Document:

Exhibit 10.4

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT
(this “Agreement”), dated effective as of February 1, 2005, by and
between Warren Resources, Inc., a New York corporation (the “Company”),
and David E. Fleming (the “Employee”).

 

W I T N E S S E T H:

 

WHEREAS, Employee
is currently employed by the Company under an agreement effective as of January 1,
2004 (“Prior Agreement”); and

 

WHEREAS, the
Company is desirous of continuing the employment of Employee pursuant to the
terms and conditions set forth in this Agreement, and Employee is desirous of
continuing in the employ of Employer pursuant to such terms and conditions; and

 

WHEREAS, this
Agreement shall supercede and replace the Prior Agreement between the Company
and Employee; and

 

NOW, THEREFORE,
in consideration of the premises and the respective covenants and agreements of
the parties herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:

 

1.                                       Employment.  The Company hereby agrees to employ the
Employee, and the Employee hereby agrees to serve the Company, on the terms and
conditions hereinafter set forth in this Agreement.

 

2.                                       Term. 
This Agreement, and the employment of the Employee by the Company
hereunder, will commence on the date hereof (the “Effective Date”) and
terminate on December 31, 2005 (the “Initial Term”), subject to
termination as set forth herein (the “Employment Period”).  As used herein, the term “Employment Year”
shall mean each consecutive twelve (12) month period during the Employment Period
commencing on the Effective Date, or the yearly anniversary thereof, as the
case may be. Effective on the first anniversary of the Effective Date, this
Agreement shall be automatically extended indefinitely until the Company or the
Employee shall give ninety (90) days prior written notice to the other party
that it or he, as the case may be, in its or his sole discretion, wishes to
terminate this Agreement.

 

3.                                       Position and Duties.  Subject to the provisions of this Section 3,
during the Employment Period, the Employee shall serve as the Senior Vice
President, General Counsel and Corporate Secretary of the Company and shall
faithfully perform the

 

 

duties and
responsibilities normally associated with such positions, subject to the
oversight and direction of the Chief Executive Officer of the Company and the
Board of Directors of the Company.

 

4.                                       Place of Employment.  Generally, the Employee will fulfill all
duties and responsibilities to the Company as set forth herein from the current
principal place of business of Warren Resources, Inc., located at 489 Fifth
Avenue, 32nd Floor, New York, NY 10017 or to any other location in
the midtown Manhattan area in New York City where the principal place of
business of the Company may be relocated.

 

5.                                       Best Efforts.  The Employee’s employment with the
Company shall be his full business time and the Employee shall devote his best
efforts exclusively to the performance of his duties and responsibilities as
set forth in this Agreement, which duties and responsibilities shall be
performed competently, carefully and faithfully.  Except as provided below, the Employee shall
not, while an employee of the Company and without the prior written consent of
the Company, engage in any other gainful occupation or activity which conflicts
with or impinges upon the full and faithful performance of the Employee’s
duties, or otherwise violates any other term or provision of this
Agreement.  It is expressly understood
and agreed, however, that the provisions of this Section 5 shall not be
construed to prevent the Employee from pursuing any other activity or
profession in his own personal time not devoted to the Company, including
investing for his own account or pursuing charitable or civic activities; provided,
that such activities do not impair the performance by the Employee of his
duties and responsibilities hereunder, or otherwise violate any provision of
this Agreement, and that Employee shall not become employed by or affiliated
with another company in the oil and gas industry.

 

6.                                       The Employee’s Compensation.

 

(a)                                  Salary. 
During the Employment Period, for the services described herein the
Company shall pay to the Employee an annual base salary of $265,000.00 (as
adjusted pursuant to the terms hereof, the “Base Compensation”). The
Base Compensation shall be increased on each anniversary date of this Agreement
by any increases in the cost of living based on the changes in the “Consumer
Price Index” as published from time to time by the U.S. Department of Commerce
for the New York City metropolitan area. The Base Compensation will be paid to
the Employee in accordance with the normal payroll practices of the Company in
effect from time to time, less all required withholdings for benefits, federal,
state and local taxes, if any.  The amount
of the Base Compensation may, in the Company’s discretion, be increased by the
Company on an annual basis during the Employment Period.  All increases to the Base Compensation, if
any, shall be based on the condition of the Company’s business and results of
operations and the Company’s evaluation of the Employee’s individual
performance for the relevant period.  Any
increases made to the Base Compensation shall be in the discretion of the
Company.

 

(b)                                 Incentive Bonus Compensation.  In addition to the Base Compensation to which
the Employee is entitled under Section 6(a), the Employee shall be
eligible to be awarded incentive bonus compensation (the “Bonus Compensation”)
with

 

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respect to each calendar
year or portion thereof during which the Employee was employed by the Company
hereunder equal to up to and including 100% of the Employee’s Base
Compensation.  The criteria for
determining the amount of the Bonus Compensation shall be determined by mutual
agreement between the Employee and the Chief Executive Officer of the Company
and shall by approved by the Compensation Committee of the Board of Directors.
Incentive Bonus Compensation shall be paid within 90 days following the
end of the calendar year.

 

(c)                                  Incentive Plans.  Employee shall be eligible to receive awards
(“Awards”) under the Company’s equity incentive plans (the “Equity Incentive
Plans”).  The grant of such Awards shall
be documented with a formal award letter from the Company to the Employee
setting forth the terms and conditions of Employee’s Award.

 

7.                                       The Employee’s Benefits.  As an employee of the Company, the
Employee shall be entitled to receive and enjoy the following benefits during
the Employment Period:

 

(a)                                  Participation in Company Benefit Plans.  The Employee shall be entitled to
participate in and to receive benefits generally available to senior executives
under those certain employee benefit plans and arrangements which may be
offered by the Company from time to time during the Employment Period, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements by the Company.  The Company shall provide full medical,
hospitalization and dental insurance coverage for the Employee.

 

(b)                                 Vacations.  The Employee shall be entitled to four (4)
weeks of paid vacation per Employment Year, provided that any vacations are to
be taken at times mutually agreeable to the Company and the Employee.  In addition to the foregoing, the Employee
shall be entitled to receive all paid holidays given by the Company to its
employees generally. If Employee has not used his accrued but unused vacation
days during an Employment Year, such days may not be carried over to another
and shall be deemed waived by the Employee. Any accrued but unused vacation
days in an Employment Year shall be reimbursed in cash to Employee upon a
termination of his employment Without Cause hereunder.

 

(c)                                  Business Expense Reimbursement.  The Company shall promptly reimburse or pay
the Employee for all reasonable and necessary business expenses paid or
incurred by the Employee in performing his duties and responsibilities
hereunder; provided, that, the Employee shall have (i) submitted
such reasonable documentation as may be requested by the Company in accordance
with the reimbursement policies of the Company in effect from time to time and
(ii) obtained the prior approval of the Company for all charges in excess of
$5,000.

 

(d)                                 Life Insurance. The Company shall
provide term life insurance in the amount of $1,000,000 on the life of
Employee, with Employee’s spouse, or other Employee designee, as the named
beneficiary of such life insurance policy.

 

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(e)                                  Disability Insurance. The Company
may provide disability insurance paying benefits to Employee (subject to
reasonableness and/or availability).

 

8.                                       Termination of Employment.  The Employee’s employment with the
Company may be terminated as follows:

 

(a)                                  With Cause.  The Employee’s employment with the
Company may be terminated by the Company at any time for “Cause.”  As used herein, the term “Cause” shall
refer to the following: (i) theft, fraud, dishonesty, gross negligence or
willful malfeasance by the Employee in connection with the performance of his
duties hereunder (collectively, “Theft Events”); (ii) a material breach or
failure to fulfill and perform the Employee’s duties hereunder, which breach or
failure is not cured to the reasonable satisfaction of the Company within
forty-five (45) days after written demand from the Company (if such breach is
at all curable during such time in the reasonable determination of the Company;
failing such determination, “Cause” shall have occurred upon the occurrence of
such breach or failure); (iii) conviction of a felony or a crime involving
moral turpitude; (iv) habitual neglect of duties or misconduct in the
performance of the Employee’s duties and responsibilities hereunder following
an initial notice of warning from the Company with respect thereto; or (v) a
repeated or ongoing failure to comply with the reasonable directions and
instructions of management of the Company in connection with the performance of
the Employee’s duties and responsibilities hereunder following an initial notice
of warning from the Company with respect thereto.  Upon termination for Cause, all rights of the
Employee under this Agreement shall immediately terminate and the Company shall
have no further obligations.  A
termination of the Employee’s employment with the Company by the Employee upon
his voluntary resignation or voluntary retirement shall be treated as a
termination for Cause hereunder.  In
connection therewith, the Employee covenants and agrees not to voluntarily
resign or voluntarily retire without providing the Company with ninety (90)
days’ prior written notice. Upon a termination for Cause, Employee shall
receive in full satisfaction of all amounts due to him an amount equal to the
remainder of Base Compensation through date of termination. Notwithstanding any
of the foregoing, in the event that the Company has terminated Employee’s
employment on account of a Theft Event, the Company shall be entitled to
withhold from any amounts otherwise due to Employee under this Subsection 8(a)
the amount of monetary damages incurred by the Company from such Theft Event
which shall be quantified and determined in writing by the Company within 90
days after the date of termination. The Employee agrees that his eligibility to
receive any and all amounts described in this Section 8(a) shall be
subject to and contingent upon the Employee’s execution of a full and complete
general release in favor of the Company and its affiliated persons and
entities, satisfactory to the Company in its sole discretion.

 

(b)                                 Without Cause.  The Employee’s employment with the
Company may be terminated by the Company at any time without Cause, but in the
event of any such termination pursuant to this Section 8(b), the Company
will pay, in addition to any other amounts due hereunder, the Employee
severance pay in an amount equal to the greater of (i) the balance of all of
Employee’s remaining and unpaid Base Compensation

 

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due for the balance of
the then existing term hereunder, or (ii) 90 days of Base Compensation, payable
upon execution and delivery of the release described below, less all required
withholdings and in accordance with then current payroll practices of the
Company and applicable law or regulation. Notwithstanding the foregoing, in the
event of a termination by the Company without Cause in connection with a “Change
of Control Event”, as defined under Section 8(e) below, then the
compensation to Employee provided under Section (e) shall govern.  In addition, Employee shall receive any
accrued but unpaid vacation time for the current Employment Year. The Employee
agrees that his eligibility to receive any and all amounts described in this Section 8(b)
shall be subject to and contingent upon the Employee’s execution of a full and
complete general release in favor of the Company and its affiliated persons and
entities, satisfactory to the Company in its sole discretion.

 

(c)                                  Termination for Death or Disability.  The Employee’s employment hereunder shall
terminate immediately upon the Employee’s death or Disability.  For purposes of the preceding sentence, the
term “Disability” shall mean the Employee’s inability, by reason of
physical or mental incapacity (determined by a licensed physician reasonably
acceptable to the Employee and the Company), to perform the essential functions
of his job, with or without a reasonable accommodation by the Company, for an
aggregate of ninety (90) days during any twelve (12) month period, provided further that during any such continuous period, the
Employee’s Base Compensation payable under Section 6(a) shall be reduced
by the amount, if any, of payments to the Employee under any short-term or
long-term disability insurance policy, plan or program maintained by the
Company.  During any period when the
Employee implicitly or explicitly purports to be unable to perform his duties
hereunder by reason of physical or mental illness, incapacity or disability,
the Employee, at the request and expense of Company, shall submit to one or
more examinations by a physician of the Company’s choice. A termination of the
Employee’s employment with the Company due to any of the foregoing provisions
of this Section 8(c) shall be treated as a termination without Cause
hereunder.

 

(d)                                 Termination by Employee for Good Reason.
 Employee shall have the right to
terminate this Agreement for “Good Reason”. The following events affecting
Employee shall constitute “Good Reason” within the meaning of this Agreement:
(i) if Employee, at any time during the Employment Period (except during a
period of Disability), has suffered a material change or diminution in duties
and responsibilities from those contemplated herein.

 

(e)                                  Termination by Employee for Change of Control.  Employee shall have the right to terminate
this Agreement for a Change of Control Event, as defined below.  For purposes of this Employment Agreement, a “Change
of Control” shall mean the happening of any of the following:

 

(i)                                     the
acquisition by any person or group deemed a person under Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) (other
than the Company and its subsidiaries as determined immediately prior to that
date)

 

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of
beneficial ownership, directly or indirectly (with beneficial ownership
determined as provided in Rule 13d-3, or any successor rule, under the Exchange
Act), of a majority of the total combined voting power of all classes of stock
of the Company having the right under ordinary circumstances to vote at an
election of the Board of Directors of the Company, if such person or group
deemed a person was not a beneficial owner of at least five percent (5%) of
such total combined voting power of the Company on the date of this Agreement;

 

(ii)                                     the
election to the Board of Directors of the Company of members as a result of
which a majority of the Board of Directors shall consist of persons who are not
members of the Board of Directors as of the Effective Date (including Employee
as a member of the Board of Directors as of the Effective Date), except in the
event that such slate of Directors is proposed by the management of the
Company;

 

(iii)                               the date of approval by
the stockholders of the Company of an agreement providing for the merger or
consolidation of the Company with another corporation or other entity where (x)
stockholders of the Company immediately prior to such merger or consolidation
would not beneficially own following such merger or consolidation shares
entitling such stockholders to 50% or more of all votes (without consolidation
of the rights of any class of stock to elect directors by a separate class
vote) to which all stockholders of the surviving corporation would be entitled
in the election of directors, or (y) where the members of the Board of Directors,
immediately prior to such merger or consolidation, would not, immediately after
such merger or consolidation, constitute a majority of the board of directors
of the surviving corporation; or

 

(iv)                              the
sale of all or substantially all of the assets of the Company.

 

Upon the occurrence of any of the foregoing Change of
Control events, immediately prior to the effective date of the Change of
Control, Employee may terminate this Agreement and the Company shall pay
Employee a cash severance payment in a lump sum in an amount equal to twelve
(12) months of Employee’s then current Base Compensation (less applicable
withholding), paid immediately prior to the effective date of the Change of
Control.

 

(f)                                    Status upon Termination.  The termination of this Agreement, and the
Employee’s employment hereunder, for any reason whatsoever shall constitute the
Employee’s effective termination and resignation from any other positions or
duties with the Company and all of its affiliates.

 

(g)                                 Effect of Termination.

 

(i)                                     In
the event of a termination of the Employee’s employment with the Company
hereunder for any reason, in addition and subject to the provisions of Sections
8(a), 8(b), 8(c). 8(d) and 8(e), the Employee shall be entitled to receive all
Base Compensation and accrued benefits owing through the date of termination in
accordance with the Company’s normal practices then in effect.

 

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(ii)                                  In
the event of a termination of the Employee’s employment without Cause pursuant
to Sections 8(b), 8(c), 8(d) or 8(e) above, the Company shall also pay the
Employee severance compensation in accordance with Section 8(b)
above.  Furthermore, if the Employee is
terminated without Cause, or the employment ceases under Sections 8(c), 8(d) or
8(e), all unvested options granted to the Employee pursuant to the Equity
Incentive Plan shall become fully vested and be kept in effect for a period of
180 days if terminated pursuant to Sections 8(b), 8(c) or 8(d) or one year if
terminated pursuant to Section 8(e).

 

(iii)                               In
the event of a termination of the Employee’s employment with the Company
hereunder for Cause pursuant to Section 8(a) above, all rights of the
Employee under this Agreement shall immediately terminate and the Company shall
have no further obligations hereunder, subject to Section 8(g)(i) above
and this provision. Furthermore, if the Employee is terminated for Cause, all
unvested options granted to the Employee pursuant to the Equity Inventive Plan
shall terminate.

 

9.                                       Noncompetition and Confidentiality.

 

(a)                                  Noncompetition.  During the Employment Period and, in the
case of a termination of the Employee’s employment for Cause, for a period of
six (6) months following the date of termination of employment, or, in the case
of a termination of the Employee’s employment without Cause, for a period of
one day following the date of termination of employment (the “Covered Period”),
the Employee agrees not to engage in any Competitive Activity within the States
of New York, California and Wyoming.  As
used herein, the term “Competitive Activity” shall mean the
following:  (i) providing competitive
services, other than on behalf of the Company, to any Customer (as defined
below); (ii) serving as an officer, director, employee, consultant, advisor,
agent or representative of, or otherwise associating in any other capacity
with, any person, corporation, partnership, limited liability company, sole
proprietorship, association or other business enterprise, other than the
Company, engaged in the business of oil and gas exploration, drilling and
production or any other business in which the Company is engaged (each, a “Competitive
Enterprise”), or engaging individually in any Competitive Enterprise; (iii)
owning or acquiring, directly or indirectly, any interest in any Competitive
Enterprise (provided, however, the Employee
shall be allowed to passively own for investment purposes, directly or
indirectly, no more than ten percent (10%) of the issued and outstanding
publicly traded securities of any issuer engaged in a Competitive Enterprise);
(iv) soliciting or inducing any partner, stockholder, member, principal,
director, officer, employee, consultant, agent or other representative of the
Company or one or more affiliates to leave the employ or retention of the
Company or such affiliate or hiring away any of the foregoing persons; and/or
(v) encouraging, requesting or advising, explicitly or implicitly, any Customer
or supplier of the Company or one or more of its affiliates to withdraw,
curtail or cancel its business relationships with the Company or any affiliate
thereof (unless expressly requested to do so by the Company as part of the
Employee’s employment services provided hereunder).

 

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As used in this Section 9,
the term “Customer” shall include any person who is or was a customer of
the Company or an affiliate thereof at any time during the period commencing
with the Employment Period through the end of the Covered Period.

 

(b)                                 Confidentiality.  During the Employment Period and for a
period of three (3) years thereafter, the Employee shall not, except as may
otherwise be required by law, directly or indirectly disclose to any person or
entity, or use or cause to be used in any manner adverse to the interests of
the Company or any affiliate thereof, any Confidential Information (as defined
below in this Section 9(b)).  The
Employee agrees that, upon the termination of his employment with the Company
for any reason, all Confidential Information (other than a copy of this
Agreement and any other agreements that have been personally executed by the
Employee other than in his capacity as an officer of the Company) and
duplicates thereof in the possession or control of the Employee, in any form or
format, including, without limitation, written, visual, audio, electronic or
magnetic formats, shall forthwith be returned to the Company and shall not be
retained by the Employee or furnished or communicated to any third party in any
form whatsoever.

 

As used in this Section 9(b),
the term “Confidential Information” shall mean the following:  (i) information disclosed to the Employee or
known by the Employee as a consequence of the Employee’s relationship with the
Company or any Affiliate thereof, as defined below, not generally known in the
Company’s business, about the Company’s or an Affiliate’s employees, customers,
directors, officers, partners, shareholders, advertising methods, public
relations methods, business plans, operations, methods, processes and forecasts,
vendors, finances, trade marks, trade secrets, source code, patent
applications, manuals, designs, technical specifications and other intellectual
property; (ii) information disclosed to the Employee or known by the Employee
as a consequence of the Employee’s relationship with the Company or any
Affiliate thereof, not generally known in the businesses in which the customers
of the Company or its affiliates are or may be engaged, about the products,
processes, operations, trade information and services of any such customer; or
(iii) information disclosed to the Employee by the Company or any of its
affiliate which is marked as “confidential” or, if communicated verbally, is
followed up by written correspondence designating such information as “confidential.”
Affiliate shall mean any person or entity that directly, or indirectly, through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Company.

 

(c)                                  Severability.  The invalidity or nonenforceability of any
provision of this Section 9 in any respect shall not affect the validity
or enforceability of the other provisions of this Section 9 in any other
respect, or of any other provision of this Agreement.  In the event that any provision of this Section 9
shall be held invalid or unenforceable by a court of competent jurisdiction by
reason of the geographic or business scope or the duration thereof or for any
other reason, such invalidity or unenforceability shall attach only to the
particular aspects of such provision found invalid or unenforceable as applied
and shall not affect or render invalid or unenforceable any other provision of
this Section 9 or the enforcement of such provision in other
circumstances, and this Section 9 shall be construed as if the geographic
or business scope or the duration of such provision or other basis on which
such provision has been challenged had been more narrowly drafted so as not to
be invalid or unenforceable.

 

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10.                                 Business Opportunities.  During the Employment Period, the
Employee agrees to bring all business opportunities to the Company relating to
or otherwise associated with the business or businesses then conducted by the
Company or each affiliate thereof, or business or businesses proposed to be
conducted by the Company.

 

11.                                 Rights to Work Product. The
Employee agrees that all work performed by the Employee pursuant hereto shall
be the sole and exclusive property of the Company, in whatever stage of
development or completion.  With respect
to any copyrightable works prepared in whole or in part by the Employee
pursuant to this Agreement, including compilations of lists or data, the
Employee agrees that all such works will be prepared as “work-for-hire” within
the meaning of the Copyright Act of 1976, as amended (the “Act”), of
which the Company shall be considered the “author” within the meaning of the
Act.  In the event (and to the extent)
that such works or any part or element thereof is found as a matter of law not to
be a “work-for-hire” within the meaning of the Act, the Employee hereby assigns
to the Company the sole and exclusive right, title and interest in and to all
such works, and all copies of any of them, without further consideration, and
agrees, to the extent reasonable under the circumstances, to cooperate with the
Company to register, and from time to time to enforce, all patents, copyrights
and other rights and protections relating to such works in any and all
countries.  To that end, the Employee
agrees to execute and deliver all documents requested by the Company in
connection therewith, and the Employee hereby irrevocably designates and
appoints the Company as the Employee’s agent and attorney-in-fact to act for
and on behalf of the Employee and in the Employee’s stead to execute, register
and file any such applications, and to do all other lawfully permitted acts to
further the registration, protection and issuance of patents, copyrights or
similar protections with the same legal force and effect as if executed by the
Employee.  The Company shall reimburse
the Employee for all reasonable costs and expenses incurred by the Employee
pursuant to this Section 11.

 

12.                                 No Disparaging Statements.  During the Term of employment and for one (1)
year after termination of this Agreement for any reason whatsoever, the
Employee and the Company agree to refrain from making any disparaging
statements, either orally or in writing, about the other party (and, on the
part of the Employee, about any affiliate of the Company, or any directors,
officers, shareholders, employees, agents or other representatives of the
Company or any affiliate thereof).

 

13.                                 Survival.  The provisions of Sections 8(b), 8(c),
8(d), 8(e), 8(g), 9, 11, 12, 14, 15, 16 and 17 hereof shall survive the
termination of this Agreement for the applicable time period necessary to fully
effectuate the provisions of such sections.

 

14.                                 Compliance With Other Agreements.  The Employee and the Company each hereby
represent and warrant to the other that the execution and delivery of this
Agreement and the performance of such party’s obligations hereunder will not,
with or without the giving of notice and/or the passage of time, (i) violate
any judgment, writ, injunction or order of any court, arbitrator or governmental
agency applicable to such party, or (ii) conflict with, result in the breach of
any provision of or the termination of, or constitute a default under, any
agreement to which such party is a party or by which such

 

9

 

party is or may be
bound.  The parties agree to indemnify
and hold harmless each other from any liability, judgment or claim incurred,
entered or made against such party based on its reliance on the representations
and warranties made in this Section 14, including all costs and expenses
and attorney’s fees incurred or paid by such party in connection with the
foregoing.

 

15.                                 Injunctive Relief.  The Employee acknowledges and agrees that
the Company and its affiliates are engaged in a highly competitive business and
that the protections of the Company and each such affiliate set forth in
Sections 9, 10 and 11 of this Agreement are fair and reasonable and are of
vital concern to the Company and its affiliates.  Further, the Employee acknowledges and agrees
that monetary damages for any violation of such Sections will not adequately
compensate the Company and its affiliates with respect to any such
violation.  Therefore, in the event of a
breach by the Employee of any of the terms and provisions contained in Sections
9, 10 or 11 hereof, the Company shall be entitled to institute legal
proceedings to enforce the specific performance of this Agreement by the
Employee and to enjoin the Employee from any further violations.  The remedies available to the Company
pursuant to this Section 15 may be exercised cumulatively by the Company
in conjunction with all other rights and remedies provided by law.

 

16.                                 Arbitration Of Disputes.  If any dispute shall arise between the
Employee and the Company in connection with this Agreement, and such dispute
cannot be resolved amicably by the parties, the same shall be conclusively and
finally resolved by binding arbitration. 
Any party hereto may commence an arbitration proceeding by providing
written notice to the other party requesting the arbitration of an unresolved
dispute.  Each such dispute, if any,
shall be submitted to an arbitrator acceptable to both parties.  If either the Employee or the Company refuses
or neglects to agree to appoint an arbitrator within thirty (30) days after
receipt of written notice from the other party requesting the other party to do
so, the American Arbitration Association may appoint such arbitrator.  The arbitrator shall be experienced in the subject
matter of the dispute. Except as otherwise specifically set forth herein, the
arbitrators shall conduct the arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.  The decision in writing of the arbitrator,
when filed with the parties hereto, shall be final and binding on both
parties.  Judgment may be entered upon
the final decision of the arbitrator in any court having jurisdiction.  Such arbitration shall take place in New
York, New York.

 

Notwithstanding anything
to the contrary contained in this Section 16, nothing shall prohibit the
Company or Employee from pursuing all legal and equitable remedies available to
the Company or Employee in order to enforce the provisions of Sections 9, 10
and 11 of this Agreement.  To the extent
that any court action is permitted consistent with or to enforce this
Agreement, the parties hereby consent to the jurisdiction of the federal or
state courts sitting in any state where the Company maintains an office.  Accordingly, with respect to any such court
action, all of the parties hereto (a) submit to the personal jurisdiction of
such courts, (b) consent to service of process and (c) waive any other
requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.

 

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17.                                 Amendment; Waiver; Discharge.  No provision of this Agreement may be
amended, waived or discharged unless such amendment, waiver or discharge is
agreed to in writing and signed by the Employee and a duly authorized
representative of the Company.  No waiver
by either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.

 

18.                                 Validity.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.

 

19.                                 Notices.  All notices, demands and other
communications provided for in this Agreement shall be in writing and shall be
delivered by hand or sent via fax transmission (with written fax confirmation)
or mailed postage prepaid or by registered, certified or express mail or
reputable overnight courier service, charges prepaid, and shall be deemed given
when so delivered, if delivered by hand, or upon receipt of reasonably adequate
fax confirmation, if faxed, or, if mailed, five (5) business days after mailing
(or one (1) business day in the case of express mail or overnight courier
service), addressed as follows:

 

If to the Employee:

 

To his last known
personal residence

 

 

If to the Company:

 

Warren Resources, Inc.

489 Fifth Avenue

32nd Floor

New York, NY 10016

Attention:  Chief Executive Officer

(Fax):  (212) 697-9466

(Tel.):  (212) 697-9660

 

or to
such other address or person as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

 

20.                                 Headings.  All headings contained in this Agreement are
for reference purposes only and shall not in any way effect the meaning or
interpretation of any provision or provisions of this Agreement.

 

21.                                 Entire Agreement.  This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all

 

11

 

prior agreements,
promises, covenants, understandings, arrangements, communications,
representations or warranties, whether oral or written, by any party or
representative of any party hereto.

 

22.                                 Assignment and Transfer.  The Employee’s rights and obligations
under this Agreement shall not be transferable by assignment or otherwise, and
any purported assignment, transfer or delegation thereof shall be void.  This Agreement shall inure to the benefit of,
and be binding upon and enforceable by, any purchaser of substantially all of
the Company’s assets, any corporate successor to the Company or any assignee
thereof.

 

23.                                 Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

24.                                 Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York without regard to its conflicts of law principles.

 

 

IN WITNESS WHEREOF, the
Company and Employee have duly executed this Agreement in multiple originals on
June 17, 2005 to be effective on the Effective Date.

 

	
   

  	
  WARREN RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Norman F. Swanton

  
	
   

  	
   

  	
  Name:
  Norman F. Swanton

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  /s/ David E. Fleming

  
	
   

  	
  David E. Fleming

  

 

12Exhibit 10.1

 

 

DIRECTV
HOLDINGS LLC

DIRECTV FINANCING CO., INC.

6-3/8% SENIOR NOTES DUE 2015

 

 

INDENTURE

Dated as of June 15, 2005

 

 

THE BANK OF
NEW YORK

as

Trustee

 

 

CROSS-REFERENCE TABLE

 

	
  TIA

  	
   

  	
  Indenture

  
	
  Section

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  303

  	
   

  	
  1.03

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  11.03

  
	
  (c)

  	
   

  	
  11.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  7.06

  
	
  (b)(2)

  	
   

  	
  7.07

  
	
  (c)

  	
   

  	
  7.06; 11.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03(a); 11.05

  
	
  (4)

  	
   

  	
  4.04; 11.05

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.04

  
	
  (c)(2)

  	
   

  	
  11.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  11.04; 11.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01(b); 7.02

  
	
  (b)

  	
   

  	
  7.05; 11.02

  
	
  (c)

  	
   

  	
  7.01(a)

  
	
  (d)

  	
   

  	
  7.01(c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a) (last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  2.13

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  11.01

  
	
  (c)

  	
   

  	
  11.01

  

 

N.A. means Not Applicable.

Note:       This Cross-Reference Table
shall not, for any purposes, be deemed to be part hereof.

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
  SECTION 1.02.

  	
  Other Definitions

  	
   

  
	
  SECTION 1.03.

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
   

  
	
  SECTION 1.04.

  	
  Rules of Construction

  	
   

  
	
  SECTION 1.05.

  	
  Acts of Holders; Record Dates

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
   

  	
   

  	
   

  
	
  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Form and Dating

  	
   

  
	
  SECTION 2.02.

  	
  Form of Execution and Authentication

  	
   

  
	
  SECTION 2.03.

  	
  Registrar and Paying Agent

  	
   

  
	
  SECTION 2.04.

  	
  Paying Agent To Hold Money in Trust

  	
   

  
	
  SECTION 2.05.

  	
  Lists of Holders of the Notes

  	
   

  
	
  SECTION 2.06.

  	
  Transfer and Exchange

  	
   

  
	
  SECTION 2.07.

  	
  Replacement Notes

  	
   

  
	
  SECTION 2.08.

  	
  Outstanding Notes

  	
   

  
	
  SECTION 2.09.

  	
  Treasury Notes

  	
   

  
	
  SECTION 2.10.

  	
  Temporary Notes

  	
   

  
	
  SECTION 2.11.

  	
  Cancellation

  	
   

  
	
  SECTION 2.12.

  	
  Defaulted Interest

  	
   

  
	
  SECTION 2.13.

  	
  Record Date

  	
   

  
	
  SECTION 2.14.

  	
  CUSIP Number

  	
   

  
	
  SECTION 2.15.

  	
  Joint and Several Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Notices to Trustee

  	
   

  
	
  SECTION 3.02.

  	
  Selection of Notes To Be Redeemed

  	
   

  
	
  SECTION 3.03.

  	
  Notice of Redemption

  	
   

  
	
  SECTION 3.04.

  	
  Effect of Notice of Redemption

  	
   

  
	
  SECTION 3.05.

  	
  Deposit of Redemption Price

  	
   

  
	
  SECTION 3.06.

  	
  Notes Redeemed in Part

  	
   

  
	
  SECTION 3.07.

  	
  Optional Redemption

  	
   

  
	
  SECTION 3.08.

  	
  Excess Proceeds Offer

  	
   

  

 

i

 

	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Payment of Notes

  	
   

  
	
  SECTION 4.02.

  	
  Maintenance of Office or Agency

  	
   

  
	
  SECTION 4.03.

  	
  Reports

  	
   

  
	
  SECTION 4.04.

  	
  Compliance Certificate

  	
   

  
	
  SECTION 4.05.

  	
  Taxes

  	
   

  
	
  SECTION 4.06.

  	
  Stay, Extension and Usury Laws

  	
   

  
	
  SECTION 4.07.

  	
  Limitation on Restricted Payments

  	
   

  
	
  SECTION 4.08.

  	
  Limitation on Dividend and Other Payment
  Restrictions Affecting Restricted Subsidiaries

  	
   

  
	
  SECTION 4.09.

  	
  Limitation on Incurrence of Indebtedness

  	
   

  
	
  SECTION 4.10.

  	
  Limitation on Asset Sales

  	
   

  
	
  SECTION 4.11.

  	
  Limitation on Transactions with Affiliates

  	
   

  
	
  SECTION 4.12.

  	
  Limitation on Liens

  	
   

  
	
  SECTION 4.13.

  	
  Additional Subsidiary Guarantees

  	
   

  
	
  SECTION 4.14.

  	
  Organizational Existence

  	
   

  
	
  SECTION 4.15.

  	
  Change of Control and Rating Decline

  	
   

  
	
  SECTION 4.16.

  	
  Limitation on Activities of the Company and
  Restricted Subsidiaries

  	
   

  
	
  SECTION 4.17.

  	
  Limitation on Activities of DTV Finance

  	
   

  
	
  SECTION 4.18.

  	
  Payments for Consent

  	
   

  
	
  SECTION 4.19.

  	
  Termination of Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
   

  
	
  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Merger, Consolidation or Sale of Assets

  	
   

  
	
  SECTION 5.02.

  	
  Successor Corporation Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events of Default

  	
   

  
	
  SECTION 6.02.

  	
  Acceleration

  	
   

  
	
  SECTION 6.03.

  	
  Other Remedies

  	
   

  
	
  SECTION 6.04.

  	
  Waiver of Past Defaults

  	
   

  
	
  SECTION 6.05.

  	
  Control by Majority

  	
   

  
	
  SECTION 6.06.

  	
  Limitation on Suits

  	
   

  
	
  SECTION 6.07.

  	
  Rights of Holders of Notes To Receive
  Payment

  	
   

  
	
  SECTION 6.08.

  	
  Collection Suit by Trustee

  	
   

  
	
  SECTION 6.09.

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  SECTION 6.10.

  	
  Priorities

  	
   

  
	
  SECTION 6.11.

  	
  Undertaking for Costs

  	
   

  

 

ii

 

	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Duties of Trustee

  	
   

  
	
  SECTION 7.02.

  	
  Rights of Trustee

  	
   

  
	
  SECTION 7.03.

  	
  Individual Rights of Trustee

  	
   

  
	
  SECTION 7.04.

  	
  Trustee’s Disclaimer

  	
   

  
	
  SECTION 7.05.

  	
  Notice of Defaults

  	
   

  
	
  SECTION 7.06.

  	
  Reports by Trustee to Holders of the Notes

  	
   

  
	
  SECTION 7.07.

  	
  Compensation and Indemnity

  	
   

  
	
  SECTION 7.08.

  	
  Replacement of Trustee

  	
   

  
	
  SECTION 7.09.

  	
  Successor Trustee by Merger, Etc.

  	
   

  
	
  SECTION 7.10.

  	
  Eligibility; Disqualification

  	
   

  
	
  SECTION 7.11.

  	
  Preferential Collection of Claims Against
  Issuers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
   

  
	
  DISCHARGE OF INDENTURE; DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Termination of the Issuers’ Obligations

  	
   

  
	
  SECTION 8.02.

  	
  Option To Effect Legal Defeasance or
  Covenant Defeasance

  	
   

  
	
  SECTION 8.03.

  	
  Legal Defeasance and Covenant Discharge

  	
   

  
	
  SECTION 8.04.

  	
  Covenant Defeasance

  	
   

  
	
  SECTION 8.05.

  	
  Conditions to Legal or Covenant Defeasance

  	
   

  
	
  SECTION 8.06.

  	
  Deposited Money and Government Securities
  To Be Held in Trust; Other Miscellaneous Provisions

  	
   

  
	
  SECTION 8.07.

  	
  Repayment to Issuers

  	
   

  
	
  SECTION 8.08.

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
   

  
	
  AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Without Consent of Holders of Notes

  	
   

  
	
  SECTION 9.02.

  	
  With Consent of Holders of Notes

  	
   

  
	
  SECTION 9.03.

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  SECTION 9.04.

  	
  Revocation and Effect of Consents

  	
   

  
	
  SECTION 9.05.

  	
  Notation on or Exchange of Notes

  	
   

  
	
  SECTION 9.06.

  	
  Trustee To Sign Amendments, Etc.

  	
   

  

 

iii

 

	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTEES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Guarantee

  	
   

  
	
  SECTION 10.02.

  	
  Execution and Delivery of Guarantees

  	
   

  
	
  SECTION 10.03.

  	
  Merger, Consolidation or Sale of Assets of Guarantors

  	
   

  
	
  SECTION 10.04.

  	
  Successor Corporation Substituted

  	
   

  
	
  SECTION 10.05.

  	
  Releases from Guarantees

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  Trust Indenture Act Controls

  	
   

  
	
  SECTION 11.02.

  	
  Notices

  	
   

  
	
  SECTION 11.03.

  	
  Communication by Holders of Notes with
  Other Holders of Notes

  	
   

  
	
  SECTION 11.04.

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  SECTION 11.05.

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  SECTION 11.06.

  	
  Rules by Trustee and Agents

  	
   

  
	
  SECTION 11.07.

  	
  No Personal Liability of Directors, Owners,
  Employees, Incorporators and Stockholders

  	
   

  
	
  SECTION 11.08.

  	
  Governing Law

  	
   

  
	
  SECTION 11.09.

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
  SECTION 11.10.

  	
  Successors

  	
   

  
	
  SECTION 11.11.

  	
  Severability

  	
   

  
	
  SECTION 11.12.

  	
  Counterpart Originals

  	
   

  
	
  SECTION 11.13.

  	
  Table of Contents, Headings, Etc.

  	
   

  
	
  SECTION 11.14.

  	
  Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  EXHIBIT A

  	
  FORM OF NOTE

  	
   

  
	
  EXHIBIT B

  	
  FORM OF GUARANTEE

  	
   

  
	
  EXHIBIT C

  	
  FORM OF CERTIFICATE OF TRANSFER

  	
   

  
	
  EXHIBIT D

  	
  FORM OF CERTIFICATE OF EXCHANGE

  	
   

  
				

 

iv

 

INDENTURE
dated as of June 15, 2005 by and among DIRECTV Holdings LLC (the “Company” or an “Issuer”), a
Delaware limited liability company, DIRECTV Financing Co., Inc. (“DTV Finance” or an “Issuer” and
together with the Company, the “Issuers”), a
Delaware corporation, the Guarantors (as hereinafter defined) and The Bank of
New York, a New York banking corporation, as trustee (the “Trustee”).

 

The Issuers,
the Guarantors and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the Issuers’ 6-3/8%
Senior Notes due 2015.

 

RECITALS

 

The Issuers
and the Guarantors have duly authorized the execution and delivery hereof to
provide for the issuance of the Notes and the Guarantees.

 

All things
necessary (i) to make the Notes, when executed by the Issuers and authenticated
and delivered hereunder and duly issued by the Issuers and delivered hereunder,
the valid obligations of the Issuers, (ii) to make the Guarantees when
executed by the Guarantors and delivered hereunder the valid obligations of the
Guarantors, and (iii) to make this Indenture a valid agreement of the
Issuers and the Guarantors, all in accordance with their respective terms, have
been done.

 

For and in
consideration of the premises and the purchase of the Notes by the Holders
thereof, it is mutually agreed as follows for the equal and ratable benefit of
the Holders of the Notes.

 

ARTICLE 1 

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01.                                         Definitions.

 

“144A Global Note” means a global note substantially in the
form of Exhibit A hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of, and registered in
the name of, the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold in
reliance on Rule 144A.

 

“Acquired Debt” means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merges
with or into or becomes a Subsidiary of such specified Person, or Indebtedness
incurred by such Person in connection with the acquisition of assets, in each
case so long as such Indebtedness was not incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person or the acquisition of such assets, as the
case may be.

 

 

“Acquired Subscriber” means a subscriber to a service
provided by a Permitted Business as to whom the Company or one of its
Restricted Subsidiaries purchases the right to provide such service to such subscriber,
whether such purchase is undertaken directly, through the acquisition of the
entity providing such service or through the acquisition of assets used or to
be used to provide such service to such subscriber.

 

“Acquired Subscriber Debt” means

 

(a)                                  Indebtedness
the proceeds of which are used to pay the purchase price for Acquired
Subscribers or to acquire the entity which has the right to provide service to
such Acquired Subscribers or to acquire from such entity or another Person assets
used or to be used in connection with such Permitted Business; provided that such Indebtedness is incurred within three
years after the date of the acquisition of such Acquired Subscribers, and

 

(b)                                 Acquired
Debt of any such entity being acquired;

 

provided that in no event shall the amount of
such Indebtedness and Acquired Debt for any Acquired Subscriber exceed the sum
of the actual purchase price (inclusive of such Acquired Debt) for such
Acquired Subscriber, such entity and such assets plus the cost, if any, incurred
to convert such Acquired Subscriber to usage of a delivery format for services
made available by the Company or any of its Restricted Subsidiaries.

 

“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. 
For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise; provided, however, that no individual, other than a director of Parent
or the Company or their respective Subsidiaries or an officer of Parent or the
Company or their respective Subsidiaries with a policy making function, shall
be deemed an Affiliate of the Company or any of its Subsidiaries solely by
reason of such individual’s employment, position or responsibilities by or with
respect to Parent, the Company or any of their respective Subsidiaries.

 

“Agent” means any Registrar, Paying Agent or co-registrar.

 

“Applicable Procedures” means, with respect to any transfer
or exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary that apply to such transfer or exchange.

 

“Bankruptcy Law” means title 11, U.S. Code or any similar
federal or state law for the relief of debtors.

 

“Board of Directors” means (a) with respect to any
Person that is a corporation, the board of directors of such Person or any duly
authorized committee thereof and (b) as to any other Person, the
functionally comparable body of such Person or any duly authorized committee
thereof.

 

2

 

“Broker-Dealer” means any broker or dealer registered under
the Exchange Act.

 

“Business Day” means any day other than a Legal Holiday.

 

“Capital Lease Obligations” means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at the time any determination
thereof is to be made shall be the amount of the liability in respect of a
capital lease that would at such time be so required to be capitalized on a
balance sheet in accordance with GAAP.

 

“Capital Stock” means any and all shares, interests,
participations, rights or other equivalents, however designated, of corporate
stock or partnership or membership interests, whether common or preferred.

 

“Cash Equivalents” means:

 

(a)                                  United
States dollars;

 

(b)                                 securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition;

 

(c)                                  certificates
of deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition, bankers’ acceptances with maturities not
exceeding one year and overnight bank deposits, in each case with any domestic
commercial bank having capital and surplus in excess of $500.0 million;

 

(d)                                 repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (b) and (c) entered into with any
financial institution meeting the qualifications specified in clause (c) above;

 

(e)                                  commercial
paper issued by any issuer rated at least P-2, A-2 or the equivalent thereof by
Moody’s or S&P, respectively, and maturing within two hundred seventy (270)
days of the date of acquisition;

 

(f)                                    variable
or fixed rate notes issued by any issuer rated at least AA by S&P (or the
equivalent thereof) or at least Aa2 by Moody’s (or the equivalent thereof) and
maturing within one (1) year of the date of acquisition;

 

(g)                                 commercial
paper rated P-1, A-1 or the equivalent thereof by Moody’s or S&P,
respectively, and in each case maturing within nine months after the date of
acquisition and variable or fixed rate notes rated at least A-1 by S&P (or
the equivalent thereof) or at least P-1 by Moody’s (or the equivalent thereof)
and maturing within one year of the date of acquisition; and

 

(h)                                 money
market funds offered by any domestic commercial or investment bank having
capital and surplus in excess of $500.0 million at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (a) through (g) of
this definition.

 

3

 

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

 

(a)                                  the
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Exchange Act and the rules of the SEC
thereunder as in effect on the Issue Date) other than one or more Permitted
Holders of Equity Interests representing more than 50% (on a fully diluted
basis) of the total voting power represented by the issued and outstanding
Equity Interests of the Company then entitled to vote in the election of the
Board of Directors of the Company; or

 

(b)                                 at
any time, the occupation of a majority of the seats (other than vacant seats)
on the Board of Directors of the Company by persons who were neither (i) nominated
by the Board of Directors of the Company with the affirmative vote of a majority
of the members of said Board of Directors at the time of such nomination or
election nor (ii) appointed by directors so nominated or elected or
appointed by Permitted Holders.

 

The formation,
by merger or otherwise, of a parent entity of the Company shall not constitute
a Change of Control if more than 50% of the Equity Interests of the Company
held by such parent entity are deemed beneficially owned by the Permitted
Holders pursuant to Rules 13d-3 and 13d-5 under the Exchange Act.

 

“Change of Control Triggering Event” means the occurrence of
both a Change of Control and a Rating Decline.

 

“Communications Act” means the Communications Act of 1934, as
amended.

 

“Consolidated Cash Flow” means, with respect to any Person
for any period, the Consolidated Net Income of such Person for such period
excluding, however, any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection with any Asset
Sale (including, without limitation, dispositions pursuant to sale and
leaseback transactions), and excluding any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss) and excluding any unusual gain (but not loss) relating to recovery of
insurance proceeds on satellites, together with any related provision for taxes
on such unusual gain (but not loss), plus, to the extent deducted in computing
Consolidated Net Income:

 

(a)                                  provision
for taxes based on income or profits;

 

(b)                                 Consolidated
Interest Expense;

 

(c)                                  Consolidated
Non-Cash Charges of such Person for such period; and

 

(d)                                 any
extraordinary loss and any net loss realized in connection with any Asset Sale,

 

in each case, on a consolidated basis determined in accordance with
GAAP.

 

4

 

“Consolidated Interest Expense” means, with respect to any
Person for any period, consolidated interest expense of such Person for such
period, whether paid or accrued, including amortization of original issue
discount and deferred financing costs, noncash interest payments and the
interest component of Capital Lease Obligations, on a consolidated basis
determined in accordance with GAAP; provided, however, that with respect to the calculation of the consolidated
interest expense of the Company, the interest expense of Unrestricted
Subsidiaries shall be excluded.

 

“Consolidated Net Income” means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, however, that:

 

(a)                                  the
Net Income of any Person that is not a Subsidiary or that is accounted for by
the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the referent Person, in
the case of a gain, or to the extent of any contributions or other payments by
the referent Person, in the case of a loss;

 

(b)                                 the
Net Income of any Person that is a Subsidiary that is not a Wholly Owned
Subsidiary shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person;

 

(c)                                  the
Net Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded;

 

(d)                                 the
Net Income of any Subsidiary of such Person that is not a Guarantor shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions is not at the time permitted by operation of the terms of its
charter or bylaws or any other agreement, instrument, judgment, decree, order,
statute, rule or government regulation to which it is subject; and

 

(e)                                  the
cumulative effect of a change in accounting principles shall be excluded.

 

“Consolidated Net Worth” means, with respect to any Person,
the sum of:  (a) the owners’ equity of
such Person; plus (b) the amount reported
on such Person’s most recent balance sheet with respect to any series of
preferred stock (other than Disqualified Stock) that by its terms is not
entitled to the payment of dividends unless such dividends may be declared and
paid only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person upon
issuance of such preferred stock, less:  (i) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the Issue Date in
the book value of any asset owned by such Person or a consolidated Subsidiary
of such Person; and (ii) all unamortized debt discount and expense and
unamortized deferred charges, all of the foregoing determined on a consolidated
basis in accordance with GAAP.

 

5

 

“Consolidated Non-Cash Charges” means, with respect to any
Person for any period, the aggregate depreciation, amortization, impairment,
compensation, rent, other non-cash expenses and write-offs and write-downs of
assets of such Person and its Restricted Subsidiaries for such period on a
consolidated basis and otherwise determined in accordance with GAAP, but
excluding (i) any such charge which consists of or requires an accrual of,
or cash reserve for, anticipated cash charges for any future period and (ii) the
non-cash impact of recording the change in fair value of any embedded
derivatives under Statement of Financial Accounting Standards No. 133 and
related interpretations as a result of the terms of any agreement or instrument
to which such Consolidated Non-Cash Charges relate.

 

“Corporate Trust Office of the Trustee” shall be at the
address of the Trustee specified in Section 11.02 hereof or such other
address as to which the Trustee may give notice to the Company.

 

“Default” means any event that is, or with the passage of
time or the giving of notice or both would be, an Event of Default.

 

“Definitive Note” means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note
shall not bear the Global Note Legend and shall not have the “Schedule of
Exchanges of Interests in the Global Note” attached thereto.

 

“Depositary” means The Depository Trust Company and any and
all successors thereto appointed as depositary hereunder and having become such
pursuant to an applicable provision hereof.

 

“Disqualified Stock” means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holders thereof, in whole or in part, on or
prior to the date on which the Notes mature; provided,
however, that any such Capital Stock may
require the issuer of such Capital Stock to make an offer to purchase such
Capital Stock upon the occurrence of certain events if the terms of such
Capital Stock provide that such an offer may not be satisfied and the purchase
of such Capital Stock may not be consummated until the 91st day after the Notes
have been paid in full.

 

“Domestic Subsidiaries” shall mean all Subsidiaries
incorporated, formed or organized under the laws of the United States of
America, any State thereof or the District of Columbia.

 

“DTV” means The DIRECTV Group, Inc., a Delaware corporation,
and its successors.

 

“Eligible Institution” means a commercial banking institution
that has combined capital and surplus of not less than $500.0 million or its
equivalent in foreign currency, whose debt is rated by at least two nationally
recognized statistical rating organizations in one of each such organization’s
four highest generic rating categories at the time as of which any investment
or rollover therein is made.

 

6

 

“Equity Interests” means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).

 

“Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

“Exchange Notes” means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof or pursuant to a registered
exchange offer for Notes with a Private Placement Legend issued after the Issue
Date.

 

“Exchange Offer” has the meaning set forth in the
Registration Rights Agreement.

 

“Exchange Offer Registration Statement” has the meaning set
forth in the Registration Rights Agreement.

 

“Existing Indebtedness” means any Indebtedness (other than
the Notes and the Guarantees) of the Company and its Subsidiaries in existence
on the Issue Date after giving effect to the use of proceeds from the offering
contemplated by the Offering Memorandum until such amounts are repaid.

 

“Existing Notes” means $910.0 million of 8-3/8% Senior Notes
due 2013 issued by the Company and DTV Finance under an indenture dated as of February 28,
2003, as amended to date.

 

“Existing Satellites” means the following satellites:  DIRECTV 1, DIRECTV 1R, DIRECTV 2,
DIRECTV 3, DIRECTV 4S, DIRECTV 5, DIRECTV 6, DIRECTV 7S, DIRECTV 8 and
Spaceway 1.

 

“FCC” means Federal Communications Commission.

 

“Financing Subsidiary” means a Subsidiary of the Company:

 

(1)                                  that
is formed solely for the purpose of, and that engages in no activities other
than activities in connection with, financing the purchase of customer premise
and receiving equipment (including delivery and installation costs) by the
Company’s retail customers;

 

(2)                                  that
is designated by the Company as a Financing Subsidiary;

 

(3)                                  no
portion of the Indebtedness or any other obligation (contingent or otherwise)
of which (a) is at any time guaranteed by the Company or any Restricted
Subsidiary, (b) is at any time recourse to or obligates the Company or any
Restricted Subsidiary in any way or (c) subjects any asset of the Company
or any other Restricted Subsidiary, directly or indirectly, contingently or
otherwise, to the satisfaction thereof;

 

(4)                                  with
which neither the Company nor any Restricted Subsidiary has any material
contract, agreement, arrangement or understanding other than contracts,
agreements, arrangements and understandings entered into in the ordinary course
of business on terms no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from persons that are not the
Company’s Affiliates; and

 

7

 

(5)                                  with
respect to which neither the Company nor any Restricted Subsidiary has any
obligation (a) to subscribe for additional shares of Capital Stock therein
or make any additional capital contribution or similar payment or transfer
thereto or (b) to maintain or preserve the solvency or any balance sheet
term, financial condition, level of income or results of operations thereof.

 

“Foreign Currency Obligations” means, with respect to any
Person, the obligations of such Person pursuant to any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Restricted Subsidiary of the Company
against fluctuations in currency values.

 

“GAAP” means United States generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession of the United States, which are applicable
as of the date of determination; provided that, except as otherwise
specifically provided, all calculations made for purposes of determining
compliance with the terms of the provisions hereof shall utilize GAAP as in
effect on the Issue Date.

 

“Global Note Legend” means the legend set forth in Section 2.01
hereof, which is required to be placed on all Global Notes issued under this
Indenture.

 

“Global Notes” means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, substantially in
the form of Exhibit A hereto issued in accordance with Section 2.01
or 2.06 hereof.

 

“Government Securities” means direct obligations of, or
obligations guaranteed by, the United States for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.

 

“guarantee” means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.

 

“Guarantee” means a guarantee by a Guarantor of the Notes.

 

“Guarantor” means any Restricted Subsidiary of the Company
that guarantees the Notes and its successors and assigns.

 

“Hedging Obligations” means, with respect to any Person, the
obligations of such Person pursuant to any arrangement with any other Person,
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either floating or a fixed
rate of interest on a stated notional amount in exchange for periodic payments
made by 

 

8

 

such other Person calculated by applying a fixed or a floating rate of
interest on the same notional amount and shall include, without limitation,
interest rate swaps, caps, floors, collars and similar agreements designed to
protect such Person against fluctuations in interest rates.

 

“Holder” means a Person in whose name a Note is registered.

 

“Indebtedness” means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof) or
representing the balance deferred and unpaid of the purchase price of any
property (including pursuant to capital leases) or representing any Hedging
Obligations or Foreign Currency Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of
the foregoing (other than Hedging Obligations or Foreign Currency Obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, and also includes, to the extent not otherwise included,
the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with respect to any
Subsidiary of such Person, the liquidation preference with respect to, any
Preferred Equity Interests (but excluding, in each case, any accrued dividends)
as well as the guarantee of items that would be included within this
definition.

 

“Indebtedness to Cash Flow Ratio” means, with respect to any
Person, the ratio of: (a) (i) the Indebtedness of such Person and its
Subsidiaries (or, if such Person is the Company, of the Company and its
Restricted Subsidiaries) as of the end of the most recently ended fiscal
quarter, plus (ii) the amount of any Indebtedness incurred (and minus the
amount of any Indebtedness repaid) subsequent to the end of such fiscal
quarter; provided, however,
that if such Indebtedness under this clause (ii) constitutes Indebtedness
under a revolving credit facility, then the amount of increase or reduction
shall be determined by comparison to the amount determined under clause (I)
below; to (b) such Person’s Consolidated Cash Flow for the most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which the event for which such
calculation is being made shall occur (the “Measurement Period”);
provided, however,
that:  (I) in making such computation,
Indebtedness shall include the average daily balance outstanding under any
revolving credit facility during the most recently ended fiscal quarter and
(II) if such Person or any of its Subsidiaries (or, if such Person is the Company,
any of its Restricted Subsidiaries) consummates an acquisition or an Asset Sale
or other disposition of assets subsequent to the commencement of the
Measurement Period but prior to the event for which the calculation of the
Indebtedness to Cash Flow Ratio is made, then the Indebtedness to Cash Flow
Ratio shall be calculated giving pro forma effect to such acquisition or Asset
Sale or other disposition of assets, including giving effect to Pro Forma Cost
Savings, as if the same had occurred at the beginning of the applicable period.

 

“Indenture” means this Indenture, as amended or supplemented
from time to time.

 

“Independent Financial Advisor” means a Person or entity
which, in the judgment of the Board of Directors of the Company, is independent
and otherwise qualified to perform the task for which it is to be engaged.

 

9

 

“Indirect Participant” means a Person who holds a beneficial
interest in a Global Note through a Participant.

 

“Initial Notes” means the $1.0 billion aggregate principal
amount 6-3/8% Senior Notes due 2015 of the Issuers issued under this Indenture
on the Issue Date.

 

“Initial Purchasers” means, with
respect to the Initial Notes, Banc of America Securities LLC and Credit Suisse
First Boston LLC.

 

“Investment Grade” designates a rating of BBB- or higher by
S&P or Baa3 or higher by Moody’s or the equivalent of such ratings by
S&P or Moody’s.  In the event that
the Company shall select any other Rating Agency, the equivalent of such
ratings by such Rating Agency shall be used.

 

“Investments” means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including guarantees), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.

 

“Issue Date” means June 15, 2005, the date of original
issuance of the Initial Notes.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.

 

“Letter of Transmittal” means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.

 

“Lien” means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction).

 

“Make Whole Amount” means, with respect to any Note at any
redemption date, the greater of (i) 1.0% of the principal amount of such
Note and (ii) the excess, if any, of (A) an amount equal to the
present value of (1) the redemption price of such Note at June 15, 2010
plus (2) the remaining scheduled interest payments on the Notes to be
redeemed (subject to the right of Holders on the relevant record date to
receive interest due on the relevant interest payment date) to June 15, 2010
(other than interest accrued to the redemption date), computed using a discount
rate equal to the Treasury Rate plus 50 basis points, over (B) the principal
amount of the Notes to be redeemed.

 

10

 

“Marketable Securities” means:  (a) Government Securities; (b) any
certificate of deposit maturing not more than 365 days after the date of
acquisition issued by, or time deposit of, an Eligible Institution; (c) commercial
paper maturing not more than 365 days after the date of acquisition issued by a
corporation (other than an Affiliate of the Company) with a rating by at least
two nationally recognized statistical rating organizations in one of each such
organization’s four highest generic rating categories at the time as of which any
investment therein is made, issued or offered by an Eligible Institution; (d) any
bankers’ acceptances or money market deposit accounts issued or offered by an
Eligible Institution; and (e) any fund investing exclusively in
investments of the types described in clauses (a) through (d) above.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Net Income” means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with GAAP.

 

“Net Proceeds” means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries, as the case may be, in
respect of any Asset Sale, net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements),
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that are the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets.  Net Proceeds shall exclude any non-cash
proceeds received from any Asset Sale, but shall include such proceeds when and
as converted by the Company or any Restricted Subsidiary to cash.

 

“News Group” means News Corporation, a Delaware corporation,
and any of its successors and Affiliates, and (i) K. Rupert Murdoch and
any executor, administrator, guardian, conservator or similar legal
representative thereof, (ii) any member of the immediate family of K.
Rupert Murdoch, (iii) any Person directly or indirectly controlled by one
or more of the members of the Murdoch family described above (a “Controlled Person”), and (iv) any Person acting as
agent for any Person described in clauses (i) through (iii) hereof; provided that a trust and the trustees of such trust shall
be deemed to be controlled by any one or more members of the Murdoch family if
a majority of the trustees of such trust are members of the Murdoch family or
may be removed or replaced by any one or more of the members of the Murdoch
family and/or Controlled Persons.

 

“Non-U.S. Person” means a Person who is not a U.S. Person.

 

“Notes” means the Initial Notes, the Exchange Notes and any
other notes issued after the Issue Date in accordance with the fourth paragraph
of Section 2.02 hereof treated as a single class of securities.

 

“Obligations” means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

 

11

 

“Offering Memorandum” means the Offering Memorandum dated June 8,
2005 relating to and used in connection with the initial offering of the Initial
Notes.

 

“Officer” means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
Controller, Secretary or any Vice President of such Person, or any other
officer designated by the Board of Directors serving in a similar capacity.

 

“Officers’ Certificate” means a certificate signed on behalf
of the Company or DTV Finance, as the case may be, by two Officers of such
Person or of such Person’s partner or managing member, one of whom must be the
principal executive officer, principal financial officer, treasurer or
principal accounting officer of such Person or of such Person’s partner or managing
member.

 

“Opinion of Counsel” means an opinion from legal counsel, who
may be an employee of or counsel to the Company or any Subsidiary of the
Company.

 

“Parent” means DTV and its successors, in each case together
with each Subsidiary of Parent that beneficially owns any Equity Interests of
the Company.

 

“Participant” means, with respect to the Depositary, a Person
who has an account with the Depositary.

 

“Permitted Business” means any of developing, owning,
engaging in and dealing with all or any part of the business of domestic and
international media, entertainment, electronics, communications, voice, data
and network services and reasonably related extensions thereof, including but not
limited to the purchase, ownership, operation, leasing and selling of, and
generally dealing in or with, one or more communications satellites and the
transponders thereon, and communications uplink centers and related terrestrial
infrastructure, the acquisition, transmission, broadcast, production and other
provision of programming relating thereto and the manufacturing, distribution
and financing of equipment (including consumer electronic equipment) relating
thereto.

 

“Permitted Holder” means each of (a) News Group, (b) Parent
and (c) any other Person, directly or indirectly, controlled by any of the
foregoing.

 

“Permitted Investments” means:

 

(a)                                  Investments
in the Company or in a Restricted Subsidiary;

 

(b)                                 Investments
in Cash Equivalents and Marketable Securities;

 

(c)                                  any
guarantee permitted by Section 4.09 hereof;

 

(d)                                 Investments
by the Company or any of its Subsidiaries in a Person if, as a result of such
Investment:  (i) such Person becomes
a Wholly Owned Restricted Subsidiary and becomes a Guarantor; provided that to the extent such Person is subject to any
instrument governing Acquired Debt, as in effect at the time of acquisition
thereof, that 

 

12

 

prohibits such Person from issuing a Guarantee, such Person shall not
be required to become a Guarantor to satisfy the requirements of this clause
(d)(i), or (ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Restricted Subsidiary that is a
Guarantor; provided that if at any time a
Restricted Subsidiary shall cease to be a Subsidiary of the Company, the
Company shall be deemed to have made a Restricted Investment in the amount of
the Company’s remaining investment, if any, in such former Subsidiary;

 

(e)                                  Investments
in stock, obligations or securities received in settlement of debts created in
the ordinary course of business and owing to the Company or any of its
Restricted Subsidiaries or in satisfaction of judgments;

 

(f)                                    loans
and advances to subscribers or distributors of the Company’s products in the
ordinary course of business;

 

(g)                                 Investments
in stock, obligations or securities received in lieu of fees for launching programming
channels in the ordinary course of business;

 

(h)                                 Investments
in any Person to the extent such Investment represents the non-cash portion of
the consideration received for an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof;

 

(i)                                     loans
or advances or other similar transactions with suppliers or purchasers or
sellers of goods or services, in each case, in the ordinary course of business;

 

(j)                                     Investments
in Permitted Joint Ventures in an amount not to exceed $500.0 million
outstanding at any time for all such Investments made after the Issue Date; and

 

(k)                                  any
Investment by the Company or any Restricted Subsidiary in a Receivables
Subsidiary or any Investment by a Receivables Subsidiary in any other Person in
connection with a Qualified Receivables Transaction, so long as any Investment
in a Receivables Subsidiary is in the form of a Purchase Money Note or an
Investment in Capital Stock.

 

“Permitted Joint Ventures” means any Person, other than an
individual or a Subsidiary of the Company, (i) in which the Company or a
Restricted Subsidiary of the Company holds or acquires an ownership interest
(whether by way of Capital Stock or otherwise) and (ii) which is engaged
in or intends to pursue a Permitted Business.

 

“Permitted Liens” means:

 

(a)                                  Liens
securing the Notes and Liens securing any Guarantee;

 

(b)                                 Liens
securing any Indebtedness (and other Obligations arising under the
documentation governing such Indebtedness) permitted by Section 4.09
hereof; provided that any such Lien, taken
together with all other Liens incurred in reliance on this clause 

 

13

 

(b), shall not secure Indebtedness in a principal amount at the time
such Lien is incurred exceeding the greater of (x) the product of 4.5 times the
Trailing Cash Flow Amount at such time and (y) the sum of the amount of
Indebtedness permitted by clauses (3) and (12) of Section 4.09(b) hereof;

 

(c)                                  Liens
securing Purchase Money Indebtedness; provided that
such Indebtedness was permitted to be incurred by the terms hereof and such
Liens do not extend to any assets of the Company or its Restricted Subsidiaries
other than the assets so acquired;

 

(d)                                 Liens
securing Indebtedness the proceeds of which are used to develop, construct or
launch any satellites other than the Existing Satellites; provided
that such Indebtedness was permitted to be incurred by the terms of this
Indenture and such Liens do not extend to any assets of the Company or its
Restricted Subsidiaries other than such satellites being developed,
constructed, launched or insured, and to the related licenses, permits and
construction, launch and TT&C contracts;

 

(e)                                  Liens
on orbital slots, licenses and other assets and rights of the Company; provided that such orbital slots, licenses and other assets
and rights relate solely to the satellites referred to in clause (d) of
this definition;

 

(f)                                    Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any of its Restricted Subsidiaries; provided that such Liens were not incurred in connection
with, or in contemplation of, such merger or consolidation, other than in the
ordinary course of business;

 

(g)                                 Liens
on property of an Unrestricted Subsidiary at the time that it is designated as
a Restricted Subsidiary pursuant to the definition of “Unrestricted Subsidiary”;
provided that such Liens were not
incurred in connection with, or contemplation of, such designation;

 

(h)                                 Liens
on property existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary of the Company; provided that
such Liens were not incurred in connection with, or in contemplation of, such
acquisition and do not extend to any assets of the Company or any of its
Restricted Subsidiaries other than the property so acquired;

 

(i)                                     Liens
to secure the performance of statutory obligations, surety or appeal bonds or
performance bonds, or landlords’, carriers’, warehousemen’s, mechanics’,
suppliers’, materialmen’s or other like Liens, in any case incurred in the
ordinary course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate process of law, if a reserve or
other appropriate provision, if any, as is required by GAAP shall have been made
therefor;

 

(j)                                     Liens
existing on the Issue Date;

 

(k)                                  Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor;

 

14

 

(l)                                     Liens
securing Indebtedness permitted under Section 4.09(b)(11); provided that such Liens shall not extend to assets other
than the assets that secure such Indebtedness being refinanced;

 

(m)                               any
interest or title of a lessor under any Capital Lease Obligations; provided that such Capital Lease Obligation is permitted
under the other provisions of this Indenture;

 

(n)                                 Liens
on the Capital Stock of a Receivables Subsidiary and accounts receivable and
related assets described in the definition of Qualified Receivables
Transaction, in each case, incurred in connection with a Qualified Receivables
Transaction;

 

(o)                                 Liens
(other than Liens created or imposed under ERISA) incurred or deposits made by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business in connection with workers’ compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);

 

(p)                                 easements,
rights-of-way, covenants, restrictions (including zoning restrictions), minor
defects or irregularities in title and other similar charges or encumbrances
not, in any material respect, impairing the use of the encumbered property for
its intended purposes;

 

(q)                                 licenses,
sublicenses, leases or subleases granted to others not interfering in any
material respect with the business of the Company or its Restricted
Subsidiaries;

 

(r)                                    Liens
in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods
and Liens deemed to exist in connection with Investments in repurchase
agreements that constitute Permitted Investments;

 

(s)                                  normal
and customary rights of setoff upon deposits of cash in favor of banks or other
depository institutions;

 

(t)                                    Liens
of a collection bank arising under Section 4-210 of the Uniform Commercial
Code on items in the course of collection;

 

(u)                                 Liens
in favor of or by a Financing Subsidiary on the Capital Stock of such Financing
Subsidiary or the customer premise and receiving equipment, accounts
receivables and related assets associated with such equipment;

 

(v)                                 Liens
not provided for in clauses (a) through (u) above securing Indebtedness
incurred in compliance with the terms hereof so long as the Notes are secured
by the assets subject to such Liens on an equal and ratable basis or on a basis
prior to such 

 

15

 

Liens; provided that to the extent that
such Lien secured Indebtedness that is subordinated to the Notes, such Lien
shall be subordinated to and be later in priority than the Notes on the same
basis; and

 

(w)                               extensions,
renewals or refundings of any Liens referred to in clauses (a) through (u)
above; provided that any such extension,
renewal or refunding does not extend to any assets or secure any Indebtedness
not securing or secured by the Liens being extended, renewed or refinanced.

 

“Person” means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust or unincorporated organization (including any subdivision or ongoing
business of any such entity or substantially all of the assets of any such
entity, subdivision or business).

 

“Preferred Equity Interest” in any Person, means an Equity
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.

 

 “Private Placement Legend”
means the legend set forth in Section 2.01 hereof to be placed on all
Notes issued under this Indenture except where otherwise permitted by the provisions
hereof.

 

“Pro Forma Cost Savings” means, with respect to any period,
the reduction in net costs and related adjustments that (i) were directly
attributable to an acquisition, merger, consolidation or disposition that
occurred during the four-quarter reference period or subsequent to the
four-quarter reference period and on or prior to the date of determination and
calculated on a basis that is consistent with Regulation S-X under the Securities
Act as in effect and applied as of the Issue Date, (ii) were actually
implemented by the business that was the subject of any such acquisition,
merger, consolidation or disposition within 12 months after the date of the
acquisition, merger, consolidation or disposition and prior to the date of
determination that are supportable and quantifiable by the underlying
accounting records of such business or (iii) relate to the business that
is the subject of any such acquisition, merger, consolidation or disposition
and that the Company reasonably determines are probable based upon specifically
identifiable actions to be taken within 12 months of the date of the
acquisition, merger, consolidation or disposition and, in the case of each of
(i), (ii) and (iii), are described, as provided below, in an Officers’ Certificate,
as if all such reductions in costs had been effected as of the beginning of
such period.  Pro Forma Cost Savings
described above shall be accompanied by an Officers’ Certificate delivered to
the Trustee from the chief financial officer of the Company that outlines the
actions taken or to be taken, the net cost savings achieved or to be achieved
from such actions and that, in the case of clause (iii) above, such
savings have been determined to be probable.

 

“Purchase Money Indebtedness” means (i) Indebtedness
incurred (within 365 days of such purchase) to finance the purchase of any
assets (including the purchase of Equity Interests of Persons that are not Affiliates
of the Company or the Guarantors):  (a) to
the extent the amount of Indebtedness thereunder does not exceed 100% of the
purchase cost of such assets; and (b) so long as such Indebtedness is
without recourse to the Company or any of its Restricted 

 

16

 

Subsidiaries or any of their respective assets, other than to the
assets so purchased; or (ii) Indebtedness which refinances Indebtedness
referred to in clause (i) of this definition; provided
that such refinancing satisfies subclauses (a) and (b) of such clause
(i).

 

“Purchase Money Note” means a promissory note of a Receivable
Subsidiary to the Company or any Restricted Subsidiary, which note must be
repaid from cash available to the Receivable Subsidiary, other than amounts
required to be established as reserves pursuant to agreements, amounts paid to
investors in respect of interest, principal and other amounts owing to such
investors and amounts paid in connection with the purchase of newly generated
receivables.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Qualified Receivables Transaction” means any transaction or
series of transactions entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or such Restricted Subsidiary sells,
conveys or otherwise transfers (including the grant of a backup security
interest in the assets purported to be transferred for any such sale,
conveyance or transfer) to (a) a Receivables Subsidiary (in the case of a
transfer by the Company or any of the Restricted Subsidiaries) or (b) any
other Person (in the case of a transfer by a Receivables Subsidiary), or grants
a security interest in, any accounts receivable (whether now existing or
arising in the future) of the Company or any of its Restricted Subsidiaries,
and any assets related thereto, including, without limitation, all collateral
securing such accounts receivable, all contracts and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts receivable
and other assets which are customarily transferred or in respect of which
security interests are customarily granted in connection with an accounts
receivable financing transaction; provided such transaction is on market terms
at the time the Company or such Restricted Subsidiary enters into such
transaction.

 

“Rating Agencies” means:

 

(a)                                  S&P;

 

(b)                                 Moody’s;
or

 

(c)                                  if
S&P or Moody’s or both shall not make a rating of the Notes publicly
available, a nationally recognized securities rating agency or agencies, as the
case may be, selected by the Company, which shall be substituted for S&P or
Moody’s or both, as the case may be.

 

“Rating Category” means:

 

(a)                                  with
respect to S&P, any of the following categories: BB, B, CCC, CC, C and D
(or equivalent successor categories);

 

(b)                                 with
respect to Moody’s, any of the following categories: Ba, B, Caa, Ca, C and D
(or equivalent successor categories); and

 

17

 

(c)                                  the
equivalent of any such category of S&P or Moody’s used by another Rating
Agency.

 

In determining
whether the rating of the Notes has decreased by one or more gradation,
gradations within Rating Categories (+ and - for S&P; 1, 2 and 3 for Moody’s;
or the equivalent gradations for another Rating Agency) shall be taken into
account (e.g., with respect to S&P, a decline
in a rating from BB+ to BB, as well as from BB- to B+, will constitute a
decrease of one gradation).

 

“Rating Decline” shall be deemed to occur if, at the time of
or in connection with the occurrence of a Change of Control, the rating of the
Notes by either Rating Agency shall be decreased by one or more gradations
(including gradations within Rating Categories as well as between Rating
Categories), and such decrease is directly attributable, in whole or in part,
to such Change of Control.

 

“Receivable Fees” means distributions or payments made
directly or by means of discounts with respect to any participation interest
issued or sold in connection with, and other fees paid to a Person that is not
a Restricted Subsidiary in connection with, any Qualified Receivables Financing.

 

“Receivables Repurchase Obligation” means any obligation of a
seller of receivables in a Qualified Receivables Financing to repurchase
receivables arising as a result of a breach of a representation, warranty or
covenant or otherwise, including as a result of a receivable or portion thereof
becoming subject to any asserted defense, dispute, off-set or counterclaim of
any kind as a result of any action taken by, any failure to take action by or
any other event relating to the seller.

 

“Receivables Subsidiary” means a Subsidiary of the Company:

 

(1)                                  that
is formed solely for the purpose of, and that engages in no activities other
than activities in connection with, financing accounts receivable of the
Company and/or its Restricted Subsidiaries;

 

(2)                                  that
is designated by the Company as a Receivables Subsidiary and that has total
assets at the time of such creation and designation with a book value of
$10,000 or less;

 

(3)                                  no
portion of the Indebtedness or any other obligation (contingent or otherwise)
of which (a) is at any time guaranteed by the Company or any Restricted
Subsidiary (excluding guarantees of obligations (other than any guarantee of
Indebtedness) pursuant to Standard Securitization Undertakings), (b) is at
any time recourse to or obligates the Company or any Restricted Subsidiary in
any way, other than pursuant to Standard Securitization Undertakings or (c) subjects
any asset of the Company or any other Restricted Subsidiary, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings (such Indebtedness, “Non-Recourse Receivables Subsidiary Indebtedness”);

 

18

 

(4)                                  with
which neither the Company nor any Restricted Subsidiary has any material
contract, agreement, arrangement or understanding other than contracts,
agreements, arrangements and understandings entered into in the ordinary course
of business on terms no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from persons that are
not the Company’s Affiliates in connection with a Qualified Receivables
Transaction and fees payable in the ordinary course of business in connection
with servicing accounts receivable in connection with such a Qualified Receivables
Transaction; and

 

(5)                                  with
respect to which neither the Company nor any Restricted Subsidiary has any
obligation (a) to subscribe for additional shares of Capital Stock therein
or make any additional capital contribution or similar payment or transfer
thereto or (b) to maintain or preserve the solvency or any balance sheet
term, financial condition, level of income or results of operations thereof.

 

“Registration Rights Agreement” means the Registration Rights
Agreement for the Initial Notes, dated as of June 15, 2005, by and among
the Issuers, the Guarantors and the Initial Purchasers, as such agreement may
be amended, modified or supplemented from time to time.

 

“Regulation S” means Regulation S promulgated under the
Securities Act.

 

“Regulation S Global Note” means a Global Note bearing the
Private Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.

 

“Responsible Officer,” when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.

 

“Restricted Definitive Note” means a Definitive Note bearing
the Private Placement Legend.

 

“Restricted Global Note” means a Global Note bearing the
Private Placement Legend.

 

“Restricted Investment” means an Investment other than a
Permitted Investment.

 

“Restricted Period” means the 40-day distribution compliance
period as defined in Regulation S.

 

“Restricted Subsidiary” or “Restricted
Subsidiaries” means any corporation, limited liability company,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, 

 

19

 

directly or indirectly, by the Company or one or more Subsidiaries of
the Company or a combination thereof, other than Unrestricted Subsidiaries.

 

“Rule 144” means Rule 144 promulgated under the
Securities Act.

 

“Rule 144A” means Rule 144A promulgated under the
Securities Act.

 

“Rule 903” means Rule 903 promulgated under the
Securities Act.

 

“Rule 904” means Rule 904 promulgated under the
Securities Act.

 

“S&P” means Standard & Poor’s Rating Services, a
division of The McGraw-Hill Companies, Inc., and its subsidiaries.

 

“SEC” means the Securities and Exchange Commission.

 

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

 

“Senior Secured Credit Facility” means any credit agreement
to which the Company and/or one or more of its Restricted Subsidiaries is party
from time to time including without limitation the credit agreement dated as of
April 13, 2005 by and among the Company, as borrower, the lenders party
thereto from time to time, Bank of America N.A., as administrative agent, and
JPMorgan Chase Bank, N.A., as syndication agent, together with the related
documents thereto (including, without limitation, any guarantee agreements and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented or otherwise modified from
time to time, including any agreement exchanging, extending the maturity of,
refinancing, renewing, replacing, substituting or otherwise restructuring,
whether in the bank or debt capital markets (or combination thereof) (including
increasing the amount of available borrowings thereunder (provided
that such increase in borrowings is permitted by Section 4.09) or adding
Subsidiaries as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.

 

“Shelf Registration Statement” means the Shelf Registration
Statement as defined in the Registration Rights Agreement.

 

“Significant Subsidiary” means any Subsidiary that would be a
“significant subsidiary” as defined in Article 1, Rule 1-02 of
Regulation S-X promulgated pursuant to the Securities Act, as such regulation
is in effect on the Issue Date; provided, however, that neither a Receivables Subsidiary nor a
Financing Subsidiary shall be considered to be a “Significant Subsidiary.”

 

“Specified Affiliate Payments” means, to the extent
constituting a Restricted Payment, amounts paid by the Company to Parent or any
other Person with which the Company is included in a consolidated tax return
equal to the amount of federal, state and local income taxes payable in respect
of the income of the Company and its Subsidiaries, including without limitation
any payments made in accordance with tax allocation agreements between the
Company and Parent in effect on the Issue Date.

 

20

 

“Standard Securitization Undertakings” means representations,
warranties, covenants, indemnities and guarantees of performance entered into
by the Company or any Restricted Subsidiary which are reasonably customary in
an accounts receivable or equipment lease financing securitization transaction,
including, without limitation, those relating to the servicing of the assets of
a Receivables Subsidiary or a Financing Subsidiary, it being understood that
any Receivables Repurchase Obligation which is customary for off-balance sheet
receivables financing shall be deemed to be a Standard Securitization
Undertaking.

 

“Subsidiary” or “Subsidiaries”
means, with respect to any Person, any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of such Person or a combination thereof.

 

“TIA” means the Trust Indenture Act of 1939 as in effect on
the date hereof.

 

“Trailing Cash Flow Amount” means the Company’s Consolidated
Cash Flow during the most recent four fiscal quarters for which financial
statements are available; provided that
Consolidated Cash Flow shall be calculated giving pro forma effect to any
acquisitions or Asset Sales or other dispositions of assets, including any Pro
Forma Cost Savings, as if the same had occurred at the beginning of the
applicable period.

 

“Treasury Rate” means, at the time of computation, the yield
to maturity of United States Treasury Securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the redemption date or, if such Statistical Release is no longer published,
any publicly available source of similar market data) most nearly equal to the
period from the redemption date to June 15, 2010; provided,
however, that if the period from the
redemption date to June 15, 2010 is not equal to the constant maturity of
a United States Treasury Security for which a weekly average yield is given,
the Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury Securities for which such yields are given, except that if the period
from the redemption date to June 15, 2010 is less than one year, the
weekly average yield on actually traded United States Treasury Securities
adjusted to a constant maturity of one year shall be used.

 

“Trustee” means the party named as such above until a
successor replaces it in accordance with the applicable provisions hereof and
thereafter means the successor serving hereunder.

 

“TT&C” means telemetry, tracking and control.

 

“Unrestricted Definitive Note” means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.

 

“Unrestricted Global Note” means a permanent Global Note
substantially in the form of Exhibit A attached hereto that bears
the Global Note Legend and that has the “Schedule of Exchanges of
Interests in the Global Note” attached thereto, and that is deposited with or
on behalf of and registered in the name of the Depositary, representing Notes
that do not bear the Private Placement Legend.

 

21

 

“Unrestricted Subsidiary” or “Unrestricted
Subsidiaries” means:  (A) RSG
Resources Supply GmbH; (B) any Subsidiary designated as an Unrestricted
Subsidiary in a resolution of the Company’s Board of Directors in accordance
with the instructions set forth below; and (C) any Subsidiary of an
Unrestricted Subsidiary.

 

The Company’s
Board of Directors may designate any Subsidiary (including any newly acquired
or newly formed Subsidiary) to be an Unrestricted Subsidiary so long as:

 

(a)                                  no
portion of the Indebtedness or any other obligation (contingent or otherwise)
of which, immediately after such designation: 
(i) is guaranteed by the Company or any other Subsidiary of the
Company (other than another Unrestricted Subsidiary); (ii) is recourse to
or obligates the Company or any other Subsidiary of the Company (other than
another Unrestricted Subsidiary) in any way; or (iii) subjects any
property or asset of the Company or any other Subsidiary of the Company (other
than another Unrestricted Subsidiary), directly or indirectly, contingently or
otherwise, to satisfaction thereof;

 

(b)                                 with
which neither the Company nor any other Subsidiary of the Company (other than
another Unrestricted Subsidiary) has any contract, agreement, arrangement,
understanding or is subject to an obligation of any kind, written or oral,
other than on terms no less favorable to the Company or such other Subsidiary
than those that might be obtained at the time from Persons who are not Affiliates
of the Company; and

 

(c)                                  with
which neither the Company nor any other Subsidiary of the Company (other than
another Unrestricted Subsidiary) has any obligation:  (i) to subscribe for additional shares of
Capital Stock or other equity interests therein; or (ii) to maintain or
preserve such Subsidiary’s financial condition or to cause such Subsidiary to
achieve certain levels of operating results.

 

If at any time
after the Issue Date the Company designates an additional Subsidiary as an
Unrestricted Subsidiary, the Company will be deemed to have made a Restricted
Investment in an amount equal to the fair market value (as determined in good faith
by the Board of Directors of the Company evidenced by a resolution of the Board
of Directors of the Company and set forth in an Officers’ Certificate delivered
to the Trustee no later than ten Business Days following a request from the
Trustee, which certificate shall cover the six months preceding the date of the
request) of such Subsidiary.  An
Unrestricted Subsidiary may be designated as a Restricted Subsidiary if, at the
time of such designation after giving pro forma effect thereto, no Default or
Event of Default shall have occurred or be continuing.

 

“U.S. Person” means a U.S. Person as defined in Rule 902(k)
under the Securities Act.

 

“Weighted Average Life to Maturity” means, when applied to
any Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.

 

22

 

“Wholly Owned Restricted Subsidiary” means a Wholly Owned
Subsidiary of the Company that is a Restricted Subsidiary.

 

“Wholly Owned Subsidiary” means, with respect to any Person,
any Subsidiary all of the outstanding voting stock (other than directors’
qualifying shares) of which is owned by such Person, directly or indirectly.

 

SECTION 1.02.                                         Other
Definitions.

 

	
  Term

  	
   

  	
  Defined

  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  	
   

  
	
  “Asset Sale”

  	
   

  	
  4.10

  	
   

  
	
  “Change of Control Offer”

  	
   

  	
  4.15

  	
   

  
	
  “Change of Control Payment”

  	
   

  	
  4.15

  	
   

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.15

  	
   

  
	
  “Company”

  	
   

  	
  Preamble

  	
   

  
	
  “Covenant Defeasance”

  	
   

  	
  8.04

  	
   

  
	
  “DTC”

  	
   

  	
  2.01(b)

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  	
   

  
	
  “Excess Proceeds Offer”

  	
   

  	
  3.08(a)

  	
   

  
	
  “Global Note Legend

  	
   

  	
  2.01(b)

  	
   

  
	
  “incur”

  	
   

  	
  4.09

  	
   

  
	
  “Issuers”

  	
   

  	
  Preamble

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.03

  	
   

  
	
  “Offer Amount”

  	
   

  	
  3.08(b)

  	
   

  
	
  “Offer Period”

  	
   

  	
  3.08(b)

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Payment Default”

  	
   

  	
  6.01(e)

  	
   

  
	
  “Permitted Refinancing”

  	
   

  	
  4.09(b)

  	
   

  
	
  “Private Placement Legend”

  	
   

  	
  2.01(c)

  	
   

  
	
  “Purchase Date”

  	
   

  	
  3.08(b)

  	
   

  
	
  “Refinancing Indebtedness”

  	
   

  	
  4.09(b)(ii)

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Restricted Payments”

  	
   

  	
  4.07

  	
   

  

 

SECTION 1.03.                                         Incorporation
by Reference of Trust Indenture Act.

 

Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part hereof.

 

23

 

The following
TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes;

 

“indenture security holder” means a Holder of a Note;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the
Trustee; and

 

“obligor” on the Notes means each of the Issuers and any
successor obligor upon the Notes.

 

All other
terms used in this Indenture that are defined by the TIA, defined by reference
to another statute or defined by SEC rule under the TIA have the meanings
so assigned to them.

 

SECTION 1.04.                                         Rules of
Construction.

 

Unless the
context otherwise requires,

 

(1)                a term has the
meaning assigned to it;

 

(2)                an accounting term
not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3)                “or” is not exclusive;

 

(4)                words in the
singular include the plural, and in the plural include the singular; and

 

(5)                provisions apply
to successive events and transactions.

 

SECTION 1.05.                                         Acts
of Holders; Record Dates.

 

(a)                                                                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders shall be
embodied in and evidenced by one or more instruments of substantially similar tenor
signed by such Holders in Person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Issuers.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose hereof
and conclusive in favor of the Trustee and the Issuers, if made in the manner
provided in this Section 1.05.

 

(b)                                                                                 The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to such Person the execution thereof.  Where such execution is by a signer acting in
a capacity other than such Person’s individual

 

24

capacity, such certificate or
affidavit shall also constitute sufficient proof of such Person’s
authority.  The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.

 

(c)                                  The
Issuers may, in the circumstances permitted by the TIA, fix any date as the
record date for the purpose of determining the Holders entitled to give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or take
by Holders.  If not set by the Issuers
prior to the first solicitation of a Holder made by any Person in respect of
any such action, or, in the case of any such vote, prior to such vote, the
record date for any such action or vote shall be the 30th day (or, if later,
the date of the most recent list of Holders required to be provided pursuant to
Section 2.05 hereof) prior to such first solicitation or vote, as the case
may be.  With regard to any record date,
only the Holders on such date (or their duly designated proxies) shall be
entitled to give or take, or vote on, the relevant action.

 

ARTICLE 2

THE NOTES

 

SECTION 2.01.                                         Form and
Dating.

 

(a)                                  The
Notes and the Trustee’s certificate of authentication shall be substantially in
the form of Exhibit A hereto, the terms of which are incorporated
in and made a part hereof.  The Notes may
have notations, legends or endorsements approved as to form by the Issuers, and
required by law, stock exchange rule, agreements to which the Issuers are
subject or usage.  Each Note shall be
dated the date of its authentication. 
The Notes shall be issuable only in denominations of $1,000 and integral
multiples thereof.

 

(b)                                 The
Notes shall initially be issued in the form of one or more Global Notes and the
Depository Trust Company (“DTC”), its
nominees, and their respective successors, shall act as the Depositary with
respect thereto.  Each Global Note shall (i) be
registered in the name of the Depositary for such Global Note or the nominee of
such Depositary, (ii) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary’s instructions, and (iii) shall bear a
legend (the “Global Note Legend”)
substantially to the following effect:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE ISSUERS OR THEIR
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

25

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY.  THIS NOTE IS NOT EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

(c)                                  Except
as permitted by Section 2.06(g) hereof, any Note not registered under
the Securities Act shall bear the following legend (the “Private
Placement Legend”) on the face thereof:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
AGREES ON ITS OWN BEHALF AND ON BEHALF IF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL 

 

26

 

BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR”
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT TO THE ISSUER’S AND THE
TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.

 

The Trustee
must refuse to register any transfer of a Note bearing the Private Placement
Legend that would violate the restrictions described in such legend.

 

SECTION 2.02.                                         Form of
Execution and Authentication.

 

An Officer
shall sign the Notes for each Issuer by manual or facsimile signature.

 

If an Officer
whose signature is on a Note no longer holds that office at the time the Note
is authenticated, the Note shall nevertheless be valid.

 

A Note shall
not be valid until authenticated by the manual signature of the Trustee.  The signature of the Trustee shall be conclusive
evidence that the Note has been authenticated under this Indenture.

 

The Trustee
shall authenticate (i) Initial Notes for original issue on the Issue Date
in an aggregate principal amount of $1.0 billion, (ii) pursuant to
the Exchange Offer, Exchange Notes from time to time for issue only in exchange
for a like principal amount of Initial Notes and (iii) subject to
compliance with Section 4.09 hereof, one or more series of Notes for
original issue after the Issue Date (such Notes to be substantially in the form
of Exhibit A) in an unlimited amount (and if issued with a Private
Placement Legend, the same principal amount of Exchange Notes in exchange
therefor upon consummation of a registered exchange offer), in each case upon
written orders of the Issuers in the form of an Officers’ Certificate, which
Officers’ Certificate shall, in the case of any issuance pursuant to clause (iii) above,
certify that such issuance is in compliance with Section 4.09 hereof.  In addition, each such Officers’ Certificate
shall specify the amount of Notes to be authenticated, the date on which the
Notes are to be authenticated, 

 

27

 

whether the
Securities are to be Initial Notes, Exchange Notes or Notes issued under clause
(iii) of the preceding sentence and the aggregate principal amount of
Notes outstanding on the date of authentication, and shall further specify the
amount of such Notes to be issued as a Global Note or Definitive Notes.  Such Notes shall initially be in the form of
one or more Global Notes, which (i) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, the Notes
to be issued, (ii) shall be registered in the name of the Depositary for
such Global Note or Notes or its nominee and (iii) shall be delivered by
the Trustee to the Depositary or pursuant to the Depositary’s instruction.  All Notes issued under this Indenture shall
vote and consent together on all matters as one class and no series of Notes
will have the right to vote or consent as a separate class on any matter.

 

The Trustee
may appoint an authenticating agent acceptable to the Issuers to authenticate
Notes.  Unless limited by the terms of
such appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as an Agent to deal with the Issuers or any Affiliate of the
Issuers.

 

SECTION 2.03.                                         Registrar
and Paying Agent.

 

The Issuers
shall maintain (i) an office or agency where Notes may be presented for
registration of transfer or for exchange (including any co-registrar, the “Registrar”) and (ii) an office or agency where Notes may
be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the
Notes and of their transfer and exchange. 
The Issuers may appoint one or more co-registrars and one or more
additional paying agents.  The term “Paying
Agent” includes any additional paying agent. 
The Issuers may change any Paying Agent, Registrar or co-registrar
without prior notice to any Holder of a Note. 
The Issuers shall notify the Trustee in writing and the Trustee shall
notify the Holders of the Notes of the name and address of any Agent not a
party to this Indenture.  The Issuers may
act as Paying Agent, Registrar or co-registrar. 
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA.  The agreement shall implement
the provisions hereof that relate to such Agent.  The Issuers shall notify the Trustee in
writing of the name and address of any such Agent.  If the Issuers fail to maintain a Registrar
or Paying Agent, or fail to give the foregoing notice, the Trustee shall act,
at the written direction of the Issuers, as such, and shall be entitled to
appropriate compensation in accordance with Section 7.07 hereof.

 

The Issuers
initially appoint the Trustee as Registrar, Paying Agent and agent for service
of notices and demands in connection with the Notes.

 

SECTION 2.04.                                         Paying
Agent To Hold Money in Trust.

 

The Issuers
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent shall hold in trust for the benefit of the Holders of the
Notes or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, and interest on the Notes, and shall notify the
Trustee in writing of any Default by the Issuers in making any such payment.  While any such Default continues, the Trustee
may require a Paying Agent to pay all money held by it to the Trustee.  The Issuers at any time may require a Paying
Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the 

 

28

 

Paying Agent
(if other than an Issuer) shall have no further liability for the money
delivered to the Trustee.  If an Issuer
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders of the Notes all money held by them as Paying Agent.

 

SECTION 2.05.                                         Lists
of Holders of the Notes.

 

The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Holders of the Notes
and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, the
Issuers shall furnish to the Trustee at least seven Business Days before each interest
payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Holders of the Notes, including the aggregate
principal amount of the Notes held by each thereof, and the Issuers shall otherwise
comply with TIA § 312(a).

 

SECTION 2.06.                                         Transfer
and Exchange.

 

(a)                                  Transfer and Exchange of Global Notes. 
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary, or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.  Beneficial interests in
Global Notes will be exchanged by the Issuers for Definitive Notes, subject to
any applicable laws, if (i) requested by a Holder of a beneficial
ownership in the Global Notes or (ii) the Issuers deliver to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary and a successor Depositary is not appointed by the Issuers within 90
days after the date of such written notice from the Depositary.  In any such case, the Issuers will notify the
Trustee in writing that, upon surrender by the Direct Participants and Indirect
Participants of their interest in such Global Note, Certificated Notes will be
issued to each Person that such Direct Participants and Indirect Participants
and DTC identify as being the beneficial owner of the related Notes.  Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.07 and 2.10
hereof.  Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall
be authenticated and delivered in the form of, and shall be, a Global
Note.  A Global Note may not be exchanged
for another Note other than as provided in this Section 2.06.  However, beneficial interests in a Global Note
may be transferred and exchanged as provided in paragraph (b), (c) or (f) below.

 

(b)                                 Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial
interests in the Global Notes shall be effected through the Depositary, in
accordance with the provisions hereof and the Applicable Procedures.  Beneficial interests in the Restricted Global
Notes shall be subject to restrictions on transfer comparable to those set
forth in this Indenture to the extent required by the Securities Act.  Transfers of beneficial interests in the
Global Notes also shall require compliance with either subparagraph (i) or
(ii) below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:

 

(i)                  Transfer of Beneficial
Interests in the Same Global Note. 
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery 

 

29

 

thereof in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set forth in the
Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, no transfer of
beneficial interests in the Regulation S Global Note may be made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser) unless permitted by applicable law and made in compliance with
subparagraphs (ii) and (iii) below. 
Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note.  No written
orders or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this subparagraph (i) unless
specifically stated above.

 

(ii)               All Other Transfers and
Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and
exchanges of beneficial interests that are not subject to subparagraph (i) above,
the transferor of such beneficial interest must deliver to the Registrar either
(A) (1) a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant account
to be credited with such increase or, (B) (1) if Definitive Notes are
at such time permitted to be issued pursuant to this Indenture, a written order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange referred
to in (1) above.  Upon consummation
of an Exchange Offer by the Issuers in accordance with paragraph (f) below,
the requirements of this subparagraph (ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in the
Letter of Transmittal delivered by the Holder of such beneficial interests in
the Restricted Global Notes.  Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to paragraph (h) below.

 

(iii)            Transfer of Beneficial
Interests to Another Restricted Global Note.  A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of subparagraph (ii) above and the
Registrar receives the following:

 

(A)                              if the transferee will
take delivery in the form of a beneficial interest in the 144A Global Note, then
the transferor must deliver a certificate in the form of Exhibit C
hereto, including the certifications in item (1) thereof; and

 

30

 

(B)                                if the transferee will
take delivery in the form of a beneficial interest in the Regulation S Global
Note, then the transferor must deliver a certificate in the form of Exhibit C
hereto, including the certifications in item (2) thereof.

 

(iv)           Transfer and Exchange of
Beneficial Interests in a Restricted Global Note for Beneficial Interests in an
Unrestricted Global Note.  A
beneficial interest in any Restricted Global Note may be exchanged by any
Holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note if the exchange or transfer complies
with the requirements of subparagraph (ii) above and

 

(A)                              such exchange or transfer
is effected pursuant to the Exchange Offer in accordance with the Registration
Rights Agreement and the Holder of the beneficial interest to be transferred,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an “affiliate” (as defined in Rule 144)
of the Issuers;

 

(B)                                such transfer is
effected pursuant to a Shelf Registration Statement in accordance with the
Registration Rights Agreement;

 

(C)                                such transfer is
effected by a Broker-Dealer pursuant to an Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receives
the following:

 

(y)                                 if
the Holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit D
hereto, including the certifications in item (1)(a) thereof, or

 

(z)                                   if
the Holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (4) thereof;

 

and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained in this
Indenture and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.

 

31

 

If any such
transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the aggregate principal amount of
beneficial interests transferred pursuant to subparagraph (B) or (D) above.

 

Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.

 

(c)                                  Transfer or Exchange of Beneficial Interests for Definitive Notes.

 

(i)                                     Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes.  If any
Holder of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Restricted Definitive Note, then, upon receipt by the Registrar of
the following documentation:

 

(A)                              if
the Holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such Holder in the form of Exhibit D hereto,
including the certifications in item (2)(a) thereof;

 

(B)                                if
such beneficial interest is being transferred to a QIB in accordance with Rule 144A
under the Securities Act, a certificate to the effect set forth in Exhibit C
hereto, including the certifications in item (1) thereof;

 

(C)                                if
such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit C
hereto, including the certifications in item (2) thereof;

 

(D)                               if
such beneficial interest is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth in Exhibit C
hereto, including the certifications in item (3)(a) thereof;

 

(E)                                 if
such beneficial interest is being transferred to the Issuers or any of their
Subsidiaries, a certificate to the effect set forth in Exhibit C
hereto, including the certifications in item (3)(b) thereof; or

 

(F)                                 if
such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect
set forth in Exhibit C hereto, including the certifications in item
(3)(c) thereof,

 

the Trustee shall
cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to paragraph (h) below, and the Issuers shall
execute and the Trustee shall authenticate and deliver to the Person designated
in the instructions a Restricted Definitive 

 

32

 

Note in the
appropriate principal amount.  Any
Restricted Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this paragraph (c) shall be registered
in such name or names and in such authorized denomination or denominations as
the Holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant.  The Trustee shall deliver
such Restricted Definitive Notes to the Persons in whose names such Notes are
so registered.  Any Restricted Definitive
Note issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this subparagraph (i) shall bear the Private Placement Legend
and shall be subject to all restrictions on transfer contained therein.

 

(ii)                                  Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes.  A Holder of
a beneficial interest in a Restricted Global Note may exchange such beneficial
interest for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if

 

(A)                              such
exchange or transfer is effected pursuant to an Exchange Offer in accordance
with the Registration Rights Agreement and the Holder of such beneficial
interest, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an “affiliate” (as defined in Rule 144)
of the Issuers;

 

(B)                                such
transfer is effected pursuant to a Shelf Registration Statement in accordance
with the Registration Rights Agreement;

 

(C)                                such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the
Registrar receives the following:

 

(y)                                 if
the Holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such Holder in the form of Exhibit D
hereto, including the certifications in item (1)(b) thereof; or

 

(z)                                   if
the Holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (4) thereof,

 

and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained in this
Indenture and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.

 

33

 

If any such
transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the aggregate principal amount of
beneficial interests transferred pursuant to subparagraph (B) or (D) above.

 

(iii)                               Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes.  If any
Holder of a beneficial interest in an Unrestricted Global Note proposes to exchange
such beneficial interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in subparagraph (b)(ii) above,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to paragraph (h) below, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount.  Any Definitive Note
issued in exchange for a beneficial interest pursuant to this subparagraph (c)(iii) shall
be registered in such name or names and in such authorized denomination or
denominations as the Holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant.  The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered.  Any Definitive Note issued
in exchange for a beneficial interest pursuant to this subparagraph (c)(iii) shall
not bear the Private Placement Legend.

 

(d)                                 Transfer and Exchange of Definitive Notes for Beneficial Interests.

 

(i)                                     Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes.  If any Holder
of a Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the Registrar of
the following documentation:

 

(A)                              if
the Holder of such Restricted Definitive Note proposes to exchange such Note
for a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit D hereto, including the
certifications in item (2)(b) thereof;

 

(B)                                if
such Restricted Definitive Note is being transferred to a QIB in accordance
with Rule 144A under the Securities Act, a certificate to the effect set
forth in Exhibit C hereto, including the certifications in item (1) thereof;
or

 

(C)                                if
such Restricted Definitive Note is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit C
hereto, including the certifications in item (2) thereof,

 

the Trustee
shall cancel the Restricted Definitive Note, increase or cause to be increased
the aggregate principal amount of, in the case of clause (A) above, the
appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, and in the case of clause (C) above, the Regulation S
Global Note.

 

34

 

(ii)                                  Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes.  A Holder of a
Restricted Definitive Note may exchange such Note for a beneficial interest in
an Unrestricted Global Note or transfer such Restricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if

 

(A)                              such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange Notes or (3) a
Person who is an “affiliate” (as defined in Rule 144) of the Issuers;

 

(B)                                such
transfer is effected pursuant to a Shelf Registration Statement in accordance
with the Registration Rights Agreement;

 

(C)                                such
transfer is effected by a Broker-Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the
Registrar receives the following:

 

(y)                                 if
the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit D hereto, including the certifications in item (1)(c) thereof;
or

 

(z)                                   if
the Holder of such Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained in this
Indenture and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.

 

Upon
satisfaction of the conditions of any of the subparagraphs in this subparagraph
(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to
be increased the aggregate principal amount of the Unrestricted Global Note.

 

(iii)                               Unrestricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes.  A Holder of an
Unrestricted Definitive Note may exchange such Note for a beneficial interest
in an Unrestricted Global Note or transfer such Unrestricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note at any time. 
Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Note and increase or cause
to be increased the aggregate principal amount of one of the Unrestricted
Global Notes.

 

35

 

If any such
exchange or transfer from an Unrestricted Definitive Note or a Restricted
Definitive Note, as the case may be, to a beneficial interest is effected
pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time
when an Unrestricted Global Note has not yet been issued, the Issuers shall
issue and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of Unrestricted
Definitive Notes or Restricted Definitive Notes, as the case may be, so
transferred.

 

(e)                                  Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes
and such Holder’s compliance with the provisions of this paragraph (e), the
Registrar shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. 
In addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following provisions
of this paragraph (e).

 

(i)                  Restricted Definitive
Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may be transferred
to and registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the following:

 

(A)                              if the transfer will be
made pursuant to Rule 144A under the Securities Act, then the transferor
must deliver a certificate in the form of Exhibit C hereto,
including the certifications in item (1) thereof;

 

(B)                                if the transfer will be
made pursuant to Rule 903 or Rule 904, then the transferor must
deliver a certificate in the form of Exhibit C hereto, including
the certifications in item (2) thereof; and

 

(C)                                if the transfer will be
made pursuant to any other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate in the form of Exhibit C
hereto, including, if the Registrar so requests, a certification or Opinion of
Counsel in form reasonably acceptable to the Issuers to the effect that such
transfer is in compliance with the Securities Act.

 

(ii)                                  Restricted
Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be exchanged
by the Holder thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if

 

(A)                              such exchange or transfer
is effected pursuant to an Exchange Offer in accordance with the Registration
Rights Agreement and the Holder, in the case of an exchange, or the transferee,
in the case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating 

 

36

 

in the distribution of the Exchange Notes or (3) a Person who is
an “affiliate” (as defined in Rule 144) of the Issuers;

 

(B)                                any such transfer is
effected pursuant to a Shelf Registration Statement in accordance with the Registration
Rights Agreement;

 

(C)                                any such transfer is
effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receives
the following:

 

(y)                                 if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for an Unrestricted Definitive Note, a certificate from such Holder in the form
of Exhibit D hereto, including the certifications in item (1)(d) thereof;
or

 

(z)                                   if
the Holder of such Restricted Definitive Notes proposes to transfer such Notes
to a Person who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this
subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Issuers to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained in this Indenture and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act.

 

(iii)                               Unrestricted
Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note.  Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.

 

(f)                                    Exchange Offer.  Upon
the occurrence of an Exchange Offer in accordance with the Registration Rights
Agreement, the Issuers shall issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one
or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that make the certifications in the
applicable Letters of Transmittal required by Section 2(a) of the
Registration Rights Agreement, and accepted for exchange in an Exchange Offer
and (ii) Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in an
Exchange Offer.  Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Restricted Definitive Notes so accepted
Unrestricted Definitive Notes in the appropriate principal amount.

 

37

 

(g)                                 Legends.  The
following legends shall appear on the face of all Global Notes and Definitive
Notes issued under this Indenture unless specifically stated otherwise in the
applicable provisions hereof.

 

(i)                                     Private Placement Legend.

 

(A)                              Except as permitted by
subparagraph (B) below, each Global Note (other than an Unrestricted
Global Note) and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the Private Placement Legend.

 

(B)                                Notwithstanding the
foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs
(b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of
this Section 2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.

 

(ii)                                  Global Note
Legend.  Each Global Note
shall bear the Global Note Legend.

 

(h)                                 Cancellation and/or Adjustment of Global Notes.  At such time as all beneficial interests in a
particular Global Note have been exchanged for Definitive Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in
part, each such Global Note shall be returned to or retained and canceled by
the Trustee in accordance with Section 2.11 hereof.  At any time prior to such cancellation, if
any beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such reduction; and if the beneficial interest is
being exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note, such other Global
Note shall be increased accordingly and an endorsement shall be made on such
Global Note by the Trustee or by the Depositary at the direction of the Trustee
to reflect such increase.

 

(i)                                     General Provisions Relating to Transfers and Exchanges.

 

(i)                  To permit registrations of transfers
and exchanges, the Issuers shall execute and the Trustee shall authenticate
Global Notes and Definitive Notes upon the Issuers’ order or at the Registrar’s
request.

 

(ii)               No service charge shall be made to a
Holder of a beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Issuers may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections
2.10, 3.06, 3.08 and 9.05 hereof).

 

38

 

(iii)            The Registrar shall not be required to
register the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in part.

 

(iv)           All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Issuers, evidencing the same debt,
and entitled to the same benefits hereof, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.

 

(v)              The Issuers shall not be required (A) to
issue, to register the transfer of or to exchange any Notes during a period
beginning at the opening of business on a Business Day 15 days before the day
of any selection of Notes for redemption under Section 3.02 hereof and
ending at the close of business on the day of selection or (B) to register
the transfer of or to exchange any Note so selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in part.

 

(vi)           Prior to due presentment for the
registration of a transfer of any Note, the Trustee, any Agent and the Issuers
may deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of principal
of and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Issuers shall be affected by notice to the contrary.

 

(vii)        The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02 hereof.

 

(viii)     All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by facsimile.

 

SECTION 2.07.                                         Replacement
Notes.

 

If any
mutilated Note is surrendered to the Trustee, or the Issuers and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, the Issuers shall issue and the Trustee, upon the written order of the
Issuers signed by two Officers of each Issuer, shall authenticate a replacement
Note if the Trustee’s requirements for replacements of Notes are met.  If required by the Trustee or the Issuers, an
indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Issuers to protect the Issuers, the Trustee,
any Agent or any authenticating agent from any loss which any of them may suffer
if a Note is replaced.  The Issuers and
the Trustee may charge for its expenses in replacing a Note.

 

Every
replacement Note is a joint and several obligation of the Issuers.

 

SECTION 2.08.                                         Outstanding
Notes.

 

The Notes
outstanding at any time are all the Notes authenticated by the Trustee except
for those canceled by it, those delivered to it for cancellation and those
described in this Section 2.08 as not outstanding.

 

39

 

If a Note is
replaced pursuant to Section 2.07 hereof, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a protected purchaser.

 

If the
principal amount of any Note is considered paid under Section 4.01 hereof,
it shall cease to be outstanding and interest on it shall cease to accrue.

 

Subject to Section 2.09
hereof, a Note does not cease to be outstanding because the Issuers, a
Subsidiary of the Issuers or an Affiliate of the Issuers holds the Note.

 

SECTION 2.09.                                         Treasury
Notes.

 

In determining
whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Issuers, any Subsidiary of
the Issuers or any Affiliate of the Issuers shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only Notes
which a Responsible Officer knows to be so owned shall be so considered.  Notwithstanding the foregoing, Notes that are
to be acquired by the Issuers, any Subsidiary of the Issuers or an Affiliate of
the Issuers pursuant to an exchange offer, tender offer or other agreement
shall not be deemed to be owned by the Issuers, a Subsidiary of the Issuers or
an Affiliate of the Issuers until legal title to such Notes passes to the
Issuers, such Subsidiary or such Affiliate, as the case may be.

 

SECTION 2.10.                                         Temporary
Notes.

 

Until
definitive Notes are ready for delivery, the Issuers may prepare and the Trustee
shall authenticate temporary Notes. 
Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Issuers and the Trustee consider appropriate
for temporary Notes.  Without
unreasonable delay, the Issuers shall prepare and the Trustee, upon receipt of
the written order of the Issuers signed by two Officers of the Issuers, shall authenticate
definitive Notes in exchange for temporary Notes.  Until such exchange, temporary Notes shall be
entitled to the same rights, benefits and privileges as definitive Notes.

 

SECTION 2.11.                                         Cancellation.

 

The Issuers at
any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment.  The Trustee shall
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall dispose of all canceled Notes in its customary
manner (subject to the record retention requirement of the Exchange Act),
unless the Issuers direct canceled Notes to be returned to them.  The Issuers may not issue new Notes to
replace Notes that they have redeemed or paid or that have been delivered to
the Trustee for cancellation.  All
canceled Notes held by the Trustee shall be disposed of and certification of
their disposal delivered to the Issuers upon their request therefor, unless by
a written order, signed by two Officers of the Issuers, the Issuers shall
direct that canceled Notes be returned to them.

 

40

 

SECTION 2.12.                                         Defaulted
Interest.

 

If the Issuers
default in a payment of interest on the Notes, they shall pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on
the defaulted interest, to the Persons who are Holders of the Notes on a
subsequent special record date, which date shall be at the earliest practicable
date but in all events at least five Business Days prior to the payment date, in
each case at the rate provided in the Notes. 
The Issuers shall, with the consent of the Trustee, fix or cause to be
fixed each such special record date and payment date.  At least 15 days before the special record
date, the Issuers (or the Trustee, in the name of and at the expense of the
Issuers) shall mail to Holders of the Notes a notice that states the special
record date, the related payment date and the amount of such interest to be
paid.

 

SECTION 2.13.                                         Record
Date.

 

The record
date for purposes of determining the identity of Holders of the Notes entitled
to vote or consent to any action by vote or consent authorized or permitted
under this Indenture shall be determined as provided for in TIA § 316(c).

 

SECTION 2.14.                                         CUSIP
Number.

 

The Issuers in
issuing the Notes may use a “CUSIP” number and, if they do so, the Trustee
shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided that
any such notice may state that no representation is made as to the correctness
or accuracy of the CUSIP number printed in the notice or on the Notes and that
reliance may be placed only on the other identification numbers printed on the
Notes.  The Issuers shall promptly notify
the Trustee in writing of any change in the CUSIP number.

 

SECTION 2.15.                                         Joint
and Several Liability.

 

Except as
otherwise expressly provided herein, the Issuers shall be jointly and severally
liable for the performance of all obligations and covenants under this
Indenture and the Notes.

 

ARTICLE 3

 

REDEMPTION

 

SECTION 3.01.                                         Notices
to Trustee.

 

If the Issuers
elect to redeem Notes pursuant to the optional redemption provisions of Section 3.07
hereof, they shall furnish to the Trustee, at least 35 days (unless a shorter
period is acceptable to the Trustee) but not more than 60 days before a
redemption date, an Officers’ Certificate of the Issuers setting forth (i) the
redemption date, (ii) the principal amount of Notes to be redeemed and (iii) the
redemption price.  If the Issuers are
required to make the redemption pursuant to Section 3.08 hereof, they
shall furnish the Trustee, at least one but not more than ten Business Days
before the applicable purchase date, an Officers’ Certificate of the Issuers
setting forth (i) the purchase date, (ii) the principal amount of
Notes offered to be purchased and (iii) the purchase price.

 

41

 

SECTION 3.02.                                         Selection
of Notes To Be Redeemed.

 

(a)                                  If
less than all of the Notes are to be redeemed at any time in accordance with Section 3.07
hereof, the selection of Notes for redemption shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed, or if the Notes are not so listed on a pro rata basis, or, in the case of a redemption other than
as provided in Section 3.07(b) hereof, by lot or in accordance with
any other method the Trustee deems fair and appropriate; provided
that no Notes with a principal amount of $1,000 or less shall be redeemed in
part.  In the event of partial redemption
by lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for redemption.

 

(b)                                 The
Trustee shall promptly notify the Issuers in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the
principal amount thereof to be redeemed. 
Notes and portions of them selected shall be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed, the entire outstanding amount of Notes held by such Holder, even
if not a multiple of $1,000, shall be redeemed. 
Except as provided in the preceding sentence, provisions hereof that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.

 

SECTION 3.03.                                                                 Notice
of Redemption.

 

Subject to the
provisions of Section 3.08 hereof, at least 30 days but not more than 60
days before a redemption date, the Company shall mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.

 

The notice
shall identify the Notes to be redeemed and shall state

 

(i)                  the redemption date;

 

(ii)               the redemption price;

 

(iii)            if any Note is being redeemed in part only,
the portion of the principal amount of such Note to be redeemed and that, after
the redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued in the name of
the Holder thereof upon cancellation of the original Note;

 

(iv)           the name and address of the Paying Agent;

 

(v)              that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;

 

(vi)           that, unless the Issuers default in making
such redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;

 

42

 

(vii)        the paragraph of the Notes and/or Section hereof
pursuant to which the Notes called for redemption are being redeemed; and

 

(viii)     that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.

 

At the Company’s
written request, the Trustee shall give the notice of redemption in the Company’s
name and at its expense; provided that
the Company shall have delivered to the Trustee, at least 35 days (unless a
shorter period is acceptable to the Trustee) prior to the redemption date, an
Officers’ Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.

 

SECTION 3.04.                                         Effect
of Notice of Redemption.

 

Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called
for redemption become due and payable on the redemption date at the redemption
price.

 

SECTION 3.05.                                         Deposit
of Redemption Price.

 

On or prior to
any redemption date, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date.  The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the Paying
Agent by the Company in excess of the amounts necessary to pay the redemption
price of, and accrued interest on, all Notes to be redeemed.

 

On and after
the redemption date, if the Company does not default in the payment of the
redemption price, interest shall cease to accrue on the Notes or the portions
of Notes called for redemption.  If a
Note is redeemed on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date.  If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes.

 

SECTION 3.06.                                         Notes
Redeemed in Part.

 

Upon surrender
and cancellation of a Note that is redeemed in part, the Issuers shall issue
and the Trustee shall authenticate for the Holder of the Notes at the expense
of the Issuers a new Note equal in principal amount to the unredeemed portion
of the Note surrendered.

 

SECTION 3.07.                                         Optional
Redemption.

 

(a)                                  Except
as provided in paragraphs (b) and (c) below, the Notes will not be
redeemable at the Issuers’ option prior to June 15, 2010.  Thereafter, the Notes will be subject to redemption
at the option of the Issuers, in whole or in part, upon not less than 30 nor
more than 60 days’ notice, at the redemption prices (expressed as percentages
of principal amount) set forth 

 

43

 

below, together with accrued
and unpaid interest thereon to the applicable redemption date, if redeemed
during the 12-month period beginning on June 15 of the years indicated
below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2010

  	
   

  	
  103.188

  	
  %

  
	
  2011

  	
   

  	
  102.125

  	
  %

  
	
  2012

  	
   

  	
  101.063

  	
  %

  
	
  2013 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Notwithstanding
the foregoing, at any time and from time to time prior to June 15, 2008,
the Company may redeem up to 35% of the aggregate principal amount of the Notes
outstanding at a redemption price equal to 106.375% of the principal amount
thereof on the redemption date, together with accrued and unpaid interest to
such redemption date, with the net cash proceeds of one or more public or
private sales of Equity Interests (other than Disqualified Stock) of the
Company (including sales to or capital contributions from Parent, regardless of
whether Parent obtains such funds from an offering of its Equity Interests, the
incurrence of Indebtedness or otherwise), other than proceeds from a sale to
the Company or any Subsidiary of the Company or any employee benefit plan in
which the Company or any of its Subsidiaries participates; provided
that:  (i) at least 65% in aggregate
principal amount of the Notes originally issued remain outstanding immediately
after the occurrence of such redemption; and (ii) the sale of such Equity
Interests is made in compliance with the terms hereof.

 

(c)                                  In
addition, at any time and from time to time prior to June 15, 2010, the
Issuers may redeem all or any portion of the Notes outstanding at a redemption
price equal to (i) 100% of the aggregate principal amount of the Notes to
be redeemed, together with accrued and unpaid interest to such redemption date,
plus (ii) the Make Whole Amount.

 

SECTION 3.08.                                         Excess
Proceeds Offer.

 

(a)                                  When
the cumulative amount of Excess Proceeds that have not been applied in
accordance with Section 4.10 exceeds $100.0 million, the Company shall
make an offer to all Holders of the Notes (an “Excess Proceeds
Offer”) to purchase the maximum principal amount of Notes that may
be purchased out of such Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, together with accrued and unpaid
interest to the date fixed for the closing of such offer in accordance with the
procedures set forth herein.  To the
extent the Company or a Restricted Subsidiary is required under the terms of
Indebtedness of the Company or such Restricted Subsidiary which is ranked
equally with the Notes with any proceeds which constitute Excess Proceeds under
this Indenture, the Company shall make a pro rata offer to the Holders of all
other pari passu Indebtedness (including the
Notes) with such proceeds.  If the aggregate
principal amount of Notes and other pari passu Indebtedness
surrendered by Holders thereof exceeds the amount of such Excess Proceeds, the
Trustee shall select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis.

 

(b)                                 The
Excess Proceeds Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the “Offer Period”).  No later than five Business Days after the termination
of 

 

44

 

the Offer Period (the “Purchase Date”), the Company shall purchase the maximum
principal amount of Notes that may be purchased with such Excess Proceeds
(which maximum principal amount of Notes shall be the “Offer Amount”)
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Excess Proceeds Offer.

 

(c)                                  If
the Purchase Date is on or after an interest record date and on or before the
related interest payment date, any accrued interest shall be paid to the Person
in whose name a Note is registered at the close of business on such record
date, and no additional interest shall be payable to Holders who tender Notes
pursuant to the Excess Proceeds Offer.

 

(d)                                 Upon
the commencement of any Excess Proceeds Offer, the Company shall send, by first
class mail, a notice to each of the Holders of the Notes, with a copy to the
Trustee.  The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Excess Proceeds Offer. 
The notice, which shall govern the terms of the Excess Proceeds Offer,
shall state:

 

(i)                  that the Excess Proceeds Offer is
being made pursuant to this Section 3.08 and the length of time the Excess
Proceeds Offer shall remain open;

 

(ii)               the Offer Amount, the purchase price and
the Purchase Date;

 

(iii)            that any Note not tendered or accepted for
payment shall continue to accrue interest;

 

(iv)           that any Note accepted for payment pursuant
to the Excess Proceeds Offer shall cease to accrue interest after the Purchase
Date;

 

(v)              that Holders electing to have a Note
purchased pursuant to any Excess Proceeds Offer shall be required to surrender
the Note, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three Business Days before the Purchase Date;

 

(vi)           that Holders shall be entitled to withdraw
their election if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is unconditionally withdrawing his election to have the Note
purchased;

 

(vii)        that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Offer Amount, the Company shall select
the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000, or integral multiples thereof, shall be
purchased); and

 

(viii)     that Holders whose Notes were purchased only in
part shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.

 

45

 

(e)                                  On
or before the Purchase Date, the Company shall, to the extent lawful, accept
for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Notes or portions thereof tendered pursuant to
the Excess Proceeds Offer, or if less than the Offer Amount has been tendered,
all Notes or portion thereof tendered, and deliver to the Trustee an Officers’
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 3.08.  The Company, Depositary or Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Note tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee shall authenticate and mail or deliver such new Note, to such Holder
equal in principal amount to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof.  The Company shall publicly announce the
results of the Excess Proceeds Offer on the Purchase Date.  To the extent that the aggregate principal
amount of Notes tendered pursuant to an Excess Proceeds Offer is less than the
amount of such Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes in compliance with the provisions
hereof.  Upon completion of an Excess
Proceeds Offer, the amount of Excess Proceeds shall be reset at zero.

 

(f)                                    Other
than as specifically provided in this Section 3.08, any purchase pursuant
to this Section 3.08 shall be made pursuant to the provisions of Sections
3.01 through 3.06 hereof.

 

ARTICLE 4

 

COVENANTS

 

SECTION 4.01.                                         Payment
of Notes.

 

(a)                                  The
Issuers shall pay or cause to be paid the principal of, premium, if any, and
interest on the Notes on the dates and in the manner provided in the
Notes.  Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than either Issuer, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by or on behalf of the Issuers in immediately available funds
and designated for and sufficient to pay all principal, premium, if any, and
interest then due.

 

(b)                                 The
Issuers shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal at the rate equal to the then
applicable interest rate on the Notes to the extent lawful; they shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any applicable
grace period) at the same rate to the extent lawful.

 

SECTION 4.02.                                         Maintenance
of Office or Agency.

 

(a)                                  The
Issuers shall maintain an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuers in 

 

46

 

respect of the Notes and this
Indenture may be served.  The Issuers
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. 
If at any time the Issuers shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee.

 

(b)                                 The
Issuers may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however, that
no such designation or rescission shall in any manner relieve the Issuers of
their obligation to maintain an office or agency for such purposes.  The Issuers shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

 

(c)                                  The
Issuers hereby designate the Corporate Trust Office of the Trustee as one such
office or agency of the Issuers in accordance with Section 2.03 hereof.

 

SECTION 4.03.                                         Reports.

 

(a)                                  Whether
or not required by the rules and regulations of the SEC, so long as any
Notes are outstanding, the Issuers shall furnish to the Holders of Notes all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuers were
required to file such forms, including a “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and, with respect to the
annual information only, a report thereon by the certified public accountants
of the Issuers; provided, however,
that to the extent such reports are filed with the SEC and publicly available,
no additional copies need be provided to Holders of the Notes or the
Trustee.  The Issuers shall also comply
with the provisions of TIA §314(a).

 

(b)                                 The
Issuers shall provide the Trustee with a sufficient number of copies of all
reports and other documents and information that the Trustee may be required to
deliver to the Holders of the Notes under this Section 4.03.

 

SECTION 4.04.                                         Compliance
Certificate.

 

(a)                                  The
Issuers shall deliver to the Trustee, within 120 days after the end of each
fiscal year, an Officers’ Certificate of the Issuers stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Issuers and Guarantors have kept, observed, performed
and fulfilled their obligations under this Indenture and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge each such entity has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions
hereof, including, without limitation, a default in the performance or breach
of Section 4.07, Section 4.09, Section 4.10 or Section 4.15
hereof (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge
and what action each is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of 

 

47

 

which payments on account of
the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action each is taking
or proposes to take with respect thereto.

 

(b)                                 The
Issuers shall, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon any Officer becoming aware of (i) any Default or
Event of Default, or (ii) any default under any Indebtedness referred to
in Section 6.01(f) or (g) hereof, an Officers’ Certificate of
the Issuers specifying such Default, Event of Default or default and what
action the Issuers or any of their Affiliates are taking or propose to take
with respect thereto.

 

SECTION 4.05.                                         Taxes.

 

The Issuers
shall pay, and shall cause each of its Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except as
contested in good faith and by appropriate proceedings or where the failure to
effect such payment is not adverse in any material respect to the Holders of
the Notes.

 

SECTION 4.06.                                         Stay,
Extension and Usury Laws.

 

The Issuers
covenant (to the extent that they may lawfully do so) that they shall not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance hereof; and the Issuers (to the extent that they may lawfully do
so) hereby expressly waive all benefit or advantage of any such law, and
covenant that they shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.

 

SECTION 4.07.                                         Limitation
on Restricted Payments.

 

(a)                                  Neither
the Company nor any of its Restricted Subsidiaries may, directly or indirectly:

 

(i)                  declare or pay any dividend or make
any distribution on account of any Equity Interests of the Company other than
dividends or distributions payable in Equity Interests (other than Disqualified
Stock) of the Company;

 

(ii)               purchase, redeem or otherwise acquire or
retire for value any Equity Interests of Parent, the Company or any of their
respective Subsidiaries, other than any such Equity Interests owned by the
Company or by any Wholly Owned Restricted Subsidiary;

 

(iii)            declare or pay any dividend or make any
distribution on account of any Equity Interests of any Restricted Subsidiary,
other than:

 

(A)                              to
the Company or any Wholly Owned Restricted Subsidiary; or

 

48

 

(B)                                to
all Holders of any class or series of Equity Interests of such Restricted
Subsidiary on a pro  rata
basis; provided that in the case of this clause (B), such dividends or
distributions may not be in the form of Indebtedness or Disqualified Stock; or

 

(iv)                              make any Restricted
Investment.

 

(all such
prohibited payments and other actions set forth in clauses (i) through (iv) being
collectively referred to as “Restricted Payments”),
unless, at the time of such Restricted Payment:

 

(1)                                  no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof;

 

(2)                                  after
giving effect to the incurrence of any Indebtedness the net proceeds of which
are used to finance such Restricted Payment, the Indebtedness to Cash Flow
Ratio of the Company would not have exceeded 8.0 to 1; and

 

(3)                                  such
Restricted Payment, together with the aggregate of all other Restricted
Payments made by the Company after the Issue Date, is less than the sum of:

 

(A)                              the difference of:

 

(x)                                   cumulative
Consolidated Cash Flow of the Company determined at the time of such Restricted
Payment (or, in case such Consolidated Cash Flow shall be a deficit, minus 100%
of such deficit); minus

 

(y)                                 120%
of Consolidated Interest Expense of the Company,

 

each as
determined for the period (taken as one accounting period) from March 31,
2005 to the end of the Company’s most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment; plus

 

(B)                                an amount equal to 100%
of the aggregate net cash proceeds and the fair market value of any property or
assets received by the Company either from capital contributions, or from the
issue or sale (including an issue or sale to Parent or any of its Subsidiaries
(other than the Company or any of the Company’s Subsidiaries)) of Equity
Interests (other than Disqualified Stock) of the Company (other than Equity
Interests sold to any of the Company’s Subsidiaries), since March 31,
2005, but, excluding the April 13, 2005 capital contribution from Parent
used on May 19, 2005 to redeem a portion of the Existing Notes; plus

 

(C)                                if any Unrestricted
Subsidiary is designated by the Company as a Restricted Subsidiary, an amount
equal to the fair market value of the net Investment by the Company or a Restricted
Subsidiary in such Subsidiary at the time of such designation; provided, however, that
the foregoing amount shall not exceed the amount of the Investments made by the
Company or any Restricted Subsidiary in any such Unrestricted Subsidiary since March 31,
2005; plus

 

49

 

(D)                               100% of any cash
dividends and other cash distributions received by the Company and its
Restricted Subsidiaries from an Unrestricted Subsidiary since March 31,
2005 to the extent not included in Consolidated Cash Flow; plus

 

(E)                                 to the extent not
included in clauses (A) through (D) above, an amount equal to the net
reduction in Investments of the Company and its Restricted Subsidiaries since March 31,
2005 resulting from payments in cash of interest on Indebtedness, dividends, or
repayment of loans or advances, or other transfers of property, in each case,
to the Company or to a Wholly Owned Restricted Subsidiary or from the net cash
proceeds from the sale, conveyance or other disposition of any such Investment;
provided, however, that the foregoing amount shall not exceed, with respect to
any Person in whom such Investment was made, the amount of Investments
previously made by the Company or any Restricted Subsidiary in such Person
which were included in computations made pursuant to this clause (3); plus

 

(F)                                 the amount available
as of March 31, 2005 under Section 4.07(a)(3) of the indenture
governing the Existing Notes.

 

Notwithstanding
the foregoing clause (3), the Company may make any Restricted Payment if after
giving effect to the incurrence of any Indebtedness the net proceeds of which
are used to finance such Restricted Payment, the Company’s Indebtedness to Cash
Flow Ratio as of the Company’s most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted Payment
would not have exceeded 4.5 to 1.

 

(b)                                 The
foregoing provisions will not prohibit the following (provided
that with respect to clauses (2), (4) and (5) below, no Default or
Event of Default shall have occurred and be continuing):

 

(1)                the payment of any dividend or
distribution within 60 days after the date of declaration thereof, if at the
date of declaration such payment would have complied with the provisions
hereof;

 

(2)                the redemption, repurchase, retirement
or other acquisition of any Equity Interests of the Company in exchange for, or
out of the net proceeds of the substantially concurrent capital contribution
from Parent or from the substantially concurrent issue or sale (including to
Parent) of, Equity Interests (other than Disqualified Stock) of the Company
(other than Equity Interests issued or sold to any Subsidiary of the Company);

 

(3)                Investments in a Permitted Business in
an amount equal to 100% of the aggregate net proceeds (whether or not in cash)
received by the Company or any Restricted Subsidiary from capital contributions
from Parent or from the substantially concurrent issue and sale (including to
Parent or any of its Subsidiaries other than the Company and its Subsidiaries)
of Equity Interests (other than Disqualified Stock) of the Company (other than
Equity Interests issued or sold to the Company’s Subsidiaries) on or after the
Issue Date to the extent such capital contributions are not included in the
calculation of Consolidated Net Worth for purposes of clause (4) below;
plus, to the extent not 

 

50

 

included in Consolidated Cash Flow, an amount equal to the net
reduction in such Investments resulting from payments in cash of interest on Indebtedness,
dividends, or repayment of loans or advances, or other transfers of property,
in each case, to the Company or to a Restricted Subsidiary or from the net cash
proceeds from the sale, conveyance, or other disposition of any such
Investment; provided, however,
that the foregoing amount shall not exceed, with respect to any Person in whom
such Investment was made, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Person pursuant to this clause
(3);

 

(4)                Investments in a Permitted Business
(other than payment of a dividend or distribution to Parent without
consideration) so long as after giving effect to such Investment and all other
Investments made in reliance on this clause (4), the aggregate amount of all
Investments made in reliance on this clause (4) shall not exceed the
greater of (x) $500.0 million and (y) 25% of the Company’s Consolidated Net
Worth at the time of such Investment; provided, however, that solely for purposes of this clause (4),
calculations of Consolidated Net Worth shall not include capital contributions
received by the Company or any Wholly Owned Restricted Subsidiary and applied
to make Investments pursuant to clause (3) above;

 

(5)                Investments made as a result of the
receipt of non-cash proceeds from Asset Sales made in compliance with Section 4.10;

 

(6)                Specified Affiliate Payments;

 

(7)                purchases of receivables or other
assets pursuant to a Receivables Repurchase Obligation in connection with a
Qualified Receivables Transaction and the payment or distribution of Receivables
Fees; and

 

(8)                Investments to fund the financing
activity of a Financing Subsidiary in the ordinary course of its business in an
amount not to exceed, as of the date of determination, the sum of (A) $100.0
million, plus (B) 50% of the aggregate cost to such Financing Subsidiary
for customer premise and receiving equipment (including delivery and
installation costs) purchased by such Financing Subsidiary and leased by such
Financing Subsidiary to retail customers in excess of 100,000 units.

 

(c)                                  Restricted
Payments made pursuant to the second paragraph of clause (a) and
paragraphs (b)(1), (2) and (3) (but as to clauses (2) and (3) only
to the extent that net proceeds received by the Company as set forth therein
were included in the computations made in paragraph (a)(3)(B)) shall be
included as Restricted Payments in any computation made pursuant to paragraph
(a)(3).  Restricted Payments made
pursuant to paragraphs (b)(2), (3), (4), (5), (6), (7) and (8) (but
as to clauses (2) and (3) only to the extent that net proceeds
received by the Company as set forth therein were not included in the
computations made in paragraph (a)(3)(B)) shall not be included as Restricted
Payments in any computation made pursuant to paragraph (a)(3).

 

If the Company
or any Restricted Subsidiary makes an Investment that was included in
computations made pursuant to this Section 4.07 and the Person in which
such Investment was 

 

51

 

made
subsequently becomes a Restricted Subsidiary, to the extent such Investment
resulted in a reduction in the amounts calculated under paragraph (a)(3) or
under any other provision of this Section 4.07, then such amount shall be
increased by the amount of such reduction.

 

SECTION 4.08.                                         Limitation
on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Restricted Subsidiary to:

 

(a)                                  pay dividends or make
any other distribution to the Company or any of its Restricted Subsidiaries on
its Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the Company or any of
its Subsidiaries;

 

(b)                                 make loans or advances
to the Company or any of its Subsidiaries; or

 

(c)                                  transfer any of its
properties or assets to the Company or any of the Company’s Subsidiaries;

 

except for
such encumbrances or restrictions existing under or by reason of:

 

(i)                                     Existing
Indebtedness and existing agreements as in effect on the Issue Date;

 

(ii)                                  applicable law or
regulation;

 

(iii)                               any instrument governing
Acquired Debt as in effect at the time of acquisition (except to the extent
such Indebtedness was incurred in connection with, or in contemplation of, such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired;

 

(iv)                              by reason of customary
nonassignment provisions in leases entered into in the ordinary course of
business and consistent with past practices;

 

(v)                                 Refinancing
Indebtedness; provided that the restrictions
contained in the agreements governing such Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced;

 

(vi)                              this Indenture and the
Notes (and any Exchange Notes issued in exchange therefor);

 

(vii)                           the Senior Secured Credit
Facility;

 

(viii)                        Permitted Liens;

 

52

 

(ix)                                any agreement for the
sale of any Subsidiary or its assets that restricts distributions by that
Subsidiary pending its sale; provided that
during the entire period in which such encumbrance or restriction is effective,
such sale (together with any other sales pending) would be permitted under the
terms of this Indenture;

 

(x)                                   secured Indebtedness
otherwise permitted to be incurred by this Indenture that limit the right of
the debtor to dispose of the assets securing such Indebtedness;

 

(xi)                                customary provisions in
joint venture agreements and other similar agreements;

 

(xii)                             purchase money obligations
for property acquired and Capital Lease Obligations in the ordinary course of
business that impose restrictions of the type described in Section 4.08(c) on
the property so acquired;

 

(xiii)                          Non-Recourse Receivables
Subsidiary Indebtedness or other contractual requirements of a Receivables
Subsidiary in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables
Subsidiary or the receivables and related assets described in the definition of
Qualified Receivables Transaction which are subject to such Qualified
Receivables Transaction; or

 

(xiv)                         any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations referred to in
clauses (i) through (xiii) of Section 4.08(c); provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the Company’s good
faith judgment, no more restrictive as a whole with respect to such
encumbrances and restrictions than those prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or refinancing.

 

SECTION 4.09.                                         Limitation
on Incurrence of Indebtedness.

 

(a)                                  The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt); provided, however, that,
notwithstanding the foregoing, the Company, DTV Finance and any Guarantor may
incur Indebtedness (including Acquired Debt), if, after giving effect to the
incurrence of such Indebtedness and the application of the net proceeds thereof
on a pro forma basis, either (a) the Company’s Indebtedness to Cash Flow
Ratio would not have exceeded 8.0 to 1 or (b) the aggregate amount of the
Company’s Indebtedness and that of the Guarantors would not exceed $1,000 per
subscriber.

 

(b)                                 The
foregoing limitation will not apply to any of the following incurrences of Indebtedness:

 

(1)                                  Indebtedness
represented by the Notes (and any Exchange Notes issued in exchange therefor)
and the Guarantees in an aggregate principal amount of $1.0 billion;

 

53

 

(2)                                  the incurrence by the
Company, DTV Finance or any Guarantor of Acquired Subscriber Debt of up to
$1,750 per Acquired Subscriber;

 

(3)                                  Indebtedness of the
Company, DTV Finance or any Guarantor under the Senior Secured Credit Facility
in an aggregate principal amount of up to $2.5 billion at any one time
outstanding;

 

(4)                                  Indebtedness among
the Company and its Restricted Subsidiaries; provided
that in order to be subject to this clause (4), any such Indebtedness owed by
the Company or a Guarantor to any Restricted Subsidiary that is not a Guarantor,
shall be subordinated to the prior payment in full of the Notes and the Guarantees,
as applicable;

 

(5)                                  Acquired Debt (A) of
a Person incurred prior to the date upon which such Person was acquired by the
Company or any Restricted Subsidiary; provided that
after giving pro forma effect to such acquisition and incurrence of Acquired
Debt the Company’s Indebtedness to Cash Flow Ratio would not have exceeded 8.0
to 1; or (B) owed to the Company or any of its Restricted Subsidiaries;

 

(6)                                  Existing
Indebtedness;

 

(7)                                  the incurrence of
Purchase Money Indebtedness by the Company or any Restricted Subsidiary in an
amount not to exceed the cost of (A) construction, acquisition or
improvement of assets used in a Permitted Business and (B) any launch
costs and insurance premiums related to such assets;

 

(8)                                  Hedging Obligations
of the Company or any of its Restricted Subsidiaries covering Indebtedness of
the Company or such Restricted Subsidiary; provided, however, that such Hedging Obligations are entered into for
purposes of managing interest rate exposure of the Company and its Restricted
Subsidiaries on Existing Indebtedness or other Indebtedness incurred in
accordance with this Indenture and not for speculative purposes;

 

(9)                                  Foreign Currency
Obligations of the Company or any of its Restricted Subsidiaries entered into
to manage exposure of the Company and its Restricted Subsidiaries to
fluctuations in currency values and not for speculative purposes;

 

(10)                            Indebtedness of the Company
or any of its Restricted Subsidiaries in respect of performance bonds or letters
of credit of the Company or any Restricted Subsidiary or surety bonds provided
by the Company or any Restricted Subsidiary incurred in the ordinary course of
business and on ordinary business terms in connection with a Permitted
Business;

 

(11)                            the incurrence by the
Company, DTV Finance or any Guarantor of Indebtedness issued in exchange for,
or the proceeds of which are used to extend, refinance, renew, replace,
substitute or refund in whole or in part, Indebtedness referred to in paragraph
(a) of this Section 4.09 or in clauses (b)(1), (2), (5), (6) or (7) (“Refinancing Indebtedness”); provided,
however, that:

 

54

 

 

(A)                              the
principal amount of such Refinancing Indebtedness shall not exceed the
principal amount and accrued interest of the Indebtedness so exchanged,
extended, refinanced, renewed, replaced, substituted or refunded and any
premiums payable and reasonable fees, expenses, commissions and costs in
connection therewith;

 

(B)                                the
Refinancing Indebtedness shall have a final maturity equal to or later than,
and a Weighted Average Life to Maturity equal to or greater than, the final
maturity and Weighted Average Life to Maturity, respectively, of the
Indebtedness being exchanged, extended, refinanced, renewed, replaced, substituted
or refunded; and

 

(C)                                the
Refinancing Indebtedness shall be subordinated in right of payment to the Notes
and the Guarantees, if at all, on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
exchanged, extended, refinanced, renewed, replaced, substituted or refunded (a “Permitted Refinancing”);

 

(12)                            additional Indebtedness in
an aggregate principal amount of up to $500.0 million at any one time outstanding
(which amount may, but need not be, incurred in whole or in part under the
Senior Secured Credit Facility); 

 

(13)                            the guarantee by the
Company or any Guarantor of Indebtedness of the Company or a Restricted
Subsidiary that was permitted to be incurred by another provision of this Section 4.09;
and

 

(14)                            Non-Recourse Receivables
Subsidiary Indebtedness (as defined in the definition of “Receivables
Subsidiary”) incurred by any Receivables Subsidiary in a Qualified
Receivables Transaction.

 

(c)                                  For
purposes of determining compliance with this Section 4.09, (1) the
outstanding principal amount of any item of Indebtedness shall be counted only
once, and any obligation arising under any guarantee, Lien, letter of credit or
similar instrument supporting such Indebtedness incurred in compliance with
this Section 4.09 shall be disregarded, and (2) if an item of Indebtedness
meets the criteria of more than one of the categories described in clauses (b)(1) through
(14) above or is permitted to be incurred pursuant to paragraph (a) of
this Section 4.09 and also meets the criteria of one or more of the
categories described in paragraphs (b)(1) through (14), the Company shall,
in its sole discretion, classify such item of Indebtedness in any manner that
complies with this Section 4.09 and may from time to time reclassify such
item of Indebtedness in any manner in which such item could be incurred at the
time of such reclassification; provided that
Indebtedness outstanding under the Senior Secured Credit Facility on the Issue
Date shall be deemed to be outstanding under paragraph (b)(3) and may not
be reclassified.

 

(d)                                 Accrual
of interest, the accretion of original issue discount and the payment of
interest in the form of additional Indebtedness of the same class shall not be
deemed to be an incurrence of Indebtedness for purposes of determining
compliance with this Section 4.09. 
Any increase in the amount of Indebtedness solely by reason of currency
fluctuations shall not be 

 

55

 

deemed to be an incurrence of
Indebtedness for purposes of determining compliance with this Section 4.09.  A change in GAAP that results in an obligation
existing at the time of such change, not previously classified as Indebtedness,
becoming Indebtedness will not be deemed to be an incurrence of Indebtedness
for purposes of determining compliance with this Section 4.09.

 

(e)                                  Notwithstanding
the foregoing, the Company shall not, and shall not permit any Guarantor to,
directly or indirectly, incur any Indebtedness that purports to be by its terms
(or by the terms of any agreement or instrument governing such Indebtedness)
subordinated to any other Indebtedness of the Company or of such Guarantor, as
the case may be, unless such Indebtedness is also by its terms (or by the terms
of the agreement or instrument governing such Indebtedness) made expressly
subordinated to the Notes or the Guarantee of such Guarantor, as applicable, to
at least the same extent as such Indebtedness is subordinated to such other
Indebtedness of the Company or such Guarantor, as applicable.  Indebtedness shall not be deemed to be
subordinated solely by virtue of being unsecured.

 

SECTION 4.10.                                         Limitation
on Asset Sales.

 

If the Company
or any Restricted Subsidiary, in a single transaction or a series of related
transactions,

 

(a)                                  sells,
leases (in a manner that has the effect of a disposition), conveys or otherwise
disposes of any of the Company’s or any Restricted Subsidiary’s assets (including
by way of a sale-and-leaseback transaction), other than:

 

(1)                                  sales or other
dispositions of assets in the ordinary course of business;

 

(2)                                  sales or other
dispositions to the Company or a Restricted Subsidiary by the Company or any
Restricted Subsidiary;

 

(3)                                  sales or other
dispositions of rights to construct or launch satellites;

 

(4)                                  any transfer or other
disposition of accounts receivable and related assets (including contract
rights) of the type specified in the definition of “Qualified Receivables
Transaction” or a fractional undivided interest therein, by a Receivables
Subsidiary in a Qualified Receivables Transaction; and

 

(5)                                  sales, conveyances or
other dispositions of accounts receivable and related assets (including contract
rights) of the type specified in the definition of “Qualified Receivables
Transaction,” to a Receivables Subsidiary pursuant to a Qualified Receivables
Transaction for the fair market value thereof;

 

56

 

provided
that the sale, lease, conveyance or other disposition of all or substantially
all of the Company’s assets shall be governed by the provisions of Section 5.01;
or

 

(b)                                 issues
or sells Equity Interests of any Restricted Subsidiary,

 

in either
case, which assets or Equity Interests: (1) have a fair market value in
excess of $100.0 million (as determined in good faith by the Board of Directors
of the Company evidenced by a resolution of the Board of Directors of the
Company and set forth in an Officers’ Certificate delivered to the Trustee); or
(2) are sold or otherwise disposed of for Net Proceeds in excess of $100.0
million (each of the foregoing, an “Asset Sale”),
then:

 

(A)                              the
Company or such Restricted Subsidiary, as the case may be, must receive
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by the Board of Directors of the Company evidenced by a resolution of the Board
of Directors of the Company and set forth in an Officers’ Certificate delivered
to the Trustee not later than ten Business Days following a request from the
Trustee, which certificate shall cover each Asset Sale made in the six months
preceding the date of the request, as the case may be); and

 

(B)                                at
least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary, as the case may be, must be in the form of:

 

(x)                                   cash,
Cash Equivalents or Marketable Securities;

 

(y)                                 any
asset which is promptly (and in no event later than 180 days after the date of
transfer to the Company or a Restricted Subsidiary) converted into cash; provided that to the extent that such conversion is at a
price that is less than the fair market value (as determined above) of such
asset at the time of the Asset Sale in which such asset was acquired, the
Company shall be deemed to have made a Restricted Payment in the amount by
which such fair market value exceeds the cash received upon conversion; and/or

 

(z)                                   properties
and capital assets (including Capital Stock of an entity owning such property
or assets so long as the receipt of such Capital Stock otherwise complies with Section 4.07
hereof (other than paragraph (b)(5) thereof)) to be used by the Company or
any of its Restricted Subsidiaries in a Permitted Business;

 

provided, however, the amount of any liabilities (other than
subordinated Indebtedness) of the Company or any Restricted Subsidiary that are
assumed by or on behalf of the transferee in connection with an Asset Sale and
from which the Company or such Restricted Subsidiary are unconditionally
released shall be deemed to be cash for purposes of this clause (B).

 

The Net
Proceeds from an Asset Sale shall be used only: 
to acquire assets used in, or stock or other ownership interests in a
Person that becomes a Restricted Subsidiary upon the acquisition and will be
engaged primarily in, a Permitted Business or to prepay, repay or purchase
indebtedness under the Senior Secured Credit Facility or other senior secured
Indebtedness.  Any Net Proceeds from any
Asset Sale that are not applied or invested (or committed pursuant to a written
agreement to be applied) as provided in the preceding sentence within 365 days
after the receipt thereof and, in the case of funds committed other than to
purchase a satellite, any such 

 

57

 

funds which
are not actually so applied within 270 days following such 365 day period shall
constitute “Excess  Proceeds”
and shall be applied to an offer to purchase secured Indebtedness, Notes and
other senior Indebtedness of the Company if and when required under Section 3.08.  Pending the final application of any such Net
Proceeds, the Company or such Restricted Subsidiary may temporarily reduce
revolving indebtedness under a Senior Secured Credit Facility, if any, or
otherwise invest such Net Proceeds in Cash Equivalents.

 

SECTION 4.11.                                         Limitation
on Transactions with Affiliates.

 

The Company
shall not and shall not permit any Restricted Subsidiary to, directly or
indirectly, sell, lease, transfer or otherwise dispose of any of the Company’s
or any Restricted Subsidiary’s properties or assets to, or purchase any
property or assets from, or enter into any contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Affiliate
(including any Unrestricted Subsidiary) (each of the foregoing, an “Affiliate Transaction”), unless:

 

(a)                                  such
Affiliate Transaction is on terms that are no less favorable to the Company,
taken as a whole, or such Restricted Subsidiary in any material respect than
those that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person; and

 

(b)                                 if
such Affiliate Transaction involves aggregate payments in excess of the greater
of (A) $200.0 million or (B) 7.5% of Consolidated Net Worth, either (i) such
Affiliate Transaction has been approved by a resolution of the majority of the
disinterested members of the Company’s Board of Directors or (ii) if there
are no disinterested directors on the Company’s Board of Directors, the Company
or such Restricted Subsidiary has obtained the favorable opinion of an
Independent Financial Advisor as to the fairness of such Affiliate Transaction
to the Company or the relevant Restricted Subsidiary, as the case may be, from
a financial point of view, and the Company delivers to the Trustee no later
than ten business days following a request from the Trustee such resolution
(set forth in an Officers’ Certificate certifying that such Affiliate
Transaction has been so approved and complies with clause (a) above) or
such opinion;

 

provided,
however, that the following shall, in
each case, not be deemed Affiliate Transactions:

 

(i)                  the payment of compensation to
directors and management of Parent and its Subsidiaries;

 

(ii)               indemnification payments made to
officers, directors, employees or agents of the Company or any of its
Restricted Subsidiaries pursuant to charter, bylaw, statutory or contractual
provisions;

 

(iii)            transactions between or among the Company
and its Restricted Subsidiaries (other than any Restricted Subsidiary more than
10% of the Equity Interests of which are owned by the Company’s Affiliates
(other than its Restricted Subsidiaries));

 

58

 

(iv)           Restricted Payments (other than Investments
permitted by Section 4.07(b)(4)) permitted by Section 4.07 and
Permitted Investments (other than transactions permitted by clauses (a) and
(j) of the definition of “Permitted Investments”);

 

(v)              any transactions between the Company or
any of its Restricted Subsidiaries and any Affiliate of the Company the Equity
Interests of which Affiliate are owned solely by the Company or one of its Restricted
Subsidiaries, on the one hand, and by Persons who are not Affiliates of the
Company or its Restricted Subsidiaries, on the other hand;

 

(vi)           any agreements in effect on the Issue Date
and any modifications, extensions or renewals thereof that are no less
favorable to the Company or the applicable Restricted Subsidiary in any
material respect than such agreement as in effect on the Issue Date;

 

(vii)        so long as it complies with clause (a) above,
customary transactions with DTV or any of its Subsidiaries or Affiliates or any
other suppliers or purchasers or sellers of goods or services including,
without limitation, entering into of programming agreements, subscription
agreements, telecommunications services agreements, broadcast engineering
services agreements, television advertising and intellectual property agreements;

 

(viii)     transactions with News Group approved by a
majority of the members of the audit committee of the board of directors of DTV
for so long as such members meet the independence requirements of the
New York Stock Exchange or NASDAQ;

 

(ix)             transactions with Permitted Joint Ventures
(other than any Permitted Joint Venture more than 10% of the Equity Interests
of which are owned by an Affiliate of the Company (other than the Company’s Restricted
Subsidiaries)); and

 

(x)                transactions effected as part of a
Qualified Receivables Transaction.

 

SECTION 4.12.                                         Limitation
on Liens.

 

The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, create, incur, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired, or on any income or profits therefrom or assign or
convey any right to receive income therefrom, except Permitted Liens.

 

SECTION 4.13.                                         Additional
Subsidiary Guarantees.

 

If (a) any
of the Company’s Domestic Subsidiaries (other than a Financing Subsidiary or a
Receivables Subsidiary) that is not a Guarantor guarantees or becomes otherwise
obligated under the Senior Secured Credit Facility, other of the Company’s
senior secured Indebtedness or the Existing Notes, or (b) the Company or
any of its Restricted Subsidiaries transfers or causes to be transferred, in
one transaction or a series of related transactions, any property to any
Restricted Subsidiary (other than a Financing Subsidiary or a Receivables
Subsidiary) that is a Domestic Subsidiary but not a Guarantor, or if the
Company or any of its Subsidiaries shall organize, 

 

59

 

acquire or
otherwise invest in another Restricted Subsidiary that is a Domestic Subsidiary
(other than a Financing Subsidiary or a Receivables Subsidiary) having total
assets with a fair market value in excess of the greater of (A) $50.0
million and (B) 5% of the Company’s Consolidated Net Worth, then in each
case such guarantor, obligor, transferee or acquired or other Restricted
Subsidiary shall (i) execute and deliver to the Trustee a supplemental
indenture in form reasonably satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Issuers’
obligations under the Notes and this Indenture on the terms set forth in this
Indenture and (ii) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered by such
Restricted Subsidiary and constitutes a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary. 
Thereafter, such Restricted Subsidiary shall be a Guarantor for all
purposes hereof; provided, however,
that to the extent that a Restricted Subsidiary is subject to any instrument
governing Acquired Debt, as in effect at the time of acquisition thereof, that
prohibits such Restricted Subsidiary from issuing a Guarantee, such Restricted
Subsidiary shall not be required to execute such a supplemental indenture until
it is permitted to issue such Guarantee pursuant to the terms of such Acquired
Debt; provided, further,
however, that any Guarantee existing
solely due to the requirement of clause (a) above shall be released upon
the release of the guarantee or other obligation under the Senior Secured
Credit Facility or such other senior secured Indebtedness.

 

SECTION 4.14.                                         Organizational
Existence.

 

Subject to Article 5
hereof and the proviso to this Section 4.14, the Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect (i) its
existence as a limited liability company and, subject to Section 4.10
hereof, the corporate, limited liability company, partnership or other
existence of any Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
Restricted Subsidiary and (ii) subject to Section 4.10 hereof, the
rights (charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; provided, however, that the Company shall not be required to preserve
any such right, license or franchise, or the corporate, partnership or other
existence of any Restricted Subsidiary (other than the corporate existence of
DTV Finance) if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Holders of the Notes.

 

SECTION 4.15.                                         Change
of Control and Rating Decline.

 

Upon the
occurrence of a Change of Control Triggering Event, the Company shall make an
offer (a “Change of Control Offer”) to each Holder
of Notes to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder’s Notes at a purchase price equal to 101% of the
aggregate principal amount thereof, together with accrued and unpaid interest
thereon to the date of repurchase (in either case, the “Change of
Control Payment”).  Within 30
days following any Change of Control Triggering Event, the Company shall mail a
notice to each Holder stating:

 

60

 

(1)                                  that the Change of
Control Offer is being made pursuant to this Section 4.15;

 

(2)                                  the purchase price
and the purchase date, which shall be no earlier than 30 days nor later than
45 days after the date such notice is mailed (the “Change of
Control Payment Date”);

 

(3)                                  that any Notes not
tendered will continue to accrue interest in accordance with the terms hereof;

 

(4)                                  that, unless the
Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date;

 

(5)                                  that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is unconditionally withdrawing
its election to have such Notes purchased;

 

(6)                                  that Holders whose
Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral
multiple thereof, and

 

(7)                                  any other information
material to such Holder’s decision to tender Notes.

 

The Company
will comply with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of the Notes
required in the event of a Change of Control Triggering Event.

 

SECTION 4.16.                                         [Intentionally
Omitted]

 

SECTION 4.17.                                         Limitation
on Activities of DTV Finance.

 

DTV Finance
may not hold any material assets, become liable for any material obligations,
engage in any trade or business, or conduct any business activity, other than
the issuance of Equity Interests to the Company or any Wholly Owned Restricted
Subsidiary of the Company, the Incurrence of Indebtedness as a co-obligor or
guarantor of the Notes, the Exchange Notes, if any, the Senior Secured Credit
Facility and any other Indebtedness that is permitted to be incurred by the
Company under Section 4.09.  Neither
the Company nor any Restricted Subsidiary shall engage in any transactions with
DTV Finance in violation of the immediately preceding sentence.

 

61

 

SECTION 4.18.                                         Payments
for Consent.

 

The Issuers
shall not, and shall not permit any of their Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of a Note for or as an inducement to
any consent, waiver or amendment of any of the terms or provisions hereof or
the Notes unless such consideration is offered to be paid or agreed to be paid
to all Holders of the Notes that so consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

 

SECTION 4.19.                                         Termination
of Covenants.

 

From and after
the first date on which the Notes are rated Investment Grade by both Rating
Agencies and notwithstanding that the Notes may cease to be so rated
thereafter, the following Sections shall no longer apply:

 

(1)                                  Section 3.08;

 

(2)                                  Section 4.07;

 

(3)                                  Section 4.09;

 

(4)                                  Section 4.10;

 

(5)                                  Section 4.11;
and

 

(6)                                  clauses (d)(i) and
(ii) of Section 5.01.

 

At such time
Sections 3.08, 4.07, 4.09, 4.10, 4.11 and clauses (d)(i) and (ii) of Section 5.01
are terminated, the Company shall no longer be permitted to designate any
Restricted Subsidiary as an Unrestricted Subsidiary.

 

ARTICLE 5

 

SUCCESSORS

 

SECTION 5.01.                                         Merger,
Consolidation or Sale of Assets.

 

The Company
shall not consolidate or merge with or into (whether or not the Company is the
surviving entity), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets in one or more
related transactions to, another Person unless:

 

(a)                                  the
Company is the surviving Person or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a
corporation, limited partnership or limited liability company organized or
existing under the laws of the United States, any state thereof or the District
of Columbia;

 

62

 

(b)                                 the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of the Company pursuant to a supplemental indenture in form reasonably
satisfactory to the Trustee, under the Notes and this Indenture;

 

(c)                                  immediately
after such transaction, no Default or Event of Default exists; and

 

(d)                                 the
Company or the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made:

 

(i)                                     will
have an Indebtedness to Cash Flow Ratio immediately after the transaction (but
prior to any purchase accounting adjustments or accrual of deferred tax
liabilities resulting from the transaction) not less than the Company’s
Indebtedness to Cash Flow Ratio immediately preceding the transaction; or

 

(ii)                                  would,
at the time of such transaction after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Indebtedness to Cash Flow Ratio set forth in Section 4.09(a).

 

SECTION 5.02.                                         Successor
Corporation Substituted.

 

Upon any
consolidation or merger, or any sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company in accordance with Section 5.01
hereof, the successor corporation formed by such consolidation or into or with
which the Company is merged or to which such sale, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions hereof referring to the Company shall refer instead
to the successor corporation and not to the Company), and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person has been named as the Company herein.

 

ARTICLE 6

 

DEFAULTS AND REMEDIES

 

SECTION 6.01.                                         Events
of Default.

 

Each of the
following constitutes an “Event of Default”:

 

(a)                                  default for 30 days
in the payment when due of interest or additional interest, if any, on the
Notes;

 

63

 

(b)                                 default in the payment
when due of principal of or premium, if any, on the Notes at maturity, upon
repurchase, redemption or otherwise;

 

(c)                                  failure to comply
with the provisions of Section 3.08, Section 4.15 or Section 5.01
hereof;

 

(d)                                 default under any
other provision of this Indenture or the Notes, which default remains uncured
for 60 days after notice from the Trustee or the Holders of at least 25% of the
aggregate principal amount then outstanding of the Notes;

 

(e)                                  default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company and any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company and any of its Restricted Subsidiaries), other than
Non-Recourse Receivables Subsidiary Indebtedness, which default is caused by a
failure to pay the principal of such Indebtedness at the final stated maturity
thereof within the grace period provided in such Indebtedness (a “Payment Default”), and the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default, aggregates
$100 million or more;

 

(f)                                    default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company and any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), other than
Non-Recourse Receivables Subsidiary Indebtedness, which default results in the
acceleration of such Indebtedness prior to its express maturity not rescinded
or cured within 30 days after such acceleration, and the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $100 million or more;

 

(g)                                 failure by the Company
and any of its Restricted Subsidiaries to pay final judgments (other than any
judgment as to which a reputable insurance company has accepted full liability)
aggregating $100 million or more, which judgments are not stayed within 60 days
after their entry other than judgments in respect of Non-Recourse Receivables
Subsidiary Indebtedness;

 

(h)                                 any Guarantee of a
Significant Subsidiary shall be held in a judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect, or any
Guarantor that qualifies as a Significant Subsidiary, or any Person acting on
behalf of any Guarantor that qualifies as a Significant Subsidiary, shall deny
or disaffirm its obligations under its Guarantee;

 

(i)                                     the Company, DTV
Finance or any Significant Subsidiary of the Company pursuant to or within the
meaning of Bankruptcy Law (i) commences a voluntary case; (ii) consents
to the entry of an order for relief against it in an involuntary case; (iii) consents
to the appointment of a Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit of its
creditors; and

 

64

 

(j)                                     a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law
that:  (i) is for relief against the
Company, DTV Finance or any Significant Subsidiary of the Company in an involuntary
case; (ii) appoints a custodian of the Company, DTV Finance or any
Significant Subsidiary of the Company or for all or substantially all of the
property of the Company, DTV Finance or any Significant Subsidiary of the
Company; or (iii) orders the liquidation of the Company, DTV Finance or
any Significant Subsidiary of the Company, and the order or decree remains
unstayed and in effect for 60 consecutive days.

 

SECTION 6.02.                                         Acceleration.

 

If an Event of
Default (other than an Event of Default relating to an Issuer specified in
paragraph (i) or (j) of Section 6.01 hereof) occurs and is
continuing, the Trustee by notice to the Issuers or the Holders of at least 25%
of the aggregate principal amount then outstanding of the Notes by written
notice to the Issuers and the Trustee, may declare all the Notes to be due and
payable immediately. Notwithstanding the foregoing, in the case of an Event of
Default specified in paragraph (i) or (j) of Section 6.01 hereof with
respect to an Issuer, all outstanding Notes shall become and be immediately due
and payable without further action or notice. 
Holders of the Notes may not enforce this Indenture or the Notes except
as provided in this Indenture.  The
Trustee may withhold from Holders of the Notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if it determines that withholding notice is
in such Holders’ interest.  The Holders
of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the acceleration)
have been cured or waived.

 

All powers of
the Trustee under this Indenture will be subject to applicable provisions of
the Communications Act, including without limitation, the requirements of prior
approval for de facto or de jure transfer
of control or assignment of Title III licenses.

 

SECTION 6.03.                                         Other
Remedies.

 

If an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal, premium, if any, and interest on the Notes
or to enforce the performance of any provision of the Notes and this Indenture.

 

The Trustee
may maintain a proceeding even if it does not possess any of the Notes or does
not produce any of them in the proceeding. 
A delay or omission by the Trustee or any Holder of a Note in exercising
any right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of
Default.  All remedies are cumulative to
the extent permitted by law.

 

65

 

SECTION 6.04.                                         Waiver
of Past Defaults.

 

Holders of not
less than a majority in aggregate principal amount of Notes then outstanding,
by written notice to the Trustee, may on behalf of the Holders of all of the
Notes waive an existing Default or Event of Default and its consequences under
this Indenture, except a continuing Default or Event of Default in the payment
of the principal of, premium, if any, or interest on, the Notes.  Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose hereof; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.

 

SECTION 6.05.                                         Control
by Majority.

 

Holders of a
majority in principal amount of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow any
direction that conflicts with the law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.

 

SECTION 6.06.                                         Limitation
on Suits.

 

A Holder of a
Note may pursue a remedy with respect to this Indenture or the Notes only if

 

(a)                                  the Holder of a Note
gives to the Trustee written notice of a continuing Event of Default;

 

(b)                                 the Holders of at
least 25% in principal amount of the then outstanding Notes make a written
request to the Trustee to pursue the remedy;

 

(c)                                  such Holder of a Note
or Holders of Notes offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;

 

(d)                                 the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer and, if requested, the provision of indemnity; and

 

(e)                                  during such 60-day
period the Holders of a majority in principal amount of the then outstanding
Notes do not give the Trustee a direction inconsistent with the request.

 

A Holder of a
Note may not use this Indenture to prejudice the rights of another Holder of a
Note or to obtain a preference or priority over another Holder of a Note.

 

SECTION 6.07.                                         Rights
of Holders of Notes To Receive Payment.

 

Notwithstanding
any other provision hereof, the right of any Holder of a Note to receive payment
of principal, premium, if any, and interest on the Note, on or after the respective
due dates expressed in the Note, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder of the Note.

 

66

 

SECTION 6.08.                                         Collection
Suit by Trustee.

 

If an Event of
Default specified in Section 6.01(a) or (b) hereof occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Issuers for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

 

SECTION 6.09.                                         Trustee
May File Proofs of Claim.

 

The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders of the Notes allowed in
any judicial proceedings relative to the Issuers (or any other obligor upon the
Notes), the Issuers’ creditors or the Issuers’ property and shall be entitled
and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder of a Note to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders of the Notes, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof.  To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07
hereof out of the estate in any such proceeding, shall be denied for any
reason, payment of the same shall be secured by a Lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
properties which the Holders of the Notes may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder of a Note any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder of a Note thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder of a Note in any such proceeding.

 

SECTION 6.10.                                         Priorities.

 

If the Trustee
collects any money pursuant to this Article 6, it shall pay out the money
in the following order:

 

First:  to the Trustee, its
agents and attorneys for amounts due under Section 7.07 hereof, including
payment of all compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;

 

67

 

Second:  to Holders of Notes for
amounts due and unpaid on the Notes for principal, premium, if any, and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if any and
interest, respectively; and

 

Third:  to the Issuers or to such
party as a court of competent jurisdiction shall direct in writing.

 

The Trustee
may fix a record date and payment date for any payment to Holders of Notes.

 

SECTION 6.11.                                         Undertaking
for Costs.

 

In any suit
for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes pursuant to this Article 6.

 

ARTICLE 7

 

TRUSTEE

 

SECTION 7.01.                                         Duties
of Trustee.

 

(a)                                  If
an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent Person would exercise
or use under the circumstances in the conduct of his or her own affairs.

 

(b)                                 Except
during the continuance of an Event of Default,

 

(i)                                     the duties of the
Trustee shall be determined solely by the express provisions hereof and the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

 

(ii)                                  in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements hereof.  However, in the case
of certificates or opinions specifically required by any provision hereof to be
furnished to it, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements hereof.

 

68

 

(c)                                  The
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that

 

(i)                                     this paragraph
does not limit the effect of paragraph (b) of this Section 7.01;

 

(ii)                                  the Trustee shall not
be liable for any error of judgment made in good faith by a Responsible
Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and

 

(iii)                               the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.05
hereof.

 

(d)                                 Whether
or not therein expressly so provided, every provision hereof that in any way
relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.

 

(e)                                  No
provision hereof shall require the Trustee to expend or risk its own funds or
incur any liability.  The Trustee shall
be under no obligation to exercise any of its rights or powers under this Indenture
at the request of any Holders of Notes, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to the Trustee against any
loss, liability or expense.

 

(f)                                    The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Issuers.  Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.

 

SECTION 7.02.                                         Rights
of Trustee.

 

(a)                                  The
Trustee may conclusively rely upon any document (whether in original or
facsimile form) believed by it to be genuine and to have been signed or
presented by the proper Person.  The
Trustee need not investigate any fact or matter stated in the document.

 

(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’ Certificate
of the Issuers or an Opinion of Counsel or both.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’ Certificate
or Opinion of Counsel.  The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.

 

(c)                                  The
Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.

 

(d)                                 The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers
conferred upon it by this Indenture.

 

69

 

(e)                                  Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from an Issuer shall be sufficient if signed by an Officer
of such Issuer.

 

(f)                                    The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or direction.

 

(g)                                 Except
with respect to Section 4.01 hereof, the Trustee shall have no duty to
inquire as to the performance of the Issuers’ covenants in Article 4.  In addition, the Trustee shall not be deemed
to have knowledge of any Default or Event of Default except (i) any Event
of Default occurring pursuant to Sections 4.01, 6.01(a) and 6.01(b) hereof
or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.

 

(h)                                 Delivery
of reports, information and documents to the Trustee under Section 4.03
hereof is for informational purposes only and the Trustee’s receipt of the
foregoing shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Issuers’ compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

(i)                                     The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder; and

 

(j)                                     the
Trustee may request that the Company deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture.

 

SECTION 7.03.                                         Individual
Rights of Trustee.

 

The Trustee in
its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuers or any Affiliate of the Issuers with
the same rights it would have if it were not Trustee.  However, in the event that the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the SEC for permission to continue as Trustee (if any of the
Notes are registered pursuant to the Securities Act), or resign.  Any Agent may do the same with like rights
and duties.  The Trustee is also subject
to Sections 7.10 and 7.11 hereof.

 

SECTION 7.04.                                         Trustee’s
Disclaimer.

 

(a)                                  The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy hereof or the Notes, it shall not be accountable for the
Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or
upon the Issuers’ direction under any provision hereof, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital 

 

70

 

herein or any statement in the
Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.

 

(b)                                 The
Trustee shall not be bound to make any investigation into facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture or other paper or
document.

 

SECTION 7.05.                                         Notice
of Defaults.

 

If a Default
or Event of Default occurs and is continuing and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to Holders of Notes
a notice of the Default or Event of Default within 90 days after it
occurs.  Except in the case of a Default
or Event of Default in payment of principal of, premium, if any, or interest on
any Note, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice
is in the interests of the Holders of the Notes.

 

SECTION 7.06.                                         Reports
by Trustee to Holders of the Notes.

 

Within 60 days
after each May 15 beginning with the May 15 following the date
hereof, the Trustee shall mail to the Holders of the Notes a brief report dated
as of such reporting date that complies with TIA § 313(a) (but if no
event described in TIA § 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted).  The Trustee also shall comply with TIA § 313(b).  The Trustee shall also transmit by mail all
reports as required by TIA § 313(c).

 

A copy of each
report at the time of its mailing to the Holders of Notes shall be mailed to
the Issuers and filed with the SEC and each stock exchange on which any Notes
are listed.  The Issuers shall promptly
notify the Trustee in writing when any Notes are listed on any stock exchange.

 

SECTION 7.07.                                         Compensation
and Indemnity.

 

The Issuers
shall pay to the Trustee from time to time reasonable compensation for its
acceptance hereof and services hereunder. 
The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. 
The Issuers shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services.  Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee’s agents and counsel.

 

The Issuers, jointly
and severally, shall indemnify the Trustee against any and all losses,
liabilities, claims, damages or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except any such loss, liability or expense as shall be determined to
have been caused by the negligence, willful misconduct or bad faith of the
Trustee.  The Trustee shall notify the
Issuers promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the
Issuers shall not relieve the Issuers of their obligations hereunder.  The Issuers shall defend the claim and the
Trustee shall cooperate in the defense. 
The Trustee may have separate counsel and the Issuers shall pay the
reasonable fees 

 

71

 

and expenses
of such counsel.  The Issuers need not
pay for any settlement made without their consent, which consent shall not be
unreasonably withheld.

 

The
obligations of the Issuers under this Section 7.07 shall survive the
satisfaction and discharge hereof.

 

To secure the
Issuers’ payment obligations in this Section 7.07, the Trustee shall have
a Lien prior to the Notes on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular
Notes.  Such Lien shall survive the satisfaction
and discharge hereof.

 

When the
Trustee incurs expenses or renders services after an Event of Default specified
in Section 6.01(i) or (j) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

 

SECTION 7.08.                                         Replacement
of Trustee.

 

A resignation
or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as
provided in this Section 7.08.

 

The Trustee
may resign in writing at any time and be discharged from the trust hereby
created by so notifying the Issuers and obtaining the prior written approval of
the FCC, if so required by the Communications Act, including Section 310(d) and
the rules and regulations promulgated thereunder.  The Holders of at least a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers in writing.  The Issuers may remove the Trustee (subject
to the prior written approval of the FCC, if required by the Communications
Act, including Section 310(d), and the rules and regulations promulgated
thereunder) if:

 

(a)                                  the Trustee fails to
comply with Section 7.10 hereof;

 

(b)                                 the Trustee is
adjudged a bankrupt or an insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law;

 

(c)                                  the Trustee is no
longer in compliance with the foreign ownership provisions of Section 310
of the Communications Act and the rules and regulations promulgated thereunder.

 

(d)                                 a Custodian or public
officer takes charge of the Trustee or its property; or

 

(e)                                  the Trustee becomes
incapable of acting.

 

If the Trustee
resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Issuers shall promptly appoint a successor Trustee.  Within one year after the successor Trustee
takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Issuers.

 

72

 

If a successor
Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Issuers, or the Holders of Notes of at
least 10% in principal amount of the then outstanding Notes may petition at the
expense of the Issuers any court of competent jurisdiction for the appointment
of a successor Trustee.

 

If the Trustee
after written request by any Holder of a Note who has been a Holder of a Note
for at least six months fails to comply with Section 7.10 hereof, such Holder
of a Note may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.

 

A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers.  Thereupon,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture.  The
successor Trustee shall mail a notice of its succession to Holders of the
Notes.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof.  Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Issuers’ obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.

 

If a Trustee
is removed without cause, all fees and expenses of the Trustee incurred in the
administration of the trust or in the performance of the duties hereunder shall
be paid to the Trustee.

 

SECTION 7.09.                                         Successor
Trustee by Merger, Etc.

 

If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.

 

SECTION 7.10.                                         Eligibility;
Disqualification.

 

There shall at
all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America or of any state
thereof authorized under such laws to exercise corporate trustee power, shall
be subject to supervision or examination by federal or state authority and
shall have a combined capital and surplus of at least $25 million as set forth
in its most recent published annual report of condition.

 

This Indenture
shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1),
(2) and (5).  The Trustee is subject
to TIA § 310(b).

 

SECTION 7.11.                                         Preferential
Collection of Claims Against Issuers.

 

The Trustee is
subject to TIA § 311(a), excluding any creditor relationship listed in TIA
§ 311(b).  A Trustee who has resigned
or been removed shall be subject to TIA § 311(a) to the extent
indicated therein.

 

73

 

ARTICLE 8

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.01.                                         Termination
of the Issuers’ Obligations.

 

(a)                                  The
Issuers may terminate their Obligations as to all outstanding Notes, except
those obligations referred to in paragraph (b) of this Section 8.01,
when

 

(1)                                  either

 

(A)                              all
the Notes theretofore authenticated and delivered (except lost, stolen or destroyed
Notes which have been replaced or paid and Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust)
have been delivered to the Trustee for cancellation; or

 

(B)                                all
Notes not theretofore delivered to the Trustee for cancellation have become due
and payable and the Company has irrevocably deposited or caused to be deposited
with the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the Notes to
the date of deposit together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;

 

(2)                                  the Company has paid
or caused to be paid all other sums payable under this Indenture by the
Issuers; and

 

(3)                                  the Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel
stating that all conditions precedent under this Indenture relating to the
satisfaction and discharge hereof have been complied with; provided,
however, that
such counsel may rely, as to matters of fact, on a certificate or certificates of
Officers of the Company.

 

(b)                                 Notwithstanding
paragraph (a) of this Section 8.01, the Issuers’ obligations in
Sections 2.03, 2.04, 2.05, 2.06, 7.07, 7.08, 8.07 and 8.08 hereof shall
survive until the Notes are no longer outstanding pursuant to Section 2.08
hereof.  After the Notes are no longer
outstanding, the Issuers’ obligations in Sections 7.07, 7.08, 8.07 and
8.08 hereof shall survive such satisfaction and discharge.

 

SECTION 8.02.                                         Option
To Effect Legal Defeasance or Covenant Defeasance.

 

The Company
may, at the option of its Board of Directors evidenced by a resolution set
forth in an Officers’ Certificate, at any time, with respect to the Notes,
elect to have either Section 8.03 or 8.04 hereof applied to all
outstanding Notes upon compliance with the conditions set forth below in this Article 8.

 

74

 

SECTION 8.03.                                         Legal
Defeasance and Covenant Discharge.

 

Upon the
Company’s exercise under Section 8.02 hereof of the option applicable to
this Section 8.03, the Issuers shall be deemed to have been discharged
from their obligations with respect to all outstanding Notes on the date the
conditions set forth below are satisfied (hereinafter, “Legal
Defeasance”).  For this
purpose, such Legal Defeasance means that the Issuers shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding
Notes, which shall thereafter be deemed to be “outstanding” only for the purposes
of Section 8.06 hereof and the other Sections hereof referred to in
clauses (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: 
(a) the rights of Holders of outstanding Notes to receive, solely
from the funds deposited with the Trustee in accordance with Sections 8.05 and
8.06 hereof, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, or on the redemption date,
as the case may be, (b) the Issuers’ obligations with respect to such
Notes under Sections 2.05, 2.07, 2.08, 2.10, 2.11 and 4.02 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Issuers’ obligations in connection therewith and (d) this Section 8.03.  Subject to compliance with this Article 8,
the Company may exercise its option under this Section 8.03
notwithstanding the prior exercise of its option under Section 8.04 hereof
with respect to the Notes.

 

SECTION 8.04.                                         Covenant
Defeasance.

 

Upon the
Company’s exercise under Section 8.02 hereof of the option applicable to
this Section 8.04, the Company shall be released from its obligations
under the covenants contained in Sections 3.08, 4.03, 4.04, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.15, 4.17 and 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, “Covenant Defeasance”),
and the Notes shall thereafter be deemed not “outstanding” for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for GAAP).  For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Notes, the Issuers may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 6.01(c) hereof, but, except as
specified above, the remainder hereof and such Notes shall be unaffected
thereby.  In addition, upon the Company’s
exercise under Section 8.02 hereof of the option applicable to this Section 8.04,
Sections 6.01(c) through 6.01(h) shall not constitute Events of Default.

 

SECTION 8.05.                                         Conditions
to Legal or Covenant Defeasance.

 

The following
shall be the conditions to the application of either Section 8.03 or Section 8.04
hereof to the outstanding Notes:

 

75

 

(a)                                  the
Company shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10
hereof who shall agree to comply with the provisions of this Article 8
applicable to it) in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Notes, (i) cash in U.S. Dollars, (ii) non-callable
Government Securities which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, cash in U.S. Dollars, or
(iii) a combination thereof, in such amounts, as will be sufficient in
each case, in the opinion of a nationally recognized firm of independent public
accountants selected by the Trustee expressed in a written certification
thereof delivered to the Trustee, to pay and discharge and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge the
principal of, premium, if any, and interest on the outstanding Notes on the
stated maturity or on the applicable optional redemption date, as the case may
be;

 

(b)                                 in
the case of an election under Section 8.03 hereof, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
satisfactory to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or (ii) since
the Issue Date, there has been a change in the applicable federal income tax
law, in each case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax in the same amounts, in
the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;

 

(c)                                  in
the case of an election under Section 8.04 hereof, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;

 

(d)                                 no
Default or Event of Default with respect to the Notes shall have occurred and
be continuing on the date of such deposit or, in so far as Section 6.01(i) or
6.01(j) hereof is concerned, at any time in the period ending on the 91st day after
the date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);

 

(e)                                  such
Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

 

(f)                                    the
Company shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit made by the Company pursuant to its election under Section 8.03

 

76

 

or 8.04 hereof was not made by the Company
with the intent of preferring the Holders of the Notes over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and

 

(g)                                 the
Company shall have delivered to the Trustee an Officers’ Certificate stating
that all conditions precedent provided for relating to either the Legal
Defeasance under Section 8.03 hereof or the Covenant Defeasance under Section 8.04
hereof (as the case may be) have been complied with as contemplated by this Section 8.05.

 

SECTION 8.06.                                         Deposited
Money and Government Securities To Be Held in Trust; Other Miscellaneous
Provisions.

 

Subject to Section 8.07
hereof, all money and Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of
this Section 8.06, the “Trustee”)
pursuant to Section 8.05 hereof in respect of the outstanding Notes shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Notes and this Indenture, to the payment, either directly or through
any Paying Agent (including an Issuer acting as Paying Agent) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.

 

The Issuers
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or Government Securities deposited pursuant to Section 8.05
hereof or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of
the outstanding Notes.

 

Anything in
this Article 8 to the contrary notwithstanding, the Trustee shall deliver
or pay to the Company from time to time upon the request of the Company any
money or Government Securities held by it as provided in Section 8.05
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee (which may be the opinion delivered under Section 8.05(a) hereof),
are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

SECTION 8.07.                                         Repayment
to Issuers.

 

Any money
deposited with the Trustee or any Paying Agent, or then held by the Issuers, in
trust for the payment of the principal of, premium, if any, or interest on any
Note and remaining unclaimed for two years after such principal, and premium,
if any, or interest has become due and payable shall be paid to the Issuers on
their request or (if then held by the Issuers) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as a general creditor,
look only to the Issuers for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Issuers as trustees thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Issuers
cause to be published once, in the New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Issuers.

 

77

 

SECTION 8.08.                                         Reinstatement.

 

If the Trustee
or Paying Agent is unable to apply any United States Dollars or Government
Notes in accordance with Section 8.03 or 8.04 hereof, as the case may be,
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Issuers’ obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.03 or
8.04 hereof until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.03 or 8.04 hereof, as
the case may be; provided, however,
that, if the Company makes any payment of principal of, premium, if any, or
interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.

 

ARTICLE 9

 

AMENDMENT, SUPPLEMENT AND WAIVER

 

SECTION 9.01.                                         Without
Consent of Holders of Notes.

 

Notwithstanding
Section 9.02 hereof, the Issuers, the Guarantors and the Trustee may amend
or supplement this Indenture, the Notes and the Guarantees or any amended or
supplemental indenture without the consent of any Holder of a Note:

 

(a)                                  to
cure any ambiguity, defect or inconsistency;

 

(b)                                 to
provide for uncertificated Notes or Guarantees in addition to or in place of
certificated Notes or Guarantees (provided that
the uncertificated Notes are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code);

 

(c)                                  to
provide for the assumption of the obligations of the Issuers or any Guarantor
to the Holders of the Notes in the case of a merger or consolidation pursuant
to Article 5 or Article 10 hereof;

 

(d)                                 to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
hereunder of any Holder of the Notes; or

 

(e)                                  to
comply with requirements of the SEC in order to effect or maintain the
qualification hereof under the TIA.

 

78

 

Upon the
request of the Issuers accompanied by a resolution of the Boards of Directors
of each Issuer and a resolution of the Board of Directors of each Guarantor and
upon receipt by the Trustee of the documents described in Section 11.04
hereof, the Trustee shall join with the Issuers and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms hereof and shall make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be obligated
to enter into such amended or supplemental Indenture which affects its own
rights, duties or immunities under this Indenture or otherwise.

 

SECTION 9.02.                                         With
Consent of Holders of Notes.

 

The Issuers,
the Guarantors and the Trustee may amend or supplement this Indenture, the
Notes or the Guarantees or any amended or supplemental Indenture with the
written consent of the Holders of Notes of at least a majority of the aggregate
principal amount of Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for the Notes), and any existing Default
and its consequences or compliance with any provision hereof or the Notes may
be waived with the consent of the Holders of a majority of the aggregate
principal amount of Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Notes).  Notwithstanding the foregoing, without the
consent of each Holder affected, an amendment or waiver may not (with respect
to any Notes held by a non-consenting Holder of Notes):

 

(a)                                  reduce
the aggregate principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;

 

(b)                                 reduce
the principal of or change the fixed maturity of any Note or alter the
provisions with respect to the redemption of the Notes;

 

(c)                                  reduce
the rate of or change the time for payment of interest on any Note;

 

(d)                                 waive
a Default or Event of Default in the payment of principal of or premium, if
any, or interest on the Notes (except a rescission of acceleration of the Notes
by the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted from such
acceleration);

 

(e)                                  make
any Note payable in money other than that stated in the Notes;

 

(f)                                    make
any change in the provisions hereof relating to waivers of past Defaults or the
rights of Holders of Notes to receive payments of principal of or interest on
the Notes;

 

(g)                                 waive
a redemption payment or mandatory redemption with respect to any Note;

 

(h)                                 amend,
change or modify in any material respect the obligation of the Company to make
and consummate a Change of Control Offer in the event of a Change of Control
Triggering Event after such Change of Control Triggering Event has occurred; or

 

79

 

(i)                                     make
any change in the foregoing amendment and waiver provisions.

 

Upon the
request of the Issuers accompanied by a resolution of the Boards of Directors
of the Issuers and a resolution of the Board of Directors of each Guarantor,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders of Notes as aforesaid, and upon receipt by the
Trustee of the documents described in Section 11.04 hereof, the Trustee
shall join with the Issuers and the Guarantors in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.

 

It shall not
be necessary for the consent of the Holders of Notes under this Section 9.02
to approve the particular form of any proposed amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof.

 

After an
amendment, supplement or waiver under this Section 9.02 becomes effective,
the Issuers shall mail to the Holders of Notes affected thereby a notice
briefly describing the amendment, supplement or waiver.  Any failure of the Issuers to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such amended or supplemental Indenture or waiver.  Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then outstanding
may waive compliance in a particular instance by the Issuers with any provision
hereof or the Notes.

 

SECTION 9.03.                                         Compliance
with Trust Indenture Act.

 

Every
amendment or supplement to this Indenture and the Notes shall be set forth in
an amended or supplemental Indenture that complies with the TIA as then in
effect.

 

SECTION 9.04.                                         Revocation
and Effect of Consents.

 

Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note.  However, any such Holder of a Note
or subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver, supplement
or amendment becomes effective.  An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder of a Note.

 

The Issuers
may fix a record date for determining which Holders of the Notes must consent
to such amendment, supplement or waiver. 
If the Issuers fix a record date, the record date shall be fixed at (i) the
later of 30 days prior to the first solicitation of such consent or the date of
the most recent list of Holders of Notes furnished to the Trustee prior to such
solicitation pursuant to Section 2.05 hereof or (ii) such other date
as the Issuers shall designate.

 

80

 

SECTION 9.05.                                         Notation
on or Exchange of Notes.

 

The Trustee
may place an appropriate notation about an amendment, supplement or waiver on
any Note thereafter authenticated.  The
Issuers in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment, supplement or waiver.

 

Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.

 

SECTION 9.06.                                         Trustee
To Sign Amendments, Etc.

 

In executing,
or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall receive, and shall by fully
protected in relying upon, an Opinion of Counsel and an Officers’ Certificate
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture.  The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.

 

ARTICLE 10

 

GUARANTEES

 

SECTION 10.01.                                   Guarantee.

 

Each of the
Guarantors, jointly and severally, hereby unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the Obligations of the Issuers hereunder or
thereunder, that

 

(a)                                  the
principal of and interest on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Issuers to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and

 

(b)                                 in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. 
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, each of the Guarantors, jointly and
severally, will be obligated to pay the same immediately.

 

Each of the
Guarantors, jointly and severally, hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or 

 

81

 

this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against the Issuers, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor.

 

Each of the
Guarantors, jointly and severally, hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuers, any right to require a proceeding first against the
Issuers, protest, notice (except that the Trustee shall provide at least ten
days’ prior written notice to the Issuers on behalf of the Guarantors before
taking any action for which the Communications Act and/or the FCC rules require
such notice and which right to notice is not waivable by any Guarantor) and all
demands whatsoever and covenant that this Guarantee will not be discharged
except by complete performance of the Obligations guaranteed hereby.  If any Holder or the Trustee is required by
any court or otherwise to return to the Issuers or any Guarantor, or any
Custodian, Trustee, liquidator or other similar official acting in relation to
either the Issuers or any Guarantor, any amount paid by either to the Trustee
or such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.

 

Each of the
Guarantors, jointly and severally, agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed
hereby.  Each of the Guarantors, jointly
and severally, further agrees that, as between such Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6
for the purposes of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6, such obligations (whether or not
due and payable) shall forthwith become due and payable by each Guarantor for
the purpose of this Guarantee.  Notwithstanding
the foregoing, in the event that any Guarantee would constitute or result in a
violation of any applicable fraudulent conveyance or similar law of any
relevant jurisdiction, the liability of the applicable Guarantor under its
Guarantee shall be reduced to the maximum amount permissible under such
fraudulent conveyance or similar law.

 

The Guarantors
hereby agree as among themselves that each Guarantor that makes a payment or
distribution under a Guarantee shall be entitled to a pro rata
contribution from each other Guarantor hereunder based on the net assets of
each other Guarantor.  The preceding sentence
shall in no way affect the rights of the Holders of Notes to the benefits
hereof, the Notes or the Guarantees.

 

Nothing in
this Section 10.01 shall apply to claims of, or payments to, the Trustee
under or pursuant to the provisions of Section 7.07 hereof.  Nothing contained in this Section 10.01
or elsewhere in this Indenture, the Notes or the Guarantees shall impair, as
between any Guarantor and the Holder of any Note, the obligation of such Guarantor,
which is unconditional and absolute, to pay to the Holder thereof the principal
of, premium, if any, and interest on the Notes in accordance with their terms
and the terms of the Guarantee and this Indenture, nor shall anything herein or
therein prevent the Trustee or the Holder of any Note from exercising all
remedies otherwise permitted by applicable law or hereunder or thereunder upon
the occurrence of an Event of Default.

 

82

 

SECTION 10.02.                                   Execution
and Delivery of Guarantees.

 

To evidence
its Guarantee set forth in Section 10.01 hereof, each Guarantor hereby
agrees that a notation of such Guarantee substantially in the form of Exhibit B
hereto shall be endorsed by an officer of such Guarantor on each Note
authenticated and delivered by the Trustee and that this Indenture shall be executed
on behalf of such Guarantor by any of its Officers.  Each of the Guarantors, jointly and
severally, hereby agrees that its Guarantee set forth in Section 10.01
hereof shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Guarantee.  If an officer or Officer whose signature is
on this Indenture or on the Guarantee of a Guarantor no longer holds that
office at the time the Trustee authenticates the Note on which the Guarantee of
such Guarantor is endorsed, the Guarantee of such Guarantor shall be valid
nevertheless.  The delivery of any Note
by the Trustee, after the authentication thereof hereunder, shall constitute
due delivery of the Guarantees set forth in this Indenture on behalf of the
Guarantors.

 

SECTION 10.03.                                   Merger,
Consolidation or Sale of Assets of Guarantors.

 

Subject to Section 10.05
hereof, a Guarantor may not, and the Company will not cause or permit any
Guarantor to, consolidate or merge with or into (whether or not such Guarantor is
the surviving entity), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets in one or more
related transactions to, another Person other than the Company or another
Guarantor unless:

 

(a)                                  such
Guarantor is the surviving Person or the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation, limited partnership or limited liability company
organized or existing under the laws of the United States, any state thereof or
the District of Columbia;

 

(b)                                 the
Person formed by or surviving any such consolidation or merger (if other than
such Guarantor) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of such Guarantor, pursuant to a supplemental indenture in form reasonably
satisfactory to the Trustee, under the Notes and this Indenture; and

 

(c)                                  immediately
after such transaction, no Default or Event of Default exists.

 

Nothing
contained in this Indenture shall prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor that is a Wholly Owned
Restricted Subsidiary of the Company or shall prevent any sale or conveyance of
the property of a Guarantor as an entirety or substantially as an entirety to
the Company or another Guarantor that is a Wholly Owned Restricted Subsidiary
of the Company.  Except as set forth in
Articles 4 and 5 hereof, nothing contained in this Indenture shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor that is a Restricted Subsidiary of the Company or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor that is a
Restricted Subsidiary of the Company.

 

83

 

SECTION 10.04.                                   Successor
Corporation Substituted.

 

Upon any
consolidation, merger, sale or conveyance described in paragraphs (a) through
(c) of Section 10.03 hereof, and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of any Guarantee previously signed by
the Guarantor and the due and punctual performance of all of the covenants and
conditions hereof to be performed by the Guarantor, such successor corporation
shall succeed to and be substituted for the Guarantor with the same effect as
if it had been named herein as a Guarantor. 
Such successor corporation thereupon may cause to be signed any or all
of the Guarantees to be issuable hereunder by such Guarantor and delivered to
the Trustee.  All the Guarantees so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Guarantees theretofore and thereafter issued in accordance
with the terms hereof as though all of such Guarantees had been issued at the
date of the execution of such Guarantee by such Guarantor.

 

SECTION 10.05.                                   Releases
from Guarantees.

 

If pursuant to
any direct or indirect sale of assets (including, if applicable, all of the
Capital Stock of any Guarantor) or other disposition by way of merger,
consolidation or otherwise, the assets sold include all or substantially all of
the assets of any Guarantor or all of the Capital Stock of any such Guarantor,
then such Guarantor or the Person acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such a
Guarantor) shall be released and relieved of its obligations under its
Guarantee or Section 10.03 and Section 10.04 hereof, as the case may
be; provided that in the event of an Asset
Sale, the Net Proceeds from such sale or other disposition are applied in
accordance with the provisions of Section 4.10 hereof.  In addition, a Guarantor shall be released
and relieved of its obligations under its Guarantee or Section 10.03 and Section 10.04
hereof, as the case may be if (1) such Guarantor is dissolved or
liquidated in accordance with the provisions hereof; (2) the Company
designates any such Guarantor as an Unrestricted Subsidiary in compliance with
the terms hereof; or (3) the Issuers effectively discharge their obligations
or defease the Notes in compliance with the terms of Article 8
hereof.  Upon delivery by the Company to
the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Company in accordance with
the provisions hereof, including without limitation Section 4.10 hereof,
if applicable, the Trustee shall execute any documents pursuant to written
direction of the Company in order to evidence the release of any such Guarantor
from its obligations under its Guarantee. 
Any such Guarantor not released from its obligations under its Guarantee
shall remain liable for the full amount of principal of and interest on the
Notes and for the other obligations of such Guarantor under this Indenture as
provided in this Article 10.

 

84

 

ARTICLE 11

 

MISCELLANEOUS

 

SECTION 11.01.                    Trust
Indenture Act Controls.

 

If any
provision hereof limits, qualifies or conflicts with the duties imposed by TIA § 318(c),
the imposed duties shall control.

 

SECTION 11.02.                    Notices.

 

Any notice or
communication by the Issuers, any Guarantor or the Trustee to the other is duly
given if in writing by hand-delivery, registered first-class mail, next-day air
courier or facsimile:

 

If to the Issuers or any
Guarantor, to it care of:

 

DIRECTV Holdings LLC

2230 East Imperial Highway

El Segundo, California  90245

Facsimile No.:  (310) 964-0839

Attention:  General Counsel

 

with a copy to:

 

Weil, Gotshal & Manges
LLP

767 Fifth Avenue

New York, New York 10153

Attention:  Michael E. Lubowitz, Esq.

 

If to the Trustee:

 

The Bank of New York

700 South Flower Street 

Los Angeles, CA 90017

Attn:  Corporate Trust Administration

 

The Issuers,
any Guarantor or the Trustee, by notice to the other, may designate additional
or different addresses for subsequent notices or communications.

 

All notices
and communications (other than those sent to Holders of Notes) shall be deemed
to have been duly given:  when delivered
by hand, if personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; one Business Day after being timely
delivered to a next-day air courier; and when transmission is confirmed, if
sent by facsimile.

 

85

 

Any notice or
communication to a Holder of a Note shall be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar.  Any notice or communication
shall also be so mailed to any Person described in TIA § 313(c), to the
extent required by the TIA.  Failure to
mail a notice or communication to a Holder of a Note or any defect in it shall
not affect its sufficiency with respect to other Holders of Notes.

 

If a notice or
communication is mailed in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it.

 

If the Issuers
mail a notice or communication to Holders of Notes, they shall mail a copy to
the Trustee and each Agent at the same time.

 

The Trustee
agrees to accept and act upon facsimile transmission of written instructions
and/or directions pursuant to this Indenture given by the Issuers provided
however that subsequent to such facsimile of written instructions and/or
directions, (i) the Issuers shall provide the originally executed
instructions and/or directions to the Trustee in a timely manner and (ii) such
originally executed instructions and/or directions shall be signed by an Officer.

 

SECTION 11.03.                    Communication
by Holders of Notes with Other Holders of Notes.

 

Holders of the
Notes may communicate pursuant to TIA § 312(b) with other Holders of
Notes with respect to their rights under this Indenture or the Notes.  The Issuers, the Trustee, the Registrar and
anyone else shall have the protection of TIA § 312(c).

 

SECTION 11.04.                    Certificate
and Opinion as to Conditions Precedent.

 

Upon any
request or application by the Issuers to the Trustee to take any action under
this Indenture (except in connection with the original issuance of the Notes),
the Issuers shall furnish to the Trustee:

 

(a)           an
Officers’ Certificate of each Issuer in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and

 

(b)           an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.

 

SECTION 11.05.                    Statements
Required in Certificate or Opinion.

 

Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA § 314(a)(4)) shall include:

 

(a)           a
statement that the Person making such certificate or opinion has read such
covenant or condition;

 

86

 

(b)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

 

(c)           a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been satisfied; and

 

(d)           a
statement as to whether or not, in the opinion of such Person, such condition
or covenant has been satisfied.

 

SECTION 11.06.                    Rules by
Trustee and Agents.

 

The Trustee
may make reasonable rules for action by or at a meeting of Holders of
Notes.  The Registrar or Paying Agent may
make reasonable rules and set reasonable requirements for its functions.

 

SECTION 11.07.                    No Personal
Liability of Directors, Owners, Employees, Incorporators and Stockholders.

 

No director,
owner, officer, employee, incorporator or stockholder of the Issuers, the
Guarantors or any of their Affiliates, as such, shall have any liability for
any obligations of the Issuers, the Guarantors and any of their Affiliates
under the Notes, the Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.  Each Holder of the Notes by accepting a Note
waives and releases all such liability. 
The waiver and release are part of the consideration for issuance of the
Notes.  Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of
the SEC that such waiver is against public policy.

 

SECTION 11.08.                    Governing Law.

 

The internal
law of the State of New York shall govern and be used to construe this Indenture,
the Notes and the Guarantees without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.

 

SECTION 11.09.                    No Adverse
Interpretation of Other Agreements.

 

This Indenture
may not be used to interpret another indenture, loan or debt agreement of the
Issuers or any of their respective Subsidiaries.  Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.

 

SECTION 11.10.                    Successors.

 

All agreements
of the Issuers and the Guarantors in this Indenture and the Notes and the
Guarantees shall bind the successors of the Issuers and the Guarantors,
respectively.  All agreements of the
Trustee in this Indenture shall bind its successor.

 

87

 

SECTION 11.11.                    Severability.

 

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

 

SECTION 11.12.                    Counterpart
Originals.

 

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

 

SECTION 11.13.                    Table of
Contents, Headings, Etc.

 

The Table of
Contents and headings of the Articles and Sections hereof have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.

 

SECTION 11.14.                    Force Majeure.

 

In no event
shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly
or indirectly, forces beyond its control, including, without limitation,
strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software or hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.

 

[Signatures on following page]

 

88

 

IN WITNESS
WHEREOF, the parties hereto have caused this Indenture to be duly executed as
of the day and year first above written.

 

	
   

  	
  DIRECTV HOLDINGS LLC,

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV FINANCING CO., INC.,

  
	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV, INC.,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV CUSTOMER SERVICES, INC.,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-1

 

	
   

  	
  DIRECTV MERCHANDISING, INC.,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV ENTERPRISES, LLC,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV OPERATIONS, LLC, as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LABC PRODUCTIONS, INC., as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV HOME SERVICES, LLC, as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV PROGRAMMING HOLDINGS I, LLC,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-2

 

	
   

  	
  DIRECTV PROGRAMMING HOLDINGS II,

  
	
   

  	
  LLC, as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-3

 

	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-4

 

EXHIBIT A

 

[Face of Note]

63/8%
Senior Note due 2015

 

Cert. No.

CUSIP No. [                          ]

 

DIRECTV
Holdings LLC and

DIRECTV Financing Co., Inc.

 

jointly and
severally promise to pay to

 

or its
registered assigns

 

the principal
sum of                                         

 

Dollars on June 15,
2015

 

Interest
Payment Dates:  June 15 and December 15,
commencing December 15, 2005.

 

Record
Dates:  June 1 and December 1
(whether or not a Business Day).

 

IN WITNESS
WHEREOF, the Issuers have caused this Note to be duly executed.

 

Dated:

 

	
   

  	
  DIRECTV HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIRECTV FINANCING CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  

 

This is one of the Notes referred to in

the within-mentioned Indenture:

 

	
  THE BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
					

 

A-1

 

(Back of Note)

 

Capitalized
terms used herein have the meanings assigned to them in the Indenture (as
defined below) unless otherwise indicated.

 

(1)        Interest.  DIRECTV
Holdings LLC, a Delaware limited liability company (the “Company”)
and DIRECTV Financing Co., Inc., a Delaware corporation (“DTV Finance” and, together with the Company, the “Issuers”) jointly and severally promise to pay interest on
the principal amount of this Note at the rate and in the manner specified below.  Interest will accrue at 63/8%
per annum and will be payable semi-annually in cash on each June 15 and December 15,
commencing December 15, 2005, or if any such day is not a Business Day on
the next succeeding Business Day (each, an “Interest Payment Date”)
to Holders of record of the Notes at the close of business on the immediately
preceding June 1 and December 1, whether or not a Business Day.  Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months. 
Interest shall accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of original issuance.  To the extent lawful, the Issuers shall pay interest
on overdue principal at the rate of the then applicable interest rate on the
Notes; they shall pay interest on overdue installments of interest (without
regard to any applicable grace periods) at the same rate to the extent
lawful.  In addition, Holders may be
entitled to the benefits of certain provisions of the [                           ](a).

 

(2)        Method of Payment.  The
Issuers shall pay interest on the Notes (except defaulted interest) to the
Persons who are registered Holders of Notes at the close of business on the
record date next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date.  The Holder hereof must surrender this Note to
a Paying Agent to collect principal payments.  The Issuers will pay principal and interest in
money of the United States that at the time of payment is legal tender for payment
of public and private debts.  The Notes
will be payable both as to principal and interest at the office or agency of the
Issuers maintained for such purpose or, at the option of the Issuers, payment
of interest may be made by check mailed to the Holders of Notes at their
respective addresses set forth in the register of Holders of Notes.  Unless otherwise designated by the Issuers,
the Issuers’ office or agency will be the office of the Trustee maintained for
such purpose.

 

(3)        Paying Agent and Registrar. 
Initially, the Trustee will act as Paying Agent and Registrar.  The Issuers may change any Paying Agent,
Registrar or co-registrar without prior notice to any Holder of a Note.  The Company may act in any such capacity.

 

(4)        Indenture.  The
Issuers issued the Notes under an Indenture, dated as of June 15, 2005
(the “Indenture”), among the Issuers, the
Guarantors and the Trustee.  This is one
of an issue of Notes of the Issuers issued, or to be issued, under the
Indenture.  The Issuers shall be entitled
to issue additional Notes pursuant to Section 2.02 of the Indenture.  All Notes issued under the Indenture shall be
treated as a single class of Notes under the Indenture.  The terms of the

 

(a)     Insert
title of registration rights agreement, if any.

 

A-2

 

Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code §§ 77aaa-77bbbb), as in effect on the date of the Indenture.  The Notes are subject to all such terms, and
Holders of Notes are referred to the Indenture and such act for a statement of
such terms.  The terms of the Indenture
shall govern any inconsistencies between the Indenture and the Notes.  The Notes are senior unsecured obligations of
the Issuers.

 

(5)        Optional Redemption.  (a) 
Except as provided in the paragraphs (b) and (c) below, the Notes
will not be redeemable at the Issuers’ option prior to June 15, 2010.  Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days’ notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, together with accrued and
unpaid interest thereon to the applicable redemption date, if redeemed during
the 12-month period beginning on June 15 of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2010

  	
   

  	
  103.188

  	
  %

  
	
  2011

  	
   

  	
  102.125

  	
  %

  
	
  2012

  	
   

  	
  101.063

  	
  %

  
	
  2013 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)  Notwithstanding
the foregoing, at any time and from time to time prior to June 15, 2008,
the Company may redeem up to 35% of the aggregate principal amount of the Notes
outstanding at a redemption price equal to 106.375% of the principal amount
thereof on the repurchase date, together with accrued and unpaid interest to
such redemption date, with the net cash proceeds of one or more public or
private sales of the Company’s Equity Interests (other than Disqualified Stock)
(including sales to or capital contributions from Parent, regardless of whether
Parent obtains such funds from an offering of its Equity Interests, the
incurrence of Indebtedness or otherwise), other than proceeds from a sale to the
Company or any of its Subsidiaries or any employee benefit plan in which the
Company or any of its Subsidiaries participates; provided that (a) at least 65% in aggregate principal
amount of the Notes originally issued remain outstanding immediately after the
occurrence of such redemption; and (b) the sale of such Equity Interests
is made in compliance with the therms of the Indenture.

 

(c)  In
addition, at any time and from time to time prior to June 15, 2010, the Company
may redeem all or any portion of the Notes outstanding at a redemption price
equal to (a) 100% of the aggregate principal amount of the Notes to be
redeemed, together with accrued and unpaid interest to such redemption date,
plus (b) the Make Whole Amount.

 

“Make Whole Amount” means, with respect to any Note at any
redemption date, the greater of (i) 1.0% of the principal amount of such
Note and (ii) the excess, if any, of (A) an amount equal to the
present value of (1) the redemption price of such Note at June 15,
2010 plus (2) the remaining scheduled interest payments on the Notes to be
redeemed (subject to the right of Holders on the relevant record date to
receive interest due on the relevant interest payment date) to June 15,
2010 (other than interest accrued to the redemption date), computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (B) the
principal amount of the Notes to be redeemed.

 

A-3

 

“Treasury Rate” means, at the time of computation, the yield
to maturity of United States Treasury Securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the redemption date or, if such Statistical Release is no longer published,
any publicly available source of similar market data) most nearly equal to the
period from the redemption date to June 15, 2010; provided,
however, that if the period from the
redemption date to June 15, 2010 is not equal to the constant maturity of
a United States Treasury Security for which a weekly average yield is given,
the Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury Securities for which such yields are given, except that if the period
from the redemption date to June 15, 2010 is less than one year, the
weekly average yield on actually traded United States Treasury Securities
adjusted to a constant maturity of one year shall be used.

 

(6)        Repurchase
at Option of Holder.  Upon the
occurrence of a Change of Control Triggering Event, the Company will be
required to make an offer to purchase on the Change of Control Payment Date all
outstanding Notes at a purchase price equal to 101% of the aggregate principal
amount thereof, together with accrued and unpaid interest thereon to the date
of purchase.  Holders of Notes that are
subject to an offer to purchase will receive a Change of Control Offer from the
Company prior to any related Change of Control Payment Date and may elect to
have such Notes purchased by completing the form entitled “Option of Holder To Elect
Purchase” appearing below.

 

When the
cumulative amount of Excess Proceeds that have not been applied in accordance
with Section 4.10 of the Indenture exceeds $100.0 million, the Company
will be obligated to make an offer to all Holders of the Notes (an “Excess  Proceeds  Offer”) to purchase the maximum principal amount of Notes
that may be purchased out of such Excess Proceeds at an offer price in cash in
an amount equal to 100% of the principal amount thereof, together with accrued
and unpaid interest to the date fixed for the closing of such offer in
accordance with the procedures set forth in the Indenture. To the extent the
Company or a Restricted Subsidiary is required under the terms of Indebtedness
of the Company or such Restricted Subsidiary which is ranked equally with the
Notes with any proceeds which constitute Excess Proceeds under the Indenture,
the Company shall make a pro rata offer to the holders of all other pari passu Indebtedness (including the Notes) with such
proceeds.  If the aggregate principal
amount of Notes and other pari passu
Indebtedness surrendered by holders thereof exceeds the amount of such Excess
Proceeds, the Trustee shall select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis.  Holders of Notes that are subject to an offer
to purchase will receive a Excess Proceeds Offer from the Company prior to any
related Purchase Payment Date and may elect to have such Notes purchased by
completing the form entitled “Option of Holder To Elect Purchase” appearing below.

 

(7)        Notice of
Redemption.  Notice of
redemption shall be mailed at least 30 days but not more than 60 days before
the redemption date to each Holder whose Notes are to be redeemed at its
registered address.  Notes may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder of Notes are to be redeemed. 
On and after the redemption date, interest ceases to accrue on Notes or
portions of them called for redemption unless the Company fails to redeem such
Notes or such portions thereof.

 

A-4

 

(8)        Termination
of Covenants.  From and after
the first date on which the Notes are rated Investment Grade by both Rating
Agencies and notwithstanding that the Notes may cease to be so rated thereafter,
Sections 3.08 (Excess Proceeds Offer), 4.11 (Limitation on Restricted Payment,
4.09 (Limitation on Incurrence of Indebtedness), 4.10 (Limitation on Asset
Sales) of the Indenture, 4.22 (Limitation on Transactions with Affiliates), and
5.01(d)(i) and (ii) (Merger, Consolidation or Sale of Assets) of the
Indenture will not apply.

 

(9)        Denominations,
Transfer, Exchange.  The Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the Indenture.
 The Registrar and the Trustee may require
a Holder of a Note, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture.  The Registrar need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption.  Also, it need not exchange
or register the transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed.

 

(10)      Persons
Deemed Owners.  Prior to due
presentment to the Trustee for registration of the transfer of this Note, the
Trustee, any Agent and the Issuers may deem and treat the Person in whose name
this Note is registered as their absolute owner for the purpose of receiving
payment of principal of, premium, if any, and interest on this Note and for all
other purposes whatsoever, whether or not this Note is overdue, and neither the
Trustee, any Agent nor the Issuers shall be affected by notice to the
contrary.  The registered Holder of a
Note shall be treated as its owner for all purposes.

 

(11)      Amendments,
Supplement and Waivers. 
Subject to certain exceptions, the Indenture, the Notes and the Guarantees
or any amended or supplemental indenture may be amended or supplemented with
the consent of the Holders of at least a majority of the aggregate principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for the Notes), and any existing default
or compliance with any provision of the Indenture or the Notes may be waived
with the consent of the Holders of a majority of the aggregate principal amount
of Notes then outstanding (including consents obtained in connection with a tender
offer or exchange offer for the Notes). 
Notwithstanding the foregoing, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder of Notes) reduce the principal amount of Notes whose
Holders must consent to an amendment, supplement or waiver; reduce the
principal of or change the fixed maturity of any Note or alter the provisions
with respect to the redemption of the Notes; reduce the rate of or change the time
for payment of interest on any Note; waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the then outstanding Notes and a waiver of the
payment default that resulted from such acceleration); make any Note payable in
money other than that stated in the Notes; make any change in the provisions of
the Indenture relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of or interest on the Notes; waive a
redemption payment or mandatory redemption with respect to any Note; amend,
change or modify

 

A-5

 

in any
material respect the obligation of the Issuers to make and consummate a Change
of Control Offer in the event of a Change of Control Triggering Event after
such Change of Control Triggering Event has occurred; or make any change in the
foregoing amendment and waiver provisions. 
Notwithstanding the foregoing, without the consent of any Holder of a
Note, the Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency; to provide for uncertificated Notes or
Guarantees in addition to or in place of certificated Notes or Guarantees; to
provide for the assumption of the obligations of the Company or any Guarantor
to the Holders of the Notes in case of a merger or consolidation; to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder; or to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act.

 

(12)      Defaults and
Remedies.  Each of the
following constitutes an Event of Default:

 

(a)           default
for 30 days in the payment when due of interest or additional interest, if any,
on the Notes;

 

(b)           default
in payment when due of principal of or premium, if any, on the Notes at
maturity, upon repurchase, redemption or otherwise;

 

(c)           failure
to comply with Section 3.08, 4.15 or 5.01 of the Indenture;

 

(d)           default
under any other provision of the Indenture or the Notes, which default remains
uncured for 60 days after notice from the Trustee or the Holders of at least
25% of the aggregate principal amount then outstanding of the Notes;

 

(e)           default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company and any of its Restricted Subsidiaries (or the payment of which
is guaranteed by the Company and any of its Restricted Subsidiaries), other
than Non-Recourse Receivables Subsidiary Indebtedness, which default is caused
by a failure to pay the principal of such Indebtedness at the final stated
maturity thereof within the grace period provided in such Indebtedness (a “Payment  Default”), and
the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default, aggregates $100 million or more;

 

(f)                            default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company and any of its Restricted Subsidiaries (or the payment of which
is guaranteed by the Company or any of its Restricted Subsidiaries), other than
Non-Recourse Receivables Subsidiary Indebtedness, which default results in the
acceleration of such Indebtedness prior to its express maturity not rescinded
or cured within 30 days after such acceleration, and the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $100 million or more;

 

A-6

 

(g)           failure
by the Company and any of its Restricted Subsidiaries to pay final judgments
(other than any judgment as to which a reputable insurance company has accepted
full liability) aggregating $100 million or more, which judgments are not
stayed within 60 days after their entry other than judgments in respect of
Non-Recourse Receivables Subsidiary Indebtedness;

 

(h)           any
Guarantee of a Significant Subsidiary shall be held in a judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect, or any Guarantor that qualifies as a Significant Subsidiary, or any
Person acting on behalf of any Guarantor that qualifies as a Significant
Subsidiary, shall deny or disaffirm its obligations under its Guarantee;

 

(i)            the
Company, DTV Finance or any Significant Subsidiary of the Company pursuant to
or within the meaning of Bankruptcy Law (i) commences a voluntary case; (ii) consents
to the entry of an order for relief against it in an involuntary case; (iii) consents
to the appointment of a Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit of its
creditors; and

 

(j)            a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that: (i) is for relief against the Company, DTV Finance or any
Significant Subsidiary of the Company in an involuntary case; (ii) appoints
a custodian of the Company, DTV Finance or any Significant Subsidiary of the
Company or for all or substantially all of the property of the Company, DTV
Finance or any Significant Subsidiary of the Company; or (iii) orders the
liquidation of the Company, DTV Finance or any Significant Subsidiary of the
Company, and the order or decree remains unstayed and in effect for 60 consecutive
days.

 

If an Event of
Default (other than an Event of Default relating to an Issuer specified in
clause (i) or (j) above) occurs and is continuing, the Trustee by notice
to the Issuers, or the Holders of at least 25% of the aggregate principal
amount then outstanding of the Notes by written notice to the Issuers and the
Trustee, may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default specified in
clause (i) or (j) above with respect to an Issuer, all outstanding Notes shall
become and immediately be due and payable without further action or notice.  Holders of the Notes may not enforce the Indenture
or the Notes except as provided in the Indenture.  The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in such Holders’ interest.

 

The Holders of
a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of all the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived. 
The Holders of a majority in

 

A-7

 

aggregate
principal amount of the then outstanding Notes, by written notice to the
Trustee, may on behalf of the Holders of all of the Notes waive any existing Default
or Event of Default and its consequences under the Indenture, except a
continuing Default or Event of Default in the payment of interest or premium
on, or principal of, the Notes.

 

The Issuers
are required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Issuers are required upon becoming aware
of any Default or Event of Default to deliver to the Trustee a statement
specifying such Default or Event of Default.

 

All powers of
the Trustee under the Indenture will be subject to applicable provisions of the
Communications Act, including, without limitation, the requirements of prior
approval for de facto or de jure transfer of control or assignment
of Title III licenses.

 

(13)          Trustee
Dealings with Issuers.  The
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Issuers or their
Subsidiaries, and may otherwise deal with the Issuers or their Subsidiaries, as
if it were not Trustee; however, if the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as Trustee or resign.

 

(14)          No Personal
Liabilities of Directors, Owners, Employees, Incorporators and Stockholders.  No director, owner, officer, employee,
incorporator or stockholder of the Company or any of its Affiliates, as such,
shall have any liability for any obligations of the Company or any of its
Affiliates under this Note, the Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note
waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.

 

(15)          Guarantees.  Payment of principal and interest (including
interest on overdue principal and overdue interest, if lawful) is
unconditionally guaranteed, jointly and severally, by each of the Guarantors.

 

(16)          Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

(17)          Abbreviations.  Customary abbreviations may be used in the
name of a Holder of a Note or an assignee, such as TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN ( = joint tenants with
right of survivorship and not as tenants in common), CUST (5 Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).

 

(18)          CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Note Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes and
has directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders of Notes.  No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

 

A-8

 

The Company
will furnish to any Holder of a Note upon written request and without charge a
copy of the Indenture.  Request may be
made to:

 

DIRECTV Holdings LLC

2230 East Imperial Highway

El Segundo, California  90245

Attention:  Corporate Secretary

 

A-9

 

ASSIGNMENT FORM

 

	
  To assign
  this Note, fill in the form below: (I) or (we) assign and transfer this Note
  to

  
	
   

  	
   

  
	
   

  
	
  (Insert
  assignee’s Soc. Sec. or tax I.D. no.)

  
	
   

  	
   

  
	
   

  
	
  (Print or
  type assignee’s name, address and zip code)

  
	
   

  	
   

  
	
  and
  irrevocably
  appoint                          agent
  to transfer this Note on the books of the Company. The agent may substitute
  another to act for him.

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the
  face of

  
	
   

  	
   

  	
  this Note)

  
	
  Signature Guarantee.

  	
   

  
							

 

A-10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to
elect to have all or any part of this Note purchased by the Issuers pursuant to
Section 3.08 (Excess Proceeds Offer) or Section 4.15 (Change of
Control and Rating Decline) of the Indenture, check the appropriate box:

 

	
  o

  	
  Section 3.08

  	
  o

  	
   

  	
  Section 4.15

  

 

If you want to
have only part of the Note purchased by the Issuers pursuant to Section 3.08
or Section 4.15 of the Indenture, state the amount you elect to have
purchased:

 

$

 

	
  Date: 

  	
   

  	
   

  

 

	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the
  face of

  
	
   

  	
   

  	
  this Note)

  
	
  Signature Guarantee.

  	
   

  
				

 

A-11

 

[ATTACHMENT FOR GLOBAL NOTES]

 

SCHEDULE OF EXCHANGES OF INTERESTS IN
THE GLOBAL NOTE

 

The following
exchanges of a part of this Global Note for an interest in another Global Note
or for a Definitive Note, or exchanges of a part of another Global Note or
Definitive Note for an interest in this Global Note, have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount of

  this Global Note

  	
   

  	
  Amount of Increase

  Principal Amount of

  the Global Note

  	
   

  	
  Principal Amount

  of this Global Note

  following such

  Decrease (or Increase)

  	
   

  	
  Signature of

  authorized officer

  of Trustee or

  Note Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-12

 

EXHIBIT B

 

FORM OF GUARANTEE

 

[Name of
Guarantor] and its successors under the Indenture, jointly and severally with
any other Guarantors, hereby irrevocably and unconditionally (i) guarantee
the due and punctual payment of the principal of, premium, if any, and interest
on the Notes, whether at maturity, by acceleration, redemption or otherwise,
the due and punctual payment of interest on the overdue principal of and
interest, if any, on the Notes, to the extent lawful, and the due and punctual
performance of all other obligations of DIRECTV Holdings LLC and DIRECTV Financing
Co., Inc. (together the “Issuers”) to
the Holders or the Trustee all in accordance with the terms set forth in Article 10
of the Indenture and (ii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, guarantee that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.  Capitalized terms used herein have the
meanings assigned to them in the Indenture unless otherwise indicated.

 

No
stockholder, officer, director or incorporator, as such, past, present or
future, of [name of Guarantor] shall have any personal liability under this
Guarantee by reason of his or its status as such stockholder, officer, director
or incorporator.  This Guarantee shall be
binding upon [name of Guarantor] and its successors and assigns and shall inure
to the benefit of the successors and assigns of the Trustee and the Holders
and, in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof.

 

This Guarantee
shall not be valid or obligatory for any purpose until the certificate of authentication
on the Note upon which this Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers.

 

THE TERMS OF ARTICLE 10
OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

This Guarantee
shall be governed by and construed in accordance with the laws of the State of
New York.

 

	
   

  	
  [NAME OF GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

B-1

 

EXHIBIT C

 

FORM OF CERTIFICATE OF TRANSFER

 

DIRECTV Holdings LLC

DIRECTV Financing Co., Inc.

2230 East Imperial Highway

El Segundo, California  92405

 

The Bank of New York

700 South Flower Street 

Los Angeles, CA 90017

Attn:  Corporate Trust Administration

 

Re:  63/8%
Senior Notes due 2015

 

Reference is
hereby made to the Indenture, dated as of June 15, 2005 (the “Indenture”), among DIRECTV Holdings LLC and DIRECTV
Financing Co., Inc., as co-issuers (the “Issuers”),
the Guarantors named therein and The Bank of New York, as trustee.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

                                  (the “Transferor”)
owns and proposes to transfer the Note[s] or interest in such Note[s] specified
in Annex A hereto, in the principal amount of $        
in such Note[s] or interests (the “Transfer”), to                     
(the “Transferee”), as further specified in
Annex A hereto.  In connection with the
Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.             o            Check if Transferee will take delivery of a
beneficial interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the United States Securities Act of
1933, as amended (the “Securities Act”),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a “qualified institutional buyer” within
the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A
and such Transfer is in compliance with any applicable blue sky securities laws
of any state of the United States.  Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture,
the transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.

 

C-1

 

2.             o            Check if Transferee will take delivery of a
beneficial interest in the Regulation S Global Note or a Definitive Note
pursuant to Regulation S. 
The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a
Person in the United States and (x) at the time the buy order was originated,
the Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the  facilities of a designated offshore
securities market and neither such Transferor nor any Person acting on its
behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed  selling
efforts have been made in contravention of the requirements of Rule 903(b) or
Rule 904(b) of  Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act and (iv) if
the proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser).  Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on Transfer enumerated
in the Private Placement Legend printed on the Regulation S Global Note and/or
the Definitive Note and in the Indenture and the Securities Act.

 

3.             o            Check and complete if Transferee will take
delivery of a beneficial interest in a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S.  The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any
state of the United States, and accordingly the Transferor hereby further
certifies that (check one):

 

(a)          o             such
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;

 

or

 

(b)          o             or
such Transfer is being effected to the Issuers or a subsidiary thereof;

 

or

 

(c)            o           such
Transfer is being effected pursuant to an effective registration statement
under the Securities Act and in compliance with the prospectus delivery requirements
of the Securities Act.

 

C-2

 

4.             o            Check if Transferee will take delivery of a
beneficial interest in an Unrestricted Global Note or of an Unrestricted
Definitive Note.

 

(a)            o           Check if Transfer is pursuant to Rule 144.  (i)  The Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act and
in compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will no longer be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.

 

(b)            o           Check if Transfer is Pursuant to Regulation S.  (i)  The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. 
Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
no longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

 

(c)            o           Check if Transfer is Pursuant to Other Exemption.  (i)  The Transfer is being effected
pursuant to and in compliance with an exemption from the registration
requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.

 

C-3

 

This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuers.

 

 

	
   

  	
   

  
	
   

  	
  [Insert Name
  of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  
					

 

C-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.             The Transferor owns
and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

	
  (a)

  	
   

  	
  o

  	
  a beneficial interest in the:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  o

  	
  144A Global Note (CUSIP
  [                ]),
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  o

  	
  Regulation S Global (CUSIP
  [                ])),
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  o

  	
  a Restricted Definitive Note.

  

 

2.             After the Transfer
the Transferee will hold:

 

[CHECK ONE]

 

	
  (a)

  	
   

  	
  o

  	
  a beneficial interest in the:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  o

  	
  144A Global Note (CUSIP
  [                ]),
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  o

  	
  Regulation S Global Note (CUSIP
  [                ]),
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  o

  	
  Unrestricted Global Note CUSIP
  [                ],
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  o

  	
  a Restricted Definitive Note; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  o

  	
  an Unrestricted Definitive Note,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  in accordance with the terms of the Indenture.

  

 

C-5

 

EXHIBIT D

 

FORM OF CERTIFICATE OF EXCHANGE

 

DIRECTV Holdings LLC

DIRECTV Financing Co., Inc.

2230 East Imperial Highway

El Segundo, California   92405

 

The Bank of New York

700 South Flower Street 

Los Angeles, CA 90017

Attn:  Corporate Trust Administration

 

Re:  63/8%
Senior Notes due 2015

 

(CUSIP
[             ])

 

Reference is
hereby made to the Indenture, dated as of June 15, 2005 (the “Indenture”), among DIRECTV Holdings LLC and DIRECTV
Financing Co., Inc., as co-issuers (the “Issuers”),
the Guarantors named therein and The Bank of New York, as trustee.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

                              
(the “Owner”) owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $                
in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:

 

1.          Exchange of Restricted Definitive Notes or
Beneficial Interests in a Restricted Global Note for Unrestricted Definitive
Notes or Beneficial Interests in an Unrestricted Global Note.

 

(a)        o      Check if Exchange is from beneficial interest in a Restricted Global
Note to beneficial interest in an Unrestricted Global Note.  In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the United States Securities Act of 1933, as
amended (the “Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

 

(b)        o      Check if Exchange is from beneficial interest in a Restricted Global
Note to Unrestricted Definitive Note.  In connection with the Exchange of the Owner’s
beneficial

 

D-1

 

interest in a
Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

 

(c)        o      Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for a beneficial interest in an Unrestricted Global
Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

 

(d)        o      Check
if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

 

2.          Exchange of Restricted Definitive Notes or
Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes
or Beneficial Interests in Restricted Global Notes.

 

(a)        o      Check if Exchange is from beneficial interest in a Restricted Global
Note to Restricted Definitive Note. 
In connection with the Exchange of the Owner’s beneficial interest in a
Restricted Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note is being
acquired for the Owner’s own account without transfer.  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.

 

(b)        o      Check if Exchange is from Restricted Definitive Note to beneficial interest
in a Restricted Global Note. 
In connection with the Exchange of the Owner’s Restricted Definitive
Note for a beneficial interest in the [CHECK ONE]    144A Global
Note,    Regulation S Global Note with an equal principal amount, the
Owner hereby certifies (i) the beneficial interest

 

D-2

 

is being
acquired for the Owner’s own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States.  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture and the
Securities Act.

 

This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuers.

 

	
   

  	
   

  
	
   

  	
  [Insert Name
  of Transferor]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  
					

 

D-3

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