EXHIBIT 10.2

 
AMENDMENT AND RESTATEMENT AGREEMENT
 
AMENDMENT AND RESTATEMENT AGREEMENT, dated as of May 6, 2010 (this “Agreement”),
between CINEDIGM DIGITAL CINEMA CORP. (f/k/a ACCESS INTEGRATED TECHNOLOGIES,
INC. (the “Company”) and SAGEVIEW CAPITAL MASTER, L.P. (the “Holder”).
 
W I T N E S S E T H:
 
WHEREAS, reference is made to the Senior Secured Note, dated August 11, 2009 in
the principal amount of $75,000,000 (the “Original Note”), issued by the Company
payable to the order of the Holder;
 
WHEREAS, the Company desires to amend and restate the Original Note on the terms
set forth herein;
 
WHEREAS, Section 11 of the Original Note provides that the Company and the
Majority Holders may amend the Original Note;
 
WHEREAS, the Holder is the sole holder of Notes;
 
NOW, THEREFORE, in consideration of the premises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
 
SECTION  1. Defined Terms:  Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Original Note.
 
SECTION  2. Restatement Date:  The “Restatement Date” shall be the date that all
conditions set out in Section 4 hereof shall have been satisfied.
 
SECTION  3. Amendment and Restatement of the Original Note:  (a)  Effective on
the Restatement Date, the Original Note (excluding Schedule I thereto, which
shall remain in effect after the Restatement Date) is hereby amended and
restated to read in its entirety as set forth in Exhibit A hereto (the “Restated
Note”).
 
(b) The amendment and restatement of the Original Note as contemplated hereby
shall not be construed to discharge or otherwise affect any obligations of the
Company accrued or otherwise owing under the Original Note that have not been
paid, it being understood that such obligations will constitute obligations
under the Restated Note.
 
(c) Except as expressly set forth herein, this Agreement shall not by
implication or otherwise limit, impair, constitute a waiver of or otherwise
affect the rights and remedies of the Holder under the Original Note (such
rights and remedies being now covered under the Restated Note) or any other
Transaction Document.
 
(d) Each of the Company and each Subsidiary Note Party reaffirms its obligations
under the Transaction Documents to which it is party and the validity of the
Liens granted by it pursuant to the Guarantee and Collateral Agreement.  Each of
the Company and the Subsidiary Note Parties hereby consents to this Agreement
and confirms that all obligations of such entity under the Transaction Documents
to which such entity is a party shall continue to apply to the Restated Note.
 
 
 

--------------------------------------------------------------------------------

 
 
(e) This Amendment shall constitute a Transaction Document for purposes of the
Restated Note and from and after the Restatement Date, all references to the
Note in any Transaction Document shall refer to the Restated Note.
 
SECTION  4. Conditions.  The consummation of the amendment and restatement set
forth in Section 3 of this Agreement shall be subject to the satisfaction of the
following conditions precedent:
 
(a) The Holder shall have received from the Company (i) this Agreement duly
executed by the Company and each Subsidiary Note Party and (ii) the Restated
Note duly executed on behalf of the Company and registered in the name of the
Holder.
 
(b) The Holder shall have received an amendment in the form of Exhibit B hereto
to the Side Letter, dated as of August 11, 2009, among Christie/AIX and the
Holder, duly executed by each Phase I Subsidiary, and Christie Sub shall have
become a party to such side letter (as amended).
 
(c) The Company shall have provided to the Holder an accurate and complete copy
of the Management Services Agreement, which Management Services Agreement shall
be in form and substance reasonably acceptable to the Holder.
 
(d) The Company shall have deposited $3,873,045 into the Satellite Financing
Account (as defined in the Restated Note).
 
(e) The Holder shall have received the Satellite Financing Control Agreement (as
defined in the Restated Note), duly executed on behalf of the Company, the
Collateral Agent and UBS Financial Services Inc.
 
(f) The Holder shall have received a favorable written opinion (addressed to the
Holder and dated the Restatement Date) of Kelley Drye & Warren LLP, counsel for
the Company, covering such matters relating to the Company and the Restated Note
as the Holder shall reasonably request.  The Company hereby requests such
counsel to deliver such opinion.
 
(g) The Holder shall have received a certificate evidencing the incorporation or
certificate of formation, as the case may be, and good standing of the Company
and Christie Sub in such entity’s state or other jurisdiction of incorporation
or organization issued by the Secretary of State (or other applicable authority)
of such state of incorporation or organization as of a date within fifteen (15)
days of the Restatement Date.
 
(h) The Holder shall have received a secretary’s certificate, dated as of the
Restatement Date, certifying as to (i) the organizational documents of Christie
Sub, certified as of a date within five (5) days of the Closing Date by the
applicable governmental authority of the applicable jurisdiction and (ii) the
by-laws, limited partnership agreement or limited liability company agreement,
as applicable, of Christie Sub.
 
(i) The Holder shall have received all fees and other amounts due and payable in
connection with this Agreement and the Original Note on or prior to the
Restatement Date.
 
 
-2-

--------------------------------------------------------------------------------

 

SECTION  5. Representations and Warranties.  The Company hereby represents and
warrants as of the Restatement Date as follows:
 
(i) the Company and each Subsidiary Note Party has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder and under
the Restated Note, as applicable;
 
(ii) the execution and delivery of this Agreement by the Company and each
Subsidiary Note Party and the execution and delivery of the Restated Note by the
Company has been duly authorized by all necessary action on the part of the
Company and each Subsidiary Note Party and no further action is required by the
Company, the Subsidiary Note Parties or the board of directors or stockholders
of any thereof in connection therewith;
 
(iii) each of this Agreement and the Restated Note has been duly executed by the
Company and the Subsidiary Note Parties, as applicable, and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company and the Subsidiary Note Parties, as
applicable, enforceable against the Company and the Subsidiary Note Parties, as
applicable, in accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies; and
 
(iv) as of the Restatement Date, no Default has occurred and is continuing.
 
SECTION  6. Applicable Law.  This Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the
internal laws of the State of New York, including Section 5-1401 of the New York
General Obligations Law.
 
SECTION  7. Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall constitute but one instrument.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or by other
electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement.

 
[SIGNATURES ON FOLLOWING PAGE]
 
 
-3-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.
 

 
CINEDIGM DIGITAL CINEMA CORP.,
 
 
By:   /s/ A. Dale Mayo                                             
 
      Name:  A. Dale Mayo
 
      Title:  Chief Executive Officer

 
 
HOLLYWOOD SOFTWARE, INC.,
 
 
By:   /s/ A. Dale Mayo                                             
 
      Name:  A. Dale Mayo
 
      Title:  Chief Executive Officer

 
CORE TECHNOLOGY SERVICES, INC.,
 
 
By:   /s/ A. Dale Mayo                                             
 
      Name:  A. Dale Mayo
 
      Title:  Chief Executive Officer
 
FIBERSAT GLOBAL SERVICES, INC.,
 
 
By:   /s/ A. Dale Mayo                                             
 
      Name:  A. Dale Mayo
 
      Title:  Chief Executive Officer
 
 
ADM CINEMA CORPORATION,
 
 
By:   /s/ A. Dale Mayo                                             
 
      Name:  A. Dale Mayo
 
      Title:  Chief Executive Officer
 
 
UNIQUESCREEN MEDIA, INC.,
 
 
By:   /s/ A. Dale Mayo                                             
 
      Name:  A. Dale Mayo
 
      Title:  Chief Executive Officer

 

 
 

--------------------------------------------------------------------------------

 
 
VISTACHIARA PRODUCTIONS, INC.,
 
 
By:   /s/ A. Dale Mayo                                             
 
      Name:  A. Dale Mayo
 
      Title:  Chief Executive Officer

 
 
 
 
 

 
-5-

--------------------------------------------------------------------------------

 

SAGEVIEW CAPITAL MASTER, L.P.,
 
By: Sageview Capital GenPar, Ltd., its general partner
 
 
By:   /s/ Edward A. Gilhuly                                             
 
      Name:  Edward A. Gilhuly
 
      Title:  Director

 
 

 
-6-

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
 
 
EXHIBIT A
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.
 
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT UNDER SECTIONS 1272, 1273 AND
1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  YOU MAY CONTACT GARY S.
LOFFREDO, THE GENERAL COUNSEL OF THE COMPANY, AT 55 MADISON AVENUE, SUITE 300,
MORRISTOWN, NJ 07960, (973) 290-0080, WHO WILL PROVIDE YOU WITH ANY
REQUIRED INFORMATION REGARDING THE ORIGINAL ISSUE DISCOUNT.

SENIOR SECURED AMENDED AND RESTATED NOTE

      May [_], 2010     $75,000,000

                                                               
FOR VALUE RECEIVED, CINEDIGM DIGITAL CINEMA CORP., a Delaware corporation (the
“Company”), hereby promises to pay to the order of Sageview Capital Master, L.P.
or registered assigns (the “Holder”) the principal amount of SEVENTY-FIVE
MILLION United States Dollars ($75,000,000) (the “Original Principal Amount”) on
the Maturity Date (as defined in Section 3(a)) or the Extended Maturity Date (as
defined in Section 4(a)), if applicable, or upon acceleration, redemption or as
otherwise required herein, and to pay interest (“Interest”) on the unpaid
principal balance hereof on each Interest Payment Date (as defined in Section
3), at the interest rates and in the manner set forth in this Senior Secured
Note (this “Note”).  Interest shall accrue from the Issuance Date (as defined in
Section 3) and shall be computed on the basis of a 360-day year of twelve (12)
30-day months.
 
 
1.           Securities Purchase Agreement; Other Notes.  This Note is issued
pursuant to the Securities Purchase Agreement, dated as of August 11, 2009 (as
the same may be amended, supplemented or otherwise modified from time to time,
the “Securities Purchase Agreement”) between the Company and the purchasers
referred to therein.  This Note amends and restates in its entirety the Senior
Secured Note, dated August 11, 2009  (the “Original Note”), in the principal
amount of $75,000,000 by the Company payable to the order of the Holder, which
Original Note has been cancelled as of the Restatement Date and is void and
without further effect.  This Note and all Other Notes (as defined in Section 3)
are collectively referred to in this Note as the “Notes”.
 
 
2.           Payments.
 
(a)           Payment Location.  All payments of principal of, and interest and
premiums on, this Note, except to the extent any such interest is payable
through the increase in Principal pursuant to Section 6(b), shall be made in
lawful money of the United States of America by wire transfer of immediately
available funds to such account as the Holder may from time to time designate by
written notice in accordance with the provisions of this Note.  Whenever any
amount expressed to be due by the
 
 
 

--------------------------------------------------------------------------------

 
 
terms of this Note is due on any day that is not a Trading Day (as defined in
Section 3), the same shall instead be due on the next succeeding day that is a
Trading Day.
 
(b)           Optional Prepayment.  From the Restatement Date through February
11, 2011, the Company may, in its sole and absolute discretion, any time and
from time to time, upon at least three (3) Trading Days prior written notice to
the Holder certifying that the Company and the Subsidiary Note Parties shall
have unrestricted cash and Permitted Investments of not less than $10,000,000
(or such lesser amount as the Majority Holders shall reasonably agree) in the
aggregate after giving effect to the contemplated prepayment, prepay (any date
on which a prepayment is made, a “Prepayment Date”) up to an aggregate of 20% of
the Original Principal Amount under this Note and the Other Notes in cash at a
price equal to 100% of such Principal plus an amount equal to the Interest
Amount with respect to such prepaid Principal that is due through and including
the Prepayment Date.  Subject to Sections 5 and 9, the Company may not otherwise
prepay all or any portion of the Principal due under this Note (or principal
under any Other Notes) prior to August 11, 2011.  On or after August 11, 2011,
the Company may, at any time and from time to time, upon twenty (20) Trading
Days prior written notice to Holder, prepay all or any portion of the Principal
outstanding under this Note in cash at a price equal to the sum of (i) an amount
equal to (x) 107.5% of such Principal if the Prepayment Date occurs on or after
August 11, 2011 but prior to August 11, 2012, (y) 103.75% of such Principal if
the Prepayment Date occurs on or after August 11, 2012 but prior to August 11,
2013, or (z) 100% of such Principal if the Prepayment Date occurs on or after
August 11, 2013 plus (ii) an amount equal to the Interest Amount with respect to
such prepaid Principal through and including the Prepayment Date.  Any optional
prepayment of this Note shall be accompanied by an optional prepayment of each
Other Note then outstanding on a pro rata basis in accordance with the
respective unpaid principal amounts thereof at the time of such prepayment.
 
(c)           Mandatory Prepayments.  (i) Within one business day after each
Quarterly Application Date, the Company shall prepay this Note and the Other
Notes, without premium or penalty, in an aggregate amount equal to 100% of
Excess Cash Flow on such Quarterly Application Date.
 
(ii)           Within one business day after each Quarterly Application Date,
the Company shall prepay this Note and the Other Notes, without premium or
penalty, in an aggregate amount equal to the excess of (A) the aggregate amount
of Servicing Fees received by the Company during the Fiscal Quarter ended most
recently prior to such Quarterly Application Date over (B) the Company Servicing
Fee with respect to such Quarterly Application Date.

(iii)           On June 30, 2011, the Company shall prepay this Note and the
Other Notes, without premium or penalty, in an aggregate amount equal to the
amount on deposit in the Satellite Financing Account as of such date (including,
for the avoidance of doubt, any interest that has accrued on amounts in the
Satellite Financing Account that remain on deposit through such date).

(iv)           In the case of each partial prepayment of the Notes under this
Section 2(c), the aggregate principal amount of this Note and the Other Notes to
be prepaid shall be allocated by the Company among this Note and the Other Notes
then outstanding on a pro rata basis in accordance with the respective unpaid
principal amounts thereof at the time of such prepayment.

 
3.           Certain Defined Terms.
 
(a)           Each capitalized term used herein, and not otherwise defined
herein, shall have the meaning ascribed thereto in the Securities Purchase
Agreement.  For purposes of this Note, the following terms shall have the
following meanings:
 
 
2

--------------------------------------------------------------------------------

 
“Access DM” means Access Digital Media, Inc.
 
“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls or is controlled by
or is under common control with such specified Person.  Notwithstanding the
foregoing, (i) the Company, its Subsidiaries and its other controlled Affiliates
shall not be considered Affiliates of the Holder and (ii) neither the Holder nor
its Affiliates shall be considered Affiliates of any portfolio company in which
the Holder or any of its Affiliates have made a debt or equity investment.
 
“Approved Stock Plan” means any employee benefit or other plan existing on the
Issuance Date and identified in Schedule 3.1(ll) of the Securities Purchase
Agreement or that is approved by the board of directors and stockholders of the
Company, pursuant to which the Company’s securities may be issued to any
employee, officer or director for services provided to the Company.
 
“Breakeven LTM EBITDA” means, for any Fiscal Quarter, the number set forth on
Schedule I opposite such Fiscal Quarter.
 
“Breakeven Servicing Fee” means, for any Quarterly Application Date, (i)
Consolidated EBITDA (as defined in the Phase I Credit Agreement) for the
four-Fiscal Quarter period ended most recently prior to such Quarterly
Application Date plus (ii) the aggregate amount of Servicing Fees received by
the Company during the four-Fiscal Quarter period ended most recently prior to
such Quarterly Application Date minus (iii) the aggregate amount of Servicing
Fees received by the Company during the applicable Three FQ Period minus (iv)
Breakeven LTM EBITDA for the Fiscal Quarter ended most recently prior to such
Quarterly Application Date; provided that in no event shall the Breakeven
Servicing Fee be less than zero.
 
“Capital Lease Obligation” means, as to any Person, any obligation that is
required to be classified and accounted for as a capital lease on a balance
sheet of such Person prepared in accordance with GAAP and the amount of such
obligation shall be the capitalized amount thereof, determined in accordance
with GAAP.
 
“Cash Collateral Control Agreement” means that certain Account Control
Agreement, dated as of August 11, 2009, among the Company, the Collateral Agent
and UBS Financial Services Inc., as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
 
“Cash Interest Rate” means a per annum interest rate equal to 7.0% through the
Maturity Date and, if applicable, a per annum interest rate of 9.5% beginning on
the day after the Maturity Date and ending on the Extended Maturity Date,
payable as set forth in Section 6 of this Note. 
 
“Change of Control” means (i) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
of the assets of the Company (including, for the avoidance of doubt, the sale of
all or substantially all of the assets and/or the capital stock of the Company’s
Subsidiaries in the aggregate) to any Person or group (as defined in Section
13(d) of the Exchange Act) (other than Sageview Capital LP and/or any of its
Affiliates), (ii) the approval by the holders of the Company’s capital stock of
any plan or proposal to effect the liquidation, dissolution or winding up of the
Company, (iii) any Person or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than Sageview Capital LP and/or any of its Affiliates)
shall become the beneficial owner (as defined in Rule 13(d)(3) under the
Exchange Act) of the voting securities representing more than 35% of the
aggregate voting power of all classes of the voting securities of the Company,
(iv) the consolidation, merger or other business combination of the Company with
or into another Person (other than as
 
 
3

--------------------------------------------------------------------------------

 
permitted by Section 8(p)(i)), (v) as a direct result of any proxy contest or
solicitation opposed by the Company, individuals who, at the commencement of
that proxy contest or solicitation (the “Incumbent Directors”) cease to
constitute at least a majority of the Company's board of directors at the
conclusion thereof, provided that any person becoming a director in connection
with that proxy contest or solicitation whose election or nomination for
election was approved by a vote of at least a majority of the Incumbent
Directors shall be an Incumbent Director or (vi) if the Purchaser Director
Entitlement or the Purchaser Observer Entitlement under the Securities Purchase
Agreement entitles the Holders of the Notes to at least one Director or one
Observer, for 10 consecutive Trading Days the Common Stock is neither listed for
trading on a U.S. national securities exchange nor quoted on an established U.S.
automated interdealer quotation system and no American Depositary Shares or
similar instruments for such common stock are so listed or approved for listing
in the United States.
 
“Christie/AIX” means Christie/AIX, Inc., a company organized under the laws of
Delaware.
 
“Christie Note” means the note issued by Christie/AIX payable to Christie
Digital Systems USA, Inc., dated August 9, 2007, in the principal amount of
$9,600,000, as amended, supplemented or otherwise modified from time to time.
 
“Christie Sub” means Cinedigm Digital Funding I, LLC, a direct wholly-owned
Subsidiary of Christie/AIX.
 
“Class B Common Stock” means (i) the Company’s Class B Common Stock, $0.001 par
value per share, and (ii) any capital stock resulting from a reclassification of
such common stock.
 
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
 
“Collateral Agent” has the meaning assigned thereto in the Guarantee and
Collateral Agreement.
 
“Common Stock” means (A) the Company’s Class A Common Stock, $0.001 par value
per share, and (B) any capital stock resulting from a reclassification of such
common stock.
 
“Company Servicing Fee” means, as of any Quarterly Application Date, the lesser
of (i) the aggregate amount of Servicing Fees received by the Company during the
Fiscal Quarter ended most recently prior to such Quarterly Application Date and
(ii) the Breakeven Servicing Fee for such Quarterly Application Date.
 
“Contingent Obligation” means, as to any Person, any direct or indirect
financial liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other financial obligation of another Person if
the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.
 
“control” (including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the affairs or management of a
 
 
4

--------------------------------------------------------------------------------

 
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise.
 
“Convertible Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exchangeable or exercisable for
Shares.
 
“Default” means any event or circumstance that is, or with the giving of notice
or lapse of time or both, would be an Event of Default.
 
“Disposition” means, with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof.  The
term “Dispose” shall have a correlative meaning.
 
“Disqualified Stock” means, with respect to any Person, any capital stock of
such Person which, by its terms, or by the terms of any security into which it
is convertible or for which it is putable or exchangeable, or upon the happening
of any event, matures or is mandatorily redeemable, in whole or in part, in each
case prior to the date that is ninety-one (91) days after the Extended Maturity
Date; provided that any capital stock held by any future, present or former
employee, officer or director of the Company or any of its Subsidiaries pursuant
to an Approved Stock Plan shall not constitute Disqualified Stock solely because
it may be required or permitted to be repurchased by the Company in connection
with the termination of employment by, or service with, the Company and its
Subsidiaries.
 
“Dollars” or “$” means United States Dollars.
 
“Environmental Law” shall mean any law or any regulatory policy statement or
similar guidance of any kind relating to pollution or protection of the indoor
or outdoor environment (including protection of human health and safety, other
than in respect of occupational health and safety), including (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1984, (ii) the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984,
(iii) the Federal Water Pollution Control Act of 1972, as amended by the Clean
Water Act of 1977, (d) the Toxic Substances Control Act of 1976, (iv) the
Emergency Planning and Community Right-To-Know Act of 1986, (v) the Clean Air
Act of 1966, as amended by the Clean Air Act Amendments of 1990, (vi) the
National Environmental Policy Act of 1970, (h) the Endangered Species Act of
1973, (vii) the Safe Drinking Water Act of 1974 and (viii) the Atomic Energy Act
of 1954.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
and the rules and regulations promulgated thereunder.
 
“Excess Cash Flow” means, as of any Quarterly Application Date, the aggregate
amount of Restricted Payments (as defined in the Phase I Credit Agreement)
permitted to be made to Christie/AIX on such date pursuant to Section
7.11(e)(vii) of the Phase I Credit Agreement.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder, or any similar successor statute.
 
“Excluded Taxes” means, with respect to the Holder, or any other recipient of
payment to be made by or on account of any obligations of the Company or any of
its Subsidiaries under the Notes, (A) income or franchise taxes imposed on (or
measured by) its net income by the United States of America or any other
jurisdiction under the laws of which such recipient is organized, its principal
 
 
5

--------------------------------------------------------------------------------

 
offices are located, it is resident for tax purposes or to which it has a
connection giving rise to such taxes other than by reason of the transactions
contemplated by the Notes, the Securities Purchase Agreement or any other
Transaction Document, including the holding of the Notes, and enforcing its
rights thereunder, (B) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which such
Holder or recipient is treated as doing business, (C) any Taxes imposed by
reason of such Holder or recipient failing to provide forms or certifications it
is legally able to provide that would reduce or eliminate such Taxes and that
are reasonably requested by the Company and (D) any withholding taxes payable on
behalf of a Holder at the time it becomes a Holder, except to the extent that
such Holder’s transferor, if any, was entitled, at the time of the transfer to
obtain additional amounts from the Company in respect of such Taxes pursuant to
Section 21 herein.
 
“Fiscal Quarter” has the meaning assigned thereto in the Phase I Credit
Agreement.
 
“Foreign Subsidiary” has the meaning assigned thereto in the Guarantee and
Collateral Agreement.
 
“GAAP” means United States generally accepted accounting principles applied on a
consistent basis.
 
“GE Credit Facility” means that certain Credit Agreement, dated as of August 1,
2006, by and among Christie/AIX, the lenders party thereto and General Electric
Capital Corporation, as administrative agent and collateral agent, as amended,
supplemented or otherwise modified from time to time.
 
“Governmental Authority” means the government of any nation, state or other
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
 
“Guarantee and Collateral Agreement” means that certain Guarantee and Collateral
Agreement, dated as of August 11, 2009, among the Company, the Subsidiary Note
Parties and Sageview Capital Master, L.P., as collateral agent, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
 
“Holders” means, collectively, the Holder and the other holders of the Notes.
 
“Immaterial Subsidiary” means any Subsidiary listed on Schedule 1 of the
Original Note as of the Issuance Date, provided that the aggregate assets or
revenues of all Immaterial Subsidiaries, determined in accordance with GAAP, may
not exceed 1.0% of consolidated total assets or consolidated revenues,
respectively, of the Company and its Subsidiaries, collectively, at any time.
 
“Indebtedness” of any Person means, without duplication, (A) all indebtedness
for borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than unsecured account
trade payables that are (i) entered into or incurred in the ordinary course of
such Person’s business, (ii) on terms that require full payment within ninety
(90) days and (iii) not unpaid in excess of ninety (90) days beyond the date
such invoice is due to be paid or are being contested in good faith and as to
which such reserve as is required by GAAP has been made), (C) all reimbursement
or payment obligations, contingent or otherwise, with respect to commercial
letters of credit, banker’s acceptances, surety bonds and other similar
instruments (including the face amount of all letters of credit), (D) all
obligations evidenced by notes, bonds, debentures, redeemable capital stock
 
 
6

--------------------------------------------------------------------------------

 
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
Capital Lease Obligations, (G) obligations in respect of Disqualified Stock, (H)
all indebtedness referred to in clauses (A) through (G) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person that owns such assets or property has not assumed or become liable for
the payment of such indebtedness and (I) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A)
through (H) above.  The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness expressly provide that such
Person is not liable therefor.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 
“Interest Amount” means, with respect to any Principal, all accrued and unpaid
Interest (including any Default Interest as defined in Section 6(c) but not
including any interest added to the Principal pursuant to Section 6(b)) on such
Principal through and including such date of determination.
 
“Interest Payment Date” means (i) September 30, December 31, March 31 and June
30 of each year (or if such date is not a Trading Day, the immediately
succeeding Trading Day), beginning with September 30, 2009, (ii) the Maturity
Date or Extended Maturity Date, as applicable, and (iii) each other date on
which any Principal of this Note is paid in accordance with the terms of this
Note.
 
“Interest Reserve Account” has the meaning assigned thereto in the Guarantee and
Collateral Agreement.
 
“Issuance Date” means August 11, 2009.
 
“Liens” means, with respect to any asset, any mortgage, lien, pledge,
hypothecation, charge, security interest, encumbrance or adverse claim of any
kind and any restrictive covenant, condition, restriction or exception of any
kind that has the practical effect of creating a mortgage, lien, pledge,
hypothecation, charge, security interest, encumbrance or adverse claim of any
kind (including any of the foregoing created by, arising under or evidenced by
any conditional sale or other title retention agreement, the interest of a
lessor with respect to a Capital Lease Obligation, or any financing lease having
substantially the same economic effect as any of the foregoing).
 
“Majority Holders” means, at any time, Holders of the majority of the principal
amount of Notes then outstanding.
 
“Managed Services Businesses” means the information technology consulting
services and managed network monitoring services of Core Technology Services,
Inc.
 
“Management Services Agreement” means that certain Management Services Agreement
dated as of May 6, 2010 between the Company, as administrative servicer, and
Christie Sub under which the Company has agreed to provide certain management
services and accounting, technical,
 
 
7

--------------------------------------------------------------------------------

 
operational, general and administrative services for Christie Sub and its
Subsidiaries, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
 
“Material Adverse Effect” means a material adverse effect on (i) the legality,
validity or enforceability of any Transaction Document, (ii) the results of
operations, assets, liabilities, business, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole or (iii) the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document.
 
“Maturity Date” means August 11, 2014.
 
“NEC Notes” means, collectively (i) the promissory note, dated as of May 28,
2008, issued by Access DM to NEC Financial Services, LLC, (ii) the promissory
note, dated as of October 22, 2008, issued by Access DM to NEC Financial
Services, LLC and (iii) the promissory note, dated as of October 29, 2008,
issued by Access DM to NEC Financial Services, LLC.
 
“Obligations” has the meaning assigned thereto in the Guarantee and Collateral
Agreement.
 
“Options” means any rights, warrants or options to subscribe for or purchase
Shares or Convertible Securities.
 
“Other Notes” means (i) all of the notes issued pursuant to the Securities
Purchase Agreement, other than this Note and the Original Note, and (ii) all
notes issued in exchange therefor or replacement thereof.
 
“Permitted Lien” means (i) Liens existing on the Issuance Date not otherwise
described in this definition and set forth on Schedule 3.1(jj) to the Securities
Purchase Agreement, (ii) Liens for taxes, assessments or governmental charges
not at the time due or delinquent or the validity of which is being contested in
good faith by appropriate proceedings diligently prosecuted, which proceedings
have the effect of preventing the forfeiture or sale of the property subject
thereto, and in each case for which adequate reserves in accordance with GAAP
are being maintained, (iii) statutory liens of landlords and Liens arising by
operation of law in the ordinary course of business in favor of carriers and
materialmen, or other similar Liens imposed by law, which are not more than 30
days overdue and remain payable without penalty or which are being contested in
good faith by appropriate proceedings diligently prosecuted, which proceedings
have the effect of preventing the forfeiture or sale of the property subject
thereto, and in each case for which adequate reserves in accordance with GAAP
are being maintained, (iv) Liens arising in the ordinary course of business in
connection with workers’ compensation, unemployment compensation, unemployment
insurance and other types of social security (excluding Liens arising under
ERISA) which are not yet due or delinquent or the validity of which is being
contested in good faith by appropriate proceedings diligently prosecuted, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto, and in each case for which adequate reserves in accordance with
GAAP are being maintained, (v) attachments, appeal bonds (and cash collateral
securing such bonds), judgments and other similar Liens, for sums not exceeding
$500,000 in the aggregate for the Company and its Subsidiaries at any one time
outstanding, arising in connection with court proceedings, provided that the
execution or other enforcement of such Liens is effectively stayed, (vi)
easements, rights of way, restrictions and other similar Liens arising in the
ordinary course of business and not materially detracting from the value of the
property subject thereto and not impairing or interfering in any material
respect with the operation of the business of the Company or any Subsidiary,
(vii) Liens securing Indebtedness permitted under Section 8(c)(ii), provided
that, (a) to the extent such Indebtedness is used (or intended to be used) for
the purchase or acquisition of Satellite Equipment, such
 
 
8

--------------------------------------------------------------------------------

 
Liens attach at all times only to such assets financed (or to be financed) by
such Indebtedness and (b) to the extent any amounts on deposit in the Satellite
Financing Account are used for the purchase or acquisition of Satellite
Equipment, no Liens may attach to such Satellite Equipment other than Liens in
favor of the Holders, (viii) Liens on the assets of, and equity interests in,
Subsequent Phase Subsidiaries securing Permitted Phase II Indebtedness and (ix)
Liens on the assets of, and equity interests in, Phase I Subsidiaries securing
Indebtedness permitted under Section 8(c)(iv).
 
“Permitted Phase II Indebtedness” means any Indebtedness of a Subsequent Phase
Subsidiary (i) as to which neither the Company nor any of its Subsidiaries
(other than (A) the Subsequent Phase Subsidiaries and (B) the immediate parent
of any Subsequent Phase Subsidiary, to the extent limited to the pledge of
capital stock of such Subsequent Phase Subsidiary) provides any Contingent
Obligation or credit support of any kind or is directly or indirectly liable (as
a guarantor or otherwise) and (ii) which does not provide any recourse against
any of the assets of the Company or any of its Subsidiaries (other than the
Subsequent Phase Subsidiaries).
 
“Person” means any individual, firm, corporation, partnership, limited liability
company, trust, incorporated or unincorporated association, joint venture, joint
stock company, Governmental Authority or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
 
“Phase I Consolidated Net Income” means, for any period, the consolidated net
income (or loss) of the Phase I Subsidiaries as determined in accordance with
GAAP as in effect on the Issuance Date,  excluding (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Phase I Subsidiary or is
merged into or consolidated with any Phase I Subsidiary, (b) the income (or
deficit) of any Person (other than a Phase I Subsidiary) in which any Phase I
Subsidiary has an ownership interest, except to the extent that any such income
is actually received by a Phase I Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Phase I Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by such Subsidiary is not at the time permitted, by law, contract or otherwise.
 
“Phase I Credit Agreement” means that certain Credit Agreement, dated as of May
6, 2010, by and among Christie Sub, the lenders party thereto, Société Générale,
New York Branch, as co-administrative agent and paying agent, and General
Electric Capital Corporation, as co-administrative agent and collateral agent,
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with the terms hereof.
 
“Phase I Digital Deployment Agreement” means a digital deployment agreement
executed by a Phase I Subsidiary with a Person in the business of distributing
theatrical feature films or other traditional or non-traditional motion picture
content.
 
“Phase II Digital Deployment Agreement” means a digital deployment agreement
executed by a Subsequent Phase Subsidiary with a Person in the business of
distributing theatrical feature films or other traditional or non-traditional
motion picture content.
 
“Phase I EBITDA” means, for any period, Phase I Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of Phase I Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Notes), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and non-recurring organization costs, (e) any
extraordinary charges or losses determined in accordance with GAAP as in
 
 
9

--------------------------------------------------------------------------------

 
effect on the Issuance Date, and (f) any other non-cash charges, non-cash
expenses or non-cash losses for such period (excluding any such charge, expense
or loss incurred in the ordinary course of business that constitutes an accrual
of or a reserve for cash charges for any future period), provided, however, that
cash payments in respect of such non-cash charges, expenses or losses (excluding
any such charge, expense or loss incurred in the ordinary course of business
that constitutes an accrual of or a reserve for cash charges for any future
period) shall be subtracted from Phase I Consolidated Net Income in calculating
Phase I EBITDA in the period when such payments are made, and minus, to the
extent included in the statement of such Phase I Consolidated Net Income for
such period, the sum of (i) interest income, (ii) any extraordinary income or
gains determined in accordance with GAAP as in effect on the Issuance Date and
(iii) any other non-cash income (excluding any items that represent the reversal
of any accrual of, or cash reserve for, anticipated cash charges in any prior
period that are described in the parenthetical to clause (f) above), all as
determined on a consolidated basis.
 
“Phase I Master License Agreement” means a license agreement executed by a Phase
I Subsidiary with a Person in the business of owning or operating one or more
cineplexes used for the exhibition of traditional or non-traditional motion
picture content.
 
“Phase II Master License Agreement” means a license agreement executed by a
Subsequent Phase Subsidiary with a Person in the business of owning or operating
one or more cineplexes used for the exhibition of traditional or non-traditional
motion picture content.
 
“Phase I Subsidiaries” means Christie/AIX, Christie Sub and any of their
Subsidiaries primarily engaged in the financing or deployment of digital cinema
equipment.
 
“Preferred Stock” means (A) the Company’s preferred stock, $0.001 par value,
including the Series A 10% Non-Voting Cumulative Preferred Stock, $0.001 par
value, and (B) any capital stock resulting from a reclassification of such
preferred stock.
 
“Principal” means the outstanding principal amount of this Note as of any date
of determination (including any Interest added to the outstanding principal
amount of this Note pursuant to Section 6(b)).
 
“Principal Market” means, with respect to the Common Stock, the Nasdaq Global
Market or such other primary exchange on which the Common Stock subsequently
becomes traded, and with respect to any other security, the principal securities
exchange or trading market for such other security.
 
“Quarterly Application Date” has the meaning assigned thereto in the Phase I
Credit Agreement.
 
“Registration Rights Agreement” means that certain Registration Rights
Agreement, dated as of August 11, 2009, between the Company and the Purchasers,
as the same may be amended, supplemented or otherwise modified from time to
time.
 
“Restatement Date” means May 6, 2010.
 
“Satellite Financing Account” means the “Account” as such term is defined in the
Satellite Financing Control Agreement.
 
 
10

--------------------------------------------------------------------------------

 
“Satellite Financing Amount” means the aggregate principal amount of money
deposited by the Company into the Satellite Financing Account on the Restatement
Date, which amount shall be $3,873,045.
 
“Satellite Financing Control Agreement” means the Account Control Agreement,
dated as of May 6, 2010, among the Company, the Collateral Agent and UBS.
 
“SEC” means the United States Securities and Exchange Commission, or any
successor thereto.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute.
 
“Servicing Fee” has the meaning assigned thereto in the Management Services
Agreement.
 
“Shares” means the shares of Common Stock.
 
“Subsequent Phase Subsidiaries” means (i) Access Digital Cinema Phase 2, Corp.
and any of its Subsidiaries and (ii) any Subsidiary formed after the Issuance
Date, in each case provided such Subsidiary is primarily engaged in the
financing or deployment of digital cinema equipment as contemplated by the Phase
II Digital Deployment Agreements as in effect on the Issuance Date.
 
“Subsidiary” means any entity in which the Company or any one or more of its
Subsidiaries owns, directly or indirectly, a majority of the outstanding capital
stock, equity or similar interests having by their terms ordinary voting power
to elect a majority of the board of directors or others performing similar
functions with respect to such entity.
 
“Subsidiary Note Parties” means all Subsidiaries of the Company other than (i)
the Phase I Subsidiaries (so long as the Phase I Credit Agreement is
outstanding), (ii) Access DM (so long as any of the NEC Notes are outstanding),
(iii) the Subsequent Phase Subsidiaries and (iv) the Immaterial Subsidiaries.
 
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions.
 
“Taxes” means any federal, state, provincial, county, local, foreign and other
taxes (including, without limitation, income, profits, windfall profits,
alternative, minimum, accumulated earnings, personal holding company, capital
stock, premium, estimated, excise, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto.
 
“The Pavilion Theatre” means the nine-screen digital movie theater and showcase,
located in Brooklyn, New York, operated by the Company and equipped to
demonstrate the Company’s integrated digital cinema solutions.
 
 
11

--------------------------------------------------------------------------------

 
“Three FQ Period” means, for any Quarterly Application Date, the first three
Fiscal Quarters of the four-Fiscal Quarter period ended most recently prior to
such Quarterly Application Date.
 
“Trading Day” means any day on which the Common Stock is traded on its Principal
Market; provided that “Trading Day” shall not include any day on which the
Principal Market is open for trading for fewer than 4.5 hours.
 
“Transaction Documents” means this Note, the Other Notes, the Securities
Purchase Agreement, the Warrant, the Registration Rights Agreement, the
Guarantee and Collateral Agreement, the Cash Collateral Control Agreement and
each of the other agreements to which the Company is a party or by which it is
bound and which is entered into by the parties to the Securities Purchase
Agreement in connection with the transactions contemplated thereby.
 
“Transfer Restriction Termination Event” means, following the Issuance Date, the
earliest to occur of (i) the second anniversary of the Issuance Date, (ii)
consummation of a Change of Control or (iii) an Event of Default.
 
“UBS” means UBS Financial Services Inc.
 
“Warrants” means those certain Warrants issued on the Issuance Date pursuant to
the Securities Purchase Agreement.
 
(b)           Terms Defined Elsewhere in this Note.  The following terms are
defined elsewhere in this Note as follows:
 
“Acceleration Amount”
Section 9(b)
“Alternative Satellite Indebtedness”
Section 8(bb)
“Bankruptcy Law”
Section 9(a)
“Cash Interest Election”
Section 6(b)
“Company”
Preamble
“Company Process Agent”
Section 23
“Custodian”
Section 9(a)
“Default Interest”
Section 6
“Event of Default”
Section 9(a)
“Extended Maturity Date”
Section 4
“Holder”
Preamble
“Holding Company”
Section 8(y)
“Incumbent Directors”
Section 2
“Interest”
Preamble
“Investments”
Section 8(f)
“Moody’s”
Section 8(f)
“Note”
Section 1
“Notice of Change of Control”
Section 5(c)(i)
“Notice of Redemption Upon Change of Control”
Section 5(c)(i)
“Notes”
Section 1
“Original Note” Section 1

 
 
12

--------------------------------------------------------------------------------

 
 
“Original Principal Amount”
Preamble
“Permitted Investments”
Section 8(f)
“Prepayment Date”
Section 2(b)
“Redemption Price”
Section 5(a)
“Registrar”
Section 17
“S&P”
Section 8(f)
“Satellite Equipment”
Section 8(bb)
“Securities Purchase Agreement”
Section 1
“Tax Refund”
Section 21(a)
“Void Acceleration Notice”
Section 9(c)
“Void Optional Redemption Notice”
Section 5(f)

 
4.           Extended Maturity Date.
 
(a)           The Company shall have the right, in its sole discretion, to
extend irrevocably the Maturity Date until August 11, 2015 (as applicable, the
“Extended Maturity Date”), provided, that (i) Phase I EBITDA in respect of the
twelve (12) month period ending on June 30, 2014 is not less than $40,000,000,
(ii) the aggregate outstanding principal amount of Indebtedness of the Phase I
Subsidiaries as of the Maturity Date is less than $10,000,000, (iii) the
aggregate principal amount of Indebtedness of the Company, the Subsidiary Note
Parties and the Phase I Subsidiaries that is due and payable on or before
November 11, 2015 does not exceed $10,000,000, (iv) no Default or Event of
Default has occurred and is continuing at such time, (v) neither the Company nor
any Subsidiary Note Party has made (or will make) any Investment in any
Subsequent Phase Subsidiary during the period from August 11, 2013 to the
Extended Maturity Date and (vi) the Company has provided Holder with an
irrevocable written notice of such election, via electronic delivery or by
overnight courier, at any time at least ten (10) Trading Days prior to the
Maturity Date certifying that the foregoing conditions shall be satisfied as of
the Maturity Date and including a calculation of the Phase I EBITDA required by
the foregoing clause (i).
 
(b)           Notwithstanding anything contained herein or in any of the other
Transaction Documents to the contrary, if the Notes shall remain outstanding
after the fifth (5th) anniversary of the initial issuance thereof and the
aggregate amount that would be includible in the gross income of the Holders
with respect to the Notes (within the meaning of the Code section 163(i)) for
all periods ending on or before any Interest Payment Date that occurs after that
fifth (5th) anniversary (the “Aggregate Accrual”) would otherwise exceed an
amount equal to the sum of (i) the aggregate amount of interest to be paid
(within the meaning of Code section 163(i)) under the Notes on or before such
Interest Payment Date and (ii) the product of (A) the issue price (as defined in
Code section 1273(b)) of the Notes and (B) the yield to maturity (interpreted in
accordance with Code section 163(i)) of the Notes (such sum, the “Maximum
Accrual”), then the Company shall prepay to the Holders in cash on each Interest
Payment Date occurring after such fifth (5th) anniversary that minimum portion
of the Principal and/or Interest Amount necessary to prevent the Notes from
constituting “applicable high yield discount obligations” within the meaning of
Code section 163(i), up to an amount equal to the excess, if any, of the
Aggregate Accrual over the Maximum Accrual, and the amount of such payment shall
be treated for U.S. federal income tax purposes as an amount of interest to be
paid (within the meaning of Code section 163(i)(2)(B)(1)) under the Notes.  This
provision is intended to prevent the Notes from being classified as “applicable
high yield discount obligations”, as defined in Code section 163(i), and shall
be interpreted consistently therewith.
 
 
13

--------------------------------------------------------------------------------

 
5.           Redemption at Option of the Holder.
 
(a)           Redemption Option Upon a Change of Control.  In addition to all
other rights of the Holder contained herein, after a Change of Control, the
Holder shall have the right, at the Holder’s option, exercised by written notice
to the Company given within thirty (30) days of such Change of Control, to
require the Company to redeem all or a portion of the Principal at a price (the
“Redemption Price”) equal to the sum of (i) 101% of such Principal plus (ii)
cash in an amount equal to the Interest Amount with respect to such Principal
through and including the date of redemption pursuant to this Section 5.
 
(b)           Intentionally deleted.
 
(c)           Mechanics of Redemption Upon Notice of Change of Control and
Payment Upon a Change of Control.
 
(i)             No sooner than thirty (30) nor later than fifteen (15) Trading
Days prior to the consummation of a Change of Control, but in any event not
prior to the public announcement of such Change of Control, the Company shall
deliver written notice thereof via electronic delivery and overnight courier (a
“Notice of Change of Control”) to the Holder and each holder of the Other
Notes.  At any time during the period beginning after receipt of a Notice of
Change of Control (or, in the event a Notice of Change of Control is not
delivered at least twenty (20) days prior to a Change of Control, at any time on
or after the date which is twenty (20) days prior to a Change of Control) and
ending on the date that is five (5) Trading Days prior to the consummation of
such Change of Control, the Holder may require the Company to redeem all or a
portion of the Principal pursuant to Section 5(a) by delivering written notice
thereof via electronic delivery and overnight courier (a “Notice of Redemption
Upon Change of Control”) to the Company, which Notice of Redemption Upon Change
of Control shall indicate (I) the amount of Principal that the Holder is
submitting for redemption and (II) the applicable Redemption Price, as
calculated pursuant to Section 5(a).
 
(ii)             The Company shall pay and/or deliver the Redemption Price
simultaneously with the consummation of the Change of Control; provided that, if
required by Section 5(g), this Note shall have been so delivered to the
Company.  The Company shall not enter into any binding agreement or other
arrangement with respect to a Change of Control unless the Company provides that
the payments provided for in this Section 5(c) shall have priority to payments
to stockholders in connection with such Change of Control and the Company
complies with such provision.
 
(d)           Intentionally deleted.
 
(e)           Intentionally deleted.
 
(f)           Intentionally deleted.
 
(g)           Book-Entry.  Notwithstanding anything to the contrary set forth
herein, upon redemption of this Note in accordance with the terms hereof, the
Holder shall not be required to physically surrender this Note to the Company
unless all of the Principal is being redeemed.  The Holder and the Company shall
each maintain records showing the Principal redeemed and the dates of such
redemptions or shall use such other method, reasonably satisfactory to the
other, so as not to require physical surrender of this Note upon each such
redemption.  In the event of any dispute or discrepancy, such records of the
Company establishing the Principal to which the Holder is entitled shall be
controlling and determinative in the absence of demonstrable
error.  Notwithstanding the foregoing, if this Note is redeemed in part as
aforesaid, the Holder may not transfer this Note unless the Holder first
physically
 
 
14

--------------------------------------------------------------------------------

 
surrenders this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note of like tenor, registered as
the Holder may request, representing in the aggregate the remaining Principal
represented by this Note.  The Holder and any assignee, by acceptance of this
Note, acknowledge and agree that, by reason of the provisions of this paragraph,
following prepayment or redemption of any portion of this Note, the Principal of
this Note may be less than the principal amount stated on the face hereof.
 
(h)           Disputes; Miscellaneous.  In the event of a bona fide dispute as
to the determination of the arithmetic calculation of the Redemption Price, the
Company shall transmit an explanation of the disputed arithmetic calculations to
the Holder via electronic delivery within two (2) Trading Days of receipt of
Notice of Redemption Upon Change of Control.  If the Holder and the Company are
unable to agree upon the arithmetic calculation of the Redemption Price within
one (1) Trading Day of such disputed arithmetic calculation being transmitted to
the Holder, then the Company shall promptly (and in any event within two (2)
Trading Days) submit via electronic delivery the disputed arithmetic calculation
of the Redemption Price to the Company’s independent, outside accountants.  The
Company shall direct the accountants to perform the calculations and notify the
Company and the Holder of the results no later than two (2) Trading Days from
the time it receives the disputed calculations.  Such accountant’s calculation
shall be binding upon all parties absent demonstrable error.  The costs and
expenses of the accountant engaged pursuant to this Section 5(h) shall be borne
equally by the Company and the Holder.  In the event of a redemption pursuant to
this Section 5 of less than all of the Principal, the Company shall promptly
cause to be issued and delivered to the Holder a replacement note representing
the remaining Principal that has not been redeemed, if required pursuant to
Section 5(g).
 
 
6.           Interest.
 
(a)           Cash Portion.  Interest shall be payable at the Cash Interest Rate
on each Interest Payment Date, including the Maturity Date or the Extended
Maturity Date, as applicable, to the record Holder of this Note on such Interest
Payment Date in cash.  On each Interest Payment Date, funds on deposit in the
Interest Reserve Account shall be withdrawn by the Collateral Agent and applied
to pay Interest payable pursuant to this Section 6(a) in accordance with the
Guarantee and Collateral Agreement; provided that, to the extent funds on
deposit in the Interest Reserve Account at such time are insufficient to pay
such Interest in full or the Cash Collateral Control Agreement is no longer in
effect, the Company shall pay the balance of such Interest directly on such
Interest Payment Date.
 
(b)           PIK Portion.  Additional Interest shall be payable at a rate per
annum equal to 8.0% on each Interest Payment Date to the Holder of this Note on
such Interest Payment Date by increasing the principal amount of this Note and
each Other Note, provided that (i) any such Interest payable on the Maturity
Date or the Extended Maturity Date, as applicable, shall be payable in cash and
(ii) at the Company’s election, all or any portion of the Interest payable under
this Section 6(b) may be paid in cash (such an election, the “Cash Interest
Election”).  Any Interest added to the principal amount of this Note pursuant to
this Section 6(b) shall thereafter bear Interest at the interest rates as
provided in this Section 6.  If any Cash Interest Election is made in respect of
this Note on any Interest Payment Date, the Company shall make a Cash Interest
Election under each Other Note in an equal portion relative to the respective
unpaid principal amounts outstanding under this Note and the Other Notes at such
time.
 
(c)           Default Interest.  Any accrued and unpaid Interest which is not
paid in accordance with Section 6(a) within five (5) Trading Days of the
applicable Interest Payment Date or any unpaid Principal which is not paid when
due shall bear interest at a rate equal to the lesser of 1.0% per month
(prorated for partial months) or the highest lawful rate per annum from such
Interest Payment Date or such due date, as applicable, until the same is paid in
full (the “Default Interest”).
 
 
15

--------------------------------------------------------------------------------

 
7.           Collateral Agent.  The Holder, by accepting this Note, hereby
agrees to the appointment of the Collateral Agent and the provisions of Section
8 of the Guarantee and Collateral Agreement.
 
8.           Covenants. The Company shall observe each of the following
covenants, unless the Majority Holders otherwise consent in writing:
 
(a)           Corporate Existence.  From the Issuance Date and for so long as
any of the Obligations are outstanding, the Company shall, and shall cause each
of its Subsidiaries to (i) conduct its operations in the ordinary course of
business consistent with past practice, (ii) maintain its corporate existence
and take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business (except as
otherwise permitted under Section 8(p)), and (iii) maintain and protect the
validity and enforceability of all material Intellectual Property Rights used in
the business of the Company and its Subsidiaries, including by pursuing each
registration and application for material Intellectual Property Rights and
conducting all commercially reasonable actions necessary to enforce its material
Intellectual Property Rights against any misappropriation, violation or
infringement.
 
(b)           Intentionally Deleted.
 
(c)           Limitations on Indebtedness.  From the Issuance Date and for so
long as any of the Obligations are outstanding, the Company shall not, and shall
not permit any of its Subsidiaries to, issue, incur, assume, maintain, suffer to
exist or extend the term of any Indebtedness, except for:
 
(i)              Indebtedness under the Notes and all Indebtedness existing on
the Issuance Date and set forth on Schedule 3.1(jj) to the Securities Purchase
Agreement;
 
(ii)             other Indebtedness of the Company and the Subsidiary Note
Parties, in an aggregate principal amount not to exceed, together with amounts
withdrawn from the Satellite Financing Account in accordance with Section 8(bb),
$10,000,000 at any time; provided, however, that (I) the proceeds of such
Indebtedness are used (or required by the terms of such Indebtedness to be used)
(A) for the purchase, acquisition or installation of Satellite Equipment or (B)
to fund working capital requirements of the Company and its Subsidiaries; (II)
the yield with respect to such Indebtedness shall not exceed a rate equal to 12%
per annum; and (III) the aggregate number of shares of Common Stock, Preferred
Stock and Convertible Securities, if any, that are issued in connection with the
incurrence of such Indebtedness shall not exceed 1% of the total Common Stock,
Preferred Stock and Convertible Securities outstanding, on a fully diluted
basis, immediately prior to the incurrence of such Indebtedness and the issuance
of such Common Stock, Preferred Stock and/or Convertible Securities;
 
(iii)             Indebtedness of (A) the Company owing to any Subsidiary or (B)
any Subsidiary owing to the Company or any other Subsidiary to the extent
permitted by Section 8(f);
 
(iv)             Indebtedness incurred by the Phase I Subsidiaries under the
Phase I Credit Agreement in an aggregate principal amount not to exceed
$172,500,000; and
 
(v)             Permitted Phase II Indebtedness.
 
(d)           Limitation on Liens.  From the Issuance Date and for so long as
any of the Obligations are outstanding, the Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired by the
Company or any of the Subsidiaries other than a Permitted Lien.
 
 
16

--------------------------------------------------------------------------------

 
(e)           Limitation on Prepayment of Debt. From the Issuance Date and for
so long as any of the Obligations are outstanding, the Company shall not, and
shall not permit any of its Subsidiaries to redeem, retire, defease or otherwise
repay or prepay in cash any principal of any Indebtedness listed on Schedule
3.1(jj) to the Securities Purchase Agreement other than (i) the 2007 Notes, (ii)
the prepayment in full of the GE Credit Facility and the Christie Note with the
proceeds of Indebtedness under the Phase I Credit Agreement, (iii) as required
by the terms of such Indebtedness in effect on the Issuance Date, (iv)
Indebtedness of any Subsequent Phase Subsidiary, or (v) in the case of
Indebtedness (other than Indebtedness of the Subsequent Phase Subsidiaries),
from the proceeds of an offering of equity securities of the Company.
 
(f)           Restriction on Loans; Investments.  From the Issuance Date and for
so long as any of the Obligations are outstanding, the Company shall not, and
shall not permit any of its Subsidiaries to (except for (A) Investments (as
defined below) existing as of the Issuance Date and set forth on Schedule
3.1(jj) of the Securities Purchase Agreement, (B) Permitted Investments (as
defined below), (C) Investments in the Subsequent Phase Subsidiaries in an
aggregate amount not to exceed $2,000,000; provided that, in no event, shall any
such Investment be made after the Maturity Date, and (D) Investments on the
Issuance Date in an aggregate amount not to exceed $5,000,000 in Phase I
Subsidiaries in order to pay down the GE Credit Facility, as contemplated by the
GECC Amendment Agreement (as defined in the Securities Purchase Agreement)) make
any loans to, or investments in, any other Person, including through lending
money, deferring the purchase price of property or services, purchasing any
note, bond, debenture or similar instrument, providing any letter of credit,
guaranteeing (or taking any action that has the effect of guaranteeing) any
obligations of any other Person, or acquiring any equity securities of, or other
ownership interest in, or making any capital contribution to any other Person
(“Investments”); provided, however, that the Company and the Subsidiary Note
Parties may make Investments in each other and the Subsidiaries that are not
Subsidiary Note Parties may make Investments in the Company or any
Subsidiary.  “Permitted Investments” means (a) marketable direct obligations
issued by, or unconditionally guaranteed or insured by, the United States or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within two years from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of one year or less
(provided that if such certificates of deposit, time deposits, Eurodollar time
deposits or overnight bank deposits are in an aggregate amount of $250,000 or
less, having maturities of two years or less) from the date of acquisition
issued by any commercial bank organized under the laws of the United States or
any state thereof having combined capital and surplus of not less than
$500,000,000; (c) commercial paper of an issuer rated at least A-1 by Standard &
Poor’s Ratings Services (“S&P”) or P-1 by Moody’s Investors Service, Inc.
(“Moody’s”), or carrying an equivalent rating by a nationally recognized rating
agency if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within nine months from the
date of acquisition; (d) repurchase obligations of any commercial bank
satisfying the requirements of clause (b) of this definition, having a remaining
term of not more than 30 days, with respect to securities issued or
unconditionally guaranteed or insured by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States; (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least AA by S&P or Aa by
Moody’s; (f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any commercial bank
satisfying the requirements of clause (b) of this definition; (g) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition or
money market funds that (A) comply with the criteria set forth in SEC Rule 2a-7
under the Investment Company Act of 1940, as amended, (B) are rated AAA by S&P
and Aaa by Moody’s and (C) have portfolio assets of at least
 
 
17

--------------------------------------------------------------------------------

 
$5,000,000,000; or (h) other Investments in an amount not to exceed $1,000,000
in the aggregate at any one time outstanding, provided that, in no event, shall
any Investment be made under this clause (h) in any Subsequent Phase Subsidiary
after the Maturity Date.
 
(g)           Restrictions on Subsidiary Equity.  From the Issuance Date and for
so long as any of the Obligations are outstanding, the Company shall not, and
shall not permit any of its Subsidiaries to issue, transfer or pledge any
capital stock or equity interest in any Subsidiary to any Person other than (i)
any transfer or issuance to the Company or any Subsidiary Note Party and the
issuance of 100% of the equity of Christie Sub to Christie/AIX, (ii) pursuant to
the Guarantee and Collateral Agreement, (iii) the pledge of capital stock of the
Phase I Subsidiaries pursuant to (A) prior to the Restatement Date, the GE
Credit Facility and (B) on and after the Restatement Date, the Phase I Credit
Agreement, (iv) the issuance of capital stock or equity interests of a
Subsequent Phase Subsidiary to the Company, a Subsidiary Note Party or another
Subsequent Phase Subsidiary or (v) the pledge of capital stock or equity
interests of any Subsequent Phase Subsidiary to secure Permitted Phase II
Indebtedness.
 
(h)           Restriction on Purchases or Payments.  From the Issuance Date and
for so long as any of the Obligations are outstanding, the Company shall not,
and shall not permit any of its Subsidiaries to, (i) declare, set aside or pay
any dividends on or make any other distributions (whether in cash, stock, equity
securities or property) in respect of any capital stock or set any record date
with respect to any of the foregoing, except as may be required by the NOL
Rights Agreement (as defined in the Securities Purchase Agreement); provided
that beginning September 30, 2010, the Company may pay dividends in accordance
with the terms of the Preferred Stock outstanding as of the Issuance Date; and
provided, further, that any Subsidiary may declare, set aside or pay any
dividends on or make any other distributions (whether in cash, stock, equity
securities or property) in respect of any of its capital stock that is held
solely by the Company or by another Subsidiary, or (ii) purchase, redeem or
otherwise acquire, directly or indirectly, any shares of the Company’s capital
stock or the capital stock of any of its Subsidiaries; provided, however, that
so long no Event of Default has occurred and is continuing the Company may
repurchase shares of its securities from its employees and directors pursuant to
an Approved Stock Plan in an amount not to exceed $250,000 in any fiscal year,
or (iii) permit any of its Subsidiaries to enter into any agreement which would
limit or restrict the Company’s or any of its Subsidiaries’ ability to perform
under, or take any other voluntary action to avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it
under, this Note, the Securities Purchase Agreement, or any other Transaction
Document.
 
(i)           Restriction on Asset Dispositions.  From the Issuance Date and for
so long as any of the Obligations are outstanding, the Company shall not, and
shall not permit any of its Subsidiaries to, Dispose of any of its property,
whether now owned or hereafter acquired, except:
 
(i)             the Disposition of obsolete or worn out property in the ordinary
course of business;
 
(ii)              the sale of inventory in the ordinary course of business;
 
(iii)             any Disposition permitted by Section 8(g) or 8(p);
 
(iv)             the Disposition by any Subsidiary of any or all of its assets
to the Company or any Subsidiary Note Party;
 
 
18

--------------------------------------------------------------------------------

 
(v)             the Disposition of The Pavilion Theatre and/or the Managed
Services Business at fair market value; provided that 100% of the consideration
thereof is payable in cash or Permitted Investments;
 
(vi)             the Disposition of the capital stock of any Subsequent Phase
Subsidiary; provided that the Company continues to act as the “Servicer” to such
Subsequent Phase Subsidiary on terms (including economics) no less favorable to
the Company than set forth in the Phase II Digital Deployment Agreements as in
effect on the Issuance Date; provided, further, that 100% of the consideration
thereof is payable in cash or Permitted Investments;
 
(vii)             the Disposition of property not referred to in clauses
(i)-(vi), (viii) and (ix) of this Section 8(i) having a fair market value not to
exceed $500,000 in the aggregate; provided that 100% of the consideration
thereof is payable in cash or Permitted Investments;
 
(viii)             the Disposition by Christie/AIX of all of its assets and
liabilities to Christie Sub; and
 
(ix)              the Disposition by a Subsequent Phase Subsidiary of property
or assets to another Subsequent Phase Subsidiary.

Notwithstanding anything to the contrary, any earn-out payments payable to the
Company or any Subsidiary and services credited pursuant to any agreement
entered into in connection with a Disposition shall be deemed cash consideration
for purposes of this Section 8(i).

(j)           Restriction on Swap Agreements.  From the Issuance Date and for so
long as any of the Obligations are outstanding, the Company shall not, and shall
not permit any of its Subsidiaries to, enter into any Swap Agreement, except (a)
Swap Agreements entered into to hedge or mitigate risks to which the Company or
any Subsidiary has actual exposure (other than those in respect of capital
stock) and not for speculative purposes and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of the Company or
any Subsidiary.
 
(k)           Clauses Restricting Subsidiary Distributions.  From the Issuance
Date and for so long as any of the Obligations are outstanding, the Company
shall not, and shall not permit any of its Subsidiaries to, enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to (i) make, declare, set aside or pay any dividends
on or make any other distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Company or any other Subsidiary, (ii) make loans or
advances to, or other Investments in, the Company or any other Subsidiary or
(iii) transfer any of its assets to the Company or any other Subsidiary, except
for such encumbrances or restrictions existing under (A) the GE Credit Facility
as of the Issuance Date, (B) the Phase I Credit Agreement as of the Restatement
Date or (C) any Permitted Phase II Indebtedness.
 
(l)           Restrictions on Changes in Lines of Business.  From the Issuance
Date and for so long as any of the Obligations are outstanding, the Company
shall not enter into any business, either directly or through any Subsidiary,
except for those businesses in which the Company and its Subsidiaries are
engaged on the Issuance Date or that are reasonably related thereto.
 
(m)           Restriction on Amendments to Material Documents.  From the
Issuance Date and for so long as any of the Obligations are outstanding, the
Company shall not, and shall not
 
 
19

--------------------------------------------------------------------------------

 
permit any of its Subsidiaries to, amend, supplement or otherwise modify
(pursuant to a waiver or otherwise) in a manner adverse to the interests of the
Holders in any material respect, including for the avoidance of doubt, any
amendment that would be less favorable to the Phase I Subsidiaries in any
material respect, the certificate of incorporation, by-laws, operating,
management or partnership agreement or other organizational documents of the
Company or any Subsidiary Note Party (including any certificate of designation
with respect to any Preferred Stock), except as permitted by Section 4.28 of the
Securities Purchase Agreement or as required to (i) change the Company’s name to
Cinedigm Digital Cinema Corp., (ii) effect a reverse stock split, (iii) disable
the anti-takeover provisions of Section 203 of the Delaware General Corporation
Law or (iv) implement the provisions of Section 4.29 of the Securities Purchase
Agreement.
 
(n)           Restriction on Amendments to Phase I Material Agreements.  (i)
From the Issuance Date and for so long as any of the Obligations are
outstanding, the Company shall not permit any Phase I Subsidiary to (A) amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) in a manner
adverse to the Holders or the Company in any material respect the certificate of
incorporation, by-laws, operating, management or partnership agreement or other
organizational documents of any Phase I Subsidiary (including, without
limitation, the Management Services Agreement), (B) amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) in a manner adverse to the
interests of the Holders or the Company in any material respect, including for
the avoidance of doubt, any amendment that would be less favorable to the Phase
I Subsidiaries in any material respect, any Phase I Master License Agreement or
any Phase I Digital Deployment Agreement or (C) enter into any new Phase I
Master License Agreement or Phase I Digital Deployment Agreement, which has
terms that differ from the Phase I Master License Agreements or any Phase I
Digital Deployment Agreements, as applicable, as of the Issuance Date, and which
change in terms is adverse to the interests of the Holders or the Company in any
material respect.
 
(ii)              From the Restatement Date and for so long as any of the
Obligations are outstanding, the Company shall not permit any Phase I Subsidiary
to amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the
Phase I Credit Agreement without the prior written consent of the Majority
Holders (such consent not to be unreasonably withheld or delayed).

(o)           Restriction on Amendments to Phase II Material Agreements. From
the Issuance Date and for so long as any of the Obligations are outstanding, the
Company shall not, and shall not permit any of its Subsidiaries to (i) amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) in a manner
adverse to the Holders or the Company in any material respect (A) any agreement
relating to any Permitted Phase II Indebtedness, (B) the certificate of
incorporation, by-laws, operating, management or partnership agreement or other
organizational documents of any Subsequent Phase Subsidiary or (C) any Phase II
Master License Agreement or any Phase II Digital Deployment Agreement or (ii)
enter into any new Phase II Master License Agreement or Phase II Digital
Deployment Agreement, which has terms that differ in any material respect from
the Phase II Master License Agreements or any Phase II Digital Deployment
Agreements, as applicable, as of the Issuance Date, and which change in terms is
adverse to the Holders or the Company in any material respect.
 
(p)           Restriction on Fundamental Changes.  From the Issuance Date and
for so long as any of the Obligations are outstanding, the Company shall not,
and shall not permit any of its Subsidiaries to, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), except:
 
(i)             the Company may consummate (A) a merger, consolidation or
business combination in which holders of voting securities of the Company
immediately prior to the transaction continue after the transaction to hold,
directly or indirectly, a majority of the aggregate voting
 
 
20

--------------------------------------------------------------------------------

 
power of all classes of voting securities of the surviving Person entitled to
vote generally for the election of the members of the board of directors (or
their equivalent if other than a corporation) of such Person, or (B) a migratory
merger solely for the purpose of changing the jurisdiction of incorporation of
the Company; provided that the surviving Person (if other than the Company) (I)
be organized under the laws of the Untied States or any state thereof, (II)
agree to assume this Note and the Company’s obligations hereunder and the
Guarantee and Collateral Agreement and the Company’s obligations thereunder and
(III) deliver to the Holder an opinion of counsel to the Company confirming the
continuing enforceability of this Note, the Guarantee and Collateral Agreement
and the perfection and priority of the Liens created thereunder;
 
(ii)             that any Subsidiary may be merged with or into the Company
(provided that the Company shall be the continuing or surviving corporation) or
any Subsidiary Note Party (provided that the Subsidiary Note Party shall be the
continuing or surviving corporation); and
 
(iii)             the Company and the Subsidiaries may distribute all of the
capital stock of any or all of the Subsequent Phase Subsidiaries so long as the
Company continues to act as the “Servicer” to such Subsequent Phase Subsidiary
on terms (including economics) no less favorable to the Company than set forth
in the Phase II Digital Deployment Agreements as in effect on the Issuance Date.
 
(q)           Restriction on Affiliate Transactions.  From Issuance Date and for
so long as any of the Obligations are outstanding, the Company shall not, and
shall not permit any of its Subsidiaries to, enter into or be a party to any
agreement or transaction with any Affiliate (other than a Subsidiary Note
Party), including transfer of any assets to any such Affiliate, except in the
ordinary course of the Company’s or such Subsidiary’s business and upon fair and
reasonable terms that are no less favorable to the Company or such Subsidiary,
as the case may be, than such Person would obtain in a comparable arms’-length
transaction with a Person not an Affiliate of the Company or such Subsidiary,
and on terms consistent with the business relationship of the Company or such
Subsidiary and such Affiliate prior to the Issuance Date, if any, except that
Christie/AIX may Dispose of all of its assets to Christie Sub in accordance with
Section 8(i)(viii) and a Subsequent Phase Subsidiary may Dispose of its assets
or property to another Subsequent Phase Subsidiary in accordance with Section
8(i)(ix).
 
(r)           SEC Filings.  From the Issuance Date and for so long as any of the
Obligations are outstanding, (i) the Company shall timely file with the SEC,
within the time periods specified in the SEC’s rules and regulations, all annual
financial information required to be filed with the SEC on Form 10-K or Form
10-KSB, as applicable, all current reports required to be filed with the SEC on
Form 8-K and any other information required to be filed with the SEC; (ii) the
Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would otherwise permit such termination and (iii) the Company shall
deliver (A) copies of all such filings with the SEC to each holder of Notes then
outstanding within one (1) day after the filing thereof with the SEC, unless the
foregoing are filed with the SEC through EDGAR or a similar retrieval system
maintained by the SEC and are immediately available to the public through EDGAR
or such system and (B) electronic copies of all press releases issued by the
Company or any of its Subsidiaries on the same day as the release thereof,
except to the extent any such release is available through Bloomberg Financial
Markets (or any successor thereto) contemporaneously with such issuance.
 
(s)           Additional Deliverables.  From the Issuance Date and for so long
as any of the Obligations are outstanding, the Company shall furnish to the
Holder (i) within thirty (30) days prior to the commencement of each fiscal year
of the Company, an annual budget (it being understood that the initial budget
shall be in a form and with such information and other data as is reasonably
 
 
21

--------------------------------------------------------------------------------

 
satisfactory to the Majority Holders on the Issuance Date and each budget
thereafter shall be prepared in a similar form with corresponding information),
which budget shall be certified by the chief financial officer of the Company as
having been prepared in good faith based upon assumptions believed by the
Company to be reasonable at the time made, (ii) within 10 days after the end of
each Fiscal Quarter, a compliance certificate demonstrating compliance with the
covenants set forth in this Note and stating that no Default or Event of Default
has occurred (or if a Default or Event of Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto), (iii) concurrently with the delivery to the holders of any
Indebtedness of the Company or any Subsidiary having an aggregate principal
amount (or commitments to lend) in excess of $5,000,000 or any representative of
such holders, any financial information, certificates, reports, notices or other
material information furnished to any such Person, (iv) within one (1) Trading
Day after receipt thereof, a copy of any material notice or other material
written communication from any holder of any Indebtedness of the Company or any
Subsidiary having an aggregate principal amount (or commitments to lend) in
excess of $5,000,000 and (v) within 5 days after the end of each Fiscal Quarter,
a certificate setting forth the detailed calculations of (x) the Breakeven
Servicing Fee, (y) the Company Servicing Fee and (z) amounts (if any) due under
Section 2(c)(ii).
 
(t)           Compliance with Laws.  From the Issuance Date and for so long as
any of the Obligations are outstanding, the Company will comply, and cause each
Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations and requirements of Governmental Authorities
(including ERISA and the rules and regulations thereunder and all Environmental
Laws).
 
(u)           Maintenance of Assets; Insurance.  From the Issuance Date and for
so long as any of the Obligations are outstanding the Company will:
 
(i)             keep, and will cause each Subsidiary to keep, all assets
necessary in its business in good working order and condition, ordinary wear and
tear excepted;
 
(ii)             maintain, and cause each Subsidiary to maintain (either in the
name of the Company or in such Subsidiary’s own name), with financially sound
and reputable insurance companies, insurance on all their assets in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies of established repute engaged in the same or
a similar business, which insurance, in the case of the Company and each
Subsidiary Note Party, shall (A) name the Collateral Agent as insured party or
loss payee and (B) be reasonably satisfactory in all other respects to the
Collateral Agent, and the Company and each Subsidiary Note Party shall endeavor
to provide that the issuing insurer shall endeavor to mail thirty (30) days
written notice to the Collateral Agent of any cancellation in coverage thereof;
 
(iii)             furnish to the Holder, upon reasonable written request, full
information as to the insurance carried; and
 
(iii)             within thirty (30) days after the end of each fiscal year of
the Company, furnish to the Collateral Agent and the Holder a report of a
reputable insurance broker with respect to the insurance carried.
 
(v)           Payment of Taxes.  From the Issuance Date and for so long as any
of the Obligations are outstanding, the Company will, and will cause each of
Subsidiary to, pay and discharge, before the same shall become delinquent, all
income and all other material Taxes, assessments and other governmental charges
or levies, imposed upon them or any of their properties or assets or in respect
of their businesses or incomes except for those being contested in good faith by
proper proceedings
 
 
22

--------------------------------------------------------------------------------

 
diligently conducted and against which adequate reserves, in accordance with
GAAP, have been established.
 
(w)           Senior Indebtedness.  Payments of principal and other payments due
under this Note shall not be subordinated to any obligations of the Company or
any Subsidiary Note Party and shall rank senior to all other Indebtedness (other
than payments of trade accounts payable of the Company and the Subsidiary Note
Parties).
 
(x)           Phase I Prepayments and Other Obligations.  From the Restatement
Date and for so long as any of the Obligations are outstanding, the Company
shall (i) cause the Phase I Subsidiaries to, within one business day after each
Quarterly Application Date, distribute 100% of Excess Cash Flow to the Company,
(ii) cause the Christie Sub on each Monthly Application Date (as defined in the
Phase I Credit Agreement) to pay the Servicing Fee earned during such month to
the Company to the extent permitted by the Phase I Credit Agreement and (iii)
apply any optional prepayment first to the scheduled installment of term loans
under the Phase I Credit Agreement due on the maturity date thereof until such
amount is zero.
 
(y)           Holding Company Pledge.  From the Issuance Date and for so long as
any of the Obligations are outstanding, the Company shall not enter into any
transactions pursuant to which all of the capital stock of the Company would be
owned by a corporation, limited liability company, partnership or other entity
(the “Holding Company”), unless such Holding Company agrees to pledge all of the
capital stock of the Company for the benefit of the Holders.
 
(z)           Collateral Agreements.
 
(i)             At such time as the Phase I Credit Agreement has been paid in
full, the Company shall cause each Phase I Subsidiary to (A) become a Subsidiary
Note Party and execute and deliver a joinder to the Guarantee and Collateral
Agreement in the form attached thereto as Annex I, (B) take such actions
necessary or advisable to grant to the Collateral Agent for the benefit of the
Holders a perfected first priority (subject to Liens to the extent permitted by
the Guarantee and Collateral Agreement) security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such Phase I
Subsidiary, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be reasonably requested by the Collateral Agent
and (C) if requested by the Collateral Agent, deliver to the Collateral Agent,
for the benefit of the Holders legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Collateral Agent.
 
(ii)             At such time as the NEC Notes have been paid in full, the
Company shall cause Access DM to (A) become a Subsidiary Note Party and execute
and deliver a joinder to the Guarantee and Collateral Agreement in the form
attached thereto as Annex I, (B) take such actions necessary or advisable to
grant to the Collateral Agent for the benefit of the Holders a perfected first
priority (subject to Liens to the extent permitted by the Guarantee and
Collateral Agreement) security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to Access DM, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Collateral Agent and (C) if requested by the
Collateral Agent, deliver to the Collateral Agent, for the benefit of the
Holders legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Collateral Agent; provided that Access DM shall not pledge the capital stock of
Christie/AIX prior to the date that the Phase I Subsidiaries become Subsidiary
Note Parties pursuant to Section 8(z)(i).
 
 
23

--------------------------------------------------------------------------------

 
(iii)             Upon (A) the formation or acquisition of any new direct or
indirect Subsidiary (other than a Foreign Subsidiary, a Subsequent Phase
Subsidiary or Christie Sub) by the Company or any Subsidiary, or (B) any
Subsidiary ceasing to be an Immaterial Subsidiary, the Company shall, within 15
days (which may be extended by up to additional 15 days by the Majority Holders)
after such formation or acquisition or such Subsidiary ceasing to be an
Immaterial Subsidiary, cause such Subsidiary to (1) become a Subsidiary Note
Party and execute and deliver a joinder to the Guarantee and Collateral
Agreement in the form attached thereto as Annex I, (2) take such actions
necessary or advisable to grant to the Collateral Agent for the benefit of the
Holders a perfected first priority (subject to Liens to the extent permitted by
the Guarantee and Collateral Agreement) security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such
Subsidiary, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be reasonably requested by the Collateral Agent
and (3) if requested by the Collateral Agent, deliver to the Collateral Agent,
for the benefit of the Holders legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Collateral Agent.
 
(iv)             From after the date which is thirty (30) days after the
Issuance Date, the Company shall, and shall cause each Subsidiary Note Party to,
maintain at all times all of its cash and Permitted Investments in excess of
$250,000 in deposit accounts or securities accounts with respect to which the
Collateral Agent has entered into an agreement providing the Collateral Agent
“control” over such accounts within the meaning of the Uniform Commercial Code
(as defined in the Guarantee and Collateral Agreement), in form and substance
reasonably satisfactory to the Collateral Agent.
 
(aa)           Interest Reserve Account.  From the Restatement Date and for so
long as any of the Obligations are outstanding, the Company shall deposit
$125,000 into the Interest Reserve Account on the last business day of each
March, June, September and December of each year.
 
(bb)           Satellite Financing Account. From the Restatement Date and at any
time on or prior to June 30, 2011, the Company may, with the written consent of
the Majority Holders (it being understood that such written consent may be in
the form required by the Satellite Financing Control Agreement in order to
effect withdrawals from the Satellite Financing Account and which written
consent shall not be withheld if the Company certifies in the officer’s
certificate required by clause (i) below that the amounts being withdrawn will
be used for the purchase of Satellite Equipment described on Schedule II hereto
for a price of not more than 110% of the amount therefor set forth in Schedule
II) and in accordance with the provisions of the Satellite Financing Control
Agreement, withdraw amounts on deposit in the Satellite Financing Account, in an
aggregate amount not to exceed the Satellite Financing Amount and interest
accrued thereon, for the purchase, acquisition or installation of satellite
dishes, equipment or infrastructure (collectively, “Satellite Equipment”);
provided that (i) prior to any such withdrawals, the Company shall provide an
officer’s certificate to the Holders, in form and substance reasonably
satisfactory to the Holders, certifying that such amounts shall be used only for
the purchase of Satellite Equipment and (ii) the amount that the Company shall
be entitled to withdraw from the Satellite Financing Account shall be reduced,
on a dollar-for-dollar basis, by any Indebtedness (such Indebtedness,
“Alternative Satellite Indebtedness”) incurred by the Company to finance the
purchase, acquisition or installation of Satellite Equipment.
 
(cc)           Alternative Satellite Indebtedness. The Company shall provide the
Holders with two business days prior written notice of the incurrence of any
Alternative Satellite Indebtedness, which notice shall include (i) the amount
thereof and (ii) the interest rate applicable thereto.
 
 
 
24

--------------------------------------------------------------------------------

 
9.           Defaults and Remedies.
 
(a)           Events of Default.  An “Event of Default” is (i) default in
payment of any Principal of this Note, or any Redemption Price, when and as due;
(ii) default in payment of any Interest on this Note that is not included in an
amount described in the immediately preceding clause (i) that is not cured
within five (5) Trading Days from the date such Interest was due; (iii) any
default in the observance or performance of any covenant or agreement contained
in clauses (c) through (f) and (l) of Section 8; (iv) failure by the Company to
comply with any other provision of this Note or any other Transaction Document
in all material respects within twenty (20) days after the earlier of (x) the
Company’s receipt of notice to comply with such provision or (y) the Company
becoming aware of such default; (v) any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Company in this
Note, the Securities Purchase Agreement, any Transaction Document or in any
certificate or other document delivered pursuant hereto or thereto, shall be
incorrect in any material respect when made or deemed made; (vi) any default in
payment of any Indebtedness or Swap Agreement obligation in excess of
$5,000,000, individually or in the aggregate, or any event or circumstances
arising such that any Person is entitled, or could, with the giving of notice
and/or lapse of time and/or the fulfillment of any condition and/or the making
of any determination, become entitled (A) to require repayment before its stated
maturity of any Indebtedness or Swap Agreement obligation in excess of
$5,000,000 of the Company or any of the Subsidiary Note Parties or Phase I
Subsidiaries, or (B) to take any step to enforce any security for, any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness in excess of $5,000,000 by the Company or
any of the Subsidiary Note Parties or Phase I Subsidiaries, in each case whether
such Indebtedness or Swap Agreement now exists or shall be created hereafter;
(vii) any of the Transaction Documents (including the guarantee contained in
Section 2 of the Guarantee and Collateral Agreement) or any subordination
provisions in any subordinated indebtedness shall cease, for any reason, to be
in full force and effect, or the Company or any of the Subsidiaries shall so
assert; (viii) the Company, the Subsidiary Note Parties or the Phase I
Subsidiaries pursuant to or within the meaning of any Bankruptcy Law (as defined
below): (A) commences a voluntary case; (B) consents to the entry of an order
for relief against it in an involuntary case; (C) consents to the appointment of
a Custodian (as defined below) of it or any of its Subsidiaries for all or
substantially all of its property; (D) makes a general assignment for the
benefit of its creditors; or (E) admits in writing that it is generally unable
to pay its debts as the same become due; (ix) an involuntary case or other
proceeding is commenced directly against the Company or any of the Subsidiary
Note Parties or Phase I Subsidiaries seeking liquidation, reorganization or
other relief with respect to it or its Indebtedness under any Bankruptcy Law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other Bankruptcy Law proceeding
remains undismissed and unstayed for a period of sixty (60) days, or an order of
relief is entered against the Company or any of the Subsidiary Note Parties or
Phase I Subsidiaries as debtor under the Bankruptcy Laws as are now or hereafter
in effect; or (x) one or more final judgments, non interlocutory orders or
decrees shall be entered by a U.S. state or federal or a foreign court or
administrative agency of competent jurisdiction against any the Company or any
of the Subsidiary Note Parties or Phase I Subsidiaries involving in the
aggregate a liability (to the extent not covered by independent third party
insurance as to which the insurers has not denied coverage) as to any single or
related series of transactions, incidents or conditions, of $5,000,000 or more,
and the same shall remain unsatisfied, unvacated, unbonded or unstayed pending
appeal for a period of ninety (90) days after the entry thereof.  The term
“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal, state, or
foreign law for the relief of debtors.  The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
 
(b)           Remedies.  If any Event of Default has occurred and is continuing,
the Majority Holders may, upon written notice to the Company, except in the case
of events described in
 
 
25

--------------------------------------------------------------------------------

 
Sections 9(a)(viii) or 9(a)(ix), in which case no notice shall be required, (i)
declare all of the Principal of the Notes then outstanding (including all
interest added to the Principal pursuant to Section 6(b)) together with the
Interest Amount payable under the terms hereof with respect to such Principal
and all other amounts, including the amounts due under Section 5(a), owing or
payable hereunder and under the Other Notes (the “Acceleration Amount”)
immediately due and payable, in cash, all without presentment, demand, protest
or further act or notice of any kind, all of which are expressly waived by the
Company and (ii) exercise any and all rights and remedies available to the
holder of this Note under this Note, the Securities Purchase Agreement, or any
other Transaction Document at law or in equity.  In addition to any remedy the
Holder may have under this Note, the Securities Purchase Agreement or any other
Transaction Document, such Acceleration Amount shall bear interest at a rate
equal to the Default Rate until paid in full.  Nothing in this Section 9 shall
limit any other rights the Holder may have under this Note, the Securities
Purchase Agreement or any other Transaction Document, including Section 5 of
this Note.
 
(c)           Void Acceleration.  In the event that the Company does not pay the
Acceleration Amount within five (5) Trading Days of this Note becoming due under
Section 9(b), at any time thereafter and until the Company pays such unpaid
Acceleration Amount in full, the Holder shall have the option to, in lieu of
redemption, require the Company to promptly return this Note (to the extent this
Note has been previously delivered to the Company), in whole or any portion
thereof, to the Holder, by sending written notice thereof to the Company via
electronic delivery (the “Void Acceleration Notice”).  Upon the Company’s
receipt of such Void Acceleration Notice, (i) the acceleration pursuant to
Section 9(b) shall be null and void with respect to the portion of this Note
subject to such Void Acceleration Notice and, (ii) the Company shall promptly
return the portion of this Note (to the extent this Note has been previously
delivered to the Company) subject to such Void Acceleration Notice.
 
10.           Notice of Certain Events.  The Company will give prompt (but in
any event no later than five (5) Trading Days after the occurrence of any of the
following events) written notice to the Holder of: (i) the occurrence of any
Default or Event of Default, (ii) the commencement of any litigation or
proceeding affecting the Company or any Subsidiary (A) in which the amount
involved is $2,000,000 or more and not covered by insurance, (B) in which
injunctive or similar relief is sought or (C) which relates to any Transaction
Document or (iii) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
 
11.           Vote to Change the Terms of the Notes.  Except as otherwise
expressly specified herein, the written consent of the Company and the Majority
Holders shall be required for any change in the Guarantee and Collateral
Agreement or the Notes (including this Note) other than an extension of the
Maturity Date pursuant to Section 4(a) hereof; provided that the consent of all
Holders adversely affected thereby shall be required for (a) reductions in the
principal amount of the Notes, (b) extensions of the Maturity Date (other than
an extension of the Maturity Date pursuant to Section 4(a) hereof) or the
Extended Maturity Date, (c) reductions in the Cash Interest Rate, the interest
rate in Section 6(b) or any premium payable pursuant to Sections 2(b) or 5(a),
(d) extensions of any Interest Payment Date, the date of any prepayment pursuant
to Section 2(c) or the date of any redemption pursuant to Section 5 and (e)
changes to any provision of this Section 11. Upon receipt of the consent of the
Majority Holders or all relevant Holders, as applicable, each Note shall be
deemed amended thereby.
 
12.           Lost or Stolen Notes.  Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note and, in the case of loss, theft or destruction, of an
indemnification undertaking by the Holder to the Company satisfactory to the
Company and, in the case of mutilation, upon surrender and cancellation of this
Note, the Company shall execute and deliver a new Note of like tenor and date.
 
 
26

--------------------------------------------------------------------------------

 
13.           Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief.  The remedies provided in this Note shall be cumulative and
in addition to all other remedies available under this Note, at law or in equity
(including a decree of specific performance and/or other injunctive relief).  No
remedy contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit the
Holder’s right to pursue actual damages for any failure by the Company to comply
with the terms of this Note.  The Company covenants to the Holder that there
shall be no characterization concerning this instrument other than as expressly
provided herein.  Amounts set forth or provided for herein with respect to
payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the Holder thereof and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof).  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate.  The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.
 
14.           Specific Shall Not Limit General; Construction.  No specific
provision contained in this Note shall limit or modify any more general
provision contained herein.  This Note shall be deemed to be jointly drafted by
the Company and all Holders pursuant to the Securities Purchase Agreement and
shall not be construed against any Person as the drafter hereof.
 
15.           Failure or Indulgence Not Waiver.  No failure or delay on the part
of the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.
 
16.           Notice.  Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Note must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by electronic delivery
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) Trading Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same.  The addresses and
e-mail addresses for such communications shall be:
 
 
If to the Company:

 
Cinedigm Digital Cinema Corp.

 
55 Madison Ave., Suite 300

 
Morristown, N.J. 07960

 
E-mail:  gloffredo@cinedigm.com

 
Attention:  General Counsel

 
With copy to:

 
Kelley Drye & Warren LLP

 
101 Park Avenue

 
New York, New York 10178

 
E-mail:  jcooperman@kelleydrye.com

 
Attention: Jonathan Cooperman

 
27

--------------------------------------------------------------------------------

 
If to the Holder, to it at the address and e-mail address set forth on the
signature pages to the Securities Purchase Agreement, with copies to such
Holder’s representatives as set forth on such schedule, or, in the case of a
Holder or any other party named above, at such other address and/or e-mail
addresses and/or to the attention of such other Person as the recipient party
has specified by written notice given to each other party in accordance with
this Section 16 five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
electronic delivery or deposit with a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
 
17.           Transfer of this Note.  The Holder may assign or transfer this
Note or some or all of its rights hereunder at any time without the consent of
the Company after the Transfer Restriction Termination Event, subject to
compliance with Section 4.1 of the Securities Purchase
Agreement.  Notwithstanding the foregoing, subject to compliance with Section
4.1 of the Securities Purchase Agreement, the Holder may assign or transfer this
Note or some or all of its rights hereunder at any time without the consent of
the Company to any Affiliate of the Holder or to the Company or any of its
Subsidiaries.  The Company shall not assign or otherwise transfer any of its
rights and obligations under this Note without the prior written consent of all
Holders and any attempted assignment or transfer without such consent shall be
null and void.  The Company shall maintain an office where the Notes may be
presented for registration of transfer or for exchange (“Registrar”).  The
Registrar shall keep a register of the Notes and of their transfer and
exchange.  The Company may change the Registrar upon written notice to each
holder of Notes.  Prior to due presentment for the registration of a transfer of
any Note, the Company may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all other purposes.
 
18.           Payment of Collection, Enforcement and Other Costs.  If (a) this
Note is placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding; or (b) an attorney is
retained to represent the Holder in any bankruptcy, reorganization, receivership
of the Company or other proceedings affecting Company creditors’ rights and
involving a claim under this Note, then the Company shall pay the costs incurred
by the Holder for such collection, enforcement or action, including reasonable
attorneys’ fees and disbursements.
 
19.           Cancellation.  After all Obligations have been paid in full, this
Note shall automatically be deemed canceled, shall be surrendered to the Company
for cancellation and shall not be reissued.
 
20.           Note Exchangeable for Different Denominations.  In the event of a
redemption or transfer pursuant to this Note of less than all of the Principal,
the Company shall promptly cause to be issued and delivered to the Holder, upon
tender by the Holder of this Note, a new Note of like tenor representing the
remaining Principal that has not been so redeemed.  This Note is exchangeable,
upon the surrender hereof by the Holder at the principal office of the Company,
for a new Note or Notes containing the same terms and conditions and
representing in the aggregate the Principal, and each such new Note will
represent such portion of such Principal as is designated by the Holder at the
time of such surrender.  The date the Company issued this Note shall be the
Issuance Date hereof regardless of the number of times a new Note shall be
issued.
 
 
28

--------------------------------------------------------------------------------

 
21.           Taxes.
 
(a)           Payments Free of Taxes.  Any and all payments by or on account of
any obligation of the Company or any of its Subsidiaries under the Notes, the
Securities Purchase Agreement or any other Transaction Document shall be made
without any set-off, counterclaim or deduction and free and clear of and without
deduction for any Indemnified Taxes; provided that if the Company or any of its
Subsidiaries shall be required to deduct any Indemnified Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 21(a)), the Holder receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Company or such Subsidiary, as applicable, shall make such deductions and (iii)
the Company or such Subsidiary shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law; provided,
further, that if the Company or any of its Subsidiaries is required to make an
additional payment to the Holder under this Section 21(a), and if the Holder is
entitled to a cash refund or credit against cash Taxes payable which is both
identifiable and quantifiable by the Holder as being attributable to the
imposition of such Indemnified Taxes (a “Tax Refund”), and such Tax Refund may
be obtained without increased liability or obligation to the Holder (including
any obligation of the Holder to file Tax returns in jurisdictions where it would
not otherwise be obligated to file Tax returns), then, upon the written request
of the Company, the Holder shall apply for such Tax Refund and, to the extent
such Tax Refund is received by the Holder, shall reimburse the Company or such
Subsidiary for such amount as the Holder shall determine to be the proportion of
the Tax Refund attributable to such additional payment as will leave the Holder
after the reimbursement in the same position as it would have been if the
additional payment had not been required; provided that, if any Tax Refund
reimbursed by the Holder to the Company or such Subsidiary is subsequently
disallowed, the Company shall repay the Holder such amount (together with
interest and any applicable penalty payable to the Holder to the relevant taxing
authority) promptly after the Holder notifies the Company of such
disallowance.  The Company agrees to reimburse the Holder for the Holder’s
reasonable out-of-pocket expenses, if any, incurred in complying with any
request hereunder and agrees that all costs incurred by the Holder in respect of
this Section 21(a) may be deducted from the amount of any reimbursement to the
Company or any of its Subsidiaries in respect of any Tax Refund pursuant to this
Section 21(a).  Nothing in this Section 21(a) shall require the Holder to
disclose to the Company any of its Tax returns or any other Tax-related
information that it deems to be confidential.
 
(b)           Indemnification by the Company.  The Company shall indemnify the
Holder, within thirty (30) days after written demand therefor, for the full
amount of any Indemnified Taxes paid by the Holder, on or with respect to any
payment by or on account of any obligation of the Company or any of its
Subsidiaries under the Notes, the Securities Purchase Agreement and the other
Transaction Documents (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 21) arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate of
the Holder as to the amount of such payment or liability (together with a
calculation of such payment or liability and supporting documentation reasonably
requested by the Company) under this Section 21 shall be delivered to the
Company and shall be conclusive absent demonstrable error.
 
(c)           Withholding Obligations.  Subject to Sections 21(a) and (b), if
the Company is subject to withholding tax obligations under applicable law with
respect to any transaction under this Note, then, notwithstanding any provision
to the contrary in this Note, the Company shall be entitled to withhold cash in
the amount that the Company is required to withhold.
 
22.           Waiver of Notice.  To the extent permitted by law, the Company
hereby waives demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance,
 
 
29

--------------------------------------------------------------------------------

 
performance, default or enforcement of this Note, Securities Purchase Agreement
and the other Transaction Documents.
 
23.           Governing Law; Jurisdiction.  This Note shall be construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the
internal laws of the State of New York, including Section 5-1401 of the New York
General Obligations Law.  Each party hereby irrevocably and unconditionally
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Note and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  The Company hereby
irrevocably and unconditionally appoints its General Counsel at the address set
forth in Section 16 (the “Company Process Agent”) as agent to receive on behalf
of the Company and its property service of copies of the summons and complaint
and any other process which may be served in any action referred to above or any
other proceeding in any New York State or Federal court.  In any action or
proceeding in a New York State or Federal court sitting in The City of New York,
such service may be made on the Company by delivering a copy of such process to
the Company in care of the Company Process Agent at such Company Process Agent’s
above address and by depositing a copy of such process in the mails by certified
or registered air mail, addressed to the Company at the address for such notices
to it under this Note (such service to be effective upon such receipt by the
Company Process Agent and the depositing of such process in the mails as
aforesaid).  The Company hereby irrevocably and unconditionally authorizes and
directs such Company Process Agent to accept such service on its
behalf.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
 
24.           WAIVER OF JURY TRIAL.  THE COMPANY, ON BEHALF OF ITSELF AND ITS
SUBSIDIARIES, AND THE HOLDER OF THIS NOTE HEREBY IRREVOCABLY WAIVE ANY RIGHTS
THEY MAY HAVE TO, AND AGREE NOT TO REQUEST, A TRIAL BY JURY IN RESPECT OF ANY
ACTION BASED UPON, OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
HEREBY.
 
25.           Effect of Redemption; No Prepayment.  Upon payment of the
Redemption Price in accordance with the terms hereof with respect to any portion
of the Principal of this Note, such portion of the Principal of this Note shall
be deemed paid in full and shall no longer be deemed outstanding for any
purpose.  Except as specifically set forth in this Note, the Company does not
have any right, option, or obligation, to pay any portion of the Principal at
any time prior to the Maturity Date or the Extended Maturity Date, as
applicable.
 
26.           Purchase of Notes by the Company.  The Company shall not, and
shall not permit any Subsidiary or Affiliate to, voluntarily purchase or acquire
any portion of any Note, unless concurrently with such action, the Company, such
Subsidiary or Affiliate makes an offer to all Holders to acquire the same
portion of their Notes on the same terms.  This Section 26 may not be amended
except with the written consent of the holders of two-thirds (2/3) of the
aggregate principal amount of all the Notes then outstanding.
 
27.           Other Payments to Holders of Notes.  The Company will not directly
or indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional
 
 
30

--------------------------------------------------------------------------------

 
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof or
thereof unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding that consented to such waiver or amendment.
 
28.           Payment Set Aside.  To the extent that the Company makes a payment
or payments to the Holder hereunder or the Holder enforces or exercises its
rights hereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
by a trustee, receiver or any other person under any law (including any
bankruptcy law, U.S. state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
 
29.           Interpretative Matters.  Unless the context otherwise requires,
(a) all references to Sections, Schedules or Exhibits are to sections, schedules
or exhibits contained in or attached to this Note, (b) each accounting term not
otherwise defined in this Note has the meaning assigned to it in accordance with
GAAP as in effect from time to time (unless expressly provided otherwise), (c)
words in the singular or plural include the singular and plural and pronouns
stated in either the masculine, the feminine or neuter gender shall include the
masculine, feminine and neuter and (d) the use of the word “including” in this
Note shall be by way of example rather than limitation.
 
* * * * * *

 
31

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company has caused this Note to be executed on its
behalf by the undersigned as of the __ of May 2010.
 
 

      CINEDIGM DIGITAL CINEMA CORP.                                By:          
 
Name:
Title
 

 
 
 
 
 
 

 
Note

--------------------------------------------------------------------------------

 

SCHEDULE I
 
BREAKEVEN LTM EBITDA
 

 
 

--------------------------------------------------------------------------------

 

SCHEDULE II

 
SATELLITE EQUIPMENT
 
 
 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT A

 
SUBORDINATION PROVISIONS
 
Section 1.01.  Subordination of Liabilities.  ___________________ (the
“Obligor”), for itself, and its successors and assigns, covenants and agrees,
that the payment of the principal of, interest on, and all other amounts owing
in respect of, [__________] (the “Subordinated Indebtedness”)  is hereby
expressly subordinated to the extent and in the manner hereinafter set forth, to
the prior payment in full in cash, of all Senior Indebtedness (as defined in
Section 1.07 below).  These Subordination Provisions shall constitute a
continuing offer to all persons who, in reliance upon such provisions, become
holders of, or continue to hold, Senior Indebtedness, and such provisions are
made for the benefit of the holders of Senior Indebtedness, and such holders are
hereby made obligees hereunder the same as if their names were written herein as
such, and they and/or each of them may proceed to enforce such provisions.
 
Section 1.02.  Obligor Not to Make Payments with Respect to Subordinated
Indebtedness in Certain Circumstances.  (a)  Upon the maturity of any Senior
Indebtedness (including interest thereon, premium, if any, or fees or any other
amounts owing in respect thereof), whether at stated maturity, by acceleration
or otherwise, all Obligations (as defined in Section 1.07 below) owing in
respect thereof shall first be paid in full in cash, before any payment (whether
in cash, property, securities or otherwise) is made on account of the
Subordinated Indebtedness.
 
(b)During any Blockage Period (as defined in Section 1.09 below), no holder of
Subordinated Indebtedness shall assert or exercise any remedy in respect of any
Subordinated Indebtedness or take or receive from or on behalf of the Obligor,
directly or, indirectly, or by setoff or in any other manner (whether pursuant
to any enforcement, collection, execution, levy or foreclosure proceeding or
otherwise) any assets of the Obligor.  Without limiting the generality of the
foregoing, during any Blockage Period, unless and until the Senior Indebtedness
(including interest thereon, premium, if any, or fees or any other amounts owing
in respect thereof) shall have been paid in full in cash, no holder of
Subordinated Indebtedness shall (i) take any action of any kind, exercise any
rights or initiate any proceeding of any kind (including any insolvency
proceeding or Lien Enforcement Action, as defined in Section 1.09 below),
whether privately or judicially, including any motion to lift an automatic stay
or to obtain adequate protection, or any action to notify account debtors, seek
a Lien (as defined in Section 1.09 below) upon any assets of the Obligor or
commence, or join with any creditor other than holders of Senior Indebtedness in
commencing, any enforcement, collection, execution, levy or foreclosure
proceeding with respect to the Obligor, (ii) hinder, interfere with, object to
or delay any holder of Senior Indebtedness in (A) enforcement of any of its
Liens on any collateral, (B) liquidation or foreclosure thereof or (C) the
manner in which a holder of Senior Indebtedness chooses to effectuate such
enforcement, liquidation or foreclosure, (iii) demand, request, plead or
otherwise assert or otherwise claim the benefit of, any marshalling,
appraisement, valuation or other similar right that may otherwise be available
under applicable law or any other similar rights a junior creditor may have
under applicable law, or (iv) bring any action to contest the validity,
legality, enforceability, perfection, priority or avoidability of any of the
Senior Indebtedness or any of the Liens of holders of Senior Indebtedness in or
on any  collateral.

(c)During any Blockage Period, (i) no holder of Subordinated Indebtedness shall
exercise any right of setoff or counterclaim with respect to any collateral or
with respect to any proceeds thereof and all proceeds of collateral shall be
paid to the Collateral Agent (as defined in Section 1.09 below) for application
to the Senior Indebtedness and (ii) until the Senior Indebtedness (including
interest thereon, premium, if any, or fees or any other amounts owing in respect
thereof) shall have been paid in full in cash, any proceeds of collateral
received by any holder of Subordinated Indebtedness and any other
 
 
 

--------------------------------------------------------------------------------

 
cash or other property on account of the interest of such holder of Subordinated
Indebtedness in any collateral received by such holder of Subordinated
Indebtedness in contravention of these Subordination Provisions shall be held
for the benefit of and paid over to the Collateral Agent for the benefit of the
holders of the Senior Indebtedness in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct.  In connection with the foregoing, each holder of Subordinated
Indebtedness hereby:  (i) authorizes the Collateral Agent to make any such
endorsements as the agent and attorney-in fact for such holder of Subordinated
Indebtedness; and (ii) acknowledges and agrees that its foregoing authorization,
being coupled with an interest, is irrevocable.

(d)           In the event that, notwithstanding the provisions of the preceding
subsections (a), (b) and (c) of this Section 1.02, the Obligor shall make any
payment on account of (or the holders of the Subordinated Indebtedness receives
any payment on account of) the Subordinated Indebtedness at a time when payment
is not permitted by said subsection (a), (b) or (c), such payment shall be held
by the holders of the Subordinated Indebtedness, in trust for the benefit of,
and shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness or their representative or the trustee under the indenture or other
agreement pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, for application
pro rata to the payment of all Senior Indebtedness (after giving effect to the
relative priorities of such Senior Indebtedness) remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in cash in accordance with the
terms of such Senior Indebtedness, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness.  Without in any
way modifying these Subordination Provisions or affecting the subordination
effected hereby if the hereafter referenced notice is not given, the Obligor
shall give the holders of the Subordinated Indebtedness written notice of any
event which would prevent payments under Section 1.02(a), (b) or (c) hereafter.
 
Section 1.03.  Subordination to Prior Payment of All Senior Indebtedness,
Dissolution, Liquidation or Reorganization of Obligor.  Upon any distribution of
assets of the Obligor upon dissolution, winding up, liquidation or
reorganization of the Obligor (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
 
(a)           the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including, without
limitation, post petition interest at the rate provided in the documentation
with respect to the Senior Indebtedness whether or not such post-petition
interest is an allowed claim against the debtor in any bankruptcy or similar
proceeding) before the holders of the Subordinated Indebtedness is entitled to
receive any payment of any kind or character on account of the Subordinated
Indebtedness;
 
(b)           any payment or distributions of assets of the Obligor of any kind
or character, whether in cash, property or securities to which the holders of
the Subordinated Indebtedness would be entitled except for these Subordination
Provisions, shall be paid by the liquidating trustee or agent or other person
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or other trustee or agent, directly to the holders of
Senior Indebtedness, their representative or representatives, or to the trustee
or trustees under any indenture under which any instruments evidencing any such
Senior Indebtedness may have been issued, to the extent necessary to make
payment in full in cash of all Senior Indebtedness remaining unpaid after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness; and
 
(c)           in the event that, notwithstanding the foregoing provisions of
this Section 1.03, any payment or distribution of assets of the Obligor of any
kind or character, whether they be cash, property or securities, shall be
received by the holders of the Subordinated Indebtedness on account of
Subordinated Indebtedness before all Senior Indebtedness is paid in full in
cash, such payment or
 
 
 

--------------------------------------------------------------------------------

 
distribution shall be received and held in trust for and shall forthwith be paid
over to the holders of the Senior Indebtedness (after giving effect to the
relative priorities of such Senior Indebtedness) remaining unpaid or unprovided
for or their representative or representatives, or to the trustee or trustees
under any indenture under which any instruments evidencing any such Senior
Indebtedness may have been issued, for application to the payment of such Senior
Indebtedness until all such Senior Indebtedness shall have been paid in full in
cash, after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness.
 
Without in any way modifying these Subordination Provisions or affecting the
subordination effected hereby if the hereafter referenced notice is not given,
the Obligor shall give prompt written notice to the holders of the Subordinated
Indebtedness of any dissolution, winding up, liquidation or reorganization of
the Obligor (whether in bankruptcy, insolvency or receivership proceedings or
upon assignment for the benefit of creditors or otherwise).
 
Section 1.04.  Subrogation.  Subject to the prior payment in full in cash of all
Senior Indebtedness, the holders of the Subordinated Indebtedness shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Obligor applicable to the Senior
Indebtedness until all amounts owing on the Subordinated Indebtedness shall be
paid in full, and for the purpose of such subrogation no payments or
distributions to the holders of the Senior Indebtedness by or on behalf of the
Obligor or by or on behalf of the holders of the Subordinated Indebtedness by
virtue of these Subordination Provisions which otherwise would have been made to
the holder of the Subordinated Indebtedness shall, as between the Obligor, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Subordinated Indebtedness, be deemed to be payment by the Obligor to or on
account of the Subordinated Indebtedness, it being understood that these
Subordination Provisions are and are intended solely for the purpose of defining
the relative rights of the holders of the Subordinated Indebtedness, on the one
hand, and the holders of the Senior Indebtedness, on the other hand.
 
Section 1.05.  Obligation of the Obligor Unconditional.  Nothing contained in
these Subordination Provisions or in the Subordinated Indebtedness is intended
to or shall impair, as between the Obligor and the holders of the Subordinated
Indebtedness, the obligation of the Obligor, which is absolute and
unconditional, to pay to the holders of the Subordinated Indebtedness the
principal of and interest on the Subordinated Indebtedness as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the holders of the Subordinated
Indebtedness and other creditors of the Obligor other than the holders of the
Senior Indebtedness, nor, except as specifically provided herein, shall anything
herein or therein prevent the holder of the Subordinated Indebtedness from
exercising all remedies otherwise permitted by applicable law upon an event of
default under the Subordinated Indebtedness, subject to the rights, if any,
under these Subordination Provisions of the holders of Senior Indebtedness in
respect of cash, property, or securities of the Obligor received upon the
exercise of any such remedy.  Upon any distribution of assets of the Obligor,
the holders of the Subordinated Indebtedness shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the liquidating trustee or agent or other person making any
distribution to the holders of the Subordinated Indebtedness, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness, and other indebtedness of the Company (as
defined in Section 1.09 below) and the Obligor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to these Subordination Provisions.
 
Section 1.06.  Subordination Rights Not Impaired by Acts or Omissions of the
Obligor or Holders of Senior Indebtedness.  No right of any present or future
holders of any Senior Indebtedness to
 
 
 

--------------------------------------------------------------------------------

 
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Obligor
or by any act or failure to act in good faith by any such holder, or by any
noncompliance by the Obligor with the terms and provisions of the Subordinated
Indebtedness, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of the Senior Indebtedness may,
without in any way affecting the obligations of the holders of the Subordinated
Indebtedness with respect hereto, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of, change or
extend the time of payment of, or renew or alter, any Senior Indebtedness or
amend, modify or supplement any agreement or instrument governing or evidencing
such Senior Indebtedness or any other document referred to therein, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of a Default thereunder
and the release of any collateral securing such Senior Indebtedness, all without
notice to or assent from the holder of the Subordinated Indebtedness.
 
Section 1.07.  Senior Indebtedness.  As used herein, the term “Senior
Indebtedness” shall mean the Obligations (as defined in the Guarantee and
Collateral Agreement, dated as of August 11, 2009, among the Company, the
subsidiaries of the Company parties thereto and the Collateral Agent).
 
Section 1.08.  Miscellaneous.  If, at any time, all or part of any payment with
respect to Senior Indebtedness theretofore made by the Obligor or any other
Person is rescinded or must otherwise be returned by the holders of Senior
Indebtedness for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Obligor or such other Persons),
the Subordination Provisions set forth herein shall continue to be effective and
be reinstated, as the case may be, all as though such payment had not been made.
 
Section 1.09.  Definitions.  When used herein, the following terms shall have
the definitions set forth below:
 
 
“Blockage Notice” means, with respect to a Payment Default or a Non-Payment
Default, a notice delivered by or on behalf of the Majority Holders to one or
more holders of Subordinated Indebtedness that a Payment Default or Non-Payment
Default, as the case may be, has occurred.
 
“Blockage Period” means  (a) with respect to a Payment Default, the period
commencing on the date a Blockage Notice is delivered to a holder of
Subordinated Indebtedness and terminating on the date on which such Payment
Default is cured (to the extent the same is capable of being cured) or waived
(if waived in accordance with the terms of the Senior Notes); and (b) with
respect to a Non-Payment Default, the period commencing on the date a Blockage
Notice is delivered to a holder of Subordinated Indebtedness and terminating on
the date that is the earlier to occur of (i) one hundred eighty (180) days
following the date of delivery of such Blockage Notice and (ii) delivery by or
on behalf of the Majority Holders of a written notice expressly terminating the
Blockage Period as a result of such Non-Payment Default being cured (to the
extent the same is capable of being cured) or waived (if waived in accordance
with the terms of the Senior Notes).  Other than with respect to a Payment
Default, Blockage Periods may not in the aggregate exceed one hundred eighty
(180) days during any consecutive period of three hundred sixty-five (365) days,
whether pursuant to one Blockage Notice or multiple Blockage Notices.
 
“Collateral Agent” has the meaning set forth in the Senior Notes.
 
“Company” means Cinedigm Digital Cinema Corp.
 
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or
 
 

--------------------------------------------------------------------------------

 
preferential arrangement in the nature of a security interest of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any financing lease having substantially the same economic effect
as any of the foregoing).
 
“Lien Enforcement Action” means (a) any action by a creditor to foreclose,
enforce, collect, take possession of, sell or otherwise realize upon, or to
exercise any other right or remedy with respect to, any collateral, including
any action by a creditor to foreclose on the Lien of such Person in any
collateral or any action by a creditor to take possession of, sell or otherwise
realize (judicially or non-judicially) upon any collateral (including by setoff
or notification of account debtors); or (b) the commencement by a creditor of
any legal proceedings against the Obligor with respect to any collateral to
facilitate the actions described in clause (a) of this definition.
 
“Majority Holders” has the meaning set forth in the Senior Notes.
 
“Non-Payment Default” means any Event of Default as defined in the Senior Notes,
other than a Payment Default.
 
“Payment Default” means any Event of Default as defined in the Senior Notes
arising by virtue of (a) the failure by the Company to make any payment of
principal, interest or fees when due and payable or when declared due and
payable (whether as a result of maturity, acceleration or otherwise) or (b) the
making by the Obligor of any payment or distribution to a holder of Subordinated
Indebtedness in violation of these Subordination Provisions.
 
“Senior Notes” means the Company’s Senior Secured Amended and Restated Notes in
the original aggregate principal amount of $75,000,000 issued on May 6, 2010
pursuant to the Securities Purchase Agreement dated as of August 11, 2009 among
the Company and the purchasers named therein.

 
 

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
 
EXHIBIT B
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

CHRISTIE/AIX, INC.
c/o Cinedigm Digital Cinema Corp.
55 Madison Ave, Suite 300
Morristown, NJ  07960
 
 
May 6, 2010
 

Amendment to
Side Letter

 
Sageview Capital Master, L.P.
245 Lytton Avenue, Suite 250
Palo Alto, CA 94301
 
Attention:  Edward A. Gilhuly
 
Ladies and Gentlemen:
 
Reference is made to that certain Side Letter, dated as of August 11, 2009 (the
“Side Letter”), among Christie/AIX, Inc. (“Christie/AIX”) and Sageview Capital
Master, L.P.  The undersigned hereby agree to amend the Side Letter to (i) add
Cinedigm Digital Funding I, LLC as a party thereto, with the same obligations as
Christie/AIX thereunder, and (ii) delete the second paragraph thereof in its
entirety and substitute in lieu thereof the following:
 
“In accordance with Section 8(z)(i) of the Notes, the undersigned hereby agree
that upon the payment in full of the Phase I Credit Agreement, each Phase I
Subsidiary shall, and shall cause any of its Subsidiaries that is a Phase I
Subsidiary to, (i) become a Subsidiary Note Party and execute and deliver a
joinder to the Guarantee and Collateral Agreement in the form attached thereto
as Annex I, (ii) take such actions necessary or advisable to grant to the
Collateral Agent for the benefit of the Holders a perfected first priority
(subject to Liens to the extent permitted by the Guarantee and Collateral
Agreement) security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such Phase I Subsidiary, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Collateral Agent and (iii) if requested by the
Collateral Agent, deliver to the Collateral Agent, for the benefit of the
Holders, legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Collateral Agent.”
 
This amendment shall be construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance
of this letter shall be governed by, the internal laws of the State of New York,
including Section 5-1401 of the New York General Obligations Law.  This
amendment may be executed in any number of counterparts, each of which shall be
an original, and all of which, when taken together, shall constitute one
agreement.  Delivery of an executed signature page of this letter by facsimile
or electronic transmission shall be effective as delivery of a manually executed
counterpart hereof.
 
 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the undersigned has executed this amendment as of
the date first written above.  
 

      Very truly yours,                       CHRISTIE/AIX, INC.                
               By:            
Name:
Title
 

 
 
 

      CINEDIGM DIGITAL FUNDING I, LLC                                By:        
   
Name:
Title
 

 
 
 

Amendment to the Christie/AIX Side Letter
 
 

--------------------------------------------------------------------------------

 

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

SAGEVIEW CAPITAL MASTER, L.P.

By: Sageview Capital GenPar, Ltd., its
       general partner

By:____________________________
     Name:  Edward A. Gilhuly
     Title:  Director
 
 

 
 

Amendment to the Christie/AIX Side Letter