270 Legal [Sample Agreements]

SUBORDINATED LOAN AGREEMENT

This SUBORDINATED LOAN AGREEMENT is dated as of October 27, 2004 and entered into by and between DREAMWORKS ANIMATION SKG, INC., a Delaware corporation (“DreamWorks Animation”), and HOME BOX OFFICE, INC., a Delaware corporation (“HBO”).

R E C I T A L S

WHEREAS, HBO and DreamWorks L.L.C. (“DreamWorks”) are parties to the HBO License Agreement (as defined below);

WHEREAS, in connection with an amendment to the HBO License Agreement dated as of May 3, 2000, HBO and DreamWorks entered into that certain Subordinated Loan Agreement dated as of December 15, 2000, as amended by that certain letter agreement dated as of December 20, 2000 (the “Original Subordinated Loan Agreement”), pursuant to which HBO made a subordinated term loan to DreamWorks in an aggregate principal amount equal to One Hundred Twenty-Five Million Dollars ($125,000,000) (the “Original Subordinated Loan”); and

WHEREAS, in connection with the transactions described in that certain letter agreement dated as of October 27, 2004 (the “Transaction Agreement”) among HBO, DreamWorks Animation and DreamWorks, including, but not limited to (i) the formation, separation and initial public offering of DreamWorks Animation; (ii) the execution of an amendment to the HBO License Agreement dated of even date herewith (the “HBO License Agreement Amendment”); and (iii) the execution of the Attornment Agreement, the Animation Security Agreement (each such term, as defined below) and certain other documents in connection therewith, HBO and DreamWorks have agreed to amend and restate certain of the terms of the Original Subordinated Loan Agreement and DreamWorks Animation has agreed to assume and repay a portion of the Original Subordinated Loan in a principal amount equal to Eighty Million Dollars ($80,000,000) (of which, a principal amount equal to Thirty Million Dollars ($30,000,000) will be prepaid by DreamWorks Animation on the date of the closing of the initial public offering of DreamWorks Animation Class A Common Stock (but in no event later than December 15, 2004)).

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ARTICLE 4

CONDITIONS PRECEDENT TO CLOSING

SECTION 4.01 Closing Documents. The Closing shall be deemed to have occurred upon the receipt by HBO of the following documents, each of which shall be satisfactory to HBO and its counsel in form and substance and the satisfaction of the additional closing conditions set forth in Section 4.02:

(a) Agreement and Subordinated Note. This Agreement and the Subordinated Note, each duly executed and delivered by DreamWorks Animation.

(b) DreamWorks Documents. The DreamWorks Loan Agreement and all Subordinated Loan Documents (as defined in the DreamWorks Loan Agreement), each duly executed and delivered by DreamWorks.

(c) HBO License Agreement Amendment. The HBO License Agreement Amendment, duly executed and delivered by DreamWorks and the Attornment Agreement, duly executed and delivered by DreamWorks Animation and DreamWorks.

(d) Collateral Documents. The Animation Security Agreement, duly executed and delivered by DreamWorks Animation and granting to HBO a first priority security interest in the Collateral, accompanied by (1) appropriately completed UCC-1 financing statements naming HBO as secured party and DreamWorks Animation as debtor with respect to the Collateral filed in the State of Delaware and such other jurisdictions as HBO shall determine in its sole good faith discretion; (2) a copyright mortgage, duly executed by DreamWorks Animation which has been or will be submitted for recordation with the U.S. Copyright Office; and (3) such other documents as the Animation Security Agreement shall specify or as HBO shall have reasonably requested, in order to create, perfect and establish the priority of the Lien granted by the Animation Security Agreement.

(e) Consents. All consents of other Persons, if any, in each case that are necessary in connection with the transactions contemplated by the Subordinated Loan Documents and DreamWorks Loan Agreement, and each of the foregoing shall be in full force and effect.
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