Document:

Exhibit 10.2

 

Execution Copy

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (hereinafter this “Agreement”) is made this 14th day of November 2013 (the “Effective Date”) between Timios National Corporation (formerly known as Homeland Security Capital Corporation), a Delaware corporation (hereinafter the “Company”) and Michael T. Brigante, an individual (hereinafter the “Executive”).

 

WHEREAS, the Company is engaged in the business of providing title and escrow services for lenders, residential property appraisal management and real estate owned liquidation services (the “Business”);

 

WHEREAS, the Executive has been employed as the Company’s Executive Vice President of Finance and Chief Financial Officer pursuant to an employment agreement dated June 15, 2011 (the “Prior Employment Agreement”);

 

WHEREAS, the Company granted the Executive options to purchase 125,000 shares of common stock of the Company (the “Options”) pursuant to a stock option agreement dated December 17, 2012 (the “Option Agreement”); and

 

WHEREAS, the Company desires to continue to employ the Executive as its Executive Vice President of Finance and Chief Financial Officer, and the Executive desires to continue to be so employed by the Company, on the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements herein set forth, the Company and the Executive hereby agree as follows:

 

1.                                      Employment.  The Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve as the Executive Vice President of Finance and Chief Financial Officer of the Company.  The Executive shall report to the Company’s Chief Executive Officer (the “CEO”) and agrees to perform such duties customary to that office and such additional duties as shall from time to time reasonably be assigned to him by the CEO.  The Executive further agrees to devote all of his full working-time and attention to the performance of such duties and to the promotion of the business and interests of the Company and its subsidiaries and affiliates (which shall include time spent meeting any continuing professional education requirements), unless otherwise approved in advance by the Company’s Board of Directors (the “Board”).  The Executive may serve on boards of for profit and not-for-profit companies, and participate in civic, religious or charitable activities, provided that such outside activities do not interfere materially with, or detract from, the performance of his duties to the Company.  The Company hereby acknowledges and agrees to Executive’s service with the entities listed on Appendix A hereto.  Executive may serve on three (3) company boards (in addition to those listed on Appendix A) without the prior approval of the Board, so long as such service does not violate Executive’s obligations under Section 7 of this Agreement.  If Executive wishes to serve on more than three (3) such company boards, he must first receive prior approval of the Board, which approval will not be unreasonably withheld.

 

2.                                      Term of Employment.  The Executive’s employment hereunder shall be for a term commencing on the Effective Date and ending on June 14, 2016 (the “Expiration Date”), unless terminated earlier pursuant to Section 4 of this Agreement (the “Term of Employment”).

 

 

Thereafter, this Agreement shall automatically be renewed and the Term of Employment extended for additional consecutive terms of one (1) year (each a “Renewal Term”), unless such renewal is objected to by either the Company or the Executive upon ninety (90) days written notice prior to the commencement of the next Renewal Term.  In the event of renewal, the last day of each Renewal Term shall be deemed the new Expiration Date and shall so extend the Term of Employment.

 

3.                                      Compensation and Other Related Matters.

 

(a)                                 Base Salary.  As compensation for services rendered hereunder, the Executive’s salary shall be $250,000 annually (the “Base Salary”), which shall accrue day to day and be paid in accordance with the Company’s then prevailing payroll practices.  The Base Salary may be increased from time to time at the discretion of the Company, but it shall not be decreased without the prior written consent of the Executive.

 

(b)                                 Bonus.  At the sole discretion of the Company, the Executive shall be eligible to receive a bonus for each fiscal year ending during the Term of Employment in an amount up to fifty percent (50%) of the Executive’s Base Salary (the “Bonus”) based on the Executive and the Company successfully achieving targeted annual performance objectives, which objectives will be established by the Compensation Committee of the Board in reasonable consultation with the CEO and Executive, within sixty (60) days following the start of each fiscal year; provided, however, that for fiscal year ending December 31, 2013, Executive’s Bonus shall be no less than the second highest bonus paid to any employee of the Company (including its subsidiaries).  In the event the Company changes its fiscal year (which is currently December 31st), Executive shall be eligible to receive a pro-rated Bonus, if any, for any shortened fiscal year, the numerator of which is the number of days in such shortened fiscal year and the denominator of which is 365.  The Bonus for each such fiscal year (including any shortened fiscal year) will be paid no later than two and one-half (2 1⁄2) months following the end of such fiscal year.  Except as otherwise provided for in this Agreement, to receive such Bonus, the Executive must still be employed with the Company on the date when the Bonus is payable.

 

(c)                                  Special Bonus.  Except as set forth in Section 5, so long as Executive is employed on December 31, 2013 or, if earlier, at the time of a Change of Control, the Company shall pay to the Executive a one-time payment in an amount equal to $222,453 as consideration for previous bonuses and other compensation that was due and owing to Executive for periods prior to the Effective Date (the “Special Bonus”).  Such payment shall be made no later than December 31, 2014; provided, however that such payment shall be paid within five (5) days following a Change of Control, so long as the transaction is a change of control or change in effective control for purposes of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”).  If the Change of Control occurs in 2013 but does not satisfy the definitions set forth in Section 409A, then such payment shall be made in the first payroll period to occur in 2014 and if it occurs in 2014, then such payment shall be made in the next payroll following the Change of Control.

 

As used herein, “Change of Control” means the date (i) that any one person (for purposes herein, “person” includes an individual or entity), or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons), assets from the Company that have a total gross

 

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fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions (which, for the sake of clarity, includes the sale of the Company’s Timios, Inc. subsidiary); (ii) a change in the composition of the Board as a result of which less than two-thirds (2/3) of the directors are Incumbent Directors (as defined in the 2012 Employee, Director, and Consultant Equity Incentive Plan); (iii) that any one person, or more than one person acting as a group, is or becomes the beneficial owner, directly or indirectly, of thirty percent (30%) or more of any class of the outstanding stock of the Company; or (iv) of a consummation of a merger, consolidation, share exchange or similar form of corporate reorganization (a “Business Combination”) of the Company with or into any other entity other than a Business Combination in which the shares of the Company outstanding immediately before such Business Combination are exchanged or converted into or constitute shares which represent sixty (60%) or more of the surviving entity’s voting capital stock after such Business Combination.  Notwithstanding the foregoing, under no circumstances shall a Change of Control occur under this Agreement if it results from the sale of the Company’s assets to an entity in which more than seventy percent (70%) of the total outstanding stock (any class) is owned by the Company’s shareholders (individually or in the aggregate) who own (individually or in the aggregate), more than seventy percent (70%) of the total outstanding stock (any class) of the Company.

 

(d)                                 Automobile Allowance.  During the Term of Employment, the Company will pay to the Executive a monthly automobile allowance in an amount equal to $500, which amount will be paid pursuant to the Company’s prevailing payroll schedule and pro-rated for any partial months of employment; provided, however, that payment of the automobile allowance will not commence until after such time that the Executive is no longer using a Company provided vehicle.

 

(e)                                  401K Matching Contribution.  The Company will make a matching contribution annually to the Executive’s 401K account based on the amount of the Executive’s elective deferrals, up to the maximum allowed under Section 401(k) of the Code, subject to and consistent with the terms of the governing plan document.

 

(f)                                   Other Benefits.  Executive shall be provided with health, life, dental, long term care and disability insurance coverage and such other benefits and perquisites as are provided to other senior executives of the Company, as amended from time to time.  The Executive will be entitled to six (6) weeks of vacation per year, which will accrue monthly.  Any accrued but unused vacation time in one calendar year will roll-over to the subsequent calendar year.

 

(g)                                  Expenses.  The Executive will be reimbursed for all reasonable out-of-pocket expenses actually incurred by him in the furtherance of his duties under this Agreement, including travel and lodging to visit the Company’s headquarters (which shall include either (i) the use of a corporate apartment maintained by the Company as of the Effective Date or (ii) if, following the Effective Date, the Company no longer maintains a corporate apartment,  payment of a monthly housing allowance in an amount that is no more than the Company’s cost of maintaining a corporate apartment as of the date that the Company no longer maintains an apartment) and other offices.  Such expenses shall be reimbursed upon submission to the Company of invoices containing original receipts for all such expenditures, and upon review by the Company with respect to the reasonable nature thereof.  All expense reimbursements shall be

 

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paid as soon as administratively practicable.

 

(h)                                 Attorneys’ Fees.  The Company will reimburse the Executive for attorneys’ fees and costs actually incurred by Executive in connection with the review of this Agreement, up to an amount equal to $10,000, which will be paid to Executive within thirty (30) days of Executive’s submission to the Company of invoice(s) evidencing the fees and costs.

 

4.                                      Termination.

 

(a)                                 Disability.  The Company may terminate the Executive’s employment for Disability upon ninety (90) days written notice.  For purposes of this Agreement, “Disability” means a determination by the Company in accordance with applicable law that as a result of a physical or mental injury, illness, or impairment, Executive is unable to perform the essential functions of his position with or without reasonable accommodation for a period of (i) ninety (90) consecutive days, or (ii) one hundred twenty (120) days (which days need not be consecutive) in any one (1) year period.

 

(b)                                 Death.  The Executive’s employment shall terminate immediately upon the death of the Executive.

 

(c)                                  Cause.  The Company may terminate the Executive’s employment for “Cause” on contemporaneous written notice upon a resolution duly adopted by the affirmative vote of not less than seventy-five percent (75%) of the entire membership of the Board.  “Cause” shall mean termination based upon (i) a conviction with respect to any felony involving theft, fraud, dishonesty or misrepresentation; (ii) any misappropriation, embezzlement or conversion of the Company’s or any of its subsidiary’s or affiliate’s property; (iii) willful misconduct by the Executive in respect of the Executive’s material duties or obligations under this Agreement; or (iv) the Executive’s material breach of this Agreement, provided that if the Executive engages in the conduct set forth in (iii) or (iv) herein, the Company shall first notify the Executive in writing and may only terminate the Executive for Cause if the Executive fails to cure such conditions giving rise to Cause, if curable, within thirty (30) days following his receipt of the written notice.

 

(d)                                 Termination Without Cause.  The Company shall have the right to terminate the Executive’s employment without Cause at any time upon ninety (90) days prior written notice.

 

(e)                                  Good Reason.  The Executive may resign his employment for “Good Reason”.  “Good Reason” means that the Company (i) materially breached any of its obligations under this Agreement; (ii) materially reduced the Executive’s Base Salary; (iii) materially reduced the Executive’s duties or responsibilities or authority; or (iv) requires the Executive to work at a location on a permanent basis that is more than thirty (30) miles from the location at which the Executive provided the services as of the Effective Date; provided, however, that within ninety (90) days of the occurrence of the conditions giving rise to a resignation for Good Reason, the Executive provides written notice to the Company setting forth in reasonable detail the conditions giving rise to Good Reason, the Company fails to cure the conditions within thirty (30) days of receipt of the notice, and the Executive resigns within ninety (90) days following the Company’s receipt of the notice.

 

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(f)                                   Resignation.  The Executive may resign his employment without Good Reason with sixty (60) days prior written notice to the Company.

 

5.                                      Compensation Upon Termination.

 

(a)                                 Disability; Death.  If during the Term of Employment the Executive’s employment shall be terminated by the Company due the Executive’s Disability pursuant to Section 4(a), or due to the Executive’s Death pursuant to Section 4(b), the Company shall pay to the Executive (or his estate, as applicable) (i) his accrued but unpaid Base Salary and accrued but unused vacation time up to the date of termination, plus any unreimbursed business expenses (the “Accrued Obligations”); (ii) an amount equal to one (1) year of the Executive’s Base Salary at the rate in effect as of the effective date of the Executive’s termination of employment (the “Termination Date”), but not lower than his Base Salary pursuant to Section 3(a); (iii) the Bonus that the Executive would have received had he remained employed with the Company through the end of the fiscal year, multiplied by a fraction, the numerator of which is the number of days Executive was actually employed in the fiscal year in the year of the Termination Date and the denominator of which is 365, calculated based on fifty percent (50%) of Executive’s Base Salary at the rate in effect as of the Termination Date, provided, that for fiscal year ending December 31, 2013, such Bonus shall be calculated based on the greater of the foregoing or the second highest bonus paid to any employee of the Company (including its subsidiaries) (the “Pro-Rated Bonus”); (iv) any unpaid Bonus from the prior fiscal year (the “Prior Year Bonus”); (v) the Special Bonus, if unpaid, (together with the Pro-Rated Bonus and the Prior Year Bonus referred to collectively as the “Bonus Payments”); and (vi) in the case of a termination due to Executive’s Disability, if Executive timely elects to continue his health and/or dental insurance coverage pursuant to COBRA, that portion of the COBRA premium that it would pay if Executive were an active employee with the same type of coverage (the “COBRA Premiums”), for a period of one (1) year from the Termination Date (or if earlier, the date Executive is eligible for comparable coverage with a subsequent employer).  The foregoing amounts (with the exception of the COBRA Premiums, which shall be paid by the Company to the insurance carriers) shall be paid in a lump-sum on the first regularly scheduled payroll date following the Termination Date.  Thereafter the Company shall have no further obligation to the Executive under this Agreement.  Any amounts paid by the Company for the COBRA Premiums under this Agreement shall be recorded as additional income pursuant to Section 6041 of the Code, and shall not be entitled to any tax qualified treatment.

 

(b)                                 For Cause; Without Good Reason.  If during the Term of Employment the Company terminates the Executive’s employment for Cause under Section 4(c) of this Agreement or the Executive resigns without Good Reason under Section 4(f), the Company shall pay to the Executive the Accrued Obligations, and thereafter the Company shall have no further obligation to the Executive under this Agreement.

 

(c)                                  Without Cause; For Good Reason.  If during the Term of Employment the Company terminates the Executive’s employment without Cause pursuant to Section 4(d) of this Agreement, or the Executive resigns his employment for Good Reason under Section 4(e), or the Executive’s employment ends after the Company has delivered a notice of non-renewal pursuant to Section 2, the Company shall pay the Executive (i) an amount equal to one (1) year of his Base Salary at the rate in effect as of the Termination Date (without regard to any reduction in Base Salary that gave rise to Good Reason); (ii) the Base Salary that the Executive would have

 

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received had he remained employed through the Expiration Date (without regard to any reduction in Base Salary that gave rise to Good Reason) (together with the amount set forth in (i) the “Severance”); (iii) the Bonus(es) (including, without limitation, the Bonus Payments) that the Executive would have received had he remained employed through the Expiration Date, calculated based on fifty percent (50%) of Executive’s Base Salary (without regard to any reduction in Base Salary that gave rise to Good Reason), provided that for fiscal year ending December 31, 2013, such Bonus shall be the greater of the foregoing or the second highest bonus paid to any employee of the Company (including its subsidiaries); (iv) the COBRA Premiums until the date that is one (1) year following the Termination Date or if earlier, the date Executive is eligible for comparable coverage with a subsequent employer; and (v) the Accrued Obligations.  In addition, the Options, to the extent unvested, will fully vest on the Termination Date.  Payment of the Severance, the Bonus(es), and the COBRA Premiums and the vesting of the Options are conditioned on the Executive executing a general release of claims releasing all of his claims against the Company in a form reasonably satisfactory to the Company (but which will not require Executive to release his rights under this Agreement that are intended to survive Executive’s termination of employment or any vested rights under any Company plan or arrangement) (the “Release”) and the Release becoming effective and irrevocable prior to the sixtieth (60th) day following the Termination Date.  The Severance and Bonuses will be paid in a lump sum amount on the sixtieth (60th) day following the Termination Date, subject to Section 14 below, if applicable.  The Accrued Obligations will be paid on the next regularly scheduled payroll date following the Termination Date.  Thereafter, the Executive acknowledges that the Company shall have no further obligation to the Executive under this Agreement.  Notwithstanding the foregoing, if the Executive is at any time in material breach of Sections 7 or 8 of this Agreement, the Company will have no obligations under this Section 5(c).

 

(d)                                 Change of Control.  In the event of a Change of Control, the Executive may resign his employment upon thirty (30) days written notice and receive the same payments and benefits provided pursuant to Section 5(c), subject to Executive’s execution of the Release described in Section 5(c).  The Severance and the Bonus(es) will be paid in a lump sum amount on the sixtieth (60th) day following the Termination Date (subject to Section 14 below, if applicable) and the Accrued Obligations will be paid on the next regularly scheduled payroll date following the Termination Date.  Thereafter, the Executive acknowledges that the Company shall have no further obligation to the Executive under this Agreement.  Notwithstanding the foregoing, if the Executive is at any time in material breach of Sections 7 or 8 of this Agreement, the Company will have no obligations under this Section 5(d).

 

6.                                      Resignation from Officer Positions.  Immediately upon termination of the Executive’s employment for any reason, either by the Company or voluntarily by the Executive, the Executive shall resign from any officer positions with the Company then held by the Executive.

 

7.                                      Confidentiality and Restrictive Covenants.

 

(a)                                 The Executive acknowledges that:

 

(i)                                     the Business in which the Company is engaged is intensely competitive and that his employment by the Company will require that he have access to and knowledge of confidential information of the Company, including, but not limited to, certain/all

 

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of the Company’s products, plans for creation, prototypes, acquisition or disposition of products or publications, expansion plans, financial status and plans, marketing plans, products, improvements, formulas, designs or styles, source code, software architecture, hardware and software configurations, method of distribution, customer lists, product development plans, rules and regulations, personnel information and trade secrets of the Company, all of which are of vital importance to the success of the Company’s business (collectively, “Confidential Information”);

 

(ii)                                  the direct or indirect disclosure of any Confidential Information could place the Company at a serious competitive disadvantage and could do serious damage, financial and otherwise, to the Company’s business;

 

(iii)                               by his training, experience and expertise, the Executive’s services to the Company will be special and unique; and

 

(iv)                              if the Executive leaves the Company’s employ to work for a competitive business, in any capacity, it could cause the Company irreparable harm.

 

(b)                                 Covenant Against Disclosure.  The Executive therefore covenants and agrees that all Confidential Information relating to the Business of the Company or any of its subsidiaries, affiliates or customers shall be and remain the sole property and confidential business information of the Company, free of any rights of the Executive.  The Executive shall not make any use of the Confidential Information and shall not disclose any Confidential Information to third parties, except in the performance of his duties hereunder or with the prior written consent of the Company.

 

(c)                                  Return of Company Documents.  The Executive agrees that, upon any termination of his employment with the Company or upon the Company’s demand, he will return all Confidential Information in his possession, directly or indirectly, that is in written or other tangible form (together with all duplicates thereof) and that he will not retain or furnish any such Confidential Information to any third party, either by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other means of communication.

 

(d)                                 Non-competition.  The Executive agrees that, during the Term of Employment and, following the termination of the Executive’s employment for any reason, during the period that is equal to the sum of (i) one (1) year; and (ii) the period of time between the Termination Date and ending on the Expiration Date (together with the Term of Employment, the “Restricted Period”), the Executive shall not, directly or indirectly, own, manage, operate, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or have any financial interest in, or aid or assist anyone else in the conduct of, any entity or business which competes with the Business conducted by the Company or any of its subsidiaries or affiliates within any area in which the Company or any of its subsidiaries or affiliates conducts its business on the Termination Date.  Notwithstanding the foregoing, Executive’s (i) ownership of securities of a public company engaged in competition with the Company’s Business not in excess of two percent (2%) of any class of such securities; or (ii) ownership interest and/or position in any future special purpose acquisition corporations, shall not be considered a breach of the covenants set forth in this Section 7(d).

 

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(e)                                  Further Covenant.  During the Restricted Period, the Executive shall not, directly or indirectly, take any of the following actions, and, to the extent the Executive owns, manages, operates, controls, is employed by or participates in the ownership, management, operation or control of any business, the Executive will use his best efforts to ensure that such business does not take any of the following actions:

 

(i)                                     persuade or attempt to persuade any customer of the Company or any of its subsidiaries or affiliates to cease doing business with the Company or any of its subsidiaries or affiliates, or to reduce the amount of business any customer does with the Company or any of its subsidiaries or affiliates;

 

(ii)                                  solicit for himself or on behalf of an entity that competes with the Business of the Company, the business of a customer of the Company or any of its subsidiaries or affiliates, or solicit any such entity that was a customer of the Company or any of its subsidiaries or affiliates within one (1) year prior to the termination of the Executive’s employment; and

 

(iii)                               persuade or attempt to persuade any employee of the Company or any of its subsidiaries or affiliates to leave the employ of the Company or any of its subsidiaries or affiliates, or hire or engage, directly or indirectly, any individual who was an employee of the Company or any of its subsidiaries or affiliates during the one (1) year prior to the Executive’s termination of employment.

 

8.                                      Intellectual Property.

 

(a)                                 Assignment.  The Executive assigns, to the Company, without additional compensation, all right, title and interest in all creations, inventions, ideas, designs, copyrightable materials, trademarks, and other technology and rights (and any related improvements or modifications), whether or not subject to patent or copyright protection (collectively, “Inventions”), relating to any activities of the Company that are conceived or developed by the Executive in the course of his employment, whether alone or with others and whether or not conceived or developed during regular business hours, and if based on Confidential Information after the termination of this Agreement for any reason.  Such Inventions shall be the sole property of the Company and, to the maximum extent permitted by applicable law, shall be deemed “works made for hire” as the term is used in the United States Copyright Act.

 

(b)                                 Disclosure.  The Executive will promptly inform the Company of any such Inventions.  The Executive will (whether while employed by the Company or after the termination of this Agreement), at the Company’s sole expense, execute such written instruments and do other such acts as may be necessary in the reasonable opinion of the Company or its counsel to secure the Company’s rights in the Inventions, including obtaining a patent, registering a copyright, or otherwise (and the Executive irrevocably appoints the Company and any of its officers as Executive’s attorney in fact to undertake such acts in his name).  The Executive’s obligation to execute written instruments and otherwise assist the Company in securing its rights in the Inventions will continue after the termination of this Agreement for any reason.

 

(c)                                  Sub-License.  To the extent, if any, that the Executive retains any right,

 

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title or interest with respect to any Inventions that he develops during his employment with the Company, the Executive grants to the Company an irrevocable, paid-up, transferable, sub-licensable, worldwide right and license (i) to modify all or any portion of such Inventions, including, without limitation, the making of additions to or deletions from such Inventions, regardless of the medium (now or hereafter known) into which such Inventions may be modified and regardless of the effect of such modifications on the integrity of such Inventions, and (ii) to identify the Executive, or not to identify the Executive, as one or more authors of or contributors to such Inventions or any portion thereof, whether or not such Inventions or any portion thereof have been modified.  The Executive further waives any “moral” rights, or other rights with respect to attribution of authorship or integrity of such Inventions that he may have under any applicable law, whether under copyright, trademark, unfair competition, defamation, right of privacy, contract, tort or other legal theory.

 

9.                                      Disputes.

 

(a)                                 Arbitration.  The Executive and the Company will arbitrate any and all controversies, claims or disputes arising out of or relating to this Agreement or the Executive’s employment with the Company (“Claims”) before the American Arbitration Association (“AAA”) in accordance with the AAA’s National Rules for the Resolution of Employment Disputes, such arbitration to take place in Arlington County, Virginia.  The Executive waives any right to a trial by jury in any controversy, claim or dispute with the Company, including those that arise under any federal, state or local law, including without limitation, claims of harassment, discrimination or wrongful termination under common law or under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act.  This Section 9(a) shall not apply to claims by the Executive under Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, as amended.

 

(b)                                 Administrative Claims.  While this Agreement precludes the Executive from filing a court action for any Claim against the Company, this Agreement does not prohibit the Executive from filing an administrative charge with a local, state or federal administrative body.

 

(c)                                  Injunctive Relief.  Notwithstanding the agreement to arbitrate, a material breach by the Executive of his obligations under Section 7 or 8 of this Agreement would cause the Company irreparable harm and no adequate remedy at law would be available in respect thereof.  Accordingly, if any dispute arises between the parties under Section 7 or 8, the parties shall not be required to arbitrate such Claim under Section 9(a), but shall have the right to institute judicial proceedings in any court of competent jurisdiction with respect to such dispute or claim and may be entitled to relief enjoining such acts without the need to post a bond.  If such judicial proceedings are instituted, such proceedings shall not be stayed or delayed pending the outcome of any arbitration proceeding under Section 9(a) of this Agreement.  The Executive and the Company consent to the exclusive jurisdiction of the United States District Court for the Eastern District of Virginia (or if such court cannot exercise jurisdiction for any reason, to the jurisdiction of the Virginia state courts encompassing Arlington County) for this purpose.  Further, the Executive and the Company waive any objections to the jurisdiction of such courts based on improper or inconvenient forum.

 

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(d)                                 Attorneys’ Fees.  In the event of a dispute, including without limitation, the commencement of a litigation, arbitration or an administrative action by either party against the other to enforce such party’s rights hereunder, the Executive shall be entitled to recover from the Company all reasonable costs, expenses and fees, including reasonable attorneys’ fees, through all appeals, incurred in connection with such dispute (including without limitation, prosecuting or defending such action) if the Executive is the prevailing party in such dispute or action.  The prevailing party is the party who received or was awarded substantially the relief sought.

 

10.                               Market Standoff Agreement.  The Executive agrees that if so requested by the Company or by any representative of any underwriters in connection with any registration of the offering of any securities of the Company under the Securities Act, the Executive shall not sell or otherwise transfer any securities of the Company during the ninety (90) day period following the effective date of a registration statement of the Company filed under the Securities Act of 1933, as amended.

 

11.                               Director’s and Officer’s Liability Insurance.  During the Term of Employment and thereafter, until such time as all applicable statutes of limitations have expired, the Company, or any successor to the Company resulting from a Change of Control, shall keep in place a director’s and officer’s liability insurance policy (or policies) providing coverage in an amount up to at least $3,000,000.

 

12.                               Indemnification.  The Executive shall be indemnified and held harmless by the Company against all liabilities, damages, claims, lawsuits, judgments, settlements, fines, costs and expenses, including reasonable attorneys’ fees (the attorney to be selected by Executive), and other amounts actually and reasonably incurred by Executive in connection with any proceeding or claim (or threatened proceeding or claim) arising by reason of Executive’s employment with the Company, whether before, during or after the Term of Employment, in accordance with the indemnification provisions of the Company’s Certificate of Incorporation and/or Bylaws as in effect on the Effective Date, and otherwise to the fullest extent to permissible under the laws of the state of incorporation, as may be amended from time to time.

 

13.                               Non-Disparagement.  Executive agrees that he will not, whether during his employment or thereafter, directly or indirectly, make or ratify any statement, public or private, oral or written, to any person that disparages, either professionally or personally, the Company or any of its subsidiaries or affiliates, past and present, and each of them, as well as its and their trustees, directors, officers, members, managers, partners, agents, attorneys, insurers, employees, stockholders, representatives, assigns, and successors, past and present, and each of them.  The Company agrees that during Executive’s employment and thereafter, it will not and will cause its trustees, directors, officers, members, managers, partners, assigns and successors, past and present, and each of them, not to, directly or indirectly, make or ratify any statement, public or private, oral or written, to any person that disparages, either professionally or personally.  Notwithstanding the foregoing, nothing in this Agreement shall prohibit the Company or Executive from making truthful statements when required by law.

 

14.                               Section 409A.

 

(a)                                 To the extent that the payments and benefits to which the Executive is

 

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entitled in connection with a termination of his employment (the “Separation Benefits”) constitute non-qualified deferred compensation subject to Section 409A of the Code, the following rules shall apply to the Separation Benefits: (i) Any termination of the Executive’s employment triggering payment of the Separation Benefits must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence.  To the extent that the termination of the Executive’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by the Executive to the Company at the time the Executive’s employment terminates), any part of the Separation Benefits that constitute non-qualified deferred compensation under Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h).  For purposes of clarification, this Section 14(a) shall not cause any forfeiture of benefits on the Executive’s part, but shall only act as a delay until such time as a “separation from service” occurs; (ii) if the Executive is a “specified employee” (as that term is used in Section 409A and regulations and other guidance issued thereunder) on the date his separation from service becomes effective, any part of the Separation Benefits that constitutes non-qualified deferred compensation subject to Section 409A shall be delayed until the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the date of the Executive’s death, but only to the extent necessary to avoid the adverse tax consequences and penalties under Section 409A.  On the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the Executive’s death, the Company shall pay the Executive in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid the Executive prior to that date under this Agreement but for this Section; (iii) it is intended that each installment of the payments and benefits provided in this Agreement in connection with a termination of the Executive’s employment shall be treated as a “separate payment” for purposes of Section 409A; and (iv) neither the Company nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

 

In the event (i) any of Executive’s non-qualified deferred compensation is subject to a six-month delay pursuant to this Section 14(a) or (ii) of a Change of Control, the Company shall place immediately negotiable funds into a “rabbi” trust in an amount equal to the cash payments that may be due (or will be due) to Executive as a result of Executive’s termination of employment.  Such trust shall be maintained pursuant to a standard rabbi trust arrangement among the Company, Executive and an independent trustee (reasonably acceptable to Executive) providing for the timely payment to Executive of the amounts held in such trust in the event Executive becomes entitled thereto under the applicable provisions of this Agreement (the (“Trust Agreement”).  The Trust Agreement shall be maintained until the payment to Executive of all sums held in the trust.  This provision is subject to the limitations imposed by Section 409A(b) of the Code.  In addition, this provision will be null and void if the establishment or maintenance of such a trust would result in the imposition of a tax or penalty under Section 409A.

 

(b)                                 If any of the reimbursements or in-kind benefits provided for under this Agreement are subject to Section 409A and the rules and regulations thereunder, the following rules shall apply:  (i) in no event shall any such reimbursement be paid after the last day of the

 

11

 

taxable year following the taxable year in which the expense was incurred; (ii) the amount of such reimbursable expenses incurred, or the provision of in-kind benefits, in one tax year shall not affect the expenses eligible for reimbursement or the provision of in-kind benefits in any other tax year; and (iii) the right to such reimbursement for expenses or provision of in-kind benefits is not subject to liquidation or exchange for any other benefit.

 

(c)                                  Notwithstanding any other provision of this Agreement to the contrary, in the event of any ambiguity in the terms of this Agreement, such term(s) shall be interpreted and at all times administered in a manner that avoids the inclusion of compensation in income under Section 409A, or the payment of increased taxes, excise taxes or other penalties under Section 409A.

 

(d)                                 The parties intend this Agreement to be in compliance with or otherwise exempt from Section 409A.  Executive acknowledges and agrees that Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Agreement, including but not limited to consequences related to Section 409A.

 

15.                               No Mitigation or Off-Set.  The Executive shall be under no obligation to seek other employment after his termination of employment with the Company and the obligations of the Company that arise upon the termination of his employment shall not be subject to mitigation or off-set.

 

16.                               Section 280G.  In the event a Change in Control occurs and the Executive becomes entitled to any benefits or payments in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) under this Agreement, or any other plan, arrangement, or agreement with the Company (the “Total Payments”), and the Total Payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the Company shall pay the Executive, at the time any Excise Tax is paid with respect to such Total Payments, an additional amount which, after the imposition of all income and excise taxes thereon, is equal to the Excise Tax on the Total Payments.  For purposes of determining the amount of the gross up payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the applicable payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In determining the potential impact of the Excise Tax, the parties shall reasonably cooperate.

 

17.                               Registration of the Plan.  To the extent not already registered, the Company will register the plan under which the Options were granted (the Timios National Corporation 2012 Employee, Director and Consultant Equity Incentive Plan) on a Form S-8 Registration Statement (or, if not so eligible, on another applicable form) as soon as practicable following the date of this Agreement.

 

18.                               Miscellaneous.

 

(a)                                 Successors; Binding Agreement.  This Agreement and the obligations of the Company hereunder and all rights of the Executive hereunder shall inure to the benefit of the

 

12

 

parties hereto and their respective heirs, personal representatives, successors and assigns, provided, however, that the duties of the Executive hereunder are personal to the Executive and may not be delegated or assigned by him.

 

(b)                                 Notice.  All notices of termination and other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand, facsimile, overnight carrier, or mailed by United States registered mail, return receipt requested, addressed as follows:

 

If to the Company:

 

Timios National Corporation

4601 Fairfax Drive, Suite 1200

Arlington, Virginia 22201

Fax: (703) 528-7073

Attn: Board of Directors

 

With a copy to (which shall not constitute notice):

 

Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

The Chrysler Center

666 Third Avenue

New York, New York 10017

Fax: (212) 983-3115

Attn:  Avisheh Avini, Esq.

 

If to the Executive:

 

Michael T. Brigante

17 Daniel Drive

Hillsborough, New Jersey 08844

 

With a copy to (which shall not constitute notice):

 

Becker, Glynn, Muffly, Chassin & Hosinski LLP

299 Park Avenue

New York, New York 10171

Fax: (212) 888-0255

Attn:  Bonnie Klugman, Esq.

 

or to such other address as either party may designate by notice to the other, which notice shall be deemed to have been given upon receipt.

 

(c)                                  Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the conflict of law rules thereof.

 

(d)                                 Waivers.  The waiver of either party hereto of any right hereunder or of

 

13

 

any failure to perform or breach by the other party hereto shall not be deemed a waiver of any other right hereunder or of any other failure or breach by the other party hereto, whether of the same or a similar nature or otherwise.  No waiver shall be deemed to have occurred unless set forth in writing executed by or on behalf of the waiving party.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

(e)                                  Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall otherwise remain in full force and effect.  Moreover, if any one or more of the provisions contained in this Agreement is held to be excessively broad as to duration, scope or activity, such provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.

 

(f)                                   Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

 

(g)                                  Entire Agreement.  This Agreement sets forth the entire agreement and understanding of the parties in respect of the subject matter contained herein, and supersedes all prior agreements (including, without limitation, the Prior Employment Agreement, which shall be of no further force and effect as of the Effective Date), promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of either party in respect of said subject matter.

 

(h)                                 Modifications.  This Agreement may only be modified in a writing signed by both the Company and the Executive.

 

(i)                                     Headings Descriptive.  The headings of the several paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any of this Agreement.

 

(j)                                    Capacity.  The Executive represents and warrants that he is not a party to any agreement that would prohibit him from entering into this Agreement or performing fully his obligations hereunder.

 

(k)                                 Survival.  The parties agree that the obligations and rights set forth in Section 5 and Sections 7 through and including Section 18 shall survive the termination of this Agreement or the Executive’s employment for any reason.

 

[signature page follows]

 

14

 

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first written above.

 

 

	
 
    	
MICHAEL T. BRIGANTE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Michael T. Brigante
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TIMIOS NATIONAL CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ C. Thomas McMillen
    
	
 
    	
 
    	
Name:
    	
C. Thomas McMillen
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    

 

15

 

Appendix A

 

Somerset Capital Advisors, LLC

Marsh Road, LLC

TMMB Properties, LLC

Main Street Property Management, LLC (in the process of being formed)

Endela

 

16Exhibit 4.1

 

EXECUTION VERSION

 

FOURTH SUPPLEMENTAL INDENTURE

 

Dated as of November 20, 2013

 

to

 

INDENTURE

 

Dated as of September 14, 2012

 

Between

 

DIRECTV HOLDINGS LLC,

 

and

 

DIRECTV FINANCING CO., INC.,
 as Issuers,

 

THE GUARANTORS PARTY HERETO

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
 as Trustee

 

 

5.200% Senior Notes due 2033

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1.    DEFINITIONS
    	
2
    
	
 
    	
 
    
	
Section 1.1.
    	
Definition   of Terms
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE 2.    TERMS AND   CONDITIONS OF NOTES
    	
2
    
	
 
    	
 
    
	
Section 2.1.
    	
Designation   and Principal Amount
    	
2
    
	
Section 2.2.
    	
Maturity
    	
2
    
	
Section 2.3.
    	
Further   Issues
    	
2
    
	
Section 2.4.
    	
Payment
    	
2
    
	
Section 2.5.
    	
Global   Securities
    	
3
    
	
Section 2.6.
    	
Interest
    	
3
    
	
Section 2.7.
    	
Authorized   Denominations
    	
4
    
	
Section 2.8.
    	
Redemption   and Sinking Fund
    	
4
    
	
Section 2.9.
    	
Ranking
    	
5
    
	
Section 2.10.
    	
Appointments
    	
5
    
	
Section 2.11.
    	
Defeasance
    	
5
    
	
Section 2.12.
    	
Guarantees
    	
5
    
	
Section 2.13.
    	
Other   Modifications to Indenture
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE 3.    FORM OF   NOTES
    	
7
    
	
 
    	
 
    
	
Section 3.1.
    	
Form of   Notes
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 4.    ORIGINAL ISSUE   OF NOTES
    	
7
    
	
 
    	
 
    
	
Section 4.1.
    	
Original   Issue of Notes
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 5.     MISCELLANEOUS
    	
7
    
	
 
    	
 
    
	
Section 5.1.
    	
Ratification   of Indenture
    	
7
    
	
Section 5.2.
    	
Trustee   Not Responsible for Recitals
    	
8
    
	
Section 5.3.
    	
Governing   Law
    	
8
    
	
Section 5.4.
    	
Waiver   of Jury Trial
    	
8
    
	
Section 5.5.
    	
Separability
    	
8
    
	
Section 5.6.
    	
Counterparts
    	
8
    
	
 
    	
 
    	
 
    
	
EXHIBIT A — FORM OF 2033 NOTES
    	
A-1
    
	
 
    	
 
    
	
EXHIBIT B — FORM OF NOTATION OF   GUARANTEE
    	
B-1
    

 

i

 

FOURTH SUPPLEMENTAL INDENTURE, dated as of November 20, 2013 (this “Supplemental Indenture”), by and among DIRECTV Holdings LLC (the “Company” or an “Issuer”), a Delaware limited liability company, DIRECTV Financing Co., Inc. (“DIRECTV Financing” or an “Issuer” and together with the Company, the “Issuers”), a Delaware corporation, each of the Guarantors listed on the signature page hereto (together with any additional Subsidiary of the Company that becomes a Guarantor of the Notes (as defined below) following the date hereof, the “Guarantors”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized and existing under the laws of the United States, as Trustee (the “Trustee”).

 

RECITALS

 

WHEREAS, the Issuers and the Guarantors have executed and delivered to the Trustee the Indenture, dated as of September 14, 2012, as supplemented by the First Supplemental Indenture, dated as of September 14, 2012, as further supplemented by the Second Supplemental Indenture dated as of January 15, 2013 and as further supplemented by the Third Supplemental Indenture dated as of May 20, 2013 (the “Indenture”), to provide for the issuance of the Issuers’ debt securities (the “Securities”), to be issued in one or more series;

 

WHEREAS, pursuant to the terms of the Indenture, the Issuers desire to provide for the establishment of a new series of their Securities under the Indenture to be known as their “5.200 % Senior Notes due 2033” (the “Notes”), the form and substance and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this Supplemental Indenture;

 

WHEREAS, each of the Guarantors desire to provide for Guarantees of each series of Notes on the terms set forth in Article XV of the Indenture;

 

WHEREAS, the Board of Directors of each of the Issuers by duly adopted resolutions has authorized the proper officers of the Issuers to, among other things, determine the terms of the Securities to be issued under the Indenture and execute any and all appropriate documents necessary or appropriate to effect each such issuance;

 

WHEREAS, this Supplemental Indenture is being entered into pursuant to the provisions of Section 901(8) of the Indenture;

 

WHEREAS, the Issuers have requested that the Trustee execute and deliver this Supplemental Indenture; and

 

WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of each of the Issuers and the Guarantors, in accordance with its terms, and to make the Notes, when executed by the Issuers and authenticated and delivered by the Trustee, the valid obligations of the Issuers and to make the Guarantees, when the notations of Guarantee to be attached to each Note are executed by the Guarantors and delivered by the Trustee, the valid obligations of the Guarantors have, in each case, been performed, and the execution and delivery of this Supplemental Indenture has been duly authorized in all respects;

 

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the forms and terms of the Notes, the Issuers and the Guarantors covenant and agree, with the Trustee, as follows:

 

ARTICLE 1.

 

DEFINITIONS

 

Section 1.1.                                 Definition of Terms.  Unless the context otherwise requires:

 

(a)                                 each capitalized term defined in the Indenture or the Notes and not defined herein has the same meaning provided in the Indenture or the Notes, as applicable, when used in this Supplemental Indenture;

 

(b)                                 the singular includes the plural, and vice versa; and

 

(c)                                  headings are for convenience of reference only and do not affect interpretation.

 

ARTICLE 2.

 

TERMS AND CONDITIONS OF NOTES

 

Section 2.1.                                 Designation and Principal Amount.  There is hereby authorized and established a series of Securities under the Indenture, designated as the “5.200% Senior Notes due 2033,” which is initially limited in aggregate principal amount to £350,000,000 (except upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture and except for any Securities which, pursuant to Section 303 of the Indenture, are deemed never to have been authenticated and delivered).

 

Section 2.2.                                 Maturity.  The Stated Maturity of principal of the Notes shall be November 18, 2033.

 

Section 2.3.                                 Further Issues.  The Company may at any time and from time to time, without the consent of the Holders of any series of the Notes, issue additional Notes of any series.  Any such additional Notes shall have the same ranking, interest rate, maturity date and other terms as the relevant series of the Notes.  Any such additional notes of a series, together with the Notes of the relevant series herein provided for, shall constitute a single series of Securities under the Indenture.

 

Section 2.4.                                 Payment.  Principal of and interest on the Notes shall be payable in pounds sterling (“Sterling”).  If the United Kingdom adopts the euro, in lieu of Sterling, as its lawful currency, the Notes will be redenominated in euro on a date determined by the Company,

 

2

 

with a principal amount for each Note equal to the principal amount of that Note in Sterling, converted into euro at the rate established by the applicable law; provided, that, if the Company determines that the then current market practice in respect of the redenomination into euro of internationally offered securities is different from the provisions specified herein, such provisions will be deemed to be amended so as to comply with such market practice and the Company will promptly notify the Trustee and the Paying Agent of such deemed amendment.  The Company will give 30 days’ notice of the redenomination date to the Paying Agent, the Trustee, Euroclear and Clearstream.

 

If Sterling or, in the event the Notes are redenominated in euro, euro is unavailable to the Company due to the imposition of exchange controls or other circumstances beyond the Company’s control (other than due to circumstances described in the preceding paragraph) or the euro is no longer used by the member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions within the international banking community, then all payments in respect of the Notes will be made in U.S. dollars until Sterling or euro, as the case may be, is again available to the Company or so used.  The amount payable on any date in Sterling or, in the event the Notes are redenominated in euro, euro will be converted to U.S. dollars on the basis of the then most recently available market exchange rate for Sterling or euro, as the case may be.  Any payment in respect of the Note so made in U.S. dollars will not constitute an event of default under the Indenture.  Neither the Trustee nor the Paying Agent shall be responsible for obtaining exchange rates, effecting conversions or otherwise handling redenominations.

 

For purposes of these Notes, the Place of Payment shall be the City of London.

 

Section 2.5.                                 Global Securities.  Upon the original issuance, the Notes will be represented by Global Securities registered in the name of The Bank of New York Depository (Nominees) Limited, as nominee of The Bank of New York Mellon, London Branch, the common depositary for Euroclear/Clearstream.  The Company will deposit the Global Securities with Euroclear/Clearstream or its custodian and register the Global Securities in the name of The Bank of New York Depository (Nominees) Limited.

 

For purposes of these Notes:

 

“Business Day” means any day other than Saturday or a Sunday, (1) which is not a day on which banking institutions are authorized or obligated by law or executive order to close in New York City or London and (2) on which the Trans-European Automated Real-time Gross Settlement Express Transfer System (the TARGET2 system), or any successor thereto, is open.

 

“Clearstream” means Clearstream Banking, société anonyme.

 

“Euroclear” means Euroclear Bank S.A./N.V.

 

Section 2.6.                                 Interest.  The Notes will bear interest from November 20, 2013 at the rate of 5.200% per annum, payable annually in arrears on November 18 of each year, beginning November 18, 2014, to Holders of record as at the close of the Business Day prior to the Interest Payment Date.  Interest on the Notes will accrue from the most recent date to which

 

3

 

interest has been paid or, if no interest had been paid, from November 20, 2013.  If the scheduled Interest Payment Date is not a Business Day, then interest will be paid on the first business day following the scheduled Interest Payment Date.  Interest periods are unadjusted.  The day count convention is ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

 

Section 2.7.                                 Authorized Denominations.  The Notes shall be issuable in minimum denominations of £100,000 and integral multiples of £1,000 in excess thereof.

 

Section 2.8.                                 Redemption and Sinking Fund.

 

(a)                                 Sinking Fund.  The Notes shall not be entitled to the benefit of any sinking fund.

 

(b)                                 Rights of Issuers to Redeem Notes.

 

At any time and from time to time the Company may redeem all or any portion of the Notes of any series outstanding at a Redemption Price (calculated by the Company) equal to the greater of:

 

(i)                                     100% of the aggregate principal amount of the Notes to be redeemed; and

 

(ii)                                  an amount equal to the sum of the present values of the remaining scheduled payments of principal of and interest on such Notes to be redeemed (excluding accrued and unpaid interest to the Redemption Date and subject to the right of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date) discounted from their scheduled date of payment to the Redemption Date on an annual basis (ACTUAL/ACTUAL (ICMA)) using a discount rate equal to the Comparable Government Bond Rate plus 25 basis points,

 

plus, in each of the above cases, accrued and unpaid interest, if any, to such Redemption Date.

 

For purposes of this clause (b)(ii):

 

“Comparable Government Bond Rate” means the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded upwards), at which the gross redemption yield on the Notes, if they were to be purchased at such price on the third Business Day prior to the date fixed for redemption, would be equal to the gross redemption yield on such Business Day of the Comparable Government Bond (as defined below) on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by an independent investment bank selected by the Company.

 

“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by the Company, a United Kingdom government bond whose maturity is closest to the maturity of the Notes, or if such independent investment bank in its discretion considers that such similar bond is not in issue, such other United Kingdom government

 

4

 

bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, United Kingdom government bonds selected by such independent investment bank, determine to be appropriate for determining the Comparable Government Bond Rate.

 

To the extent not specified above, any redemption of any Notes pursuant to this Section 2.8(b) and paragraph (g) of the Notes shall be in accordance with the provisions of Article XI of the Indenture.

 

Section 2.9.                                 Ranking.  The Notes shall be senior unsecured debt securities of the Issuers, ranking equally with the Issuers’ other unsecured and unsubordinated debt.

 

Section 2.10.                          Appointments.  The Paying Agent will initially be The Bank of New York Mellon, London Branch.  The Trustee will initially be the Security Registrar.  The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent or Security Registrar, to appoint additional or other Paying Agents or Security Registrars and to approve any change in the office through which any Paying Agent or Security Registrar acts.

 

Section 2.11.                          Defeasance.  The Company may elect, at its option at any time, pursuant to Section 1301 of the Indenture, to have Section 1302 or Section 1303 in the Indenture, or both, apply to the Notes, or all, or any principal amount thereof.

 

Section 2.12.                          Guarantees.  The Notes shall have the benefit of Guarantees on the terms set forth in Article XV of the Indenture, from each of the Guarantors.

 

Section 2.13.                          Other Modifications to Indenture.

 

(a)                                 For purposes of the Notes, the following definitions shall be added in alphabetical order to Section 101 of the Indenture:

 

“2018 Notes” means $750 million of 1.750% Senior Notes due 2018 issued by the Issuers under this Indenture as supplemented by the first supplemental indenture dated September 14, 2012 and as further supplemented by the second supplemental indenture dated January 15, 2013.

 

“2023 Notes” means €500 million of 2.750% Senior Notes due 2023 issued by the Issuers under this Indenture as supplemented by the first supplemental indenture dated September 14, 2012, as further supplemented by the second supplemental indenture dated as of January 15, 2013 and as further supplemented by the third supplemental indenture dated as of May 20, 2013.

 

“2029 Notes” means £750 million of 4.375% Senior Notes due 2029 issued by the Issuers under this Indenture as supplemented by the first supplemental indenture dated September 14, 2012.

 

5

 

(b)                                 For purposes of the Notes, the definition of “Existing Notes” in Section 101 of the Indenture shall read as follows:

 

“Existing Notes” means the 2014 Notes, the 2015 Notes, the 2016 Notes, the 3.500% 2016 Notes, the 2017 Notes, the 2018 Notes, the 2019 Notes, the 2020 Notes, the 2021 Notes, the 5.000% 2021 Notes, the 2022 Notes, the 2023 Notes, the 2029 Notes, the 2040 Notes, the 6.000% 2040 Notes, the 2041 Notes and the 2042 Notes.

 

(c)                                  For purposes of the Notes, the definition of “Senior Revolving Credit Facility” is replaced in its entirety with the following:

 

“Senior Revolving Credit Facilities” means ” means any credit agreement to which the Issuer and/or one or more of its Domestic Subsidiaries is party from time to time including without limitation the 3.5 year credit agreement with a revolving termination date of February 7, 2016 (‘‘3.5 Year Credit Agreement’’) and the 5 year credit agreement with a revolving termination date of September 28, 2017 (‘‘5 Year Credit Agreement’’ and together with the 3.5 Year Credit Agreement, the ‘‘Credit Agreements’’), each of the Credit Agreements dated as of September 28, 2012, by and among the Issuer, as borrower, the lenders party thereto from time to time, Citibank, N.A., as administrative agent, Barclays Bank PLC, as syndication agent, and Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Bank of America, N.A., The Royal Bank of Scotland plc and UBS Securities LLC, as co-documentation agents, and Citigroup Global Markets Inc., Barclays Bank PLC, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBS Securities Inc. and UBS Securities LLC as joint lead arrangers and joint bookrunners, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement exchanging, extending the maturity of, refinancing, renewing, replacing, substituting or otherwise restructuring, whether in the bank or debt capital markets (or combination thereof) (including increasing the amount of available borrowings thereunder or adding Subsidiaries as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.”

 

In each instance that “Senior Revolving Credit Facility” is used in the Indenture, the term shall be replaced with “Senior Revolving Credit Facilities.”

 

(d)                                 For purposes of the Notes, Section 1012 of the Indenture is amended by the following:

 

(i)                                     replacing “$1,000” with “£1,000” in the first sentence thereof; and

 

(ii)                                  replacing “$100,000” with “£100,000” and “$1,000” with “£1,000” in clause (6) thereof.

 

6

 

(e)                                  Section 1103 of the Indenture is amended by replacing the first paragraph of the Section with the following:

 

“If less than all the Securities of any series are to be redeemed at any time (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the selection of Securities for redemption shall be made in accordance with the procedures of the Depositary; provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.”

 

(f)                                   Section 1104 of the Indenture is amended by replacing “given by first-class mail, postage prepaid, mailed” with “transmitted” and deleting “at such Holder’s address appearing in the Security Register” in the first paragraph.

 

(g)                                  Section 1104 of the Indenture is further amended by replacing the last two sentences of the Section with the following:

 

“The notice, if transmitted in the manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice or any defect in the notice to the Holder of any Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Securities.”

 

ARTICLE 3.

 

FORM OF NOTES

 

Section 3.1.                                 Form of Notes.  The Notes and the Trustee’s Certificate of Authentication to be endorsed thereon are to be substantially in the form set forth in Exhibit A hereto.  The form of notation of Guarantee to be attached to each Note shall be as set forth in Exhibit B hereto.

 

ARTICLE 4.

 

ORIGINAL ISSUE OF NOTES

 

Section 4.1.                                 Original Issue of Notes.  The Notes may, upon execution of this Supplemental Indenture, be executed by the Issuers and delivered to the Trustee for authentication, and the Trustee shall, upon Issuer Order, authenticate and deliver such Notes as in such Issuer Order provided.

 

ARTICLE 5.

 

MISCELLANEOUS

 

Section 5.1.                                 Ratification of Indenture.  The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided; provided, however, that the provisions of this Supplemental Indenture shall apply solely with respect to the Notes.

 

7

 

Section 5.2.                                 Trustee Not Responsible for Recitals.  The recitals herein contained are made by the Issuers and the Guarantors and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

 

Section 5.3.                                 Governing Law.  This Supplemental Indenture and each Note shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Section 5.4.                                 Waiver of Jury Trial.  EACH OF THE ISSUERS, GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

Section 5.5.                                 Separability.  In case any one or more of the provisions contained in the Indenture, this Supplemental Indenture or the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of the Indenture, this Supplemental Indenture or the Notes, but the Indenture, this Supplemental Indenture and the Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

Section 5.6.                                 Counterparts.  This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

 

[Signature page follows]

 

8

 

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

 

	
 
    	
DIRECTV   HOLDINGS LLC, as Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DIRECTV   FINANCING CO., INC., as Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DIRECTV   CUSTOMER SERVICES, INC.,
    
	
 
    	
 
    	
as   Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DIRECTV   MERCHANDISING, INC.,
    
	
 
    	
 
    	
as   Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DIRECTV   ENTERPRISES, LLC,
    
	
 
    	
 
    	
as   Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    

 

[Signature Page To Fourth Supplemental Indenture]

 

 

	
 
    	
DIRECTV,   LLC,
    
	
 
    	
 
    	
as   Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LABC   PRODUCTIONS, LLC,
    
	
 
    	
 
    	
as   Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DIRECTV   HOME SERVICES, LLC,
    
	
 
    	
 
    	
as   Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DIRECTV,
    
	
 
    	
 
    	
as   Parent Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Fraser M. Woodford
    
	
 
    	
 
    	
Name:   
    	
Fraser   M. Woodford
    
	
 
    	
 
    	
Title:   
    	
Assistant   Treasurer
    

 

[Signature Page To Fourth Supplemental Indenture]

 

 

	
 
    	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lawrence Dillard
    
	
 
    	
 
    	
Name:   
    	
Lawrence   Dillard
    
	
 
    	
 
    	
Title:   
    	
Vice   President
    

 

[Signature Page To Fourth Supplemental Indenture]

 

 

EXHIBIT A

 

[FORM OF NOTE]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR BANK, S.A./N.V. (“EUROCLEAR”) AND CLEARSTREAM BANKING, SOCIÉTÉ ANONYME (“CLEARSTREAM” AND, TOGETHER WITH EUROCLEAR, “EUROCLEAR/CLEARSTREAM”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF THE BANK OF NEW YORK DEPOSITORY (NOMINEES) LIMITED OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR/CLEARSTREAM (AND ANY PAYMENT IS MADE TO THE BANK OF NEW YORK DEPOSITORY (NOMINEES) LIMITED OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR/CLEARSTREAM), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, THE BANK OF NEW YORK DEPOSITORY (NOMINEES) LIMITED, HAS AN INTEREST HEREIN

 

DIRECTV HOLDINGS LLC
 DIRECTV FINANCING CO., INC.

 

5.200 % Senior Notes due 2033

 

ISIN Number:  XS0994920238
 Common Code:  099492023

 

	
No.
    	
£[   ]
    

 

DIRECTV HOLDINGS LLC, a limited liability company duly formed under the laws of the State of Delaware (herein called an “Issuer” or the “Company,” which term includes any successor Person under the Indenture hereinafter referred to) and DIRECTV FINANCING CO., INC., a corporation duly incorporated under the laws of Delaware (herein called “DIRECTV Financing” or an “Issuer” and, together with the Company, the “Issuers”), for value received, hereby each jointly and severally promises to pay to The Bank of New York Depository (Nominees) Limited as nominee of The Bank of New York Mellon, London Branch, a common depositary for Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme, or registered assigns, the principal sum of £[    ] ([   ]) on November 18, 2033, and to pay interest thereon from November 20, 2013 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, annually on November 18 of each year (each an “Interest Payment Date”), commencing on November 18, 2014, at the rate of 5.200% per annum, until the principal hereof is paid or made available for payment; provided, that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate 5.200% per annum (to the extent permitted by applicable law), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on

 

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demand.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the Business Day prior to such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of New York Stock Exchange (the “NYSE”) on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

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

 

Dated:  November 20, 2013

 

	
 
    	
DIRECTV   HOLDINGS LLC, as Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DIRECTV   FINANCING CO., INC., as Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-3

 

This Note is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

Dated:  November 20, 2013

 

	
 
    	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

A-4

 

[REVERSE OF NOTE]

 

(a)                                 Indenture.

 

This Note is one of a duly authorized issue of securities of the Issuers (herein called the “Notes”), issued and to be issued in one or more series under an Indenture, dated as of September 14, 2012 (as amended, supplemented or modified from time to time, the “Base Indenture”), and a supplemental indenture relating to such series dated as of November 20, 2013 (as amended or modified from time to time, the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”), between the Issuers, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Notes are, and are to be, authenticated and delivered.  This Note is one of the series designated on the face hereof, such series initially limited in aggregate principal amount to £350,000,000; provided, that the Company may at any time and from time to time, without the consent of any Holder, issue additional Notes of this series.

 

The Notes of this series may be required to be repurchased by Holders under the circumstances provided in Section 1012 of the Base Indenture and are redeemable at the option of the Company as provided in Section 2.8(b) of the Supplemental Indenture and paragraph (g) of this Note.

 

The Notes of this series are not entitled to the benefit of any sinking fund.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness of the Notes of this series or certain restrictive covenants and Events of Default with respect to such Notes, in each case upon compliance with certain conditions set forth in the Indenture.

 

(b)                                 Interest.

 

The Company promises to pay interest from November 20, 2013, on the principal amount of this Note annually in cash in arrears on November 18 each year, beginning November 18, 2014, in like coin or currency, at the rate per annum specified in the title hereof.

 

Interest on the Notes shall be computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the date from which interest begins to accrue for the period (or November 20, 2013 if no interest has been paid on the Notes), to but excluding the next scheduled Interest Payment Date.  If interest or principal on this Note is payable on a date that is not a Business Day, then interest will be paid on the first Business Day following the scheduled Interest Payment Date.  Interest periods are unadjusted.  The day count convention is ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

 

“Business Day” means any day other than Saturday or a Sunday, (1) which is not a day on which banking institutions are authorized or obligated by law or executive order to close in New York City or London and (2) on which the Trans-European Automated Real-time Gross Settlement Express Transfer System (the TARGET2 system), or any successor thereto, is open.

 

A-5

 

(c)                                  Issuance in Sterling.

 

Principal and interest payments in respect of the Notes will be payable in Sterling.  If the United Kingdom adopts the euro, in lieu of Sterling, as its lawful currency, the Notes will be redenominated in euro on a date determined by the Company, with a principal amount for each Note equal to the principal amount of that note in Sterling, converted in euro at the rate established by the applicable law; provided, that, if the Company determines that the then current market practice in respect of the redenomination into euro of internationally offered securities is different from the provisions specified above, such provisions will be deemed to be amended so as to comply with such market practice and the Company will promptly notify the Trustee and the Paying Agent of such deemed amendment.  The Company will give 30 days’ notice of the redenomination date to the Paying Agent, the Trustee, Euroclear and Clearstream.

 

If Sterling or, in the event the Notes are redenominated in euro, euro is unavailable to the Company due to the imposition of exchange controls or other circumstances beyond the Company’s control (other than due to circumstances described in the preceding paragraph) or the euro is no longer used by the member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions within the international banking community, then all payments in respect of the Notes will be made in U.S. dollars until Sterling or euro, as the case may be, is again available to the Company or so used.  The amount payable on any date in Sterling or euro, as the case may be, will be converted to U.S. dollars on the basis of the then most recently available market exchange rate for Sterling or euro, as the case may be.  Any payment in respect of the Note so made in U.S. dollars will not constitute an event of default under the Indenture.  Neither the Trustee nor the Paying Agent shall be responsible for obtaining exchange rates, effecting conversions or otherwise handling redenominations.

 

(d)                                 Method of Payment.

 

The interest so payable, and punctually paid or duly provided for, on any November 18 will, except as provided in the Indenture, be paid to the Person in whose name this Note is registered at the close of business on the Business Day immediately preceding the Interest Payment Date (herein called the “Regular Record Date”) and may, at the option of the Company, be paid by check mailed to the registered address of such Person.  Any such interest which is payable, but is not so punctually paid or duly provided for, shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may be paid either to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of the NYSE on which the Notes will be listed and upon such notice as may be required by the NYSE, if such manner of payment shall be deemed practicable by the Trustee, all as more fully provided in the Indenture.

 

A-6

 

(e)                                  Paying Agent.

 

Initially, The Bank of New York Mellon, London Branch will act as Paying Agent.  The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent, to appoint additional or other Paying Agents and to approve any change in the office through which any Paying Agent acts.

 

(f)                                   Optional Redemption.

 

The Company will have the right at its option to redeem any of the Notes in whole or in part, at any time or from time to time prior to their maturity, on at least 30 days, but not more than 60 days, prior notice mailed to the registered address of each Holder of Notes, at a Redemption Price calculated by the Company equal to the greater of (i) 100% of the aggregate principal amount of the Notes to be redeemed, and (ii) an amount equal to the sum of the present values of the remaining scheduled payments of principal of and interest on such Notes to be redeemed (excluding accrued and unpaid interest to the Redemption Date and subject to the right of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date) discounted from their scheduled date of payment to the Redemption Date on an annual basis (ACTUAL/ACTUAL (ICMA)) using a discount rate equal to the Comparable Government Bond Rate plus 25 basis points, plus, in each of clauses (i) and (ii), accrued and unpaid interest, if any, to such Redemption Date.

 

“Comparable Government Bond Rate” means the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded upwards), at which the gross redemption yield on the Notes, if they were to be purchased at such price on the third Business Day prior to the date fixed for redemption, would be equal to the gross redemption yield on such Business Day of the Comparable Government Bond (as defined below) on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by an independent investment bank selected by the Company.

 

“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by the Company, a United Kingdom government bond whose maturity is closest to the maturity of the Notes, or if such independent investment bank in its discretion considers that such similar bond is not in issue, such other United Kingdom government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, United Kingdom government bonds selected by such independent investment bank, determine to be appropriate for determining the Comparable Government Bond Rate.

 

To the extent not specified above, any redemption of any Notes pursuant to this paragraph (f) of the Notes shall be in accordance with the provisions of Article XI of the Indenture.

 

(g)                                  Redemption for Tax Reasons.

 

If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of the United States (or any taxing authority in the United States), or any change in, or amendments to, an official position regarding the application or

 

A-7

 

interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes effective on or after November 20, 2013, the Company becomes or, based upon a written opinion of independent counsel selected by the Company, will become obligated to pay additional amounts as described below with respect to the Notes, then the Company may at any time at its option redeem, in whole, but not in part, the Notes on not less than 30 nor more than 60 days prior notice, at a Redemption Price equal to 100% of their principal amount, together with accrued and unpaid interest on those Notes to, but not including, the date fixed for redemption.

 

To the extent not specified above, any redemption of any Notes pursuant to this paragraph (g) of the Notes shall be in accordance with the provisions of Article XI of the Indenture.

 

(h)                                 Payment of Additional Amounts.

 

The Company will, subject to the exceptions and limitations set forth below, pay as additional interest on the Notes such additional amounts as are necessary in order that the net payment by the Company or the Paying Agent of the principal of and interest on the Notes to a Holder who is not a United States person (as defined below), after withholding or deduction for any present or future tax, assessment or other governmental charge imposed by the United States or a taxing authority in the United States will not be less than the amount provided in the Notes to be then due and payable; provided, however, that the foregoing obligation to pay additional amounts shall not apply:

 

(1)                                 to any tax, assessment or other governmental charge that would not have been imposed but for the Holder, or a fiduciary, settlor, beneficiary, member or shareholder of the Holder if the Holder is an estate, trust, partnership or corporation, or a person holding a power over an estate or trust administered by a fiduciary holder, being considered as:

 

(a)                                 being or having been engaged in a trade or business in the United States or having or having had a permanent establishment in the United States;

 

(b)                                 having a current or former connection with the United States (other than a connection arising solely as a result of the ownership of the Notes, the receipt of any payment or the enforcement of any rights hereunder), including being or having been a citizen or resident of the United States;

 

(c)                                  being or having been a personal holding company, a passive foreign investment company or a controlled foreign corporation with respect to the United States or a corporation that has accumulated earnings to avoid United States federal income tax;

 

(d)                                 being or having been a “10-percent shareholder” of the Parent as defined in section 871(h)(3) of the United States Internal Revenue  Code of 1986, as amended (the “Code”) or any successor provision; or

 

A-8

 

(e)                                  being a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business;

 

(2)                                 to any Holder that is not the sole beneficial owner of the Notes, or a portion of the Notes, or that is a fiduciary, partnership or limited liability company, but only to the extent that a beneficiary or settlor with respect to the fiduciary, a beneficial owner or member of the partnership or limited liability company would not have been entitled to the payment of an additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment;

 

(3)                                 to any tax, assessment or other governmental charge that would not have been imposed but for the failure of the Holder or any other person to comply with certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with the United States of the Holder or beneficial owner of the Notes, if compliance is required by statute, by regulation of the United States or any taxing authority therein or by an applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax, assessment or other governmental charge;

 

(4)                                 to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by the Company or the Paying Agent from the payment;

 

(5)                                 to any tax, assessment or other governmental charge that would not have been imposed but for a change in law, regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment becomes due or is duly provided for, whichever occurs later;

 

(6)                                 to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property tax or similar tax, assessment or other governmental charge;

 

(7)                                 to any withholding or deduction that is imposed on a payment to an individual and that is required to be made pursuant to any law implementing or complying with, or introduced in order to conform to, any European Union Directive on the taxation of savings;

 

(8)                                 to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of or interest on any Note, if such payment can be made without such withholding by at least one other paying agent;

 

A-9

 

(9)                                 to any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of any Note, where presentation is required, for payment on a date more than 30 days after the date on which payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

 

(10)                          to any withholding or deduction that is imposed on a payment pursuant to Sections 1471 through 1474 of the Code and related Treasury regulations and pronouncements (the Foreign Account Tax Compliance Act); or

 

(11)                          in the case of any combination of items (1), (2), (3), (4), (5), (6), (7), (8), (9) and (10).

 

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the Notes.  Except as specifically provided under this paragraph “Payments of Additional Amounts,” the Company will not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision.

 

As used under this paragraph “Payments of Additional Amounts” and under paragraph (g) “Redemption for Tax Reasons”, the term “United States” means the United States of America (including the states and the District of Columbia and any political subdivision thereof), and the term “United States person” means any individual who is a citizen or resident of the United States for U.S. federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia (other than a partnership that is not treated as a United States person under any applicable Treasury regulations), or any estate or trust the income of which is subject to United States federal income taxation regardless of its source.

 

(i)                                     Defaults and Remedies.

 

If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of such Notes may be declared, or shall immediately become, due and payable in the manner and with the effect provided in the Indenture.

 

As provided in and subject to the provisions of the Indenture, the Holders of the Notes of this series shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in aggregate principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in aggregate principal amount of such Notes at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

A-10

 

(j)                                    Supplemental Indentures.

 

The Indenture permits, with certain exceptions as therein provided, the Issuers, the Guarantors and the Trustee to enter into supplemental indentures to the Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the Holders of the Securities of each series under the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of each series to be affected thereby.

 

(k)                                 Consent and Waiver.

 

The Indenture contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holders of Notes of this series shall be conclusive and binding upon such Holders and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

(l)                                     Obligations of the Company and the Guarantors.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligations of the Issuers, which are absolute and unconditional, to pay the principal of and any premium and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

(m)                             Denominations; Transfer; Exchange.

 

The Notes are issuable in registered form without coupons, in a minimum denomination of £100,000 and integral multiples of £1,000 in excess thereof.  A Holder shall register the transfer of or exchange Notes in accordance with the Indenture.  As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

A-11

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

This Note is a Global Security and is subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities.

 

(n)                                 Persons Deemed Owners.

 

Prior to due presentment of this Note for registration of transfer, the Issuers, the Trustee and any agent of the Issuers or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment of principal of and premium, if any, and, subject to Section 307 of the Indenture, any interest on this Note and for all other purposes whatsoever, whether or not this Note be overdue, and neither the Issuers, the Trustee nor any agent of the Issuers or the Trustee shall be affected by notice to the contrary.

 

(o)                                 Defined Terms.

 

All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

(p)                                 Governing Law.

 

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

(q)                                 Authentication.

 

Unless the certificate of authentication hereon has been manually executed by or on behalf of the Trustee under the Indenture, this Note shall not be entitled to any benefits under the Indenture, or be valid or obligatory for any purpose.

 

A-12

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have all or any part of this Note purchased by the Issuers pursuant to Section 1012 of the Base Indenture, check the box below:

 

o                                    Section 1012

 

If you want to have only part of this Note purchased by the Issuers pursuant to Section 1012 of the Base Indenture, state the amount you elect to have purchased:

 

£

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
(Sign   exactly as your name appears on the face of this Note)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature   Guarantee.
    
						

 

A-13

 

EXHIBIT B

 

FORM OF NOTATION OF GUARANTEE

 

Each of the undersigned and its successors under the Indenture, jointly and severally with any other Guarantors, hereby irrevocably and unconditionally (i) guarantee the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on the overdue principal of and interest, if any, on the Notes, to the extent lawful, and the due and punctual performance of all other obligations of DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. (together the “Issuers”) to the Holders or the Trustee all in accordance with the terms set forth in Article XV of the Indenture and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, guarantee that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.  Capitalized terms used herein have the meanings assigned to them in the Indenture and the Supplemental Indenture unless otherwise indicated.

 

No director, owner, officer, employee, incorporator or stockholder of any Guarantor or any of its Affiliates, as such, shall have any liability for any obligations of such Guarantor or any of its Affiliates under this guarantee by reason of his or its status as such.  This Guarantee shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof.

 

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers.

 

THE TERMS OF ARTICLE XV OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

This Guarantee shall be governed by and construed in accordance with the laws of the State of New York.

 

	
 
    	
[NAME   OF GUARANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

B-1

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