement
orders. This power of attorney shall be deemed coupled with an interest, and
Pledgor hereby ratifies and confirms that which Pledgor’s attorney acting under
such power, or such attorney’s successors or agents, shall lawfully do by
virtue of this Pledge Agreement. If so requested by Secured Party or by any
buyer of the Collateral or a portion thereof, Pledgor shall further ratify and
confirm any such delivery or sale by executing and delivering to Secured Party
or to such buyer or buyers at the expense of Pledgor all proper deeds, bills of
sale, instruments of assignment, conveyance or transfer, releases, instructions
and entitlement orders as may be designated in any such request.

 

(e) If a
Default Event shall have occurred and be continuing, Secured Party may proceed
to realize upon the Security Interests in the Collateral against any one or
more of the types of Collateral, at any time, as Secured Party shall determine
in its sole discretion subject to the foregoing provisions of this Section 7.
The proceeds of any sale of, or other realization upon, or other receipt from,
any of the Collateral shall be applied by Secured Party in the following order
of priorities:

 

first, to
the payment to Secured Party of the expenses of such sale or other realization,
including reasonable compensation to the agents and counsel of Secured Party,
and all expenses, liabilities and advances incurred or made by Secured Party in
connection therewith, including brokerage fees in connection with the sale by
Secured Party of any Collateral;

 

second,
to the payment to Secured Party of the aggregate amount (or
the value of any delivery or other performance) owed by Pledgor to Secured
Party under the Secured Obligations;

 

14

 

finally,
if all of the Secured Obligations have been fully discharged
or sufficient funds have been set aside by Secured Party at the request of
Pledgor for the discharge thereof, any remaining proceeds shall be released to
Pledgor.

 

8.         Netting and Set-off.

 

(a) If on any
date, cash would otherwise be payable or Shares or other property would
otherwise be deliverable pursuant to the Collar Transaction Documents, the
Credit Agreement or this Pledge Agreement, as applicable, by Secured Party to
Pledgor and by Pledgor to Secured Party, and the type of property required to
be paid or delivered by each such party on such date is the same, then, on such
date, each such party’s obligation to make such payment or delivery will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable or deliverable by one such party exceeds the
aggregate amount that would otherwise have been payable or deliverable by the
other such party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable or deliverable to pay or deliver to
the other party the excess of the larger aggregate amount over the smaller
aggregate amount.

 

(b) In
addition to and without limiting any right, for so long as such Default Event
is continuing, to set off that Secured Party may have as a matter of law,
pursuant to contract or otherwise, the occurrence of any Default Event shall
constitute an Event of Default with respect to Pledgor under the Collar
Transaction Documents and an Event of Default with respect to Pledgor under the
Credit Agreement, and Secured Party shall have the right to terminate,
liquidate, accelerate and otherwise close out all transactions under the Collar
Transaction Documents and the Credit Agreement pursuant to the default provisions
thereof and may reduce any amount payable by or other obligation of Secured
Party to Pledgor by its set-off against any amount payable by Pledgor to
Secured Party (whether or not arising under the Collar Transaction Documents or
the Credit Agreement, matured or contingent and irrespective of the currency,
place of payment or place of booking of the obligation). To the extent that
such amounts are set off, such obligations will be discharged promptly and in
all respects. Secured Party shall give notice to Pledgor after any set-off
effected pursuant to this Section 8.

 

(c) In the
exercise of its set-off rights as set forth in this Section 8, upon the
occurrence and during the continuation of a Default Event, Secured Party may
set off any obligation it may have to release from the Security Interests or
return to Pledgor any Collateral pursuant to the terms of this Pledge Agreement
against any right Secured Party or any of its affiliates may have against
Pledgor pursuant to this Pledge Agreement or any other agreement between
Pledgor and Secured Party, including, without limitation, any right to receive
a payment or delivery pursuant to any provision of the Collar Transaction
Documents, the Credit Agreement or this Pledge Agreement. In the case of a
set-off of any obligation to return or replace assets against any right to
receive assets of the same type, such obligation and right shall be set off in
kind. In the case of a set-off of any obligation to return or replace assets
against any right to receive assets of any other type, the value of each of
such obligation and such right shall be reasonably determined by

 

15

 

Secured Party and the
result of such set-off shall be that the net obligor shall pay or deliver to the
other party an amount of cash or assets, at the net obligor’s option, with a
value (reasonably determined, in the case of a delivery of assets, by Secured
Party) equal to that of the net obligation. In determining the value of any
obligation to release or deliver any securities or right to receive any
securities, the value at any time of such obligation or right shall be
determined by Secured Party by reference to the fair market value of such
securities at such time. If an obligation or right is unascertained at the time
of any such set-off, Secured Party may in good faith estimate the amount or
value of such obligation or right, in which case set-off will be effected in
respect of that estimate, and the relevant party shall account to the other
party at the time such obligation or right is ascertained.

 

9.         Miscellaneous.

 

(a) To the
extent permitted by law, the unenforceability or invalidity of any provision or
provisions of this Pledge Agreement shall not render any other provision or
provisions herein contained unenforceable or invalid.

 

(b) Any
provision of this Pledge Agreement may be amended or waived if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by Pledgor and Secured Party or, in the case of a waiver, by the party against
whom the waiver is to be effective. No failure or delay by either party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

 

(c) All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard forms
of telecommunication. Notices to Pledgor shall be directed to Pledgor c/o Neal
Dermer, Liberty Media Corporation, 12300 Liberty Boulevard, Englewood, CO
80112, Telephone: 720-875-5419, Facsimile: 720-875-5915. Notices to Secured
Party before  May 5,
2008 shall be directed to it care of Bank of America, N.A. Attention: Equity
Derivatives Group Middle Office, with copy to Equity Derivatives - Legal at 9
West 57th Street, 40th floor, NY, NY 10019. Notices to Secured Party after  May 5, 2008 shall be
directed to it care of Bank of America, N.A. Attention: Equity Derivatives
Group Middle Office, with copy to Equity Derivatives – Legal* Bank of America
Tower, 3rd Floor, One Bryant Park, NewYork, New York 10036-6715.

 

(d) All
calculations and determinations required hereunder shall be made by Secured
Party acting in good faith and in a reasonable manner.

 

(e)      THIS PLEDGE AGREEMENT AND ALL MATTERS
ARISING OUT OF OR RELATING HERETO SHALL IN ALL RESPECTS BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO CHOICE OF LAW DOCTRINE); PROVIDED THAT AS TO COLLATERAL LOCATED IN
ANY

 

16

 

JURISDICTION
OTHER THAN THE STATE OF NEW YORK, SECURED PARTY SHALL HAVE, IN ADDITION TO ANY
RIGHTS UNDER THE LAW OF THE STATE OF NEW YORK, ALL OF THE RIGHTS TO WHICH A
SECURED PARTY IS ENTITLED UNDER THE LAW OF SUCH OTHER JURISDICTION. THE PARTIES
HERETO HEREBY AGREE CUSTODIAN’S JURISDICTION, WITHIN THE MEANING OF SECTION 8-110(e) OF
THE UCC, INSOFAR AS IT ACTS AS A SECURITIES INTERMEDIARY HEREUNDER OR IN
RESPECT HEREOF, IS THE STATE OF NEW YORK.

 

(f)       EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND
STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN
ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, TO THE EXTENT PERMITTED BY APPLICABLE
LAW.

 

(g)      EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS PLEDGE AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

(h) This
Pledge Agreement may be executed, acknowledged and delivered in any number of
counterparts and all such counterparts taken together shall be deemed to
constitute one and the same agreement.

 

(i) The
parties hereto agree and acknowledge that this Pledge Agreement and the Credit
Agreement shall each be a “Credit Support Document” (as defined in the Collar
Transaction Documents) under the Collar Transaction Documents with respect to
Pledgor.

 

(j) Pledgor
and Secured Party hereby agree that Section 7 of the ISDA Master
constituting part of the Collar Transaction Documents shall not apply to
Pledgor to the extent necessary for Pledgor to grant a security interest in the
ISDA Receivable to Secured Party hereunder and for Secured Party to exercise the
remedies set forth herein.

 

(k) Pledgor
and Secured Party hereby agree that (a) the Credit Agreement, together
with this Pledge Agreement, is a “securities contract” (as defined in Section 741(7) of
the United States Bankruptcy Code (the “Bankruptcy
Code”),  (b) this
Pledge Agreement and the Parent Guarantee entered into in connection with the
Collar Transaction Documents are or will be a “security agreement or
arrangement” or other “credit enhancement” that forms a part of such “securities
contract” within the meaning of Section 362 of the Bankruptcy Code and (c) all
transfers of cash, securities or other property under or in connection with the
Credit Agreement or the Collar Transaction (including all pledges under this
Pledge Agreement) to Secured Party are “transfers” made “by or to (or for the
benefit of)” Secured Party as a “financial institution” or a

 

17

 

“financial participant”
(each as defined in the Bankruptcy Code) within the meaning of Section 546(e) of
the Bankruptcy Code and are “in connection with” a “securities contract” within
the meaning of Section 546(e) and 548(d)(2) of the Bankruptcy
Code.

 

(l) Whenever
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party. All the covenants and
agreements herein contained by or on behalf of Pledgor and Secured Party shall
bind, and inure to the benefit of, such party’s respective successors and
assigns whether so expressed or not, and shall be enforceable by and inure to
the benefit of the other party and its successors and assigns. Subject to the
following, neither Pledgor nor Secured Party may assign its rights or
obligations under this Pledge Agreement, except with the prior written consent
of the other party, and any purported assignment without such prior written
consent shall be void and of no effect. Notwithstanding the foregoing, Secured
Party may, from time to time, without the consent of Pledgor assign all of its
rights and obligations hereunder to an Eligible Assignee (as defined in the
Credit Agreement) to which the Credit Agreement has been assigned provided that, Secured Party shall also
assign its rights and obligations under the Collar Transaction Documents to the
same extent and in connection with its assignment of the Credit Agreement to
such Eligible Assignee, pursuant to the terms thereof.

 

10.       Termination
of Pledge Agreement. This Pledge Agreement and the rights granted by
Pledgor in the Collateral shall cease and terminate upon satisfaction in full
of all of the Secured Obligations. Any Collateral remaining at the time of such
termination shall be fully released and discharged from the Security Interests
and delivered to Pledgor by Secured Party, all at the request and expense of
Pledgor.

 

11.       Relationship
to Collar Transaction Documents. The parties hereto acknowledge and
agree that (a) in no event shall any provision of this Pledge Agreement,
or the performance hereof, constitute a breach or violation of, or default under,
the Collar Transaction Documents and (b) in the event that, upon execution
of documentation replacing and superseding the Transaction Acknowledgement, any
relevant provisions of the Collar Transaction Documents then in effect differ
in any material respect from those of the Transaction Acknowledgement, the
parties will negotiate in good faith to modify this Agreement in a manner that
preserves the economic intent of the parties and the Lien intended to be
created hereby.

 

18

 

IN WITNESS
WHEREOF, the parties have signed this Pledge Agreement as of the date and year
first above written.

 

	
  PLEDGOR:

  	
   

  	
  SECURED
  PARTY:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GREENLADY II, LLC

  	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
  By:

  	
  Greenlady Corp., its sole Managing member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David J.A. Flowers

  	
   

  	
  By:

  	
  /s/ William Brett

  
	
   

  	
  Name:

  	
  David J.A. Flowers

  	
   

  	
   

  	
  Name: William
  Brett

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  	
   

  	
  Title: Managing
  Director

  

 

 

	
  Accepted and agreed solely for purposes of

  	
   

  
	
  Sections 2(b) and 9(e) hereof:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BANC OF AMERICA SECURITIES LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William
  Brett

  	
   

  
	
   

  	
  Name: William
  Brett

  	
   

  
	
   

  	
  Title: Managing
  Director

  	
   

  

 

 

Signature Page- Pledge Agreement

 

 

SCHEDULE 1

 

	
   

  	
  Tranches under

  the Credit

  Agreement

  	
   

  	
  Share Allocations as of

  April 9, 2008

  	
   

  	
   

  	
   

  
	
   

  	
  1

  	
   

  	
  36,960,114

  	
   

  	
   

  	
   

  
	
   

  	
  2

  	
   

  	
  26,718,446

  	
   

  	
   

  	
   

  
	
   

  	
  3

  	
   

  	
  21,121,697

  	
   

  	
   

  	
   

  
	
   

  	
  4

  	
   

  	
  22,426,211

  	
   

  	
   

  	
   

  
	
   

  	
  5

  	
   

  	
  27,175,982

  	
   

  	
   

  	
   

  
	
   

  	
  6

  	
   

  	
  35,597,550

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Shares:

  	
   

  	
  170,000,000

  	
   

  	
   

  	
   

  

 

 

Signature Page - Pledge AgreementExhibit 10.40

 

AMENDMENT, UNWIND, CONSENT AND WAIVER AGREEMENT

 

Amendment, Unwind, Consent and Waiver Agreement, dated as of November 19,
2009 (the “Agreement”), among Greenlady II, LLC (“Greenlady II”),
DIRECTV (“New DTV”) and Bank of America, N.A. (“BofA”).

 

WHEREAS,
BofA and Greenlady II have entered into the Credit Agreement, dated as of April 9,
2008 (the “Credit Agreement”), the Pledge Agreement, dated as of April 9,
2008 (the “Pledge Agreement”), and the Master Confirmation, dated as of April 9,
2008, and the Supplemental Confirmations thereunder (together, the “Collar
Confirmation” and, together with the Credit Agreement and the Pledge
Agreement, the “Transaction Documents”), relating to six collar
transactions (the “Collar Transactions” and each, a “Component”,
five of which are further described in Exhibit A hereto) between Greenlady
II and BofA with respect to the common stock, par value USD 0.01 per share, of
The DIRECTV Group, Inc. (“Old DTV”);

 

WHEREAS,
Liberty Media Corporation, Liberty Entertainment, Inc., Old DTV, New DTV,
DTVG One, Inc. and DTVG Two, Inc. have entered into the Agreement and
Plan of Merger, dated as of May 3, 2009, as amended and supplemented by
Amendment No. 1 thereto, dated as of July 29, 2009, and Amendment No. 2
thereto, dated as of October 2, 2009 (together, the “Merger Agreement”);

 

WHEREAS,
after the consummation of the transactions contemplated by Section 1.1 of
the Merger Agreement and the Split-Off (as defined in the Merger Agreement)
(collectively, the “Merger Transactions”), New DTV will indirectly own
all of the equity interests in Greenlady II;

 

WHEREAS,
in connection with the Merger Transactions, the parties hereto desire to amend
the Transaction Documents and unwind certain Collar Transactions;

 

NOW,
THEREFORE, in consideration of the covenants, conditions and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
covenant and agree as follows:

 

ARTICLE I

UNWIND OF CERTAIN COLLAR TRANSACTIONS

 

Capitalized
terms used but not defined in this Article I shall have the meanings given
to such terms in the Collar Confirmation.

 

SECTION 1.01.
Unwind of Certain Collar Transactions. Each of Components 2 through 6
under the Collar Confirmation shall be terminated in the order indicated in Exhibit A
hereto pursuant to the methodology set forth in Section 1.02(b) below
(each such termination, a “Component Unwind”). For the avoidance of
doubt, Component 1 shall not be subject to any Component Unwind and the “Valuation”
and “Settlement Terms” provisions of Section 2 of the Collar Confirmation
shall not apply to any Component Unwind hereunder.

 

SECTION 1.02.
Unwind Methodology.

 

(a)           Definitions.

 

(i)            “2002
Definitions” means the 2002 ISDA Equity Derivatives Definitions, as
published by the International Swaps and Derivatives Association, Inc.

 

1

 

(ii)           “Component
Unwind Date” means, (A) with respect to Component 2, the scheduled
Exchange Business Day immediately following the Closing Date (as defined in Section 7.01(a) below),
subject to adjustment as provided in Section 7.01(a) below and (B) with
respect to each subsequent Component to be terminated, the scheduled Exchange
Business Day immediately following the final day of the immediately preceding
Component Unwind Reference Period.

 

(iii)          “Component
Unwind Payment Date” means, for each Component Unwind, the third Currency
Business Day following the final day of the related Component Unwind Reference
Period.

 

(iv)          “Component
Unwind Reference Period” means, for each Component Unwind, the period
beginning on and including the related Component Unwind Date and ending on and
including the date BofA notifies Greenlady II that it has unwound its existing
hedge position(s) for the related Component in the open market and/or in
private transactions, as determined by BofA in its sole discretion.

 

(v)           “Component
Unwind Reference Price” means, for each Component Unwind, the
volume-weighted average price per Share at which BofA unwinds its existing
hedge position(s) for the related Component.

 

(vi)          “Market
Disruption Event” has the meaning specified in Section 6.3(a) of
the 2002 Definitions, determined as if (v) BofA were the “Calculation
Agent”, (w) New DTV were the relevant “Issuer”, (x) the New DTV
Shares (as defined in Section 8.02(h)) were the relevant “Shares”, (y) The
NASDAQ Global Select Market were the “Exchange” and (z) the “Related
Exchange” were “All Exchanges”; provided that the third and fourth line
of Section 6.3(a) of the 2002 Definitions shall be amended by
deleting the words “, at any time during the one hour period that ends at the
relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or
Knock-out Valuation Time, as the case may be,”.

 

(vii)         “Merger
Event” has the meaning specified in Section 12.1(b) of the 2002
Definitions, determined as if (x) BofA were the “Calculation Agent”, (y) New
DTV were the relevant “Issuer” and (z) the New DTV Shares were the
relevant “Shares”; provided that, for the avoidance of doubt, no Merger
Transaction shall constitute a Merger Event.

 

(viii)        “Potential
Adjustment Event” has the meaning specified in Section 11.2(e) of
the 2002 Definitions, determined as if (x) BofA were the “Calculation
Agent”, (y) New DTV were the relevant “Issuer” and (z) the New DTV
Shares were the relevant “Shares”.

 

(ix)           “Reference
Call Volatility” means, for each Component Unwind, the “Reference Call
Volatility” set forth for the related Component in Exhibit A hereto.

 

(x)            “Reference
LIBOR Rate” means, for each Component Unwind Reference Period, the rate
determined by BofA for the remaining term of the related Component, by linear
interpolation if appropriate, using the “offer side” of the U.S. Dollar Swap
rate, as set forth on Bloomberg Financial Markets Page “IYC1 USD
S<go>, page <go>“ (or any successor or replacement page); provided
that, if such page is not available for any reason, BofA shall determine
such rate in good faith.

 

(xi)           “Reference
Put Volatility” means, for each Component Unwind, the “Reference Put
Volatility” set forth for the related Component in Exhibit A hereto.

 

2

 

(xii)          “Reference
Rate” means, for each Component Unwind, the discount rate, quoted as a zero
coupon, continuously-compounded rate, as determined by BofA assuming the
then-current Reference LIBOR Rate and taking into account any other factors
that BofA reasonably deems appropriate for such determination.

 

(xiii)         “Regulatory
Disruption” means any event that BofA, in its reasonable discretion,
determines makes it appropriate with regard to any legal, regulatory or
self-regulatory requirements or related policies and procedures, for it to
refrain from or decrease any market activity in connection with any Component
Unwind.

 

(xiv)        “Tender
Offer” has the meaning specified in Section 12.1(d) of the 2002
Definitions, determined as if (x) BofA were the “Calculation Agent”, (y) New
DTV were the relevant “Issuer” and (z) the New DTV Shares were the relevant
“Shares”; provided that Section 12.1(d) of the 2002
Definitions shall be amended by inserting the words “or the New DTV Shares”
after the words “voting shares of the Issuer” in the fourth line thereof; provided
further, that, for the avoidance of doubt, no Merger Transaction shall
constitute a Tender Offer.

 

(xv)         “Unwind
Adjustment Event” means any Market Disruption Event, Merger Event,
Potential Adjustment Event, Regulatory Disruption or Tender Offer.

 

(xvi)        “Unwind
Borrow Rate” means, for each Component Unwind, the per annum rate set forth
as the “Unwind Borrow Rate” for the related Component in Exhibit A hereto.

 

(b)           Component Unwind. With respect
to each Component to be terminated, (i) BofA shall calculate a Loss amount
payable by one party to the other party under the Collar Confirmation (taking
into account the amendments contained herein) in respect of such Component (the
“Component Unwind Payment Amount”) as if an Additional Termination Event
had occurred with respect to which Greenlady II (as Party B under the Collar
Transactions) were the sole Affected Party and the relevant Component were the
sole Affected Transaction and (ii) an Early Termination Date with respect
to such Component shall be deemed to occur on the related Component Unwind Date
and BofA and Greenlady II shall have all rights, obligations and liabilities in
respect thereof pursuant to the terms of the Collar Confirmation (taking into
account the amendments contained herein). In determining the Component Unwind
Payment Amount in respect of a Component, BofA shall take into account only the
following factors: the related Component Unwind Reference Price, Reference Put
Volatility, Reference Call Volatility, Reference Rate and Unwind Borrow Rate
(together, the “Agreed Factors”) using such models as it uses in the
regular course of business for pricing or valuing similar transactions between
it and unrelated third parties; provided that, notwithstanding the
foregoing, upon the earlier of (x) the occurrence of any Unwind Adjustment
Event and (y) the announcement of any potential event or transaction that,
in the reasonable discretion of BofA, if consummated could become an Unwind
Adjustment Event, BofA may adjust the Agreed Factors, take into account any
other factors it deems appropriate and make such other adjustments to its
unwind activities in connection with the related Component and its calculations
of the related Component Unwind Payment Amount to account for such Unwind
Adjustment Event or potential Unwind Adjustment Event. With respect to each
Component, BofA shall promptly notify the parties of the related Component
Unwind Payment Amount, and the party owing such amount shall make payment of
such amount to the party to whom such amount is owed on or prior to the related
Component Unwind Payment Date.

 

If
New DTV objects in writing to BofA’s determination of a Component Unwind
Payment Amount within three Exchange Business Days after it receives notice
thereof, BofA will obtain a quotation for such determination provided by a
leading equity derivatives dealer, as selected by BofA,

 

3

 

and BofA shall consider such
quotation in good faith but shall not be bound by such quotation in making the
relevant determination.

 

(c)           Instruction Days. New DTV may
provide, at any time on a particular Exchange Business Day and on no more than
fifteen Exchange Business Days in the aggregate for all Component Unwinds, (and
upon such provision, BofA shall implement) instructions directing BofA not to
unwind its hedge position(s) on such Exchange Business Day, it being
understood that any such instruction shall apply only for a single Exchange
Business Day and that the Component Unwind Reference Price for such day shall
take into account any unwind by BofA of its hedge position(s) in respect
of the related Component occurring prior to the time BofA is able, using
commercially reasonable efforts, to implement such instructions (any such
Exchange Business Day with respect to which New DTV provides such an instruction,
an “Instruction Day”). For the avoidance of doubt, (i) New DTV may
only instruct or direct BofA to suspend fully its unwind of its hedge position(s) on
a particular Exchange Business Day in a manner set forth above, (ii) subject
to the other provisions of this Agreement, BofA shall maintain full discretion
as to how any hedge position is unwound on any day that is not an Instruction
Day or prior to its implementing any instructions given by New DTV on an
Instruction Day and (iii) New DTV will not seek to control or influence
BofA’s decision with respect to how, when or whether to unwind any hedge
position. Notwithstanding the foregoing, the parties acknowledge that any
exercise by New DTV of its rights under the first sentence of this Section 1.02(c) shall
not be deemed a breach of clause (iii) of the immediately preceding
sentence.

 

ARTICLE II

FIRST AMENDMENT TO THE CREDIT AGREEMENT

 

Capitalized
terms used but not defined in this Article II shall have the meanings
given to such terms in the Credit Agreement.

 

SECTION 2.01.
Definitions.

 

(a)           The introductory paragraph of the
Credit Agreement is amended by inserting the words “as amended from time to
time,” in the first parenthetical therein before the words “this ‘Agreement’”.

 

(b)           The definition of “Collar Transaction”
in Section 1.01 of the Credit Agreement is amended by inserting the words “,
each as amended and supplemented from time to time” after the first instance of
the word “Agreement” and before the comma in the penultimate line thereof.

 

(c)           The definition of “Issuer” in Section 1.01
of the Credit Agreement is replaced with the following:

 

“Issuer”
has the meaning assigned to such term in the Collar Agreement.

 

(d)           The definition of “Loan Document” in Section 1.01
of the Credit Agreement is amended by (i) replacing the word “and” in the
second line thereof with a comma and (ii) inserting the words “ and (f) the
Amendment, Unwind, Consent and Waiver Agreement among Greenlady II, LLC,
DIRECTV and Bank of America, N.A., dated as of November 19, 2009 (the “Unwind
Agreement”)” after the words “Parent Guarantee” in the last line thereof.

 

(e)           The definition of “Parent Guarantee”
in Section 1.01 of the Credit Agreement is replaced with the following:

 

4

 

“Parent
Guarantee” means the Guarantee of DIRECTV in favor of the Lender related to
the Loan Documents, dated as of November 19, 2009.

 

(f)            The definition of “Shares” in Section 1.01
of the Credit Agreement is replaced with the following:

 

“Shares”
has the meaning assigned to such term in the Collar Agreement.

 

SECTION 2.02.
Termination of Commitments in connection with Component Unwinds.  The Commitment with respect to each Tranche
shall be reduced to zero and terminated commencing on the Component Unwind Date
for the related Component (as determined by reference to Schedule 1 to the
Credit Agreement), with such reduction deemed to have occurred pursuant to Section 2.04(a) of
the Credit Agreement in part on each day during the related Component Unwind
Reference Period in an amount determined by BofA based on the portion of the
related Component for which BofA has unwound its hedge position(s). For the
avoidance of doubt, the parties acknowledge and agree that, as a result of such
reduction and termination, (a) pursuant to Section 2.03(b) of
the Credit Agreement, Greenlady II (as the Borrower under the Credit Agreement)
shall be obligated to pay to BofA (as the Lender under the Credit Agreement) a
Prepayment Amount determined by BofA as of the relevant Unwind Prepayment Date
pursuant to Schedule 4 of the Credit Agreement (each, a “Tranche Partial
Unwind Prepayment Amount”) and (b) Greenlady II’s right to borrow and
reborrow Loans relating to the Commitment for such Tranche shall be permanently
extinguished. Notwithstanding anything to the contrary in the Credit Agreement,
an Event of Default described in Section 8.01(a) of the Credit
Agreement shall occur with respect to the payment of any Tranche Partial Unwind
Prepayment Amount only if Greenlady II has not paid such Tranche Partial Unwind
Prepayment Amount to BofA on or prior to the close of business in New York City
on the relevant Unwind Prepayment Date.  “Unwind
Prepayment Date” means, with respect to a Tranche Partial Unwind Prepayment
Amount, the Business Day following the day on which BofA unwinds the portion of
its hedge position(s) to which such Tranche Partial Unwind Prepayment
Amount relates.

 

ARTICLE III

FIRST AMENDMENT TO THE PLEDGE AGREEMENT

 

SECTION 3.01.
Definitions.

 

(a)           The introductory paragraph of the
Pledge Agreement is amended by inserting the words “as amended from time to
time,” in the first parenthetical therein before the words “this ‘Pledge
Agreement’”.

 

(b)           The definition of “Initial Shares” in
Section 1 of the Pledge Agreement is replaced with the following:

 

“Initial
Shares” means 170,000,000 shares of the common stock of The DIRECTV Group, Inc.

 

(c)           The definition of “Issuer” in Section 1
of the Pledge Agreement is replaced with the following:

 

“Issuer”
has the meaning assigned to such term in the Collar Agreement.

 

(d)           The definition of “Shares” in Section 1
of the Pledge Agreement is replaced with the following:

 

5

 

“Shares”
has the meaning assigned to such term in the Collar Agreement.

 

ARTICLE IV

FIRST AMENDMENT TO THE COLLAR CONFIRMATION

 

Capitalized
terms used but not defined in this Article III shall have the meanings
given to such terms in the Collar Confirmation.

 

SECTION 4.01.
Modified Cancellation and Payment. The definition of “Modified
Cancellation and Payment” in Section 2 of the Collar Confirmation is
amended by deleting the second paragraph thereof.

 

SECTION 4.02.
Payments on Early Termination. Section 3 of the Collar Confirmation
shall be amended by replacing the phrase “Market Quotation” with the word “Loss”.

 

SECTION 4.03.
Credit Support Document and Credit Support Provider.  The New DTV Guaranty (as defined in Section 7.01(b) below)
shall be a Credit Support Document in relation to Greenlady II (as Party B)
under the Collar Confirmation and New DTV shall be a Credit Support Provider in
relation to Greenlady II (as Party B) under the Collar Confirmation.

 

SECTION 4.04.
Effect of Merger.  The parties
agree that the consummation of the Merger Transactions pursuant to the terms of
the Merger Agreement will result in the substitution as “Shares” under the
Collar Transactions of shares of Class A common stock of New DTV for the
shares of common stock of Old DTV, and the Calculation Agent shall make
appropriate changes to the definition of Issuer and the other terms of the
Collar Transactions to reflect such substitution.

 

ARTICLE V

CONSENT AGREEMENT

 

SECTION 5.01.
Merger Consent. For avoidance of doubt, nothing in this Agreement shall
imply or be construed as an agreement, acceptance or acknowledgment by New DTV
or Greenlady II that the Merger Transactions constitute or result in a Change
of Control (as defined in the Credit Agreement). Subject to Section 7.01
hereof, BofA hereby consents to the Merger Transactions for purposes of Section 7.12
of the Credit Agreement, which consent shall, subject to Section 7.01
hereof, be deemed to have been effectively given by BofA as of the time
immediately preceding the effective time of the Merger Transactions (determined
in accordance with the terms of the Merger Agreement).

 

ARTICLE VI

WAIVER AND RELEASE AGREEMENT

 

SECTION 6.01.
Waiver of Certain Rights Related to the Collar Transactions. For
avoidance of doubt, nothing in this Agreement shall imply or be construed as an
agreement, acceptance or acknowledgment by New DTV or Greenlady II that the
Merger Transactions constitute or result in an Insider Acquisition Event, a
Liberty Induced Float Reduction Event or a Liberty Control Event (each, as
defined in the Collar Confirmation). The parties hereby agree that, subject to Section 7.01
hereof, while any of the Collar Transactions are outstanding, BofA shall not
exercise any rights it may have under the terms of the Collar Confirmation as a
result of the consummation of the Merger Transactions pursuant to any of an
Insider Acquisition Event, a Liberty Induced Float Reduction Event or a Liberty
Control Event (each, as defined in the Collar Confirmation).

 

6

 

SECTION 6.02.
Release of Liberty Guaranty.  Subject
to Section 7.01 hereof, BofA hereby releases Liberty Media LLC from any
and all of its obligations under the Guaranty of Liberty Media LLC in favor of
BofA in relation to the Collar Transactions, dated as of April 2, 2008,
and shall promptly execute such documentation as may be reasonably requested by
Liberty Media LLC evidencing such release.

 

ARTICLE VII

CONDITIONS PRECEDENT

 

SECTION 7.01.
Conditions Precedent. The parties agree that the Component Unwinds
described in Article I hereof, the amendments described in Articles II
through IV hereof, BofA’s consent to the Merger Transactions pursuant to Section 5.01
hereof, BofA’s waiver of certain rights under the Collar Transactions pursuant
to Section 6.01 hereof and BofA’s release of Liberty Media LLC from its
obligations under its Guaranty pursuant to Section 6.02 hereof shall each
be subject to the satisfaction of the condition set forth in Section 7.01(a) and
the satisfaction (or the waiver by BofA) of the conditions set forth in
Sections 7.01(b), (c) and (d).

 

(a)           Consummation of the Merger
Transactions.  The Closing (as
defined in the Merger Agreement) of the Merger Transactions shall have occurred
pursuant to the terms of the Merger Agreement (the date of such occurrence, the
“Closing Date”) on or prior to 5:00 p.m. (New York City time) on November 30,
2009 (or such later date as BofA may agree in writing, in which case BofA shall
be entitled to adjust the Component Unwind Date for Component 2).

 

(b)           Guaranty by New DTV. BofA
shall have received from New DTV a duly executed and delivered guaranty
(substantially in the form of Exhibit B hereto) of all of Greenlady II’s
obligations under this Agreement and each of the Transaction Documents (the “New
DTV Guaranty”).

 

(c)           Representations, Warranties and
Agreements. Neither Greenlady II nor New DTV shall have breached any of its
representations, warranties or agreements contained herein or in any other
Transaction Document.

 

(d)           Closing Documentation. BofA
shall have received from each of Greenlady II and New DTV (i) on or prior
to the Closing Date, incumbency certificates and secretary’s certificates of
good standing and authority and (ii) as soon as reasonably practicable
following the Closing Date (and in any case on or prior to December 4,
2009), an opinion of counsel relating to the enforceability of New DTV’s
obligations under this Agreement and the New DTV Guaranty and Greenlady II’s
obligations under this Agreement, in form and substance reasonably satisfactory
to BofA.

 

ARTICLE VIII

REPRESENTATIONS, WARRANTIES AND AGREEMENTS

OF GREENLADY II AND NEW DTV

 

SECTION 8.01.
Representations and Warranties of Greenlady II.  As of the date of this Agreement:

 

(a)           each of Greenlady II’s
representations and warranties contained in Article V of the Credit Agreement
shall be deemed to be repeated as if set forth herein; and

 

(b)           each of Greenlady II’s
representations and warranties contained in Sections 10(a) and (c) of
the Collar Confirmation shall be deemed to be repeated as if set forth herein.

 

7

 

SECTION 8.02.
Representations, Warranties and Agreements of New DTV.  New DTV represents and warrants to, and
agrees with, BofA as follows:

 

(a)           it is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has full power to execute, deliver and perform the
obligations arising from this Agreement and the New DTV Guaranty;

 

(b)           it has duly authorized this Agreement
and the New DTV Guaranty, and each signatory of this Agreement and the New DTV
Guaranty has been duly authorized and has full power to execute and deliver
this Agreement and the New DTV Guaranty on behalf of New DTV;

 

(c)           this Agreement and the New DTV
Guaranty and the execution thereof do not violate any of New DTV’s constitutive
documents, and this Agreement and the New DTV Guaranty do not violate any law,
regulation or agreement applicable to New DTV or its assets;

 

(d)           all governmental and other consents
that are required to have been obtained by it with respect to this Agreement
and the New DTV Guaranty have been obtained and are in full force and effect
and all conditions of any such consents have been complied with;

 

(e)           it has duly executed and delivered
this Agreement and the New DTV Guaranty, and this Agreement and the New DTV
Guaranty each constitutes a valid, binding and enforceable agreement of New DTV
in accordance with its respective terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar rights affecting creditors’
rights generally and subject, as to enforceability, to equitable principles of
general applicability);

 

(f)            upon the consummation of the Merger
Transactions, New DTV will indirectly own all of the equity interests in
Greenlady II;

 

(g)           on and after the Closing Date, it
shall cause Greenlady II to perform all of its obligations under this Agreement
and the Transaction Documents; and

 

(h)           at all times during the Relevant
Period, it shall not, and shall cause Greenlady II not to, communicate,
directly or indirectly, any material non-public information concerning the
business, operations or prospects of the Issuer (as defined in the Collar
Confirmation, as amended by this Agreement) or the Shares (as defined in the
Collar Confirmation, as amended by this Agreement) (“New DTV Shares”),
to any Equity Derivatives Group Personnel (as defined below). “Material”
information for these purposes is any information to which an investor would
reasonably attach importance in reaching a decision to buy, sell or hold
securities of the relevant issuer.  “Equity
Derivatives Group Personnel” means any employee of BofA or its affiliates
who effects purchases or sales of Shares in connection with this Agreement or
is otherwise involved in unwinding BofA’s hedge position(s).

 

SECTION 8.03.
Representations, Warranties and Agreements of Greenlady II and New DTV.
Each of Greenlady II and New DTV represents and warrants to, and agrees with,
BofA as follows on the date hereof and, in the case of Section 8.03(b) and
(c), on each Instruction Day:

 

(a)           (i)            it
has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent that it has deemed necessary,
and it has made its own decisions based on its own judgment and upon any advice
from such advisors as it has deemed necessary and not upon any view expressed
by BofA or any of its affiliates or agents; and (ii) it is entering into
this Agreement and, with respect to New DTV, the New DTV Guaranty with a full
understanding of the terms, conditions and risks thereof and is capable of and
willing to assume those risks;

 

8

 

(b)           none of it, its officers and
directors, its affiliates and any other member of a “group” within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) or the regulations promulgated thereunder,
of which it is a member (a “Counterparty Group” and each member of a
Counterparty Group, together with it, its officers and directors and its
affiliates, a “Counterparty Person”) is aware of any material non-public
information concerning the business, operations or prospects of the Issuer (as
defined in the Collar Confirmation, as amended by this Agreement) or the New
DTV Shares. “Material” information for these purposes is any information to
which an investor would reasonably attach importance in reaching a decision to
buy, sell or hold securities of the relevant issuer;

 

(c)           it is not entering this Agreement nor
taking any action hereunder to create actual or apparent trading activity in
the New DTV Shares (or any security convertible into or exchangeable or
exercisable for New DTV Shares) or to raise or depress or otherwise manipulate
the price of the New DTV Shares (or any security convertible into or
exchangeable or exercisable for New DTV Shares) or otherwise in violation of
the Exchange Act;

 

(d)           during the period beginning on and
including the Component Unwind Date with respect to Component 2 through and
including the last day in the Component Unwind Reference Period with respect to
Component 5 (being the final Component to be subject to a Component Unwind
hereunder) (the “Relevant Period”), neither New DTV nor any “affiliate”
or “affiliated purchaser” (each as defined in Rule 10b-18 under the
Exchange Act (“Rule 10b-18”)) of New DTV shall directly or
indirectly (including, without limitation, by means of any derivative
instrument) purchase, offer to purchase, place any bid or limit order that
would effect a purchase of, or commence any tender offer relating to, the New
DTV Shares (or any security convertible into or exchangeable or exercisable for
New DTV Shares). The foregoing shall not limit any purchase of or offer to
purchase New DTV Shares (or any security convertible into or exchangeable or
exercisable for New DTV Shares) (i) by New DTV or any of its affiliates
from holders of awards granted under New DTV’s stock incentive plans, in
connection with the vesting, exercise, settlement, expiration or termination of
such awards (or New DTV or any of its affiliates being a party to a repurchase
or similar agreement for such purpose), (ii) by any affiliate or “affiliated
purchaser” (as defined in Rule 10b-18) of New DTV pursuant to awards
granted under New DTV’s stock incentive plans or pursuant to New DTV’s share
purchase or 401(k) plan(s) or (iii) by New DTV or any of its
affiliates in a private transaction from any director, officer or employee of
New DTV or any of its affiliates; provided that, in the case of each of
clauses (i), (ii) and (iii), that such purchase or offer to purchase is a
privately negotiated transaction (i.e., not open market) or does not constitute
a “Rule 10b-18 purchase” (as defined in Rule 10b-18);

 

(e)           it shall, at least one day prior to
the first Component Unwind Date hereunder, notify BofA of the total number of
New DTV Shares purchased (if any) pursuant to the once-a-week block exception
set forth in Rule 10b-18(b)(4) by or for it or by any of its “affiliates”
or “affiliated purchasers” (each, as defined in Rule 10b-18) during each
of the four calendar weeks preceding such day and during the week in which such
day occurs;

 

(f)            it is not currently, and during the
Relevant Period will not be, required to register as an “investment company” as
such term is defined in the Investment Company Act of 1940, as amended;

 

(g)           during the Relevant Period, the New
DTV Shares and securities that are convertible into or exchangeable or
exercisable for New DTV Shares are not, and shall not be, subject to a “restricted
period” (as such term is defined in Regulation M under the Exchange Act (“Regulation
M”)), and it shall not engage in any “distribution” (as such term is
defined under Regulation M), other than a distribution of securities (i) that
are not New DTV Shares and (ii) for which New DTV Shares are not a “reference

 

9

 

security” (as such term is
defined under Regulation M), until the second Exchange Business Day (as defined
in the Collar Confirmation) immediately following the Relevant Period;

 

(h)           it is not “insolvent” (as such term
is defined under Section 101(32) of Title 11 of the United States Code);
and

 

(i)            it shall (i) on or prior to the
Closing Date, deliver to BofA incumbency certificates and secretary’s
certificates of good standing and authority in connection with its entry into
this Agreement and, in the case of New DTV, the New DTV Guaranty and (ii) as
soon as reasonably practicable following the Closing Date (and in any case on
or prior to December 4, 2009), cause to be delivered to BofA an opinion of
counsel relating to the enforceability of, in the case of New DTV, New DTV’s
obligations under this Agreement and the New DTV Guaranty and, in the case of
Greenlady II, Greenlady II’s obligations under this Agreement, in each case in
form and substance reasonably satisfactory to BofA.

 

ARTICLE IX

MISCELLANEOUS

 

SECTION 9.01.
No Additional Amendments, Consents or Waivers. Except as provided
herein, all the terms of the Credit Agreement, the Pledge Agreement and the
Collar Transactions are hereby confirmed and ratified and shall remain and
continue in full force and effect.

 

SECTION 9.02.
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 and the same agreement.

 

SECTION 9.03.
Notices.  Except as otherwise
provided herein, any notices or other communication relating to this Agreement
shall be in writing and the effectiveness of such communication shall be
determined in accordance with Section 12(a) of the ISDA 2002 Master
Agreement, as published by the International Swaps and Derivatives Association, Inc.

 

Notices
to or other communications with any party to this Agreement shall be sent to
the relevant address set forth below. Each party to this Agreement shall be
entitled to update its address for notice by effective notice to the other
parties of such change.

 

	
   

  	
  Greenlady
  II:

  	
  Greenlady II, LLC

  
	
   

  	
   

  	
  c/o DIRECTV

  
	
   

  	
   

  	
  2230 East Imperial Highway

  
	
   

  	
   

  	
  El Segundo, CA 90245

  
	
   

  	
   

  	
  Attention: Larry D.
  Hunter, General Counsel

  
	
   

  	
   

  	
  Facsimile: (310) 964-0838

  
	
   

  	
   

  	
   

  
	
   

  	
  New DTV:

  	
  DIRECTV

  
	
   

  	
   

  	
  2230 East Imperial Highway

  
	
   

  	
   

  	
  El Segundo, CA 90245

  
	
   

  	
   

  	
  Attention: Larry D.
  Hunter, General Counsel

  
	
   

  	
   

  	
  Facsimile: (310) 964-0838

  

 

10

 

	
  BofA:

  	
  Bank of America, N.A.

  
	
   

  	
  c/o Merrill Lynch, Pierce,
  Fenner & Smith Incorporated

  
	
   

  	
  Bank of America Tower

  
	
   

  	
  One Bryant Park

  
	
   

  	
  New York, NY 10036

  
	
   

  	
  Telephone: 646-855-5383

  
	
   

  	
  Facsimile: 212-230-8492

  
	
   

  	
  Email:
  rdilworth@bofasecurities.com

  
	
   

  	
  Attn: Equity Derivatives Legal
  — Robert Dilworth

  

 

SECTION 9.04.
Release of Claims. After effective notice from BofA to Greenlady II and
New DTV (which notice BofA shall provide promptly upon such receipt) that it
has received payment of (x) all Tranche Partial Unwind Prepayment Amounts
and Component Unwind Payment Amounts arising in connection with the Component
Unwinds for Components 2 through 6 and (y) all amounts payable by
Greenlady II to BofA pursuant to the Transaction Documents with respect to
Component 1 and Tranche 1, each of BofA, on the one hand, and Greenlady II and
New DTV, on the other hand (in such capacity, each of BofA, Greenlady II and
New DTV, a “Releasor”) shall automatically release and forever discharge
the other party, its corporate parents, subsidiaries and affiliates and their
respective present and former directors, managing directors, officers, control
persons, stockholders, general partners, limited partners, employees, agents,
attorneys, administrators, successors, personal representatives, executors and
assigns (collectively, the “Released Group”) from any and all actions,
causes of action, injunctions, accounts, agreements, bonds, bills, covenants,
contracts, controversies, claims, damages, demands, debts, dues, extents,
executions, judgments, liabilities, obligations, promises, predicate acts,
reckonings, specialties, suits, sums of money, and variances whatsoever,
whether known or unknown, in law or equity, which against any of them the
Releasor, its corporate parents, subsidiaries and affiliates and their
respective present and former directors, managing directors, officers, control
persons, stockholders, general partners, limited partners, employees, agents,
attorneys, administrators, successors, personal representatives, executors and
assigns may now have, have ever had or may hereafter have against any member of
the Released Group arising out of, or in connection with, or in any manner
related to, this Agreement and the Transaction Documents, and all rights or
obligations each Releasor has against or owes to the other party arising from
this Agreement and the Transaction Documents (collectively, the “Claims”)
shall be simultaneously terminated.

 

With
respect to any and all Claims released pursuant to the foregoing paragraph,
each of the Releasors shall expressly waive the provisions, rights, and
benefits of California Civil Code § 1542 and any provisions, rights and
benefits conferred by any law of any state or territory of the United States or
principle of common law which is similar, comparable, or equivalent to
California Civil Code § 1542, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The
Releasors may, after the release described above, discover facts in addition to
or different from those that any of them now knows or believes to be true with
respect to the subject matter of the Claims released at the time such release
becomes effective; however, each Releasor shall, at such effective time, fully,
finally, and forever settle and release any and all Claims released as
described above, known or unknown, suspected or unsuspected, contingent or
non-contingent, whether or not concealed or hidden, which now exist, or
heretofore have existed upon any theory of law or equity now existing or coming
into existence in the future, including, but not limited to, conduct which is
negligent, reckless,

 

11

 

intentional, with or without
malice, or a breach of any duty, law or rule, without regard to the subsequent
discovery or existence of such different or additional facts. The Releasors
acknowledge and agree that the foregoing waiver was separately bargained for
and a key element of this Agreement.

 

SECTION 9.05.
Governing Law; Jurisdiction.  THIS
AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING HERETO SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.  THE PARTIES HERETO
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN
CONNECTION WITH ALL MATTERS ARISING OUT OF OR RELATING HERETO AND WAIVE ANY
OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH
RESPECT TO, THESE COURTS.

 

SECTION 9.06.
Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

[Signature page follows.]

 

12

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

	
   

  	
  GREENLADY II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Greenlady Corp., its sole
  managing member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. William Little

  
	
   

  	
  Name:

  	
  J. William Little

  
	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. William Little

  
	
   

  	
  Name:

  	
  J. William Little

  
	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Morse

  
	
   

  	
  Name:

  	
  David Morse

  
	
   

  	
  Title:

  	
  Managing Director

  

 

Signature Page to Amendment, Unwind,

Consent and Waiver Agreement

 

 

EXHIBIT A

 

COMPONENTS TO BE TERMINATED

 

	
  Component:

  	
   

  	
  2

  	
   

  	
  6

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reference Number:

  	
   

  	
  NY-34256

  	
   

  	
  NY-34260

  	
   

  	
  NY-34257

  	
   

  	
  NY-34258

  	
   

  	
  NY-34259

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Number of Options:

  	
   

  	
  17,500,000

  	
   

  	
  25,000,000

  	
   

  	
  12,500,000

  	
   

  	
  15,000,000

  	
   

  	
  17,500,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unwind Borrow Rate:

  	
   

  	
  0.15%

  	
   

  	
  0.15%

  	
   

  	
  0.15%

  	
   

  	
  0.15%

  	
   

  	
  0.15%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reference Put Volatility:

  	
   

  	
  41.60%

  	
   

  	
  38.71%

  	
   

  	
  37.21%

  	
   

  	
  38.04%

  	
   

  	
  37.64%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reference Call Volatility:

  	
   

  	
  38.89%

  	
   

  	
  36.00%

  	
   

  	
  35.01%

  	
   

  	
  35.33%

  	
   

  	
  35.62%

  

 

ORDER OF COMPONENT TERMINATIONS

 

1.  Component 2

2.  Component 6

3.  Component 3

4.  Component 4

5.  Component 5

 

A-1

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