Document:

Exhibit 10.2

 

SECURITY AGREEMENT

 

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

 

W I T N E S S E T H

 

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

 

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

 

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

 

1.                                       Definitions
and Interpretive Provisions.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)                                  all Accounts;

 

(b)                                 all cash and currency;

 

(c)                                  all Chattel Paper;

 

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

 

(e)                                  all Copyright
Licenses;

 

(f)                                    all Copyrights;

 

(g)                                 all Deposit Accounts;

 

(h)                                 all Documents;

 

(i)                                     all Equipment;

 

(j)                                     all Fixtures;

 

(k)                                  all General
Intangibles;

 

(l)                                     all Instruments;

 

(m)                               all Inventory;

 

(n)                                 all Investment
Property;

 

(o)                                 all Letter-of-Credit
Rights;

 

(p)                                 all Patent Licenses;

 

(q)                                 all Patents;

 

(r)                                    all Software;

 

(s)                                  all Supporting
Obligations;

 

(t)                                    all Trademark
Licenses;

 

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(u)                                 all Trademarks; and

 

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

 

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

 

3.                                       Provisions
Relating to Accounts.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)                                    Copyrights,
Patents and Trademarks.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(n)                                 Commercial Tort
Claims.

 

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

 

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

 

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

 

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

 

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7.                                       Remedies.

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

10

 

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

 

8.                                       Rights
of the Collateral Agent.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

13.                                 Continuing
Agreement.

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

19.                                 Governing Law; Submission to Jurisdiction;
Venue.

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

25.                                 Joint
and Several Obligations of Grantors.

 

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

 

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

 

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

 

15

 

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

 

[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK]

 

16

 

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

 

	
  GRANTORS:

  	
  DIRECTV HOLDINGS LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DIRECTV FINANCING CO., INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV ENTERPRISES, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV CUSTOMER SERVICES, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV HOME SERVICES, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

DIRECTV HOLDINGS LLC

SECURITY AGREEMENT

 

 

	
   

  	
  DIRECTV MERCHANDISING, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV OPERATIONS, LLC,

  
	
   

  	
  a California limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  USSB II, INC.,

  
	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV PROGRAMMING HOLDINGS I, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV PROGRAMMING HOLDINGS II, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  LABC PRODUCTIONS, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

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

 

BANK OF AMERICA, N.A.,

as Collateral Agent

 

	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:Exhibit 10.3

 

PLEDGE AGREEMENT

 

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

 

W I T N E S S E T H

 

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

 

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

 

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

 

1.                                       Definitions
and Interpretive Provisions.

 

(a)                                  Definitions.  Capitalized terms used and not otherwise
defined herein shall have the meanings provided in the Credit Agreement.  In addition, the following terms, which are
defined in the UCC, are used herein as so defined:  Accession, Financial Asset, Proceeds and
Security.  As used herein:

 

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

 

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

 

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

 

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

 

“Pledged Shares” has the meaning provided in Section 2
hereof.

 

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

 

“Secured Obligations” means, without
duplication, (a) all advances to, and debts, liabilities, obligations,
covenants and duties of, any Credit Party arising under any Credit Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement

 

 

by or
against any Credit Party of any proceeding under any Debtor Relief Laws naming
such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding, (b) all
obligations under any Swap Contract between any Credit Party and any Lender or
Affiliate of a Lender to the extent permitted under the Credit Agreement, (c) all
obligations under any Treasury Management Agreement between any Credit Party
and any Lender or Affiliate of a Lender and (d) all costs and expenses
incurred in connection with enforcement and collection of clauses (a) through
(c) of this definition, including reasonable attorneys’ fees and
disbursements.

 

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

 

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

 

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

 

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

 

(a)                                  Pledged Shares.  (i) One hundred percent (100%) (or, if
less, the full amount owned by such Pledgor) of the issued and outstanding
Capital Stock owned by such Pledgor of each Domestic Subsidiary (other than a
Domestic Subsidiary that is not a United States person under Section 7701(a)(30)
of the Internal Revenue Code) set forth on Schedule 2(a) attached
hereto and (ii) sixty-five percent (65%) (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of Capital Stock
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
(“Voting Equity”) and one hundred percent (100%) (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding Capital Stock not
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
(“Non-Voting Equity”) owned by such Pledgor of each First-Tier Foreign
Subsidiary and Domestic Subsidiary that is not a United States person under Section 7701(a)(30)
of the Internal Revenue Code set forth on Schedule 2(a) attached
hereto, in each case together with the certificates (or other agreements or
instruments), if any, representing such Capital Stock, and all options and
other rights, contractual or otherwise, with respect thereto (collectively,
together with the Capital Stock described in Section 2(b) and 2(c) below,
the “Pledged Shares”), including the following:

 

(A)                              all
shares, securities, membership interests or other equity interests representing
a dividend on any of the Pledged Shares, or representing a distribution or
return of capital upon or in respect of the Pledged Shares, or resulting from a
stock split, revision, reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the holder of, or
otherwise in respect of, the Pledged Shares; and

 

(B)                                without
affecting the obligations of the Pledgors under any provision prohibiting such
action hereunder or under the Credit Agreement, in the event of any
consolidation or merger involving the issuer of any Pledged Shares and in which
such issuer is not the surviving entity, all Capital Stock of the successor
entity formed by or resulting from such consolidation or merger.

 

2

 

(b)                                 Additional Shares.  (i) One hundred percent (100%) (or, if
less, the full amount owned by such Pledgor) of the issued and outstanding
Capital Stock owned by such Pledgor of any Person that hereafter becomes a
Domestic Subsidiary (other than a Domestic Subsidiary that is not a United States
person under Section 7701(a)(30) of the Internal Revenue Code) that owns
and holds (including through direct and indirect Subsidiaries) assets in excess
of $50 million individually and, together with all other Domestic Subsidiaries
(including their direct and indirect Subsidiaries) whose Capital Stock are not
Pledged Collateral, $100 million and (ii) sixty-five percent (65%) (or, if
less, the full amount owned by such Pledgor) of the Voting Equity and one
hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of
the Non-Voting Equity owned by such Pledgor of any Person that hereafter
becomes a First-Tier Foreign Subsidiary and a Domestic Subsidiary that is not a
United States person under Section 7701(a)(30) of the Internal Revenue
Code that owns and holds assets in excess of $50 million individually and,
together with all other First-Tier Foreign Subsidiaries and Domestic
Subsidiaries that are not United States persons under Section 7701(a)(30)
of the Internal Revenue Code whose Capital Stock are not Pledged Collateral,
$100 million, including the certificates (or other agreements or instruments)
representing such Capital Stock.

 

(c)                                  Accessions and
Proceeds.  All Accessions and all
Proceeds of any and all of the foregoing.

 

Notwithstanding
anything to the contrary contained herein, the security interests granted under
this Pledge Agreement shall not extend to, and the “Pledged Collateral” and the
“Pledged Shares” shall not include, (i) any Capital Stock of a Foreign
Subsidiary (A) that is not Capital Stock of a First-Tier Foreign
Subsidiary or (B) that is Capital Stock of a First-Tier Foreign Subsidiary
for so long as the granting, pledging or assigning of such Capital Stock (1) would
in the good faith judgment of the Borrower reasonably be expected to result in
adverse tax consequences to the Borrower or any other member of the
Consolidated Group or (2) is prohibited by applicable law, (ii) any
Capital Stock of a Receivables Subsidiary or a Financing Subsidiary and (iii) any
Capital Stock of RSG Resource Supply GmbH (“RSG”) so long as RSG does
not own and hold (including through direct and indirect Subsidiaries) assets in
excess of $50 million.

 

Without
limiting the generality of the foregoing, it is hereby specifically understood
and agreed that a Pledgor may from time to time hereafter deliver additional
Capital Stock to the Collateral Agent as collateral security for the Secured
Obligations.  Upon delivery to the
Collateral Agent, such additional Capital Stock shall be deemed to be part of
the Pledged Collateral of such Pledgor and shall be subject to the terms of
this Pledge Agreement whether or not Schedule 2(a) is amended
to refer to such additional Capital Stock.

 

3.                                       Security
for Secured Obligations.  The
security interest created hereby in the Pledged Collateral of each Pledgor
constitutes continuing collateral security for all of the Secured Obligations.

 

4.                                       Delivery
of the Pledged Collateral.  Each
Pledgor hereby agrees that:

 

(a)                                  Such Pledgor shall
deliver to the Collateral Agent (i) simultaneously with or prior to the
execution and delivery of this Pledge Agreement, all certificates representing
the Pledged Shares of such Pledgor and (ii) within ninety (90) days of the
receipt thereof by or on behalf of a Pledgor, all other certificates and
instruments constituting Pledged Collateral of a Pledgor.  Prior to delivery to the Collateral Agent,
all such certificates and instruments constituting Pledged Collateral of a
Pledgor shall be held in trust by such Pledgor for the benefit of the
Collateral Agent and the holders of the Secured Obligations pursuant
hereto.  All such certificates shall be
delivered in suitable form for transfer by delivery or shall be accompanied by
duly executed instruments of transfer or assignment in blank, substantially in
the form provided in Exhibit 4(a) attached hereto.

 

3

 

(b)                                 Additional
Securities.  If such Pledgor shall
receive by virtue of its being or having been the owner of any Pledged
Collateral, any (i) certificate, including any certificate representing a
dividend or distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares
or other equity interests, stock splits, spin-off or split-off, promissory
notes or other instruments; (ii) option or right, whether as an addition
to, substitution for, or an exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or (iv) distributions of securities in connection
with a partial or total liquidation, dissolution or reduction of capital,
capital surplus or paid-in surplus, then such Pledgor shall receive such
certificate, instrument, option, right or distribution in trust for the benefit
of the Collateral Agent and the holders of the Secured Obligations, shall
segregate it from such Pledgor’s other property and shall deliver it within ninety
(90) days of receipt to the Collateral Agent in the exact form received
together with any necessary endorsement and/or appropriate stock power duly
executed in blank, substantially in the form provided in Exhibit 4(a),
to be held by the Collateral Agent as Pledged Collateral and as further
collateral security for the Secured Obligations.

 

(c)                                  Financing
Statements.  Each Pledgor authorizes
the Collateral Agent to prepare and file such UCC or other applicable financing
statements as may be reasonably requested by the Collateral Agent in order to
perfect and protect the security interest created hereby in the Pledged
Collateral of such Pledgor.

 

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

 

(a)                                  Authorization of
Pledged Shares.  The Pledged Shares
are duly authorized and validly issued, are fully paid and nonassessable and
are not subject to the preemptive rights of any Person.

 

(b)                                 Title.  Each Pledgor is the legal and beneficial owner
of the Pledged Collateral of such Pledgor and will at all times be the legal
and beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens.  There exists
no “adverse claim” within the meaning of Section 8-102 of the UCC with
respect to the Pledged Shares of such Pledgor.

 

(c)                                  Exercising of
Rights.  The exercise by the
Collateral Agent of its rights and remedies hereunder will not violate any law
or governmental regulation or any material contractual restriction binding on
or affecting a Pledgor or any of its property.

 

(d)                                 Pledgor’s Authority.  No authorization, approval or action by, and
no notice or filing with any Governmental Authority or with the issuer of any
Pledged Shares is required either (i) for the pledge made by a Pledgor or
for the granting of the security interest by a Pledgor pursuant to this Pledge
Agreement (except as have been already obtained or made) or (ii) for the
exercise by the Collateral Agent or the holders of the Secured Obligations of
their rights and remedies hereunder (except as may be required by laws
affecting the offering and sale of securities).

 

(e)                                  Security
Interest/Priority.  This Pledge Agreement
creates a valid security interest in favor of the Collateral Agent for the ratable
benefit of the holders of the Secured Obligations, in the Pledged
Collateral.  The delivery to the
Collateral Agent of certificates evidencing the Pledged Collateral, together
with duly executed stock powers in respect thereof, will perfect and establish
the first priority of the Collateral Agent’s security interest in any
certificated Pledged Collateral that constitutes a Security.  The filing of appropriate UCC financing
statements in the appropriate filing offices in the jurisdiction of

 

4

 

organization of the
applicable Pledgor or obtaining “control” over such interests in accordance
with the provisions of Section 8-106 of the UCC will perfect and establish
the first priority of the Collateral Agent’s security interest in any
uncertificated Pledged Collateral that constitutes a Security.  The filing of appropriate UCC financing
statements in the appropriate filing offices in the jurisdiction of
organization of the applicable Pledgor will perfect and establish the first
priority of the Collateral Agent’s security interest in any Pledged Collateral
that does not constitute a Security. 
Except as set forth in this subsection (e), no action is
necessary to perfect the security interests granted by the Pledgors under this
Pledge Agreement.

 

(f)                                    Partnership and
Membership Interests.  As of the date
hereof, except as previously disclosed to the Collateral Agent, none of the
Pledged Shares consisting of partnership or limited liability company interests
(i) is dealt in or traded on a securities exchange or in a securities
market, (ii) by its terms expressly provides that it is a security
governed by Article 8 of the UCC, (iii) is an investment company
security, (iv) is held in a securities account or (v) constitutes a
Security or a Financial Asset.

 

(g)                                 No Other Interests.  As of the date hereof, no Pledgor owns any
Capital Stock in any Subsidiary other than (i) as set forth on Schedule 2(a) attached
hereto and (ii) RSG.

 

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

 

(a)                                  Defense of Title.  Warrant and defend title to and ownership of
the Pledged Collateral of such Pledgor at its own expense against the claims
and demands of all other parties claiming an interest therein, keep the Pledged
Collateral free from all Liens, except for Permitted Liens, and not sell,
exchange, transfer, assign, lease or otherwise dispose of Pledged Collateral of
such Pledgor or any interest therein, except as permitted under the Credit
Agreement and the other Credit Documents.

 

(b)                                 Further Assurances.  Promptly execute and deliver at its expense
all further instruments and documents and take all further action that may be
necessary and desirable or that the Collateral Agent may reasonably request in
order to (i) perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor (including any and all action necessary
to satisfy the Collateral Agent that the Collateral Agent has obtained a first
priority perfected security interest in all Pledged Collateral); (ii) enable
the Collateral Agent to exercise and enforce its rights and remedies hereunder
in respect of the Pledged Collateral of such Pledgor; and (iii) otherwise
effect the purposes of this Pledge Agreement, including, if requested by the
Collateral Agent after the occurrence and during the continuation of an Event
of Default, delivering to the Collateral Agent irrevocable proxies in respect
of the Pledged Collateral of such Pledgor.

 

(c)                                  Issuance or
Acquisition of Capital Stock.  If
such Pledgor shall issue or acquire any Capital Stock consisting of an interest
in a partnership or a limited liability company that (i) is dealt in or
traded on a securities exchange or in a securities market, (ii) by its
terms expressly provides that it is a security governed by Article 8 of
the UCC, (iii) is an investment company security, (iv) is held in a
securities account or (v) constitutes a Security or a Financial Asset, in
each case, such Pledgor shall notify the Collateral Agent within ninety (90)
days of such issuance or acquisition and execute and deliver, or use its
commercially reasonable efforts to cause to be executed and delivered, to the
Collateral Agent such agreements, documents and instruments as the Collateral
Agent may reasonably require.

 

7.                                       Advances
and Performance by Holders of the Secured Obligations.  After the occurrence and during the
continuation of an Event of Default, on failure of any Pledgor to perform any
of the covenants and agreements contained herein, the Collateral Agent may, at
its sole option and in its sole

 

5

 

discretion, perform the
same and in so doing may expend such sums as the Collateral Agent may
reasonably deem advisable in the performance thereof, including the payment of
any insurance premiums, the payment of any taxes, a payment to obtain a release
of a Lien or potential Lien, expenditures made in defending against any adverse
claim and all other expenditures that the Collateral Agent may make for the
protection of the security hereof or may be compelled to make by operation of
law.  All such sums and amounts so
expended shall be repayable by the Pledgors on a joint and several basis (subject
to Section 26 hereof) promptly upon timely notice thereof and
demand therefor, shall constitute additional Secured Obligations and shall bear
interest from the date said amounts are expended at the Default Rate for
Revolving Loans that are Base Rate Loans. 
No such performance of any covenant or agreement by the Collateral Agent
on behalf of any Pledgor, and no such advance or expenditure therefor, shall
relieve the Pledgors of any default under the terms of this Pledge Agreement or
the other Credit Documents.  The Collateral
Agent may make any payment hereby authorized in accordance with any bill,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by a Pledgor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.

 

8.                                       Remedies.

 

(a)                                  General Remedies.  Upon the occurrence of an Event of Default
and during the continuation thereof, the Collateral Agent and the holders of
the Secured Obligations shall have, in addition to the rights and remedies
provided herein, in the Credit Documents, or by law (including levy of
attachment and garnishment), the rights and remedies of a secured party under
the UCC of the jurisdiction applicable to the affected Pledged Collateral.

 

(b)                                 Sale of Pledged
Collateral.  Upon the occurrence of
an Event of Default and during the continuation thereof, without limiting the
generality of this Section 8 and without notice, the Collateral
Agent may, in its sole discretion, sell or otherwise dispose of or realize upon
the Pledged Collateral, or any part thereof, in one or more parcels, at public
or private sale, at any exchange or broker’s board or elsewhere, at such price
or prices and on such other terms as the Collateral Agent may deem commercially
reasonable, for cash, credit or for future delivery or otherwise in accordance
with applicable law.  To the extent permitted
by law, any holder of the Secured Obligations may in such event, bid for the
purchase of such securities.  Each
Pledgor agrees that, to the extent notice of sale shall be required by law and
has not been waived by such Pledgor, any requirement of reasonable notice shall
be met if notice, specifying the place of any public sale or the time after
which any private sale is to be made, is personally served on or mailed, postage
prepaid, to such Pledgor in accordance with the notice provisions of Section 11.02
of the Credit Agreement at least ten (10) days before the time of such
sale.  The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral of such Pledgor regardless of
notice of sale having been given.  The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

 

(c)                                  Private Sale.  Upon the occurrence of an Event of Default
and during the continuation thereof, the Pledgors recognize that the Collateral
Agent may deem it impracticable to effect a public sale of all or any part of
the Pledged Shares or any of the securities constituting Pledged Collateral and
that the Collateral Agent may, therefore, determine to make one or more private
sales of any such Pledged Collateral to a restricted group of purchasers who
will be obligated to agree, among other things, to acquire such Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof.  Each
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms that might have
been obtained at a public sale and, notwithstanding the foregoing, agrees that
such private sale shall be deemed to have been

 

6

 

made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
delay sale of any such Pledged Collateral for the period of time necessary to
permit the issuer of such Pledged Collateral to register such Pledged
Collateral for public sale under the Securities Act.  Each Pledgor further acknowledges and agrees
that any offer to sell such Pledged Collateral that has been (i) publicly
advertised on a bona fide basis in a newspaper or other publication of general
circulation in the financial community of New York, New York (to the extent
that such offer may be advertised without prior registration under the
Securities Act), or (ii) made privately in the manner described above
shall be deemed to involve a “public sale” under the UCC, notwithstanding that
such sale may not constitute a “public offering” under the Securities Act, and
the Collateral Agent may, in such event, bid for the purchase of such Pledged
Collateral.

 

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

 

(e)                                  Deficiency.  In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Collateral Agent or the holders of the Secured Obligations are legally
entitled, the Pledgors shall be jointly and severally liable for the deficiency
(subject to Section 26 hereof), together with interest thereon at
the Default Rate for Revolving Loans that are Base Rate Loans, together with reasonable
costs of collection and reasonable attorneys’ fees and disbursements.  Any surplus remaining after the full payment
and satisfaction of the Secured Obligations shall be returned to the Pledgors
or to whomsoever a court of competent jurisdiction shall determine to be
entitled thereto.

 

9.                                       Rights
of the Collateral Agent.

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

(vii)                           to sign
and endorse any drafts, assignments, proxies, stock powers, verifications,
notices and other documents relating to the Pledged Collateral;

 

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

 

(ix)                                to
exchange any of the Pledged Collateral or other property upon any merger,
consolidation, reorganization, recapitalization or other readjustment of the
issuer thereof and, in connection therewith, deposit any of the Pledged
Collateral with any committee, depository, transfer agent, registrar or other
designated agency upon such terms as the Collateral Agent may reasonably deem
appropriate;

 

(x)                                   to
vote for a shareholder resolution, or to sign an instrument in writing,
sanctioning the transfer of any or all of the Pledged Collateral into the name
of the Collateral Agent or one or more of the holders of the Secured
Obligations or into the name of any transferee to whom the Pledged Collateral
or any part thereof may be sold pursuant to Section 8 hereof; and

 

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

 

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

 

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

 

(c)                                  The Collateral
Agent’s Duty of Care.  Other than the
exercise of reasonable care to assure the safe custody of the Pledged
Collateral while being held by the Collateral Agent hereunder, the Collateral
Agent shall have no duty or liability to preserve rights pertaining thereto, it
being understood and agreed that the Pledgors shall be responsible for
preservation of all rights in the Pledged Collateral,

 

8

 

and the Collateral Agent
shall be relieved of all responsibility for the Pledged Collateral upon
surrendering it or tendering the surrender of it to the Pledgors.  The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged Collateral
in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own
property, which shall be no less than the treatment employed by a reasonable
and prudent agent in the industry, it being understood that the Collateral
Agent shall not have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not the Collateral Agent
has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to any of
the Pledged Collateral.

 

(d)                                 Voting Rights in
Respect of the Pledged Collateral.

 

(i)                                     So
long as no Event of Default shall have occurred and be continuing, to the
extent permitted by law, each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such Pledgor or any
part thereof for any purpose not inconsistent with the terms of this Pledge
Agreement or the Credit Agreement; and

 

(ii)                                  Upon
the occurrence and during the continuance of an Event of Default and following
delivery to such Pledgor by the Collateral Agent of its intent to exercise such
rights, all rights of a Pledgor to exercise the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to clause (i) of
this subsection shall cease and all such rights shall thereupon become
vested in the Collateral Agent, which shall then have the sole right to
exercise such voting and other consensual rights.

 

(e)                                  Dividend Rights in
Respect of the Pledged Collateral.

 

(i)                                     So
long as no Event of Default shall have occurred and be continuing and subject
to Section 4(b) hereof, each Pledgor may receive and retain
any and all dividends (other than stock dividends and other dividends
constituting Pledged Collateral addressed herein) or interest paid in respect
of the Pledged Collateral to the extent they are allowed under the Credit
Agreement.

 

(ii)                                  Upon
the occurrence and during the continuance of an Event of Default and following
delivery to such Pledgor by the Collateral Agent of its intent to exercise such
rights:

 

(A)                              all
rights of a Pledgor to receive the dividends and interest payments that it
would otherwise be authorized to receive and retain pursuant to clause (i) of
this subsection shall cease and all such rights shall thereupon be vested
in the Collateral Agent, which shall then have the sole right to receive and
hold as Pledged Collateral such dividends and interest payments; and

 

(B)                                all
dividends and interest payments that are received by a Pledgor contrary to the
provisions of clause (A) of this subsection shall be received
in trust for the benefit of the Collateral Agent and the holders of the Secured
Obligations, shall be segregated from other property or funds of such Pledgor,
and shall be forthwith paid over to the Collateral Agent as Pledged Collateral
in the exact form received, to be held by the Collateral Agent as Pledged
Collateral and as further collateral security for the Secured Obligations.

 

9

 

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

 

11.                                 Application
of Proceeds.  Upon the occurrence and
during the continuation of an Event of Default, any payments in respect of the
Secured Obligations and any proceeds of the Pledged Collateral, when received
by the Collateral Agent or any of the holders of the Secured Obligations in
cash or its equivalent, will be applied in reduction of the Secured Obligations
in the order set forth in the Credit Agreement, and each Pledgor irrevocably
waives the right to direct the application of such payments and proceeds and
acknowledges and agrees that the Collateral Agent shall have the continuing and
exclusive right to apply and reapply any and all such payments and proceeds in
the Collateral Agent’s sole discretion, notwithstanding any entry to the
contrary upon any of its books and records.

 

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

 

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

 

14.                                 Continuing
Agreement.

 

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

 

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

 

10

 

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

 

16.                                 Successors
in Interest.  This Pledge Agreement
shall create a continuing security interest in the Collateral and shall be
binding upon each Pledgor, its successors and assigns, and shall inure,
together with the rights and remedies of the Collateral Agent and the holders
of the Secured Obligations hereunder, to the benefit of the Collateral Agent
and the holders of the Secured Obligations and their successors and permitted
assigns; provided, however, that none of the Pledgors may assign its
rights or delegate its duties hereunder without the prior written consent of
the Required Lenders under the Credit Agreement (other than in connection with
a transaction permitted by Section 8.04 of the Credit Agreement).

 

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

 

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

 

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

 

20.                                 Governing Law; Submission to Jurisdiction;
Venue.

 

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

 

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

 

21.                                 Waiver of Right to Trial by Jury.  TO
THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY TO THIS PLEDGE AGREEMENT HEREBY EXPRESSLY WAIVES ANY

 

11

 

RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
THIS PLEDGE AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS PLEDGE AGREEMENT OR ANY OTHER CREDIT DOCUMENT RELATED
HERETO, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS PLEDGE AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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

 

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

 

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

 

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

 

26.                                 Joint
and Several Obligations of Pledgors.

 

(a)                                  Subject to subsection (c) of
this Section 26, each of the Pledgors is accepting joint and
several liability hereunder in consideration of the financial accommodation to
be provided by the holders of the Secured Obligations, for the mutual benefit,
directly and indirectly, of each of the Pledgors and in consideration of the
undertakings of each of the Pledgors to accept joint and several liability for
the obligations of each of them.

 

(b)                                 Subject to subsection (c) of
this Section 26, each of the Pledgors jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Pledgors with respect to
the payment and performance of all of the Secured Obligations arising under
this Pledge Agreement and the other Credit Documents, it being the intention of

 

12

 

the parties hereto that
all the Secured Obligations shall be the joint and several obligations of each
of the Pledgors without preferences or distinction among them.

 

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

 

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

 

 

[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK]

 

13

 

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

 

	
  PLEDGORS:

  	
  DIRECTV HOLDINGS LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DIRECTV FINANCING CO., INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV ENTERPRISES, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV CUSTOMER SERVICES, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV HOME SERVICES, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

DIRECTV HOLDINGS LLC

PLEDGE AGREEMENT

 

 

	
   

  	
  DIRECTV MERCHANDISING, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV OPERATIONS, LLC,

  
	
   

  	
  a California limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  USSB II, INC.,

  
	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV PROGRAMMING HOLDINGS I, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DIRECTV PROGRAMMING HOLDINGS II, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  LABC PRODUCTIONS, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

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

  
	
   

  
	
  BANK OF AMERICA,
  N.A.,

  
	
  as Collateral
  Agent

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

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