Document:

EX-4.4

EXHIBIT 4.4

PLEDGE AND SECURITY AGREEMENT

Dated as of December 30, 2005

among

PAXSON COMMUNICATIONS CORPORATION

and Each Other Grantor

From Time to Time Party Hereto

and

THE BANK OF NEW YORK TRUST COMPANY, NA,

as Collateral Agent

and

THE BANK OF NEW YORK TRUST COMPANY, NA,

as First Priority Trustee

THE BANK OF NEW YORK TRUST COMPANY, NA,

as Second Priority Trustee

and

CITICORP NORTH AMERICA, INC.,

1

as First Priority Administrative Agent

TABLE OF CONTENTS

Page

	 	 	 
	ARTICLE I.

Section 1.1

Section 1.2

ARTICLE II.

Section 2.1

Section 2.2

Section 2.3

ARTICLE III.

Section 3.1

Section 3.2

Section 3.3

Section 3.4

Section 3.5

Section 3.6

Section 3.7

Section 3.8

Section 3.9

Section 3.10

ARTICLE IV.

Section 4.1

Section 4.2

Section 4.3

Section 4.4

Section 4.5

Section 4.6

Section 4.7

Section 4.8

Section 4.9

Section 4.10

Section 4.11

Section 4.12

Section 4.13

Section 4.14

Section 4.15

ARTICLE V.

Section 5.1

Section 5.2

Section 5.3

Section 5.4

Section 5.5

Section 5.6

Section 5.7

ARTICLE VI.

Section 6.1

Section 6.2

Section 6.3

Section 6.4

Section 6.5

ARTICLE VII.

Section 7.1

Section 7.2

Section 7.3

ARTICLE VIII.

ARTICLE IX.

Section 9.1

Section 9.2

Section 9.3

Section 9.4

Section 9.5

Section 9.6

Section 9.7

Section 9.8

Section 9.9

Section 9.10

Section 9.11

Section 9.12

Section 9.13

Section 9.14

	 	DEFINED TERMS

Definitions.

Certain Other Terms

GRANT OF SECURITY INTEREST

Collateral

Grant of Security Interest in Collateral

Ranking of Security Interests

REPRESENTATIONS AND WARRANTIES

Title; No Other Liens

Perfection and Priority

State of Incorporation; Chief Executive Office

Inventory and Equipment

Pledged Collateral

Accounts

No Other Names

Intellectual Property

Deposit Accounts; Control Accounts

Lien Search Reports

COVENANTS

Generally

Maintenance of Perfected Security Interests; Further Documentation

Changes in Locations, Name, Etc.

Pledged Collateral

Control Accounts

Accounts

Delivery of Instruments and Chattel Paper

Intellectual Property

Vehicles

Payment of Obligations

Special Property

Electronic Chattel Paper and Transferable Records

Letter-of-Credit Rights

Commercial Tort Claims

Post-Closing Delivery of Lien Searches

REMEDIAL PROVISIONS

Code and Other Remedies

Accounts and Payments in Respect of General Intangibles

Pledged Collateral

Proceeds To Be Turned Over to Collateral Agent

Registration Rights

Waiver; Deficiency

FCC Matters

THE COLLATERAL AGENT

Collateral Agent’s Appointment as Attorney-in-Fact

Duty of Collateral Agent

Filing of Financing Statements

Authority of Collateral Agent

Directions to Collateral Agent

CERTAIN PROVISIONS CONCERNING COLLATERAL ACCOUNT

Deposits into Collateral Account

Application of Amounts in Collateral Account

Investment of Balance in Collateral Account

APPLICATION OF PROCEEDS

MISCELLANEOUS

Amendments in Writing

Notices

No Waiver by Course of Conduct; Cumulative Remedies

Successors and Assigns

Counterparts

Severability

Section Headings

Entire Agreement

Governing Law

Additional Grantors

Release of Collateral

Reinstatement

Additional Secured Obligations

Incorporation by Reference

	 	 	 
	Annexes and Schedules

	 
	 	 
	Annex 1

Annex 2

Annex 3

Annex 4

Annex 5

Annex 6

Annex 7

Schedule 1

Schedule 2

Schedule 3

Schedule 4

Schedule 5

Schedule 6

Schedule 7

Schedule 8

Schedule 9

Schedule 10

	 	The Collateral Agent and Secured Party Acknowledgments

Pledge Amendment

Joinder Agreement

Short-Form Copyright Security Agreement

Short-Form Patent Security Agreement

Short-Form Trademark Security Agreement

Additional Secured Party Consent

Grantors’ States of Incorporation; Chief Executive Offices, etc.

Pledged Collateral

Filings

Location of Inventory and Equipment

Material Intellectual Property

Deposit Accounts; Securities Accounts and Commodity Accounts

Commercial Tort Claims

Letter of Credit Rights

File Search Reports; Permitted Liens

Post-Closing Lien Searches

2

PLEDGE AND SECURITY AGREEMENT

PLEDGE AND SECURITY AGREEMENT, dated as of December 30, 2005, by Paxson Communications
Corporation (the “Company”) and each of the other entities listed on the signature pages hereof or
which become a party hereto pursuant to Section 7.10 (each such entity, a “Subsidiary Guarantor”
and, collectively, together with the Company, the “Grantors”), in favor of The Bank of New York
Trust Company, NA, a national banking association (“BNY”), as collateral agent for the Secured
Parties (the “Collateral Agent”), and acknowledged and agreed to by (i) BNY, on its own behalf
solely in its capacity as trustee (the “First Priority Trustee”) and on behalf of the First
Priority Noteholders (as defined below) under the First Priority Indenture (as defined below), (ii)
BNY, on its own behalf solely in its capacity as trustee (the “Second Priority Trustee”) and on
behalf of the Second Priority Noteholders (as defined below) under the Second Priority Indenture
(as defined below), (iii) Citicorp North America, Inc., on its own behalf solely in its capacity as
administrative agent (the “First Priority Administrative Agent”) and on behalf of the First
Priority Term Lenders (as defined below) under the First Priority Term Loan Facility (as defined
below) and (iv) each other Authorized Representative (as defined below), from time to time, for any
Class of Additional Secured Obligations with respect to which an Additional Secured Party Consent
has been delivered to the Collateral Agent and the other Authorized Representatives in accordance
with Section 9.13.

W I T N E S S E T H:

WHEREAS, this Agreement is being entered into in connection with (i) that certain First
Priority Indenture, dated as of December 30, 2005 (the “First Priority Indenture”), among the
Grantors and the First Priority Trustee, providing for the issuance by the Company of its Floating
Rate First Priority Senior Secured Notes due 2012 in an aggregate principal amount of $400,000,000
(the “First Priority Notes”; and the holders thereof from time to time, the “First Priority
Noteholders”), (ii) that certain term loan facility, dated as of December 30, 2005 (the “First
Priority Term Loan Facility”), by and among the Grantors and the First Priority Administrative
Agent, providing for the borrowing of term loans in an aggregate principal amount of $325,000,000
(the “First Priority Term Loans”; and the holders thereof from time to time, the “First Priority
Term Lenders”) and (iii) that certain Second Priority Indenture, dated as of December 30, 2005 (the
“Second Priority Indenture”), among the Grantors and the Second Priority Trustee, providing for the
issuance by the Company of its Floating Rate Second Priority Senior Secured Notes due 2013 in the
aggregate principal amount of $405,000,000 (the “Second Priority Notes”; and the holders thereof
from time to time, the “Second Priority Noteholders”);

WHEREAS, the First Priority Indenture, the First Priority Term Loan Facility and the Second
Priority Indenture permit Additional First Priority Secured Obligations and Additional Second
Priority Secured Obligations to be secured by the Liens created by this Agreement on the Collateral
on the terms set forth herein;

NOW, THEREFORE, in consideration of the foregoing, each Authorized Representative and each
Grantor hereby agrees with the Collateral Agent as follows:

	 	 	 	ARTICLE I. DEFINED TERMS

Section 1.1 Definitions. (a) Unless otherwise defined herein, capitalized terms defined
identically in all material respects in both the First Priority Indenture and the First Priority
Term Loan Facility and used herein have the meanings given to them in such First Priority
Documents.

(b) Unless otherwise defined herein or as set forth above, capitalized terms used herein that
are defined in the UCC have the meanings given to them in the UCC.

(c) The following terms shall have the following meanings:

“Additional First Priority Secured Obligations” shall have the meaning provided in Section
9.13.

“Additional First Priority Secured Parties” shall mean the holders from time to time of
Additional First Priority Secured Obligations.

“Additional Pledged Collateral” means, collectively, with respect to each Grantor, in each
case, to the extent not constituting Excluded Property, all shares of, limited and/or general
partnership interests in, and limited liability company interests in, and all securities
convertible into, and warrants, options and other rights to purchase or otherwise acquire, stock
of, either (i) any Person that, after the date of this Agreement, as a result of any occurrence,
becomes a direct Subsidiary of such Grantor or (ii) any issuer of Pledged Stock, any Partnership or
any LLC that is acquired by such Grantor after the date hereof; all certificates or other
instruments representing any of the foregoing; all Security Entitlements of such Grantor in respect
of any of the foregoing; all additional indebtedness from time to time owed to such Grantor by any
obligor on the Pledged Notes and the instruments evidencing such indebtedness; and all interest,
cash, instruments and other property or Proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the foregoing. Additional
Pledged Collateral may be General Intangibles or Investment Property.

“Additional Secured Party Consent” shall mean a completed additional secured party consent in
the form of Annex 7.

“Additional Second Priority Secured Obligations” shall have the meaning provided in Section
9.13.

“Additional Second Priority Secured Parties” shall mean the holders from time to time of
Additional Second Priority Secured Obligations.

“Additional Secured Obligations” shall mean Additional First Priority Secured Obligations and
Additional Second Priority Secured Obligations.

“Agreement” means this Pledge and Security Agreement.

“Applicable Secured Parties” means (i) prior to the First Priority Secured Obligations
Termination Date, holders of a majority in aggregate principal amount of First Priority Secured
Obligations (other than First Priority Secured Obligations under any Secured Hedging Agreement),
(ii) from and after the First Priority Secured Obligations Termination Date until the Second
Priority Secured Obligations Termination Date, holders of a majority in aggregate principal amount
of Second Priority Secured Obligations and (iii) from and after the Second Priority Secured
Obligations Termination Date, holders of a majority in aggregate principal amount of Secured
Obligations under Secured Hedging Agreements.

“Authorized Representative” means (i) each of the First Priority Trustee, the First Priority
Administrative Agent and the Second Priority Trustee, in each case, for so long as the First
Priority Notes, First Priority Term Loans or Second Priority Notes, as applicable, are Secured
Obligations hereunder and (ii) any other party designated as an “Authorized Representative” for any
Additional Secured Parties in an Additional Secured Party Consent delivered to the Collateral Agent
and the other Authorized Representatives in accordance with Section 9.13 for so long as the Class
of Additional Secured Obligations for which such party is serving in such capacity constitutes
Secured Obligations hereunder.

“Bankruptcy Code” means Chapter 11 of Title 11 of the United States Code (11 U.S.C. § 101
et seq.), as amended from time to time, and any successor statute, and all rules
and regulations promulgated thereunder.

“Class” with respect to any Secured Obligations, refers to all Secured Obligations under a
Secured Debt Document or group of related Secured Debt Documents with respect to which a single
Authorized Representative is acting as such hereunder.

“Closing Date” means December 30, 2005.

“Collateral” has the meaning specified in Section 2.1.

“Collateral Account” means any Deposit Account or Securities Account established by the
Collateral Agent as provided in Article VII in which cash and Temporary Cash Investments may from
time to time be on deposit or held as provided in Article VII.

“Control Agreement” means a control agreement, (i) with respect to any Deposit Account,
substantially on the terms, and providing the Collateral Agent substantially the same rights and
remedies, as the control agreements entered into with Wachovia Bank, N.A. on the date hereof (as
determined in good faith by the Company) and (ii) with respect to any Securities Account,
substantially on the terms, and providing the Collateral Agent substantially the same rights and
remedies, as the control agreement entered into with Union Bank of California, N.A. (as determined
in good faith by the Company), and, in any event, sufficient to establish Control, in favor of the
Collateral Agent, over any applicable Investment Property (including, without limitation, any
Securities Account or Commodity Account) or Deposit Account.

“Copyright Licenses” means any written agreement naming any Grantor as licensor or licensee
granting any right under any Copyright, including the grant of rights to copy, publicly perform,
create derivative works, manufacture, distribute, exploit and sell materials derived from any
Copyright.

“Copyrights” means (a) all copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications in the United States
Copyright Office or in any foreign counterparts thereof, (b) rights and privileges arising under
applicable law with respect to a Grantor’s use of any such copyrights, (c) reissues, renewals,
continuations and extensions thereof, (d) income, fees, royalties, damages, claims and payments now
or hereafter due and/or payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (e) rights corresponding thereto
throughout the world and (f) rights to sue for past, present or future infringements thereof.

“Default” shall mean any event that would, with the passage of time (including to the First
Priority Secured Obligations Termination Date), the giving of notice or both, constitute an “Event
of Default.”

“Deposit Account” shall mean, collectively, with respect to each Grantor, (a) all “deposit
accounts” as such term is defined in the UCC and in any event shall include, without limitation,
the Collateral Account and all accounts and sub-accounts relating to any of the foregoing accounts
and (b) all cash, funds, checks, notes and any instruments from time to time on deposit in any of
the accounts or sub-accounts described in clause (a) of this definition.

“Distributions” shall mean, collectively, with respect to each Grantor, all dividends, cash,
options, warrants, rights, instruments, distributions, returns of capital or principal, income,
interest, profits and other property, interests (debt or equity) or proceeds, including as a result
of a split, revision, reclassification or other like change of the Pledged Stock, the Pledged LLC
Interests, the Pledged Partnership Interests or the Pledged Notes, from time to time received,
receivable or otherwise distributed to such Grantor in respect of or in exchange for any of the
foregoing Pledged Collateral.

“Event of Default” shall mean (i) prior to the First Priority Secured Obligations Termination
Date, any “Event of Default” under and as defined in the First Priority Indenture, the First
Priority Term Loan Facility or any other then effective First Priority Document (other than any
First Priority Document relating solely to a Secured Hedging Agreement), (ii) from and after the
First Priority Secured Obligations Termination Date until the Second Priority Secured Obligations
Termination Date, any “Event of Default” under and as defined in the Second Priority Indenture or
any other then effective Second Priority Document and (iii) from and after the Second Priority
Secured Obligations Termination Date, any “Event of Default” or “Event of Termination” under any
Secured Hedging Agreement.

“Excluded Property” means Special Property other than the following:

(a) the right to receive any payment of money (including, without limitation, any
rights referred to in Sections 9-406(d), 9-407(a), 9-408(a) or 9-409(a) of the UCC to the
extent that sections of the UCC are effective to limit the prohibitions which make such
property “Special Property”); and

(b) any proceeds, products, accessions, rents, profits, income, benefits, substitutions
or replacements of any Special Property (unless such proceeds, products, accessions, rents,
profits, income, benefits, substitutions or replacements themselves would constitute Special
Property).

“First Priority Administrative Agent” shall have the meaning provided in the recitals to this
Agreement.

“First Priority Bank Creditors” shall mean the First Priority Administrative Agent and the
First Priority Term Lenders.

“First Priority Documents” shall mean (i) the First Priority Notes, the First Priority
Indenture, the First Priority Term Loans, the First Priority Term Loan Facility and the other
documents and instruments executed and delivered with respect to the First Priority Notes, the
First Priority Indenture, the First Priority Term Loans and the First Priority Term Loan Facility,
in each case as in effect on the date hereof and as the same may be amended, modified and/or
supplemented from time to time in accordance with the terms thereof, and (ii) any document or
instrument executed and delivered with respect to any Additional First Priority Secured
Obligations.

“First Priority Creditors” shall means the First Priority Bank Creditors and the First
Priority Note Creditors.

“First Priority Note Creditors” shall mean the First Priority Trustee and the First Priority
Noteholders.

“First Priority Noteholders” shall have the meaning provided in the recitals to this
Agreement.

“First Priority Notes” shall have the meaning provided in the recitals of this Agreement.

“First Priority Secured Obligations” shall mean with respect to each Grantor, all of such
Grantor’s obligations to the Collateral Agent pursuant to this Agreement and all of such Grantor’s
obligations (whether or not constituting future advances, obligatory or otherwise) arising under or
in respect of the First Priority Indenture, the First Priority Term Loan Facility, any Secured
Hedging Agreement and any other First Priority Document, in each case whether (i) such obligations
are direct or indirect, absolute or contingent, due or to become due whether at stated maturity, by
acceleration or otherwise, (ii) arising in the ordinary course of business or otherwise, (iii) for
payment or performance and/or (iv) now existing or hereafter arising (including, without
limitation, interest and other obligations arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization or similar proceeding with respect to any Grantor or any
other Person, or which would have arisen or accrued but for the commencement of such proceeding,
even if such obligation or the claim therefore is not enforceable or allowable in such proceeding).

“First Priority Secured Obligations Termination Date” shall mean the first time and date upon
which all First Priority Secured Obligations (other than (i) contingent obligations not yet due and
payable and (ii) First Priority Secured Obligations under Secured Hedging Agreements) have been
paid in full in cash or otherwise discharged or defeased in accordance with the terms of the
respective First Priority Documents (other than in connection with a substantially concurrent
refinancing thereof with Additional First Priority Secured Obligations).

“First Priority Security Parties” shall mean the Collateral Agent, the First Priority
Creditors and any Additional First Priority Secured Parties.

“First Priority Term Lenders” shall have the meaning provided in the recitals to this
Agreement.

“First Priority Trustee” shall have the meaning provided in the recitals to this Agreement.

“Intellectual Property” means, collectively, all rights, priorities and privileges of any
Grantor relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks, Trademark Licenses, know-how, trade secrets, customer and supplier lists, proprietary
information, inventions, methods, procedures, formulae, descriptions, compositions, technical data
and all rights to sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.

“Intercompany Note” means any promissory note evidencing loans made by any Grantor to any of
its Subsidiaries or another Grantor.

“LLC” means each limited liability company in which a Grantor has an interest, including those
set forth on Schedule 2.

“LLC Agreement” means each operating agreement with respect to an LLC, as each such agreement
has heretofore been and may hereafter be amended, restated, supplemented or otherwise modified from
time to time.

“Material Adverse Change” means an event or development or state of affairs that would (a)
adversely affect the legality, validity or enforceability of the Security Documents or (b)
materially adversely affect the value of, or remedies available to the Collateral Agent with
respect to, the Collateral taken as a whole.

“Material Intellectual Property” means Intellectual Property owned by or licensed to a
Grantor, the loss of which could reasonably be expected to result in a Material Adverse Change.

“Officer” means the Chief Executive Officer, the President, the Chief Financial Officer or any
Vice President of the Company or a Subsidiary Guarantor.

“Officers’ Certificate” means with respect to any Person, a certificate signed by two
Officers, at least one of whom shall be the principal executive officer or principal financial
officer of such Person, and delivered to the Collateral Agent and each Authorized Representative.

“Opinion of Counsel” means a written opinion from legal counsel. The counsel may be an
employee of or counsel to the Company.

“Partnership” means each partnership in which a Grantor has an interest, including those set
forth on Schedule 2.

“Partnership Agreement” means each partnership agreement governing a Partnership, as each such
agreement has heretofore been and may hereafter be amended, restated, supplemented or otherwise
modified.

“Patent Licenses” means all agreements, whether written or oral, providing for the grant by or
to any Grantor of any right to manufacture, use, import, sell or offer for sale any invention
covered in whole or in part by a Patent.

“Patents” means (a) all letters patent of the United States, any other country or any
political subdivision thereof and all reissues and extensions thereof, (b) rights and privileges
arising under applicable law with respect to such Grantor’s use of any patents, (c) inventions and
improvements described and claimed therein, (d) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, (e) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with respect thereto including, without
limitation, damages and payments for past, present or future infringements thereof, (f) rights
corresponding thereto throughout the world and (g) rights to sue for past, present or future
infringements thereof.

“Pledged Collateral” means, collectively, the Pledged Notes, the Pledged Stock, the Pledged
Partnership Interests, the Pledged LLC Interests, any other Investment Property of any Grantor, all
certificates or other instruments representing any of the foregoing and all Security Entitlements
of any Grantor in respect of any of the foregoing. Pledged Collateral may be General Intangibles
or Investment Property.

“Pledged LLC Interests” means all right, title and interest of any Grantor as a member of any
LLC and all right, title and interest of any Grantor in, to and under any LLC Agreement to which it
is a party.

“Pledged Notes” means all right, title and interest of any Grantor in the Instruments
evidencing all Indebtedness owed to such Grantor (other than Special Property), including all
Indebtedness described on Schedule 2, issued by the obligors named therein.

“Pledged Partnership Interests” means all right, title and interest of any Grantor as a
limited and/or general partner in any Partnership and all right, title and interest of any Grantor
in, to and under any Partnership Agreements to which it is a party.

“Pledged Stock” means the shares of Stock owned by each Grantor, including all shares of Stock
listed on Schedule 2.

“Related Contract” means each security agreement, lease and other contract securing or
otherwise relating to any Account.

“Required Secured Parties” shall mean (i) so long as any First Priority Secured Obligations in
respect of First Priority Notes or First Priority Term Loans are outstanding, each of the First
Priority Trustee and the First Priority Administrative Agent with such authorizations or consents,
if any, as may be required by the First Priority Indenture and the First Priority Term Loan
Facility, (ii) if any Additional First Priority Secured Obligations are outstanding, each
Authorized Representative for any Class of Additional First Priority Secured Parties holding such
Additional First Priority Secured Obligations with such authorizations or consents, if any, as may
be required by the First Priority Documents governing such Additional First Priority Secured
Obligations, (iii) so long as any Second Priority Notes are outstanding, the Second Priority
Trustee with such authorizations or consents, if any, as may be required by the Second Priority
Indenture and (iv) if any Additional Second Priority Secured Obligations are outstanding, each
Authorized Representative for any Class of such Additional Second Priority Secured Obligations with
such authorizations or consents as may be required by the Second Priority Documents governing such
Additional Second Priority Secured Obligations.

“Second Priority Documents” shall mean (i) the Second Priority Notes, the Second Priority
Indenture, and the other documents and instruments executed and delivered with respect to the
Second Priority Notes or the Second Priority Indenture, in each case as in effect on the date
hereof and as the same may be amended, modified and/or supplemented from time to time in accordance
with the terms thereof and (ii) any document or instrument executed and delivered with respect to
any Additional Second Priority Secured Obligations.

“Second Priority Note Creditors” shall mean the Second Priority Trustee and the Second
Priority Noteholders.

“Second Priority Noteholders” shall have the meaning provided in the recitals to this
Agreement.

“Second Priority Notes” shall have the meaning provided in the recitals of this Agreement.

“Second Priority Secured Obligations” shall mean with respect to each Grantor, all of such
Grantor’s obligations (whether or not constituting future advances, obligatory or otherwise)
arising under or in respect of the Second Priority Indenture and any other Second Priority
Documents, in each case whether (i) such obligations are direct or indirect, absolute or
contingent, due or to become due whether at stated maturity, by acceleration or otherwise, (ii)
arising in the ordinary course of business or otherwise, (iii) for payment or performance and/or
(iv) now existing or hereafter arising (including, without limitation, interest and other
obligations arising or accruing after the commencement of any bankruptcy, insolvency,
reorganization or similar proceeding with respect to any Grantor or any other Person, or which
would have arisen or accrued but for the commencement of such proceeding, even if such obligation
or the claim therefore is not enforceable or allowable in such proceeding).

“Second Priority Secured Obligations Termination Date” shall mean the first time and date on
or after the First Priority Secured Obligations Termination Date upon which all Second Priority
Secured Obligations (other than contingent obligations not yet due and payable) have been paid in
full in cash or otherwise discharged or defeased in accordance with the terms of the respective
Second Priority Documents (other than in connection with a substantially concurrent refinancing
thereof with Additional Second Priority Secured Obligations).

“Second Priority Secured Parties” shall mean the Second Priority Note Creditors and any
Additional Second Priority Secured Parties.

“Second Priority Trustee” shall have the meaning provided in the recitals to this Agreement.

“Secured Debt Documents” shall mean and include (i) this Agreement, (ii) the First Priority
Documents and (iii) the Second Priority Documents.

“Secured Hedging Agreement” means any Interest Rate Agreement (including any Guarantee by any
Grantor of another Grantor’s obligations under any such Interest Rate Agreement) under which any
Grantor’s obligations are secured by a Lien on the Collateral in accordance with Section 9.13.

“Secured Hedging Exchanger” means an entity that has entered into a Secured Hedging Agreement
with any Grantor.

“Secured Obligations” means (i) the First Priority Secured Obligations and (ii) the Second
Priority Secured Obligations.

“Secured Parties” means the First Priority Secured Parties and the Second Priority Secured
Parties.

“Security Documents” shall mean this Agreement and any other Agreement which any Grantor
enters into pursuant hereto in order to secure the Secured Obligations.

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

“Special Property” means:

(a) any permit, lease, license, license agreement or general intangible held by any
Grantor that validly prohibits the creation by such Grantor of a security interest therein;

(b) any permit, lease, license, license agreement or other personal property held by
any Grantor to the extent that any Requirement of Law applicable thereto prohibits the
creation of a security interest therein;

(c) Property owned by any Grantor that is subject to a Lien securing Purchase Money
Debt or a Capital Lease Obligation (in each case permitted by the Secured Debt Documents) if
the contract or other agreement pursuant to which such Lien is granted (or the documentation
providing for such Capital Lease Obligation) validly prohibits the creation of any other
Lien on such Property;

(d) the outstanding voting Capital Stock in excess of 65% of the voting power of all
classes of Capital Stock of any “controlled foreign corporation” (as defined in Section
957(a) of the Tax Code) entitled to vote; and

(e) any Instrument evidencing indebtedness owed to any Grantor by any officer, director
or employee of any Grantor to the extent that (i) the existence and amount of such
Instrument is disclosed in the Offering Memorandum or (ii) such Instrument is created
following the Closing Date in a transaction that complies with the Secured Debt Documents;

in the case of clauses (a) through (c) only to the extent, and for so long as, such Property, or
requirement of law applicable thereto, validly prohibits the creation of a Lien on such Property in
favor of the Collateral Agent (and upon the termination of such prohibition (howsoever occurring)
such Property shall cease to be “Special Property”).

“Tax Code” means the Internal Revenue Code of 1986, as amended.

“Termination Date” shall have the meaning set forth in Section 9.11.

“Trademark License” means any agreement, whether written or oral, providing for the grant by
or to any Grantor of any right to use any Trademark.

“Trademarks” means (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other source or business
identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political subdivision thereof, or otherwise,
and all common-law rights related thereto, (b) rights and privileges arising under applicable law
with respect to any Pledgor’s use of any trademarks, (c) reissues, continuations, extensions and
renewals thereof, (d) income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including, without limitation, damages, claims and
payments for past, present or future infringements thereof, (e) rights corresponding thereto
throughout the world, (f) rights to sue for past, present and future infringements thereof and (g)
all goodwill of such Pledgor’s business symbolized thereby.

“UCC” means the Uniform Commercial Code as from time to time in effect in the State of New
York; provided, however, that in the event that, by reason of mandatory provisions of law, any or
all of the attachment, perfection or priority of the Collateral Agent’s and the Secured Parties’
security interests in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to such provisions.

“Vehicles” means all vehicles or other Equipment covered by a certificate of title law of any
state.

Section 1.2 Certain Other Terms.

(a) The words “herein,” “hereof,” “hereto” and “hereunder” and similar words refer to this
Agreement as a whole and not to any particular Article, Section, subsection or clause in this
Agreement.

(b) References herein to an Annex, Schedule, Article, Section, subsection or clause refer to
the appropriate Annex or Schedule to, or Article, Section, subsection or clause in, this Agreement.

(c) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

(d) Where the context requires, provisions relating to the Collateral or any part thereof,
when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part
thereof.

(e) Any reference in this Agreement to this Agreement or any Secured Debt Document shall
include all appendices, exhibits and schedules hereto or thereto, and, unless specifically stated
otherwise, all amendments, restatements, supplements or other modifications hereto or thereto, and
as the same may be in effect at any and all times such reference becomes operative.

(f) The term “including” means “including without limitation” except when used in the
computation of time periods.

(g) A reference to a Person (including the terms “Authorized Representative,” “Collateral
Agent,” “First Priority Secured Party, “Second Priority Secured Party,” “First Priority Trustee,”
“First Priority Administrative Agent,” “Second Priority Trustee,” “Secured Hedging Exchanger” and
“Secured Party”) includes such Person’s respective successors under the applicable Secured Debt
Documents.

(h) References in this Agreement to any statute or rule shall be to such statute or rule as
amended or modified and in effect from time to time.

	 	 	 	ARTICLE II. GRANT OF SECURITY INTEREST

Section 2.1 Collateral. For the purposes of this Agreement, the term “Collateral” means,
subject to Section 2.2, all personal property now owned or at any time hereafter acquired by a
Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or
interest, including the following:

(a) all Accounts;

(b) all Chattel Paper;

(c) all Deposit Accounts;

(d) all Documents;

(e) all Equipment;

(f) all FCC Licenses;

(g) all Pledged Collateral;

(h) all General Intangibles;

(i) all Instruments;

(j) all Inventory and Goods;

(k) all Investment Property;

(l) all Letter of Credit Rights;

(m) all Vehicles;

(n) the Commercial Tort Claims listed on Schedule 7;

(o) all books and records pertaining to the other property described in this Section 2.1;

(p) all property of any Grantor held by the Collateral Agent or any Secured Party, including
all property of every description in the possession or custody of or in transit to the Collateral
Agent or such Secured Party for any purpose, including safekeeping, collection or pledge, for the
account of such Grantor, or as to which such Grantor may have any right or power; and

(q) to the extent not otherwise included, all Proceeds of any and all of the foregoing.

Section 2.2 Grant of Security Interest in Collateral. Each Grantor, as collateral security
for the full, prompt and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of (A) the First Priority Secured Obligations of such Grantor, hereby
separately collaterally assigns, mortgages, pledges and hypothecates to the Collateral Agent for
the benefit of the First Priority Secured Parties, and grants to the Collateral Agent for the
benefit of the First Priority Secured Parties, a security interest in, all of its right, title and
interest in, to and under the Collateral of such Grantor and (B) the Second Priority Secured
Obligations of such Grantor, separately collaterally assigns, mortgages, pledges and hypothecates
to the Collateral Agent for the benefit of the Second Priority Secured Parties, and separately
grants to the Collateral Agent for the benefit of the Second Priority Secured Parties, a security
interest in, all of its right, title and interest in, to and under the Collateral of such Grantor;
provided, however, that the foregoing grants of security interests shall not include any security
interest in Excluded Property; provided, further, that if and to the extent the prohibition which
prevents the granting by such Grantor to the Collateral Agent of security interests in such
Excluded Property is removed or otherwise terminated, the Collateral Agent will be deemed to have,
and at all times from and after the date hereof to have had, security interests in such Excluded
Property under clauses (A) and (B) above.

Section 2.3 Ranking of Security Interests. Notwithstanding anything to the contrary contained
in this Article II or elsewhere in this Agreement, each Grantor, the Collateral Agent and each
Authorized Representative, on behalf of itself in its capacity as an Authorized Representative and
on behalf of the holders of the Class of Secured Obligations with respect to which it is acting as
Authorized Representative hereunder, acknowledges and agrees that (w) the security interest granted
pursuant to this Agreement to the Collateral Agent (i) for the benefit of the First Priority
Secured Parties, shall be a “first” priority senior security interest in the Collateral and (ii)
for the benefit of the Second Priority Secured Parties, shall be a “second” priority interest in
the Collateral fully junior, subordinated and subject to the security interest granted to the
Collateral Agent for the benefit of the First Priority Secured Parties on the terms and conditions
set forth in this Agreement, in the other Security Documents and in the Second Priority Documents
and all other rights and benefits afforded hereunder to the Second Priority Secured Parties are
expressly subject to the terms and conditions of this Agreement, the other Security Documents and
the Second Priority Documents, (x) the Collateral Agent’s security interest in the Collateral
securing the Second Priority Secured Obligations constitutes a security interest separate and apart
(and of a different class and claim) from the Collateral Agent’s security interest in the
Collateral securing the Second Priority Secured Obligations, (y) the grants of security interest
hereunder constitute two separate and distinct grants of security, one in favor of the Collateral
Agent for the benefit of the First Priority Secured Parties, the second in favor of the Collateral
Agent for the benefit of the Second Priority Secured Parties, and (z) in the event of a conflict
between the provisions of this Agreement and the provisions of any other Secured Debt Document, the
terms of this Agreement shall prevail. In furtherance of the foregoing, the First Priority
Trustee, the First Priority Administrative Agent, the Second Priority Trustee and each other
Authorized Representative, in each case, on behalf of itself in its capacity as an Authorized
Representative of a Class of Secured Obligations and on behalf of the holders of such Class of
Secured Obligations, hereby agrees to be bound by the provisions of Annex 1 to this Security
Agreement.

	 	 	 	ARTICLE III. REPRESENTATIONS AND WARRANTIES

Each Grantor hereby represents and warrants to the Collateral Agent and the other Secured
Parties that:

Section 3.1 Title; No Other Liens. Except for the Liens granted to the Collateral Agent
pursuant to this Agreement and other Permitted Liens (other than any Liens which would only be
permitted under clause (i) of the definition thereof unless set forth on Schedule 9(b)), such
Grantor is the record and beneficial owner of the Pledged Collateral pledged by it hereunder
constituting Instruments or certificated securities, is the Entitlement Holder of all such Pledged
Collateral constituting Investment Property held in a Securities Account and has rights in or the
power to transfer each other item of Collateral on which a Lien is granted by it hereunder, free
and clear of any and all Liens.

Section 3.2 Perfection and Priority. The security interests granted pursuant to this
Agreement will constitute valid and continuing perfected security interests in favor of the
Collateral Agent in the Collateral for which perfection is governed by the UCC or filing with the
United States Patent & Trademark Office or United States Copyright Office upon (i) the completion
of the filings and other actions specified on Schedule 3 (which, in the case of all filings and
other documents referred to on such schedule, shall be promptly made following execution of this
Agreement), (ii) the delivery to the Collateral Agent of all Collateral consisting of Instruments
and certificated securities, in each case properly endorsed for transfer to the Collateral Agent or
in blank, (iii) the execution of Control Agreements with respect to each Securities Account and
Deposit Accounts set forth on Schedule 6 and (iv) the filings set forth on Schedule 3 having been
made with the United States Patent & Trademark Office and United States Copyright Office. Such
security interests will rank as provided in Section 2.3 and shall otherwise be prior to all other
Liens on the Collateral except for Permitted Liens.

Section 3.3 State of Incorporation; Chief Executive Office. On the date hereof (i) such
Grantor’s exact legal name, (ii) such Grantor’s jurisdiction of organization, (iii) such Grantor’s
organizational identification number, if any, (iv) such Grantor’s federal taxpayer identification
number and (v) the location of such Grantor’s chief executive office are specified on Schedule 1.

Section 3.4 Inventory and Equipment. On the date hereof, such Grantor’s Inventory and
Equipment (other than mobile goods and Inventory or Equipment in transit) are kept at the locations
listed on Schedule 4.

Section 3.5 Pledged Collateral.

(a) The Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests pledged
hereunder by such Grantor are listed on Schedule 2 and constitute that percentage of the issued and
outstanding equity of all classes of each issuer thereof as set forth on Schedule 2.

(b) All of the Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests have
been duly and validly issued and are fully paid and nonassessable.

(c) (i) Each of the Pledged Notes representing Debt of any Grantor owed to any other Grantor
constitutes and (ii) to the best knowledge of each Grantor, each other Pledged Note pledged by such
Grantor constitutes, the legal, valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, and general equitable principles (whether considered in a proceeding
in equity or at law).

(d) All Pledged Collateral owned by any Grantor on the date hereof consisting of Certificated
Securities or Instruments has been delivered to the Collateral Agent.

(e) All Pledged Collateral held by a Securities Intermediary in a Securities Account is
subject to a valid and enforceable Control Agreement in favor of the Collateral Agent, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law).

(f) Other than the Pledged Partnership Interests and the Pledged LLC Interests that constitute
General Intangibles, there is no Pledged Collateral other than that represented by certificated
securities or Instruments in the possession of the Collateral Agent or that consist of Financial
Assets held in a Securities Account.

Section 3.6 Accounts. No amount payable to such Grantor under or in connection with any
Account is evidenced by any Instrument or Chattel Paper which has not been delivered to the
Collateral Agent, properly endorsed for transfer.

Section 3.7 No Other Names. Except as set forth on Schedule 1, within the five-year period
preceding the date hereof such Grantor has not had, or operated in any jurisdiction under, any
trade name, fictitious name or other name other than its legal name.

Section 3.8 Intellectual Property.

(a) Schedule 5 lists all Material Intellectual Property of such Grantor on the date hereof,
separately identifying that owned by such Grantor and that licensed to such Grantor.

(b) On the date hereof, all Material Intellectual Property owned by such Grantor is valid,
subsisting, unexpired and enforceable, has not been adjudged invalid and has not been abandoned and
the use thereof in the business of such Grantor does not infringe the intellectual property rights
of any other Person, except to the extent that any such infringement could not reasonably be
expected to result in a Material Adverse Change.

(c) Except as set forth on Schedule 5, on the date hereof, none of the Material Intellectual
Property owned by such Grantor is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor.

(d) No holding, decision or judgment has been rendered by any Governmental Authority which
would limit, cancel or question the validity of, or such Grantor’s rights in, any Material
Intellectual Property.

(e) No action or proceeding seeking to limit, cancel or question the validity of any Material
Intellectual Property owned by such Grantor or such Grantor’s ownership interest therein is on the
date hereof pending or, to the knowledge of such Grantor, threatened. Except as could not
reasonably be expected to result in a Material Adverse Change, there are no claims, judgments or
settlements to be paid by such Grantor relating to the Material Intellectual Property.

Section 3.9 Deposit Accounts; Control Accounts(a) . The only Deposit Accounts, Securities
Accounts or Commodity Accounts maintained by any Grantor on the date hereof are those listed on
Schedule 6, which sets forth such information separately for each Grantor. Each Deposit Account
and Securities Account listed on Schedule 6 is subject to a valid and enforceable Control Agreement
in favor of the Collateral Agent, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally, and general equitable principles (whether considered in a proceeding in equity or
at law).

Section 3.10 Lien Search Reports. Attached as Schedule 9(a) hereto is a true and correct
summary of state and local tax, lien and judgment searches for each Grantor (including searches
under any previous name referred to in Section 3.7 and any trade names used by such Grantor in the
previous five years) in (i) such Grantor’s state of incorporation or formation and (ii) each state
and, to the extent available, county in which such Grantor maintains any equipment, inventory or
books and records or in which such Grantor is qualified to do business.

	 	 	 	ARTICLE IV. COVENANTS

As long as any of the Secured Obligations of such Grantor remain outstanding, unless the
Required Secured Parties otherwise consent in writing, each Grantor agrees with the Collateral
Agent that:

Section 4.1 Generally. Such Grantor shall (a) except for the security interests created by
this Agreement, not create or suffer to exist any Lien upon or with respect to any of the
Collateral, except for Permitted Liens; (b) not use or permit any Collateral to be used unlawfully
or in violation of any provision of this Agreement, the Secured Debt Documents, any Requirement of
Law or any policy of insurance covering the Collateral; (c) not sell, transfer or assign (by
operation of law or otherwise) any Collateral except as permitted under the Secured Debt Documents;
(d) not enter into any agreement or undertaking restricting the right or ability of such Grantor or
the Collateral Agent to sell, assign or transfer any of the Collateral if such restriction could
reasonably be expected to result in a Material Adverse Change; and (e) upon request by the
Collateral Agent, promptly notify the Collateral Agent of any limitations known to such Grantor
that materially restrict the ability to sell, assign or transfer any of the Collateral.

Section 4.2 Maintenance of Perfected Security Interests; Further Documentation.

(a) Such Grantor will maintain the security interests created by this Agreement as perfected
security interests having at least the priorities described in Section 3.2 and will defend such
security interests against the claims and demands of all Persons.

(b) Such Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent (acting at the request of the Applicable Secured
Parties) may reasonably request, all in reasonable detail.

(c) At any time and from time to time, upon the written request of the Collateral Agent, and
at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and
have recorded, such further instruments and documents and take such further action as necessary or
as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, including the filing of any
financing or continuation statement under the UCC (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby and the execution and delivery
of Control Agreements.

Section 4.3 Changes in Locations, Name, Etc.

(a) Except with prior written notice to the Collateral Agent and delivery to the Collateral
Agent of all additional financing statements and other documents necessary to maintain the
validity, perfection and priority of the security interests provided for herein, such Grantor will
not:

(i) change its state of incorporation or organizational identification number from that
referred to in Section 3.3; or

(ii) change its name, identity or corporate structure to such an extent that any
financing statement with respect to the Collateral Agent’s security interest in the
Collateral would be misleading.

(b) Such Grantor will keep and maintain at its own cost and expense satisfactory and complete
records of the Collateral, including a record of all payments received and all credits granted with
respect to the Collateral and all other dealings with the Collateral.

(c) Additionally, the Grantors shall update Schedule 4 and provide such updated Schedule to
the Collateral Agent at least annually on or before December 31 of each year, commencing December
31, 2006, if any material portion of the Inventory or Equipment is not maintained at the locations
set forth on Schedule 4 as of the date of such update (and at any other time upon request by the
Collateral Agent).

Section 4.4 Pledged Collateral.

(a) Such Grantor will (i) promptly deliver to the Collateral Agent all certificates or
Instruments representing or evidencing any Additional Pledged Collateral acquired by it after the
date of this Agreement, in suitable form for transfer by delivery or, as applicable, accompanied by
such Grantor’s endorsement, where necessary, or duly executed instruments of transfer or assignment
in blank, together with a Pledge Amendment, duly executed by such Grantor, in substantially the
form of Annex 2 (a “Pledge Amendment”), or such other documentation as may be necessary to perfect
and maintain the priority of the Collateral Agent’s interests in such Additional Pledged Collateral
and authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement and (ii)
maintain all other Pledged Collateral constituting Investment Property in a Commodity Account or
Securities Account subject to a Control Agreement in favor of the Collateral Agent. At any time
while an Event of Default shall have occurred and is continuing, the Collateral Agent shall,
subject to applicable Requirements of Law, have the right, at any time in its discretion and
without notice to the Grantor, to transfer to or to register in its name or in the name of its
nominees any or all of the Pledged Collateral and to exchange certificates or instruments
representing or evidencing any of the Pledged Collateral for certificates or instruments of smaller
or larger denominations for purposes consistent with this Agreement.

(b) If any Pledged Stock (or Pledged LLC Interests or Pledged Partnership Interests which are
“securities” within the meaning of Section 8-103(c) of the UCC) are at any time not evidenced by
certificates of ownership, then each applicable Grantor shall, to the extent permitted by
applicable Requirements of Law, cause the Collateral Agent’s security interests to be recorded on
the equityholder register or the books of the issuer, cause the issuer to execute and deliver to
the Collateral Agent an acknowledgment of the pledge of such Pledged Stock, Pledged LLC Interests
or Pledged Partnership Interests, execute any customary pledge forms or other documents necessary
or appropriate to complete the pledge hereunder and give the Collateral Agent the right as pledgee
hereunder to transfer such Pledged Collateral under the terms hereof and provide to the Collateral
Agent an Opinion of Counsel (which may be an opinion of internal counsel of such Grantor and which
may state that such opinion is based solely on consultation with counsel in the jurisdiction of the
issuer of such uncertificated securities) confirming such pledge and the perfection thereof.

(c) Except as provided in Article V, such Grantor shall be entitled to receive all
Distributions paid in respect of the Pledged Collateral (except that any Distribution that would
result in a Default shall be promptly delivered to the Collateral Agent to be held in the
Collateral Account) to be held by it subject to the other provisions of this Agreement (including,
without limitation, Section 4.4(a) and Section 4.5). Any Distributions in respect of any of the
Pledged Collateral shall, during the continuance of an Event of Default, be delivered to the
Collateral Agent. If any Distribution in respect of any of the Pledged Collateral shall be
received by such Grantor during the continuance of an Event of Default, such Grantor shall, until
such Distribution is paid or delivered to the Collateral Agent, during the continuance of such
Event of Default, hold such Distribution in trust for the Collateral Agent, segregated from other
funds of such Grantor, as additional security for the Secured Obligations.

(d) Except as provided in Article V, such Grantor will be entitled to exercise all voting,
consent and corporate rights with respect to the Pledged Collateral; provided, however, that no
vote shall be cast, consent given or right exercised or other action taken by such Grantor which
would materially and adversely impair the Collateral or which would result in a Default, or,
without prior notice to the Collateral Agent, to enable or take any other action to permit any
issuer of Pledged Collateral to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or exchange for any
stock or other equity securities of any nature of any issuer of Pledged Collateral.

(e) Except for Permitted Liens, such Grantor shall not grant Control over any Deposit Account,
Securities Account, Letter of Credit Rights, Investment Property or Electronic Chattel Paper to any
Person other than the Collateral Agent.

(f) In the case of each Grantor which is an issuer of Pledged Collateral, such Grantor agrees
to be bound by the terms of this Agreement relating to the Pledged Collateral issued by it and will
comply with such terms insofar as such terms are applicable to it. In the case of each Grantor
which is a partner in a Partnership, such Grantor hereby consents to the extent required by the
applicable Partnership Agreement to the pledge by each other Grantor, pursuant to the terms hereof,
of the Pledged Partnership Interests in such Partnership and to the transfer of such Pledged
Partnership Interests to the Collateral Agent or its nominee and to the substitution of the
Collateral Agent or its nominee as a substituted partner in such Partnership with all the rights,
powers and duties of a general partner or a limited partner, as the case may be. In the case of
each Grantor which is a member of an LLC, such Grantor hereby consents to the extent required by
the applicable LLC Agreement to the pledge by each other Grantor, pursuant to the terms hereof, of
the Pledged LLC Interests in such LLC and to the transfer of such Pledged LLC Interests to the
Collateral Agent or its nominee and to the substitution of the Collateral Agent or its nominee as a
substituted member of the LLC with all the rights, powers and duties of a member of the LLC in
question.

(g) Such Grantor will not agree to any amendment of an LLC Agreement or Partnership Agreement
that in any way adversely affects the perfection of the security interests of the Collateral Agent
in the Pledged Partnership Interests or Pledged LLC Interests pledged by such Grantor hereunder,
including electing to treat the membership interest or partnership interest of such Grantor as a
security under Section 8-103 of the UCC.

Section 4.5 Control Accounts.

(a) Such Grantor will not establish or maintain any Securities Account, Deposit Account or
Commodity Account that is not a Control Account. Such Grantor shall cause all Investment Property
and, except to the extent required to be used promptly to make a payment that would not cause a
Default, cash held by it to be maintained in a Control Account.

(b) In the event that (i) after the date hereof, any Control Agreement shall be terminated for
any reason or (ii) the Collateral Agent shall demand such termination as a result of the failure of
any Securities Intermediary, Bank or Commodity Intermediary to comply with the terms of the
applicable Control Agreement, such Grantor agrees to notify all of its obligors that were making
payments to such terminated Control Account to make all future payments to another Control Account.

Section 4.6 Accounts.

(a) Such Grantor will not, other than in the ordinary course of business, (i) grant any
extension of the time of payment of any Account, (ii) compromise or settle any Account for less
than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment
of any Account, (iv) allow any credit or discount on any Account, or (v) amend, supplement or
modify any Account in any manner that could adversely affect the value thereof.

(b) The Collateral Agent shall have the right (but not the obligation) to make test
verifications of the Accounts in any manner and through any medium that it reasonably considers
advisable, and such Grantor shall furnish all such assistance and information as the Collateral
Agent may reasonably require in connection therewith. At any time and from time to time, upon the
Collateral Agent’s request and at the expense of the relevant Grantor, such Grantor shall use its
reasonable best efforts to cause independent public accountants to furnish to the Collateral Agent
reports showing reconciliations, aging and test verifications of, and trial balances for, the
Accounts; provided, however, that unless a Default or Event of Default shall be continuing, the
Collateral Agent shall request no more than two such reports during any calendar year.

Section 4.7 Delivery of Instruments and Chattel Paper. If any amount in excess of $100,000
payable under or in connection with any of the Collateral owned by such Grantor shall be or become
evidenced by an Instrument or Chattel Paper, such Grantor shall immediately deliver such Instrument
or Chattel Paper to the Collateral Agent, duly indorsed to the Collateral Agent; provided, however,
that so long as no Event of Default shall have occurred and be continuing, the Collateral Agent
shall, promptly upon request of such Grantor, make appropriate arrangements for making any
Instrument pledged by such Grantor available to such Grantor for purposes of presentation,
collection or renewal (any such arrangement to be effected against trust receipt or like document).

Section 4.8 Intellectual Property.

(a) Such Grantor (either itself or through licensees) will not do any act, or omit to do any
act, whereby any Patent which is Material Intellectual Property (for so long as such Patent
constitutes Material Intellectual Property) may become forfeited, abandoned or dedicated to the
public.

(b) Such Grantor (either itself or through licensees) (i) will not (and will not permit any
licensee or sublicensee thereof to) do any act or omit to do any act whereby any portion of the
Copyrights which is Material Intellectual Property may become invalidated or otherwise materially
impaired and (ii) will not (either itself or through licensees) do any act whereby any of the
Copyrights which are Material Intellectual Property may fall into the public domain (in each case
for so long as any such Copyright constitutes Material Intellectual Property).

(c) Such Grantor (either itself or through licensees) will not do any act, or omit to do any
act, whereby any trade secret which is Material Intellectual Property may become publicly available
or otherwise unprotectable.

(d) Such Grantor (either itself or through licensees) will not do any act that knowingly uses
any Material Intellectual Property to infringe the intellectual property rights of any other
Person.

(e) Such Grantor will notify the Collateral Agent immediately if it knows, or has reason to
know, that any application or registration relating to any Material Intellectual Property may
become forfeited, abandoned or dedicated to the public, or of any adverse determination or
development (including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States Copyright Office or
any court or tribunal in any country) specifically regarding such Grantor’s ownership of, right to
use, interest in, or the validity of, any Material Intellectual Property or such Grantor’s right to
register the same or to own and maintain the same.

(f) Whenever such Grantor, either by itself or through any agent, licensee or designee, shall
file an application for the registration of any Material Intellectual Property with the United
States Patent and Trademark Office, the United States Copyright Office or any similar office or
agency within or outside the United States, such Grantor shall report such filing to the Collateral
Agent within five Business Days after the last day of the fiscal quarter in which such filing
occurs and such Grantor shall execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as may be reasonably required to evidence the Collateral Agent’s
security interest in any such Material Intellectual Property.

(g) Such Grantor will take all reasonable actions necessary or requested by the Collateral
Agent, including in any proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each registration of any Copyright,
Trademark or Patent that is Material Intellectual Property, including filing of applications for
renewal, affidavits of use, affidavits of incontestability (for so long as the foregoing
constitutes Material Intellectual Property) and opposition and interference and cancellation
proceedings.

(h) In the event that any Material Intellectual Property is infringed upon or misappropriated
or diluted by a third party, such Grantor shall notify the Collateral Agent promptly after such
Grantor learns thereof. Such Grantor shall take appropriate action in response to such
infringement, misappropriation or dilution, including promptly bringing suit for infringement,
misappropriation or dilution and to recover any and all damages for such infringement,
misappropriation of dilution, and shall take such other actions may be appropriate in its
reasonable judgment under the circumstances to protect such Material Intellectual Property.

(i) Such Grantor will execute in favor of the Collateral Agent and cause to be filed in (i)
the United States Copyright Office a short-form copyright security agreement in the form attached
hereto as Annex 4, (ii) in the United States Patent and Trademark Office a short-form patent
security agreement in the form attached hereto as Annex 5 and (iii) the United States Patent and
Trademark Office a short-form trademark security agreement in the form attached hereto as Annex 6.

Section 4.9 Vehicles. Within 30 days after the date that the aggregate Fair Market Value of
all Vehicles owned by any Grantor exceeds $750,000, the applicable Grantors shall file all
applications for certificates of title/ownership indicating the Collateral Agent’s security
interests in each Vehicle owned by such Grantor, and any other necessary documentation, in each
office in each jurisdiction as may be reasonably required to perfect the Collateral Agent’s
security interests in the Vehicles.

Section 4.10 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all taxes, assessments
and governmental charges or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including claims for labor, materials and supplies)
against or with respect to the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate proceedings, reserves in
conformity with GAAP with respect thereto have been provided on the books of such Grantor and such
proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any interest therein.

Section 4.11 Special Property. Each Grantor shall from time to time at the request of the
Collateral Agent give written notice to the Collateral Agent identifying in reasonable detail the
Special Property of such Grantor (and stating in such notice that such Special Property constitutes
“Excluded Property”) and shall provide to the Collateral Agent such other information regarding the
Special Property of such Grantor as the Collateral Agent may reasonably request, and, from and
after the Closing Date, no Grantor shall permit to become effective any document creating,
governing or providing for any permit, lease or license that would prohibit the creation of a Lien
on such permit, lease or license in favor of the Collateral Agent unless such Grantor believes, in
its reasonable judgment, that such prohibition is usual and customary in transactions of such type.

Section 4.12 Electronic Chattel Paper and Transferable Records. No amount under or in
connection with any of the Pledged Collateral is evidenced by any Electronic Chattel Paper or any
“transferable record” (as that term is defined in Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as
in effect in any relevant jurisdiction). If any amount payable under or in connection with any of
the Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any transferable
record, the Grantor acquiring such Electronic Chattel Paper or transferable record shall promptly
notify the Collateral Agent thereof and shall take such action as may be required to vest in the
Collateral Agent control under UCC Section 9-105 of such Electronic Chattel Paper or control under
Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the
case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The requirement in the preceding sentence shall apply
to the extent that such amount, together with all amounts payable evidenced by Electronic Chattel
Paper or any transferable record in which the Collateral Agent has not been vested control within
the meaning of the statutes described in this sentence exceeds $2.5 million in the aggregate for
all Grantors. The Collateral Agent agrees with such Grantor that the Collateral Agent will permit,
pursuant to procedures satisfactory to the Collateral Agent and so long as such procedures will not
result in the Collateral Agent’s loss of control, the Grantor to make alterations to the Electronic
Chattel Paper or transferable record permitted under UCC Section 9-105 or, as the case may be,
Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow without loss of control,
unless an Event of Default has occurred and is continuing or would occur after taking into account
any action by such Grantor with respect to such Electronic Chattel Paper or transferable record.

Section 4.13 Letter-of-Credit Rights. As of the date hereof, no Grantor is a beneficiary
under any Letter of Credit other than as set forth on Schedule 8. If any Grantor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of such Grantor, such Grantor
shall promptly notify the Collateral Agent thereof and such Grantor shall either (i) arrange for
the issuer and any confirmer of such Letter of Credit to consent to an assignment to the Collateral
Agent of the proceeds of any drawing under the Letter of Credit or (ii) arrange for the Collateral
Agent to become the transferee beneficiary of such Letter of Credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the Letter of Credit are to be
applied as provided in this Agreement. The actions in the preceding sentence shall be taken only
if the amount under any such Letter of Credit exceeds $2.5 million or if the amount of such Letter
of Credit, together with all amounts under Letters of Credit for which the actions described above
in clause (i) and (ii) have not been taken, exceeds $15.0 million in the aggregate for all
Grantors.

Section 4.14 Commercial Tort Claims. As of the date hereof each Grantor hereby represents and
warrants that it holds no Commercial Tort Claims other than those listed in Schedule 7. If any
Grantor shall at any time hold or acquire a Commercial Tort Claim having a value together with all
other Commercial Tort Claims of all Grantors in which the Collateral Agent does not have security
interests for the benefit of the First Priority Secured Parties and the Second Priority Secured
Parties in excess of $1.0 million in the aggregate, such Grantor shall immediately notify the
Collateral Agent in writing signed by such Grantor of the brief details thereof and grant to the
Collateral Agent in such writing security interests therein for the benefit of the First Priority
Secured Parties and the Second Priority Secured Parties and in the Proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form reasonably satisfactory to the Collateral
Agent.

Section 4.15 Post-Closing Delivery of Lien Searches. As promptly as reasonably practicable,
and in any event, within 90 days of the Closing Date, the Grantors shall deliver to the Collateral
Agent true and correct copies of lien search reports for the entities listed on Schedule 10 in the
jurisdictions listed on Schedule 10 which Lien search results shall not reflect any Liens on the
property of the applicable Grantors other than Permitted Liens (other than any Liens which would
only be permitted under clause (i) of the definition thereof unless set forth on Schedule 9(b)).

	 	 	 	ARTICLE V. REMEDIAL PROVISIONS

Section 5.1 Code and Other Remedies. During the continuance of an Event of Default, the
Collateral Agent may exercise, in addition to all other rights and remedies granted to it in this
Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the UCC or any other applicable law.
Without limiting the generality of the foregoing, the Collateral Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, at any exchange, broker’s board or
office of the Collateral Agent or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the
Collateral Agent’s request, to assemble the Collateral and make it available to the Collateral
Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere. The Collateral Agent shall apply the net proceeds of any action taken by it
pursuant to this Article V in accordance with Article VIII. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against the Collateral
Agent or any other Secured Party arising out of the exercise by it of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

Section 5.2 Accounts and Payments in Respect of General Intangibles.

(a) If required by the Collateral Agent (acting at the written request of the Applicable
Secured Parties) at any time during the continuance of an Event of Default, any payments of
Accounts or payments in respect of General Intangibles, when collected by any Grantor, shall be
forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Collateral Agent if required, into the Collateral
Account, subject to withdrawal by the Collateral Agent as provided in Section 5.4. Until so turned
over, such payments shall be held by such Grantor in trust for the Collateral Agent, segregated
from other funds of such Grantor. At the Collateral Agent’s request, each such deposit of Proceeds
of Accounts and payments in respect of General Intangibles shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included in the deposit.

(b) At the Collateral Agent’s request (acting at the written request of the Applicable Secured
Parties), during the continuance of an Event of Default, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Accounts or payments in respect of General Intangibles,
including all original orders, invoices and shipping receipts.

(c) The Collateral Agent may, without notice, at any time during the continuance of an Event
of Default, limit or terminate the authority of a Grantor to collect its Accounts or amounts due
under General Intangibles or any thereof.

(d) The Collateral Agent in its own name or in the name of others may at any time during the
continuance of an Event of Default communicate with Account Debtors to verify with them to the
Collateral Agent’s satisfaction the existence, amount and terms of any Accounts or amounts due
under any General Intangibles.

(e) Upon the request of the Collateral Agent (acting at the written request of the Applicable
Secured Parties) at any time during the continuance of an Event of Default, each Grantor shall
notify Account Debtors that the Accounts or General Intangibles have been collaterally assigned to
the Collateral Agent for the benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Collateral Agent. In addition, the Collateral Agent may at any time
during the continuance of an Event of Default enforce such Grantor’s rights against such Account
Debtors and obligors of General Intangibles.

(f) Anything herein to the contrary notwithstanding (but subject to Section 4.6(a)), each
Grantor shall remain liable under each of the Accounts and payments in respect of General
Intangibles to observe and perform all the conditions and obligations to be observed and performed
by it thereunder in all material respects, all in accordance with the terms of any agreement giving
rise thereto. Neither the Collateral Agent nor any other Secured Party shall have any obligation
or liability under any agreement giving rise to an Account or a payment in respect of a General
Intangible by reason of or arising out of this Agreement or the receipt by the Collateral Agent or
any other Secured Party of any payment relating thereto, nor shall the Collateral Agent or any
other Secured Party be obligated in any manner to perform any of the obligations of any Grantor
under or pursuant to any agreement giving rise to an Account or a payment in respect of a General
Intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled at any time or
times.

Section 5.3 Pledged Collateral.

(a) During the continuance of an Event of Default, upon notice by the Collateral Agent to the
relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to receive any and all
Proceeds of the Pledged Collateral and make application thereof to the Secured Obligations in the
order set forth in Article VIII, and (ii) the Collateral Agent or its nominee may, but shall not be
obligated to, exercise (A) all voting, consent, corporate and other rights pertaining to the
Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the
relevant issuer or issuers of Pledged Collateral or otherwise and (B) any and all rights of
conversion, exchange and subscription and any other rights, privileges or options pertaining to the
Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its
discretion any and all of the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any issuer of Pledged
Securities and the right to deposit and deliver any and all of the Pledged Collateral with any
committee, depositary, transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except to account for
property actually received by it, but the Collateral Agent shall have no duty to any Grantor to
exercise any such right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing; provided, however, that unless otherwise directed by the Applicable Secured
Parties, the Collateral Agent shall have the right during the occurrence of an Event of Default to
permit the Grantors to exercise such rights.

(b) In order to permit the Collateral Agent to exercise the voting and other consensual rights
which it may be entitled to exercise pursuant hereto and to receive all Distributions which it may
be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to
be executed and delivered) to the Collateral Agent all such proxies, dividend payment orders and
other instruments as necessary or as the Collateral Agent may from time to time reasonably request
and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to the
Collateral Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of the Pledged
Collateral would be entitled (including giving or withholding written consents of shareholders,
partners or members, as the case may be, calling special meetings of shareholders, partners or
members, as the case may be, and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other Person (including the issuer of
such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of
Default and which proxy shall only terminate on the Termination Date.

(c) Each Grantor hereby expressly authorizes and instructs each issuer of any Pledged
Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from
the Collateral Agent in writing that (A) states that an Event of Default has occurred and is
continuing and (B) is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that such issuer shall be fully
protected in so complying and (ii) unless otherwise expressly permitted hereby, pay any
Distributions with respect to the Pledged Collateral directly to the Collateral Agent.

Section 5.4 Proceeds To Be Turned Over to Collateral Agent. All Proceeds received by the
Collateral Agent under this Article V shall be held by the Collateral Agent in a Collateral
Account. All Proceeds while held by the Collateral Agent in a Collateral Account (or by such
Grantor in trust for the Collateral Agent) shall continue to be held as collateral security for any
of the Secured Obligations and shall not constitute payment thereof until applied as provided in
Article VIII.

Section 5.5 Registration Rights.

(a) If the Collateral Agent shall determine to exercise its right to sell any or all of the
Pledged Collateral pursuant to Section 5.1, and if the Collateral Agent requests that the Pledged
Collateral, or any portion thereof, be registered under the provisions of the Securities Act, the
relevant Grantor will cause the issuer thereof to (i) execute and deliver, and use its best efforts
to cause the directors and officers of such issuer to execute and deliver, all such instruments and
documents, and use its best efforts to do or cause to be done all such other acts as may be
requested by the Collateral Agent in order to register the Pledged Collateral, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use its reasonable best
efforts to cause the registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of the Pledged
Collateral, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Collateral Agent, are necessary or advisable, all
in conformity with the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to use its best efforts
to cause such issuer to comply with the provisions of the securities or “Blue Sky” laws of any and
all jurisdictions which the Collateral Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.

(b) Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of
any or all the Pledged Collateral by reason of certain prohibitions contained in the Securities Act
and applicable state securities laws or otherwise or may determine that a public sale is
impracticable or not commercially reasonable and, accordingly, may resort to one or more private
sales thereof to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to
delay a sale of any of the Pledged Collateral for the period of time necessary to permit the issuer
thereof to register such securities for public sale under the Securities Act, or under applicable
state securities laws, even if such issuer would agree to do so.

(c) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts
as may be necessary to make such sale or sales of all or any portion of the Pledged Collateral
pursuant to this Section 5.5 valid and binding and in compliance with any and all other applicable
requirements of law (including applicable requirements of the FCC). Each Grantor further agrees
that a breach of any of the covenants contained in this Section 5.5 will cause irreparable injury
to the Collateral Agent and the other Secured Parties, that the Collateral Agent and the other
Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 5.5 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against
an action for specific performance of such covenants except for a defense that no Event of Default
has occurred.

Section 5.6 Waiver; Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to pay its Secured
Obligations.

Section 5.7 FCC Matters.

(a) Notwithstanding anything herein to the contrary, to the extent this Agreement or any other
Secured Debt Document purports to require any Grantor to grant to any Secured Party a security
interest in the FCC Licenses of any Grantor now owned or hereafter acquired, as the case may be,
the Collateral Agent shall only have a security interest in such FCC Licenses at such times and to
the extent that a security interest in such licenses is permitted under applicable law.
Notwithstanding anything herein to the contrary, the Collateral Agent, on behalf of the Secured
Parties, agrees that to the extent prior FCC approval is required pursuant to the Communications
Act for (i) the operation and effectiveness of any grant, right or remedy hereunder or under any
other Security Document or (ii) taking any action that may be taken by the Collateral Agent
hereunder or under the other Security Documents, such grant, right, remedy or actions will be
subject to such prior FCC approval having been obtained by or in favor of the Collateral Agent, on
behalf of the Secured Parties. The Grantors shall, upon the occurrence and during the continuance
of an Event of Default, at the Collateral Agent’s request (acting at the written request of the
Applicable Secured Parties), immediately file or cause to be filed such applications for approval
and shall take such other actions reasonably required by the Collateral Agent, as directed by and
on behalf of the Applicable Secured Parties, to obtain such FCC approvals or consents as are
necessary to transfer ownership and control to the Collateral Agent, on behalf of the Secured
Parties, or their successors, assigns or designees of the FCC Licenses held by the Grantors. To
enforce the provisions of this subsection, the Collateral Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC an involuntary transfer of control of any such FCC License for the
purpose of seeking a bona fide purchaser to whom control will ultimately be transferred. Grantors
shall authorize such an involuntary transfer upon the request of the receiver so appointed and if
the Grantors shall refuse to authorize the transfer, their approval may be required by the court.
Upon the occurrence and during the continuance of an Event of Default, at the Collateral Agent’s
request (acting at the written request of the Applicable Secured Parties), the Grantors shall
further use their reasonable best efforts to assist in obtaining approval of the FCC, if required,
for any action or transactions contemplated hereby, including, without limitation, the preparation,
execution and filing with the FCC of the assignor’s or transferor’s portion of any application for
consent to the assignment of any FCC License or transfer of control necessary or appropriate under
the FCC’s rules and regulations for approval of the transfer or assignment of any portion of the
Collateral, together with any FCC License or other authorization.

(b) The Grantors acknowledge that the assignment or transfer of such FCC Licenses is integral
to the Secured Parties’ realization of the value of the Collateral, that there is no adequate
remedy at law for failure by the Grantors to comply with the provisions of this section and that
such failure would not be adequately compensable in damages, and therefore agree that this section
may be specifically enforced.

(c) Notwithstanding anything herein or in any other Security Document or the Secured Debt
Documents to the contrary, neither the Collateral Agent nor any other Secured Party shall, without
first obtaining the approval of the FCC, take any action hereunder or under any other Security
Document that would constitute or result in any assignment of an FCC License or any change of
control of any Grantor if such assignment or change of control would require the approval of the
FCC under applicable law (including FCC rules and regulations).

	 	 	 
	ARTICLE VI.	 	THE COLLATERAL AGENT
	Section 6.1

	 	Collateral Agent’s Appointment as Attorney-in-Fact.

(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action and to execute any and all documents and instruments which may
be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Collateral Agent the power and right
without any obligation, on behalf of such Grantor, without notice to or assent by such Grantor and
as directed by the Applicable Secured Parties, to do any or all of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account or General Intangible or with respect to any other
Collateral and file any claim or take any other action or proceeding in any court of law or
equity or otherwise for the purpose of collecting any and all such moneys due under any
Account or General Intangible or with respect to any other Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as may be reasonably necessary to
evidence the Collateral Agent’s security interest in such Intellectual Property and the
goodwill and General Intangibles of such Grantor relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;

(iv) execute, in connection with any sale provided for in Section 5.1 or 5.5, any
endorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral; and

(v) (A) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Collateral
Agent or as the Collateral Agent shall direct; (B) ask for or demand, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (C) sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in connection with
any of the Collateral; (D) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (E) defend any suit,
action or proceeding brought against such Grantor with respect to any Collateral; (F)
settle, compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Agent may request; (G) assign
any Copyright, Patent or Trademark (along with the goodwill of the business to which any
such Trademark pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Collateral Agent shall determine, including without limitation
the execution and filing of any documents necessary to effectuate and/or record such
assignment; and (H) generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral
Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and
things to protect, preserve or realize upon the Collateral and the Collateral Agent’s and
the other Secured Parties’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 6.1(a) to the contrary notwithstanding, the Collateral Agent agrees that
it will not exercise any rights under the power of attorney provided for in this Section 6.1(a)
unless an Event of Default shall be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.

(c) The expenses of the Collateral Agent incurred in connection with actions undertaken as
provided in this Section 6.1, together with interest thereon at a rate per annum equal to the rate
per annum at which interest would then be payable on the First Priority Notes under the First
Priority Indenture, from the date of payment by the Collateral Agent to the date reimbursed by the
relevant Grantor, shall be Secured Obligations and shall be payable by such Grantor to the
Collateral Agent on demand.

(d) Each Grantor hereby ratifies all that such attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated or the security interests
created hereby with respect to such Grantor are released.

Section 6.2 Duty of Collateral Agent.

(a) The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession shall be to deal with it in the same manner as the
Collateral Agent deals with similar property for its own account. The Collateral Agent shall not
be responsible for filing any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. Neither the Collateral Agent, any other
Secured Party nor any of their respective officers, directors, employees or agents shall be liable
for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Collateral Agent hereunder are solely
to protect the Collateral Agent’s interest in the Collateral and shall not impose any duty upon the
Collateral Agent or any other Secured Party to exercise any such powers. The Collateral Agent and
the other Secured Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.

(b) The Collateral Agent shall not be responsible for the existence, genuineness or value of
any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in
any of the Collateral, whether impaired by operation of law or by reason of any action or omission
to act on its part hereunder, except to the extent such action or omission constitutes gross
negligence, bad faith or willful misconduct on the part of the Collateral Agent, for the validity
or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity
of the title of any Grantor to the Collateral, for insuring the Collateral or for the payment of
taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the
Collateral. The Collateral Agent shall have no duty to ascertain or inquire as to the performance
or observance of any of the terms of this Agreement or of any other Security Documents by the
Company or any other Grantor or any other Person.

Section 6.3 Filing of Financing Statements. Each Grantor shall cause to be filed or recorded
financing statements and other filing or recording documents or instruments with respect to the
Collateral in such form and in such offices as shall be required to lawfully perfect the security
interests of the Collateral Agent under this Agreement. A photographic or other reproduction of
this Agreement shall be sufficient as a financing statement or other filing or recording document
or instrument for filing or recording in any jurisdiction.

Section 6.4 Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to any action taken by
the Collateral Agent or the exercise or nonexercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or resulting or arising out
of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed
by the provisions of Annex I and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Collateral Agent and the other
Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

Section 6.5 Directions to Collateral Agent. During the continuance of an Event of Default,
the Collateral Agent will exercise its rights under this Agreement as it shall determine in its
sole discretion or, to the extent it has received such directions, in compliance with instructions
from the Applicable Secured Parties.

	 	 	 	ARTICLE VII. CERTAIN PROVISIONS CONCERNING COLLATERAL ACCOUNT

Section 7.1 Deposits into Collateral Account. Each Grantor shall deposit with the Collateral
Agent for deposit into a Collateral Account from time to time (A) after the occurrence of an Event
of Default, the cash proceeds of any of the Collateral (including pursuant to any disposition
thereof) and (B) any cash in respect of any Collateral to which the Collateral Agent is entitled
pursuant to Section 4.4(c).

Section 7.2 Application of Amounts in Collateral Account. The balance from time to time in
the Collateral Account shall constitute part of the Collateral hereunder and shall not constitute
payment of the Secured Obligations until applied as provided in Article VIII. At any time
following the occurrence and during the continuance of an Event of Default, the Collateral Agent
may (and, if instructed by the Applicable Secured Parties, shall) in its (or their) discretion
apply or cause to be applied (subject to collection) the balance from time to time outstanding to
the credit of the Collateral Account to the payment of the Secured Obligations in the manner
specified in Article VIII.

Section 7.3 Investment of Balance in Collateral Account. Amounts on deposit in the Collateral
Account shall be invested from time to time in such Temporary Cash Investments as the Collateral
Agent shall be instructed in writing by the Applicable Secured Parties (or, in the absence of such
instructions, in the BNY Cash Reserves Fund), which Temporary Cash Investments shall be under the
control of the Collateral Agent (or any sub-agent).

	 	 	 	ARTICLE VIII. APPLICATION OF PROCEEDS

The proceeds received by the Collateral Agent in respect of any sale of, collection from or
other realization upon all or any part of the Collateral pursuant to the exercise by the Collateral
Agent of its remedies as a secured creditor as provided in Article V hereof shall be applied,
together with any other sums then held by the Collateral Agent pursuant to this Agreement, promptly
by the Collateral Agent as follows:

FIRST, to the payment of all costs and expenses, fees, commissions and taxes of
such sale, collection or other realization including, without limitation, the costs and
expenses of the Collateral Agent and its agents and counsel, and all expenses, liabilities
and advances made or incurred by the Collateral Agent in connection therewith, together with
interest on each such amount at the rate then in effect with respect to the First Priority
Notes from and after the date such amount is due until paid in full;

SECOND, to the payment of all other costs and expenses incurred by the
Collateral Agent and its agents and counsel under this Agreement which are then due and
owing, together with interest on each such amount at the rate then in effect with respect to
the First Priority Notes from and after the date such amount is due until paid in full;

THIRD, without duplication of amounts applied pursuant to clauses FIRST
and SECOND above, to the indefeasible payment in full in cash, pro
rata in accordance with the respective amounts then due and payable thereon, to (i)
the First Priority Trustee to be applied as provided in Section 6.10 of the First Priority
Indenture, based on the aggregate amount of First Priority Secured Obligations due and owing
to the First Priority Trustee and the First Priority Noteholders, (ii) to the First Priority
Administrative Agent to be applied as provided in Section 7.08 of the First Priority Term
Loan Facility, based on the aggregate amount of First Priority Secured Obligations due and
owing to the First Priority Administrative Agent and the First Priority Lenders and (iii) to
each Authorized Representative with respect to any Additional First Priority Secured
Obligations to be applied in accordance with the First Priority Documents governing such
Additional First Priority Secured Obligations, based on the aggregate amount of Additional
First Priority Secured Obligations for which such Authorized Representative is acting in
such capacity hereunder, in the case of each of subclauses (i) through (iii) above, until
such First Priority Secured Obligations have been paid in full; and

FOURTH, to the extent proceeds remain after the application pursuant to the
preceding clauses FIRST, SECOND, and THIRD above, pro
rata in accordance with the respective amounts then due and payable thereon, to (i)
the Second Priority Trustee to be applied as provided in Section 6.10 of the Second Priority
Indenture, based on the aggregate amount of Second Priority Secured Obligations due and
owing to the Second Priority Trustee and the Second Priority Noteholders which are secured
by the Collateral resulting in such proceeds and (ii) any party acting as agent under an
agreement for the holders of any Additional Second Priority Secured Obligations, based on
the aggregate amount of Second Priority Secured Obligations due and owing to such Additional
Second Priority Secured Party which are secured by Collateral resulting in such proceeds in
the case of each of subclauses (i) and (ii) until paid in full.

FIFTH, the balance, if any, to such Grantor or as otherwise directed by a court
of competent jurisdiction.

In the event that any such proceeds are insufficient to pay in full the items described in
clauses FIRST though FOURTH of this Article VIII, the Grantors shall remain liable
for any deficiency.

	 	 	 	ARTICLE IX. MISCELLANEOUS

Section 9.1 Amendments in Writing. None of the terms and conditions of this Agreement or any
other Security Document may be changed, waived, modified or varied in any manner whatsoever unless
in writing duly signed by each Grantor and the Collateral Agent (with the consent of the Required
Secured Parties); provided, that (i) additional Grantors may be added as parties hereto from time
to time in accordance with Section 9.10 hereof without the consent of any other Grantor or of the
Secured Parties, (ii) the foregoing limitation shall not apply to any release of Collateral of any
Grantor (or the termination of this Agreement or any other Security Document) effected in
accordance with the requirements of Section 9.11 of this Agreement or the comparable provisions of
the other Security Documents, as the case may be and (iii) no consent shall be required to secure
Additional Secured Obligations in accordance with Section 9.13.

Section 9.2 Notices. Except as otherwise specified herein, all notices, requests, demands or
other communications to or upon the respective parties hereto shall be deemed to have been duly
given or made when delivered to the party to which such notice, request, demand or other
communication is required or permitted to be given or made under this Agreement, addressed:

(a) if to any Grantor, to it:

c/o Paxson Communications Corporation

601 Clearwater Park Road

West Palm Beach, FL 33401

Attention: General Counsel

Facsimile: (561) 659-4754

with a copy to:

Holland & Knight LLP

222 Lakeview Avenue, Suite 1000

West Palm Beach, FL 33401

Attention: David L. Perry Jr.

Facsimile: (561) 650-8399

(b) if to the Collateral Agent:

	 	 	 
	The Bank of New York Trust Company, NA

	 
	 	 
	10161 Centurion Parkway

Jacksonville, Florida 32256

Attention:

Facsimile:

	 	

Corporate Trust Administration

(904) 645-1921

(c) if to the First Priority Trustee:

	 	 	 
	The Bank of New York Trust Company, NA

	 
	 	 
	10161 Centurion Parkway

Jacksonville, Florida 32256

Attention:

Facsimile:

	 	

Corporate Trust Administration

(904) 645-1921

(d) if to the Second Priority Trustee:

	 	 	 
	The Bank of New York Trust Company, NA

	 
	 	 
	10161 Centurion Parkway

Jacksonville, Florida 32256

Attention:

Facsimile:

	 	

Corporate Trust Administration

(904) 645-1921

(e) if to the First Priority Administrative Agent:

Citicorp North America, Inc.

388 Greenwich Street

New York, New York 10013

Attention: John Judge

Facsimile: (212) 291-1739

(f) if to any Authorized Representative for the holders of Additional Secured Obligations, to
it at its address specified in its Additional Secured Party Consent.

Section 9.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral Agent
nor any other Secured Party shall by any act (except by a written instrument pursuant to Section
9.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor
any delay in exercising, on the part of the Collateral Agent or any other Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Collateral Agent or any other
Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Collateral Agent or such other Secured Party would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies provided by law.

Section 9.4 Successors and Assigns. This Agreement shall be binding upon the respective
successors and assigns of each Authorized Representative, Secured Party, Grantor and the Collateral
Agent, and shall inure to the benefit of each Authorized Representative, the Collateral Agent and
each other Secured Party and their successors and assigns; provided, however, that no Grantor may
assign, transfer or delegate any of its rights or obligations under this Agreement without the
prior written consent of the Required Secured Parties.

Section 9.5 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same agreement.

Section 9.6 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

Section 9.7 Section Headings. The Article and Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and are not part of the
agreement of the parties hereto.

Section 9.8 Entire Agreement. This Agreement represents the entire agreement of the parties
and supersedes all prior agreements and understandings relating to the subject matter hereof.

Section 9.9 Governing Law. This Agreement and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the laws of the
State of New York.

Section 9.10 Additional Grantors. If, pursuant to the terms of any Secured Debt Document, the
Company shall be required to cause any Subsidiary that is not a Grantor to become a Grantor
hereunder, such Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement in
the form of Annex 3 and shall thereafter for all purposes be a party hereto and have the same
rights, benefits and obligations as a Grantor party hereto on the Closing Date.

Section 9.11 Release of Collateral.

(a) After the Termination Date, this Agreement shall terminate and the Collateral Agent, at
the request and expense of the relevant Grantor, will execute and deliver to such Grantor a proper
instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer
and deliver to such Grantor (without recourse and without any representation or warranty) such of
the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement,
“Termination Date” shall mean the date upon which (i) the First Priority Secured Obligations
Termination Date and the Second Priority Secured Obligations Termination Date shall have then (or
theretofore) occurred and (ii) no Secured Hedging Agreement is in effect and no Secured Obligations
(other than for contingent indemnification obligations not then due and payable) under any Secured
Hedging Agreement are outstanding (unless each Authorized Representative with respect to any such
Secured Hedging Agreement has agreed, in its sole discretion, to the termination of this
Agreement).

(b) In the event that any part of the Collateral is sold or otherwise disposed of (to a Person
other than a Grantor) (x) in connection with a sale or other disposition not prohibited by any of
the Secured Debt Documents or (y) at the direction of the Collateral Agent or the Applicable
Secured Parties in connection with an exercise of remedies by the Collateral Agent hereunder, such
Collateral will be sold, disposed of or released free and clear of each of the Liens created by
this Agreement and, in the case of clause (x), the Collateral Agent, at the request and expense of
such Grantor, will (i) duly assign, transfer and deliver to such Grantor (without recourse and
without any representation or warranty) such of the Collateral as is then being (or has been) so
sold, disposed of or released and as may be in the possession of the Collateral Agent and has not
theretofore been released pursuant to this Agreement and/or (ii) execute such releases and
discharges in respect of such Collateral as is then being (or has been) so sold, disposed of or
released as such Grantor may reasonably request.

(c) At any time that the respective Grantor desires that Collateral be released as provided in
the foregoing Section 9.11(a) or (b)(x), such Grantor shall deliver to the Collateral Agent with a
copy to each of the Authorized Representatives:

(i) in the case of a release of Collateral pursuant to clause (a) above, an Officers’
Certificate and an Opinion of Counsel, in each case, to the effect that such release is
permitted pursuant to clause (a) above;

(ii) in the case of a release of Collateral pursuant to clause (b)(x) above, (I) an
Officers’ Certificate (A) specifying the Fair Market Value of the assets being disposed of
(the “Released Collateral”) as of a date within 60 days of such Officer’s Certificate, (B)
stating that the sale of such Released Collateral is not prohibited under the terms of any
of the then effective Secured Debt Documents, (C) stating that such sale covers only the
Released Collateral or such other property that does not constitute Collateral subject to
the sale or disposition, and (D) stating that, after giving effect to the sale of the
Released Collateral, no Event of Default will have occurred and be continuing, (II) in the
event that there is to be a substitution of property for the Released Collateral subject to
such asset sale, all documentation necessary to effect the substitution of the replacement
property for the Released Collateral subject to such disposition and to create perfected
security interests in favor of the Collateral Agent therein and (III) an Opinion of Counsel
to the effect that such release of the Released Collateral complies with the terms of
Section 9.11(b)(x).

(d) In the event that any Class of Secured Obligations is repaid in full or discharged or
defeased in accordance with the terms of the applicable Secured Debt Documents governing such Class
of Secured Obligations following the Closing Date, then upon delivery by the Company to the
Collateral Agent and each Authorized Representative of an Officers’ Certificate stating that such
Class of Secured Obligations have been repaid in full or discharged or defeased in accordance with
the terms of the applicable Secured Debt Documents governing such Class of Secured Obligations
(which shall contain a signed acknowledgement to such effect by the Authorized Representative for
such repaid, discharged or defeased Class of Secured Obligations), then such repaid, discharged or
defeased Class of Secured Obligations shall automatically and without any further requirement of
any action by the Collateral Agent or any Secured Party, cease to constitute Secured Obligations
hereunder and under the other Security Documents.

(e) The Collateral Agent shall have no liability whatsoever to any other Secured Party as the
result of any release of Collateral by it in accordance with (or which the Collateral Agent in the
absence of gross negligence or willful misconduct believes to be in accordance with) this Section
9.11.

Section 9.12 Reinstatement. Each Grantor further agrees that, if any payment made by any
Grantor or other Person and applied to any of the Secured Obligations of such Grantor is at any
time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of Collateral are
required to be returned by any Secured Party to such Grantor, its estate, trustee, receiver or any
other party, including any Grantor, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and remain in full force and effect, as fully as if such payment
had never been made or, if prior thereto the Lien granted hereby or other Collateral securing such
liability hereunder shall have been released or terminated by virtue of such cancellation or
surrender, such Lien or other Collateral shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect
any Lien or other Collateral securing the obligations of any Grantor in respect of the amount of
such payment.

Section 9.13 Additional Secured Obligations. On or after the Closing Date and so long as
permitted by the First Priority Indenture, the First Priority Term Loan Facility and the Second
Priority Indenture, each as in effect on the Closing Date, the Company may from time to time (i)
designate additional obligations (including under Interest Rate Agreements) as additional First
Priority Secured Obligations (“Additional First Priority Secured Obligations”) and (ii) designate
additional obligations as additional Second Priority Secured Obligations (“Additional Second
Priority Secured Obligations”) by delivering to the Collateral Agent and each Authorized
Representative (a) a certificate signed by the chief financial officer of the Company (i)
identifying the Class of obligations so designated and the aggregate principal amount or face
amount thereof, stating that such Class of obligations is designated as an Additional First
Priority Secured Obligation or an Additional Second Priority Secured Obligation for purposes
hereof, (ii) representing that such designation of such Class of obligations as an Additional First
Priority Secured Obligation or as an Additional Second Priority Secured Obligation complies with
the terms of the Secured Debt Documents as in effect on the Closing Date and (iii) specifying the
name and address of the Authorized Representative for such Class of obligations, (b) a fully
executed Additional Secured Party Consent (in the form attached as Annex 7); and (c) an Opinion of
Counsel to the effect that the designation of such Class of Obligations as “Additional First
Priority Secured Obligations” or “Additional Second Priority Secured Obligations”, as the case may
be, would not have violated the terms of the First Priority Indenture, the First Priority Term Loan
Facility or the Second Priority Indenture, in each case, as in effect on the Closing Date.

Section 9.14 Incorporation by Reference. In acting in their capacities hereunder or under any
other Security Document, the Collateral Agent, First Priority Trustee and Second Priority Trustee
are entitled to the rights, protections, privileges, indemnitees and limitations on liability
provided to the First Priority Trustee and Second Priority Trustee under the First Priority
Indenture and the Second Priority Indenture (except that any matter referring to directions of any
holders of First Priority Notes, Second Priority Notes of First Priority Term Loans contained
therein shall be deemed to be a reference to the Applicable Secured Parties).

IN WITNESS WHEREOF, each of the undersigned has caused this Pledge and Security Agreement to
be duly executed and delivered as of the date first above written.

	 	 	 
	 
	 	 
	
 
	 	As Grantor:
	
 
	 	PAXSON COMMUNICATIONS CORPORATION

By:/s/ Richard Garcia
	
 
	 	 
	
 
	 	Name:Richard Garcia

Title:Senior Vice President and Chief

Financial Officer

	 	 	 	As Grantors:

	 	 	 	BUD
HITS, INC.

	 	 	 	BUD
SONGS, INC.

	 	 	 	CLEARLAKE PRODUCTIONS, INC.

	 	 	 	FLAGLER PRODUCTIONS, INC.

	 	 	 	IRON
MOUNTAIN PRODUCTIONS, INC.

	 	 	 	OCEAN
STATE TELEVISION, LLC

	 	 	 	PAX
HITS PUBLISHING, INC.

	 	 	 	PAX
INTERNET, INC.

	 	 	 	PAX
NET, INC.

	 	 	 	PAX
NET TELEVISION PRODUCTIONS, INC.

	 	 	 	PAXSON AKRON LICENSE, INC.

	 	 	 	PAXSON ALBANY LICENSE, INC.

	 	 	 	PAXSON ATLANTA LICENSE, INC.

	 	 	 	PAXSON BATTLE CREEK LICENSE, INC.

	 	 	 	PAXSON BIRMINGHAM LICENSE, INC.

	 	 	 	PAXSON BOSTON-68 LICENSE, INC.

	 	 	 	PAXSON BUFFALO LICENSE, INC.

	 	 	 	PAXSON CEDAR RAPIDS LICENSE, INC.

	 	 	 	PAXSON CHARLESTON LICENSE, INC.

	 	 	 	PAXSON CHICAGO LICENSE, INC.

	 	 	 	PAXSON COMMUNICATIONS LICENSE COMPANY, LLC

	 	 	 	PAXSON COMMUNICATIONS LPTV, INC.

	 	 	 	PAXSON COMMUNICATIONS MANAGEMENT COMPANY, INC.

	 	 	 	PAXSON COMMUNICATIONS OF AKRON-23, INC.

	 	 	 	PAXSON COMMUNICATIONS OF ALBANY-55, INC.

	 	 	 	PAXSON COMMUNICATIONS OF ATLANTA-14, INC.

	 	 	 	PAXSON COMMUNICATIONS OF BATTLE CREEK-43, INC.

	 	 	 	PAXSON COMMUNICATIONS OF BIRMINGHAM-44, INC.

	 	 	 	PAXSON COMMUNICATIONS OF BOSTON-68, INC.

	 	 	 	PAXSON COMMUNICATIONS OF BUFFALO-51, INC.

	 	 	 	PAXSON COMMUNICATIONS OF CEDAR RAPIDS-48, INC.

	 	 	 	PAXSON COMMUNICATIONS OF CHARLESTON-29, INC.

	 	 	 	PAXSON COMMUNICATIONS OF CHICAGO-38, INC.

	 	 	 	PAXSON COMMUNICATIONS OF DALLAS-68, INC.

	 	 	 	PAXSON COMMUNICATIONS OF DENVER-59, INC.

	 	 	 	PAXSON COMMUNICATIONS OF DES MOINES-39, INC.

	 	 	 	PAXSON COMMUNICATIONS OF DETROIT-31, INC.

	 	 	 	PAXSON COMMUNICATIONS OF FAYETTEVILLE-62, INC.

	 	 	 	PAXSON COMMUNICATIONS OF GREENSBORO-16, INC.

	 	 	 	PAXSON COMMUNICATIONS OF GREENVILLE-38, INC.

	 	 	 	PAXSON COMMUNICATIONS OF HARTFORD-26, INC.

	 	 	 	PAXSON COMMUNICATIONS OF HONOLULU-66, INC.

	 	 	 	PAXSON COMMUNICATIONS OF HOUSTON-49, INC.

	 	 	 	PAXSON COMMUNICATIONS OF INDIANAPOLIS-63, INC.

	 	 	 	PAXSON COMMUNICATIONS OF JACKSONVILLE-21, INC.

	 	 	 	PAXSON COMMUNICATIONS OF JACKSONVILLE-35, INC.

	 	 	 	PAXSON COMMUNICATIONS OF KANSAS CITY-50, INC.

	 	 	 	PAXSON COMMUNICATIONS OF KNOXVILLE-54, INC.

	 	 	 	PAXSON COMMUNICATIONS OF LEXINGTON-67, INC.

	 	 	 	PAXSON COMMUNICATIONS OF LOS ANGELES-30, INC.

	 	 	 	PAXSON COMMUNICATIONS OF LOUISVILLE-21, INC.

	 	 	 	PAXSON COMMUNICATIONS OF MEMPHIS-50, INC.

	 	 	 	PAXSON COMMUNICATIONS OF MIAMI-35, INC.

	 	 	 	PAXSON COMMUNICATIONS OF MILWAUKEE-55, INC.

	 	 	 	PAXSON COMMUNICATIONS OF MINNEAPOLIS-41, INC.

	 	 	 	PAXSON COMMUNICATIONS OF MOBILE-61, INC.

	 	 	 	PAXSON COMMUNICATIONS OF NASHVILLE-28, INC.

	 	 	 	PAXSON COMMUNICATIONS OF NEW ORLEANS-49, INC.

	 	 	 	PAXSON COMMUNICATIONS OF NEW YORK-31, INC.

	 	 	 	PAXSON COMMUNICATIONS OF NORFOLK-49, INC.

	 	 	 	PAXSON COMMUNICATIONS OF OKLAHOMA CITY-62, INC.

	 	 	 	PAXSON COMMUNICATIONS OF ORLANDO-56, INC.

	 	 	 	PAXSON COMMUNICATIONS OF PHILADELPHIA-61, INC.

	 	 	 	PAXSON COMMUNICATIONS OF PHOENIX-13, INC.

	 	 	 	PAXSON COMMUNICATIONS OF PHOENIX-51, INC.

	 	 	 	PAXSON COMMUNICATIONS OF PORTLAND-22, INC.

	 	 	 	PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC.

	 	 	 	PAXSON COMMUNICATIONS OF RALEIGH-47, INC.

	 	 	 	PAXSON COMMUNICATIONS OF ROANOKE-38, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SACRAMENTO-29, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SALT LAKE CITY-30, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SAN ANTONIO-26, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SAN JOSE-65, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SCRANTON-64, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SEATTLE-33, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SHREVEPORT-21, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SPOKANE-34, INC.

	 	 	 	PAXSON COMMUNICATIONS OF SYRACUSE-56, INC.

	 	 	 	PAXSON COMMUNICATIONS OF TAMPA-66, INC.

	 	 	 	PAXSON COMMUNICATIONS OF TUCSON-46, INC.

	 	 	 	PAXSON COMMUNICATIONS OF TULSA-44, INC.

	 	 	 	PAXSON COMMUNICATIONS OF WASHINGTON-60, INC.

	 	 	 	PAXSON COMMUNICATIONS OF WASHINGTON-66, INC.

	 	 	 	PAXSON COMMUNICATIONS OF WAUSAU-46, INC.

	 	 	 	PAXSON COMMUNICATIONS OF WEST PALM BEACH-67, INC.

	 	 	 
	PAXSON COMMUNICATIONS TELEVISION, INC.

	 
	 	 
	PAXSON DALLAS LICENSE, INC.

PAXSON DENVER LICENSE, INC.

	 	

	 
	 	 
	PAXSON DES MOINES LICENSE, INC.

	 
	 	 
	PAXSON DETROIT LICENSE, INC.

PAXSON DEVELOPMENT, INC.

	 	

	 
	 	 
	PAXSON FAYETTEVILLE LICENSE, INC.

	 
	 	 
	PAXSON GREENSBORO LICENSE, INC.

	 
	 	 
	PAXSON GREENVILLE LICENSE, INC.

	 
	 	 
	PAXSON HARTFORD HOLDINGS, INC.

PAXSON HARTFORD LICENSE, INC.

PAXSON HAWAII LICENSE, INC.

PAXSON HOLDINGS, INC.

PAXSON HOUSTON LICENSE, INC.

	 	

	 
	 	 
	PAXSON INDIANAPOLIS HOLDINGS, INC.

	 
	 	 
	PAXSON INDIANAPOLIS LICENSE, INC.

	 
	 	 
	PAXSON JACKSONVILLE LICENSE, INC.

	 
	 	 
	PAXSON JAX LICENSE, INC.

	 	

	 
	 	 
	PAXSON KANSAS CITY LICENSE, INC.

	 
	 	 
	PAXSON KNOXVILLE LICENSE, INC.

PAXSON LEXINGTON LICENSE, INC.

	 	

	 
	 	 
	PAXSON LOS ANGELES LICENSE, INC.

	 
	 	 
	PAXSON MERCHANDISING & LICENSING, INC.

	 
	 	 
	PAXSON MIAMI-35 LICENSE, INC.

PAXSON MILWAUKEE LICENSE, INC.

	 	

	 
	 	 
	PAXSON MINNEAPOLIS LICENSE, INC.

	 
	 	 
	PAXSON MOBILE LICENSE, INC.

PAXSON NEW YORK LICENSE, INC.

PAXSON NORFOLK LICENSE, INC.

	 	

	 
	 	 
	PAXSON OKLAHOMA CITY LICENSE, INC.

	 
	 	 
	PAXSON ORLANDO LICENSE, INC.

	 	

	 
	 	 
	PAXSON PHILADELPHIA LICENSE, INC.

	 
	 	 
	PAXSON PHOENIX LICENSE, INC.

PAXSON PRODUCTIONS, INC.

PAXSON RALEIGH LICENSE, INC.

PAXSON ROANOKE LICENSE, INC.

	 	

	 
	 	 
	PAXSON SACRAMENTO LICENSE, INC.

	 
	 	 
	PAXSON SALEM LICENSE, INC.

	 	

	 
	 	 
	PAXSON SALT LAKE CITY LICENSE, INC.

	 
	 	 
	PAXSON SAN ANTONIO LICENSE, INC.

	 
	 	 
	PAXSON SAN JOSE LICENSE, INC.

PAXSON SCRANTON LICENSE, INC.

PAXSON SEATTLE LICENSE, INC.

	 	

	 
	 	 
	PAXSON SHREVEPORT LICENSE, INC.

	 
	 	 
	PAXSON SPOKANE LICENSE, INC.

PAXSON SPORTS OF MIAMI, INC.

PAXSON SYRACUSE LICENSE, INC.

PAXSON TAMPA-66 LICENSE, INC.

	 	

	 
	 	 
	PAXSON TELEVISION PRODUCTIONS, INC.

	 
	 	 
	PAXSON TELEVISION, INC.

PAXSON TENNESSEE LICENSE, INC.

PAXSON TULSA LICENSE, INC.

	 	

	 
	 	 
	PAXSON WASHINGTON LICENSE, INC.

	 
	 	 
	PAXSON WASHINGTON-60 LICENSE, INC.

	 
	 	 
	PAXSON WAUSAU LICENSE, INC.

	 	

	 
	 	 
	PAXSON WEST PALM BEACH HOLDINGS, INC.

	 
	 	 
	PAXSON WEST PALM BEACH LICENSE, INC.

	 
	 	 
	By:

	 	/s/ Richard Garcia
	
 
	 	 
	Name:Richard Garcia

Title:

	 	

Vice President and Treasurer of

each of such Subsidiary Guarantors

	 	 	 	AMERICA 51, L.P.

	 	 	 	By:
Paxson Communications of Phoenix-51, Inc., its
General Partner and Limited Partner

	 	 	 	By:
Paxson Communications Television, Inc., its
Limited Partner

	 	 	 
	
 
	 	By:/s/ Richard Garcia
	
 
	 	 
	ACCEPTED AND AGREED:

	 	Name:Richard Garcia

Title:Vice President and Treasurer of

such General and Limited Partners

	 
	 	 
	THE BANK OF NEW YORK TRUST COMPANY, NA

	 
	 	 
	as Collateral Agent

By:

	 	

/s/ Craig A. Kaye
	
 
	 	 

	 	 	 
	 	 	Name:	 	 	Craig A. Kaye
	 	 	Title: Assistant Vice President
	 	 	THE BANK OF NEW YORK TRUST COMPANY, NA
	 	 	as First Priority Trustee
	 	 	By:	 	 	/s/ Craig A. Kaye

	 	 	 
	 	 	Name: Craig A. Kaye
	 	 	Title: Assistant Vice President
	 	 	THE BANK OF NEW YORK TRUST COMPANY, NA
	 	 	as Second Priority Trustee
	 	 	By: /s/ Craig A. Kaye

Name: Craig A. Kaye

Title: Assistant Vice President

	 	 	 	CITICORP NORTH AMERICA, INC.,	 

as First Priority Administrative Agent

	 	 	 	By:

Name:

Title:

3

Annex 1 to

Pledge and Security Agreement

THE COLLATERAL AGENT AND

SECURED PARTY ACKNOWLEDGMENTS1

	 	1.	 	Appointment. The First Priority Secured Parties and the Second Priority Secured
Parties, by their acceptance of the benefits of the Security Agreement to which this Annex 1
is attached (the “Security Agreement”) hereby irrevocably designate The Bank of New
York Trust Company, NA (and any successor Collateral Agent) to act as specified herein and in
the other Security Documents. Each Secured Party hereby irrevocably authorizes, and each
holder of any Secured Obligation by the acceptance of such Secured Obligation and by the
acceptance of the benefits of the Security Agreement and the other Security Documents shall be
deemed irrevocably to authorize, the Collateral Agent to take such action on its behalf under
the provisions of the Security Documents and any instruments and agreements referred to
therein and to exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Collateral Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto. The Collateral Agent may perform
any of its duties hereunder or thereunder by or through its authorized agents, sub-agents or
employees. The Collateral Agent, for itself and its successors and assigns, hereby accepts
such appointment created hereby upon the terms and conditions specified herein. The
Collateral Agent agrees that it holds its interest in the Collateral that is in its possession
or control (or in the possession or control of its agents or bailees) for the benefit of and
on behalf of the First Priority Secured Parties and the Second Priority Secured Parties for
the purpose of perfecting the security interests granted to the Collateral Agent under this
Agreement.

	 	2.	 	Nature of Duties.

(a) The Collateral Agent shall have no duties or responsibilities except those expressly set
forth in the Security Agreement or herein. The duties of the Collateral Agent shall be
mechanical and administrative in nature; the Collateral Agent shall not have by reason of this
Agreement, any other Security Document or any other Secured Debt Document a fiduciary
relationship in respect of any Secured Party; and nothing in this Agreement or any other Secured
Debt Document, expressed or implied, is intended to or shall be so construed as to impose upon
the Collateral Agent any obligations in respect of the Security Documents except as expressly
set forth herein and therein.

(b) The Collateral Agent shall not be responsible for insuring the Collateral or for the payment
of taxes, charges or assessments or discharging of Liens upon the collateral or otherwise as to
the maintenance of the Collateral.

(c) The Collateral Agent shall not be required to ascertain or inquire as to the performance by
any Grantor of any of the covenants or agreements contained in any Security Document or any
other Secured Debt Document.

(d) The Collateral Agent shall be under no obligation or duty to take any action under, or with
respect to, any Security Document if taking such action (i) would subject the Collateral Agent
to a tax in any jurisdiction where it is not then subject to a tax or (ii) would require the
Collateral Agent to qualify to do business, or obtain any license, in any jurisdiction where it
is not then so qualified or licensed or (iii) would subject the Collateral Agent to in personam
jurisdiction in any locations where it is not then so subject.

(e) Notwithstanding any other provision of this Security Agreement, neither the Collateral Agent
nor any of its officers, directors, employees, affiliates or agents shall, in its individual
capacity, be personally liable for any action taken or omitted to be taken by it in accordance
with, or pursuant to the Security Agreement or any other Security Document, unless caused by its
or their own gross negligence or willful misconduct.

(f) Notwithstanding any other provision of any Security Document or this Annex 1, the Collateral
Agent shall not be responsible or liable for perfecting, or maintaining the priority of, the
Liens created pursuant to the Security Documents.

	 	3.	 	Lack of Reliance on the Collateral Agent. Independently and without reliance upon
the Collateral Agent, each Secured Party, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial condition and
affairs of each Grantor in connection with the making and the continuance of the Secured
Obligations and the taking or not taking of any action in connection therewith, and (ii) its
own appraisal of the creditworthiness of each Grantor, and the Collateral Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide any Secured
Party with any credit or other information with respect thereto, whether coming into its
possession before or after the extension of any Secured Obligations. The Collateral Agent
shall not be responsible or liable in any manner whatsoever to any Secured Party for the
correctness of any recitals, statements, information, representations or warranties herein, in
the other Secured Debt Documents or in any document, certificate or other writing delivered in
connection herewith or therewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of any Security Document
or the security interests granted thereunder or the financial condition of any Grantor or be
required to make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of any Security Document or any other Secured Debt Document,
or the financial condition of any Grantor, or the existence or possible existence of any
default or event of default (or similar term) under any Secured Debt Document. The Collateral
Agent makes no representations as to the value or condition of the Collateral or any part
thereof, or as to the title of any Grantor thereto or as to the security afforded by any
Security Document.

	 	4.	 	Certain Rights of the Collateral Agent.

(a) No Secured Party shall have the right to take any action with respect to (or against) any
Collateral, or cause the Collateral Agent to take any action with respect to (or against) any
Collateral, with only the Authorized Representatives on behalf of the Applicable Secured Parties
having the right to direct the Collateral Agent by written instruction to take any such action.
Except for actions required to be taken by the Collateral Agent in accordance with the Security
Agreement, if the Collateral Agent shall request instructions from the Authorized
Representatives on behalf of the Applicable Secured Parties with respect to any act or action
(including failure to act) in connection with any Security Document and the Authorized
Representatives on behalf of the Applicable Secured Parties shall fail to instruct the
Collateral Agent with respect to any act or action (including failure to act and refrain from
acting) in connection with such Security Document, the Collateral Agent shall be entitled to
refrain from such act or taking such action unless and until it shall have received express
instructions from the Authorized Representatives on behalf of the Applicable Secured Parties and
to the extent requested, appropriate indemnification in respect of actions to be taken, and the
Collateral Agent shall not incur liability to any Secured Party or any other Person by reason of
so refraining. Without limiting the foregoing, (x) no Secured Party shall have any right of
action whatsoever against the Collateral Agent as a result of the Collateral Agent acting or
refraining from acting hereunder or under the Security Documents in accordance with the
instructions of the Authorized Representatives on behalf of the Applicable Secured Parties or as
expressly provided in the Security Documents and (y) without limiting the preceding clause (x),
the Collateral Agent shall not be liable to any Secured Party or any other Person for any action
taken or omitted to be taken by it hereunder or under the Security Documents, unless caused by
its gross negligence or willful misconduct.

(b) Notwithstanding anything to the contrary contained herein (and subject to Section 2(f) of
this Annex 1), the Collateral Agent is authorized, but not obligated, (i) to take any action
reasonably required to perfect or continue the perfection of the liens on the Collateral for the
benefit of the Secured Parties and (ii) when instructions from the Authorized Representatives on
behalf of the Applicable Secured Parties have been requested by the Collateral Agent but have
not yet been received, to take any action which the Collateral Agent, in good faith, believes to
be reasonably required to promote and protect the interests of the Secured Parties in the
Collateral; provided that once instructions have been received, the actions of the Collateral
Agent shall be governed thereby and the Collateral Agent shall not take any further action which
would be contrary thereto.

(c) Notwithstanding anything to the contrary contained herein or in any Security Document, the
Collateral Agent shall not be required to take or refrain from taking, and shall have no
liability to any Secured Party for taking or refraining from taking, any action that exposes or,
in the good faith judgment of the Collateral Agent may expose, the Collateral Agent or its
officers, directors, agents or employees to personal liability, unless the Collateral Agent
shall be adequately indemnified as provided herein or that is, or in the good faith judgment of
the Collateral Agent may be, contrary to any Security Document, any other Secured Debt Document
or applicable law.

(d) For purposes of the Security Agreement, each Secured Party shall appoint a Person as its
Authorized Representative for the purpose of giving or delivering any notices or instructions
thereunder. Any instructions given by the Authorized Representatives on behalf of the
Applicable Secured Parties to the Collateral Agent pursuant to the Security Documents shall be
in writing signed by the Authorized Representative(s) of the various Secured Parties comprising
the Applicable Secured Parties with respect to such instructions and such instructions shall
certify to and for the benefit of the Collateral Agent that the Secured Parties authorizing such
instructions constitute the Applicable Secured Parties for purposes of this Section 4 and the
instructions being delivered. In determining whether the Applicable Secured Parties have
consented to any action under the Security Documents, the Collateral Agent may conclusively rely
on each Authorized Representative as to the amount of Secured Obligations held by holders
represented by such Authorized Representative. The Collateral Agent shall be entitled to
conclusively and absolutely rely on such instructions and certification as to the identity of
the Applicable Secured Parties with respect to such instructions, and the Collateral Agent shall
not be required to take any action, and shall not be liable to any Secured Party for failing or
refusing to act, pursuant to any instructions which are not given or delivered by the Authorized
Representatives of various Secured Parties comprising the Applicable Secured Parties with
respect to such instructions. The parties hereto acknowledge that the Authorized Representative
of each of the Secured Parties shall be (w) the First Priority Trustee, in the case of the First
Priority Note Creditors, (x) the First Priority Administrative Agent, in the case of the First
Priority Bank Creditors, (y) the Second Priority Trustee, in the case of the Second Priority
Note Creditors and (z) as set forth in the applicable Additional Secured Party Consent with
respect to any Additional Secured Obligations.

	 	5.	 	Reliance; Interpretation. The Collateral Agent shall be entitled to rely, and shall
be fully protected in relying, upon, any note, writing, resolution, notice, statement,
certificate, telex, teletype or telescopes message, cablegram, radiogram, order or other
document or telephone message signed, sent or made by the proper Person or entity, and, with
respect to all legal matters pertaining hereto or to the Security Documents and its duties
thereunder and hereunder, upon advice of counsel selected by it. If, in its good faith
judgment, the Collateral Agent reasonably believes that any instructions given or delivered
pursuant to any Security Document require judicial interpretation or are invalid or otherwise
contrary to the provisions of any Security Document, any other Secured Debt Document or
applicable law, the Collateral Agent shall have the right to petition a court of competent
jurisdiction to determine the validity of, or otherwise interpret, any such instructions. In
such event, the Collateral Agent shall not be required to carry out such instructions unless
directed to do so, or it is determined that it may do so, by such court.

	 	6.	 	The Collateral Agent in its Individual Capacity. With respect to its obligations as
a Secured Party under any Secured Debt Document to which the Collateral Agent is a party, and
to act as agent under one or more of such Secured Debt Documents, the Collateral Agent shall
have the rights and powers specified therein and herein for a “Secured Party”, and may
exercise the same rights and powers as though it were not performing the duties specified
herein; and the terms “Secured Parties”, “First Priority Secured Parties”,
“First Priority Trustee”, “Second Priority Secured Parties”, “Second
Priority Trustee”, “Required Secured Parties”, or any similar terms shall, unless
the context clearly otherwise indicates, apply to the Collateral Agent in its individual
capacity. The Collateral Agent and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, investment banking, trust or other business with
any Grantor or any Affiliate or Subsidiary of any Grantor as if it were not performing the
duties specified herein or in the other Secured Debt Documents, and may accept fees and other
consideration from the Grantors for services in connection with the First Priority Indenture,
the First Priority Term Loan Facility, the Second Priority Indenture and the other Secured
Debt Documents and otherwise without having to account for the same to the Secured Parties.

	 	7.	 	Resignation, Removal and Appointment of Successor Collateral Agent.

(a) The Collateral Agent may resign from the performance of all of its functions and duties
hereunder and under the other Security Documents at any time by giving 20 Business Days’ prior
written notice to the Company and the Authorized Representatives. Such resignation shall take
effect upon the appointment of a successor Collateral Agent pursuant to clause (b) or (c) below.

(b) If a successor Collateral Agent shall not have been appointed within such 20 Business Day
period by the Applicable Secured Parties, the Collateral Agent, with the consent (unless an
Event of Default shall exist, in which case no such consent shall be required) of the Company
(which consent shall not be unreasonably withheld or delayed) shall then appoint a successor
Collateral Agent who shall serve as Collateral Agent hereunder or thereunder until such time, if
any, as the Applicable Secured Parties appoint a successor Collateral Agent as provided above.

(c) If no successor Collateral Agent has been appointed pursuant to clause (b) above by the 20th
Business Day after the date of such notice of resignation was given by the Collateral Agent, as
a result of a failure by the Company to consent to the appointment of such a successor
Collateral Agent, (i) the Applicable Secured Parties shall then appoint a successor Collateral
Agent who shall serve as Collateral Agent hereunder or thereunder or (ii) if the Applicable
Secured Parties shall have failed to appoint a successor Collateral Agent by the 25th Business
Day after the date such notice of resignation was given by the Collateral Agent, the Collateral
Agent may appoint (or petition a court of competent jurisdiction to appoint) a successor
Collateral Agent who shall serve as Collateral Agent hereunder or thereunder, in either such
case until such time, if any, as the Applicable Secured Parties appoint a successor Collateral
Agent as provided above.

(d) The resignation or removal of a Collateral Agent shall become effective only upon the
execution and delivery of such documents or instruments as are necessary to transfer the rights
and obligations of the Collateral Agent under the Security Documents and the recording or filing
of such documents, instruments or financing statements as may be necessary to maintain the
priority and perfection of any security interest granted by the Security Documents. Copies of
each such document or instrument shall be delivered to each of the Company, the First Priority
Trustee, the First Priority Administrative Agent and the Second Priority Trustee. The
appointment of a successor Collateral Agent pursuant to this Section 7 shall become effective
upon the acceptance of such appointment (and execution by such successor of the documents,
instruments or financing statements referred to above) and such successor Collateral Agent shall
succeed to and become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent.

	 	8.	 	Co-Collateral Agents; Separate Collateral Agents.

(a) If at any time or times it shall be necessary or prudent in order to conform to any law of
any jurisdiction in which any of the Collateral shall be located, or the Collateral Agent shall
be advised by counsel, satisfactory to it, that it is necessary or prudent in the interest of
the Collateral Agent or the Secured Parties, then the Collateral Agent shall be entitled to
appoint one or more sub-collateral agents or co-collateral agents, and in such case the
Collateral Agent, the Company and each of the other Grantors having an interest in the
Collateral located in the jurisdiction in which such separate or sub-collateral agent or
co-collateral agent is to act shall execute and deliver all instruments and agreements necessary
or proper to constitute another bank or trust company, or one or more individuals approved by
the Collateral Agent, either to act as co-collateral agent or co-collateral agents jointly with
the Collateral Agent originally named herein or any successor or successors, or to act as a
separate or sub-collateral agent or agents of the Collateral Agent and the Secured Parties in
respect of any or all of the Collateral. If the Company and each of the other Grantors having
an interest in the Collateral located in the jurisdiction in which such separate or
sub-collateral agent or co-collateral agent is to act shall not have joined in the execution of
such instruments or agreements within 10 days after the receipt of a written request from the
Collateral Agent so to do, or if an Event of Default shall be continuing, the Collateral Agent
may act under the foregoing provisions of this Section 8 without the concurrence of the Company
and the other Grantors, and the Company and each of the other Grantors hereby irrevocably
appoint the Collateral Agent as their agent and attorney to act for them under the foregoing
provisions of this Section 10 in either of such contingencies.

(b) Every separate or sub-collateral agent (and all references herein to a “separate
collateral agent” shall be deemed to refer also to a “sub-collateral agent” or a
“collateral sub-agent”) and every co-collateral agent, other than any collateral agent
which may be appointed as successor to any Collateral Agent, shall, to the extent permitted by
applicable law, be appointed and act and be such, subject to the following provisions and
conditions, namely:

(i) all rights, remedies, powers, duties and obligations conferred upon, reserved to or
imposed upon the Collateral Agent in respect of the custody, control and management of
monies, papers or securities shall be exercised solely by the Collateral Agent hereunder;

(ii) all rights, remedies, powers, duties and obligations conferred upon, reserved to
or imposed upon the Collateral Agent hereunder shall be conferred, reserved or imposed and
exercised or performed by the Collateral Agent and such separate collateral agent or
separate collateral agents or co-collateral agent or co-collateral agents, jointly or
severally, as shall be provided in the instrument appointing such separate collateral agent
or separate collateral agents or co-collateral agent or co-collateral agents, except to the
extent that, under any law of any jurisdiction in which any particular act or acts are to be
performed, the Collateral Agent shall be incompetent or unqualified to perform such act or
acts, in which event such rights, remedies, powers, duties and obligations shall be
exercised and performed by such separate collateral agent or separate collateral agents or
co-collateral agent or co-collateral agents;

(iii) no power given hereby to, or which it is provided hereby may be exercised by, any
such separate collateral agent or separate collateral agents or co-collateral agent or
co-collateral agents shall be exercised hereunder by such separate collateral agent or
separate collateral agents or co-collateral agent or co-collateral agents except (subject to
applicable law) jointly with, or with the consent or at the direction in writing of, the
Collateral Agent (which direction shall be made in accordance with the provisions of the
Security Agreement);

(iv) all provisions of the respective Security Documents relating to the Collateral
Agent or to releases of Collateral shall apply to any such separate collateral agent or
separate collateral agents or co-collateral agent or co-collateral agents;

(v) no collateral agent constituted under this Section 8 shall be personally liable by
reason of any act or omission of any other separate or co-collateral agent or the Collateral
Agent hereunder; and

(vi) the Collateral Agent at any time by an instrument in writing, executed by it, may
accept the resignation of any such separate collateral agent or co-collateral agent and the
Collateral Agent or the Applicable Secured Parties may individually or jointly remove any
such separate collateral agent or co-collateral agent, and in that case, by an instrument in
writing executed by the Collateral Agent or the Applicable Secured Parties, as the case may
be, and the Collateral Agent or the Applicable Secured Parties, as the case may be, may
appoint a successor to such separate collateral agent or co-collateral agent, as the case
may be, anything herein contained to the contrary notwithstanding. If the Company and each
of the other Grantors shall not have joined in the execution of any such instrument within
10 days after the receipt of a written request from the Collateral Agent so to do, or if an
Event of Default shall be continuing, the Collateral Agent shall have the power to accept
the resignation of or remove any such separate collateral agent or co-collateral agent and
to appoint a successor to such separate collateral agent or co-collateral agent, as the case
may be, and to execute any such instrument without the concurrence of the Company or such
other Grantor, and the Company and each of the other Grantors hereby irrevocably appoint the
Collateral Agent their agent and attorney to act for them in such connection in either of
such contingencies. If the Collateral Agent shall have appointed a separate collateral
agent or separate collateral agents or co-collateral agent or co-collateral agents as above
provided, the Collateral Agent may at any time, by an instrument in writing, accept the
resignation of or remove any such separate collateral agent or co-collateral agent, the
successor to any such separate collateral agent or co-collateral agent to be appointed by
the Company and each of the other Grantors and the Collateral Agent, or by the Collateral
Agent alone, as hereinabove provided in this Section 8.

	 	9.	 	Acknowledgment of Priorities of Security Interests and Liens.

(a) Each of the Secured Parties acknowledges and agrees (x) to the relative priorities as to the
Collateral (and the application of the proceeds therefrom) as provided in the Security Agreement
(including Article VIII of the Security Agreement) and acknowledges and agrees that such
priorities (and the application of proceeds from the Collateral) shall not be affected or
impaired in any manner whatsoever including, without limitation, on account of (i) the
invalidity, irregularity, diminution in value or unenforceability of all or any part of any
Secured Debt Document or any of the Secured Obligations thereunder, (ii) the actual date and
time of creation, execution, delivery, recording, filing, attachment or perfection of any
security interests in the Collateral, (iii) any nonperfection of any Lien purportedly securing
any of the Secured Obligations (including, without limitation, whether any such Lien is now
perfected, hereafter ceases to be perfected, is avoidable by any bankruptcy trustee or otherwise
is set aside, invalidated or lapses), (iv) any amendment, change or modification of any Secured
Debt Document, (v) any impairment, modification, change, exchange, release or subordination of
or limitation on, any liability of, or stay of actions or lien enforcement proceedings against,
any Grantor, its property, or its estate in bankruptcy resulting from any bankruptcy,
arrangement, readjustment, composition, liquidation, rehabilitation, similar proceeding or
otherwise involving or affecting any Grantor, (vi) any distribution of the Collateral upon the
liquidation or dissolution of any Grantor, or the winding up of the assets or business of any
Grantor, (vii) the initiation of any bankruptcy, moratorium, reorganization or other insolvency
proceeding with respect to any Grantor or (viii) the taking of possession of any of the
Collateral by the Collateral Agent or any of the Secured Parties, (y) that the grants of
security under the Security Agreement constitute two separate and distinct grants of security,
one in favor of the Collateral Agent for the benefit of the First Priority Secured Parties and
the second in favor of the Collateral Agent for the benefit of the Second Priority Secured
Parties and (z) that the Second Priority Secured Parties’ claims against the Grantors in respect
of the Collateral constitute second priority claims separate and apart (and of a different class
and claim) from the First Priority Secured Parties’ claims against the Grantors in respect of
the Collateral.

(b) Each Secured Party, by its acceptance of the benefits hereunder and of the Security
Documents, hereby agrees for the benefit of the other Secured Parties that, to the extent any
additional or substitute collateral for any of the Secured Obligations of the type covered by
the Security Agreement are delivered by a Grantor to or for the benefit of any Secured Party,
such collateral shall be subject to the provisions of this Annex 1 and of the Security
Agreement.

(c) Each of the Secured Parties hereby agrees not to challenge or question in any proceeding the
validity or enforceability of any Security Document (in each case as a whole or any term or
provision contained therein) or the validity of any Lien or financing statement in favor of the
Collateral Agent for the benefit of the Secured Parties as provided in the Security Agreement,
or the relative priority of any such Lien.

(d) If any Secured Party shall acquire by indemnification, subrogation, contract or otherwise,
any lien, estate, right or other interest in, or possession or control of, any of the assets of
any Grantor that would otherwise constitute Collateral to secure (or providing security for) the
respective Secured Obligations owed to such Secured Party, that lien, estate, right or other
interest shall, and any such possession or control shall, be held for the benefit of the Secured
Parties under the Security Agreement and shall be subject to the relative priorities set forth
in the Security Agreement.

	 	10.	 	Sharing Arrangements.

(a) The Secured Parties hereby agree that the provisions of the Security Documents with respect
to allocations, priorities and distributions of proceeds of the Collateral shall prevail
notwithstanding any event or circumstance, including, without limitation, in the event that,
through the operation of any bankruptcy, reorganization, insolvency or other laws or otherwise,
any Secured Party’s security interest in the Collateral is avoided in whole or in part or is
enforced with respect to some, but not all, of the respective Obligations then outstanding.

(b) The Secured Parties agree that none of them shall be entitled to benefit from any avoidance
action affecting or otherwise relating to any distribution or allocation made in accordance with
the Security Documents, whether by preference or otherwise, it being understood and agreed that
the benefit of any such avoidance action otherwise allocable to them shall instead be allocated
and turned over for application in accordance with the priorities set forth in Article VIII of
the Security Agreement.

(c) In the event that any payment or distribution shall be received by any Secured Party in a
manner that is inconsistent with the provisions of Article VIII of the Security Agreement, such
payment or distribution shall be held by the respective Secured Party for the benefit of, and
shall be paid over or delivered to, the Collateral Agent for application to the Secured Parties’
Secured Obligations (including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Grantor at the rate provided for in the respective
Secured Debt Documents, whether or not a claim for post-petition interest is allowed in any such
proceeding) in accordance with Article VIII of the Security Agreement.

	 	11.	 	Provisions in the Event of Insolvency Proceedings. Without limiting the other
provisions of this Annex 1, upon the commencement of a case under the Bankruptcy Code by or
against any Grantor:

(a) The Security Agreement shall remain in full force and effect and enforceable pursuant to
their respective terms in accordance with Section 510(a) of the Bankruptcy Code, and all
references herein to such Grantor shall be deemed to apply to such entity as
debtor-in-possession and to any trustee in bankruptcy for the estate of such entity.

(b) In any such case under the Bankruptcy Code, each Secured Party agrees not to take any action
or vote in any way inconsistent with this Agreement so as to contest (1) the validity or
enforceability of any of the Security Documents or any of the Secured Obligations thereunder,
(2) the validity, priority or enforceability of the Liens, mortgages, assignments and security
interests granted pursuant to the Security Documents with respect to the Secured Obligations, or
(3) the relative rights and duties of the holders of the First Priority Secured Obligations and
the Second Priority Secured Obligations granted and/or established in the Security Agreement
with respect to such Liens, mortgages, assignments, and security interests.

(c) Prior to the First Priority Secured Obligations Termination Date, without the express
written consent of the Applicable Secured Parties, none of the Second Priority Secured Parties
shall (i) with respect to any rights under any Secured Debt Document or applicable law, seek in
respect of any part of the Collateral or proceeds thereof or any Lien which may exist thereon,
any relief from or modification of the automatic stay as provided in Section 362 of the
Bankruptcy Code or seek or accept any form of adequate protection under either or both Sections
362 and 363 of the Bankruptcy Code with respect thereto except, with respect to the Second
Priority Secured Obligations, to the extent that if the First Priority Secured Parties (or any
subset thereof) are granted adequate protection in the form of additional collateral in
connection with any debtor-in-possession financing, then the Second Priority Secured Parties may
seek or request adequate protection in the form of a Lien on such additional collateral, which
Lien will be subordinated to the Liens securing the First Priority Secured Obligations and such
debtor-in-possession financing (and all obligations relating thereto) on the same basis as the
other Liens securing the Second Priority Secured Obligations are so subordinated to the First
Priority Secured Obligations under this Agreement, (ii) oppose or object to any First Priority
Secured Party obtaining a Lien or grant of administrative claim in connection with a grant of
adequate protection, use of cash collateral or post-petition financing under Section 362, 363 or
364 of the Bankruptcy Code, (iii) oppose or object to the use of cash collateral by a Grantor,
(iv) oppose or object to any post-petition financing (including any debtor-in-possession
financing) provided by any of the First Priority Secured Parties or provided by a third party
pursuant to Section 364 of the Bankruptcy Code (and if the Lien securing the First Priority
Secured Obligations is made junior to such post-petition financing, the Lien securing the Second
Priority Secured Obligations shall also be junior to such post-petition financing) on terms
acceptable to the Applicable Secured Parties, (v) oppose or object to or withhold consent from
the disposition of assets by any Grantor under Section 363(b) or (f) of the Bankruptcy Code,
(vi) oppose, object to, or vote against any plan of reorganization or disclosure statement the
terms of which are consistent with the rights of the First Priority Secured Parties under the
Security Agreement, (vii) make an election pursuant to Section 1111(b) of the Bankruptcy Code,
(viii) oppose or object to the determination of the extent of any Liens held by any of the First
Priority Secured Parties or the value of any claims of the First Priority Secured Parties under
Section 506(a) of the Bankruptcy Code, or (ix) oppose or object to the payment of interest and
expenses under Sections 506(b) and (c) of the Bankruptcy Code.

(d) In the event that any of the First Priority Secured Obligations shall be paid in full and
subsequently, for whatever reason (including, but not limited to, an order or judgment for
disgorgement of a preference under Title 11 of the United Stated Code, or any similar law, or
the settlement of any claim in respect thereof), formerly paid or satisfied First Priority
Secured Obligations become unpaid or unsatisfied, the terms and conditions of this Annex 1 shall
be fully applicable thereto until all such First Priority Secured Obligations are again paid in
full in cash.

	 	12.	 	Special Releases and Waivers.

(a) Each Secured Party agrees that neither the Collateral Agent nor the Applicable Secured
Parties (in directing the Collateral Agent to take any action with respect to the Collateral)
shall have any duty or obligation to realize first upon any type of Collateral or to sell,
dispose of or otherwise liquidate all or any portion of the Collateral in any manner that would
maximize the return to any class of Secured Obligations (whether First Priority Secured
Obligations or Second Priority Secured Obligations), notwithstanding that the order and timing
of any such realization, sale, disposition or liquidation may affect the amount of proceeds
actually received by any of the Secured Parties from such realization, sale, disposition or
liquidation.

(b) Each of the Second Priority Secured Parties waives any claim which each such Second Priority
Secured Party may now or hereafter have against the First Priority Secured Parties (or their
representatives) arising out of (i) any and all actions which the Collateral Agent or the First
Priority Secured Parties take or omit to take (including, without limitation, actions with
respect to the creation, perfection or continuation of Liens on the Collateral, actions with
respect to the occurrence of an Event of Default, actions with respect to the foreclosure upon,
sale, release, or depreciation of, or failure to realize upon, any of the security for the
Second Priority Secured Obligations and actions with respect to the collection of any claim for
all or any part of the Second Priority Secured Obligations from any account debtor, guarantor or
any other party) in accordance with the respective Secured Debt Documents or any other agreement
related thereto or to the collection of the Secured Obligations or the valuation, use,
protection or release of the security for the Secured Obligations, (ii) the Collateral Agent’s
or the Applicable Secured Parties’ election, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111(b) of the Bankruptcy Code and/or (iii) any borrowing
of, or grant of a security interest or administrative expense priority under Section 364 of the
Bankruptcy Code to, any Grantor as debtor-in-possession.

	 	13.	 	Right to Amend, Etc.

(a) As between the First Priority Secured Parties on the one hand and the Second Priority
Secured Parties on the other hand, it is agreed that the First Priority Secured Parties may at
any time and from time to time, in their sole discretion, and without any obligation to give any
notice or receive any consent from any Second Priority Secured Party, in its capacity as such,
change the manner, place or terms of payment, or change or extend the time of payment of, or
renew, alter or refinance the First Priority Secured Obligations, or (ii) amend or supplement in
any manner any Secured Debt Document relating to the First Priority Secured Obligations, and the
provisions of this Annex 1 shall continue in full force and effect with respect to all such
First Priority Secured Obligations.

(b) The First Priority Trustee and the First Priority Administrative Agent each acknowledge that
the terms of the First Priority Indenture and the First Priority Term Loan Facility provide that
the First Priority Noteholders and First Priority Term Lenders are permitted to take certain
actions under the First Priority Indenture and the First Priority Term Loan Facility only with
the consent of specified percentages of holders of First Priority Notes and First Priority Term
Loans, acting as a single class, and only if such action is taken with respect to both the First
Priority Term Loan Facility and the First Priority Indenture (any such matter a “Shared Voting
Matter”). In connection with any Shared Voting Matter, the First Priority Trustee and the First
Priority Collateral Agent agree to cooperate with each other in determining whether (i) the
requisite percentages of holders of First Priority Term Loans and First Priority Notes, acting
as a single class, have consented to such Shared Voting Matter and (ii) whether any action or
change resulting from such Shared Voting Matter shall be applicable to both the First Priority
Indenture and the First Priority Term Loan Facility. Additionally, the First Priority
Administrative Agent and the First Priority Trustee shall provide notice to one another of any
action proposed to be taken by such Person that the First Priority Administrative Agent and the
Trustee are required to act together in taking pursuant to the terms of the First Priority Term
Loan Facility and the First Priority Indenture.

	 	14.	 	Nature of Obligations; Post-Petition Interest. Each Second Priority Secured Party
hereby acknowledges and agrees that (i) the Second Priority Secured Parties’ claims against
the Grantors in respect of the Collateral constitute junior claims separate and apart (and of
a different class and claim) from the senior claims of the First Priority Secured Parties
against the Grantors in respect of the Collateral and (ii) the First Priority Secured
Obligations include all interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding
of any Grantor at the rate provided for in the respective Secured Debt Documents governing the
same, whether or not a claim for post-petition interest is allowed in any such case,
proceeding or other action. To further effectuate the intent of the parties as provided in
the immediately preceding sentence, if it is held that the claims against the Grantors in
respect of the Collateral constitute only one secured claim (rather than separate classes of
senior and junior claims), then each Second Priority Secured Party hereby acknowledges and
agrees that all distributions pursuant to Article VIII of the Security Agreement or otherwise
shall be made as if there were separate classes of senior and junior secured claims against
the Grantors in respect of the Collateral with the effect being that, to the extent that the
aggregate value of the Collateral is sufficient (for this purpose ignoring all claims held by
the Second Priority Secured Parties), the First Priority Secured Parties shall be entitled to
receive, in addition to amounts distributed to them in respect of principal, prepetition
interest and other claims, all amounts owing in respect of post-petition interest at relevant
contract rate (even though such claims may or may not be allowed in whole or in part in the
respective bankruptcy, insolvency, reorganization or similar proceeding) before any
distribution is made in respect of the Second Priority Secured Obligations, with the Second
Priority Secured Parties hereby acknowledging and agreeing to turn over to the holders of the
First Priority Secured Obligations all amounts otherwise received or receivable by it to the
extent needed to effectuate the intent of this sentence even if such turn-over of amounts has
the effect of reducing the amount of the claim of the Second Priority Secured Obligations.

	 	15.	 	Agreement by Second Priority Secured Parties. The Additional Second Priority Secured
Parties from time to time holding Additional Second Priority Secured Obligations hereby agree
that, for so long as the Non-Guaranteed Amount of Notes (as defined in the Second Priority
Indenture) has not been reduced to zero, then if, in connection with any enforcement action
under the terms of the Secured Debt Documents (whether or not relating to the Collateral)
governing such Additional Second Priority Secured Obligations or pursuant to any distribution
pursuant to Article VIII of the Security Agreement, such holders receive any proportionately
greater recovery in respect of such Additional Second Priority Secured Obligations than the
Second Priority Note Creditors receive in respect of the Second Priority Notes as a result of
the existence of the Non-Guaranteed Amount of Notes, then such holders shall turn over such
amounts to the holders of Second Priority Notes as may be necessary so that the proportionate
recovery on any Additional Second Priority Secured Obligations, on the one hand, and the
Second Priority Notes, on the other, is equal even if such turn-over of amounts has the effect
of reducing the claim of such Additional Second Priority Secured Obligations. Additionally,
in the event that any Second Priority Secured Party receives any amount pursuant to any
turnover of amounts received by holders of Debt of any Grantor pursuant to any arrangement
similar to that contemplated by clause (iii) of the definition of Qualified Subordinated Debt
or clause (z) of the final proviso to the definition of Refinancing Debt, in each case, in the
Second Priority Indenture, such Second Priority Secured Party shall share such amount pro rata
with the other Second Priority Secured Parties to the extent such Second Priority Secured
Parties hold unsatisfied Second Priority Secured Obligations at such time.

	 	16.	 	Rights As Unsecured Creditors. Except as otherwise specifically set forth in Section
11 of this Agreement, the Second Priority Secured Parties may exercise rights and remedies as
unsecured creditors against any Grantor in accordance with the terms of the Second Priority
Documents and applicable law.

	 	17.	 	Successors and Assigns. Each of the agreements and acknowledgments made by each
Secured Party is made on behalf of itself and its successors and assigns and is deemed
effective by virtue of such Secured Parties acceptance of the benefits of the Security
Agreement and the other Security Documents. Each Secured Party acknowledges that the relative
rights and obligations of the Secured Parties set forth in the Security Agreement and this
Annex 1 are intended to be binding upon the Secured Parties notwithstanding the application of
any automatic stay or comparable provision of law with respect to the enforcement of the
Security Agreement against any Grantor.

4

1Unless otherwise defined herein, all
capitalized terms used herein and defined in the Security Agreement, are used
herein as therein defined.

5EX-10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of December 22, 2005 by and between
PORTFOLIO RECOVERY ASSOCIATES, INC., a Delaware corporation (the “Company”), and Steven D.
Fredrickson (“Employee”).

W I T N E S S E T H

:

WHEREAS, the Company desires that Employee serve as the President and Chief Executive Officer
of the Company;

WHEREAS, the Employee desires to enter into such an employment relationship upon the terms set
forth in this Agreement;

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged,
the parties agree as follows:

1. Employment.

a) The Company hereby employs (the “Employment”) Employee as the President and Chief Executive
Officer of the Company. Employee shall perform such duties and exercise such powers as directed
by the Board of Directors of the Company (the “Board”). Employee hereby accepts the Employment and
agrees to (i) render such executive services, (ii) perform such executive duties and (iii) exercise
such executive supervision and powers to, for and with respect to the Company, as may be
established, for the period and upon the terms set forth in this Agreement.

b) Employee shall devote substantially all of his business time and attention to the business
and affairs of the Company consistent with his executive position with the Company, except as
permitted for Paid Time Off, pursuant to Section 4(d) and for Disability (as defined in Section
8(b)). This Agreement shall not be construed as preventing Employee from serving on the Boards of
Directors of other companies, engaging in charitable and community affairs, or giving attention to
his passive investments, provided that such activities do not interfere with the regular
performance of his duties and responsibilities under this Agreement or violate any other provision
of this Agreement.

2. Place of Performance. The principal place of employment of Employee shall be at
the Company’s principal executive offices in Norfolk, Virginia or, if such offices are relocated,
within a 50 mile radius of Norfolk, Virginia (the “Metropolitan Area”). Notwithstanding the
foregoing, Employee may be required to travel beyond the Metropolitan Area as reasonably required
to perform his duties hereunder.

3. Term. Except as otherwise specifically provided in Section 8 below, this Agreement
shall commence on January 1, 2006 (the “Commencement Date”), and shall continue until December 31,
2008, subject to the terms and conditions of this Agreement. The Term may be terminated at an
earlier date in accordance with Section 8 hereof.

4. Compensation.

a) Base Salary. Employee shall be paid a base salary (the “Base Salary”) at an annual
rate of $350,000, payable at such intervals as the other executive officers of the Company are
paid, but in any event at least on a monthly basis. On each January 1 following the Commencement
Date, commencing January 1, 2007, Base Salary shall be increased annually by no less than 4% over
the immediately preceding year’s Base Salary.

b) Bonus Compensation. Employee shall receive bonus compensation (“Bonus
Compensation”) in accordance with paragraph (i) of this Section 4(b); provided,
however, that if at any time the Management Bonus (as hereinafter defined) is not in
effect, Employee shall receive bonus compensation in accordance with paragraph (ii) of this Section
4(b). Employee shall not be entitled to participate in any incentive bonus program for
non-management level employees during the time the Management Bonus is in effect.

(i) Management Bonus. The performance of the business shall be reviewed at the end of
each operating year and compared to such goals as are set forth in the business plan for that year
as approved by the Board (the “Business Plan”). If the results of operations for the year achieve
the net profitability goals for the year specified in the approved Business Plan, Plan and (ii) the
Employee’s performance is determined in conformance with Company policy to have met expectations,
a bonus equal to no less than 80% of the Employee’s Base Salary shall be paid to him (the
“Management Bonus”). If (i) the results of operations for the year exceed the net profitability
goals of the approved Business Plan and (ii) the Employee’s performance is determined in
conformance with Company policy to have exceeded expectations, the amount of the Employee’s
Management Bonus may be increased in recognition of the degree to which results exceeded such
goals, and the degree to which the Employee contributed to the Company’s superior performance
results as determined in the sole discretion of the Compensation Committee of the Board (the
“Committee”). If (i) the results of operations for the year fail to achieve such net profitability
goals specified in the approved Business Plan or (ii), the Employee’s performance is determined in
conformance with Company policy not to have met expectations, then the amount, if any of the
Employee’s Management Bonus shall be within the absolute discretion of the Committee, provided that
the Committee shall give reasonable consideration to any intervening or extraordinary events or
circumstances that might have given rise to such shortfall. Further, if pursuant to the Company’s
senior executive target equity ownership policies, the Employee’s targeted equity ownership levels
have not been met, the Employee’s Management Bonus may be paid, in whole or in part, in shares of
the Company’s common stock.

(ii) Bonus. In the event that the Management Bonus is not in effect, in addition to
the Base Salary, Employee shall be entitled to such bonus compensation as may be determined from
time to time by the Committee, in its sole discretion. The Committee shall base its decision on a
review of the performance of the Company and the Employee’s performance at the end of each year.

c) Employee Benefits. In addition to the Base Salary and the Bonus Compensation, and
subject to the limitations imposed herein, Employee shall be entitled to (i) receive any fringe
benefits provided by the Company to its executive officers, including, but not limited to, life,
hospitalization, surgical, major medical and disability insurance and sick leave, (ii) such
employee benefit programs as may be offered by the Company to other employees and (iii) be a full
participant in all of the Company’s other benefit plans, pension plans, retirement plans and
profit-sharing plans which may be in effect from time to time or may hereafter be adopted by the
Company.

d) Paid Time Off. During the Term, Employee shall be entitled to such paid time off
(“PTO”) during each calendar year of his Employment hereunder consistent with the Company’s PTO
policies then in effect and his position as an executive officer of the Company, but in no event
less than twenty-five PTO days in any such calendar year (pro-rated as necessary for partial
calendar years during the Term). Such PTO may be taken, in Employee’s discretion, at such time or
times as are not inconsistent with the reasonable business needs of the Company. At the end of the
calendar year, Employee shall be entitled to carry over up to five days of unused PTO into the next
calendar year, but shall not be entitled to any additional compensation in the event that Employee,
for whatever reason, fails to take such vacation during any year of his Employment hereunder.
Employee shall also be entitled to all paid holidays given by the Company to its executive
officers.

5. Indemnification. Employee shall be entitled at all times to the benefit of the
maximum indemnification and advancement of expenses available from time to time under the laws of
the State of Delaware, and such benefit shall not be less than any other officer or director
entitled to indemnification by the Company. Without limiting the foregoing, Employee shall also be
entitled to the benefit of the following provisions:

a) D&O Insurance. Employee shall be covered under any directors’ and officers’
liability insurance policy then in effect for the Company or any of its affiliates as to which
Employee is serving as a director or officer. The failure to have an insurance policy in effect at
all times shall not allow Employee to assert a Constructive Termination of this Agreement, other
than to the extent such failure constitutes a breach of the immediately preceding sentence.

b) Scope of Indemnification. In addition to the insurance coverage provided for in
Section 5(a), the Company and any of the Company’s affiliates as to which Employee has at any time
served as a director, officer, employee, agent or fiduciary (collectively, the “Indemnitors”) shall
jointly and severally hold harmless and indemnify Employee (and his heirs, executors and
administrators) to the fullest extent permitted under applicable law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any action, suit or
proceeding (each, a “Claim”) in which he may be involved by reason of his having been a director,
officer, employee, agent or fiduciary of any Indemnitor (whether or not he continues to be a
director, officer, employee, agent or fiduciary thereof at the time of incurring such expenses or
liabilities), or by reason of any action or inaction on Employee’s part while serving in any such
capacity, such expenses and liabilities to include, but not be limited to, losses, damages,
judgments, investigation costs, court costs and attorneys’ fees and the cost of reasonable
settlements.

c) Selection of Counsel. In the event the Indemnitors shall be obligated hereunder to
pay any Expenses with respect to a Claim, the Indemnitors shall be entitled to assume the defense
of such Claim upon the delivery to Employee of written notice of its election to do so. After
delivery of such notice and the retention of such counsel by the Indemnitors, the Indemnitors will
not be liable to Employee under this Agreement for any fees of counsel subsequently incurred by
Employee with respect to the same Claim; provided that, (i) Employee shall have the right to employ
counsel in any such Claim at his expense; and (ii) if (A) the employment of counsel by Employee has
been previously authorized by the Indemnitors, (B) counsel for Employee shall have provided the
Indemnitors with written advice that there is a conflict of interest between the Indemnitors and
Employee in the conduct of any such defense, or (C) the Indemnitors shall not continue to retain
such counsel to defend such Claim, then the fees and expenses of Employee’s counsel shall be at the
expense of the Indemnitors.

d) Nonexclusivity. The indemnification rights set for in this Section 5 shall be in
addition to any rights to which Employee may be entitled under any of the Indemnitors’ charter
documents, bylaws or agreements, any vote of stockholders or disinterested directors, the laws of
the various Indemnitors’ jurisdictions of formation or incorporation. The indemnification rights
set forth in this Section 5 shall continue as to Employee for any action Employee took or did not
take while serving in an indemnified capacity even though Employee may have ceased to serve in such
capacity.

e) Survival. The indemnification and contribution provided for in this Section 5 will
remain in full force and effect after any termination of Employee’s employment and without regard
to any investigation made by or on behalf of Employee or any agent or representative of Employee.

6. Expenses. During the Term, the Company shall reimburse Employee upon presentation
of appropriate vouchers or receipts in accordance with the Company’s expense reimbursement policies
for executive officers, for all out-of-pocket business travel and entertainment expenses incurred
or expended by Employee in connection with the performance of his duties under this Agreement in
accordance with the Company’s expense reimbursement policies for executive officers.

7. Termination Procedure.

a) Notice of Termination. Any termination of Employee’s Employment by the Company or
by Employee during the Term (other than termination pursuant to Section 8(a) of this Agreement)
shall be communicated by written notice (“Notice of Termination”) to the other party hereto in
accordance with Section 13 herein. For purposes of this Agreement, a Notice of Termination shall
mean a notice which shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s Employment under the provision so indicated.

b) Date of Termination. “Date of Termination” shall mean (a) if Employee’s Employment
is terminated by his death, the date of death, (b) if Employee’s Employment is terminated pursuant
to Section 8(b) herein, 30 days after Notice of Termination (provided that Employee shall not have
returned to the substantial performance of his duties on a full-time basis during such 30 day
period), (c) if Employee’s Employment terminates upon the expiration of the Term and Employee’s
Employment is not renewed, the date of expiration of the Term, and (d) if Employee’s Employment is
terminated for any other reason, the date on which Notice of Termination is given or any later date
(within 30 days after the giving of such notice) set forth in such Notice of Termination.

8. Termination of Employment.

a) Death. In the event of the death of Employee during the Term, Employee’s
Employment hereunder shall be terminated as of the date of his death and Employee’s designated
beneficiary, or, in the absence of such designation, the estate or other legal representative of
Employee (collectively, the “Estate”), shall be paid Employee’s unpaid Base Salary through the
month in which the death occurs and any unpaid Bonus Compensation for any fiscal year which has
ended as of the date of such termination or which was at least fifty percent (50%) completed as of
the date of death. In the case of such incomplete fiscal year, the Bonus Compensation shall be
determined based upon the assumption that Employee would have earned the target Bonus Compensation
in accordance with Section 4(b) and pro-rated, and all such Bonus Compensation, if any, payable as
a result of this Section 8(a) shall be payable at the same time as bonuses would be payable to
other executive officers (regardless of whether such other officers earned any such bonus). The
Estate shall be entitled to all other death benefits in accordance with the terms of the Company’s
benefit programs and plans.

b) Disability. In the event Employee shall be unable to render the services or
perform his duties hereunder by reason of illness, injury or incapacity (whether physical, mental,
emotional or psychological) (any of the foregoing shall be referred to herein as a “Disability”)
for a period of either (i) 180 consecutive days or (ii) 270 days in any consecutive 365-day period,
the Company shall have the right to terminate this Agreement by giving Employee 30 days’ prior
written notice. Any determination of Disability shall be made by the Board in its reasonable good
faith discretion. If Employee’s Employment hereunder is so terminated, Employee shall be paid,
offset by payments under any disability insurance policy in effect, Employee’s unpaid Base Salary
through the month in which the termination occurs, plus Bonus Compensation on the same basis as is
set forth in Section 8(a) above. The Employee shall be entitled to receive all benefits in
accordance with the terms of this Agreement and of the Company’s benefit programs and plans.

c) Termination of Employment by the Company for Cause.

(i) Nothing herein shall prevent the Company from terminating Employee’s Employment for Cause
(as hereinafter defined). From and after the Date of Termination, Employee shall no longer be
entitled to receive Base Salary and Bonus Compensation and the Company shall no longer be required
to pay premiums on any life insurance or disability policy for Employee. Any rights and benefits
which Employee may have in respect of any other compensation or any employee benefit plans or
programs of the Company, whether pursuant to Section 4(c) or otherwise, shall be determined in
accordance with the terms of such other compensation arrangements or plans or programs. The term
“Cause,” as used herein, shall mean: (A) Employee’s conviction, or plea of guilty or nolo
contendere to, a felony; (B) Employee’s engaging in willful misconduct that is economically
injurious to the Company or its subsidiaries, including, but not limited to, a willful
violation of Sections 10 or 11 of this Agreement, or the embezzlement of funds or misappropriation
of other property of the Company or any subsidiary); or (C) Employee’s material violation of the
Company’s written policies and procedures (including gross and continued failure to satisfy written
directives or performance material provided to Employee), insubordination or breach this
Agreement in a material manner; or (D) Employee’s fraudulent conduct as regards the Company,
which results either in personal enrichment to Employee or material injury to the Company or
its subsidiaries. Notwithstanding the foregoing, under no circumstances shall Employee’s
refusal or unwillingness to make any of the certifications required of him as Chief Executive
Officer of the Company pursuant to Section 302 or Section 906 of the Sarbanes-Oxley Act of 2002, or
any rules or regulations promulgated thereunder, or any similar requirements of any federal, state,
local or foreign governmental authority or agency, or of any national securities exchange or
quotation system on which any class or series of the Company’s capital stock is then traded or
listed for quotation, constitute or give rise to a basis for termination for “Cause.”

(ii) The Company shall provide Employee with Notice of Termination stating that it intends to
terminate Employee’s Employment for Cause under this Section 8(c) and specifying the particular act
or acts on the basis of which the Board intends to terminate Employee’s Employment. Employee shall
then be given the opportunity, within 15 days of his receipt of such notice, to have a meeting with
the Board to discuss such act or acts (other than with respect to an action described in Sections
8(c)(i)(A), (B) or (D) above as to which the Board may immediately terminate Employee’s Employment
for Cause). Other than with respect to an action described in Sections 8(c)(i)(A) (B) or D above,
Employee shall be given seven days after his meeting with the Board to take reasonable steps to
cease or correct the performance (or nonperformance) giving rise to such Notice of Termination. In
the event the Board determines that Employee has failed within such seven-day period to take
reasonable steps to cease or correct such performance (or nonperformance), Employee shall be given
the opportunity, within 10 days of his receipt of written notice to such effect, to have a meeting
with the Board to discuss such determination. Following that meeting, if the Board believes that
Employee has failed to take reasonable steps to cease or correct his performance (or
nonperformance) as above described, the Board may thereupon terminate the Employment of Employee
for Cause.

d) Termination Other than for Cause, Death or Disability.

(i) Termination. This Agreement may be terminated by the Company (in addition to
termination pursuant to Sections 8(a), (b) or (c) above) or Employee at any time and for any reason
or upon the expiration of the Term.

(ii) Severance and Non-Competition Payments. If the Employee’s employment is
terminated under this Section 8(d) including a Constructive Termination (as hereinafter defined),
other than as a termination by Employee or as a result of death or Disability of Employee or for
Cause, the following shall apply:

A) the Company shall pay to Employee (w) his Base Salary and accrued PTO through the Date of
Termination, plus a pro rata portion of the target Bonus Compensation for the year in which the
Termination occurs (whether or not such target is actually met) determined based upon the days
elapsed in the year divided by 365, as soon as practicable following the Date of Termination, (x)
the greater of a lump-sum payment equal to two times Employee’s then current Base Salary or the
minimum Base Salary due under the remaining Term and (y) a lump-sum payment equal to the greater of
two times the amount of the Bonus Compensation, if any, paid to Employee in the year immediately
prior to the year in which the Date of Termination occurs or the target Bonus Compensation due
under the remaining Term (whether or not such target is actually met). Such payment under clauses
(x) and (y) hereof shall be made as soon as administratively feasible following the Date of
Termination and the execution of a valid Release (as hereinafter defined), but in no event more
than 45 days following the execution of such Release;

B) the Company shall continue to provide Employee with the same level of medical benefits upon
substantially the same terms and conditions (including contributions required by Employee for such
benefits) as existed immediately prior to Employee’s termination for the longer of the maximum
period of time provided under federal law or the remainder of the Term; provided that the Company
shall bear the costs of such benefits for the longer of 12 months or the remainder of the Term
and, provided further, if Employee cannot continue to participate in the Company’s plans providing
such benefits, the Company shall reimburse Employee the cost of obtaining such benefits as if
continued participation had been permitted. Notwithstanding the foregoing, in the event Employee
obtains employment with another employer and becomes eligible to receive comparable benefits from
such employer, the benefits described in this clause (B) shall cease; and

C) Employee shall be entitled to any other rights, compensation and/or benefits as may be due
to Employee in accordance with the terms and provisions of any agreements, plans or programs of the
Company.

(iii) Constructive Termination. For purposes of this Agreement, “Constructive
Termination” shall be deemed to have occurred upon (i) the removal of Employee from, or a failure
of Employee to continue as, President and Chief Executive Officer of the Company, (ii) Employee is
not elected or nominated by the Nominating and Corporate Governance Committee to serve as a
director of the Company or is removed from the Board other than for cause (other than as a result
of a change in the law preventing Employee from serving as a director), (iii) any material
diminution in the nature or scope of the authorities, powers, functions, duties or responsibilities
attached to such positions, (iv) the relocation of the Company’s principal executive offices to a
location more than 50 miles from Norfolk, Virginia, or (v) the material breach by the Company of
this Agreement and, in the case of clauses (i)-(iv) above, Employee does not agree to such change
(which decision is personal in nature and not subject to any fiduciary responsibilities Employee
may have as an officer or director of the Company) and elects to terminate his Employment.

(iv) Severance and Non-Competition Payments Following Non-Renewal of this Agreement.
If this Agreement is not renewed beyond the Term by the parties hereto, the Company shall pay
Employee a severance and non-competition payment equal to: (w) his Base Salary and accrued PTO
through the Date of Termination, as soon as practicable following the Date of Termination, plus a
pro rata portion of the target Bonus Compensation for the year in which the Termination occurs
(whether or not such target is actually met) determined based upon the days elapsed in the year
divided by 365, (x) a lump-sum payment equal to two times Employee’s then current Base Salary and
(y) the benefits set forth in Sections 8(d)(ii)(B) and (C). Such payment under clause (x) hereof
shall be made as soon as administratively feasible following the Date of Termination and the
execution of a valid Release, but in no event more than 45 days following the execution of such
Release.

(v) No Mitigation. Employee shall not be required to mitigate the amount of any
severance and non-competition payment provided for under this Agreement by seeking other employment
or otherwise.

(vi) Excise Tax. In the event that Employee becomes entitled to any payments or
benefits under this Agreement and any portion of such payments or benefits, when combined with any
other payments or benefits provided to Employee (including, without limiting the generality of the
foregoing, by reason of the exercise of any stock options or the receipt of any shares of stock of
the Company), which in the absence of this Section 8(d) would be subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then
the amount payable to Employee under this Agreement shall be reduced to the largest amount or
greatest right (for example, by deferring the vesting date of Employee’s options) such that none of
the amounts payable to Employee under this Agreement and any other payments or benefits received or
to be received by Employee as a result of, or in connection with, an event constituting a change in
the ownership or effective control of the Company or in the ownership of a substantial portion of
the assets of the Company (within the meaning of Section 280G(b)(2)(A) of the Code) or the
termination of Employment (including a Constructive Termination) shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code. The Company shall cooperate in good
faith with Employee in making such determination. In the event that the vesting date of any option
is deferred hereunder, the term during which such option may be exercised shall be extended until
the ninetieth (90th) day following the full vesting thereof.

9. Release. Employee acknowledges and agrees that the payments set forth in Section 8
of this Agreement constitute liquidated damages for any claim of breach of contract under this
Agreement as it relates to termination of Employee’s employment. In order to receive any of the
payments set forth above, prior to the payment of such amounts, Employee shall execute and agree to
be bound by an agreement relating to the waiver and general release of any and all claims (other
than claims for the compensation and benefits payable under Section 8 hereof) arising out of or
relating to Employee’s employment and termination of employment (the “Release”), which Release
shall be in substantially the form annexed hereto as Exhibit B (with such changes as counsel to the
Company may reasonably require as a result of changes in law after the date hereof).

10. Confidential Information.

a) Employee covenants and agrees that he will not at any time, either during the Term or
thereafter, use, disclose or make accessible to any other person, firm, partnership, corporation or
any other entity any Confidential Information (as defined below) pertaining to the business of the
Company or any of its subsidiaries except (i) while employed by the Company, in the business of and
for the benefit of the Company or (ii) when required to do so by a court of competent jurisdiction,
by any governmental agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with jurisdiction to order
the Company to divulge, disclose or make accessible such information. For purposes of this
Agreement, “Confidential Information” shall mean non-public information concerning the Company’s or
any of its subsidiaries’ financial data, statistical data, strategic business plans, product
development (or other proprietary product data), customer and supplier lists, customer and supplier
information, information relating to practices, processes, methods, trade secrets, marketing plans
and other non-public, proprietary and confidential information of the Company or any of its
subsidiaries; provided, however, that Confidential Information shall not include any information
which (x) is known generally to the public other than as a result of unauthorized disclosure by
Employee, (y) becomes available to the Employee on a non-confidential basis from a source other
than the Company or any of its subsidiaries or (z) was available to Employee on a non-confidential
basis prior to its disclosure to Employee by the Company or any of its subsidiaries. It is
specifically understood and agreed by Employee that any Confidential Information received by
Employee during his Employment by the Company is deemed Confidential Information for purposes of
this Agreement. In the event Employee’s Employment is terminated hereunder for any reason, he
immediately shall return to the Company all tangible Confidential Information in his possession.

b) Employee and the Company agree that this covenant regarding Confidential Information is a
reasonable covenant under the circumstances, and further agree that if, in the opinion of any court
of competent jurisdiction, such covenant is not reasonable in any respect, such court shall have
the right, power and authority to excise or modify such provision or provisions of this covenant as
to the court shall appear not reasonable and to enforce the remainder of the covenant as so
amended. Employee agrees that any breach of the covenant contained in this Section 10 would
irreparably injure the Company. Accordingly, Employee agrees that the Company, in addition to
pursuing any other remedies it may have in law or in equity, may obtain an injunction against
Employee from any court having jurisdiction over the matter, restraining any further violation of
this Section 10.

11. Non-Competition; Non-Solicitation.

a) Employee agrees that during the Non-Competition Period (as defined in Section 11(d) below),
without the prior written consent of the Company: (i) he shall not be a principal, manager, agent,
consultant, officer, director or employee of, or, directly or indirectly, own more than 1% percent
of any class or series of equity securities in, any partnership, corporation or other entity,
which, now or at such time, has material operations which are engaged in any business activity
competitive (directly or indirectly) with the Business of the Company (a “Competing Entity”); and
(ii) he shall not, on behalf of any Competing Entity, directly or indirectly, have any dealings or
contact with any suppliers or customers of the Company or any or its subsidiaries. As used in this
Agreement, the term “Business” means the means government revenue administration; the
administration, auditing and collection of taxes; skip tracing and asset location; and the
purchase, collection and management of portfolios of defaulted and bankrupt consumer receivables,
but shall not include such collection and management activities to the extent they are incidental
to a business primarily engaged in loan origination or servicing. Notwithstanding the foregoing,
an entity will not be deemed to be a Competing Entity, and Employee will not be deemed to be
engaged in the Business, if (i) Employee is employed by an entity that is engaged in any meaningful
way in one or more businesses other than the Business (the “Non-Competing Businesses”), (ii) such
entity’s relationship with Employee relates solely to the Non-Competing Businesses, and (iii) if
requested by the Company, such entity and Employee shall provide the Company with reasonable
assurances that Employee will have no direct or indirect involvement in the Business on behalf of
such entity.

b) During the Non-Competition Period, Employee agrees that, without the prior written consent
of the Company (and other than on behalf of the Company), Employee shall not, on his own behalf or
on behalf of any person or entity, directly or indirectly, (i) solicit the customers or suppliers
of the Company or any of its subsidiaries to terminate their relationship with the Company or any
of its subsidiaries (or to modify such relationship in a manner that is adverse to the interests of
the Company) or (ii) hire or solicit the employment of any employee who has been employed by the
Company or any of its subsidiaries at the time of Employee’s termination or at any time during the
six months immediately preceding such date of hiring or solicitation. This provision does not
prohibit the solicitation of employees by means of a general advertisement.

c) Employee and the Company agree that the covenants of non-competition and non-solicitation
are reasonable covenants under the circumstances, in order to protect the Company’s goodwill and
other legitimate business interests, such as business opportunities, customer and client contacts,
prospects, contracts, lists and leads, and to ensure that former employees do not disclose the
Company’s trade secrets and its proprietary and confidential information to its competitors.
Employee and the Company further agree that if, in the opinion of any court of competent
jurisdiction such covenants are not reasonable in any respect, such court shall have the right,
power and authority to excise or modify such provision or provisions of these covenants as to the
court shall appear not reasonable and to enforce the remainder of these covenants as so amended.
Employee agrees that any breach of the covenants contained in this Section 11 would irreparably
injure the Company. Accordingly, Employee agrees that the Company, in addition to pursuing any
other remedies it may have in law or in equity, may obtain an injunction against Employee from any
court having jurisdiction over the matter, restraining any further violation of this Section 11.

d) The provisions of this Section 11 shall extend for the Term and survive the termination of
this Agreement for two years from the date of such termination (herein referred to as the
“Non-Competition Period”).

e) The provisions of this Section 11 shall terminate if this Agreement is terminated by the
Company other than for Cause, or in the event of a Constructive Termination of this Agreement or if
the Company defaults on any of its payment obligations set forth in this Agreement, which payment
default is not cured within fifteen (15) days after notice.

12. Limitation of Liability and Indemnity. The limitation of liability and indemnity
provisions of Section 8.1 of the Amended and Restated By-Laws of the Company and Article 9 of the
Amended and Restated Certificate of Incorporation of the Company are a contractual benefit to
Employee and are a material consideration for Employee’s employment.

13. Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been given if delivered personally or sent by facsimile transmission,
overnight courier, or certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally or sent by facsimile transmission (provided that
a confirmation copy is sent by overnight courier), one day after deposit with an overnight courier,
or if mailed, five days after the date of deposit in the United States mails, as follows (or to
another address specified in writing by the recipient prior to the sending of such notice or
communication):

	 	 	 	 	 
	If to the Company, to:
	 	Portfolio Recovery Associates, Inc.

	 
	 	120 Corporate Boulevard
	 
	 	Norfolk, Virginia  23502

	 
	 	Attn: General Counsel

	 
	 	Fax: 757-321-2518

	If to Employee, to:
	 	Steven D. Fredrickson

	 
	 	Fax: 757-554-0586

14. Entire Agreement. This Agreement contains the entire agreement between the
parties hereto with respect to the matters contemplated herein and supersede all prior agreements
or understandings among the parties related to such matters.

15. Successors; Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon, and inure to the benefit of, the Company and its successors and assigns and
upon Employee. “Successors and assigns” shall mean, in the case of the Company, any successor
pursuant to a merger, consolidation, or sale, or other transfer of all or substantially all of the
assets or Common Stock of the Company, provided that, should the Company assign or transfer this
Agreement, the Company will require any successor to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform it if no such
assignment or transfer had taken place.

16. No Assignment. Except as contemplated by Section 15 above, this Agreement shall
not be assignable or otherwise transferable by either party.

17. Withholding. All payments hereunder shall be subject to any required withholding
of federal, state and local taxes pursuant to any applicable law or regulation.

18. Amendment or Modification; Waiver. No provision of this Agreement may be amended
or waived unless such amendment or waiver is authorized by the Board and is agreed to in writing,
signed by Employee and by a duly authorized officer of the Company (other than Employee). Except
as otherwise specifically provided in this Agreement, no waiver by either party hereto of any
breach by the other party hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of a similar or dissimilar provision or condition at the
same or at any prior or subsequent time.

19. Fees and Expenses. If either party institutes any action or proceedings to
enforce any rights the party has under this Agreement, or for damages by reason of any alleged
breach of any provision of this Agreement, or for a declaration of each party’s rights or
obligations hereunder or to set aside any provision hereof, or for any other judicial remedy, the
prevailing party shall be entitled to reimbursement from the other party for its costs and expenses
incurred thereby, including but not limited to, reasonable attorneys’ fees and disbursements.

20. Governing Law. The validity, interpretation, construction, performance and
enforcement of this Agreement shall be governed by the internal laws of the State of Delaware,
without regard to its conflicts of law rules.

21. Titles. Titles to the Sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference to the title of any
Section.

22. Counterparts. This Agreement may be executed in one or more counterparts, which
together shall constitute one agreement. It shall not be necessary for each party to sign each
counterpart so long as each party has signed at least one counterpart.

23. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms
and provisions of this Agreement in any other jurisdiction.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first set forth above.

PORTFOLIO RECOVERY ASSOCIATES, INC.

By:      /s/ Judith S. Scott     

Name: Judith S. Scott

Position: General Counsel and Secretary

By:     /s/ Steven D. Fredrickson     

	 	 	 	Steven D. Fredrickson

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